Document:

EXHIBIT 4.32B

 

SUPPLEMENTAL INDENTURE

 

Supplemental
Indenture (this “Supplemental Indenture”), dated as of March 21, 2008,
among Clean Harbors, Inc., a Massachusetts corporation (the “Company”),
Clean Harbors Recycling Services of Chicago, LLC, a Delaware limited liability
company (“CH Chicago Recycling”), Clean Harbors Recycling Services of Ohio,
LLC, a Delaware limited liability company (“CH Ohio Recycling”),  Clean Harbors Development, LLC (“CH
Development,” and together with CH Chicago Recycling and CH Ohio
Recycling,  the “New Guarantors”), and
U.S. Bank National Association, as trustee (the “Trustee”) under the Indenture
as defined below. Capitalized terms used herein without definition shall have
the meanings assigned to them in the Indenture.

 

WITNESSETH

 

WHEREAS, the
Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”),
dated as of June 30, 2004, providing for the issuance of an aggregate
principal amount of $150,000,000 of 111⁄4%  Senior
Secured Notes due 2012 (the “Securities”), and substantially all of the Company’s
Domestic Restricted Subsidiaries have unconditionally guaranteed the Company’s
obligations under the Securities and the Indenture;

 

WHEREAS,
Sections 4.15 and 4.20(a) of the Indenture provide that under certain
circumstances the Company is required to cause any New Domestic Restricted
Subsidiary to execute and deliver to the Trustee a supplemental indenture
pursuant to which such New Domestic Restricted Subsidiary shall unconditionally
guarantee all of the Company’s obligations under the Securities and the
Indenture on the terms and conditions set forth herein; and

 

WHEREAS,
pursuant to Section 9.01 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture without notice to or consent of
any Securityholder;

 

NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company, the
New Guarantors and the Trustee mutually agree for the benefit of the Holders of
the Securities as follows:

 

1.                                       Agreement
to Guarantee.  The New Guarantors
hereby agree to unconditionally guarantee all of the Company’s obligations
under the Securities and the Indenture and that their obligations to the
Holders and the Trustee pursuant to this Supplemental Indenture shall be as
expressly set forth with respect to all Guarantors in Article XI of the
Indenture and in such other provisions of the Indenture as are applicable to
all Guarantors, and reference is made to the Indenture for the precise terms of
this Supplemental Indenture.  The terms
of Article XI of the Indenture and such other

 

 

provisions of the Indenture as
are applicable to all Guarantors are incorporated herein by reference.

 

2.                                       Execution
and Delivery of Guarantee.

 

(a)                                  To
evidence its Guarantee set forth in this Supplemental Indenture, each New
Guarantor is, contemporaneously with its execution and delivery of this
Supplemental Indenture, executing and delivering to the Trustee a Guarantee
substantially in the form of Exhibit E to the Indenture.  The validity and enforceability of the
Guarantee set forth in this Supplemental Indenture and such Guarantee shall not
be affected by the fact that it is not affixed to any particular Security.

 

(b)                                 Each
of the New Guarantors hereby agrees that its Guarantee set forth in this
Supplemental Indenture and such Guarantee shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Guarantee.

 

(c)                                  If
an Officer of a New Guarantor whose signature is on this Supplemental Indenture
or such Guarantee no longer holds that office at the time the Trustee
authenticates any Security on which such Guarantee is endorsed or at any time
thereafter, such Guarantor’s Guarantee of such Security shall nevertheless be
valid.

 

(d)                                 The
delivery of any Security by the Trustee, after the authentication thereof under
the Indenture, shall constitute due delivery of the Guarantee set forth in this
Supplemental Indenture and such Guarantee on behalf of each New Guarantor.

 

3.                                       No
Recourse Against Others.  No
Affiliate, director, officer, employee, limited liability company member or
stockholder of the Company or any Subsidiary, as such, shall have any liability
for any obligations of the Issuer under the Securities or any Guarantee or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Securityholder by accepting a Security waives and releases all such
liability.  Such waiver and release are
part of the consideration for the issuance of the Securities.

 

4.                                       New
York Law to Govern.  The internal law
of the State of New York shall govern and be used to construe this Supplemental
Indenture and the Guarantee.

 

5.                                       Counterparts.  The parties may sign any number of copies of
this Supplemental Indenture.  Each signed
copy shall be an original, but all of them together represent the same
agreement.

 

6.                                       Effect
of Headings.  The Section headings
herein are for convenience only and shall not affect the construction hereof.

 

2

 

SIGNATURES

 

IN WITNESS
WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed all as of the date first written above.

 

	
   

  	
  CLEAN
  HARBORS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J.
  Rutledge

  
	
   

  	
   

  	
  Name: 

  	
  James M.
  Rutledge

  
	
   

  	
   

  	
  Title: 

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  CLEAN
  HARBORS RECYCLING SERVICES

  OF CHICAGO, LLC,

  
	
   

  	
  CLEAN
  HARBORS RECYCLING SERVICES

  OF OHIO, LLC, and

  
	
   

  	
  CLEAN
  HARBORS DEVELOPMENT, LLC,

  
	
   

  	
   

  	
  each as a
  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J.
  Rutledge

  
	
   

  	
   

  	
  Name: 

  	
  James M.
  Rutledge

  
	
   

  	
   

  	
  Title: 

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J.
  Ganss

  
	
   

  	
   

  	
  Name: 

  	
  David J.
  Ganss

  
	
   

  	
   

  	
  Title: 

  	
  Vice
  President

  

 

3Exhibit
4.1

 

CREDIT AGREEMENT

 

dated as of May 5, 2008

 

among

 

MGP INGREDIENTS, INC.

MGP INGREDIENTS OF ILLINOIS, INC.

MIDWEST GRAIN PIPELINE, INC.

(as the Borrowers)

 

COMMERCE BANK, N.A.

