Document:

Exhibit 4.8.3

 

MORTGAGE , ASSIGNMENT OF LEASES,

SECURITY AGREEMENT

AND FIXTURE FILING FINANCING STATEMENT

 

THIS MORTGAGE, ASSIGNMENT OF LEASES, SECURITY AGREEMENT AND FIXTURE
FILING FINANCING STATEMENT made this 27 day of March,
2009, by MGP INGREDIENTS, INC., a Kansas
corporation, whose address is c/o Cray Business Plaza, 100 Commercial Street,
Atchison, Kansas 66002 (the “Mortgagor”), to
the CLOUD L. CRAY, JR. TRUST under
agreement dated October 25, 1983, whose address is 20045 266th Road,
Atchison, Kansas 66002 (the “Mortgagee”).

 

1.             Granting of Property.  Mortgagor, for and in consideration of the
debt and trust hereinafter described and created, and of Ten Dollars and No
Cents ($10.00) paid to Mortgagor by Mortgagee, the receipt of which is hereby
acknowledged, hereby GRANTS, BARGAINS, REMISES, RELEASES, SELLS, CONVEYS and
CONFIRMS to Mortgagee, its successors and assigns forever, all of Mortgagor’s
estate, right, title and interest in, to and under, and grants to Mortgagee a
security interest in, any and all of the following described property which is
(except where the context otherwise requires) herein collectively called the “Property”, whether now owned or held or
hereafter acquired, such term also referring to any part or parcel hereof:

 

(a)           all of the real
estate and property legally described in Exhibit “A”
attached hereto and by this reference made a part hereof (hereinafter called
the “Real Estate”); and

 

(b)           all right,
title and interest of Mortgagor, including any after-acquired title or reversion,
in and to the beds of the ways, streets, avenues and alleys adjoining the Real
Estate and in and to any strips, gaps or gores adjoining the Real Estate on all
sides thereof; and

 

(c)           all of the
tenements, hereditaments, easements, appurtenances, passages, waters, water
rights, water courses, riparian rights and other rights, liberties and
privileges thereof now or hereafter appertaining to the Real Estate, including
any homestead or other claim at law or in equity, any after-acquired title,
franchises, licenses, and any reversions and remainders thereof; and

 

 

(d)           Mortgagor’s
interest in all buildings and improvements of every kind and description now or
hereafter erected or placed on the Real Estate (the “Improvements”); all materials intended for construction,
reconstruction, alterations and repairs of the Improvements (whether stored or
located on site or stored off site), all of which materials shall be deemed to
be included within the Property hereby conveyed immediately upon the delivery
thereof to the Real Estate; all fixtures and articles of personal property now
or hereafter owned by Mortgagor and attached to or used in connection with Real
Estate and Improvements (and the lessee’s interest in any personal property
leased by Mortgagor from third parties), including but not limited to all
furniture and furnishings, apparatus, machinery, motors, elevators, fittings,
radiators, gas ranges, mechanical refrigerators, awnings, shades, screens,
office equipment, blinds, carpeting and other furnishings, and all plumbing,
heating, lighting, cooking, laundry, ventilating, refrigerating, incinerating,
air conditioning, central energy and sprinkler equipment and fixtures and
appurtenances thereto; and all renewals or replacements of any of the
foregoing, whether or not the same are or shall be attached to the
Improvements; except that the foregoing shall not include any trade fixtures,
personal property or moveable equipment owned by tenants occupying any part of
the Property.  All of such personal
property to be deemed to be real property and be a part of the realty.   This Mortgage is hereby deemed to be as well
a security agreement as well as a mortgage for the purpose of creating hereby a
security interest in the personal property securing the Indebtedness (hereafter
defined in Section 3) for the benefit of the Mortgagee; and

 

(e)           all of the
rents, issues, proceeds and profits accruing or to accrue from the Real Estate
or arising from the use or enjoyment of all or any portion thereof or from any
lease or agreement pertaining thereto; and all right, title and interest of
Mortgagor in and to all leases of the Real Estate now or hereafter existing;
including without limitation all deposits made thereunder to secure performance
by the tenants of their obligations thereunder; and

 

(f)            all goodwill,
trademarks, trade names, option rights, purchase contracts, books and records
and general intangibles of Mortgagor relating to the Real Estate or the
Improvements including, without limitation, all rights of Mortgagor under or
with respect to all accounts, contract rights, instruments, chattel paper and
other rights of Mortgagor for payment of money for property sold, rented or
lent, for services rendered, for money lent, or advances or deposits made, and
any other intangible property of Mortgagor related to the Real Estate or the
Improvements; and

 

(g)           all rights,
including all copyrights, of Mortgagor to plans and specifications, designs,
drawings and other matters prepared for any construction on or renovation or
alteration of the Real Estate and Improvements; and

 

(h)           all proceeds
(including claims or demands thereto) of the conversion, voluntary or
involuntary, of any of the foregoing into cash or liquidated claims, including
without limitation all proceeds of insurance (including unearned premiums) and
condemnation awards including interest thereon,

 

subject, however, to liens securing that certain Credit Agreement dated
as of May 5, 2008 (as amended from time to time), by and among Mortgagor,
commerce Bank, N.A., as Agent, Issuing Bank and Swingline Lender, and the
financial institutions party thereto, including that certain 

 

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mortgage dated September 3, 2008 and recorded September 8,
2008 from Mortgagor to Commerce Bank, N.A., recorded under recording no.
200800019473.

 

2.             Security for Promissory Note; Indebtedness.  This Mortgage secures the payment of (a) the
Subordinated Secured Promissory Note (“Note”)
from Mortgagor to Mortgagee, dated this same date, in the original principal
amount of Two Million and No/100 Dollars ($2,000,000.00); (b) all
indebtedness and obligations arising under the provisions of this Mortgage; (c) all
indebtedness and obligations arising pursuant to and any and all other
agreements or assignments securing the Note (hereinafter collectively the “Loan Documents”); (d) all indebtedness
and obligations arising pursuant to any instrument evidencing the advance of
additional sums at Mortgagee’s sole option, by Mortgagee to Mortgagor; (e) any
and all renewals or extensions of any such item of indebtedness or obligation
or any part thereof; (f) any future advances which may be made by
Mortgagee to Mortgagor, whether made to protect the security or otherwise, and
whether or not evidenced by additional promissory note or other evidences of
indebtedness (but nothing in this Mortgage shall be interpreted to require
Mortgagee to make any future advances); and (g) all interest due on all of
the same (all of the above are hereinafter collectively the “Indebtedness”, which term shall also
include any part or portion thereof). 
Nothing in this Mortgage shall be construed to obligate Mortgagee to
make any renewals or additional loans or advances.

 

3.             Warranty of Title. 
Mortgagor warrants to Mortgagee good title to the Property and warrants
and agrees that the same is free from all liens except as set forth in Section 1
above; that Mortgagor has good and legal right, power and authority to so
convey the Property to Mortgagee; that Mortgagor and its successors in interest
will forever warrant and defend the title of the Property as represented above
and the estate and priority of this Mortgage against the lawful claims and
demands of all persons whomsoever claiming through Mortgagor; and that
Mortgagor will execute, acknowledge and deliver all and every such further
assurances to the Mortgagee of the title to all the Property.  All of these covenants shall run with the
land.

 

4.             Payment of the Note and Indebtedness.  Mortgagor agrees to pay promptly the
principal of and all interest on the Note and other Indebtedness at the times
and in the manner provided in the Note and the other Loan Documents.

 

5.             Maintenance and Repairs; Compliance With Laws.

 

(a)           Mortgagor shall
(i) not permit, commit or suffer to exist any waste, impairment or
deterioration of the Property (except normal wear and tear); (ii) keep and
maintain the Property and every part thereof and the fixtures, machinery and
appurtenances in working condition; (iii) effect such repairs and make all
needed and proper replacements so that the Improvements, fixtures, equipment,
goods, machinery and appurtenances will at all times be in working condition; (iv) make
such repairs as Mortgagee may reasonably require so that the Property is in
working condition; (v) fully comply with all statutes, laws, ordinances,
regulations, requirements, orders or decrees relating to Property enacted or
imposed by any federal, state or municipal authority, including courts and
administrative agencies of competent jurisdiction; (vi) observe and fully
comply with all conditions and requirements necessary to preserve and extend
any and all rights, licenses, permits (including but not limited to zoning
variances, special

 

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exceptions and nonconforming uses),
privileges, franchises and concessions which are applicable to the Property or
which have been granted to or contracted for by Mortgagor in connection with
any existing or presently contemplated use of the Property; and (vii) permit
Mortgagee or its agents, at all reasonable times, to enter upon and inspect the
Property, subject to the rights of tenants.

 

(b)           Mortgagee shall
have the right, at any time and from time to time, to engage an independent
party to determine whether the Property is being maintained so that it is in
working condition.  If the maintenance is
determined to be inadequate, such party shall determine the estimated cost of
such repairs and replacements as are necessary to place the Property in working
condition, and Mortgagor shall promptly perform the repairs and
replacements.  Mortgagor acknowledges
that upon such a determination the security of this Mortgage will be impaired
to the extent of the estimated cost of such repairs and replacements.  In such event, Mortgagor shall also reimburse
Mortgagee for the reasonable costs of such inspection, and the same shall be a
part of the Indebtedness secured hereby. 
If the independent party determines the Property is in working condition,
then the inspection shall be at Mortgagee’s expense.

 

6.             Taxes.  Mortgagor
agrees to:

 

(a)           pay, before
delinquency and before any penalty for nonpayment attaches thereto, all taxes,
assessments, water rates, sewer rentals and other governmental, municipal or
public dues, charges, fines or impositions which are or may be levied against
the Property or any part thereof; to deliver to Mortgagee, at least ten (10) days
before delinquency, receipted bills evidencing payment therefor; or to pay, in
full, under protest and in the manner provided by statute, any tax, assessment,
rate, rental, charge, fine or imposition which Mortgagor may desire to contest;
and

 

(b)           if the state
where the Property is located enacts any law imposing in any manner a tax upon
this Mortgage, Mortgagor shall immediately pay the Indebtedness in full, except
that this provision will not apply in the event Mortgagor lawfully pays in full
any such tax or assessment; and

 

(c)           keep the
Property free from statutory liens of every kind.

 

7.             Casualty Insurance.

 

(a)           Mortgagor agrees
to keep the Improvements insured against loss or damage by, or abatement of
rental income resulting from, fire and such other hazards, casualties and
contingencies (including, but not limited to, vandalism, malicious mischief and
so-called “all risk” coverage, if available at a reasonable premium) in such
amounts as may reasonably be required by Mortgagee.  Mortgagor will pay promptly when due any
premiums on such insurance.  All such
insurance shall be carried with companies approved by Mortgagor and lawfully
operating in the state where the Property is located.  The policies and renewals thereof or
certificates respecting such policies and renewals shall be deposited with and
held by Mortgagee, shall evidence full payment of the premiums therefor, and shall
(i) name Mortgagee

 

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as an additional insured, with a separation
of insureds clause, sometimes also called a “severability of insureds” or “cross
liability” clause; and shall include (ii) an agreed amount endorsement; (iii) a
replacement cost endorsement; (iv) an inflation guard endorsement; and (v) a
standard waiver of subrogation endorsement, if available, all in form
acceptable to Mortgagee.  Mortgagor shall
not carry separate insurance, concurrent in kind or form and contributing in
the event of loss with any insurance required hereunder, unless Mortgagee is
included as a mortgagee thereunder pursuant to the type of clause described in
clause (i) above.  All policies
shall provide for at least thirty (30) days’ advance written notice to
Mortgagee prior to any cancellation or material modification thereof.

 

(b)           In the event of
a change in ownership of or occupancy of the Property (except for ordinary
changes in tenant occupancy), Mortgagor shall immediately deliver notice by
mail to all insurers.

 

(c)           In the event of
a loss to the Property exceeding $500,000 in damage amount, Mortgagor will give
immediate notice to Mortgagee, whereupon Mortgagee may at its option assume the
right to settle and adjust any such claim under such policies without consent
of Mortgagor (although Mortgagee will endeavor to contact Mortgagor and obtain
Mortgagor’s consent to any such settlement or adjustment).  Mortgagee shall notify Mortgagor of whether
it elects to take action within twenty (20) days after Mortgagee receives
Mortgagor’s notice.  If Mortgagee sends
Mortgagor no such notification, then Mortgagor shall be allowed to adjust the
loss itself, with Mortgagee reserving the later right to take over the process
if it so elects.  After deducting all
costs of collection, the proceeds of any insurance shall be applied, at the
option of Mortgagee, as follows: (i) as a credit upon any portion of the
Indebtedness, as selected by Mortgagee; or (ii) to restoring the
Improvements, at the direction of Mortgagor. 
If Mortgagor is not then in default under any of the Loan Documents,
Mortgagee shall allow the proceeds to be applied as specified in alternative (ii) of
the above sentence, with any excess proceeds remaining after restoration of the
Improvements to be applied as specified in alternative (i).

 

(d)           In the event
Mortgagee elects to allow insurance proceeds to be disbursed for restoration of
the Improvements (or such disbursement is required above), the insurance
proceeds shall be paid to Mortgagee for Mortgagee to hold and disburse in
accordance with this Section.  Mortgagor
shall provide Mortgagee with a good faith estimate by a third party of the
costs of completing the work.  If the
estimated cost of completing the work exceeds the amount of insurance proceeds,
then Mortgagor shall deposit with Mortgagee additional funds from Mortgagor or
other sources which shall be sufficient to make up the difference.  The insurance proceeds shall be disbursed by
Mortgagee from time to time upon the Mortgagee being furnished with (i) satisfactory
evidence that the insurance proceeds, together with any additional funds which
may be provided by Mortgagor, continue to constitute sufficient amounts to
fully pay the estimated costs of completion of such work; and (ii) such
architect’s certificates, waivers of lien, contractor’ s sworn statements and
such other evidences of costs and of payment as the Mortgagee may reasonably
require and approve.  Mortgagee may, in
any event, require that all plans and specifications for such restoration,
repair, replacement and rebuilding be submitted to and approved by the
Mortgagee prior to commencement of work. 
No payment made prior to the final completion of the work shall exceed
ninety percent (90%) of the cost of the work performed.  Funds other than proceeds of insurance shall
be disbursed prior to disbursement of

 

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insurance proceeds.  Any insurance proceeds and other funds paid
over to the Mortgagee to be applied to the work shall be invested for the
account of the Mortgagor, in an interest bearing account with Mortgagee (or
another account or which shall be mutually satisfactory to both Mortgagee and
Mortgagor), and the interest earned on such account or instrument shall be held
in such account and applied in the same manner as the principal.

