Document:

Exhibit 4.1

 

Drafted by and when
recorded

mail to:

 

Mark Ovington, Esq.

Stinson Morrison Hecker
LLP

1201 Walnut Street, Suite 2900

Kansas City, Missouri
64106

 

MORTGAGE,
SECURITY AGREEMENT,

ASSIGNMENT
OF LEASES AND RENTS

AND
FIXTURE FILING

 

(secures
future advances and future obligations, but Maximum Amount Secured, as defined
in and subject to the provisions of Section 1 below, equals $700,000)

 

This Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing (the “Mortgage”)
is given as of December 23, 2008, by MGP INGREDIENTS, INC., a Kansas
corporation (the “Borrower”), with an office located at Cray Business
Plaza, 100 Commercial Street, Atchison, Kansas 66002, to COMMERCE BANK, N.A., a
national banking association, as Agent for the Banks from time to time party to
the Credit Agreement referred to below (in such capacity, the “Agent”),
with an office located at 1000 Walnut Street, Kansas City, Missouri 64105.

 

WHEREAS, Borrower is the
owner of the real property and improvements thereon legally described on Exhibit A
attached hereto;

 

WHEREAS, Borrower has
incurred and may hereafter incur indebtedness under the Credit Agreement, dated
as of May 5, 2008, among Borrower, certain other borrower(s) thereunder
(collectively, whether one or more, the “Other Borrower”), Commerce
Bank, N.A., as Agent, Issuing Bank and Swingline Lender, and the Banks party
thereto, as amended by a First Amendment to Credit Agreement dated as of September 3,
2008, a letter agreement dated October 31, 2008, a Second Amendment to
Credit Agreement dated as of November 7, 2008, and a Third Amendment to
Credit Agreement dated as of December 19, 2008 (as so amended and as
otherwise amended, renewed, restated, replaced, consolidated or otherwise
modified from time to time, the “Credit Agreement”), pursuant to which
the Banks have agreed or may elect, in each case subject to the terms and
conditions thereof and as of the 

 

 

date hereof, to extend
credit to or for the benefit of Borrower and/or Other Borrower in an aggregate
outstanding principal amount not to exceed $55,000,000 at any time;

 

WHEREAS, Borrower’s and
Other Borrower’s obligations to the Banks under the Credit Agreement are
evidenced by the following promissory notes: (a) an Amended and Restated
Revolving Credit Note, dated on or about September 3, 2008, from Borrower
and Other Borrower, as makers, to Commerce Bank, N.A., as payee, in the stated
principal amount of $21,175,000; (b) an Amended and Restated Revolving
Credit Note, dated on or about September 3, 2008, from Borrower and Other
Borrower, as makers, to BMO Capital Markets Financing, Inc., as payee, in
the stated principal amount of $16,912,500; (c) an Amended and Restated
Revolving Credit Note, dated on or about September 3, 2008, from Borrower
and Other Borrower, as makers, to National City Bank, as payee, in the stated
principal amount of $16,912,500; and (d) a Swingline Note, dated on or
about May 5, 2008, from Borrower and Other Borrower, as makers, to
Commerce Bank, N.A., as payee, in the stated principal amount of $5,000,000;

 

WHEREAS, the foregoing
promissory notes and any other promissory notes issued on or after the date
hereof under the Credit Agreement — whether payable to the above specifically
identified Banks or their respective permitted assignees under the Credit
Agreement or to other lenders who may hereafter become Banks under the Credit
Agreement or their respective permitted assignees under the Credit Agreement —
as any of the foregoing may be amended, renewed, restated, replaced, consolidated
or otherwise modified from time to time, are collectively referred to herein as
the “Notes” and are individually referred to herein as a “Note”;

 

WHEREAS, Borrower’s and
Other Borrower’s obligations under the Credit Agreement, the Notes, this Mortgage
and any other Credit Documents (as defined in the Credit Agreement), whether
monetary, nonmonetary, direct, indirect, acquired, joint, several, joint and
several, existing, future, contingent or otherwise, and any replacements,
renewals, extensions and other modifications of any of the above, together with
all principal, premium, interest, fees, expenses and other amounts and charges
relating thereto, and any amounts expended by or on behalf of Agent or any Bank
for the protection and preservation of the mortgage lien and security interest
granted herein, are hereinafter sometimes collectively called the “Obligations”;
and

 

WHEREAS, any agreements,
documents or instruments evidencing, securing or otherwise relating to any of
the Obligations (including, without limitation, any of the Credit Documents, as
defined in the Credit Agreement), and any amendments, restatements,
replacements, consolidations and other modifications of any of the foregoing
are hereinafter sometimes collectively called the “Credit Documents.”

 

NOW, THEREFORE, to secure
the full and prompt payment and performance of the Obligations, Borrower hereby
mortgages and warrants to Agent, on behalf of the Banks, and grants to Agent on
behalf of the Banks, a security interest in, all of Borrower’s right, title and
interest in and to the following property, whether such property or interest
therein is now owned or existing or hereafter acquired or arising
(collectively, the “Property”): (a) all of the tracts, parcels or
other units of land described in Exhibit A attached hereto (the “Premises”);
(b) all of the buildings, structures and other improvements now or
hereafter situated on the Premises, together with any alterations, additions
and improvements thereto and all restorations and replacements thereof made
from time to time (collectively, the “Building”); (c) all
machinery, apparatus, equipment and fixtures of every kind and nature
whatsoever now or hereafter located in, on or about the Building or upon the
Premises, or attached to or used or usable in connection with the operation or
maintenance of the Premises or the Building or in connection with any
construction being conducted on the Premises, including, but not limited to,
all heating, lighting and power equipment, engines, plumbing, electrical,
mechanical, refrigeration, ventilating and 

 

2

 

air-conditioning
equipment and apparatus, elevators, cranes, fittings, tools, ducts and
compressors (collectively, the “Building Equipment”), which Building
Equipment shall, to the fullest extent permitted by law, be deemed to
constitute fixtures and part of the real property encumbered by this Mortgage; (d) all
easements, tenements, hereditaments, appurtenances, rights and rights of way,
public or private, pertaining, belonging or otherwise relating to the Premises
or the Building; (e) all insurance proceeds and any judgments,
settlements, awards and other payments, including interest thereon, which may
be made in respect of the Property as a result of damage to or destruction of
the Property, the exercise of the right of condemnation or eminent domain over
any interest in the Property, the closing of, or the alteration of the grade
of, any street on or adjoining the Premises, or any other injury to or decrease
in the value of the Property; (f) all franchises, permits, licenses and
other rights therein respecting the use, occupation or operation of the
Property or the activities conducted thereon or thereabout; (g) all rents,
income and other benefits arising out of or otherwise related to the Property
and all leases on or affecting the Property, and any security deposits,
contract rights, general intangibles, actions, rights of action, and unearned
insurance premiums relating to such leases or the Property; and (h) all
accessions to, substitutes for, and all modifications, replacements, renewals,
products and proceeds of any of the foregoing; provided,
however, that the Property shall not include any Excluded GE
Equipment Collateral (as defined in the Credit Agreement).

 

Borrower covenants,
represents and warrants to Agent as follows:

 

1.             Indebtedness Secured.  This Mortgage has been given and is intended
to secure the full and prompt payment and performance of the Obligations and
constitutes a future advance mortgage under K.S.A. §58-2336.  This Mortgage secures future advances from
the Banks to Borrower or Other Borrower and other future obligations of
Borrower and/or Other Borrower to the Banks and the Agent pursuant to the
Credit Documents; provided, however, that,
notwithstanding anything to the contrary in this Mortgage, (i) the maximum
aggregate principal balance secured hereby shall not exceed $700,000 (the “Maximum
Amount Secured”), and (ii) payments made on account of the
obligations secured hereby or any portion thereof, whether in the ordinary
course, as prepayments or otherwise, shall not reduce the Maximum Amount
Secured unless the aggregate principal amount of obligations secured hereby is
less than the Maximum Amount Secured. The priority of the lien hereunder
securing such future advances and future obligations shall relate back to the
date this Mortgage was recorded.  In
addition, the Mortgage shall secure unpaid balances of advances made by Agent
or any Bank with respect to the Property, for the payment of Impositions, as
hereinafter defined, insurance premiums and costs incurred for the protection
of the Property and any charges, expenses and fees, including, without
limitation, attorneys’ fees, which, by the terms hereof, shall be added to and
increase the Obligations.  Borrower
agrees that all of the duties and obligations imposed on it hereunder, whether
absolute or contingent, due or to become due, are for the reasonable protection
of the lien of this Mortgage.  This
Mortgage shall remain in full force and effect with respect to all of the
Property until all Obligations shall have been paid and performed in full.  If the Obligations are paid and performed in
accordance with the terms of the applicable Credit Documents, including,
without limitation, the observance of all the agreements contained in this
Mortgage, this Mortgage shall be released at the expense of Borrower.  Borrower acknowledges that nothing in this Section 1
obligates Agent or any Bank to make future advances to Borrower or any other
Person.

 

2.             Title to Property and Other Representations and
Warranties.  Borrower represents,
warrants and covenants to Agent that:  (a) Borrower
owns the Premises and the improvements thereon in fee simple absolute and has
good and marketable title to the remainder of the Property; (b) the
Property is free of all liens, encumbrances, adverse claims and other defects
of title whatsoever, except for Permitted Liens (as defined in the Credit
Agreement) and the matters set forth on Exhibit B hereto (collectively,
together with Permitted Liens as defined in the Credit Agreement, “Permitted
Liens”); (c) Borrower does hereby and shall forever warrant and defend
its title to and interest in the Property (and the validity and 

 

3

 

priority of the lien of
this Mortgage) to Agent against all claims and demands whatsoever of any
Person; (d) the Building presently on the Premises complies in all
material respects with all applicable zoning and building codes, ordinances and
regulations, and such compliance is based solely upon Borrower’s owning the
Property and not upon Borrower’s title to or interest in any other property; (e) any
Building hereafter constructed on the Premises shall comply in all material
respects with all applicable zoning and building codes, ordinances and
regulations and shall lie wholly within the boundaries of the Premises; (f) there
are no actions, suits or proceedings pending or, to Borrower’s knowledge,
threatened against or affecting the Property; and (g) Borrower has the
good and unrestricted right, full power and lawful authority to subject the
Property to this Mortgage.

 

3.             Maintenance. 
Borrower shall maintain the Property in good order, condition and
repair, excepting ordinary wear and tear. 
Borrower shall make, as and when the same shall become necessary, all
structural and non-structural repairs, whether exterior or interior, ordinary
or extraordinary, foreseen or unforeseen. 
Borrower shall not commit or suffer any waste of the Property.  Borrower shall not construct any new or
additional buildings on the Premises without the prior written consent of
Agent, which consent shall not be unreasonably withheld so long as no Default
or Event of Default exists. 
Notwithstanding the foregoing, if Borrower is required by applicable law
to undertake any such alterations to the Building or the Building Equipment,
Borrower may do so without obtaining Agent’s consent thereto.  In such event, Borrower shall promptly give
Agent written notice of any such legal requirement and, prior to undertaking
such alterations, shall notify Agent in writing of any such alterations that
Borrower proposes to undertake.  Agent
and each of the Banks, and their respective agents, contractors and
representatives, may enter upon and inspect the Property at all reasonable
times until this Mortgage is released. 
Without limiting the generality of the foregoing, Agent, each of the
Banks, and their respective agents, contractors and representatives, may from
time to time enter upon the Property and conduct upon the Property inspections
and tests to determine the extent to which any hazardous substances, wastes or
other environmentally unsound materials have been placed or discharged upon or
otherwise affect the Property, all at the sole expense of Borrower.

 

4.             Restoration. 
If any of the improvements or equipment comprising the Property is
damaged or destroyed, in whole or in part, by fire or other casualty (whether
or not covered by insurance), or by any taking in condemnation proceedings or
the exercise of any right of eminent domain, Borrower shall promptly restore,
replace or rebuild the same to as nearly as possible the value, quality and
condition they were in immediately prior to such fire or other casualty or
taking, with such alterations or changes as may be approved in writing by
Agent, which approval shall not be unreasonably withheld; provided, however, that Borrower shall be
under no duty to so restore, rebuild or replace such property to the extent
that Agent receives and applies any insurance, condemnation or similar proceeds
relating to such casualty to satisfy any part of the Obligations.  Borrower shall give prompt notice to Agent of
any material damage to the Property.

 

5.             Compliance with Laws; Use of Property.  Borrower shall comply in all material
respects with all present and future laws, statutes, ordinances, rules,
regulations and other requirements (including, without limitation, applicable
zoning and building requirements) of all governmental and quasi-governmental
authorities whatsoever having jurisdiction with respect to the Property.  Borrower shall promptly perform and observe
all of the terms, covenants and conditions of all instruments of record
affecting the Property, non-compliance with which may affect the security of
this Mortgage, or which shall impose any duty or obligation upon Borrower or
any tenant or other occupant of the Premises, and Borrower shall do all things
necessary to preserve intact and unimpaired any and all easements, appurtenances
and other interests and rights in favor of or constituting any portion of the
Property.  Borrower shall not use or
permit the use of the Property in any manner which would tend to impair the
value of the Property or materially increase the risk of fire or other
casualty.

 

4

 

6.             Impositions. 
Borrower shall pay when the same shall become due and payable all real
estate taxes, assessments, water and sewer rates and charges, license fees and
all other governmental levies and charges of every kind and nature whatsoever,
general and special, ordinary and extraordinary, foreseen and unforeseen, which
shall be assessed, levied, confirmed, imposed or become a lien upon or against
the Property or which shall become payable with respect thereto (collectively, “Impositions”).  Notwithstanding the foregoing, Borrower may
contest any Imposition by appropriate and timely proceedings, provided that on
or before the due date for payment of such Imposition Borrower shall establish
an escrow or other provision for payment of such Imposition satisfactory to
Agent in an amount estimated by Agent to be adequate to pay such Imposition and
any interest or penalties that may result from its nonpayment on the due date.  In all such cases of contest, Borrower shall
pay the contested Imposition within 10 days after the dismissal of said
proceedings or the final and unappealable determination of Borrower’s or the
Property’s liability therefor, as the case may be.  So long as any Event of Default exists,
however, Borrower shall, upon demand by Agent, pay the whole of any assessment
for local improvement which may be payable in installments, notwithstanding
that such installments may not be due and payable at the time of such demand by
Agent.  Borrower shall deliver to Agent,
within 10 days after the request of Agent therefor, the original or a photocopy
of the official receipt evidencing such payment or other proof of payment
satisfactory to Agent.