(as the Agent, the Issuing Bank, the Swingline Lender and a Bank)

 

and

THE LENDERS FROM TIME TO TIME PARTY HERETO
 (as the Banks)

 

 

$40,000,000 Revolving Credit Facility

$25,000,000 Term Loan Facility

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1

  	
   

  	
  GENERAL DEFINITIONS

  	
  1

  
	
   

  	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
  1.2

  	
  Accounting Terms; Other

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  	
   

  	
  CREDIT FACILITIES

  	
  15

  
	
   

  	
  2.1

  	
  Revolving Credit Loans

  	
  15

  
	
   

  	
  2.2

  	
  Swingline Loans

  	
  17

  
	
   

  	
  2.3

  	
  Letters of Credit

  	
  18

  
	
   

  	
  2.4

  	
  Term Loans

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3

  	
   

  	
  FINANCE CHARGES, REPAYMENT AND OTHER TERMS

  	
  22

  
	
   

  	
  3.1

  	
  Interest Rate

  	
  22

  
	
   

  	
  3.2

  	
  Payments of Principal, Interest and Costs

  	
  23

  
	
   

  	
  3.3

  	
  Voluntary Prepayments

  	
  24

  
	
   

  	
  3.4

  	
  Mandatory Prepayments

  	
  24

  
	
   

  	
  3.5

  	
  Method of Payment

  	
  25

  
	
   

  	
  3.6

  	
  Use of Proceeds

  	
  25

  
	
   

  	
  3.7

  	
  Notice and Manner of Borrowing

  	
  25

  
	
   

  	
  3.8

  	
  Non-Receipt of Funds by Agent

  	
  26

  
	
   

  	
  3.9

  	
  Capital Adequacy

  	
  26

  
	
   

  	
  3.10

  	
  Application of Payments and Collections

  	
  27

  
	
   

  	
  3.11

  	
  Periodic Statement

  	
  27

  
	
   

  	
  3.12

  	
  Libor Loans

  	
  27

  
	
   

  	
  3.13

  	
  Non-Use Fee

  	
  28

  
	
   

  	
  3.14

  	
  Closing Fee

  	
  29

  
	
   

  	
  3.15

  	
  Joint and Several Liability; Subordination
  of Reimbursement Rights

  	
  29

  
	
   

  	
  3.16

  	
  Appointment of Borrowing Agent

  	
  29

  
	
   

  	
  3.17

  	
  Collateral and Guarantees to Secure Swap
  Obligations

  	
  30

  
	
   

  	
  3.18

  	
  Replacement of Existing Commerce Facility

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  	
   

  	
  LENDING CONDITIONS

  	
  30

  
	
   

  	
  4.1

  	
  Credit Documents

  	
  30

  
	
   

  	
  4.2

  	
  Additional Conditions Precedent to Initial
  Loan

  	
  31

  
	
   

  	
  4.3

  	
  Conditions Precedent to All Loans

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
  33

  
	
   

  	
  5.1

  	
  Representations, Warranties and Covenants
  of the Borrowers

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6

  	
   

  	
  COVENANTS

  	
  35

  
	
   

  	
  6.1

  	
  Affirmative Covenants

  	
  35

  
	
   

  	
  6.2

  	
  Negative Covenants

  	
  38

  
	
   

  	
  6.3

  	
  Specific Financial Covenants

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7

  	
   

  	
  DEFAULT

  	
  41

  
	
   

  	
  7.1

  	
  Events of Default

  	
  41

  
	
   

  	
  7.2

  	
  Obligation to Lend; Acceleration

  	
  42

  
	
   

  	
  7.3

  	
  Remedies

  	
  42

  
	
   

  	
  7.4

  	
  Right of Setoff

  	
  43

  

 

i

 

	
  SECTION 8

  	
   

  	
  AGENCY PROVISIONS

  	
  44

  
	
   

  	
  8.1

  	
  Authorization and Action

  	
  44

  
	
   

  	
  8.2

  	
  Liability of Agent

  	
  44

  
	
   

  	
  8.3

  	
  Rights of the Agent as Bank

  	
  44

  
	
   

  	
  8.4

  	
  Independent Credit Decisions

  	
  44

  
	
   

  	
  8.5

  	
  Indemnification

  	
  45

  
	
   

  	
  8.6

  	
  Successor Agent

  	
  45

  
	
   

  	
  8.7

  	
  Sharing of Payments

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9

  	
   

  	
  MISCELLANEOUS

  	
  46

  
	
   

  	
  9.1

  	
  Notices

  	
  46

  
	
   

  	
  9.2

  	
  Power of Attorney

  	
  46

  
	
   

  	
  9.3

  	
  Indemnity

  	
  47

  
	
   

  	
  9.4

  	
  Entire Agreement; Modification of
  Agreement; Sale of Interest

  	
  47

  
	
   

  	
  9.5

  	
  Reimbursement of Expenses

  	
  49

  
	
   

  	
  9.6

  	
  Indulgences Not Waivers

  	
  49

  
	
   

  	
  9.7

  	
  Severability

  	
  50

  
	
   

  	
  9.8

  	
  Successors and Assigns

  	
  50

  
	
   

  	
  9.9

  	
  General Waivers by Borrowers

  	
  50

  
	
   

  	
  9.10

  	
  Collateral Protection Act Notice

  	
  50

  
	
   

  	
  9.11

  	
  Mo. Rev. Stat. § 432.047 Statement

  	
  51

  
	
   

  	
  9.12

  	
  Incorporation by Reference

  	
  51

  
	
   

  	
  9.13

  	
  Execution in Counterparts; Facsimile
  Signatures

  	
  51

  
	
   

  	
  9.14

  	
  Governing Law; Consent to Forum

  	
  51

  
	
   

  	
  9.15

  	
  Waiver of Trial; Limitation on Damages

  	
  51

  
	