 

(e)           In the event of
a foreclosure of this Mortgage or other transfer of title to the Property
extinguishing the Indebtedness or the lien of this Mortgage, all right, title
and interest of Mortgagor in and to any insurance policies then in force shall
pass to and are hereby assigned by Mortgagor to the purchaser or grantee.

 

8.             Public Liability Insurance.  Mortgagor agrees to carry and maintain
liability and indemnity insurance, including without limitation water damage
insurance and the so-called assumed and contractual liability coverage, in
forms, in such amounts and with such insurers as may be reasonably required
from time to time by Mortgagee. 
Certificates of such insurance, evidencing full payment of the premiums,
shall be deposited with Mortgagee and shall contain provisions for thirty (30)
days’ written notice to Mortgagee prior to any cancellation or modification of
the policies.

 

9.             Alterations, Removal and Demolition. 
No Improvements shall be altered, except in the ordinary course of
business, or removed or demolished and no fixtures, equipment or appliances on,
in or about the Improvements having an aggregate value in excess of $50,000
shall be shall severed or removed, except in the ordinary course of business,
or sold or mortgaged, without the prior written consent of Mortgagee, which
shall not be unreasonably withheld.  In
the event all or any part of the fixtures, appliances equipment or other goods
are demolished or destroyed, Mortgagor shall promptly replace the same with
similar fixtures and appliances at least equal in quality and condition to
those replaced, free from any security interest in or any encumbrance thereon
or reservation of title thereto except as noted in paragraph 1 (however, if any
such items were originally leased or encumbered, the replacements may be so
leased or encumbered).

 

10.           Mechanic’s Liens.

 

(a)           Mortgagor will
keep the Property free from any mechanic’s liens, other statutory liens or
claims, and any other claims of all persons supplying labor or materials which
enter into the construction, alteration, repair or replacement of any and all
Improvements.

 

(a)           Notwithstanding
the above provisions, Mortgagor shall have the right to contest any such lien
or claim of any person supplying such labor or materials.  However, within thirty (30) days after the
filing of any mechanic’s lien or other statutory claim which Mortgagor may
desire to contest, Mortgagor shall furnish Mortgagee with cash, a bond (in
statutory form or such other form as Mortgagee may find reasonably
satisfactory), an irrevocable unconditional letter of credit in favor of
Mortgagee, or other security as Mortgagee may find reasonably satisfactory, in
an amount equal to one and one half times the amount of such lien.  Mortgagee may also require an endorsement to
its mortgagee policy of title insurance insuring over such lien.  Any such 

 

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contest shall not otherwise create or result
in a failure on the part of Mortgagor to comply with the terms, provisions and
conditions hereof.

 

(b)           Mortgagor shall
in any event, including under the circumstances described in the above
subsection, pay in full any such mechanic’s lien or other statutory lien or
claim prior to any foreclosure of the same or other event which would
jeopardize Mortgagor ‘s title to the Property or the lien of this Mortgage.

 

11.           Documentary Stamps.  If at any time the United States government,
or any other governmental authority, requires internal revenue or other
documentary stamps hereon or on the Note or any of the other Loan Documents, or
requires payment of an interest equalization tax upon all or any part of the
Indebtedness, then the Indebtedness shall be and become due and payable at the
election of Mortgagee ninety (90) days after Mortgagee mails a notice of such
election to Mortgagor.  However,
Mortgagee shall have no such election and the Note and this Mortgage shall
remain in effect if Mortgagor lawfully may pay for such stamps or such tax and
does in fact pay such tax when the same is due and payable.  Mortgagor further agrees to deliver to
Mortgagee, at any time upon written demand, evidence of citizenship and such
other evidence as may be required by any government agency having jurisdiction,
in order to determine whether the obligation secured hereby is subject to or
exempt from any such tax.

 

12.           Indemnification of Mortgagee Against Costs.  Mortgagor agrees to save Mortgagee harmless
from all costs and expenses, including reasonable attorneys’ fees and expenses
and all costs of a title search and preparation of a survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any
court or administrative body (including an action to foreclose or to collect
the Indebtedness) in and to which Mortgagee may be or become a party by reason
of this Mortgage, including but not limited to condemnation, bankruptcy,
probate and administration proceedings, as well as any other of the foregoing
in which a proof of claim is by law required to be filed or in which it becomes
necessary to defend or uphold the terms of this Mortgage.  All funds paid or expended by Mortgagee in
that regard, together with interest thereon from date of such payment at the
rate set forth in the Note, shall be a part of the Indebtedness and shall upon
notice to Mortgagor be immediately due and payable by Mortgagor to the
Mortgagee.  Any amounts not paid within
ten (10) days after a statement therefor has been sent to Mortgagor, shall
earn interest at the Default Rate stated in the Note, until the same is paid.

 

13.           Eminent Domain.

 

(a)           All
compensation, proceeds and awards paid to or received by Mortgagor in any
taking by eminent domain or conveyance in lieu thereof that may affect all or
any part of or interest in the Property (whether permanently or temporarily),
including severance and consequential damages and damages from a change in the
grade of any street, are hereby assigned to Mortgagee subject to the terms
hereof.  Mortgagor hereby appoints
Mortgagee as its attorney-in-fact, coupled with an interest, to collect and
receive the proceeds thereof and to give proper receipts therefor.  Mortgagor authorizes and empowers Mortgagee,
as such attorney-in-fact, at Mortgagee’s option, on behalf of Mortgagor
(notwithstanding the fact that the Indebtedness may not then be due and payable
or that the Indebtedness is otherwise adequately

 

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secured), to adjust or join with Mortgagor in
adjusting or compromising the claim for any such compensation, proceeds or
awards.  After deducting all costs of
collection, such compensation, proceeds and awards shall be applied, at the
option of Mortgagee, as follows:  (i) as
a credit upon any portion of the Indebtedness, as selected by Mortgagee; or (ii) to
restoring the Improvements, at the direction of Mortgagor.  If Mortgagor is not then in default under any
of the Loan Documents, Mortgagee shall allow the proceeds to be applied as
specified in alternative (ii) of the above sentence, with any excess
proceeds remaining after restoration of the Improvements to be applied as
specified in alternative (i).

 

(b)           In the event
Mortgagee elects not to apply such compensation, proceeds or awards to the
Indebtedness (or such application is not permitted above), Mortgagee shall
release any such amounts in the same manner and under the same conditions as
are specified above for the disbursement of insurance proceeds received in the
event of casualty loss to the Property.

 

(c)           Mortgagor
agrees to give Mortgagee immediate notice of the actual or threatened
commencement of any such eminent domain proceeding, and agrees to promptly send
to Mortgagee copies of any and all papers served or received by Mortgagor in
connection with any such proceedings. 
Mortgagor also agrees to make, execute and deliver to Mortgagee at any
time or times, upon request, free, clear and discharged of any encumbrance of
any kind whatsoever, any and all further assignments and/or other instruments
which are deemed necessary by Mortgagee for the purpose of validly and
sufficiently assigning to Mortgagee all such compensation, proceeds and awards
to Mortgagee.

 

14.           Advances by Mortgagee to Protect Security.

 

(a)           Upon default by
Mortgagor in performance of any of the terms, covenants or conditions in this
Mortgage, or upon a default of any party obligated under the Note or other Loan
Documents in the performance of any terms, covenants or conditions in such
documents, Mortgagee may, at its option and whether or not it elects to declare
the Indebtedness due and payable, pay such amounts and take such actions as
Mortgagee may deem necessary or appropriate to cure the default or protect the
value of the security for the Note. 
Mortgagee may take such actions and make such payments without the same
being a waiver of any other remedy.  In
connection with any such advance, Mortgagee, at its option, may and is hereby
authorized to obtain a report of title prepared by a title insurance company,
the cost of which shall be paid by Mortgagor upon demand.  Any amounts so paid by Mortgagee, all costs
incurred by Mortgagee under the authorizations contained in this Section, and
any other costs, charges or expenses incurred by Mortgagee in the protection of
the Property, with interest at the Default Rate stated in the Note, shall be
payable by Mortgagor to Mortgagee upon notice, and shall be additional
Indebtedness secured by this Mortgage.

 

(b)           In making any
payment authorized above relating to taxes, assessments, water rates, sewer
rentals and other governmental or municipal charges, fines, impositions or
liens, Mortgagee may rely upon any bill, statement or estimate procured from
the appropriate public office without inquiry into the accuracy of the bill,
statement or estimate, and without inquiring into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim

 

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thereof. 
Mortgagee, in making such a payment relating to any apparent or
threatened adverse title, lien, statement of lien, encumbrance, claim or
charge, shall be the sole judge of the legality or validity of same.

 

(c)           Notwithstanding
the above provisions, in the event that Mortgagee wishes to pay under authority
of this Section,  any lien, charge
or other such amount, Mortgagee shall give to Mortgagor at least ten (10) days’
notice prior to making any such advances, except in the case of emergency or
where the prior conduct of Mortgagor indicates that there is not a reasonable
possibility that Mortgagor would respond to the notice.   If Mortgagor, after receiving such notice, (i) advises
Mortgagee in writing within five (5) days after the date of the notice of
Mortgagor’s intent to contest its obligation to pay the liens, charges or other
amounts which Mortgagee proposes to pay; and (ii) Mortgagor furnishes
Mortgagee with cash, a bond, an irrevocable unconditional letter of credit or
other security satisfactory to Mortgagee in an amount equal to one and one-half
times the amount of such contested lien or charge, then in such event Mortgagee
shall not advance payment of such contested amounts.  In any event, if Mortgagor contests the
payment of such amounts, the amounts shall be paid prior to any foreclosure of
the lien or charge and prior to any other event which would jeopardize
Mortgagor’s title to the Property or the lien of this Mortgage.

 

15.           Mortgage Subordinate at Option of Mortgagee.  At the sole option of Mortgagee, this
Mortgage shall become subject and subordinate, in whole or in part, to any or
all leases of all or any part of the Property, upon the execution and recording
by Mortgagee of a unilateral declaration to that effect.  The subordination shall apply only with respect
to the leases specifically described by Mortgagee, shall not apply to other
interests in the Property, and specifically shall not apply to the priority of
this Mortgage over or any judgment liens, mechanic’s liens, tax liens or other
liens or charges affecting the Property after the date hereof.  In addition, the subordination to such leases
shall in no manner apply with respect to Mortgagee’s entitlement to any
insurance proceeds or any payments, awards or compensation made in any eminent
domain or condemnation proceedings or any payment received as a result of a
conveyance in lieu of condemnation.

 

16.           Proceeds Subrogated.  If any Indebtedness advanced by Mortgagee to
Mortgagor is used, directly or indirectly, to pay off, discharge or satisfy, in
whole or in part, any prior lien or encumbrance upon the Property or any part
thereof, then Mortgagee shall be subrogated to any security held by the holder
of such other lien or encumbrance, notwithstanding any release of the same from
the public records.

 

17.           Partial Releases by Mortgagee.  Mortgagee, without notice to Mortgagor,
without regard to the consideration, if any, paid therefor, and notwithstanding
the existence at that time of any inferior deeds of trust or other liens on the
Property, may release any part of the Property or other security described in
the Loan Documents and may release any person liable for any Indebtedness
without in any way affecting the priority of this Mortgage, to the full extent
of the remaining Indebtedness, on the remainder of the Property.  Mortgagee may also agree with any party
obligated for the Indebtedness or having any interest in the Property or other
security for the Indebtedness to extend the time for payment of any part or all
of the Indebtedness or to modify the terms for the payment thereof, or take additional
security for the payment of the

 

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Indebtedness. 
No such action or agreement will release or impair the lien or effect of
this Mortgage or bar Mortgagee from exercising any right, power or privilege
granted in this Mortgage or in any of the other Loan Documents, in the event of
any default or any subsequent default.

 

18.           Usury.  Nothing
contained in this Mortgage or the other Loan Documents shall be construed or
shall so operate either presently or prospectively to require Mortgagor to pay
interest at a rate greater than the rate which is now lawful for transactions
of this kind in the state identified on the first page, or require Mortgagor to
make any payment or do any act contrary to law. 
If the interest rate exceeds any applicable law relating to interest,
then this Mortgage and the Loan Documents shall be interpreted and construed to
require payment of interest only to the extent of such maximum lawful rate, not
to exceed the rate set forth in the Note or in this Mortgage, where applicable.

 

19.           Actions and Proceedings.  Mortgagee shall have the right (but not the
obligation) to appear in and defend any proceeding or action with respect to
the Property, and to bring any action or proceeding respecting the Property as
Mortgagee reasonably deems advisable, either in its own name or in the name of
and on behalf of Mortgagor.

 

20.           Sale of Property

 

(a)           Mortgagor
understands that Mortgagee, in making the loan evidenced by the Note, is
relying to a material extent upon the business expertise and net worth of
Mortgagor and upon its continuing interest in the Property.   Accordingly, Mortgagor shall not , without
Mortgagee’s prior written consent (which Mortgagee may withhold in its sole and
unfettered discretion), either directly or indirectly, voluntarily or
involuntarily:

 

(i)            sell, assign,
transfer, convey, or dispose of the Property, by installment sale contract or
otherwise, or grant any option for the purchase of the Property or any part
thereof;

 

(ii)           lease the
Property, other than individual tenant leases granted in the ordinary course of
business, or lease the Property (whether or not in the ordinary course of
business) with an option to purchase;

 

(iv)          further
encumber the Property, voluntarily or involuntarily, or by operation of law, or
allow to exist against the Property any lien, mortgage, deed of trust, or other
financial encumbrance; or

 

(i)            create or allow
the creation of any lien or security interest in any personal property,
fixtures or equipment included within the Property, except as referred to in
paragraph 1.

 

(b)           Any action described
in the above subsection shall be an Event of Default hereunder (as hereafter
defined), for which Mortgagee will be entitled to its remedies for default, 

 

10

 

as provided herein.  The word “Property”
as used herein shall have the full meaning earlier given, and specifically
shall include any parts or portions of the Property.

 

(c)           Whether or not
Mortgagee’s consent has been obtained, Mortgagor shall give immediate written
notice to Mortgagee of any conveyance, transfer or change of ownership of the
Property or of any interest described in this Section.