 

7.             Insurance. 
(a)  Borrower, at Borrower’s sole expense, shall insure the
Property for the benefit of Agent against loss or damage thereto and shall keep
in effect, for Agent’s benefit, comprehensive general public liability
insurance against claims for bodily injury, death or property damage.  The policies of insurance required by this Section shall
be in companies, forms and amounts, and for such periods and with such
deductibles, as shall be customary for property similar in use, location and
condition to the Property, and shall insure the respective interests of
Borrower and Agent.  The insurance
proceeds from all such policies of insurance (other than the proceeds in
respect of any liability insurance policy) shall be payable to Agent pursuant
to a noncontributing first mortgagee endorsement satisfactory in form and
substance to Agent.  Upon request by
Agent, Borrower shall promptly furnish evidence of satisfactory insurance on
the Property and that Borrower has complied with the other provisions of this
Section.  In addition to the other policies
of insurance required hereunder, Borrower shall cause a title insurer
reasonably acceptable to Agent to insure, in favor of Agent, Borrower’s
ownership of, and Agent’s first priority lien on, the Property, subject only to
Permitted Liens, in an amount equal to not less than $700,000 in such form, and
with such affirmative coverage and endorsements as Agent may reasonably
request.

 

(b)           Borrower
irrevocably makes, constitutes and appoints Agent (and all officers, employees
or agents designated by Agent) as Borrower’s true and lawful attorney-in-fact
and agent, with full power of substitution, for the purpose of making and
adjusting claims the policies of insurance referred to herein, endorsing the
name of Borrower on any check, draft, instrument or other item or payment for
the proceeds of such policies of insurance and for making all determinations
and decisions with respect to such policies of insurance or to pay any premium
in whole or in part relating thereto.  Agent,
without waiving or releasing any obligation or default by Borrower hereunder,
may (but shall be under no obligation to do so) at any time maintain such
action with respect thereto which Agent deems advisable.  All sums disbursed by Agent in connection
therewith, including attorneys’ fees, court costs, expenses and other charges
relating thereto, shall be payable, on demand, by Borrower to Agent and shall
be additional Obligations hereunder secured by this Mortgage.  Notwithstanding the foregoing, so long as no
Default or Event of Default exists, Borrower may make and settle any insurance
claims relating to the Property provided that Borrower first obtains Agent’s
written consent thereto, which consent shall not be unreasonably withheld.

 

(c)           All
proceeds of the insurance obtained by Borrower hereunder (other than those
relating to any liability insurance policy), shall be paid to Agent, and Agent
may deduct from such 

 

5

 

proceeds any expenses,
including, without limitation, legal fees, incurred by Agent in connection with
adjusting and obtaining such proceeds (the balance remaining after such
deduction being hereinafter referred to as the “Net Insurance Proceeds”).
If an Event Default exists at the time Agent receives the Net Insurance
Proceeds, Agent may apply the Net Insurance Proceeds in reduction or
satisfaction of all or any part of the Obligations, whether then matured or
not, in which event Borrower shall be relieved of its obligation under Sections
3 and 4 above to maintain and restore the Property relating to such proceeds to
the extent that Agent so applies the Net Insurance Proceeds.  If no Event of Default exits at such time (or
if an Event of Default exists and Agent elects not to apply the Net Insurance
Proceeds as provided in the previous sentence), Agent shall release the Net
Insurance Proceeds to Borrower; provided, however,
that, if the amount of the Net Insurance Proceeds exceeds $50,000, Agent may
condition the release of all or any part of the Net Insurance Proceeds on such
escrow or other disbursement conditions as Agent may reasonably require to
ensure that Borrower uses the Net Insurance Proceeds to maintain and the
restore the Property as required under this Agreement and to ensure that the
Property remains free of all mechanics’ and other liens except for Permitted
Liens.

 

(d)           In
the event of a foreclosure under this Mortgage, the purchaser of the Property
shall succeed to all of the rights of Borrower, including any right to unearned
premiums, in and to all policies of insurance which Borrower is required to
maintain under this Section and to all proceeds of such insurance.

 

8.             Deposits for Impositions and Insurance.  Upon notice from Agent (which notice shall
not be given unless an Event of Default exists), Borrower shall deposit with
Agent on the first day of each month an amount equal to one-twelfth of (i) the
aggregate annual payments for the Impositions, and (ii) the annual
insurance premiums on the policies of insurance required to be obtained and
kept in force by Borrower under this Mortgage. 
In addition, upon notice from Agent (which notice shall not be given
unless an Event of Default exists), Borrower shall deposit with Agent such sum
of money which, together with such monthly installments, shall be sufficient to
pay all the Impositions and insurance premiums at least 30 days prior to the
due date thereof.  If the amounts of any
Impositions are not ascertainable at the time any deposit is required to be
made, the deposit shall be made on the basis of the amounts of the Impositions
for the prior tax year and, upon the amounts of the Impositions being fixed for
the then current year, Borrower shall, upon notice from Agent, deposit any
deficiency with Agent.  If the amount of
the insurance premiums is not ascertainable at the time any deposit is required
to be made, the deposit shall be made on the basis of the amount of the
insurance premiums for the prior year of the policy or policies, and, upon the
amount of the insurance premiums being fixed for the then current year of the
policy or policies, Borrower shall, upon notice from Agent, deposit any
deficiency with Agent.  If on a date 30
days prior to the due date for the payment of any of the Impositions or the
insurance premiums there shall be insufficient funds on deposit with Agent to
pay the same, Borrower shall, upon notice from Agent, forthwith make a deposit
with Agent in the amount of such deficiency. 
The funds so deposited with Agent shall be held by Agent without interest,
and may be commingled with other funds of Agent, and provided that an Event of
Default exists, such funds shall be applied in payment of the Impositions and
insurance premiums when due to the extent that Borrower shall have deposited
funds with Agent for such purpose.  If an
Event of Default exists, the funds deposited with Agent may, at the option of
Agent, be retained and applied toward the payment of any or all of the
Obligations, but no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Agent.  Borrower shall furnish Agent with a bill for
each of the Impositions and insurance premiums and such other documents
necessary for their payment at least 30 days prior to the date they first
become due.  Upon an assignment of this
Mortgage prior to any default hereunder by Borrower, Agent shall have the right
and obligation to pay over the balance of such deposits in its possession to
the assignee, and thereupon Agent shall be completely released from all
liability with respect to such deposits and Borrower shall look solely to the
assignee in reference thereto.  The
provisions of the preceding sentence shall apply to each and every assignment
or transfer of such deposits to a new assignee.

 

6

 

9.             Condemnation. 
(a)  Borrower shall give immediate notice to Agent upon Borrower’s
learning of (i) any interest on the part of any Person possessing or who
has expressed the intention to possess the power of eminent domain to purchase
or otherwise acquire the Property, or (ii) the commencement of any action
or proceeding to take the Property by exercise of the right of condemnation or
eminent domain or of any action or proceeding to close or to alter the grade of
any street on or adjoining the Premises. 
Agent may participate in any such actions or proceedings in the name of
Agent or, whenever necessary, in the name of Borrower, and Borrower shall
deliver to Agent such instruments as Agent shall request to permit such
participation.  Borrower shall not settle
any such action or proceeding, whether by voluntary sale, stipulation or
otherwise, or agree to accept any award or payment without the prior written
consent of Agent, which consent shall not be unreasonably withheld so long as
no Default or Event of Default exists. 
The total of all amounts awarded or allowed with respect to all right,
title and interest in and to the Property or the portion or portions thereof
taken or affected by such condemnation or eminent domain proceeding and any
interest thereon (herein collectively called the “Award”) is hereby
assigned to and shall be paid upon receipt thereof to Agent and the amount
received shall be retained and applied as provided in Section 9(b) below.

 

(b)           If
an Event of Default exists at the time Agent receives the Award, Agent may
apply the Award in reduction or satisfaction of all or any part of the
Obligations, whether then matured or not. 
If no Event of Default exits at such time (or if an Event of Default
exists and Agent elects not to apply the Award as provided in the previous
sentence), Agent shall release the Award to Borrower; provided,
however, that, if the amount of the Award exceeds $50,000, Agent may
condition the release of all or any part of the Award on such escrow or other
disbursement conditions as Agent may reasonably require to ensure that, in the
case of a taking of all or substantially all of the Property, Buyer acquires
replacement real property that is subject to a mortgage lien in favor of Agent
subject to no lien or other encumbrance other than Permitted Liens and, in the
case of any other taking, Borrower uses the Award to restore the Property
remaining after such taking and to ensure that such Property remains free of
all mechanics’ and other liens except for Permitted Liens.  In no event shall Agent be required to
release this Mortgage until the Obligations are fully paid and performed nor
shall Agent be required to release from the lien of this Mortgage any portion
of the Property so taken until Agent receives the Award for the portion so
taken.

 

10.           Assignment of Rents and Leases.  (a)  Borrower hereby presently assigns
to Agent all of Borrower’s right, title and interest in and to any Leases, as
defined hereinafter, with respect to the Property, and all rents, issues and
profits of the Property.  “Lease”
means every lease or occupancy agreement for the use or hire of all or any
portion of the Property which shall be in effect on the date hereof, or which
shall hereafter be entered into, and by which Borrower is a lessor or the like,
and any renewals, extensions or other modifications thereof.  Borrower grants to Agent, with or without
Agent or any other Person (including, without limitation, a receiver) taking
possession of the Property, the right to give notice to the tenants of this
assignment, to collect rents, issues and profits from the tenants and to enter
onto the Property for the purpose of collecting the same and to let the
Property and to apply such rents, issues and profits, after payment of all
charges and expenses relating to the Property, to the Obligations.  This assignment shall be an absolute
assignment, subject to the license herein granted to Borrower and Borrower’s
obligations hereunder, and shall continue in effect until the Obligations are
fully paid and performed.  Agent hereby
grants a revocable license to Borrower to collect and use such rents, issues
and profits; provided, however,
that the foregoing license shall be automatically revoked, without any action
on Agent’s part, upon the occurrence of an Event of Default.  Notwithstanding any law to the contrary, if
there is an Event of Default, and if there is any applicable law requiring
Agent to take possession of the Property (or some action equivalent thereto,
such as securing the appointment of a receiver) in order for Agent to “perfect”
or otherwise “activate” its rights and remedies as set forth herein, then
Borrower waives all benefits of such laws and agrees that such laws shall be
fully satisfied, without any action on Agent’s part, solely by the occurrence
of such Event of Default.  If,
notwithstanding such 

 

7

 

waiver by Borrower, such
laws require the undertaking of some affirmative act by Agent, Borrower agrees
that such laws shall be fully satisfied solely by Agent giving Borrower notice,
written or oral, that such Event of Default has occurred and that Agent intends
to enforce its rights in any Leases and/or any rents, issues and profits
assigned herein.

 

(b)           Borrower
shall, from time to time upon request by Agent, execute, acknowledge and
deliver to Agent, in form and substance satisfactory to Agent, separate
assignments of any Leases in order to further evidence the foregoing
assignment.  Agent shall not be obligated
to perform any obligation to be performed by Borrower under any Lease or other
agreement affecting the Property, and Borrower hereby agrees to indemnify Agent
for, and hold Agent harmless from, any and all liability and expenses arising
from any such Lease or other agreement or any assignments thereof, and no
assignment of any such Lease or other agreement shall place the responsibility
for the control, care, management or repair of the Property upon Agent, nor
make Agent liable for any negligence or other tortious conduct, whether by
Agent or any other Person, with respect to the management, operation, upkeep,
repair or control of the Property resulting in injury, death, property or other
damage or loss of any nature whatsoever.

 

(c)           Borrower
shall not cancel, amend or otherwise modify the terms and conditions of any
Lease without obtaining Agent’s prior consent; nor shall Borrower accept
payments of rent or the like more than one month in advance without obtaining
Agent’s prior consent.

 

(d)           Agent
may exercise its rights from time to time under this Section 10 without
first commencing foreclosure proceedings against the Property if it so
elects.  Any such election by Agent to
exercise its rights from time to time under this Section 10 shall not
prohibit Agent from simultaneously or thereafter foreclosing upon the Property
or exercising any other rights available to Agent hereunder or at law.

 

11.           Agent’s Right to Perform Borrower’s
Covenants.  If Borrower shall fail
promptly and fully to pay, perform or observe any of the Obligations, then
Agent may, at its option, but without any obligation to do so, and without
waiving or releasing Borrower from any of the Obligations, pay any Obligation
or perform any Obligation or take such other action as Agent deems necessary or
desirable in order to cause such Obligation to be paid, performed or observed,
as the case may be.  Borrower hereby
grants to Agent, and agrees that Agent shall have, the absolute and immediate
right to enter in and upon the Property to such extent and as often as Agent,
in its discretion, deems necessary or desirable for such purpose.  Agent may pay and expend such sums of money
as Agent, in its discretion, deems necessary for any such purpose, and Borrower
hereby agrees to pay to Agent, on demand, all such sums so paid or expended by
Agent, together with interest thereon from the date of each such payment or
expenditure at the rate (the “Default Rate”) which is the lesser of (i) the
default rate of interest specified in Section 3.1(b) of the Credit
Agreement (or, if there any more than one such default rate, the highest
default rate), or (ii) the maximum interest rate permitted by law.  Any interest paid under this Section in
excess of the maximum interest rate permitted by law shall be deemed payment in
reduction of the principal amount of the Obligations and the excess, if any,
shall be refunded to Borrower without interest. 
All sums so paid or expended by Agent, and the interest thereon, shall
be added to the Obligations and shall be secured by the lien of this Mortgage.

 

12.           No Claims Against Agent.  Nothing contained in this Mortgage shall
constitute any consent or request by Agent, expressed or implied, for the
performance of any labor or services or the furnishing of any materials or
other property in respect of the Property, or be construed to permit the making
of any claim against Agent in respect of labor or services or the furnishing of
any materials or other property or any claim that any lien based on the
performance of such labor or services or the furnishing of any such materials
or other property is prior to the lien of this Mortgage.

 

8

 

13.           Liens.  This Mortgage is and shall be maintained as a
valid first mortgage lien on the Property subject only to Permitted Liens.  Borrower shall not, directly or indirectly,
create or suffer or permit to be created, or to stand, against the Property or
against the rents, issues and profits therefrom, any lien, charge, mortgage,
deed of trust, adverse claim or other encumbrance other than Permitted Liens; provided, however, that nothing contained
in this Section shall require Borrower to pay any real estate taxes or
other Impositions prior to the time when same are required to be paid under
this Mortgage.  Borrower shall keep and
maintain the Property free from all liens of Persons supplying labor or
materials relating to the construction, alteration, modification or repair of
the Property.  In no event shall Borrower
do or permit to be done, or omit to do or permit the omission of, any act or
thing where such act or omission may impair the security of this Mortgage.

 

14.           Security Agreement; Fixture Filing.
Borrower, as debtor, grants to Agent on behalf of the Banks, as secured party,
as further security for the Obligations, a security interest in all existing
and future fixtures and all proceeds of the foregoing.  This Mortgage shall be effective as a fixture
filing and a financing statement for purposes of Article 9 of the Uniform
Commercial Code as in effect in the State of Kansas.