   

  	
  9.16

  	
  USA Patriot Act Notice

  	
  52

  
	
   

  	
  9.17

  	
  Confidentiality

  	
  52

  

 

	
   

  	
   

  	
  TABLE
  OF EXHIBITS

  	
   

  
	
   

  	
  Exhibit A – Commitments

  	
   

  
	
   

  	
  Exhibit B – Form of Revolving Credit Note

  	
   

  
	
   

  	
  Exhibit C – Form of Swingline Note

  	
   

  
	
   

  	
  Exhibit D – Form of Term Note

  	
   

  
	
   

  	
  Exhibit E – Borrowing Base Certificate

  	
   

  
	
   

  	
  Exhibit F – Covenant Compliance Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TABLE
  OF SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedule 1 – D.M. Ingredients Investment; Permitted
  Acquisition

  	
   

  
	
   

  	
  Schedule 5.1(c) – Required Approvals

  	
   

  
	
   

  	
  Schedule 5.1(h) – Permitted Debt

  	
   

  
	
   

  	
  Schedule 5.1(k) – Environmental Matters

  	
   

  
	
   

  	
  Schedule 5.1(m) – Permitted Liens

  	
   

  

 

ii

 

CREDIT AGREEMENT

 

This Credit Agreement is made as of May 5, 2008,
by and among MGP Ingredients, Inc., a Kansas corporation (“MGP”),
MGP Ingredients of Illinois, Inc., an Illinois corporation (“MGPI”),
Midwest Grain Pipeline, Inc., a Kansas corporation (“Midwest Grain”),
Commerce Bank, N.A., a national banking association, in its capacity as a Bank
hereunder (in such capacity, “Commerce”), in its capacity as agent for
the Banks hereunder (in such capacity, the “Agent”), in its capacity as
the issuer of Letters of Credit hereunder (in such capacity, the “Issuing
Bank”), and in its capacity as the lender for Swingline Loans (in such
capacity, the “Swingline Lender”), and the lenders from time to time
party hereto (individually a “Bank” and collectively, the “Banks”).  MGP, MGPI and Midwest Grain are each referred
to herein as a “Borrower” and are collectively referred to herein as the
“Borrowers”.

 

Preliminary Statements

 

	
  (a)

  	
   

  	
  The Borrowers desire to obtain extensions of credit
  from the Banks.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  The Banks are willing to extend credit to the
  Borrowers, but only on the terms and conditions set forth in this Agreement.

  

 

NOW, THEREFORE, in consideration of the mutual
promises set forth in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

Section 1

General Definitions

 

1.1                                 Definitions. 
When used in this Agreement, the following terms have the following
meanings:

 

“Account Debtor” means any Person who is or may
become obligated in respect of an Account.

 

“Accounts” means accounts receivables and each
other asset that constitutes an “account,” as defined in UCC §9-102.

 

“Adjusted Base Rate” means, at any time, (1) the
Base Rate at such time, minus (2) the
Applicable Margin for Base Rate Loans at such time.

 

“Adjusted Libor Rate” means, for any Interest
Period, (1) the Libor Rate for such Interest Period, plus (2) the Applicable Margin for
Libor Loans at such time.

 

“Adjusted EBITDA”
means, for MGP and its consolidated subsidiaries on a consolidated basis, for
any period, EBITDA for such period, plus
other non-cash losses, minus other
non-cash gains, and minus or plus, as the case may be, extraordinary income (including,
without limitation, the $8 million settlement payment in the Mars litigation) or losses

 

“Affiliate” means a Person (1) which owns
or otherwise has an interest in ten percent or more of any equity interest of a
Borrower, (2) ten percent or more of the equity interests of which a
Borrower (or any shareholder or other equity holder, director, officer,
employee or subsidiary of a Borrower or any combination thereof) owns or otherwise
has an interest in, or (3) which, directly or through one or more
intermediaries, is controlled by, controls, or is under common control with a
Borrower.  For purposes of 

 

1

 

subpart (3) above, “control”
means the ability, directly or indirectly, to affect the management or policies
of a Person by virtue of an ownership interest, by right of contract or any
other means.

 

“Agent” means the Agent identified in the
introductory paragraph of this Agreement and any successor Agent appointed
pursuant to the terms of this Agreement.

 

“Agreement” means this Credit Agreement, as
amended, renewed, restated, replaced or otherwise modified from time to time.

 

“Applicable Margin”
means, at any date, (1) in the case of Base Rate Loans, 0%, (2) in
the case of Libor Loans, 2.00%, and (3) in the case of the Non-Use Fee,
0.30%; provided, however, that if the Covenant
Compliance Certificate delivered by the Borrowers to the Agent for the most
recently ended four fiscal quarters demonstrates that the Leverage Ratio for
such preceding four fiscal quarters was within any of the ranges set forth
below, then the Applicable Margin from and after the tenth day of the first
full month after the date the Agent receives the Covenant Compliance
Certificate shall be adjusted to (if such is the case) and shall equal, for
such type of Loan or Non-Use Fee, as the case may be, the amount set forth
below opposite the Leverage Ratio for such preceding four fiscal quarters.