 

21.           Notices.  Any notice required or permitted to be given
hereunder must be in writing and given (a) by depositing same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested; (b) by delivering
the same in person to such party; (c) by transmitting a facsimile copy to
the correct facsimile phone number of the intended recipient; or (d) by
depositing the same into the custody of a nationally recognized overnight
delivery service addressed to the party to be notified.  In the event of mailing, notices shall be
deemed effective three (3) days after posting; in the event of overnight
delivery, notices shall be deemed effective on the next business day following
deposit with the delivery service; in the event of personal service or
facsimile transmissions, notices shall be deemed effective when delivered.  For purposes of notice, the addresses of the
parties shall be as set forth on the first page of this Mortgage.  From time to time either party may designate
another or additional addresses for all purposes of this Mortgage by giving the
other party no less than ten (10) days’ advance notice of such change of
address in accordance with the notice provisions hereof.

 

22.           Assignment of Leases, Rents and Profits.

 

(a)           Subject to any
prior liens of lenders referred to in paragraph 1, Mortgagor hereby assigns,
transfers and conveys to Mortgagee, as primary security for repayment of the
Note and satisfaction of Mortgagor’s obligations under the Loan Documents, all
right, title and interest of Mortgagor in and to all leases affecting the
Property, including any occupancy or residency agreements or assisted living or
care agreements (all of the above are collectively the “Leases”) and all rents, income, receipts,
revenues, issues and profits from or due or arising out of the Property.

 

(b)           Mortgagor (i) will
not execute any further assignment of any of its right, title or interest in
any Leases, rents, contracts and profits; (ii) will enforce the
performance and observance of the substantial and material covenants and
obligations of the tenants under any Leases; (iii) will not, except where
Mortgagor is the landlord and the tenant is in default thereunder, terminate or
consent to the cancellation or surrender of any Lease now existing or hereafter
to be made (except that any such Lease may be cancelled if promptly after the
cancellation Mortgagor as landlord enters into a new Lease with a new tenant
having a credit standing, in the reasonable judgment of Mortgagee, at least
equivalent to that of the tenant whose Lease was cancelled, on terms not less
favorable to Mortgagor than those contained in the cancelled Lease); (iv) will
not modify any such Lease where Mortgagor is the landlord to shorten the
unexpired Lease term decrease the amount of the rent and other charges payable
by the tenant thereunder; (v) will not accept prepayments of any
installments of rent to become due under any of Leases in excess of one month,
except prepayments in the nature of security for the performance of the lessees’
obligations thereunder; (vi) will not in any other manner impair the 

 

11

 

value of the Property or the security of this
Mortgage; (vii) will observe and perform each and every term to be
observed or performed by Mortgagor pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Property; and (viii) will
not permit any Lease to be subordinated to any deed of trust which is
subordinate to this Mortgage.

 

23.           Restrictions and Other Private Property Interests.

 

(a)           Mortgagor
represents and warrants that to the best of Mortgagor’s knowledge neither this
Mortgage, the Property, nor the contemplated use of the Improvements,
constitute a breach of, or a violation of, any covenants, conditions, easements
or restrictions, whether of record or not, affecting or binding upon the
Property, or alternatively that such breach or violation has been approved or
waived by all parties required by law to so approve or waive such breach or
violation.   Mortgagor covenants and
agrees that it will take all action necessary to prevent any such breach or
violation from hereafter occurring, and defend and indemnify Mortgagee from any
consequences of such a breach or violation.

 

(b)           Mortgagor shall
at all times faithfully and timely perform or cause to be performed all of the
terms, covenants and conditions on Mortgagor’s part to be performed, which are
contained in any restriction, agreement, easement, permit or other document
affecting the Property.  Mortgagor
covenants and agrees that it will not waive or modify any of the material terms
of any of the restrictions, agreements, easements, permits or other
instruments, or the rights or easements created thereby, or cancel or surrender
same, or release or discharge any party thereunder or person bound thereby of
or from terms, covenants or conditions thereof, or permit the release or
discharge of any party thereunder, without the prior written consent of
Mortgagee.  Mortgagor shall take all
necessary action to enforce the performance of all of the obligations of the
other parties to and the persons bound by such restrictions, agreements,
easements, or permits, or other documents.

 

(c)           Mortgagor will
promptly send to Mortgagee copies of all notices, advices, demands, requests,
consents, statements, approvals, disapprovals, authorizations, determinations,
satisfactions, waivers, designations, refusals, confirmations or denials which
it shall give or receive under any of the aforesaid agreements, easements,
permits and other documents.

 

24.           Changes in Zoning. 
Mortgagor covenants not to initiate, join in, or consent to any change
in any zoning ordinance, private restrictive covenants, or other public or
private restriction changing, limiting or restricting the uses which may be
made of the Property, without the prior written consent of Mortgagee in each
instance, which consent shall not be unreasonably withheld if such change is
not inconsistent with the current use of the Property and does not in Mortgagee’s
sole judgment diminish the security for the Indebtedness.

 

25.           Covenants to Run With Land.  All covenants contained in this Mortgage
shall run with the land until this Mortgage is released of record.

 

12

 

26.           Default and Remedies.

 

(a)           Each of the
following occurrences shall be a default hereunder (an “Event of Default”):

 

(i)            Failure of
Mortgagor to make any payment of interest or principal on the Note when the
same is due, whether at maturity or by acceleration or otherwise.

 

(ii)           Failure of
Mortgagor within ten (10) days after the date of a written notice from
Mortgagee of such breach, to promptly and completely observe and perform each
and every other obligation, covenant and agreement contained in the Note, in
the Mortgage, or in any of the other Loan Documents.  If the breach is intrinsically incapable of
being cured within such time, then in such case the breach shall constitute an
Event of Default only if Mortgagor does not (1) commence actions to cure
the breach within ten (10) days after the date of Mortgagee’s notice and (2) diligently
pursue the cure to completion thereafter. 
Nothing in the preceding sentence, however shall be interpreted to
require Mortgagee to send a notice with regard to satisfaction by Mortgagor of
any requirements set forth herein pertaining to insurance or taxes.

 

(iii)          Failure of
Mortgagor to promptly and completely observe and perform all of the terms,
covenants and conditions to be observed or performed by Mortgagor under any of
the other Loan Documents beyond the applicable grace periods specified therein,
if any.

 

(iv)          A trustee,
receiver or liquidator of the Property or of Mortgagor is appointed by order of
a court of competent jurisdiction and the appointment is not withdrawn or the
party dismissed within thirty days of the date of the appointment.

 

(v)           The filing by
any of the creditors of Mortgagor of a petition in bankruptcy against Mortgagor
or for the reorganization of Mortgagor pursuant to the Federal Bankruptcy Code
or any similar law, federal or state, and the same is not discharged within
sixty (60) days after the date of filing thereof.

 

(vi)          Mortgagor takes
or permits any of the following actions: (1) files a petition in
bankruptcy or, for an arrangement, or for reorganization pursuant to the
federal Bankruptcy Code or any similar law, federal or state; (2) files a
petition or answer consenting to, or acquiescing in, a reorganization,
arrangement, adjustment, composition, liquidation, dissolution or similar
relief, under any present or future statute, law or regulation; (3) is
adjudicated as a bankrupt; (4) is determined to be insolvent by a decree
of a court of competent jurisdiction; (5) makes an assignment for the
benefit of creditors; (6) admits its inability to pay its debts generally
as they become due; or (7) consents to the appointment of a receiver or
receivers of all or any part of its assets.

 

(vii)         The granting or
entry of a final judgment, order or decree for the payment of money against
Mortgagor, and Mortgagor’s failure to stay or discharge the same or cause it to
be stayed or discharged within thirty days after the date of a written notice
from Mortgagee, if in the judgment of Mortgagee the granting or entry adversely
affects Mortgagee’s security interest in the Property or Mortgagor’s ability to
manage and operate the Property.

 

13

 

(viii)        The
continuation of a default (after the expiration of any applicable grace period)
under any security or loan document evidencing or securing any junior financing
to which Mortgagee has previously given its consent.

 

(ix)           The
continuation of a default (after the expiration of any applicable grace period)
under any security or loan document evidencing or securing any senior financing
to which Mortgagee has previously given its consent.

 

(b)           During any time
an Event of Default exists, Mortgagor will pay to Mortgagee, upon written
demand by Mortgagee, the entire principal of the Note then outstanding, and all
accrued and unpaid interest thereon, and any other amounts payable hereunder or
under any of the Loan Documents, and also interest at the default rate on the
then unpaid principal of the Note and on all amounts Mortgagor is required to
pay pursuant to any provision of this Mortgage or any of the Loan
Documents.  In addition thereto,
Mortgagor shall pay such further amounts as shall be sufficient to cover the
reasonable costs and expenses of collection. 
This shall include all amounts due under to 735 ILCS 5/15-1510 and
1512.  In the event Mortgagor fails to
pay such amounts upon such demand, Mortgagee shall be entitled and empowered,
subject to the limitations, if any, set forth herein, to institute such action
or proceedings at law or in equity as may be necessary or desirable to
Mortgagee for the collection of the amounts due, and may prosecute any such
action or proceedings to judgment or final decree.  Mortgagee may enforce any such judgment or
final decree against Mortgagor and collect, out of the property of Mortgagor
wherever situated, as well as out of the Property in any manner provided by
law, monies adjudged or decreed to be payable.

 

(c)           Mortgagee shall
be entitled to recover judgment against Mortgagor before, after or during any
proceedings for the foreclosure of this Mortgage, and the right of Mortgagee to
recover such judgment shall not be affected by any entry or sale hereunder, or
by the exercise of any other right, power or remedy for the enforcement of
Mortgagee’s remedies under this Mortgage. In case of proceedings against
Mortgagor in insolvency or bankruptcy, or any proceedings for Mortgagor’s reorganization
or involving the liquidation of Mortgagor’s assets, then Mortgagee shall be
entitled to prove the whole amount of principal and interest due upon the Note
and other Indebtedness to the full amount thereof, without deducting therefrom
any proceeds obtained from the sale of the whole or any part of the
Property.  However, in no case shall
Mortgagee receive from the aggregate amount of the proceeds of the sale of the
Property and the proceeds of any other actions a greater amount than the amount
of the Indebtedness due from Mortgagor, including all principal, interest, and
reimbursements which constitute parts of the Indebtedness.

 

(d)           During all
times during which an Event of Default exists, Lender shall have the following
rights and remedies:

 

(i)            Lender may
declare the entire principal amount of the Note then outstanding, together with
accrued and unpaid interest thereon, and all other items of Indebtedness
hereunder, to be due and payable immediately, even if the same are not then due
and payable.

 

14

 

(ii)           Regardless of
whether Lender accelerates the Indebtedness as authorized above, Lender in
person or by agent may (1) enter upon, take possession of, manage and
operate the Property; (2) make or enforce (or if the same be subject to
modification or cancellation, modify or cancel) any or all of the Leases and
Contracts (the capitalized terms as used in this Section shall have the
same meanings as such terms are used in the Assignment of Leases, Rents and
Profits recorded simultaneously herewith) upon such terms or conditions as
Lender deems proper; (3) sign new Leases and Contracts in the name of
Lender or Borrower, evict existing tenants, and fix or modify rents and
payments under Contracts; (4) make repairs and alterations and do any acts
which Lender deems proper to protect the security hereof; (5) without
taking possession, in its own name or in the name of Borrower, sue for or
otherwise collect and receive the Rents and Profits, including those past due
and unpaid.  During the time of Lender’s
actions as permitted herein, Lender shall collect the Rents and Profits of the
Property and apply the same, less the costs and expenses of operation and
collection (including reasonable attorneys’ fees and expenses), to the
Indebtedness, in such order as Lender may determine.

 

(iii)          Upon request of
Lender, Borrower shall assemble and make available to Lender at the Real Estate
any of the Property which has been removed from the Real Estate.  The entering upon and taking possession of
the Property, the collection of any Rents and Profits, and the application of
the same as provided herein, shall not operate to cure or waive any default
previously or subsequently occurring, or affect any notice of default delivered
by Lender hereunder, or invalidate any act done pursuant to any such notice.

 

(iv)          Notwithstanding
possession of the Property by Lender or a receiver, and the collection, receipt
and application of Rents and Profits as described above, Lender shall be entitled
to exercise every right contained in this Mortgage or by law upon or after the
occurrence of a default.  Any of the
actions described herein may be taken by Lender either in person or by agent,
with or without bringing any action, and may be taken regardless of whether any
notice of default or election to sell has been given hereunder, and without
regard to the adequacy of the security for the Indebtedness.

 

(v)           Lender shall be
entitled to the appointment of a receiver by a court having jurisdiction, who
shall be entitled without notice to take possession of and protect the
Property, operate the same, collect the Rents and Profits therefrom, and
otherwise exercise any rights or authority granted to Lender in this Mortgage.  Lender’s right to the appointment of a
receiver shall continue regardless of the value of the Property as security for
the Indebtedness or the solvency of any person or corporation liable for the
payment of such amount, and shall exist to the full extent provided by law.  Notwithstanding the appointment of any
receiver, liquidator or trustee for Borrower, or of any of its property, or of
the Property, Lender shall be entitled to retain possession and control of all
Property now or hereafter held under this Mortgage, including, but not limited
to, the Rents and Profits.

 

(vi)          Lender may, at
its option, bring an action in any court of competent jurisdiction to foreclose
this instrument or to enforce any of the covenants and agreements hereof.

 

15

 

(vii)         Lender may, at
its option, cause this Mortgage to be foreclosed in the manner prescribed by
law.

 

(viii)        All of the
remedies of Lender hereunder or otherwise provided by law shall be concurrent
and cumulative, and may be exercised together or independently.  Expenses incurred by Lender, including
reasonable attorneys’ fees and expenses, shall be additions to the Indebtedness
secured hereby.  The rights and powers in
this Section shall be irrevocable and shall continue after sale hereunder
if Borrower continues to have any redemption rights with respect to the
Property (to the extent redemption rights are permitted hereunder).

 

(ix)           The failure of
Lender to exercise its right to accelerate the maturity of the Indebtedness or
to exercise any remedies hereunder in any one or more instances, or acceptance
by Lender of partial payments, shall not constitute a waiver of any default or
extend or affect the grace period, if any, provided herein.  Lender shall continue to have all of its
remedies as long as an Event of Default exists. 
Acceleration of maturity, once claimed hereunder by Lender, may, at the
option of Lender, be rescinded by written acknowledgment to that effect to
Borrower by Lender, but the tender and acceptance of partial payments alone
shall not in any way affect or rescind such acceleration of maturity, nor
extend or affect the grace period, if any.