 

15.           Default.  The Obligations shall become immediately due
and payable in full at the option of Agent upon the occurrence of any one or
more of the following (an “Event of Default”):  (a) the occurrence of an Event of
Default, as defined in the Credit Agreement; (b) Borrower shall fail to
pay any Imposition on or before the date such Imposition may be paid without
any penalty, interest or other premium; (c) Borrower shall fail to pay
timely any premiums for insurance required under Section 7 or Borrower
shall fail to reimburse Agent on demand for premiums paid by it on the
insurance required under Section 7; (d) Borrower shall directly or
indirectly create, suffer or permit to be created or to stand against the
Property or against the rents, issues and profits therefrom, any lien, security
interest, charge, mortgage, deed of trust or other encumbrance not expressly
permitted herein or in the Credit Agreement without in each instance obtaining
Agent’s prior written consent thereto; (e) Borrower’s default in the
observance or performance of any other covenant of Borrower hereunder (other
than a covenant the performance or observance of which is specifically referred
to elsewhere in this Section 15), which default is not cured within 30
days after Agent gives Borrower notice thereof; (f) Borrower shall sell,
convey, alienate, assign or otherwise transfer the Property, or any part thereof
or interest therein, in any manner, whether voluntary, involuntary, by
operation of law or otherwise, or Borrower shall enter into any agreement,
written or oral, to so sell, convey, alienate, assign or otherwise transfer the
Property, or any part thereof or interest therein; (g) there shall occur a
default or an event of default under any other deed of trust, mortgage or like
real property security instrument which encumbers the Property, or under any
document evidencing any obligation secured thereby, or any foreclosure or
similar proceeding shall commence with respect to the Property; (h) Borrower
shall deliver to Agent any notice terminating or purporting to terminate, or
Borrower shall take any other action to terminate or purporting to terminate, the
operation of this Mortgage as security for any future advances or future
obligations; or (i) the filing of any action to condemn, acquire by
eminent domain or otherwise take any part of the Premises or Building which, in
Agent’s determination, materially and adversely affects the use or intended use
of the Property as a whole or otherwise materially and adversely affects
Borrower’s business prospects.

 

16.           Notice Upon Acceleration;
Application of Payments.  Whenever
Agent in this Mortgage or in the other Credit Documents is given the option to
accelerate the maturity of all or part of the Obligations, Agent may, to the
extent permitted by law, do so without presentment, protest, notice to or
demand upon Borrower.  Agent shall have
the sole and exclusive right, and Borrower irrevocably waives any right, to
direct or redirect the application of any monies received by Agent on account
of the Obligations (whether such monies are received before or after the
occurrence of an Event of Default, in the ordinary course of affairs, by
acceleration, maturity or otherwise) against the Obligations in such 

 

9

 

manner as Agent may deem
advisable, from time to time, notwithstanding any entry by Agent upon any of
its books and records.

 

17.           Appointment of Receiver.  If an Event of Default exists, or if any
action shall be commenced to foreclose this Mortgage, without obligation to do
so, Agent, to the extent permitted by applicable law, may apply for the
appointment of a receiver of the rents, issues and profits of the Property
without notice or demand, and shall be entitled to the appointment of such
receiver as a matter of right, without consideration of the value of the
Property as security for the amounts due to Agent or the solvency of any Person
liable for the payment of such amounts.

 

18.           Foreclosure.  If an Event of Default exists, Agent may, to
the extent permitted by law, institute an action of judicial foreclosure, or
take such other action as the law may allow, at law or in equity, to enforce
this Mortgage and to realize upon the Property or any other security which is
herein or elsewhere provided for, and to proceed to final judgment and
execution for the entire unpaid balance of the Obligations at the rate stipulated
herein or in the Credit Agreement or the other Credit Documents, as the case
may be, to the date of default, and thereafter at the Default Rate, together
with, to the extent permitted by applicable law, all other sums secured by this
Mortgage, all costs of suit, and interest at the Default Rate on any judgment
obtained by Agent from and after the date of any judicial sale of the Property
(which may be sold in one parcel or part or in such parcels or parts, manner or
order as Agent shall elect) until actual payment is made to Agent on the full
amount due Agent.  Agent may foreclose or
otherwise realize upon one parcel or any other part of the Property, on one or
more occasions, without releasing this Mortgage or precluding the further
foreclosure or other realization hereunder of any other parcels or parts of the
Property not so foreclosed or realized upon. 
Failure to join or to provide notice to tenants or any other Persons as
defendants or otherwise in any foreclosure action or suit shall not constitute
a defense to such foreclosure or other action. 
Upon any foreclosure sale, whether by virtue of judicial proceedings or
otherwise, Agent or any Bank may bid and purchase the Property or any part
thereof or interest therein, and upon compliance with the terms of the sale,
may hold, retain, possess and dispose of the same in its own absolute right,
without further accountability.

 

19.           Possession of Property.  To the extent permitted by applicable law, if
an Event of Default exits, Agent and its agents, designees or assigns are
authorized to (i) take possession of the Property, with or without legal
action; (ii) lease the Property; (iii) collect all rents, issues and
profits therefrom, with or without taking possession of the Property; and (iv) after
deducting all costs of collection and administration expenses, apply the net
rents, issues and profits to the payment of Impositions, insurance premiums and
all other carrying charges (including, but not limited to, agents’ compensation
and fees and costs of counsel and receivers) and to the maintenance, repair or
restoration of the Property, or on account and in reduction of the Obligations,
in such order and amounts as Agent, in Agent’s sole discretion, may elect.  Agent shall be liable to account only for
rents, issues and profits actually received by it.

 

20.           Waivers.  To the extent permitted by applicable law,
Borrower hereby irrevocably waives and releases:  (i) any right of redemption after the
date of any sale of the Property upon foreclosure, whether statutory or
otherwise, in respect of the Property now or hereafter in force (irrespective
of whether Agent or any other Person purchases the Property at such
foreclosure); (ii) the benefit of any and all valuation and appraisement
laws now or hereafter in force; (iii) all exemption laws whatsoever and
all moratoriums, extensions or stay laws or rules, or orders of court in the
nature of either of them, now or hereafter in force; and (iv) any right to
have the Property marshaled upon any foreclosure of this Mortgage.

 

21.           Expenses of Agent.  To the extent permitted by applicable law,
all costs and expenses paid or incurred by Agent and/or any of the Banks,
including, without limitation, attorneys’ fees, in any action, proceeding or
dispute of any kind in which Agent and/or any of the Banks is made a party or 

 

10

 

appears as a plaintiff or
defendant, affecting Agent, any of the Banks, this Mortgage, the other Credit
Documents and/or the Property, including, but not limited to, the enforcement
of this Mortgage, any condemnation action involving the Property, any action to
protect the security hereof, or any case or proceeding under Title 11 of the
United States Code shall be added to and included in the Obligations and shall
be secured by this Mortgage and, upon demand, shall be immediately due from
Borrower. Without limiting the generality of the foregoing, if this Mortgage
shall be foreclosed, or if any of the other Credit Documents are placed in the
hands of an attorney for collection or is collected through any court,
including any bankruptcy court, Borrower, to the extent permitted by applicable
law, shall pay to Agent the attorneys’ fees, court costs, disbursements and
other costs incurred (irrespective of whether litigation is commenced in
pursuance thereof) in collecting or attempting to collect the Obligations or
enforcing or defending Agent’s rights hereunder, or under the other Credit
Documents, or under any other collateral securing the Obligations, and all allowances
provided by law, to the extent allowed by the laws of the state in which the
Property is located, or any state in which any of such other collateral for the
Obligations is situated, or other applicable law.  All of Borrower’s obligations under this Section shall
survive the foreclosure, release or other termination of this Mortgage, the
satisfaction of the other Obligations secured hereby, and any merger of this
Mortgage into any judgment or the like, whether pursuant to foreclosure or
otherwise.

 

22.           Discontinuance of Action.  Agent may from time to time, to the extent
permitted by applicable law, take action to recover any sums, whether interest,
principal or any other obligation or sums, required to be paid under this
Mortgage or the other Credit Documents, as the same become due, without
prejudice to the right of Agent thereafter to bring an action of foreclosure,
or any other action, for a default existing when such earlier action was
commenced.  If Agent shall have proceeded
to enforce any right under this Mortgage or the other Credit Documents, and
such proceedings shall have been discontinued or abandoned for any reason, then
in every such case Borrower and Agent shall be restored to their former
positions and the rights, remedies and powers of all parties hereto shall
continue as if no such proceedings had been taken.

 

23.           Taxes.  Upon passage after the date of this Mortgage
of any law of the United States, the State of Kansas or any other governmental
entity which deducts from the value of real property, for purposes of taxation,
any indebtedness secured by mortgages or which changes in any way the laws for
the taxation of mortgages or debts secured by mortgages for State or local
purposes or the manner of the collection of any such taxes, and which imposes a
tax, either directly or indirectly, on this Mortgage or all or any part of the
sum secured hereby or the interest thereon, Agent may declare the whole of the
Obligations and the interest accrued thereon, due on a date to be specified by not
less than 30 days’ written notice to Borrower; provided,
however, that such declaration shall be ineffective if Borrower is
permitted by law to pay such tax in addition to all other payments required
hereunder, without any penalty or charge thereby accruing to Agent, and if
Borrower pays such tax within such 30 day period.  Borrower shall pay any taxes except income
taxes imposed on Agent or any Bank relating to this Mortgage.

 

24.           Recording and Other Fees; Further
Assurances.  Borrower shall pay all
recording and filing fees, all recording taxes and all other costs and expenses
in connection with the preparation, execution and recordation and other manner
of perfection of this Mortgage and any other Credit Documents – including,
without limitation, all mortgage registration fees payable under K.S.A.
§79-3102 and/or other applicable law – and shall reimburse Agent on demand for
all costs and expenses of any kind incurred by or on behalf of Agent in
connection therewith.  Borrower agrees to
execute and deliver promptly such instruments and other documents, and promptly
to take such action or promptly refrain from taking such action, as Agent may
request, from time to time, to evidence, create, perfect, continue or otherwise
assure Agent of the real and personal property security interests granted, or
purported to be granted, to or for the benefit of Agent hereunder and all other
rights and benefits granted, or purported to be granted, to or for the benefit
of Agent hereunder; all at the sole cost and expense of Borrower.  Without 

 

11

 

limiting the generality
of the foregoing, Borrower shall, at any time on request of Agent, execute or
cause to be executed and shall deliver financing statements, continuation statements,
security agreements, or the like, in respect of any Property and Borrower shall
pay all filing fees, including, without limitation, fees for filing
continuation statements, in connection with such financing statements.

 

25.           No Waiver.  Any failure by Agent to insist upon the
strict performance by Borrower of any of the Obligations shall not be deemed to
be a waiver of any of such Obligations, and Agent, notwithstanding any such
failure, may thereafter insist upon the strict performance by Borrower of any
and all of the Obligations.

 

26.           No Release.  Borrower and any other Person now or
hereafter obligated for the payment or performance of all or any part of the
Obligations shall not be released from paying and performing such Obligations
and the lien of this Mortgage shall not be affected by reason of (i) the
failure of Agent to comply with any request of Borrower, or of any other Person
so obligated, to take action to foreclose this Mortgage or otherwise enforce
any of the provisions of this Mortgage or of any of the Obligations secured by
this Mortgage; (ii) the release, regardless of consideration, of the
obligations of any Person or Persons liable for payment or performance of the
Obligations or any part thereof; or (iii) any agreement or stipulation
extending the time of payment or modifying the terms of any of the Credit
Documents and in the event of such agreement or stipulation, Borrower and all
such other Persons shall continue to be liable under such Credit Documents, as
amended by such agreement or stipulation, unless expressly released and
discharged in writing by Agent.

 

27.           Release of Collateral.  Agent may release or partially release,
regardless of consideration, the obligation of any Person liable for payment of
any of the Obligations secured hereby, or may release any part of the Property
or any other collateral now or hereafter given to secure the payment of the
Obligations or any part thereof, without impairing, reducing or otherwise
affecting the obligations of Borrower under the Credit Agreement or any other
Credit Documents, the remainder of the security of this Mortgage or the
priority of the rights created by this Mortgage.

 

28.           Rights Cumulative.  The rights and remedies provided for in this
Mortgage, or which Agent may have otherwise, at law or in equity, shall be
distinct, separate and cumulative and shall not be deemed to be inconsistent
with each other, and none of them, whether or not exercised by Agent, shall be
deemed to be in exclusion of any other, and, to the extent permitted by law,
any two or more of all such rights and remedies may be exercised at the same
time.

 

29.           Severability.  If any term or provision of this Mortgage or
the application thereof to any Person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Mortgage, or the application of
such term or provision to Persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Mortgage shall be valid and enforceable to the fullest
extent permitted by law.  If any payments
(including, without limitation, any interest payments) required to be made
hereunder or under the other Credit Documents shall be in excess of the amounts
allowed by law, the amounts of such payments shall be reduced to the maximum
amounts allowed by law.  Furthermore, all
rights, powers and remedies provided in this Mortgage may be exercised only to
the extent that the exercise thereof does not violate any applicable provisions
of law and are intended to be modified to the extent necessary to comply with
applicable law and are intended to be limited to the extent necessary so that
they will not render this Mortgage invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law.

 

12

 

30.           Notices.  All notices, demands, consents, approvals and
requests given or required to be given by any party hereto to any other party
hereto shall be in writing and shall be given in accordance with the terms and
provisions of the Credit Agreement.

 

31.           Indemnification Against
Liabilities.  Borrower shall protect,
indemnify, hold harmless and defend Agent and the Banks from and against any
and all liabilities, obligations, claims, damages, penalties, causes of action,
costs and expenses (including, without limitation, attorneys’ fees and
expenses) imposed upon incurred by or asserted against Agent or any of the
Banks by reason of (a) ownership of an interest in the Property, (b) any
accident or injury to or death of Persons or loss of or damage to or loss of
the use of property occurring on or about the Property, or the adjoining
sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or ways, (c) any
use, non-use or condition of the Property, or the adjoining sidewalks, curbs,
vaults and vault spaces, if any, streets, alleys or ways, (d) any failure
on the part of Borrower to perform or comply with any of the terms of this
Mortgage or the other Credit Documents, (e) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property made or suffered to be made by or on behalf of Borrower, (f) any
acts or omissions on the part of Borrower or any of its agents, contractors,
lessees, licensees or invitees, or (g) any work in connection with any
alterations, changes, new construction or demolition of the Property; in each
case irrespective of whether any such liabilities, obligations, claims, damages,
penalties, causes of actions, costs or expenses are, caused by, or otherwise
arise out of, in whole or in part, Agent’s or any Bank’s negligence or other
tortious conduct (other than any gross negligence or willful misconduct by
Agent of any Bank), whether active or passive. 
Borrower will pay and hold Agent and the Banks harmless against any and
all liability with respect to any intangible personal property tax or similar
imposition of the state in which the Property is located or any subdivision or
authority thereof now or hereafter in effect, to the extent that the same may
be payable by Agent or any Bank in respect of this Mortgage, the other Credit
Documents or the Obligations.  All
amounts payable to Agent or any Bank under this Section shall be payable
on demand and shall be deemed Obligations secured by this Mortgage.  If any action, suit or proceeding is brought
against Agent or any Bank by reason of any such occurrence, Borrower, upon
request of Agent will, at Borrower’s expense, resist and defend such action,
suit or proceeding or cause the same to be resisted or defended by counsel
designated by Borrower and approved by Agent. 
All of Borrower’s obligations under this Section shall survive the
foreclosure, release or other termination of this Mortgage and the satisfaction
of the Obligations, and any merger of this Mortgage into any judgment or the
like, whether pursuant to foreclosure or otherwise.