 

	
  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  Applicable

  Margin for

  Base Rate Loans

  	
   

  	
  Applicable

  Margin for

  Libor Loans

  	
   

  	
  Applicable

  Margin for

  Non-Use Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  less than 1.00 to 1

  	
   

  	
  0.75

  	
  %

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  greater than or equal to 1.00 to 1 but less than
  1.75 to 1

  	
   

  	
  0.50

  	
  %

  	
  1.50

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  greater than or equal to 1.75 to 1 but less than
  2.50 to 1

  	
   

  	
  0.25

  	
  %

  	
  1.75

  	
  %

  	
  0.30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  greater than or equal to 2.50 to 1

  	
   

  	
  0

  	
  %

  	
  2.00

  	
  %

  	
  0.30

  	
  %

  

 

; provided, further,
that (a) from the Closing Date to June 30, 2008, the Applicable
Margin for Base Rate Loans, Libor Loans the Non-Use Fee shall be that set forth
in Level I above, and (b) if the Borrowers fail to timely deliver a
Covenant Compliance Certificate to the Agent, or the Agent reasonably disputes
the calculations set forth therein or the accuracy of the related financial
statements, then the Applicable Margin from and after the tenth day of the
first full month after the latest date the Agent could have received the
Covenant Compliance Certificate in compliance with Section 6.1(b)(8) hereof
shall be the Applicable Margin set forth in Level IV above.

 

“Applicable Rate” means: (1) with respect
to each Base Rate Loan, the Adjusted Base Rate, and (2) with respect to
each Libor Loan, the Adjusted Libor Rate.

 

“Bank” means each of the Banks identified in
the introductory paragraph of this Agreement, and any other Person which may
hereafter become a lender under this Agreement, and the successors and assigns
of each of the foregoing, and includes the Swingline Lender and any successor
or assignee of the Swingline Lender.

 

2

 

“Base Rate” means the rate of interest publicly
announced or adopted by the Agent from time to time as its prime rate, or other
designation in replacement of the prime rate announced or adopted by the
Agent.  The Base Rate may fluctuate as
frequently as daily, and any change in the Base Rate shall take effect as of
the day any change in the prime rate occurs. 
The Base Rate is only a reference rate and may not be the lowest rate
offered by the Agent or any Bank.

 

“Base Rate Loan” means a Loan with respect to
which interest accrues at the Adjusted Base Rate.

 

“Borrower Security Agreement” means the
security agreement to be executed by the Borrowers on or about the Closing Date
in favor of the Agent and by which the Borrowers shall grant to the Agent (for
the benefit of the Banks), as security for the Obligations, a security interest
in all existing and future assets of the Borrowers, other than Excluded Assets,
as the same may be amended, renewed, replaced, restated, consolidated or
otherwise modified from time to time.

 

“Borrowing Base” means, at any time, an amount
equal to the sum of:

 

(1)                                  85% of the face amount of Eligible
Accounts outstanding at such time;

 

(2)                                  65% of the Value of Eligible Inventory
consisting of flour;

 

(3)                                  75% of the Value of Eligible Inventory
consisting of corn;

 

(4)                                  75% of the Value of Eligible Inventory
consisting of wheat;

 

(5)                                  80% of the Value of Eligible Inventory
consisting of alcohol (food grade or ethanol);

 

(6)                                  75% of the Value of Eligible Inventory
consisting of feed;

 

(7)                                  65% of the Value of Eligible Inventory
consisting of protein (wheat gluten);

 

(8)                                  60% of the Value of Eligible Inventory
consisting of starch; and

 

(9)                                  60% of the Value of Eligible Inventory
consisting of other finished goods;

 

less the amount of taxes arising under 26 USC 5001 at such
time which the Borrowers and any Guarantor Subsidiaries reasonably anticipate
being payable by a Borrower or a Guarantor Subsidiary to a taxing authority in
connection with planned sales of taxable alcohol Inventory to non-bonded
warehouses.

 

“Borrowing Base Certificate” means a
certificate, in favor of the Agent, signed by the chief financial officer, treasurer
or corporate controller of each Borrower and each Guarantor Subsidiary,
substantially in the form of Exhibit E hereto, or in such other form as
the Agent may reasonably request from time to time, which sets forth in
reasonable detail the computations necessary to determine the Borrowing Base at
such time.

 

“Business Day” means a day other than a
Saturday, Sunday or any other day on which commercial banks in Missouri are
authorized or required to close under the laws of such state; provided, however, that,
if the applicable Business Day relates to the advance or continuation of, or
conversion into, or payment of a Libor Loan, “Business Day” shall mean a day on
which banks are dealing in U.S. Dollar deposits in the interbank eurodollar
market in London, England and Nassau, Bahamas.

 

3

 

“Capital Expenditures” means expenditures made
for the direct or indirect acquisition of any fixed assets or improvements,
replacements, substitutions or additions thereto which have a useful life of
more than one year, including, without limitation, payments with respect to
capitalized lease obligations.

 

“Chattel Paper” has the meaning given to such
term in UCC §9-102.

 

“Closing Date” means the date of this
Agreement, as set forth in the introductory paragraph of this Agreement.

 

“Collateral” means all property with respect to
which a Lien has been or is hereafter granted to Agent, for the benefit of all
the Banks, or any Banks pursuant to any of the Credit Documents or which
otherwise secures the payment or performance of any Obligation.

 

“Commitment” means, collectively for each Bank,
such Bank’s Revolving Credit Commitment and Term Loan Commitment.

 

“Covenant Compliance
Certificate” means
a certificate, in favor of the Agent, signed by the chief financial officer,
corporate controller or treasurer of each Borrower and each Guarantor
Subsidiary, substantially in the form of Exhibit F hereto, or in such
other form as the Agent may reasonably request from time to time, which sets
forth in reasonable detail the computations necessary to determine whether the
Borrowers are in compliance with the financial covenants set forth in this
Agreement for the relevant time period and the Applicable Margin.

 

“Credit Documents” means this Agreement, the
Notes, the Security Agreements, any Guaranty, and any other agreements or
documents existing on or after the Closing Date evidencing, securing,
guaranteeing or otherwise relating to any of the transactions described in or
contemplated by this Agreement, and any amendments, renewals, restatements,
replacements, consolidations or other modifications of any of the foregoing
from time to time.

 

“Daily Credit Balance” means, on any day, the
aggregate principal amount of all Revolving Credit Loans and the LC Exposure
outstanding at the end of such day.