 

(x)            No recovery of
any judgment by Lender and no levy of an execution under any judgment upon the
Property shall affect, in any manner or to any extent, the lien of this
Mortgage upon the Property, and any liens, rights, powers and remedies of
Lender shall continue unimpaired as before.

 

(xi)           In exercising
the remedies herein described or taking any of the actions which are authorized
herein, Lender will be acting solely and exclusively as agent for Borrower in
attempting to realize the maximum return from the Property and in attempting to
obtain payment to Lender of the amounts which Lender is to receive pursuant to
the Note.  The parties acknowledge that
in so doing, Lender will not be or be deemed to be an “owner” or “operator” of
the Property under any environmental statute, law, regulation or ordinance, and
will not be assuming any obligations of Borrower to fully comply with all such
statutes, laws, regulations or ordinances, as more particularly described in
this Mortgage.  Borrower will
specifically defend and indemnify Lender against any such liability, cost, loss
or expense.

 

(xii)          Should Lender
cause any of the Property to be sold as personal property, Lender may dispose
of any part thereof in any manner now or hereafter permitted by the Uniform
Commercial Code of the state of Illinois or in accordance with any other remedy
provided by law.  Any such disposition
may be conducted by an employee or agent of Lender.  Both Borrower and Lender shall be eligible to
purchase any part or all of such property at any such disposition.  Any such disposition may be either public or
private as Lender may so elect, subject to the provisions of the Uniform
Commercial Code of Illinois.  Expenses of
retaking, holding, preparing for sale, selling or the like shall include Lender’s
reasonable attorneys’ fees and legal expenses. 
Upon such default Borrower, upon demand of Lender, shall assemble such
personal property and make it available to Lender at the Real Estate, which
Borrower and Lender agree is a place which is deemed reasonably convenient to
them.  Lender shall give Borrower at 

 

16

 

least five (5) days’ prior written
notice of the time and place of any public sale or other disposition of such
property, or of the time at or after which any private sale or any other
intended disposition is to be made, and if such notice is sent to Borrower in
the manner notices are sent herein, it shall be deemed to constitute reasonable
notice to Borrower.

 

(xiii)         Should there be
a foreclosure sale of the Property or any part thereof which is real property
or which Lender has elected to treat as real property, the Lender shall receive
the proceeds of said sale out of which Lender shall pay (a) the costs and
expenses of foreclosing this Mortgage, and a reasonable attorneys’ fee; (b) to
the Borrower, its endorsees or assigns, upon the usual vouchers therefor, any
money required to be paid by Borrower under this Mortgage including, without
limitation, money advanced for ground rents, taxes, insurance, repairs,
judgments upon statutory lien claims and any other advances hereunder and
interest thereon at the Default Rate as defined in the Note; (c) the
amount unpaid on the Note, together with the interest accrued thereon at the
Default Rate, and all charges provided for herein; (d) all the other
amounts secured by this Mortgage and (e) the balance of such proceeds, if
any, shall be paid to the Borrower.  The
purchaser at any foreclosure sale shall not be obliged to look to the
application of the proceeds thereof.  If
the Lender, at its option, shall set aside any declared acceleration of
maturity of the Note, the terms and provisions therein stated and the
covenants, terms and conditions in the Note and this Mortgage shall revive and
continue with the same force and effect as if such acceleration had not
occurred.

 

(xiv)        The purchaser
at any foreclosure sale hereunder may disaffirm any easement granted or rental
or lease contract made in violation of any provision of this Mortgage, and may
take immediate possession of the Property free from, and despite the terms of,
such grant of easement and rental or lease contract.

 

(xv)         Borrower hereby
expressly waives any right which it may have to direct the order in which any
of the Property shall be sold in the event of any sale or sales pursuant
hereto.

 

(xvi)        To the extent
permitted by law with respect to the Indebtedness or any renewals or extensions
thereof, Borrower waives and renounces any and all homestead and exemption
rights; the benefit of all valuation and appraisement privileges; any rights
under stay or redemption statutes; and any moratoriums under or by virtue of
the constitution and laws of the state where the Property is located or of the
United States now existing or hereafter enacted.  This waiver includes a waiver of all rights
of redemption pursuant to 735 ILCS 5/15-1601b and 735 ILCS 5/15-1602.

 

27.           Environmental Representations and Warranties of Mortgagor.

 

(a)           Mortgagor
covenants, represents and warrants to Mortgagee that to its actual knowledge:

 

(i)            The Property is
not being used to refine, produce, store, handle, transfer, process or
transport Hazardous Material or any pollutant or contaminate as those terms

 

17

 

are defined above or in the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA), 42 U.S.C.A. § 9601 (14);

(ii)           Mortgagor shall not in the future use all or any
part of the Property for the purpose of refining, producing, storing, handling,
transferring, processing, or transporting any pollutants or contaminates or any
Hazardous Material or petroleum products in any manner which would result in a
release or threatened release which could require response under applicable
Environmental Regulations, nor shall Mortgagor permit or suffer any other party
to use all or any part of its Property for any purpose forbidden herein.

 

(iii)          No violation of any Environmental Regulations now
exists regarding the Property.

 

(b)           As used herein, the term “Hazardous Material” means any radioactive,
hazardous, or toxic substance, material, waste, chemical, or similar item, the
presence of which on the Property, or the discharge, emission, release, or
threat of release of which on or from the Property, is prohibited or otherwise
regulated by any laws, ordinances, statutes, codes, rules, regulations, orders,
and decrees of the United States, the State of, and all local or governmental
or regulatory authorities exercising jurisdiction over Mortgagor or the Property,
or which require special handling in collection, storage, treatment, or
disposal by any such laws or requirements. 
The term Hazardous Material includes, but is not limited to, any
material, substance, waste or similar item which is now or hereafter defined as
a hazardous material, substance or term of similar meaning under the laws of
the State of, the Federal Water Pollution Control Act (33 U.S.C. Section 1317),
the Federal Resource Conservation and Recovery Act (RCRA) (42 U.S.C. Section 6901,
et seq.), the Federal
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
and (SARA) (42 U.S.C. Section 9601, et seq.),
any rules or regulations adopted by any administrative agency, including,
but not limited to, the Environmental Protection Agency, the Department of
Transportation, and any similar state or local agency having jurisdiction over
the Property or the Hazardous Material, whether or not such rules and
regulations have the force of law. The term  “Environmental Regulations” as
used herein means any federal, state or local laws, statutes, codes,
ordinances, regulations, requirements or rules relating to any
environmental matters, including the removal, handling, and disposal of
hazardous or toxic waste materials.

 

28.           Environmental
Covenants of Mortgagor.

 

(a)           Mortgagor shall furnish to
the United States Environmental Protection Agency or any lawful authority all
information lawfully requested by them with respect to the operations of the
Property.  However, nothing herein shall
operate to prevent Mortgagor from contesting any such information request by
all lawful means.

 

(b)           Mortgagor shall operate its
business on the Property in a careful and prudent manner, and shall require the
tenants or occupants to avoid and prevent any “release,” as defined in CERCLA §
9601 (22), of any Hazardous Material on or about the Property into any waters
or onto any lands, or air unless such release or disposal is pursuant to and in
compliance with all applicable Environmental Regulations.

 

18

 

(c)           Mortgagor shall give written
notice to Mortgagee immediately upon Mortgagor’s acquiring knowledge of the
presence of any Hazardous Material on the Property or of any Hazardous Material
contamination thereon, with a full description thereof.

 

(d)           Mortgagor shall immediately
advise Mortgagee in writing of any notices received by Mortgagor or its agents,
contractors, authorized representatives and employees, alleging that the
Property contains Hazardous Material or contamination thereof, or that a
violation or potential violation of any Environmental Regulation laws,
ordinances, rules or regulations exists on or at the Property, or because
of actions by Mortgagor, any tenants, or the agents of the same.

 

(e)           Mortgagor shall immediately
advise Mortgagee in writing of all claims made or threatened by any third party
against Mortgagor, its agents, contractors, authorized representatives and
employees, or the Property relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Material pertaining
to the Property.

 

(f)            Mortgagor shall immediately
advise Mortgagee in writing upon Mortgagor’s acquiring knowledge of any
discovery by Mortgagor’s agents, contractors, authorized representatives or
employees, of any occurrence or condition on the Property or on any real
property adjoining or in the vicinity of the Property which does or  could cause the Property to contain Hazardous
Material or otherwise be in violation of any Environmental Regulations, or
cause the Property to be subject to any restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Regulations.

 

(g)           At any time, and from time
to time, during the term of this Mortgage, Mortgagee may notify Mortgagor in
writing that it desires a site assessment or environmental audit (“Audit”) of the Property to be made.  At any time thereafter Mortgagor shall cause
such an Audit to be made of the Property at Mortgagor’s sole expense.  Such Audit(s) shall be performed in a
manner reasonably calculated to confirm and verify compliance with the
provisions of this Mortgage.  Mortgagor
covenants to reasonably cooperate with the persons conducting the Audit to
allow entry and reasonable access to all portions of the Property for the
purpose of the Audit, to supply the auditors with all available historical and
operational information regarding the Property as may reasonably be requested
by the auditors, and to make available for meetings with the auditors
appropriate personnel and tenants having knowledge of the matters relevant to
the Audit.  Mortgagor covenants to
comply, at its own cost and expense, with all recommendations contained in the
Audit, including any recommendation for additional testing and studies to
detect the presence of Hazardous Material, or to otherwise confirm and verify
Mortgagor’s compliance with the provisions of this Mortgage, to the extent
required by Mortgagee.

 

29.           Mortgagor’s
Obligations to Remedy Environmental Matters.

 

(a)           In the event any local
governmental authority, any state or the federal government, or any agency of
either, including, but not limited to, the United States Environmental
Protection Agency, notifies Mortgagor that an investigation is being or will be
conducted regarding the Property or that any “removal” or “remedial action” (as
these terms are

 

19

 

defined in 42 U.S.C. §§ 9601 (23) and (24)
(or successor legislation), or any clean-up operations of any kind or nature
are necessary to be performed on the Property, or in the event any of such
authorities commence, perform or complete any clean-up operation, then
Mortgagor shall notify Mortgagee thereof and the Mortgagor shall have the right
to contest, by any lawful means, (a) the determination of such
governmental authority that such clean-up operation is necessary, (b) the
means or methods of clean-up proposed, ordered or undertaken by such
governmental authority, (c) the extent of the clean-up proposed, ordered
or undertaken by such governmental authority, or (d) any other matter
respecting or relating to the clean-up proposed, ordered or undertaken by such
governmental authority.  However, prior
to Mortgagor’s commencement of such contest Mortgagor shall notify Mortgagee of
its intent to contest such items, and Mortgagee shall determine whether such
contest may cause sufficient risk to either the environment or the impairment
of the Property.  Mortgagor may proceed
with such contest pending Mortgagee’s determination, but if Mortgagee determines
that it is necessary to insure the protection of environment or the Property
during such contest, Mortgagor shall provide to Mortgagee an amount sufficient
to perform and complete the work, and to reimburse Mortgagee for any clean-up
operations which has been or may be required to be performed.  These funds shall be held in an interest
bearing escrow account, with the interest to be accumulated in the account
until the work is completed.  In lieu of
such a cash deposit, the Mortgagor may provide a bond satisfactory to
Mortgagee, or other security as Mortgagee may find satisfactory.

 

(b)           Mortgagor shall also have
the right to seek contribution, indemnity or any other legal right, remedy or
recourse which Mortgagor has or may have against any party except Mortgagee or
its officers, agents or employees.  Upon
the entry of any final, nonappealable judgment (or the execution of a consent
decree or other agreement between Mortgagor and such governmental authority)
requiring Mortgagor to perform any clean-up operation on the Property, or in
the event Mortgagor does not contest the clean-up ordered or undertaken by such
governmental authority, then Mortgagor shall begin the clean-up operation and
notify Mortgagee of the same, within five (5) days after (i) Mortgagor’s
receipt of notice from such governmental authority that such clean-up is
required, (ii) the commencement of such clean-up operation by such
governmental authority, whichever is earlier, or (iii) the time periods
set forth in the judgment, consent decree or other agreement.  Mortgagor shall promptly do the following as
appropriate:

 

(c)           begin performance of the clean-up operation;

 

(d)           cooperate with any governmental authority conducting
any clean-up operation and reimburse said authority for the cost thereof if
required by law to do so; and

 

(e)           fully reimburse any other party in accordance with
said final nonappealable judgment for any clean up operation performed as
required by law and obtain a release from such party and furnish Mortgagee a
copy of such release.

 

(f)            If Mortgagor fails to remove
any Hazardous Material or otherwise comply with the Environmental Regulations,
Mortgagee may, after notice to Mortgagor and the expiration of any cure period
provided in this Mortgage, declare an Event of Default of this Mortgage and do
whatever is necessary to either eliminate such Hazardous Material from the

 

20

 

Property or otherwise cause compliance with
the Environmental Regulations, in addition to exercising the other remedies of
Mortgagee hereunder for a breach of this Mortgage.  All losses, costs, damages, claims, and
expenses incurred by Mortgagee on account of Mortgagor’s failure to perform the
obligations described in this Mortgage shall be immediately due and payable
with interest thereon at  the
Default Rate specified in the Note.

 

(g)           Mortgagor acknowledges that
in the event any Hazardous Material is removed from the Property by either
Mortgagor or by Mortgagee, the Environmental Protection Agency Generatory
Identification Number used on the waste manifest such Hazardous Material
shall  be in the name of the Mortgagor,
or Mortgagor’s agent (other than Mortgagee), shall assume all of Mortgagee’s
potential and actual liability for the removal and disposal of such Hazardous
Material.  Mortgagor shall give and
hereby grants to Mortgagee, its agents and employees access to the Property,
and hereby specifically grants the Mortgagee a license, effective upon
expiration of the applicable cure period, if any, to remove such materials in
order to comply with Environmental Regulations. 
Notwithstanding the foregoing, Mortgagor shall not be in default
hereunder, and the Mortgagee shall not have the right to accelerate the Indebtedness,
so long as Mortgagor commences the clean-up operation within the time periods
set forth above and thereafter diligently prosecutes such clean-up operation to
completion.