 

32.           Environment.  (a)  Borrower shall comply with all
applicable laws (whether statutory, common law or otherwise), rules,
regulations, orders, permits, licenses, ordinances, judgments or decrees of all
governmental authorities (whether federal, state, local or otherwise),
including, without limitation, all laws regarding public health or welfare, environmental
protection, water or air pollution, composition of products, underground
storage tanks, toxic substances or chemicals, solid and special wastes,
hazardous wastes, substances, material or chemicals, waste, used, or recycled
oil, asbestos, occupational health and safety, nuisances, trespass, and
negligence.

 

 (b)          Neither
Agent nor any Bank shall assume or be deemed to assume any responsibility,
liability, or obligation with respect to compliance with any federal, state, or
local environmental law, rule, regulation, order, permit, license, ordinance,
judgment or decree; provided, however,
that in the event of the imposition or assumption for any reason whatsoever of
any such responsibility, liability, or obligation, Borrower agrees to indemnify
and hold Agent and the Banks harmless from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements, of any kind or nature whatsoever,
including without limitation, attorneys’ and experts’ fees, which may be
imposed on, incurred by or asserted against it in any way relating to or
arising from the Obligations, this Mortgage, the other Credit Documents and/or
the Property.  All of Borrower’s
obligations under this Section shall survive the foreclosure, release or
other 

 

13

 

termination of this
Mortgage and the satisfaction of the Obligations, and any merger of this
Mortgage into any judgment or the like, whether pursuant to foreclosure or
otherwise.

 

33.           Certain Definitions.  The following terms shall, for purposes of
this Mortgage, have the respective meanings herein specified unless the context
otherwise requires:  (a)  “Agent”
means the Agent herein named and any subsequent mortgagee under this Mortgage,
and its, his, her or their respective successors, assigns, heirs and personal
representatives.  (b)  “Bank”
means each Bank referred to in the Credit Agreement and, subject to the terms
and provisions of the Credit Agreement, its successors and assigns, and
likewise includes, except if otherwise provided in the Credit Agreement, any
swing line lender, letter of credit issuer, swap provider or other credit or
financial service provider for whom, pursuant to the terms of the Credit
Agreement, Agent is to act as collateral agent or the like.  (c)  “Borrower” means the
Borrower herein named and any subsequent owner or owners of the Property and
its, his, her or their respective successors, assigns, heirs and personal
representatives.  (d)  “Building”
means all of the Building described herein including any part thereof.  (e)  “Building Equipment” means
all of the Building Equipment described herein including any part thereof.  (f)  “Person” means an
individual, corporation, partnership, trust, unincorporated organization or
government, or any agency or political subdivision thereof, or any other legal
entity.  (g)  “Premises”
means all of the Premises described herein including any part thereof.  (h)  “Property” means all of the
Property described herein including any part thereof.

 

34.           Successors and Assigns.  The terms, covenants and provisions of this
Mortgage shall apply to and be binding upon Borrower and all subsequent owners
and other Persons who have an interest in the Property, and shall inure to
benefit of Agent, the successors and assigns of Agent, and all subsequent
holders of this Mortgage, but the provisions of this Section shall not be
construed to modify the provisions of Section 15(f).

 

35.           Related Obligations.  If and to the extent the Credit Agreement at
any time authorizes Agent to act as a collateral agent or the like for the
benefit of any Bank or any affiliate of any Bank that may issue interest rate
swaps or other hedging instruments to or for the benefit of Borrower, the
Obligations secured hereby shall include Borrower’s existing and future
obligations with respect to any such interest rate swaps and/or other hedging
instruments.

 

36.           Miscellaneous. Borrower
further agrees as follows:  (a) 
This Mortgage cannot be changed, waived, discharged or terminated orally but
only by an agreement in writing, signed by the party against whom enforcement
of the change, waiver, discharge or termination is sought.  (b)  This Mortgage shall be construed
without regard to any presumption or rule requiring construction against
the party causing such instrument or any portion thereof to be drafted.  (c)  All terms and words used in this
Mortgage, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require.  (d)  If there shall be
more than one Borrower, the representations, warranties, covenants and other
obligations of Borrower hereunder shall be the joint and several
representations, warranties, covenants and other obligations of each and every
Borrower.  Whenever the terms of this
Mortgage prohibit Borrower from doing or permitting to be done, whether
voluntarily or otherwise, any act or event, any such negative covenants shall
apply to each and every Borrower and the failure of any one Borrower in respect
thereof shall be deemed a default of such negative covenant notwithstanding
that any other Borrower may not be in default of such negative covenant.  (e)  The Section headings in this
Mortgage and any index at the beginning of this Mortgage are for convenience of
reference only and shall not limit or otherwise affect any of the terms
hereof.  (f)  All covenants
contained herein shall run with the Property until the Obligations have been
fully paid and performed.  (g)  Time
is of the essence in the payment and performance by Borrower of the
Obligations.  (h)  This Mortgage
shall be governed by the laws of the State of Kansas, without regard to any
choice of law rule thereof which gives effect to the laws of any other
jurisdiction.

 

14

 

IN WITNESS WHEREOF, this
Mortgage has been duly executed by Borrower and delivered to Agent as of the
day and year first above written.

 

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Zonneveld 

  
	
   

  	
   

  	
   Name: Robert
  Zonneveld

  
	
   

  	
   

  	
   Title: V.P.
  Finance & CFO

  

 

15

 

	
  STATE OF KANSAS      )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
            )
  SS.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  COUNTY OF ATCHISON

  	
            )

  	
   

  	
   

  

 

The foregoing instrument
was acknowledged before me on 30th day of Decem er , 2008, byRobert Zonneveld, as
FP/CFO of MGP INGREDIENTS, INC., a Kansas corporation, on behalf of the
corporation.

 

 

	
   

  	
  /s/ Marta L. Myers

  
	
   

  	
  Notary Public

  
	
  [Seal]

  	
   

  
	
   

  	
  My Commission expires:
  01/03/2010

  

 

16

 

Exhibit A

 

(legal description
of Premises)

 

TRACT 1:

 

A TRACT OF LAND IN
THE SOUTHEAST QUARTER OF SECTION 15, TOWNSHIP 11 SOUTH, RANGE 25 EAST OF THE
SIXTH PRINCIPAL MERIDIAN IN KANSAS CITY, WYANDOTTE COUNTY, KANSAS, BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:

 

BEGINNING AT A
POINT WHICH IS 27.22 FEET NORTH OF THE CENTER LINE OF VACATED CARR AVENUE AND
347.50 FEET EAST OF THE EAST RIGHT-OF-WAY LINE OF VACATED 1ST STREET AS SAID
RIGHTS-OF-WAY ARE NOW ESTABLISHED, SAID POINT ALSO BEING 1513.24 FEET NORTH AND
1461.42 FEET EAST OF THE SOUTHWEST CORNER OF THE SOUTHEAST QUARTER OF SAID
SECTION 15: 

 

THENCE NORTH 0
DEGREES 20 MINUTES 15 SECONDS WEST, 2.78 FEET, ALONG A LINE PARALLEL WITH AND
347.50 FEET EAST OF THE EAST RIGHT-OF-WAY LINE OF VACATED 1ST STREET, TO A
POINT ON THE NORTH LINE OF VACATED CARR AVENUE, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF LOT 14, BLOCK 10 IN "MCALPINES ADDITION TO
ARMOURDALE", 

 

THENCE NORTH 0
DEGREES 16 MINUTES 33 SECONDS WEST, 407.70 FEET, ALONG A LINE WHICH MAKES AN
ANGLE OF 90 DEGREES 05 MINUTES IN THE NORTHWEST QUADRANT WITH THE NORTH LINE OF
VACATED CARR AVENUE; 

 

THENCE NORTH 61
DEGREES 33 MINUTES 27 SECONDS EAST, 379.10 FEET;

 

THENCE NORTH 28
DEGREES 23 MINUTES 27 SECONDS EAST, 131.33 FEET TO THE SOUTHWEST CORNER OF A
TRACT OF LAND CONVEYED TO THE UNION PACIFIC RAILROAD COMPANY BY SWIFT &
COMPANY, AS RECORDED IN BOOK 2490 AT PAGE 301 ON JANUARY 5, 1976; 

 

THENCE
SOUTHEASTERLY 495.71 FEET, ALONG A CURVE CONCAVE TO THE SOUTHWEST, HAVING A
RADIUS OF 433.11 FEET THROUGH A CENTRAL ANGLE OF 65 DEGREES 43 MINUTES 17
SECONDS AND TO WHICH THE CENTER OF SAID CURVE BEARS SOUTH 1 DEGREES 06 MINUTES
57 SECONDS WEST, TO A POINT 15.0 FEET WESTERLY AND AT RIGHT ANGLES TO THE
CENTER OF THE ARMOURDALE SPUR OF THE UNION PACIFIC RAILROAD, AS NOW
ESTABLISHED: 

 

THENCE SOUTH 14
DEGREES 50 MINUTES 16 SECONDS EAST, 233.82 FEET, ALONG A LINE PARALLEL WITH AND
15.0 FEET WESTERLY FROM THE CENTERLINE OF SAID SPUR TRACK; 

 

 

 

 

THENCE
SOUTHEASTERLY 245.16 FEET, ALONG A CURVE CONCAVE TO THE SOUTHWEST, TANGENT TO
THE LAST DESCRIBED COURSE, 15.00 FEET WESTERLY OF AND PARALLEL TO THE
CENTERLINE OF SAID SPUR TRACK, HAVING A RADIUS OF 2774.03 FEET THROUGH A
CENTRAL ANGLE OF 5 DEGREES 03 MINUTES 50 SECONDS, TO A POINT; 

 

THENCE SOUTHERLY
65.74 FEET, ALONG A NON-TANGENT CURVE CONCAVE TO THE WEST, HAVING A RADIUS OF
463.34 FEET THROUGH A CENTRAL ANGLE OF 8 DEGREES 08 MINUTES 09 SECONDS AND TO
WHICH THE CENTER OF THE CIRCLE OF SAID CURVE BEARS SOUTH 81 DEGREES 36 MINUTES
03 SECONDS WEST, TO A POINT WHICH IS 20.46 FEET WESTERLY OF AND PARALLEL TO THE
CENTERLINE OF SAID SPUR TRACK; 

 

THENCE NORTH 84
DEGREES 28 MINUTES 27 SECONDS WEST, 904.85 FEET, TO THE POINT OF BEGINNING OF
THE TRACT HEREIN DESCRIBED, LESS THAT PART TAKEN OR USED FOR ROAD PURPOSES.

 

 

 

 

 

 

Exhibit B

 

(Permitted Liens)

 

1.                                       Taxes and assessments for the calendar
year 2008 and subsequent years, provided that payment of such taxes and
assessments is not delinquent.Exhibit 4.2

 

Drafted by and when
recorded

mail to:

 

Mark Ovington, Esq.

Stinson Morrison Hecker
LLP

1201 Walnut Street, Suite 2900

Kansas City, Missouri
64106

 

MORTGAGE,
SECURITY AGREEMENT,

ASSIGNMENT
OF LEASES AND RENTS

AND
FIXTURE FILING

 

(secures
future advances and future obligations, but Maximum Amount Secured, as defined
in and subject to the provisions of Section 1 below, equals $19,700,000)

 

This Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing (the “Mortgage”)
is given as of November 7, 2008, by MGP INGREDIENTS, INC., a Kansas
corporation formerly known as Midwest Grain Products, Inc. and, before
that, as Midwest Solvents Company, Inc. and as successor by merger to
Midwest Grain Processing Equipment Company, Inc. (the “Borrower”),
with an office located at Cray Business Plaza, 100 Commercial Street, Atchison,
Kansas 66002, to COMMERCE BANK, N.A., a national banking association, as Agent
for the Banks from time to time party to the Credit Agreement referred to below
(in such capacity, the “Agent”), with an office located at 1000 Walnut
Street, Kansas City, Missouri 64105.