 

“Debt” means any of the following: (1) indebtedness
or liability for borrowed money; (2) obligations evidenced by bonds,
debentures, notes or other similar instruments; (3) obligations for the
deferred purchase price of property or services, or arising out of non-compete
agreements or the like entered into in connection with asset or equity
acquisitions; (4) obligations as lessee under capital leases; (5) synthetic
lease obligations or similar obligations to pay rent or other payment amounts
under a lease of (or other indebtedness arrangements conveying the right to
use) real or personal property which may be classified and accounted for as an
operating lease or an off-balance sheet liability for accounting purposes but
as a secured or unsecured loan for federal income tax purposes; (6) current
liabilities in respect of unfunded vested benefits under Plans covered by
ERISA; (7) obligations under letters of credit or acceptance facilities; (8) all
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person, or otherwise to
assure a creditor against loss; and (9) obligations secured by a Lien on a
Person’s property, whether or not the obligations have been assumed by such
Person; provided, however, that MGP’s
obligations under the following agreements shall not be deemed Debt:  (i) the Lease Agreement, dated December 16,
1993, between MGP and Cilcorp Development Services, (ii) the Heat Service
Agreement, dated December 16, 1993, between MGP and Cilcorp Development
Services, and (iii) the Cogeneration Agreement, dated December 16,
1993, among MGP, Cilcorp Development Services and Central Illinois Light
Company, and (iv) the agreements existing on the Closing Date and
evidencing the arrangements described in Schedule 1 hereto.

 

4

 

“Default” means an event or condition the
occurrence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.

 

“Default Rate” has the meaning provided in Section 3.1(b) of
this Agreement.

 

“Deposit Account” has the meaning given to such
term in UCC §9-102.

 

“EBITDA” means, for MGP and its consolidated
subsidiaries for any period, net income for such period, plus
amounts deducted in the computation thereof for (1) interest expense, (2) federal,
state and local income taxes, and (3) depreciation and amortization.

 

“Eligible Account” means an Account arising in
the ordinary course of a Borrower’s or a Guarantor Subsidiary’s business from
the sale of goods or the rendering of services which the Agent, in its
reasonable credit judgment, deems to be an Eligible Account.  To be an Eligible Account, such Account must
be subject to First Priority Lien and no other Lien except for Permitted Liens,
and must be evidenced by an invoice or other documentary evidence reasonably
satisfactory to the Agent.  Without
limiting the generality of the foregoing, no Account shall be an Eligible
Account if: (1) the Account remains unpaid more than 90 days after the due
date shown in the original invoice, provided that the due date shown in the
original invoice is no more than 45 days after the original invoice date; or (2) 25%
or more of the Accounts from the Account Debtor are not Eligible Accounts; or (3) the
Account Debtor is also a creditor or supplier of such Borrower or Guarantor
Subsidiary, or has disputed liability with respect to such Account, or has made
any claim with respect to any other Account due from such Account Debtor to
such Borrower or Guarantor Subsidiary, or the Account otherwise is subject to
any right of setoff by the Account Debtor, in each case to the extent of any
such offset, dispute or claim; or (4) any bankruptcy or other insolvency
proceeding has been filed by or against the Account Debtor; or (5) the
Account arises from a sale to an Account Debtor outside the United States,
unless the Account is supported by a letter of credit, guaranty or credit
insurance, in each case reasonably acceptable to the Agent; or (6) the
Account arises from a sale to the Account Debtor which is not final, including,
without limitation, on a bill-and-hold, guaranteed sale, sale-or-return,
sale-on-approval, consignment or any other repurchase or return basis; or (7) the
Agent believes, in its reasonable credit judgment, that collection of such
Account is insecure or that payment thereof is doubtful or will be delayed by reason
of the Account Debtor’s financial condition; or (8) the Account Debtor is
the United States of America or any state, or any department, agency,
instrumentality or subdivision of the foregoing, unless the applicable Borrower
or Guarantor Subsidiary assigns its right to payment of such Account to the
Agent (for the benefit of the Banks), in form and substance reasonably
satisfactory to the Agent, so as to comply with the Assignment of Claims Act,
as amended (31 U.S.C. Section 3727 et  seq.), or the comparable state statute, as the case may be;
or (9) the goods giving rise to such Account are nonconforming goods or
the services giving rise to such Account have not been properly performed; or (10) the
total unpaid Accounts of any Account Debtor exceed 10% of the total unpaid
Accounts of all Account Debtors, but only to the extent such Account exceeds
such limit; or (11) the Account is evidenced by chattel paper or an instrument
of any kind (unless the original of such chattel paper or instrument has been pledged
and delivered to the Agent, for the benefit of the Banks, with such
endorsements thereto as the Agent may reasonably request), or has been reduced
to judgment; or (12) such Borrower or Guarantor Subsidiary has made any
agreement with the Account Debtor for any deduction therefrom, except for
discounts or allowances which are made in the ordinary course of such Borrower
or Guarantor Subsidiary’s business for prompt payment and which are reflected
on the related invoice and which are consistent with such Borrower or Guarantor
Subsidiary’s past business practices; or (13) the Account arises out of a sale
by such Borrower or Guarantor Subsidiary 
to an Affiliate of such Borrower or Guarantor Subsidiary or to a Person
controlled by an Affiliate of such Borrower or Guarantor Subsidiary.

 

5

 

“Eligible Inventory” means such Inventory of
each Borrower and each Guarantor Subsidiary which the Agent, in the exercise of
its reasonable credit judgment, deems to be Eligible Inventory.  Without limiting the generality of the
foregoing, no Inventory shall be Eligible Inventory unless, in the Agent’s
reasonable determination, it: (1) is in good, new and saleable condition, (2) is
not obsolete or unmerchantable, (3) meets all standards imposed by any
governmental agency or authority, (4) conforms in all respects to the
warranties and representations set forth in this Agreement and the Borrower
Security Agreement or Guarantor Security Agreement, as applicable, (5) is
at all times subject to a First Priority Lien and no other Lien except for
Permitted Liens, and (6) is situated at a location in compliance with the
Borrower Security Agreement or Guarantor Security Agreement, as applicable.