 

(h)           In exercising any of the
remedies provided herein or taking any of the actions which are authorized
herein, Mortgagee will be acting solely and exclusively as agent for Mortgagor
in attempting to realize the maximum return from the Property and in attempting
to obtain payment to Mortgagee of the amounts which Mortgagee is to receive
pursuant to the Note.  The parties
acknowledge that in so doing, Mortgagee will not be or be deemed to be an “owner”
or “operator” of the Property under any Environmental Regulation, and will not
be assuming any obligations of Mortgagor to fully comply with the Environmental
Regulations.  Mortgagor  will specifically defend and indemnify
Mortgagee against any such liability, cost, loss or expense.

 

30.           Environmental
Indemnification.  Mortgagor
hereby agrees to defend, indemnify and hold Mortgagee (including its
successors, assigns, employees, contractors, agents, officers and directors)
harmless from, any and all actions, loss, liability, damage, cost or expense
occasioned by, resulting from, or consequent to any Hazardous Material or
Hazardous Material contamination on the Property; any releases or discharges of
Hazardous Material from the Property; any manufacturing, treating, storing,
maintaining, holding, handling, transporting, spilling, leaking or dumping of
Hazardous Material on, from or at the Property; any other violation of
Hazardous Material laws, ordinances, rules and regulations; any claim or
assertion that any Hazardous Material or Hazardous Material contamination is
located on the Property; any claim that any such activities or violations have
been, or are being, engaged in on the Property; or any other failure or alleged
failure of Mortgagor, Mortgagor’s agents, contractors, authorized
representatives or employees, the Property, to comply with the provisions of
this Agreement.  This indemnity shall be
enforceable notwithstanding any attempts by Mortgagor to exercise due diligence
in ascertaining whether or not any of the events outlined above affect the
Property.  The loss, liability, damage,
cost, or expense which is covered by this indemnity shall include, without
limitation, all foreseeable consequential damages; the costs of any required or
necessary repair, cleanup or detoxification of the Property, including the soil
and ground water thereof, and the preparation and implementation of any
closure, remedial or other required plans;

 

21

 

damage to any natural resources; and all
reasonable costs and expenses incurred by Mortgagee in connection with the
above, including but not limited to attorneys’ and consultants’ fees.  It is the intent of Mortgagor and Mortgagee
that Mortgagee shall have no liability or responsibility for damage or injury
to human health, the environment or natural resources caused by, for abatement
and/or clean-up of, or otherwise with respect to Hazardous Material by virtue
of the interest of Mortgagee in the Property created hereby, or as the result
of Mortgagee exercising any of its remedies hereunder, including but not
limited to Mortgagee’s becoming the owner of the Property by foreclosure or
conveyance in lieu of foreclosure.  Any
amounts covered by the foregoing indemnification shall be added to the
Indebtedness otherwise secured by the Mortgage and shall bear interest from the
date incurred at  the Default Rate
as defined in the Note, and shall be payable on demand and be a part of the
Indebtedness secured hereby.  Such
expenses shall be reimbursed by Mortgagor to Mortgagee as and when such
expenses are incurred, and Mortgagee shall not be required to wait until such losses,
costs, damages, liabilities or expenses have been reduced to judgment.

 

31.           Uniform
Commercial Code Security Agreement.  This Mortgage is intended to be a security
agreement pursuant to the Uniform Commercial Code for any of the items
specified above as part of the Property which, under applicable law, may be
subject to a security interest pursuant to the Uniform Commercial Code, and
Mortgagor hereby grants Mortgagee a security interest in said items.  Borrower agrees that Mortgagee may file this
Mortgage, or a reproduction thereof, in the real estate records or other
appropriate index, as a financing statement for any of the items specified
above as part of the Property, and Mortgagor hereby authorizes Mortgagee to do
so.  Any reproduction of this Mortgage or
of any other security agreement or financing statement shall be sufficient as a
financing statement.  In addition,
Mortgagor hereby authorizes Mortgagee to prepare and file any and all financing
statements, as well as extensions, renewals and amendments thereof, and
reproductions of this Mortgage in such form as Mortgagee may require, to
perfect a security interest with respect to said items in any public offices or
records as Mortgagee may determine.  Borrower
shall pay all costs of filing such financing statements and any extensions,
renewals, amendments and releases thereof, and shall pay all reasonable costs
and expenses of any record searches for financing statements which Mortgagee
may reasonably require.  Without the
prior written consent of Mortgagee, Mortgagor shall not create or suffer to be
created pursuant to the Uniform Commercial Code any other security interest in
said items, including replacements and additions thereto.  Upon Mortgagor’s breach of any covenant or
agreement of Mortgagor contained in this Mortgage including the covenants to
pay when due all sums secured by this Mortgage, Mortgagee shall have the
remedies of a secured party under the Uniform Commercial Code and, at Mortgagee’s
option, may also invoke the remedies provided in this Mortgage as to such
items.  In exercising any of said
remedies, Mortgagee may proceed against the items of real property and any
items of personal property specified above as part of the Property separately
or together and in any order whatsoever, without in any way affecting the
availability of Mortgagee’s remedies under the Uniform Commercial Code or of
the remedies provided in this Mortgage.

 

32.           Merger.  There shall be no merger of this Mortgage or
any other document securing the Note with the fee estate of the Real Estate by
reason of the fact that the same party may hold or acquire, directly or
indirectly, the Note, this Mortgage or any other document securing the Note and
at the same time be the owner of the fee estate of the Property or thereafter

 

22

 

acquire the fee estate of the Real Estate, or
by reason of the fact that the same party may hold or acquire, directly or
indirectly, the fee estate of the Real Estate and at the same time be the owner
and holder of the Note, this Mortgage or any other instruments securing the
Note or thereafter acquire the Note, this Mortgage or any other instrument
securing the Note.

 

33.           Miscellaneous.

 

(a)           In the event of a conflict
between the terms, covenants and conditions of this Mortgage and those of any
other Loan Document, the terms, covenants and conditions of the document which
shall enlarge the interest of Mortgagee in the Property, afford the Mortgagee
greater financial security in the Property and/or assure payment of the
Indebtedness in full, shall control.

 

(b)           The headings and captions of
various paragraphs of this Mortgage are for convenience only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.

 

(c)           In the event any one or more
of the provisions contained in this Mortgage or in the Note or in the Loan
Documents shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Mortgage or Note or other Loan Document, but
this Mortgage or Note or other Loan Document shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein or
therein.

 

(d)           This Mortgage, and the
rights of enforcement hereunder shall, without regard to the place of contract
or payment, be construed and enforced according to the laws of the state where
the Property is located.

 

(e)           Time is of the essence of
this Mortgage, and the waiver of the options or obligations secured hereby
shall not at any time thereafter be held to be an abandonment of such
rights.  Notice of the exercise of any
option granted to Mortgagee herein, or in the Note, is not required to be
given, except as otherwise provided herein.

 

(f)            The covenants herein
contained are joint and several and shall bind, and the benefits and advantages
thereof shall also inure to the benefit of, the respective successors and
assigns of the parties.

 

(g)           Whenever used, the singular
number shall include the plural, the plural the singular and the use of any
gender shall include all genders.

 

34.           Loss of
Note.  In the event the Note is
mutilated, destroyed, lost or stolen, Mortgagor shall deliver to Mortgagee in
substitution therefor a new promissory note containing the same terms and
conditions as the Note, with a notation thereon of the unpaid principal and
accrued but unpaid interest.  Mortgagor
shall be furnished with reasonably satisfactory evidence of the mutilation,
destruction, loss or theft of the Note, and also such security of indemnity as
may be reasonably requested by Mortgagor.

 

23

 

35.           Waiver of
Trial by Jury.  To the
extent permitted by law, Mortgagor and Mortgagee hereby waive trial by jury in
any action, proceeding or counterclaim brought by either party against the
other on any matter arising out of or in any way connected with this Mortgage,
and any other loan or security document given in connection herewith, the
relationship of Mortgagor and Mortgagee, or Mortgagor’s use and occupancy of
the Property.

 

36.           Illinois
Collateral Protection Act.  Pursuant to the requirements of the Illinois
Collateral Protection Act, Mortgagor is hereby notified as follows:  Unless Mortgagor provides Mortgagee with
notice of the insurance coverage required by this Mortgage, Mortgagee may
purchase insurance at Mortgagor’s expense to protect Mortgagee’s interest in
the Property.  This insurance may, but
need not, protect Mortgagor’s interests. 
The coverage that Mortgagee purchases may not pay any claim that
Mortgagor may make or any claim that is made against Mortgagor in connection
with the Property.  Mortgagor may cancel
any insurance purchased by Mortgagee, but only after providing Mortgagee with
evidence that Mortgagor has obtained insurance as required by this
Mortgage.  If Mortgagee purchases
insurance for the Property, Mortgagor will be responsible for the costs of that
insurance, including interest and any other charges that Mortgagee may impose
in connection with the placement of such insurance, until the effective date of
the cancellation or expiration of any such insurance.  Without limitation of any other provision in
this Mortgage, the cost of such insurance shall be added to the obligations
secured hereby.  The cost of such
insurance may be more than the cost of insurance Mortgagor may be able to
obtain on its own.

 

NOW, THEREFORE, if the Note
and the interest thereon and the Indebtedness be paid when due and the said
agreements be faithfully performed as aforesaid, then these presents, including
the lease hereinabove set forth, shall cease and be void, and the Property
shall be released at the cost of the Mortgagor.

 

IN WITNESS WHEREOF, the
undersigned has executed this Mortgage or caused this Mortgage to be executed
by their duly authorized representatives the day and year first above written.

 

	
  Mortgagor:

  	
  MGP
  INGREDIENTS, INC., a Kansas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
  Print
  Name:

  	
  Timothy
  W. Newkirk

  
	
   

  	
  Print Title:

  	
  President & CEO

  
				

 

24

 

	
  STATE
  OF KANSAS

  	
  )

  
	
   

  	
  )
  ss.

  
	
  COUNTY
  OF ATCHISON

  	
  )

  

 

I,
Marta L. Myers a Notary Public in and for the said County, in the State
aforesaid, DO HEREBY CERTIFY that                                  ,
personally known to me to be the Timothy W. Newkirk of  MGP Ingredients, Inc., a Kansas
corporation which is authorized to do business in Illinois, who is personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that as
such officer, he signed and delivered the said instrument, pursuant to
authority, given by the board of directors of the corporation as his free and
voluntary act, and as the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.

 

Given
under my hand and official seal, this 27th day of March,
2009.

 

 

	
   

  	
  /s/
  Marta L. Myers 

  
	
   

  	
  Notary
  Public

  

 

Commission
expires:

01/23/2010

 

25

 

Exhibit “A”

 

Legal
Description of Pekin, Illinois Property

Mortgage
from MGP Ingredients, Inc. to Cloud L. Cray, Jr.

 

Real property in the County of Tazewell, State of
Illinois, described as follows:

 

Tract I:

 

A part of the Northeast Quarter of Fractional Section 9,
and a part of Lots 6 and 8 in the Southeast Quarter of Fractional Section 4,
said Lots 6 and 8 being shown on plat recorded on page 57 of Plat Book “B”,
in the Recorder’s Office of Tazewell County, Illinois, all being in Township 24
North, Range 5 West of the Third Principal Meridian, Tazewell County, Illinois,
and more particularly described as follows:

 

Commencing at the Northeast corner of said Northeast
Quarter of Fractional Section 9; thence South 89 degrees 29 minutes 14
seconds West, along the North line of said Fractional Section 9, a
distance of 1,629.48 feet to the place of beginning; thence from said place of
beginning South 20 degrees 05 minutes 14 seconds West a distance of 13.41 feet;
thence South 86 degrees 48 minutes 22 seconds East a distance of 267.42 feet;
thence South 00 degrees 56 minutes 03 seconds West a distance of 159.82 feet to
the North line of The Quaker Oats Company by deed recorded in Book 2045, page 72,
of the Tazewell County Recorder’s Office; thence South 89 degrees 27 minutes 16
seconds West along said North line a distance of 104.33 feet; thence South 00
degrees 56 minutes 03 seconds West along the West line of The Quaker Oats
Company property as described in aforementioned deed, a distance of 253.00 feet
to the South line of The American Distilling Company property; thence South 89
degrees 27 minutes 16 seconds West along the South line of The American
Distilling property, a distance of 850.76 feet to the Southeast corner of a
parcel conveyed by The American Distilling Company to Pekin River and Warehouse
Terminal, Inc. by deed recorded in Book 2351, page 208, of the
Tazewell County Recorder’s Office; thence North 25 degrees 40 minutes 22
seconds West along Easterly line of said parcel, a distance of 371.70 feet,
thence North 00 degrees 02 minutes 54 seconds West along Easterly line of said
parcel, a distance of 106.63 feet to the South line of said Fractional Section 4;
thence continuing North 00 degrees 02 minutes 54 seconds along Easterly line of
said parcel 77.64 feet to the Northerly corner of Pekin River and Warehouse
Terminal Inc. property, and also being a point on the Northwesterly line of Lot
8 as recorded in Plat Book “B”, page 57, of the Tazewell County Recorder’s
Office; thence North 46 degrees 59 minutes 11 seconds East along the
Northwesterly line, of said Lot 8 a distance of 1,110.92 feet; thence South 43
degrees 00 minutes 54 seconds East a distance of 280.47 feet; thence South 42
degrees 00 minutes 08 seconds West, a distance of 188.94 feet; thence South 19
degrees 51 minutes 12 seconds West, a distance of 276.07 feet; thence South 69
degrees 54 minutes 46 seconds East, a distance of 148.90 feet; thence South 20
degrees 05 minutes 14 seconds West, a distance of 182.59 feet to the place of
beginning; situate, lying and being in the County of Tazewell and State of
Illinois.