 

WHEREAS, Borrower is the
owner of the real property and improvements thereon legally described on Exhibit A
attached hereto;

 

WHEREAS, Borrower was formerly
known as Midwest Solvents Company, Inc. and acquired under such former
name Parcels 1 and 50 described on Exhibit A attached hereto;

 

WHEREAS, Borrower was
also formerly known as Midwest Grain Products, Inc. and acquired under
such former name Parcels 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,
17, 27, 28, 29, 30, 31, 32, 33, 34, 37, 38, 39, 40, 42, 43, 44 and 48 described
on Exhibit A attached hereto;

 

 

WHEREAS, Midwest Grain
Processing Equipment Company, Inc., also sometimes referred to as Midwest
Grain Processing Equipment Co., Inc. and Midwest Grain Processing
Equipment Company, acquired Parcels 18, 19, 20, 21, 22, 23, 25, 35 and 46
described on Exhibit A attached hereto under the name Midwest Grain
Processing Equipment Company, Inc., and acquired Parcels 24, 26, 47 and 49
described on Exhibit A attached hereto under the name Midwest Grain
Processing Equipment Co., Inc., and acquired Parcel 45 described on Exhibit A
attached hereto under the name Midwest Grain Processing Equipment Company, in
each case before Midwest Grain Processing Equipment Company, Inc. was
merged with and into Borrower, with Borrower being the sole surviving entity;

 

WHEREAS, Borrower has
incurred and may hereafter incur indebtedness under the Credit Agreement, dated
as of May 5, 2008, among Borrower, certain other borrower(s) thereunder
(collectively, whether one or more, the “Other Borrower”), Commerce
Bank, N.A., as Agent, Issuing Bank and Swingline Lender, and the Banks party
thereto, as amended by a First Amendment to Credit Agreement dated as of September 3,
2008, a letter agreement dated October 31, 2008, and a Second Amendment to
Credit Agreement dated on or about the date hereof (as so amended and as
otherwise amended, renewed, restated, replaced, consolidated or otherwise
modified from time to time, the “Credit Agreement”), pursuant to which
the Banks have agreed or may elect, in each case subject to the terms and
conditions thereof and as of the date hereof, to extend credit to or for the
benefit of Borrower and/or Other Borrower in an aggregate outstanding principal
amount not to exceed $55,000,000 at any time;

 

WHEREAS, Borrower’s and
Other Borrower’s obligations to the Banks under the Credit Agreement are
evidenced by the following promissory notes: (a) an Amended and Restated
Revolving Credit Note, dated on or about September 3, 2008, from Borrower
and Other Borrower, as makers, to Commerce Bank, N.A., as payee, in the stated
principal amount of $21,175,000; (b) an Amended and Restated Revolving
Credit Note, dated on or about September 3, 2008, from Borrower and Other
Borrower, as makers, to BMO Capital Markets Financing, Inc., as payee, in
the stated principal amount of $16,912,500; (c) an Amended and Restated
Revolving Credit Note, dated on or about September 3, 2008, from Borrower
and Other Borrower, as makers, to National City Bank, as payee, in the stated
principal amount of $16,912,500; and (d) a Swingline Note, dated on or
about May 5, 2008, from Borrower and Other Borrower, as makers, to
Commerce Bank, N.A., as payee, in the stated principal amount of $5,000,000;

 

WHEREAS, the foregoing
promissory notes and any other promissory notes issued on or after the date
hereof under the Credit Agreement — whether payable to the above specifically
identified Banks or their respective permitted assignees under the Credit
Agreement or to other lenders who may hereafter become Banks under the Credit
Agreement or their respective permitted assignees under the Credit Agreement —
as any of the foregoing may be amended, renewed, restated, replaced,
consolidated or otherwise modified from time to time, are collectively referred
to herein as the “Notes” and are individually referred to herein as a “Note”;

 

WHEREAS, Borrower’s and
Other Borrower’s obligations under the Credit Agreement, the Notes, this
Mortgage and any other Credit Documents (as defined in the Credit Agreement),
whether monetary, nonmonetary, direct, indirect, acquired, joint, several,
joint and several, existing, future, contingent or otherwise, and any replacements,
renewals, extensions and other modifications of any of the above, together with
all principal, premium, interest, fees, expenses and other amounts and charges
relating thereto, and any amounts expended by or on behalf of Agent or any Bank
for the protection and preservation of the mortgage lien and security interest
granted herein, are hereinafter sometimes collectively called the “Obligations”;
and

 

WHEREAS, any agreements,
documents or instruments evidencing, securing or otherwise relating to any of
the Obligations (including, without limitation, any of the Credit Documents, as
defined 

 

2

 

in the Credit Agreement),
and any amendments, restatements, replacements, consolidations and other
modifications of any of the foregoing are hereinafter sometimes collectively
called the “Credit Documents.”

 

NOW, THEREFORE, to secure
the full and prompt payment and performance of the Obligations, Borrower hereby
mortgages and warrants to Agent, on behalf of the Banks, and grants to Agent on
behalf of the Banks, a security interest in, all of Borrower’s right, title and
interest in and to the following property, whether such property or interest
therein is now owned or existing or hereafter acquired or arising (collectively,
the “Property”): (a) all of the tracts, parcels or other units of
land described in Exhibit A attached hereto (the “Premises”); (b) all
of the buildings, structures and other improvements now or hereafter situated
on the Premises, together with any alterations, additions and improvements
thereto and all restorations and replacements thereof made from time to time
(collectively, the “Building”); (c) all machinery, apparatus,
equipment and fixtures of every kind and nature whatsoever now or hereafter
located in, on or about the Building or upon the Premises, or attached to or
used or usable in connection with the operation or maintenance of the Premises
or the Building or in connection with any construction being conducted on the
Premises, including, but not limited to, all heating, lighting and power
equipment, engines, plumbing, electrical, mechanical, refrigeration,
ventilating and air-conditioning equipment and apparatus, elevators, cranes,
fittings, tools, ducts and compressors (collectively, the “Building
Equipment”), which Building Equipment shall, to the fullest extent
permitted by law, be deemed to constitute fixtures and part of the real
property encumbered by this Mortgage; (d) all easements, tenements,
hereditaments, appurtenances, rights and rights of way, public or private,
pertaining, belonging or otherwise relating to the Premises or the Building; (e) all
insurance proceeds and any judgments, settlements, awards and other payments,
including interest thereon, which may be made in respect of the Property as a
result of damage to or destruction of the Property, the exercise of the right
of condemnation or eminent domain over any interest in the Property, the
closing of, or the alteration of the grade of, any street on or adjoining the Premises,
or any other injury to or decrease in the value of the Property; (f) all
franchises, permits, licenses and other rights therein respecting the use,
occupation or operation of the Property or the activities conducted thereon or
thereabout; (g) all rents, income and other benefits arising out of or
otherwise related to the Property and all leases on or affecting the Property,
and any security deposits, contract rights, general intangibles, actions,
rights of action, and unearned insurance premiums relating to such leases or
the Property; and (h) all accessions to, substitutes for, and all
modifications, replacements, renewals, products and proceeds of any of the
foregoing; provided, however, that the Property
shall not include any Excluded GE Equipment Collateral (as defined in the
Credit Agreement).

 

Borrower covenants,
represents and warrants to Agent as follows:

 

1.             Indebtedness Secured.  This Mortgage has been given and is intended
to secure the full and prompt payment and performance of the Obligations and
constitutes a future advance mortgage under K.S.A. §58-2336.  This Mortgage secures future advances from
the Banks to Borrower or Other Borrower and other future obligations of
Borrower and/or Other Borrower to the Banks and the Agent pursuant to the
Credit Documents; provided, however, that,
notwithstanding anything to the contrary in this Mortgage, (i) the maximum
aggregate principal balance secured hereby shall not exceed $19,700,000 (the “Maximum
Amount Secured”), and (ii) payments made on account of the
obligations secured hereby or any portion thereof, whether in the ordinary
course, as prepayments or otherwise, shall not reduce the Maximum Amount
Secured unless the aggregate principal amount of obligations secured hereby is
less than the Maximum Amount Secured. The priority of the lien hereunder
securing such future advances and future obligations shall relate back to the
date this Mortgage was recorded.  In
addition, the Mortgage shall secure unpaid balances of advances made by Agent
or any Bank with respect to the Property, for the payment of Impositions, as
hereinafter defined, insurance premiums and costs incurred for the protection
of the Property and any charges, expenses and fees, including, without
limitation, 

 

3

 

attorneys’ fees, which,
by the terms hereof, shall be added to and increase the Obligations.  Borrower agrees that all of the duties and
obligations imposed on it hereunder, whether absolute or contingent, due or to become
due, are for the reasonable protection of the lien of this Mortgage.  This Mortgage shall remain in full force and
effect with respect to all of the Property until all Obligations shall have
been paid and performed in full.  If the
Obligations are paid and performed in accordance with the terms of the
applicable Credit Documents, including, without limitation, the observance of
all the agreements contained in this Mortgage, this Mortgage shall be released
at the expense of Borrower.  Borrower
acknowledges that nothing in this Section 1 obligates Agent or any Bank to
make future advances to Borrower or any other Person.

 

2.             Title to Property and Other Representations and
Warranties.  Borrower represents,
warrants and covenants to Agent that:  (a) Borrower
owns the Premises and the improvements thereon in fee simple absolute and has
good and marketable title to the remainder of the Property; (b) the
Property is free of all liens, encumbrances, adverse claims and other defects
of title whatsoever, except for Permitted Liens (as defined in the Credit
Agreement) and the matters set forth on Exhibit B hereto (collectively,
together with Permitted Liens as defined in the Credit Agreement, “Permitted
Liens”); (c) Borrower does hereby and shall forever warrant and defend
its title to and interest in the Property (and the validity and priority of the
lien of this Mortgage) to Agent against all claims and demands whatsoever of
any Person; (d) the Building presently on the Premises complies in all
material respects with all applicable zoning and building codes, ordinances and
regulations, and such compliance is based solely upon Borrower’s owning the
Property and not upon Borrower’s title to or interest in any other property; (e) any
Building hereafter constructed on the Premises shall comply in all material
respects with all applicable zoning and building codes, ordinances and
regulations and shall lie wholly within the boundaries of the Premises; (f) there
are no actions, suits or proceedings pending or, to Borrower’s knowledge, threatened
against or affecting the Property; and (g) Borrower has the good and
unrestricted right, full power and lawful authority to subject the Property to
this Mortgage.

 

3.             Maintenance. 
Borrower shall maintain the Property in good order, condition and
repair, excepting ordinary wear and tear. 
Borrower shall make, as and when the same shall become necessary, all
structural and non-structural repairs, whether exterior or interior, ordinary
or extraordinary, foreseen or unforeseen. 
Borrower shall not commit or suffer any waste of the Property.  Borrower shall not construct any new or
additional buildings on the Premises without the prior written consent of
Agent, which consent shall not be unreasonably withheld so long as no Default
or Event of Default exists. 
Notwithstanding the foregoing, if Borrower is required by applicable law
to undertake any such alterations to the Building or the Building Equipment,
Borrower may do so without obtaining Agent’s consent thereto.  In such event, Borrower shall promptly give
Agent written notice of any such legal requirement and, prior to undertaking
such alterations, shall notify Agent in writing of any such alterations that
Borrower proposes to undertake.  Agent
and each of the Banks, and their respective agents, contractors and
representatives, may enter upon and inspect the Property at all reasonable
times until this Mortgage is released. 
Without limiting the generality of the foregoing, Agent, each of the
Banks, and their respective agents, contractors and representatives, may from
time to time enter upon the Property and conduct upon the Property inspections
and tests to determine the extent to which any hazardous substances, wastes or
other environmentally unsound materials have been placed or discharged upon or
otherwise affect the Property, all at the sole expense of Borrower.

 

4.             Restoration. 
If any of the improvements or equipment comprising the Property is
damaged or destroyed, in whole or in part, by fire or other casualty (whether
or not covered by insurance), or by any taking in condemnation proceedings or
the exercise of any right of eminent domain, Borrower shall promptly restore,
replace or rebuild the same to as nearly as possible the value, quality and
condition they were in immediately prior to such fire or other casualty or
taking, with such alterations or changes as may be approved in writing by
Agent, which approval shall not be unreasonably withheld; provided, 

 

4

 

however,
that Borrower shall be under no duty to so restore, rebuild or replace such
property to the extent that Agent receives and applies any insurance,
condemnation or similar proceeds relating to such casualty to satisfy any part
of the Obligations.  Borrower shall give
prompt notice to Agent of any material damage to the Property.

 

5.             Compliance with Laws; Use of Property.  Borrower shall comply in all material
respects with all present and future laws, statutes, ordinances, rules,
regulations and other requirements (including, without limitation, applicable
zoning and building requirements) of all governmental and quasi-governmental
authorities whatsoever having jurisdiction with respect to the Property.  Borrower shall promptly perform and observe
all of the terms, covenants and conditions of all instruments of record
affecting the Property, non-compliance with which may affect the security of
this Mortgage, or which shall impose any duty or obligation upon Borrower or
any tenant or other occupant of the Premises, and Borrower shall do all things
necessary to preserve intact and unimpaired any and all easements,
appurtenances and other interests and rights in favor of or constituting any
portion of the Property.  Borrower shall
not use or permit the use of the Property in any manner which would tend to
impair the value of the Property or materially increase the risk of fire or
other casualty.

 

6.             Impositions. 
Borrower shall pay when the same shall become due and payable all real
estate taxes, assessments, water and sewer rates and charges, license fees and
all other governmental levies and charges of every kind and nature whatsoever,
general and special, ordinary and extraordinary, foreseen and unforeseen, which
shall be assessed, levied, confirmed, imposed or become a lien upon or against
the Property or which shall become payable with respect thereto (collectively,
“Impositions”).  Notwithstanding
the foregoing, Borrower may contest any Imposition by appropriate and timely
proceedings, provided that on or before the due date for payment of such
Imposition Borrower shall establish an escrow or other provision for payment of
such Imposition satisfactory to Agent in an amount estimated by Agent to be
adequate to pay such Imposition and any interest or penalties that may result
from its nonpayment on the due date.  In
all such cases of contest, Borrower shall pay the contested Imposition within
10 days after the dismissal of said proceedings or the final and unappealable
determination of Borrower’s or the Property’s liability therefor, as the case
may be.  So long as any Event of Default
exists, however, Borrower shall, upon demand by Agent, pay the whole of any
assessment for local improvement which may be payable in installments,
notwithstanding that such installments may not be due and payable at the time
of such demand by Agent.  Borrower shall
deliver to Agent, within 10 days after the request of Agent therefor, the
original or a photocopy of the official receipt evidencing such payment or
other proof of payment satisfactory to Agent.

 

7.             Insurance. 
(a)  Borrower, at Borrower’s sole expense, shall insure the
Property for the benefit of Agent against loss or damage thereto and shall keep
in effect, for Agent’s benefit, comprehensive general public liability
insurance against claims for bodily injury, death or property damage.  The policies of insurance required by this Section shall
be in companies, forms and amounts, and for such periods and with such
deductibles, as shall be customary for property similar in use, location and
condition to the Property, and shall insure the respective interests of
Borrower and Agent.  The insurance
proceeds from all such policies of insurance (other than the proceeds in
respect of any liability insurance policy) shall be payable to Agent pursuant
to a noncontributing first mortgagee endorsement satisfactory in form and
substance to Agent.  Upon request by
Agent, Borrower shall promptly furnish evidence of satisfactory insurance on
the Property and that Borrower has complied with the other provisions of this Section.  In addition to the other policies of
insurance required hereunder, Borrower shall cause a title insurer reasonably
acceptable to Agent to insure, in favor of Agent, Borrower’s ownership of, and
Agent’s first priority lien on, the Property, subject only to Permitted Liens,
in an amount equal to not less than $19,700,000 in such form, and with such
affirmative coverage and endorsements as Agent may reasonably request.

 

5

 

(b)           Borrower
irrevocably makes, constitutes and appoints Agent (and all officers, employees
or agents designated by Agent) as Borrower’s true and lawful attorney-in-fact
and agent, with full power of substitution, for the purpose of making and
adjusting claims the policies of insurance referred to herein, endorsing the
name of Borrower on any check, draft, instrument or other item or payment for
the proceeds of such policies of insurance and for making all determinations
and decisions with respect to such policies of insurance or to pay any premium
in whole or in part relating thereto. 
Agent, without waiving or releasing any obligation or default by
Borrower hereunder, may (but shall be under no obligation to do so) at any time
maintain such action with respect thereto which Agent deems advisable.  All sums disbursed by Agent in connection
therewith, including attorneys’ fees, court costs, expenses and other charges
relating thereto, shall be payable, on demand, by Borrower to Agent and shall
be additional Obligations hereunder secured by this Mortgage.  Notwithstanding the foregoing, so long as no
Default or Event of Default exists, Borrower may make and settle any insurance
claims relating to the Property provided that Borrower first obtains Agent’s
written consent thereto, which consent shall not be unreasonably withheld.