 

“Environmental Laws” means all federal, state,
local and other applicable statutes, ordinances, rules, regulations, judicial
orders or decrees, common law theories of liability, governmental or
quasi-governmental directives or notices or other laws or matters existing on
or after the Closing Date relating in any respect to occupational safety,
health or environmental protection.

 

“Equipment” has the meaning given to such term
in UCC §9-102.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and all rules and
regulations from time to time promulgated thereunder.

 

“Eurocurrency Reserve Requirement” means, for
any Libor Loan for any Interest Period therefor, the daily average of the
stated maximum rate (expressed as a decimal) at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion dollars
against “Eurocurrency liabilities” (as such term is used in Regulation D) but
without benefit or credit of proration, exemptions or offsets that might
otherwise be available from time to time under Regulation D. Without limiting
the effect of the foregoing, the Eurocurrency Reserve Requirement shall reflect
any other reserves required to be maintained against (1) any category of
liabilities that includes deposits by reference to which the Libor Rate for
Libor Loans is to be determined, or (2) any category of extension of credit
or other assets that include Libor Loans.

 

“Event of Default” has the meaning provided in Section 7.1
of this Agreement.

 

“Excluded Assets” means all real or personal
property other than:

 

	
  (1)

  	
   

  	
  Accounts;

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  Chattel Paper, to the
  extent arising out of or otherwise relating to the sale or other transfer of
  Inventory or the furnishing of services;

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  Instruments, to the
  extent arising out of or otherwise relating to the sale or other transfer of
  Inventory or the furnishing of services;

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  Inventory;

  
	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  Refinanced Equipment
  Collateral;

  
	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  Deposit Accounts
  maintained with the Agent or any Bank;

  
	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  books, journals and
  other records (in each case whether electronic or otherwise) relating in
  whole or in part to any of the foregoing; and

  

 

6

 

	
  (8)

  	
   

  	
  Proceeds of the
  foregoing.

  

 

“Existing Commerce Facility” means MGP’s credit
facility with Commerce Bank, N.A., as in effect immediately prior to the
Closing Date.

 

“First Priority Lien” means a duly perfected
Lien in favor of the Agent, for the benefit of the Banks, as security for the
Obligations, and which Lien is a first priority Lien except, in the case of a
Lien on Inventory consisting of distilled spirits, for any superior Lien on
such Inventory arising under 26 USC 5004.

 

“Fee Letter” means the letter or letters
executed by some or all of the Borrowers on or before the Closing Date in favor
of Commerce Bank, N.A.

 

“Financing Statements” means, collectively,
UCC-1 financing statements showing each Borrower and each Guarantor, as debtor,
and the Agent, as secured party, covering the Collateral, to be filed in such
jurisdictions as the Agent deems necessary or desirable to perfect its security
interest in the Collateral.

 

“Fixed Charge Coverage Ratio” means, at any
date, the ratio of (1) Adjusted EBITDA for the four fiscal quarters ending
on such date, minus (a) federal, state and
local income taxes paid or payable (whichever is greater) during such four
fiscal quarters, and (b) dividends paid by MGP during such four fiscal
quarters, to (2) Fixed Charges for such four fiscal quarters.

 

“Fixed Charges”
means, for MGP and its consolidated subsidiaries on a consolidated basis, for
any period, the sum of: (1) interest and other finance charges paid or
payable (whichever is greater) with respect to indebtedness during such period,
including, without limitation, the interest component of any capital lease
obligations; and  (2) principal
paid or payable (whichever is greater) during such period with respect to
indebtedness having a maturity of one year or longer at the time such payment
is paid or is payable, as the case may be, including, without limitation, the
principal component of any capital lease obligations.

 

“GAAP” means generally accepted accounting
principles in effect from time to time in the United States of America.

 

“Guarantor” means any Person who, on or after
the Closing Date, may guarantee the payment or performance of all or any part
of the Obligations.

 

“Guarantor Subsidiary” means any Person (other
than a Borrower) that is a Subsidiary of a Borrower that has guaranteed the
payment and performance of the Obligations pursuant to a Guaranty acceptable to
the Agent and that has entered into a Guarantor Security Agreement.

 

“Guaranty” means each guaranty executed by a
Guarantor in favor of the Agent for the benefit of the Banks at any time, and
any amendments, renewals, restatements, replacements, consolidations or other
modifications of any of the foregoing from time to time.

 

“Guarantor Security Agreements” means,
collectively, each security agreement executed by a Guarantor Subsidiary on or
after the Closing Date in favor of the Agent and by which such Guarantor
Subsidiary grants to the Agent a First Priority Lien on all existing and future
assets of such Person (other than Excluded Assets), subject to no other Lien
except for Permitted Liens, as the same may be amended, renewed, replaced,
restated, consolidated or otherwise modified from time to time.

 

7

 

“Hazardous Substance” means any hazardous,
toxic, dangerous or otherwise environmentally unsound substance, waste or other
material, in whatever form, as defined or described in, or contemplated by, any
Environmental Law and any other hazardous, toxic, dangerous or otherwise
environmentally unsound substance, waste or other material in whatever form, or
any other substance, waste or other material regulated by any Environmental
Law.

 

“Interest Period” means, with respect to any
Libor Loan, the period commencing on the date such Loan is made and ending (as
a Borrower may select pursuant to Section 3.7) on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, except that each Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month; provided, however, that (1) no
Interest Period may extend beyond the Revolving Credit Termination Date or Term
Loan Maturity Date (as applicable), and (2) if an Interest Period would
end on a day that is not a Business Day, such Interest Period shall be extended
to the next Business Day unless such Business Day would fall in the next
calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day.