 

26

 

Tract II:

 

A part of the Northeast Quarter of Fractional Section 9,
and a part of Lots 6 and 8 in the Southeast Quarter of Fractional Section 4,
said Lots 6 and 8 being shown on plat recorded in page 57 of Plat Book “B”
in the Recorder’s Office of Tazewell County, Illinois, all being in Township 24
North, Range 5 West of the Third Principal Meridian, Tazewell County, Illinois
and more particularly described as follows:

 

Commencing at the Southeast corner of the Southeast
Quarter of said Fractional Section 4; thence South 89 degrees 29 minutes
14 seconds West, along the South line of the Southeast Quarter of said
Fractional Section 4, a distance of 1,020.92 feet to a concrete monument
being the Place of Beginning for the Tract herein being described; thence North
37 degrees 03 minutes 04 seconds East a distance of 1,013.11 feet; thence North
57 degrees 55 minutes West a distance of 292.65 feet to the Northwesterly
right-of-way line of South Front Street; thence North 29 degrees 56 minutes 48
seconds East, along the Northeasterly right-of-way line of South Front Street,
a distance of 481.39 feet to a concrete monument; thence North 46 degrees 54
minutes 36 seconds West a distance of 263.31 feet to a point on the
Northeasterly line of Lot 6 as recorded in Plat Book “B”, page 57, of the
Tazewell County Recorder’s Office; thence North 24 degrees 46 minutes 48
seconds West, along the Northeasterly line of said Lot 6 a distance of 35.6
feet; thence North 87 degrees 04 minutes 48 seconds West a distance of 214.55
feet to a point on the Northwesterly line of said Lot 6; said point being 200
feet from the Northerly corner of said Lot 6; thence South 46 degrees 59
minutes 11 seconds West, along the Northwesterly line of said Lot 6 and Lot 8
as recorded in Plat Book “B”, page 57 of the Tazewell County Recorder’s
Office, a distance of 1,146.23 feet to the Northerly corner of Tract I
previously described; thence South 43 degrees 00 minutes 54 seconds East, along
said Tract I, a distance of 280.47 feet; thence South 42 degrees 00 minutes 08
seconds West, along said Tract I, a distance of 188.94 feet; thence South 19
degrees 51 minutes 12 seconds West, along said Tract I, a distance of 276.97
feet; thence South 69 degrees 54 minutes 46 seconds East, along said Tract I, a
distance of 148.90 feet; thence South 20 degrees 05 minutes 14 seconds West,
along said Tract I, a distance of 196.00 feet; thence South 86 degrees 48
minutes 22 seconds East, along said Tract I, a distance of 267.42 feet; thence
South 00 degrees 56 minutes 03 seconds West, along said Tract I, a distance of
159.82 feet to the property line of Quaker Oats Company; thence North 89
degrees 27 minutes 16 seconds East, along said property line a distance of
345.67 feet; thence North 00 degrees 56 minutes 03 seconds East, along said
property line, a distance of 189.47 feet of the Place of Beginning; situate, lying
and being in the County of Tazewell and State of Illinois.

 

27Exhibit
4.8.4

 

SUBORDINATION AGREEMENT

 

THIS
SUBORDINATION AGREEMENT (“Agreement”),
dated as of July 17, 2009, is made by and between the CLOUD L. CRAY, JR.
TRUST, under an agreement dated October 25, 1983 (the “Subordinated Creditor”), and UNION STATE
BANK OF EVEREST DBA BANK OF ATCHISON USB (with its successors and
assigns, the “Senior Lender”).

 

MGP
Ingredients, Inc., a Kansas corporation (“Ingredients”),
is now or hereafter may be indebted to the Senior Lender on account of loans or
the other extensions of credit or financial accommodations from the Senior
Lender to Ingredients, or to any other person under the guaranty or endorsement
of Ingredients.

 

The
Subordinated Creditor has entered into certain financial accommodations with
Ingredients and Midwest Grain Pipeline, Inc., a Kansas corporation, a
wholly owned subsidiary of Ingredients (“Pipeline”).

 

As
a condition to making any loan or extension of credit to Ingredients, the
Senior Lender has required that the Subordinated Creditor (i) subordinate
the payment of the Subordinated Note and the Subordinated Creditor’s other
financial accommodations to the payment of any and all indebtedness of
Ingredients to the Senior Lender and (ii) subordinate its Liens in the
Senior Collateral to the Liens of the Senior Lender in the Senior
Collateral.  Assisting Ingredients in
obtaining credit accommodations from the Senior Lender and subordinating his  interests pursuant to the terms of this Agreement are in
the Subordinated Creditor’s best interest.

 

ACCORDINGLY,
in consideration of the loans and other financial accommodations that have been
made and may hereafter be made by the Senior Lender for the benefit of
Ingredients, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Subordinated Creditor hereby
agrees as follows:

 

1.                                       Definitions. As used
herein, the following terms have the meanings set forth below:

 

“Borrower Default” means a Default or Event of Default as
defined in any agreement or instrument evidencing, governing, or issued in
connection with Senior Lender Indebtedness, or any default under or breach of
any such agreement or instrument.

 

“Cray Collateral”
means all collateral now or hereafter securing payment of the Subordinated
Indebtedness, including all proceeds thereof.

 

“Cray Filing” shall mean any UCC-1 filed with the Kansas
Secretary of State which shows Ingredients as “Debtor” and Subordinated
Creditor as “Secured Party and that certain Mortgage, Assignment of Leases,
Security Agreement and Fixture Filing Financing Statement given by Ingredients
to Subordinated Creditor related to certain property in Atchison, Kansas
described in Exhibit A attached hereto and incorporated 

 

 

herein by this reference,
which was recorded 3/30/09 in the office of the Recoreder of Deeds in Atchison
County, Kansas, book 571, page 615-647.

 

“Lien” means any security interest,
mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention
agreement or analogous instrument or device, including the interest of each
lessor under any capitalized lease and the interest of any bondsman under any
payment or performance bond, in, of or on any assets or properties of a person,
whether now owned or hereafter acquired and whether arising by agreement or
operation of law.

 

“Senior Collateral” means all collateral
now or hereafter securing payment of the Senior Lender Indebtedness, including
all proceeds thereof.

 

“Senior Lender Indebtedness” is used
herein in its most comprehensive sense and means any and all advances, debts,
obligations and liabilities of Ingredients to the Senior Lender, heretofore,
now or hereafter made, incurred or created, whether voluntary or involuntary
and however arising, whether due or not due, absolute or contingent, liquidated
or unliquidated, determined or undetermined, including under any swap,
derivative, foreign exchange, hedge, deposit, treasury management or other
similar transaction or arrangement at any time entered into by the Ingredients
with the Senior Lender, and whether Ingredients may be liable individually or
jointly with others, or whether recovery upon such Indebtedness may be or
hereafter becomes unenforceable.

 

“Subordinated Indebtedness” means all obligations arising
under the Subordinated Note and each and every other debt, liability and
obligation of every type and description which Ingredients may now or at any
time hereafter owe to the Subordinated Creditor, whether such debt, liability
or obligation now exists or is hereafter created or incurred, and whether it is
or may be direct or indirect, due or to become due, absolute or contingent,
primary or secondary, liquidated or unliquidated, or joint, several or joint
and several.

 

“Subordinated Note” means the Subordinated Secured Promissory
Note made by Ingredients and Pipeline dated March 27, 2009, payable to the
order of the Subordinated Creditor in the original principal amount of
$2,000,000, together with all amendments, renewals, extensions and
modifications thereof and any note or notes issued in substitution therefore.

 

2.                                       Subordination.  The Subordinated Creditor hereby agrees that
the payment and performance of all of the Subordinated Indebtedness is hereby
expressly subordinated to the payment and performance of the Senior Lender
Indebtedness and regardless of any priority otherwise available to the
Subordinated Creditor by law or by agreement, the Senior Lender shall hold a
first priority Lien in the Senior Collateral, and any Lien claimed therein by
the Subordinated Creditor, including but not limited to the Liens evidenced by
the Cray Filing, shall be and remain fully subordinate for all purposes to the
Lien of the Senior Lender in the Senior Collateral for all purposes
whatsoever.  The Subordinated
Indebtedness shall continue to be 

 

2

 

subordinated
to the Senior Lender Indebtedness even if the Senior Lender Indebtedness is
deemed unsecured, under-secured, subordinated, avoided or disallowed under the
United States Bankruptcy Code or other applicable law. Notwithstanding the
forgoing the Subordinated Creditor’s Lien in any Cray Collateral (other than
the Senior Collateral) is not subordinated hereunder nor is the Subordinated
Creditor’s right to received any proceeds therefrom.

 

3.                                       Payments.  Until all of the Senior Lender Indebtedness
has been indefeasibly paid and performed in full and the Senior Lender has
released its Lien in the Senior Collateral, the Subordinated Creditor shall
not, without the Senior Lender’s prior written consent, demand, receive or
accept any payment (whether of principal, interest or otherwise) from
Ingredients in respect of the Subordinated Indebtedness, or exercise any right
of or permit any setoff in respect of the Subordinated Indebtedness except
that:

 

(i) the
Subordinated Creditor may accept scheduled, current (but not past due),
non-accelerated payments (but not prepayments) of principal and interest
required to be paid under the Subordinated Note; and

 

(ii) the
Subordinated Creditor may exercise any remedies it may have against the Cray
Collateral (other than the Senior Collateral) and accept proceeds therefrom to
be applied against the Subordinated Indebtedness upon the earlier to occur of
the follow events (each a “Remedies Event”):

 

(A) any
filing of a petition by or against Ingredients under the United States
Bankruptcy Code or any other bankruptcy, insolvency, liquidation or similar
proceeding or the appointment of a trustee, receivor or similar officer for
Ingredients or a substantial portion of its assets; or

 

(B) 120
days after any other event constituting a Borrower Default.

 

4.                                       Receipt of
Prohibited Payments. If the Subordinated Creditor receives any payment
on the Subordinated Indebtedness that the Subordinated Creditor is not entitled
to receive under Section 3, the Subordinated Creditor will hold the amount
so received in trust for the Senior Lender and will forthwith turn over such
payment to the Senior Lender in the form received (except for the endorsement
of the Subordinated Creditor where necessary) for application to then-existing
Senior Lender Indebtedness (whether or not due), in such manner of application
as the Senior Lender may deem appropriate. If the Subordinated Creditor
exercises any right of setoff which the Subordinated Creditor is not permitted
to exercise under the provisions of this Agreement, the Subordinated Creditor
will promptly pay over to the Senior Lender, in immediately available funds, an
amount equal to the amount of the claims or obligations offset. If the
Subordinated Creditor fails to make any endorsement required under this
Agreement, the Senior Lender, or any of its officers or employees or agents on
behalf of the Senior Lender, is hereby irrevocably appointed as the
attorney-in-fact (which appointment is coupled with an interest) for the Subordinated
Creditor to make such endorsement in the Subordinated Creditor’s name.

 

3

 

5.                                       Action on
Subordinated Indebtedness. 
Unless and until the Senior Lender Indebtedness has been indefeasibly
paid and performed in full and the Senior Lender has released its Lien in the
Collateral:

 

(a)                                  The
Subordinated Creditor will not commence any action or proceeding against
Ingredients to recover all or any part of the Subordinated Indebtedness, or
join with any creditor (unless Senior Lender shall so join) in bringing any
proceeding against Ingredients under any bankruptcy, reorganization,
readjustment of debt, arrangement of debt receivership, liquidation or
insolvency law or statute of the federal or any state government other than
after the occurrence of a Remedies Event; and

 

(b)                                 The
Subordinated Creditor will not commence any action or proceeding with respect
to the Senior Collateral or against Ingredients, will not take possession of,
sell or dispose of, or otherwise deal with, the Senior Collateral, and will not
exercise or enforce any other right or remedy which may be available to the
Subordinated Creditor against Ingredients or with respect to the Senior
Collateral.

 

6.                                       Action
Concerning Collateral and Restrictions on Liens.

 

(a)                                  Subordinated
Creditor represents, warrants, covenants, promises and agrees to and with
Senior Lender that unless and until all of the Senior Lender Indebtedness has
been indefeasibly paid and performed in full and the Senior Lender has released
its Lien in the Collateral the Subordinated Creditor will not modify, amend,
restate or otherwise change the Subordinated Note or any documents, agreements
or instruments representing or related to any Subordinated Indebtedness other
than extending the maturity date thereof from time to time;

 

(b)                                 Senior Lender
may take possession of, sell, dispose of, and otherwise deal with all or any
part of the Senior Collateral, and may enforce any right or remedy available to
it with respect to Ingredients or the Senior Collateral, all without notice to
or consent of the Subordinated Creditor except as specifically required by
applicable law.  In addition, and without
limiting the generality of the foregoing, if (i) a Borrower Default has
occurred and is continuing, (ii) Ingredients or the Senior Lender intends
to sell or otherwise dispose of any Senior Collateral to an unrelated third
party outside the ordinary course of business, (iii) Senior Lender has
given written notice thereof to the Subordinated Creditor, and (iv) the
Subordinated Creditor has failed, within ten (10) days after receipt of
such notice, to purchase for cash the Senior Lender Indebtedness for the full
amount thereof, the Subordinated Creditor shall be deemed to have consented to
such sale or disposition, to have released any Lien it may have in such
Collateral and to have authorized Senior Lender or its agents to file partial
releases (and any related financing statements such as “in lieu” financing
statements under Part 7 of Article 9 of the Uniform Commercial Code)
with respect to such Collateral; provided that Subordinated Creditor shall be
entitled to any proceeds in excess of the amount necessary to satisfy the
Senior Lender Indebtedness.

 

4

 

(c)                                  The Senior
Lender shall have no duty to preserve, protect, care for, insure, take
possession of, collect, dispose of, or otherwise realize upon any of the Senior
Collateral or any other property or assets of Ingredients, and in no event
shall the Senior Lender be deemed the Subordinated Creditor’s agent with
respect to the Senior Collateral. All proceeds received by the Senior Lender
with respect to any Senior Collateral may be applied, first, to pay or
reimburse the Senior Lender for all costs and expenses (including reasonable
attorneys’ fees) incurred by the Senior Lender in connection with the
collection of such proceeds, and, second, to any Senior Lender Indebtedness
secured by the Senior Lender’s Lien in that Senior Collateral in any order that
it may choose.

 

(d)                                 Nothing contained herein
will prevent Ingredients and Senior Lender from amending, modifying, restating
and otherwise dealing with the Senior Lender Indebtedness in any manner
Ingredients and Senior Lender deem necessary and/or desirable without notice to
or consent of the Subordinated Creditor (the “Modified
Senior Lender Indebtedness”). 
This Agreement shall remain fully applicable to such Modified Senior
Lender Indebtedness and the Modified Senior Lender Indebtedness will be deemed the
“Senior Lender Indebtedness” for all purposes hereunder.