 

(c)           All
proceeds of the insurance obtained by Borrower hereunder (other than those
relating to any liability insurance policy), shall be paid to Agent, and Agent
may deduct from such proceeds any expenses, including, without limitation,
legal fees, incurred by Agent in connection with adjusting and obtaining such
proceeds (the balance remaining after such deduction being hereinafter referred
to as the “Net Insurance Proceeds”). If an Event Default exists at the
time Agent receives the Net Insurance Proceeds, Agent may apply the Net
Insurance Proceeds in reduction or satisfaction of all or any part of the
Obligations, whether then matured or not, in which event Borrower shall be
relieved of its obligation under Sections 3 and 4 above to maintain and restore
the Property relating to such proceeds to the extent that Agent so applies the
Net Insurance Proceeds.  If no Event of
Default exits at such time (or if an Event of Default exists and Agent elects
not to apply the Net Insurance Proceeds as provided in the previous sentence),
Agent shall release the Net Insurance Proceeds to Borrower; provided, however, that, if the amount of the Net Insurance
Proceeds exceeds $50,000, Agent may condition the release of all or any part of
the Net Insurance Proceeds on such escrow or other disbursement conditions as
Agent may reasonably require to ensure that Borrower uses the Net Insurance
Proceeds to maintain and the restore the Property as required under this
Agreement and to ensure that the Property remains free of all mechanics’ and
other liens except for Permitted Liens.

 

(d)           In
the event of a foreclosure under this Mortgage, the purchaser of the Property
shall succeed to all of the rights of Borrower, including any right to unearned
premiums, in and to all policies of insurance which Borrower is required to
maintain under this Section and to all proceeds of such insurance.

 

8.             Deposits for Impositions and Insurance.  Upon notice from Agent (which notice shall
not be given unless an Event of Default exists), Borrower shall deposit with
Agent on the first day of each month an amount equal to one-twelfth of (i) the
aggregate annual payments for the Impositions, and (ii) the annual
insurance premiums on the policies of insurance required to be obtained and
kept in force by Borrower under this Mortgage. 
In addition, upon notice from Agent (which notice shall not be given
unless an Event of Default exists), Borrower shall deposit with Agent such sum
of money which, together with such monthly installments, shall be sufficient to
pay all the Impositions and insurance premiums at least 30 days prior to the
due date thereof.  If the amounts of any
Impositions are not ascertainable at the time any deposit is required to be
made, the deposit shall be made on the basis of the amounts of the Impositions
for the prior tax year and, upon the amounts of the Impositions being fixed for
the then current year, Borrower shall, upon notice from Agent, deposit any
deficiency with Agent.  If the amount of
the insurance premiums is not ascertainable at the time any deposit is required
to be made, the deposit shall be made on the basis of the amount of the
insurance premiums for the prior year of the policy or policies, and, upon the
amount of the insurance premiums being fixed for the then current year of the 

 

6

 

policy or policies,
Borrower shall, upon notice from Agent, deposit any deficiency with Agent.  If on a date 30 days prior to the due date
for the payment of any of the Impositions or the insurance premiums there shall
be insufficient funds on deposit with Agent to pay the same, Borrower shall,
upon notice from Agent, forthwith make a deposit with Agent in the amount of
such deficiency.  The funds so deposited
with Agent shall be held by Agent without interest, and may be commingled with
other funds of Agent, and provided that an Event of Default exists, such funds
shall be applied in payment of the Impositions and insurance premiums when due
to the extent that Borrower shall have deposited funds with Agent for such
purpose.  If an Event of Default exists,
the funds deposited with Agent may, at the option of Agent, be retained and
applied toward the payment of any or all of the Obligations, but no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Agent.  Borrower
shall furnish Agent with a bill for each of the Impositions and insurance
premiums and such other documents necessary for their payment at least 30 days
prior to the date they first become due. 
Upon an assignment of this Mortgage prior to any default hereunder by
Borrower, Agent shall have the right and obligation to pay over the balance of
such deposits in its possession to the assignee, and thereupon Agent shall be
completely released from all liability with respect to such deposits and
Borrower shall look solely to the assignee in reference thereto.  The provisions of the preceding sentence
shall apply to each and every assignment or transfer of such deposits to a new
assignee.

 

9.             Condemnation. 
(a)  Borrower shall give immediate notice to Agent upon Borrower’s
learning of (i) any interest on the part of any Person possessing or who
has expressed the intention to possess the power of eminent domain to purchase
or otherwise acquire the Property, or (ii) the commencement of any action
or proceeding to take the Property by exercise of the right of condemnation or
eminent domain or of any action or proceeding to close or to alter the grade of
any street on or adjoining the Premises. 
Agent may participate in any such actions or proceedings in the name of
Agent or, whenever necessary, in the name of Borrower, and Borrower shall
deliver to Agent such instruments as Agent shall request to permit such participation.  Borrower shall not settle any such action or
proceeding, whether by voluntary sale, stipulation or otherwise, or agree to
accept any award or payment without the prior written consent of Agent, which
consent shall not be unreasonably withheld so long as no Default or Event of
Default exists.  The total of all amounts
awarded or allowed with respect to all right, title and interest in and to the
Property or the portion or portions thereof taken or affected by such
condemnation or eminent domain proceeding and any interest thereon (herein
collectively called the “Award”) is hereby assigned to and shall be paid
upon receipt thereof to Agent and the amount received shall be retained and
applied as provided in Section 9(b) below.

 

(b)           If
an Event of Default exists at the time Agent receives the Award, Agent may
apply the Award in reduction or satisfaction of all or any part of the
Obligations, whether then matured or not. 
If no Event of Default exits at such time (or if an Event of Default
exists and Agent elects not to apply the Award as provided in the previous
sentence), Agent shall release the Award to Borrower; provided,
however, that, if the amount of the Award exceeds $50,000, Agent may
condition the release of all or any part of the Award on such escrow or other
disbursement conditions as Agent may reasonably require to ensure that, in the
case of a taking of all or substantially all of the Property, Buyer acquires
replacement real property that is subject to a mortgage lien in favor of Agent subject
to no lien or other encumbrance other than Permitted Liens and, in the case of
any other taking, Borrower uses the Award to restore the Property remaining
after such taking and to ensure that such Property remains free of all
mechanics’ and other liens except for Permitted Liens.  In no event shall Agent be required to
release this Mortgage until the Obligations are fully paid and performed nor
shall Agent be required to release from the lien of this Mortgage any portion
of the Property so taken until Agent receives the Award for the portion so
taken.

 

10.           Assignment of Rents and Leases.  (a)  Borrower hereby presently assigns
to Agent all of Borrower’s right, title and interest in and to any Leases, as
defined hereinafter, with respect to the 

 

7

 

Property, and all rents,
issues and profits of the Property.  “Lease”
means every lease or occupancy agreement for the use or hire of all or any
portion of the Property which shall be in effect on the date hereof, or which
shall hereafter be entered into, and by which Borrower is a lessor or the like,
and any renewals, extensions or other modifications thereof.  Borrower grants to Agent, with or without
Agent or any other Person (including, without limitation, a receiver) taking
possession of the Property, the right to give notice to the tenants of this
assignment, to collect rents, issues and profits from the tenants and to enter
onto the Property for the purpose of collecting the same and to let the
Property and to apply such rents, issues and profits, after payment of all
charges and expenses relating to the Property, to the Obligations.  This assignment shall be an absolute
assignment, subject to the license herein granted to Borrower and Borrower’s
obligations hereunder, and shall continue in effect until the Obligations are
fully paid and performed.  Agent hereby
grants a revocable license to Borrower to collect and use such rents, issues
and profits; provided, however,
that the foregoing license shall be automatically revoked, without any action
on Agent’s part, upon the occurrence of an Event of Default.  Notwithstanding any law to the contrary, if
there is an Event of Default, and if there is any applicable law requiring
Agent to take possession of the Property (or some action equivalent thereto,
such as securing the appointment of a receiver) in order for Agent to “perfect”
or otherwise “activate” its rights and remedies as set forth herein, then
Borrower waives all benefits of such laws and agrees that such laws shall be
fully satisfied, without any action on Agent’s part, solely by the occurrence
of such Event of Default.  If,
notwithstanding such waiver by Borrower, such laws require the undertaking of
some affirmative act by Agent, Borrower agrees that such laws shall be fully
satisfied solely by Agent giving Borrower notice, written or oral, that such
Event of Default has occurred and that Agent intends to enforce its rights in
any Leases and/or any rents, issues and profits assigned herein.

 

(b)           Borrower
shall, from time to time upon request by Agent, execute, acknowledge and
deliver to Agent, in form and substance satisfactory to Agent, separate
assignments of any Leases in order to further evidence the foregoing
assignment.  Agent shall not be obligated
to perform any obligation to be performed by Borrower under any Lease or other
agreement affecting the Property, and Borrower hereby agrees to indemnify Agent
for, and hold Agent harmless from, any and all liability and expenses arising
from any such Lease or other agreement or any assignments thereof, and no
assignment of any such Lease or other agreement shall place the responsibility
for the control, care, management or repair of the Property upon Agent, nor
make Agent liable for any negligence or other tortious conduct, whether by
Agent or any other Person, with respect to the management, operation, upkeep,
repair or control of the Property resulting in injury, death, property or other
damage or loss of any nature whatsoever.

 

(c)           Borrower
shall not cancel, amend or otherwise modify the terms and conditions of any
Lease without obtaining Agent’s prior consent; nor shall Borrower accept
payments of rent or the like more than one month in advance without obtaining
Agent’s prior consent.

 

(d)           Agent
may exercise its rights from time to time under this Section 10 without
first commencing foreclosure proceedings against the Property if it so
elects.  Any such election by Agent to
exercise its rights from time to time under this Section 10 shall not
prohibit Agent from simultaneously or thereafter foreclosing upon the Property
or exercising any other rights available to Agent hereunder or at law.

 

11.           Agent’s Right to Perform
Borrower’s Covenants.  If Borrower
shall fail promptly and fully to pay, perform or observe any of the
Obligations, then Agent may, at its option, but without any obligation to do
so, and without waiving or releasing Borrower from any of the Obligations, pay
any Obligation or perform any Obligation or take such other action as Agent
deems necessary or desirable in order to cause such Obligation to be paid,
performed or observed, as the case may be. 
Borrower hereby grants to Agent, and agrees that Agent shall have, the
absolute and immediate right to enter in and upon 

 

8

 

the Property to such
extent and as often as Agent, in its discretion, deems necessary or desirable
for such purpose.  Agent may pay and
expend such sums of money as Agent, in its discretion, deems necessary for any
such purpose, and Borrower hereby agrees to pay to Agent, on demand, all such
sums so paid or expended by Agent, together with interest thereon from the date
of each such payment or expenditure at the rate (the “Default Rate”)
which is the lesser of (i) the default rate of interest specified in Section 3.1(b) of
the Credit Agreement (or, if there any more than one such default rate, the
highest default rate), or (ii) the maximum interest rate permitted by
law.  Any interest paid under this Section in
excess of the maximum interest rate permitted by law shall be deemed payment in
reduction of the principal amount of the Obligations and the excess, if any,
shall be refunded to Borrower without interest. 
All sums so paid or expended by Agent, and the interest thereon, shall
be added to the Obligations and shall be secured by the lien of this Mortgage.

 

12.           No Claims Against Agent.  Nothing contained in this Mortgage shall
constitute any consent or request by Agent, expressed or implied, for the
performance of any labor or services or the furnishing of any materials or
other property in respect of the Property, or be construed to permit the making
of any claim against Agent in respect of labor or services or the furnishing of
any materials or other property or any claim that any lien based on the
performance of such labor or services or the furnishing of any such materials
or other property is prior to the lien of this Mortgage.

 

13.           Liens.  This Mortgage is and shall be maintained as a
valid first mortgage lien on the Property subject only to Permitted Liens.  Borrower shall not, directly or indirectly,
create or suffer or permit to be created, or to stand, against the Property or
against the rents, issues and profits therefrom, any lien, charge, mortgage,
deed of trust, adverse claim or other encumbrance other than Permitted Liens; provided, however, that nothing contained
in this Section shall require Borrower to pay any real estate taxes or
other Impositions prior to the time when same are required to be paid under
this Mortgage.  Borrower shall keep and
maintain the Property free from all liens of Persons supplying labor or
materials relating to the construction, alteration, modification or repair of
the Property.  In no event shall Borrower
do or permit to be done, or omit to do or permit the omission of, any act or
thing where such act or omission may impair the security of this Mortgage.

 

14.           Security Agreement; Fixture Filing.
Borrower, as debtor, grants to Agent on behalf of the Banks, as secured party,
as further security for the Obligations, a security interest in all existing
and future fixtures and all proceeds of the foregoing.  This Mortgage shall be effective as a fixture
filing and a financing statement for purposes of Article 9 of the Uniform
Commercial Code as in effect in the State of Kansas.

 

15.           Default.  The Obligations shall become immediately due
and payable in full at the option of Agent upon the occurrence of any one or
more of the following (an “Event of Default”):  (a) the occurrence of an Event of Default,
as defined in the Credit Agreement; (b) Borrower shall fail to pay any
Imposition on or before the date such Imposition may be paid without any
penalty, interest or other premium; (c) Borrower shall fail to pay timely
any premiums for insurance required under Section 7 or Borrower shall fail
to reimburse Agent on demand for premiums paid by it on the insurance required
under Section 7; (d) Borrower shall directly or indirectly create,
suffer or permit to be created or to stand against the Property or against the
rents, issues and profits therefrom, any lien, security interest, charge,
mortgage, deed of trust or other encumbrance not expressly permitted herein or
in the Credit Agreement without in each instance obtaining Agent’s prior
written consent thereto; (e) Borrower’s default in the observance or
performance of any other covenant of Borrower hereunder (other than a covenant
the performance or observance of which is specifically referred to elsewhere in
this Section 15), which default is not cured within 30 days after Agent
gives Borrower notice thereof; (f) Borrower shall sell, convey, alienate,
assign or otherwise transfer the Property, or any part thereof or interest
therein, in any manner, whether voluntary, involuntary, by operation of law or
otherwise, or Borrower shall enter into 

 

9

 

any agreement, written or
oral, to so sell, convey, alienate, assign or otherwise transfer the Property,
or any part thereof or interest therein; (g) there shall occur a default
or an event of default under any other deed of trust, mortgage or like real property
security instrument which encumbers the Property, or under any document
evidencing any obligation secured thereby, or any foreclosure or similar
proceeding shall commence with respect to the Property; (h) Borrower shall
deliver to Agent any notice terminating or purporting to terminate, or Borrower
shall take any other action to terminate or purporting to terminate, the
operation of this Mortgage as security for any future advances or future
obligations; or (i) the filing of any action to condemn, acquire by
eminent domain or otherwise take any part of the Premises or Building which, in
Agent’s determination, materially and adversely affects the use or intended use
of the Property as a whole or otherwise materially and adversely affects
Borrower’s business prospects.