 

“Instrument” has the meaning given to such term
in UCC §9-102.

 

“Inventory” has the meaning given to such term
in UCC §9-102.

 

“KCIT Facility” means MGP’s plant located in
Kansas City, Kansas.

 

“LC Exposure” means, at any date, the sum of (1) the
undrawn face amount of all Letters of Credit then outstanding, and (2) the
aggregate amount of all payments made by the Issuing Bank under or in
connection with any Letter of Credit for which the Issuing Bank has not been
reimbursed.

 

“Leverage Ratio” means, on any date, the ratio
of (1) Senior Funded Debt on such date, to (2) Adjusted EBITDA for
the four fiscal quarters ending on such date.

 

“Letter of Credit” has the meaning provided in Section 2.3(a) of
this Agreement.

 

“Letter of Credit Commitment” means, as to each
Bank, its obligation to participate in Letters of Credit, as described in Section 2.3(f) hereof,
in an aggregate amount at any time not to exceed the amount set forth opposite
such Bank’s name on Exhibit A hereto under the column entitled “Letter of
Credit Commitment.”

 

“Lien” means any mortgage, deed of trust,
pledge, security interest, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), or preference, priority, or other
security agreement or preferential arrangement, charge or encumbrance of any
kind or nature whatsoever, including, without limitation, any conditional sale
or other title retention agreement, any financing lease having substantially
the same economic effect as any of the foregoing, or the filing of any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction to evidence any of the foregoing.

 

“Libor Loan” means a Loan (other than a
Swingline Loan) with respect to which the interest rate accrues at the Adjusted
Libor Rate.

 

“Libor Rate” means, for any Interest Period,
the rate per annum determined by the Agent to equal the quotient of (1) the
London interbank offered rate for dollars for such Interest Period, as quoted
two 

 

8

 

Business Days immediately
preceding the date of the proposed Libor Loan in the “Money Rates” section of
The Wall Street Journal or by Bloomberg, Telerate or any other financial news
services (electronic or otherwise) used by the Agent from time to time in
accordance with commercially reasonable industry standards, divided by (2) one minus the
Eurocurrency Reserve Requirement for such Interest Period.

 

“Loans” means, collectively, the Revolving
Credit Loans, the Swingline Loans and the Term Loans.

 

“Material Adverse Effect” means (1) a
material adverse effect on the assets, liabilities, business, prospects,
operations, income or condition, financial or otherwise, of MGP and its
consolidated subsidiaries taken as a whole, (2) a material impairment of
the ability of a Borrower or any Guarantor to pay, perform or observe their
respective material obligations under the Credit Documents, or (3) a
material impairment of the enforceability or availability of the rights or
remedies stated to be available to the Agent or the Banks under the Credit
Documents.

 

“MGPI Merger” means the proposed merger, after
the Closing Date, of MGPI into MGP, with MGP being the surviving entity.

 

“Net Income” means, for any period, a Person’s
net income (or loss) as defined in accordance with GAAP.

 

“Non-Use Fee” has the meaning provided in Section 3.13
of this Agreement.

 

“Notes” means, collectively, the Revolving
Credit Notes, the Swingline Note and the Term Notes.

 

“Obligations”
means, collectively, all indebtedness, liabilities and obligations whatsoever
of each Borrower to the Agent, the Banks and/or any of their respective
affiliates whether now existing or hereafter incurred or arising under or in
connection with this Agreement and/or any of the other Credit Documents,
including without limitation, the principal of, and interest on, the Loans, all
future advances thereunder, the Swap Obligations, and all other amounts now or
hereafter owing to the Agent, the Banks and/or any of their respective
affiliates under this Agreement, the Notes, the Letters of Credit, the
Reimbursement Agreements or any of the other Credit Documents.

 

“Permitted
Acquisitions” means any acquisition by a Borrower of the equity interests
or assets of another Person made in accordance with the following terms and
conditions:  (1) no Default or Event
of Default shall exist at the time of the acquisition or result therefrom, (2) within
a reasonable period of time before the acquisition is consummated, the
Borrowers shall have delivered to the Agent and the Banks pro forma financial
projections, reasonably acceptable in form and detail to the Agent, demonstrating
that, after giving effect to the acquisition, the acquisition  shall not result in a violation of any
financial or other covenant contained in this Agreement or any other Credit
Document, (3) if the total amount of consideration incurred or expended by
the Borrowers in connection with the acquisition and all other acquisitions, if
any, made within three years after the Closing Date exceeds $15,000,000, or if
the Person whose equity interests or whose assets are being acquired is not in
the same general line of business as the Borrowers, the Borrowers shall have
obtained the prior written consent of the Agent to the acquisition, (4) immediately
upon the consummation of the acquisition, the Agent shall have a First Priority
Lien on the assets acquired, other than Excluded Assets, subject to no other
Lien except for Permitted Liens, and (5) in the case of an equity
acquisition whereby a Borrower shall acquire all or substantially all of the
equity interests of another Person, immediately upon the consummation of such
acquisition the Agent shall have a First Priority Lien on the assets of such
Person, other than Excluded Assets, as security for the Obligations, subject to
no other Lien except for Permitted Liens, and such Person shall sign a Guaranty
and a Guarantor Security Agreement. 
Notwithstanding the foregoing, any acquisition made in accordance 

 

9

 

with the arrangements
described in Schedule 1 hereto shall constitute a Permitted Acquisition if such
acquisition complies with the terms and conditions described in subparts (1) and
(3) above.