 

7.                                       Bankruptcy and
Insolvency. In the event of any receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization or
arrangement with creditors, whether or not pursuant to bankruptcy law, the sale
of all or substantially all of the assets of Ingredients, dissolution,
liquidation or any other marshalling of the assets or liabilities of
Ingredients, the Subordinated Creditor will file all claims, proofs of claim or
other instruments of similar character necessary to enforce the obligations of
Ingredients in respect of the Subordinated Indebtedness and except as otherwise
provided in Section 3 will hold in trust for the Senior Lender and
promptly pay over to the Senior Lender in the form received (except for the
endorsement of the Subordinated Creditor where necessary) for application to
the then-existing Senior Lender Indebtedness, any and all moneys, dividends or
other assets received in any such proceedings on account of the Subordinated
Indebtedness, unless and until the Senior Lender Indebtedness has been paid in
full and the Senior Lender’s Lien in the Senior Collateral has been terminated.
If the Subordinated Creditor shall fail to take any such action, the Senior Lender,
as attorney-in-fact for the Subordinated Creditor, may take such action on the
Subordinated Creditor’s behalf. The Subordinated Creditor hereby irrevocably
appoints the Senior Lender, or any of its officers or employees on behalf of
the Senior Lender, as the attorney-in-fact for the Subordinated Creditor (which
appointment is coupled with an interest) with the power but not the duty to
demand, sue for, collect and receive any and all such moneys, dividends or
other assets and give acquittance therefor and to file any claim, proof of
claim or other instrument of similar character, to vote claims comprising
Subordinated Indebtedness to accept or reject any plan of partial or complete
liquidation, reorganization, arrangement, composition or extension and to take
such other action in the Senior Lender’s own name or in the name of the
Subordinated Creditor as the Senior Lender may deem necessary or advisable for
the enforcement of the agreements contained herein; and the Subordinated
Creditor will execute and deliver to the Senior Lender such other and further
powers-of-attorney or instruments as the Senior Lender may request in order to
accomplish the foregoing. If the Senior Lender desires to permit the use of
cash collateral or to provide post-petition financing to Ingredients, the 

 

5

 

Subordinated
Creditor shall not object to the same or assert that its interests are not
being adequately protected.

 

8.                                       Continuing
Effect. This Agreement shall constitute a continuing agreement of
subordination, and the Senior Lender may, without notice to or consent by the
Subordinated Creditor, modify any term of the Senior Lender Indebtedness in
reliance upon this Agreement. Without limiting the generality of the foregoing,
the Senior Lender may, at any time and from time to time, without the consent
of or notice to the Subordinated Creditor and without incurring responsibility
to the Subordinated Creditor or impairing or releasing any of the Senior Lender’s
rights or any of the Subordinated Creditor’s obligations hereunder:

 

(a)                                  change the
interest rate or change the amount of payment or extend the time for payment or
renew or otherwise alter the terms of any Senior Lender Indebtedness or any
instrument evidencing the same in any manner;

 

(b)                                 sell, exchange,
release or otherwise deal with any property at any time securing payment of the
Senior Lender Indebtedness or any part thereof;

 

(c)                                  release anyone
liable in any manner for the payment or collection of the Senior Lender Indebtedness
or any part thereof;

 

(d)                                 exercise or
refrain from exercising any right against Ingredients or any other person
(including the Subordinated Creditor); and

 

(e)                                  apply any sums
received by the Senior Lender, by whomsoever paid and however realized, to the
Senior Lender Indebtedness in such manner as the Senior Lender shall deem
appropriate.

 

10.                                 No Commitment. None of the
provisions of this Agreement shall be deemed or construed to constitute or
imply any commitment or obligation on the part of the Senior Lender to make any
future loans or other extensions of credit or financial accommodations to
Ingredients.

 

11.                                 Waiver and
Consent.  Senior Lender shall have no
obligation to the Subordinated Creditor with respect to the Senior Collateral
or the Senior Lender Indebtedness. 
Senior Lender may (a) exercise collection rights, (b) take
possession of, sell or dispose of, and otherwise deal with, the Senior
Collateral, (c) in Senior Lender’s name or in Ingredients’ name, demand,
sue for, collect or receive any money or property at any time payable or
receivable on account of, or securing, any right to payment, or grant any
extension to, make any compromise or settlement with or otherwise agree to
waive, modify, amend or change the obligations (including collateral
obligations) of any account debtor or other obligor of Ingredients; (d) prosecute,
settle and receive proceeds on any insurance claims relating to the Senior
Collateral, and (e) exercise and enforce any right or remedy available to
Senior Lender with respect to the Senior Collateral, whether available before
or after the occurrence of any default; all without notice to or consent by
anyone except as specifically required by law. Senior Lender may apply the
proceeds of the Senior Collateral in any order of application, and may remit or
release such proceeds or any other 

 

6

 

sums
or amounts to Ingredients without being obligated to assure that any such
proceeds or sums are applied to the satisfaction of the Subordinated Creditor’s
subordinated security interest in any Senior Collateral, except as required by
law. The Subordinated Creditor hereby waives any and all right to require the
marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable law or agreement.

 

12.                                 Notice. All notices
and other communications hereunder shall be in writing and shall be (i) personally
delivered, (ii) transmitted by registered mail, postage prepaid, or (iii) transmitted
by telecopy, in each case addressed to the party to whom notice is being given
at its address as set forth below:

 

If
to the Senior Lender:

 

Bank
of Atchison 

                                            

                                            

                                            

Attention:

Telecopier:

 

If to the Subordinated Creditor:

 

Cloud
Cray, Jr. Trust

20045
266th Road

Atchison,
KS 66002

Attention:

Telecopier: (      )

 

or
at such other address as may hereafter be designated in writing by that party.
All such notices or other communications shall be deemed to have been given on (i) the
date received if delivered personally, (ii) the date of posting if
delivered by mail, or (iii) the date of transmission if delivered by
telecopy.

 

13.                                 Conflict in
Agreements. If the subordination provisions of any instrument
evidencing Subordinated Indebtedness conflict with the terms of this Agreement,
the terms of this Agreement shall govern the relationship between the Senior
Lender and the Subordinated Creditor.

 

14.                                 No Waiver. No waiver
shall be deemed to be made by the Senior Lender of any of its rights hereunder
unless the same shall be in writing signed on behalf of the Senior Lender, and
each such waiver, if any, shall be a waiver only with respect to the specific matter
or matters to which the waiver relates and shall in no way impair the rights of
the Senior Lender or the obligations of the Subordinated Creditor to the Senior
Lender in any other respect at any time.

 

7

 

15.                                 Binding Effect;
Acceptance. This Agreement shall be binding upon the
Subordinated Creditor and the Subordinated Creditor’s heirs, legal
representatives, successors and assigns and shall inure to the benefit of the
Senior Lender and its participants, successors and assigns irrespective of
whether this or any similar agreement is executed by any other creditor of
Ingredients. Notice of acceptance by the Senior Lender of this Agreement or of
reliance by the Senior Lender upon this Agreement is hereby waived by the
Subordinated Creditor.

 

16.                                 Miscellaneous. The paragraph
headings herein are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. This Agreement may
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.

 

17.                                 Governing Law;
Consent to Jurisdiction and Venue; Waiver of Jury Trial. This
Agreement shall be governed by and construed in accordance with the substantive
laws (other than conflict laws) of the State of Kansas.  Each party consents to the personal
jurisdiction of the state and federal courts located in the State of Kansas in
connection with any controversy related to this Agreement, waives any argument
that venue in any such forum is not convenient, and agrees that any litigation
initiated by any of them in connection with this Agreement may be venued in
either the state or federal courts located in Atchison County, Kansas.  THE PARTIES WAIVE ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO
THIS AGREEMENT.

 

[Signature Page Follows]

 

8

 

IN WITNESS WHEREOF, the Subordinated Creditor and the Senior Lender
have executed this Agreement as of the date and year first above-written.

 

 

	
   

  	
  CLOUD L. CRAY, JR. TRUST

  
	
   

  	
  under
  an agreement dated October 25, 1983

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Cloud L. Cray, Jr. TTEE

  
	
   

  	
  Name:Cloud
  L. Cray, Jr.

  
	
   

  	
  Its:Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION STATE BANK OF EVEREST DBA 

  BANK OF ATCHISON USB

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeff Caudle

  
	
   

  	
  Name:
  Jeff Caudle

  
	
   

  	
  Its: Vice President

  

 

9

 

Acknowledgment by Ingredients

 

The undersigned, being MGP
Ingredients, Inc., hereby (i) acknowledges receipt of a copy thereof,
(ii) agrees to all of the terms and provisions thereof, (iii) agrees
to and with the Senior Lender that it shall make no payment on the Subordinated
Indebtedness that the Subordinated Creditor would not be entitled to receive
under the provisions of the Agreement, (iv) agrees that any such payment
will constitute a default under the Senior Lender Indebtedness, and (v) agrees
to mark its books conspicuously to evidence the subordination of the
Subordinated Indebtedness effected hereby.

 

 

	
   

  	
  MGP
  INGREDIENTS, INC.

  
	
   

  	
  a
  Kansas corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
  Name
  Timothy W. Newkirk

  
	
   

  	
  Its:President & CEO

  

 

 

	
  STATE
  OF KANSAS

  	
  )

  
	
   

  	
   

  
	
   

  	
  )
  ss.

  
	
   

  	
   

  
	
  COUNTY
  OF ATCHISON

  	
  )

  

 

BE
IT REMEMBERED, that on this 17th day of July, 2009, before me the undersigned,
a Notary Public in and for said County and State, personally appearedTimothy W.
newkirkto me personally known, who being by me duly sworn, did say that he is
the President & CEO of MGP Ingredients, Inc., a Kansas
corporation, that said instrument was signed on behalf of said corporation, and
said Timothy W. Newkirk acknowledged said instrument to be the free act and
deed of said corporation.

 

IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal at my
office in Atchison, Kansas, the day and year last above written.

 

 

	
   

  	
  /s/
  Marta L. Myers

  
	
   

  	
  Notary
  Public in and for said County and State

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Marta
  L. Myers

  
	
   

  	
   

  
	
   

  	
  (Type,
  print or stamp the Notary’s name.)

  

 

 

My
Commission Expires:

 

11

 

	
  STATE
  OF KANSAS

  	
  )

  
	
   

  	
   

  
	
   

  	
  )
  ss.

  
	
   

  	
   

  
	
  COUNTY
  OF ATCHISON

  	
  )

  

 

BE
IT REMEMBERED, that on this 17th day of July, 2009, before me the undersigned,
a Notary Public in and for said County and State, personally appeared Jeff
Caudle, to me personally known, who being by me duly sworn, did say that he is
the vice President of UNION STATE BANK OF
EVEREST DBA BANK OF ATCHISON USB, that said instrument was signed on
behalf of said corporation, and said Jeff Caudle acknowledged said instrument
to be the free act and deed of said corporation.

 

IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal at my
office in Atchison, Kansas, the day and year last above written.

 

 

	
   

  	
  /s/
  Marta L. Myers

  
	
   

  	
  Notary
  Public in and for said County and State

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Marta
  L. Myers

  
	
   

  	
   

  
	
   

  	
  (Type,
  print or stamp the Notary’s name.)

  

 

 

My
Commission Expires:

 

12

 

	
  STATE
  OF KANSAS

  	
  )

  
	
   

  	
   

  
	
   

  	
  )
  ss.

  
	
   

  	
   

  
	
  COUNTY
  OF ATCHISON

  	
  )

  

 

BE
IT REMEMBERED, that on this 17th day of July, 2009, before me the undersigned,
a Notary Public in and for said County and State, personally appeared Cloud L.
Cray, Jr., to me personally known, who being by me duly sworn, did say
that he is the Trustee of the CLOUD L. CRAY, JR. TRUST, under an agreement
dated October 25, 1983,  that said
instrument was signed on behalf of said Trust, and said Cloud L. Cray, Jr.
acknowledged said instrument to be the free act and deed of saidTrust.

 

IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal at my
office in Atchison, Kansas, the day and year last above written.

 

 

	
   

  	
  /s/Marta
  L. Myers

  
	
   

  	
  Notary
  Public in and for said County and State

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Marta
  L. Myers

  
	
   

  	
   

  
	
   

  	
  (Type,
  print or stamp the Notary’s name.)

  

 

 

My
Commission Expires:

 

13

 

Exhibit “a”

 

Legal
Description of Atchison, Kansas Property

 

Mortgage
from MGP ingredients, Inc. to Cloud L. Cray, Jr.

 

Parcel 1:

 

[Intentionally omitted]

 

Parcel 2:

 

[Intentionally omitted]

 

Parcel 3:

 

West Thirty-Five feet (35’) of Lot Three (3), Block
twenty and one-half(201⁄2), in West Atchison, an addition to the City of
Atchison.

 

Parcel 4:

 

the West Half of Lot two (2), in Block twenty and
one-half(201⁄2), in West Atchison, an addition to the City of Atchison.

 

Parcel 5:

 

Lot One (1) and the East Half of Lot two (2),
in Block twenty and one-half(201⁄2), in West Atchison, an addition to the City of
Atchison.

 

Parcel 6:

 

the East Thirty-Eight and Three-Fourths feet (E38.75’)
of Lot Three (3), Block twenty and one-half(201⁄2), in that part of the City of
Atchison known and designated as West Atchison.

 

14

 

Parcel 7:

 

the East one-half(E1⁄2) of Lot Four (4), Block twenty
and one-half(201⁄2) in West Atchison, an addition to the City of Atchison.

 

Parcel 8:

 

the West one-half(W1⁄2) of Lot Four (4), Block twenty
and one-half(201⁄2), in West Atchison, an addition to the City of Atchison.

 

15

 

Parcel 9:

 

Lot Five (5) in Block twenty and one-half(201⁄2),
in West Atchison, an addition to the City of Atchison.

 

Parcel 10:

 

the South Thirty feet (30’) of Lot six (6), Block
twenty, West Atchison, an addition to the City of Atchison.

 

Parcel 11:

 

the North Ninety feet of Lot six, in Block twenty in
West Atchison, an addition to the City of Atchison, Kansas, together with the
West vacated Thirty feet of Roberts Street, which abut on the East of said
North Ninety feet of Lot six.

 

Parcel 12:

 

the East (E) Forty (40) feet of Lot Seven (7),
in Block twenty (Blk 20), in West Atchison (WA), an addition to the City of
Atchison, Atchison County, Kansas.