 

16.                                 Notice
Upon Acceleration; Application of Payments. 
Whenever Agent in this Mortgage or in the other Credit Documents is
given the option to accelerate the maturity of all or part of the Obligations,
Agent may, to the extent permitted by law, do so without presentment, protest,
notice to or demand upon Borrower.  Agent
shall have the sole and exclusive right, and Borrower irrevocably waives any
right, to direct or redirect the application of any monies received by Agent on
account of the Obligations (whether such monies are received before or after
the occurrence of an Event of Default, in the ordinary course of affairs, by
acceleration, maturity or otherwise) against the Obligations in such manner as
Agent may deem advisable, from time to time, notwithstanding any entry by Agent
upon any of its books and records.

 

17.                                 Appointment
of Receiver.  If an Event of Default
exists, or if any action shall be commenced to foreclose this Mortgage, without
obligation to do so, Agent, to the extent permitted by applicable law, may
apply for the appointment of a receiver of the rents, issues and profits of the
Property without notice or demand, and shall be entitled to the appointment of
such receiver as a matter of right, without consideration of the value of the
Property as security for the amounts due to Agent or the solvency of any Person
liable for the payment of such amounts.

 

18.                                 Foreclosure.  If an Event of Default exists, Agent may, to
the extent permitted by law, institute an action of judicial foreclosure, or
take such other action as the law may allow, at law or in equity, to enforce
this Mortgage and to realize upon the Property or any other security which is
herein or elsewhere provided for, and to proceed to final judgment and
execution for the entire unpaid balance of the Obligations at the rate
stipulated herein or in the Credit Agreement or the other Credit Documents, as
the case may be, to the date of default, and thereafter at the Default Rate,
together with, to the extent permitted by applicable law, all other sums
secured by this Mortgage, all costs of suit, and interest at the Default Rate
on any judgment obtained by Agent from and after the date of any judicial sale
of the Property (which may be sold in one parcel or part or in such parcels or
parts, manner or order as Agent shall elect) until actual payment is made to
Agent on the full amount due Agent. 
Agent may foreclose or otherwise realize upon one parcel or any other
part of the Property, on one or more occasions, without releasing this Mortgage
or precluding the further foreclosure or other realization hereunder of any
other parcels or parts of the Property not so foreclosed or realized upon.  Failure to join or to provide notice to tenants
or any other Persons as defendants or otherwise in any foreclosure action or
suit shall not constitute a defense to such foreclosure or other action.  Upon any foreclosure sale, whether by virtue
of judicial proceedings or otherwise, Agent or any Bank may bid and purchase
the Property or any part thereof or interest therein, and upon compliance with
the terms of the sale, may hold, retain, possess and dispose of the same in its
own absolute right, without further accountability.

 

19.                                 Possession
of Property.  To the extent permitted
by applicable law, if an Event of Default exits, Agent and its agents,
designees or assigns are authorized to (i) take possession of the
Property, with or without legal action; (ii) lease the Property; (iii) collect
all rents, issues and profits therefrom, with or without taking possession of
the Property; and (iv) after deducting all costs of collection and 

 

10

 

administration expenses,
apply the net rents, issues and profits to the payment of Impositions, insurance
premiums and all other carrying charges (including, but not limited to, agents’
compensation and fees and costs of counsel and receivers) and to the
maintenance, repair or restoration of the Property, or on account and in
reduction of the Obligations, in such order and amounts as Agent, in Agent’s
sole discretion, may elect.  Agent shall
be liable to account only for rents, issues and profits actually received by
it.

 

20.                                 Waivers.  To the extent permitted by applicable law,
Borrower hereby irrevocably waives and releases:  (i) any right of redemption after the
date of any sale of the Property upon foreclosure, whether statutory or
otherwise, in respect of the Property now or hereafter in force (irrespective
of whether Agent or any other Person purchases the Property at such
foreclosure); (ii) the benefit of any and all valuation and appraisement
laws now or hereafter in force; (iii) all exemption laws whatsoever and
all moratoriums, extensions or stay laws or rules, or orders of court in the
nature of either of them, now or hereafter in force; and (iv) any right to
have the Property marshaled upon any foreclosure of this Mortgage.

 

21.                                 Expenses
of Agent.  To the extent permitted by
applicable law, all costs and expenses paid or incurred by Agent and/or any of
the Banks, including, without limitation, attorneys’ fees, in any action,
proceeding or dispute of any kind in which Agent and/or any of the Banks is
made a party or appears as a plaintiff or defendant, affecting Agent, any of
the Banks, this Mortgage, the other Credit Documents and/or the Property,
including, but not limited to, the enforcement of this Mortgage, any
condemnation action involving the Property, any action to protect the security
hereof, or any case or proceeding under Title 11 of the United States Code
shall be added to and included in the Obligations and shall be secured by this
Mortgage and, upon demand, shall be immediately due from Borrower. Without
limiting the generality of the foregoing, if this Mortgage shall be foreclosed,
or if any of the other Credit Documents are placed in the hands of an attorney
for collection or is collected through any court, including any bankruptcy
court, Borrower, to the extent permitted by applicable law, shall pay to Agent
the attorneys’ fees, court costs, disbursements and other costs incurred
(irrespective of whether litigation is commenced in pursuance thereof) in
collecting or attempting to collect the Obligations or enforcing or defending
Agent’s rights hereunder, or under the other Credit Documents, or under any
other collateral securing the Obligations, and all allowances provided by law,
to the extent allowed by the laws of the state in which the Property is
located, or any state in which any of such other collateral for the Obligations
is situated, or other applicable law. 
All of Borrower’s obligations under this Section shall survive the
foreclosure, release or other termination of this Mortgage, the satisfaction of
the other Obligations secured hereby, and any merger of this Mortgage into any judgment
or the like, whether pursuant to foreclosure or otherwise.

 

22.                                 Discontinuance
of Action.  Agent may from time to
time, to the extent permitted by applicable law, take action to recover any
sums, whether interest, principal or any other obligation or sums, required to
be paid under this Mortgage or the other Credit Documents, as the same become
due, without prejudice to the right of Agent thereafter to bring an action of
foreclosure, or any other action, for a default existing when such earlier action
was commenced.  If Agent shall have
proceeded to enforce any right under this Mortgage or the other Credit
Documents, and such proceedings shall have been discontinued or abandoned for
any reason, then in every such case Borrower and Agent shall be restored to
their former positions and the rights, remedies and powers of all parties
hereto shall continue as if no such proceedings had been taken.

 

23.                                 Taxes.  Upon passage after the date of this Mortgage
of any law of the United States, the State of Kansas or any other governmental
entity which deducts from the value of real property, for purposes of taxation,
any indebtedness secured by mortgages or which changes in any way the laws for
the taxation of mortgages or debts secured by mortgages for State or local
purposes or the manner of the collection of any such taxes, and which imposes a
tax, either directly or indirectly, on this Mortgage or all 

 

11

 

or any part of the sum
secured hereby or the interest thereon, Agent may declare the whole of the
Obligations and the interest accrued thereon, due on a date to be specified by
not less than 30 days’ written notice to Borrower; provided, however, that such declaration shall be
ineffective if Borrower is permitted by law to pay such tax in addition to all
other payments required hereunder, without any penalty or charge thereby
accruing to Agent, and if Borrower pays such tax within such 30 day
period.  Borrower shall pay any taxes
except income taxes imposed on Agent or any Bank relating to this Mortgage.

 

24.                                 Recording
and Other Fees; Further Assurances. 
Borrower shall pay all recording and filing fees, all recording taxes
and all other costs and expenses in connection with the preparation, execution
and recordation and other manner of perfection of this Mortgage and any other
Credit Documents – including, without limitation, all mortgage registration
fees payable under K.S.A. §79-3102 and/or other applicable law – and shall
reimburse Agent on demand for all costs and expenses of any kind incurred by or
on behalf of Agent in connection therewith. 
Borrower agrees to execute and deliver promptly such instruments and
other documents, and promptly to take such action or promptly refrain from
taking such action, as Agent may request, from time to time, to evidence,
create, perfect, continue or otherwise assure Agent of the real and personal
property security interests granted, or purported to be granted, to or for the
benefit of Agent hereunder and all other rights and benefits granted, or
purported to be granted, to or for the benefit of Agent hereunder; all at the
sole cost and expense of Borrower. 
Without limiting the generality of the foregoing, Borrower shall, at any
time on request of Agent, execute or cause to be executed and shall deliver
financing statements, continuation statements, security agreements, or the
like, in respect of any Property and Borrower shall pay all filing fees,
including, without limitation, fees for filing continuation statements, in connection
with such financing statements.

 

25.                                 No
Waiver.  Any failure by Agent to
insist upon the strict performance by Borrower of any of the Obligations shall
not be deemed to be a waiver of any of such Obligations, and Agent,
notwithstanding any such failure, may thereafter insist upon the strict
performance by Borrower of any and all of the Obligations.

 

26.                                 No
Release.  Borrower and any other
Person now or hereafter obligated for the payment or performance of all or any
part of the Obligations shall not be released from paying and performing such
Obligations and the lien of this Mortgage shall not be affected by reason of (i) the
failure of Agent to comply with any request of Borrower, or of any other Person
so obligated, to take action to foreclose this Mortgage or otherwise enforce
any of the provisions of this Mortgage or of any of the Obligations secured by
this Mortgage; (ii) the release, regardless of consideration, of the
obligations of any Person or Persons liable for payment or performance of the Obligations
or any part thereof; or (iii) any agreement or stipulation extending the
time of payment or modifying the terms of any of the Credit Documents and in
the event of such agreement or stipulation, Borrower and all such other Persons
shall continue to be liable under such Credit Documents, as amended by such
agreement or stipulation, unless expressly released and discharged in writing
by Agent.

 

27.                                 Release
of Collateral.  Agent may release or
partially release, regardless of consideration, the obligation of any Person
liable for payment of any of the Obligations secured hereby, or may release any
part of the Property or any other collateral now or hereafter given to secure
the payment of the Obligations or any part thereof, without impairing, reducing
or otherwise affecting the obligations of Borrower under the Credit Agreement
or any other Credit Documents, the remainder of the security of this Mortgage
or the priority of the rights created by this Mortgage.

 

28.                                 Rights
Cumulative.  The rights and remedies
provided for in this Mortgage, or which Agent may have otherwise, at law or in
equity, shall be distinct, separate and cumulative and shall not be deemed to
be inconsistent with each other, and none of them, whether or not exercised by
Agent, shall be 

 

12

 

deemed to be in exclusion
of any other, and, to the extent permitted by law, any two or more of all such
rights and remedies may be exercised at the same time.

 

29.                                 Severability.  If any term or provision of this Mortgage or
the application thereof to any Person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Mortgage, or the application of
such term or provision to Persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Mortgage shall be valid and enforceable to the fullest
extent permitted by law.  If any payments
(including, without limitation, any interest payments) required to be made
hereunder or under the other Credit Documents shall be in excess of the amounts
allowed by law, the amounts of such payments shall be reduced to the maximum
amounts allowed by law.  Furthermore, all
rights, powers and remedies provided in this Mortgage may be exercised only to
the extent that the exercise thereof does not violate any applicable provisions
of law and are intended to be modified to the extent necessary to comply with
applicable law and are intended to be limited to the extent necessary so that
they will not render this Mortgage invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law.

 

30.                                 Notices.  All notices, demands, consents, approvals and
requests given or required to be given by any party hereto to any other party
hereto shall be in writing and shall be given in accordance with the terms and
provisions of the Credit Agreement.

 

31.                                 Indemnification
Against Liabilities.  Borrower shall
protect, indemnify, hold harmless and defend Agent and the Banks from and
against any and all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses (including, without limitation, attorneys’
fees and expenses) imposed upon incurred by or asserted against Agent or any of
the Banks by reason of (a) ownership of an interest in the Property, (b) any
accident or injury to or death of Persons or loss of or damage to or loss of
the use of property occurring on or about the Property, or the adjoining
sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or ways, (c) any
use, non-use or condition of the Property, or the adjoining sidewalks, curbs,
vaults and vault spaces, if any, streets, alleys or ways, (d) any failure
on the part of Borrower to perform or comply with any of the terms of this
Mortgage or the other Credit Documents, (e) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property made or suffered to be made by or on behalf of Borrower, (f) any
acts or omissions on the part of Borrower or any of its agents, contractors,
lessees, licensees or invitees, or (g) any work in connection with any
alterations, changes, new construction or demolition of the Property; in each
case irrespective of whether any such liabilities, obligations, claims,
damages, penalties, causes of actions, costs or expenses are, caused by, or
otherwise arise out of, in whole or in part, Agent’s or any Bank’s negligence
or other tortious conduct (other than any gross negligence or willful
misconduct by Agent of any Bank), whether active or passive.  Borrower will pay and hold Agent and the
Banks harmless against any and all liability with respect to any intangible personal
property tax or similar imposition of the state in which the Property is
located or any subdivision or authority thereof now or hereafter in effect, to
the extent that the same may be payable by Agent or any Bank in respect of this
Mortgage, the other Credit Documents or the Obligations.  All amounts payable to Agent or any Bank
under this Section shall be payable on demand and shall be deemed
Obligations secured by this Mortgage.  If
any action, suit or proceeding is brought against Agent or any Bank by reason
of any such occurrence, Borrower, upon request of Agent will, at Borrower’s
expense, resist and defend such action, suit or proceeding or cause the same to
be resisted or defended by counsel designated by Borrower and approved by
Agent.  All of Borrower’s obligations
under this Section shall survive the foreclosure, release or other
termination of this Mortgage and the satisfaction of the Obligations, and any
merger of this Mortgage into any judgment or the like, whether pursuant to
foreclosure or otherwise.

 

13

 

32.                                 Environment.  (a)  Borrower shall comply with all
applicable laws (whether statutory, common law or otherwise), rules,
regulations, orders, permits, licenses, ordinances, judgments or decrees of all
governmental authorities (whether federal, state, local or otherwise),
including, without limitation, all laws regarding public health or welfare,
environmental protection, water or air pollution, composition of products,
underground storage tanks, toxic substances or chemicals, solid and special
wastes, hazardous wastes, substances, material or chemicals, waste, used, or
recycled oil, asbestos, occupational health and safety, nuisances, trespass,
and negligence.

 

(b)                                 Neither
Agent nor any Bank shall assume or be deemed to assume any responsibility,
liability, or obligation with respect to compliance with any federal, state, or
local environmental law, rule, regulation, order, permit, license, ordinance,
judgment or decree; provided, however,
that in the event of the imposition or assumption for any reason whatsoever of
any such responsibility, liability, or obligation, Borrower agrees to indemnify
and hold Agent and the Banks harmless from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements, of any kind or nature whatsoever,
including without limitation, attorneys’ and experts’ fees, which may be
imposed on, incurred by or asserted against it in any way relating to or
arising from the Obligations, this Mortgage, the other Credit Documents and/or
the Property.  All of Borrower’s
obligations under this Section shall survive the foreclosure, release or
other termination of this Mortgage and the satisfaction of the Obligations, and
any merger of this Mortgage into any judgment or the like, whether pursuant to
foreclosure or otherwise.

 

33.                                 Certain
Definitions.  The following terms
shall, for purposes of this Mortgage, have the respective meanings herein
specified unless the context otherwise requires:  (a)  “Agent” means the Agent
herein named and any subsequent mortgagee under this Mortgage, and its, his,
her or their respective successors, assigns, heirs and personal
representatives.  (b)  “Bank”
means each Bank referred to in the Credit Agreement and, subject to the terms
and provisions of the Credit Agreement, its successors and assigns, and
likewise includes, except if otherwise provided in the Credit Agreement, any
swing line lender, letter of credit issuer, swap provider or other credit or financial
service provider for whom, pursuant to the terms of the Credit Agreement, Agent
is to act as collateral agent or the like. 
(c)  “Borrower” means the Borrower herein named and any
subsequent owner or owners of the Property and its, his, her or their
respective successors, assigns, heirs and personal representatives.  (d)  “Building” means all of the
Building described herein including any part thereof.  (e)  “Building Equipment” means
all of the Building Equipment described herein including any part thereof.  (f)  “Person” means an
individual, corporation, partnership, trust, unincorporated organization or
government, or any agency or political subdivision thereof, or any other legal
entity.  (g)  “Premises”
means all of the Premises described herein including any part thereof.  (h)  “Property” means all of the
Property described herein including any part thereof.

 

34.                                 Successors
and Assigns.  The terms, covenants
and provisions of this Mortgage shall apply to and be binding upon Borrower and
all subsequent owners and other Persons who have an interest in the Property,
and shall inure to benefit of Agent, the successors and assigns of Agent, and
all subsequent holders of this Mortgage, but the provisions of this Section shall
not be construed to modify the provisions of Section 15(g).

 

35.                                 Related
Obligations.  If and to the extent
the Credit Agreement at any time authorizes Agent to act as a collateral agent
or the like for the benefit of any Bank or any affiliate of any Bank that may
issue interest rate swaps or other hedging instruments to or for the benefit of
Borrower, the Obligations secured hereby shall include Borrower’s existing and
future obligations with respect to any such interest rate swaps and/or other
hedging instruments.

 

14

 

36.                                 Miscellaneous.
Borrower further agrees as follows:  (a) 
This Mortgage cannot be changed, waived, discharged or terminated orally but
only by an agreement in writing, signed by the party against whom enforcement
of the change, waiver, discharge or termination is sought.  (b)  This Mortgage shall be construed
without regard to any presumption or rule requiring construction against
the party causing such instrument or any portion thereof to be drafted.  (c)  All terms and words used in this
Mortgage, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require.  (d)  If there shall be
more than one Borrower, the representations, warranties, covenants and other
obligations of Borrower hereunder shall be the joint and several
representations, warranties, covenants and other obligations of each and every
Borrower.  Whenever the terms of this Mortgage
prohibit Borrower from doing or permitting to be done, whether voluntarily or
otherwise, any act or event, any such negative covenants shall apply to each
and every Borrower and the failure of any one Borrower in respect thereof shall
be deemed a default of such negative covenant notwithstanding that any other
Borrower may not be in default of such negative covenant.  (e)  The Section headings in this
Mortgage and any index at the beginning of this Mortgage are for convenience of
reference only and shall not limit or otherwise affect any of the terms
hereof.  (f)  All covenants
contained herein shall run with the Property until the Obligations have been
fully paid and performed.  (g)  Time
is of the essence in the payment and performance by Borrower of the
Obligations.  (h)  This Mortgage shall
be governed by the laws of the State of Kansas, without regard to any choice of
law rule thereof which gives effect to the laws of any other jurisdiction.

 

15

 

IN WITNESS WHEREOF, this
Mortgage has been duly executed by Borrower and delivered to Agent as of the
day and year first above written.

 

 

	
   

  	
  MGP INGREDIENTS, INC.,
  a Kansas corporation formerly known as Midwest Grain Products, Inc. and,
  before that, as Midwest Solvents Company, Inc. and as successor by
  merger to Midwest Grain Processing Equipment Company, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Robert Zonneveld 

  
	
   

  	
   

  	
  Name: Robert Zonneveld

  
	
   

  	
   

  	
  Title: V.P
  Finance & CFO

  

 

16

 

	
  STATE OF KANSAS   )

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ) SS.

  	
   

  
	
   

  	
   

  	
   

  
	
  COUNTY OFATCHISON

  	
  )

  	
   

  

 

The foregoing instrument
was acknowledged before me on December 11_, 2008, by _Robert Zonneveld, as
V.P Finance of MGP INGREDIENTS, INC., a Kansas corporation, on behalf of the
corporation.

 

 

	
   

  	
  /s/ Marta L.
  MyersNotary Public

  
	
  [Seal]

  	
   

  
	
   

  	
  My Commission expires:
  01/03/2010

  

 

17

 

Exhibit A

 

(legal description
of Premises)

 

PARCEL 1:

 

LOTS FOUR, FIVE, SIX AND
SEVEN (LOTS 4, 5, 6 & 7), IN BLOCK FIFTEEN (BLK 15), BRANCHTON
ADDITION, AN ADDITION TO THE CITY OF ATCHISON, ATCHISON COUNTY, KANSAS.

 

PARCEL 2:

 

THE WEST FIFTY FEET (W.
50') OF LOT TWELVE (12), BLOCK EIGHTEEN (18), WEST ATCHISON, AN ADDITION TO THE
CITY OF ATCHISON.

 

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.

 

 

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.

 

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 (LT 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 (33 3⁄4') 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.

 

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.

 

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 1/3RD) FEET OF LOT SEVEN (LT 7), AND THE WEST (W) FIFTY-TWO
(52) FEET OF LOT EIGHT (LT 8), BLOCK TWENTY AND ONE-HALF (BLK 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:

 

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 (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:

 

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.

 

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:

 

LOT FOUR (LT 4), BLOCK
THIRTY-THREE (BLK 33), IN L. C. CHALLISS ADDITION TO THE CITY OF ATCHISON,
ATCHISON COUNTY, KANSAS.

 

PARCEL 32:

 

LOTS FIVE (5) THROUGH
ELEVEN (11), THE NORTH 100.8 FEET OF THE EAST .2 FOOT OF LOT TWELVE (12), THE
SOUTH 49.2 FEET OF LOTS TWELVE (12) AND THIRTEEN (13), BLOCK THIRTY-THREE (33),
L. C. CHALLISS, AN ADDITION TO THE CITY OF ATCHISON.

 

PARCEL 33:

 

THE NORTH SEVENTY-FOUR
FEET (N 74') OF LOTS ONE (1) AND TWO (2), ALL OF LOTS THREE THROUGH
FOURTEEN, INCLUSIVE, (3-14), IN BLOCK FORTY (40), AND THE WEST 24.8 FEET OF THE
NORTH 100.8 FEET OF LOT TWELVE (12), THE NORTH 100.8 FEET OF LOT THIRTEEN (13),
ALL OF LOTS FOURTEEN (14) THROUGH TWENTY-ONE (21), INCLUSIVE, TOGETHER WITH
RIGHTS OF EASEMENT OVER THE SOUTH TWENTY FEET OF LOTS TWELVE (12) AND THIRTEEN
(13), IN BLOCK THIRTY-THREE (33), L. C. CHALLISS ADDITION, CITY OF ATCHISON,
KANSAS.)

 

 

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:

 

TRACT 1 - THE NORTH ONE
HUNDRED TEN (110) FEET OF LOTS ELEVEN (11) TO TWENTY-ONE (21) INCLUSIVE, IN
BLOCK THIRTY-TWO (32), L.C. CHALLISS ADDITION TO THE CITY OF ATCHISON, ATCHISON
COUNTY, KANSAS, ACCORDING TO THE PLAT THEREOF ON FILE AND OF RECORD IN THE OFFICE
OF THE REGISTER OF DEEDS OF SAID ATCHISON COUNTY, INCLUDING THE FOLLOWING
PORTIONS OF VACATED STREETS ADJACENT THERETO, VIZ.: THE VACATED SOUTH ELEVEN
AND ONE HALF (11 1⁄2) FEET OF MAIN STREET FROM THE CENTER OF 11TH STREET TO THE
EAST LINE OF LOT ELEVEN (11) IN SAID BLOCK AND THE VACATED PORTION OF 11TH
STREET FROM MAIN STREET TO THE SOUTH LINE OF SAID 110-FOOT STRIP.

 

TRACT 2 - THE NORTH ONE
HUNDRED TEN (110) FEET OF LOTS ONE (1) TO TWENTY-FOUR (24), INCLUSIVE, IN
BLOCK FORTY-ONE (41), L.C. CHALLISS ADDITION TO THE CITY OF ATCHISON, ATCHISON
COUNTY, KANSAS, ACCORDING TO THE PLAT THEREOF ON FILE AND OF RECORD IN THE
OFFICE OF THE REGISTER OF DEEDS OF SAID ATCHISON COUNTY, INCLUDING THE
FOLLOWING PORTIONS OF VACATED STREETS AND ALLEYS ADJACENT THERETO, VIZ: THE
VACATED ALLEY FROM MAIN STREET TO THE SOUTH LINE OF SAID 110-FOOT STRIP BETWEEN
LOTS NINETEEN (19) AND TWENTY (20) IN SAID BLOCK FORTY-ONE (41) THE VACATED
SOUTH ELEVEN AND ONE-HALF (11 1⁄2) FEET OF MAIN STREET FROM THE CENTER OF 11TH
STREET TO THE CENTER OF 12TH STREET, THE VACATED WEST HALF OF 11TH STREET FROM
MAIN STREET TO THE SOUTH LINE OF SAID 110 FOOT STRIP AND THE VACATED EAST HALF
OF 12TH STREET FROM MAIN STREET TO THE SOUTH LINE OF SAID 110-FOOT STRIP.

 

TRACT 3 - THE EAST ONE
HUNDRED FEET (E 100') OF THE NORTH HALF (N 1⁄2) OF BLOCK FIFTY (50), IN L.C.
CHALLISS ADDITION TO THE CITY OF ATCHISON, EXCEPTING THEREFROM A TRACT OF LAND
DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE EAST LINE OF SAID BLOCK NO.
FIFTY (50) WHICH IS 76.4 FEET SOUTH OF THE NORTHEAST CORNER OF SAID BLOCK,
RUNNING THENCE IN A SOUTHWESTERLY DIRECTION 114.6 FEET TO A POINT WHICH IS 97
FEET WEST OF THE EAST LINE OF SAID BLOCK NO. FIFTY (50), THENCE RUNNING EAST
28.1 FEET, THENCE RUNNING IN A NORTHEASTERLY DIRECTION 84.1 FEET TO A POINT
WHICH IS 94.1 FEET SOUTH OF THE NORTHEAST CORNER OF SAID BLOCK NO. FIFTY (50),
THENCE RUNNING NORTH 17.7 FEET TO THE POINT OF BEGINNING; AND ALSO EXCEPT
BEGINNING AT POINT IN THE EAST LINE OF LOT ONE (1), BLOCK FIFTY (50), IN L.C.
CHALLISS ADDITION, 127.5 FEET SOUTH OF THE NORTH LINE OF SAID BLOCK FIFTY (50);
THENCE SOUTH 10 FEET MORE OR LESS TO THE NORTHERLY RIGHT OF WAY LINE OF THE
MISSOURI PACIFIC RAILROAD COMPANY; THENCE EASTERLY ALONG SAID NORTHERLY RIGHT
OF WAY LINE 3 FEET MORE OR LESS TO SAID RAILROAD COMPANY’S NORTHWESTERLY RIGHT
OF WAY LINE; 

 

 

THENCE NORTHEASTERLY
ALONG SAID NORTHWESTERLY RIGHT OF WAY LINE 70 FEET, THENCE SOUTHWESTERLY 68
FEET MORE OR LESS, TO THE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM:
COMMENCING AT A POINT ON THE CENTER LINE OF 12TH STREET, 73 FEET SOUTH OF THE
SOUTH LINE OF MAIN STREET, THENCE SOUTH ALONG THE CENTER LINE OF 12TH STREET,
66 FEET, THENCE WEST ON A LINE AT RIGHT ANGLES TO THE CENTER LINE OF 12TH
STREET 111.6 FEET, THENCE IN A NORTHEASTERLY DIRECTION TO THE POINT OF
BEGINNING, AND THAT PART OF VACATED 12TH STREET ADJACENT THERETO.

 

TRACT 4 - 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.

 

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 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

 

A TRACT IN THE SOUTHEAST
QUARTER (SE 1⁄2) 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.

 

 

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:

 

PART OF THE
NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION ONE, TOWNSHIP SIX,
RANGE TWENTY, BEGINNING AT THE NORTHEAST CORNER OF SAID NORTHWEST QUARTER OF
THE SOUTHWEST QUARTER, RUNNING THENCE WEST FIVE HUNDRED FEET; THENCE SOUTH 460
FEET; THENCE EAST 500 FEET; THENCE NORTH 460 FEET TO THE PLACE OF BEGINNING,
EXCEPT A PARCEL OF LAND 20 FEET WIDE AND 300 FEET LONG, BEING 10 FEET ON EACH
SIDE OF THE CENTER LINE OF A RAILROAD TRACK, WHICH BEGINS 30 FEET SOUTH AND
107.5 FEET WEST OF THE NORTHEAST CORNER OF THE NORTHWEST QUARTER AT THE
SOUTHWEST QUARTER OF SECTION ONE, TOWNSHIP SIX, RANGE TWENTY, THENCE
SOUTHERLY AT AN ANGLE OF 76° 12'' TO THE SOUTHEAST.

 

 

Exhibit B

 

(Permitted Liens)

 

1.                                     Taxes
and assessments for the calendar year 2008 and subsequent years, provided that
payment of such taxes and assessments is not delinquent.

 

2.                                     Exception
numbers 9 through 27, inclusive, as shown in Schedule B, Section 2 of
title insurance commitment number NCS-374977-KCTY, with a commitment date of November 20,
2008, at 7:30 A.M., issued by First American Title Insurance Company of
Kansas.

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