 

Parcel 13:

 

the West Thirty-Three and Three-Fourths feet (333⁄4)
of Lot Seven (7), the East Eleven and One-Fourth feet (111⁄4’) of Lot Eight (8),
Block twenty (20), West Atchison, an addition to the CITY of Atchison.

 

Parcel 14:

 

the East Thirty feet (30’) of the West sixty-two and
one-half feet (621⁄2’) of Lot Eight (8), Block twenty (20), West Atchison, an
addition to the City of Atchison.

 

Parcel 15:

 

All of the West Thirty-two and one-half feet (32-1⁄2’)
of Lot Eight (8), Block twenty (20), West Atchison, an addition to the City of
Atchison, Atchison County, Kansas.

 

16

 

Parcel 16:

 

the East Forty-Seven feet (47’) of Lot ten (10),
Block twenty (20), West Atchison, an addition to the City of Atchison.

 

Parcel 17:

 

North Thirty feet (30’) of the South sixty feet (60’)
of Lot six (6), Block twenty (20), West Atchison, an addition to the City of
Atchison.

 

17

 

Parcel 18:

 

the East Fifty-Eight feet (E 58’) of Lot Eight (8),
Block twenty and one-half(20-1⁄2), in West Atchison, an addition to the City of
Atchison.

 

Parcel 19:

 

the East (E) Seventy-Three and One-Third (73
1/3 RD) feet of Lot Seven (LT 7), and the West (W) Fifty-two (52) feet of
Lot Eight (LT 8), Block twenty and one-half(20 1⁄2) in West Atchison, an addition
to the City of Atchison, Atchison County, Kansas.

 

Parcel 20:

 

the East Three feet (E 3’) and Nine inches (9”) of
Lot six (6) and the West Thirty-six feet (W 36’) and Eight inches (8”) of
Lot Seven (7), all in Block twenty and one-half(20 1⁄2) in West Atchison, an
addition to the City of Atchison.

 

Parcel 21:

 

the West Eighty-Five feet (W 85’) of Lot six (LT 6),
in Block twenty and one-half(BLK 20 1⁄2), in West Atchison, an addition to the
City of Atchison.

 

Parcel 22:

 

Lot Eleven (LT 11) and the West (W) Thirty (30)
feet of vacated Roberts Street, all in Block twenty (Blk 20), in West Atchison,
an addition to the City of Atchison, Kansas.

 

Parcel 23:

 

Tract No. 1

 

Lots 1 to 16, both inclusive, Block 211⁄2, West
Atchison, an addition to the City of Atchison, Kansas, together with all
adjacent tracts out of the streets and alleys adjoining said Lots heretofore
acquired, by reversion, upon the vacation of said streets and alleys.

 

Tract No. 2

 

Lots 9, 10 and 11, Block 21, West Atchison, an
addition to the City of Atchison, Kansas, and the West 30 feet of vacated
Roberts Street East of and adjoining said Lot 11, except the following
described tract:

 

18

 

Beginning at a point 14 feet East of the Southeast
corner of said Lot 11; thence East 16 feet to the center line of Roberts Street
(now vacated); thence North along said center line 30 feet; thence
southwesterly 34 feet to the point of beginning, together with all adjacent
tracts out of the streets and alleys adjoining the tract above described
heretofore acquired, by reversion, upon the vacation of said streets and
alleys.

 

Tract No. 3

 

Lot 6, Block 21, West Atchison, an addition to the
City of Atchison, Kansas, and the West 30 feet of vacated Roberts Street East
of and adjoining said Lot, except the following described tract:

 

Beginning at the Northwest corner of said Lot 6;
thence East along the North line of said Lot and the Easterly continuation
thereof 100 feet; thence South 100 feet; thence West 100 feet to a point on the
West line of said Lot 6; thence North 100 feet to the point of beginning.  Together with all adjacent tracts out of the
streets and alleys adjoining the tract above described heretofore acquired, by
reversion, upon the vacation of said streets and alleys.

 

Tract No. 4

 

Lots 1 to 8, both inclusive, Block 50, L.C. Challiss
Addition, an addition to the City of Atchison, Kansas, together with all
adjacent tracts out of the streets and alleys adjoining said lots heretofore
acquired, by reversion, upon the vacation of said streets and alleys.

 

Tract No. 5

 

All that part of Block 28, John Roberts’ Third
Addition, now vacated, together with a portion of Utah Avenue adjacent thereto,
now vacated, in West Atchison, an addition to the City of Atchison, Kansas,
described as follows:

 

Beginning at the point on the South line of Utah
Avenue (now vacated) approximately 165 feet West of the Northeast Corner of
said Block 28, measured along the North line of said Block (said point being 9
feet Northwesterly of, measured at right angles to, the center line of the
Missouri Pacific Railroad Co. Track No. 17-137); thence Southwesterly
along a line making a Southwest angle of 54°14’ with said North line of said
Block 28 a distance of 70 feet to a point (said point being 9 feet
Northwesterly of, measured at right angles to, the center line of said Track
17-137); thence Northwesterly at right angles to the last described course 10
feet to a point (said point being 9 feet Northwesterly of, measured at right
angles to, the center line of the Missouri Pacific Railroad Co. Track No. 17-138);
thence Southwesterly along a line turning an angle of 82°53’ to the left of the
last described course 80 feet to a point (said point being 9 feet Northwesterly
of, measured at right angles to, the center line of said Track No. 17-138);
thence Southwesterly along a line turning an angle of 10°03’ to the right of
the last described course 67.5 feet to a point 

 

19

 

(said point being 9 feet Northwesterly of, measured
at right angles to, the center line of said Track No. 17-138); thence
Southwesterly along a line turning an angle of 9°32’ to the right of the last
described course 67.5 feet to a point (said point being 9 feet Northwesterly
of, measured at right angles to, the center line of said Track No. 17-138);
thence Southwesterly along a line turning an angle of 5°32’ to the right of the
last described course 67.5 feet to a point (said point being 9 feet
Northwesterly of, measured at right angles to, the center line of said Track No. 17-138);
thence Southwesterly along a line turning an angle of 5° to the right of the
last described course 136 feet, more or less, to a point on the West line of
said Block 28 (said point being 9 feet Northwesterly of, measured at right
angles to, the center line of said Track No. 17-138); thence Northwesterly
along the West line of said Block 28 and the extension thereof 285 feet, more
or less, to the center line of vacated Utah Avenue; thence East along the
center line of vacated Utah Avenue 445 feet, thence Southwesterly along a line
turning an angle of 114°18’ to the right of the last described course 44.6 feet,
more or less, to the point of beginning.

 

Parcel 24:

 

Lot 8, in Block 21, and that part of the City of
Atchison usually known and designated as West Atchison, an Addition to the City
of Atchison, Kansas, Atchison County, Kansas.

 

Parcel 25:

 

The North One Hundred feet (N 100’) of Lot Seven
(7), in Block twenty-One (21), in West Atchison, an Addition to the City of
Atchison.

 

Parcel 26:

 

The South (S) Fifty (50) feet of Lot Seven (Lt
7), Block Twenty-One (Blk 21), in West Atchison (WA), an Addition to the City
of Atchison, Atchison County, Kansas, according to the Recorded Plat Thereof.

 

Parcel 27:

 

The East Fifty-Six feet (56’) of Lot Twenty (20), in
Block Twenty-Two (22), in West Atchison, an Addition to the City of Atchison.

 

Parcel 28:

 

The East twenty-six feet ten inches (26’10”) of Lot
Seventeen (17), Block Twenty-Two (22), West Atchison, an Addition to the City
of Atchison.

 

20

 

Parcel 29:

 

The North Eighty-Seven and one-half feet (N 87 1/2’)
of Lots One (1) and Two (2), in Block Twenty-Two (22), in West Atchison.

 

Parcel 30:

 

The South sixty-two and one-half feet (621⁄2’) of Lot
One (1) and the South sixty-two and one-half feet (621⁄2’) of Lot Two (2),
Except the West twenty-five feet (25’) of said Lot Two (2), all in Block
Twenty-Two (22), in West Atchison, an Addition to the City of Atchison.

 

Parcel 31:

 

[Intentionally omitted]

 

21

 

Parcel 32:

 

[Intentionally Omitted]

 

Parcel 33:

 

Intentionally Omitted]

 

Parcel 34:

 

The South Fifty feet (S. 50’) of Lots Thirty-six
(36), Thirty-Seven (37), Thirty-Eight (38) and Thirty-Nine (39), in Block
Thirty-Nine (39), in L.C. Challiss, an Addition to the City of Atchison.

 

Parcel 35

 

All of Lots Twenty-Five (25) and Twenty-Six (26) and
the West 0.50 feet of Lot Twenty-Seven (27), in Block Forty (40), in L.C.
Challiss Addition to the City of Atchison, Atchison County, Kansas.

 

Parcel 36:

 

The South 76 feet of Lots One (1) and Two (2),
in Block Forty (40), in L.C. Challis Addition, an Addition to the City of
Atchison, Atchison County, Kansas.

 

Parcel 37:

 

Lots Fifteen (15) and Sixteen (16), in Block Forty
(40), L.C. Challiss Addition, an Addition to the City of Atchison.

 

Parcel 38:

 

Lot Seventeen (17), and the East Ten (10) feet
of Lot Eighteen (18), Block Forty (40) in the L.C. Challis Addition to the City
of Atchison.

 

Parcel 39:

 

Lot Nineteen (19) and the West Fifteen feet (W. 15’)
of Lot Eighteen (18), in Block Forty (40), in L.C. Challiss Addition to the
City of Atchison.

 

22

 

Parcel 40:

 

All of Lots 35 to 38 inclusive, in Block 40, L.C.
Challiss Addition to the City of Atchison, Atchison County, Kansas, Except that
part of the same that is South of the most Northwesterly right of way line of
the Missouri Pacific Railroad Co. and running through said Lots in Block 40,
L.C. Challiss Addition.

 

Parcel 41:

 

The South 76 feet of Lots One (1) and Two (2),
in Block Forty (40), in L.C. Challis Addition, an Addition to the City of Atchison,
Atchison County, Kansas.

 

Parcel 42:

 

All of Lots 39 and 40 of Block 40 of the L.C.
Challis Addition to the City of Atchison, Atchison County, Kansas, and all
those portions of Lots 31, 32, 33, 34, 35, 36, 37 and 38 of said Block 40 that
Lie Southeasterly and Easterly of the Southeasterly line of that certain strip
of land described in General Warranty Deed dated October 14, 1929, from
Missouri Pacific Railroad Company to Pillsbury Flour Mills Company, identified
in the Missouri Pacific Railroad Deed Records as Document No. 1600306
#3-2.

 

Also the North 30 feet of Lot 42 of Block 40 of the
L.C. Challis Addition to the City of Atchison, Atchison County, Kansas.

 

Parcel 43:

 

Lots Five, Six, Seven, Eight, Nine and Ten (5, 6, 7,
8, 9 and 10), Block Forty-Three (43), in L.C. Challiss Addition to the City of
Atchison, except that part thereof described as follows;

 

Commencing at the Southwest Corner of said Lot Ten
(10), Block Forty-Three (43), L.C. Challiss Addition, thence East along the
South line of Lots Ten (10) to Five (5), inclusive to the Southeast Corner
of said Lot Five (5), Block Forty-Three (43), L.C. Challiss Addition, thence
North along the East line of said Lot Five (5), a distance of Seventy-Five and
six-tenths (75.6) feet, thence Southwest to the place of beginning. and all of
Lots Eleven, Twelve, Thirteen, Fourteen and Fifteen (11, 12, 13, 14 and 15),
Block Forty-Three (43), L.C. Challiss Addition to the City of Atchison.

 

Parcel 44:

 

Lots One (1) through Sixteen (16), inclusive,
and Lot Twenty-Two (22), in Block Forty-Eight (48), in L.C. Challiss’ Addition
to the City of Atchison, Atchison County, Kansas; and

 

23

 

A Tract in the Southeast Quarter (SE 1⁄4) of the
Northwest Quarter (NW 1⁄4) of Section One (1), Township Six (6), Range
Twenty (20), described as follows:

 

Beginning at a point in the West line of Thirteenth
Street in the City of Atchison, 320 feet Northwardly from the intersection of
said West line with the East and West center line of said Section 1,
thence Southwardly along said West line 15 feet more or less to a point in the
Northwesterly line of a tract of land condemned by the City of Atchison
pursuant to Ordinance No. 3966, Report of Condemnation being recorded in
Book 234, Page 523, of the Register of Deeds’ Office for Atchison County,
thence Southwestwardly along said Northwesterly line to a point in the
prolongation Southerly of the East line of Fourteenth Street, thence
Northwardly along said prolongation 390’ more or less to an intersection with
the Southeasterly line of property of the Atchison, Topeka and Santa Fe Railway
Company, thence Northeastwardly along said Southeasterly line 610 feet more or
less to a point in the West line of Thirteenth Street vacated Under Ordinance No. 3192
Dated May 24, 1915, thence Eastwardly by a straight line at right angles
to said West line of Thirteenth Street 30 feet to the center line of said
Thirteenth Street vacated, thence Southwardly along said center line 400 feet
more or less to the Southerly line of that part of Thirteenth Street vacated
under said Ordinance, thence Westwardly along said Southerly line 30 feet to
the point of beginning, Containing 5.85 acres more or less.

 

Parcel 45:

 

Lots One and Two (1 & 2) and the North
Sixty-Five feet (N 65’) and the East Half (E 1⁄2) of the South Eighty-Five feet
(S 85’) of Lot Three (3) in Block Fifty-One (51), in L.C. Challiss
Addition to the City of Atchison.

 

Parcel 46:

 

Lots Thirteen and Fourteen (Lts 13 & 14),
Block Fifty-One (Blk 51), in L.C. Challiss’ Addition to the City of Atchison,
Atchison County, Kansas.

 

Parcel 47:

 

All of Lots twenty Three (23) and twenty Four (24),
in Block Fifty-One (51) in that part of the City of Atchison known and
designated as L.C. Challiss Addition.

 

Parcel 48:

 

Lots Nineteen (19) , Twenty (20) , Twenty-One (21)
and Twenty-Two (22), Block Fifty-One (51), L.C. Challiss Addition to the City
of Atchison, Atchison County, Kansas.

 

24

 

Parcel 49:

 

Lots Fifteen (15), sixteen (16), Seventeen (17) and
Eighteen (18), Block Fifty-One (51) in L.C. Challiss Addition to the City of
Atchison.

 

Parcel 50:

 

[Intentionally Omitted]

 

25

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