 

“Permitted Debt”
means any of the following:

 

(1)           accrued
expenses and current trade account payables incurred in the ordinary course of
a Person’s business;

 

(2)           Debt under the
Credit Documents;

 

(3)           Swap Obligations;

 

(4)           Debt described in Schedule
5.1(h) of this Agreement, together with any refinancings of such Debt,
provided that any refinancing does not act to increase the principal amount of
the Debt outstanding at the time of the refinancing;

 

(5)           intercompany Debt
between or among any Borrower and/or any Guarantor Subsidiaries;

 

(6)           to the extent the
same constitute Debt by virtue of subparts (8) or (9) of the
definition thereof, any such Debt arising under performance bonds or surety
bonds incurred in the ordinary course of business;

 

(7)           Debt, other than
Debt described in subparts (1) through (6) above, which Debt may be
either unsecured Debt or Debt secured by Liens described in subpart (7) of
the definition of Permitted Liens in this Section, provided that the aggregate
principal amount of all such Debt 
outstanding does not exceed $5,000,000 at any time during the three (3) year
period following the Closing Date; and

 

(8)           other Debt approved
in advance in a writing signed by the Required Banks and delivered to the
Agent.

 

“Permitted Debt Refinancing” has the meaning
given to such term in Section 3.6(b) of this Agreement.

 

“Permitted Investments” means investments in (1) cash
equivalents and short term marketable securities; (2) Guarantor
Subsidiaries; (3) D.M. Ingredients GmbH, provided that the amount of such
investments does not exceed (i) $365,000 on the Closing Date, or (ii) an
additional 175,000 Euros for each fiscal year ending on or after June 30,
2009; (4) advances to officers, directors and employees of a Borrower or a
Guarantor Subsidiary in the ordinary course of such Person’s business; (5) derivative
instruments entered into in the ordinary course in connection with the
Borrowers’ hedging programs, including readily marketable exchange-traded
commodity futures and option contracts entered into to reduce the risk of
future grain price increases and exchange traded futures contracts for the sale
of fuel alcohol entered into to hedge the selling price to customers; (6) deposits
associated with Borrowers’ hedging programs described in subpart (5) above,
and (7) and investments, other than those described in subparts (1) through
(6) above, provided that the aggregate amount of such investments at any
time does not exceed $2,000,000.

 

10

 

“Permitted Liens”
means any of the following:

 

(1)           Liens
for taxes, assessments or governmental charges not delinquent or being
contested in good faith and by appropriate proceedings and for which adequate
reserves are maintained in accordance with GAAP;

 

(2)           Liens arising out of
deposits in connection with workers’ compensation, unemployment insurance, old
age pensions or other social security or retirement benefits legislation;

 

(3)           deposits or pledges
to secure bids, tenders, contracts (other than contracts for the payment of
money), leases, statutory obligations, surety and appeal bonds, and other
obligations of like nature arising in the ordinary course of business;

 

(4)           Liens imposed by
law, such as mechanics’, workers’, materialmen’s, carriers’ or other like Liens
(excluding, however, any Lien in favor of a landlord) arising in the ordinary
course of a Borrower’s business which secure the payment of obligations which
are not more than 30 days  past due or
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves are maintained in accordance with GAAP;

 

(5)           rights of way,
zoning restrictions, easements and similar encumbrances affecting real property
which do not materially interfere with the use of such property;

 

(6)           Liens existing on
the Closing Date and described on Schedule 5.1(m) of this
Agreement, and any renewals or refinancings thereof,  provided that (a) the Debt secured by
such Liens is limited to the Debt owing to the related creditor as described in
Schedule 5.1(h), and any renewals or refinancings thereof, and (b) such
Liens do not encumber any Collateral;

 

(7)           Liens on Excluded
Assets, provided that (a) such Liens secure only Debt described in subpart
(7) of the definition of Permitted Debt (or – if and to the extent the
Agent consents in writing to such Debt being secured by a Lien – Debt described
in subpart (8) of the definition of Permitted Debt), and (b) such
Liens do not encumber any Collateral;

 

(8)           Liens in favor of a
Bank or its affiliate securing Swap Obligations, which Liens shall be pari
passu in priority with the Liens referred to in subpart (10) immediately
below;

 

(9)           in the case of
Inventory of a Borrower or a Subsidiary of a Borrower consisting of distilled
spirits, the Lien thereon arising under 26 USC 5004;

 

(10)         Liens in favor of the
Agent (for the benefit of the Banks);

 

(11)         Liens resulting from
any judgment or award, the time for the appeal or petition for rehearing for
which shall not have expired, or in respect of which a Borrower or a Subsidiary
of a Borrower shall in good faith be prosecuting on appeal or proceeding for
review and in respect of which a stay or execution pending such appeal or
preceding for review shall have been granted; and

 

(12)         other Liens approved
in advance in a writing signed by the Required Banks and delivered to the
Agent.

 

11

 

“Person” means an individual, corporation,
limited liability company, partnership, trust, governmental entity or any other
entity, organization or group whatsoever.

 

“Plan” means an employee benefit plan (as
defined in Section 3(3) of ERISA) maintained for employees of a
Borrower on or after the Closing Date.

 

“Proceeds” has the meaning given to such term
in UCC §9-102.

 

“Pro-Rata Share” means, at any time, with
respect to a Bank, in each case expressed as a percentage:

 

(1)           Make Revolving Credit Loans.  In the case of a Bank’s obligation to make
Revolving Credit Loans, a fraction (a) the numerator of which is such Bank’s
Revolving Credit Commitment at such time, and (b) the denominator of which
is the Total Revolving Credit Commitment at such time.

 

(2)           LC Exposure.  In the
case of a Bank’s obligation to participate in Letters of Credit, as
contemplated by Section 2.3(f) hereof, a fraction (a) the
numerator of which is the amount of such Bank’s Letter of Credit Commitment on
such date, and (b) the denominator of which is the Total Letter of Credit
Commitment on such date.

 

(3)           Swingline Exposure.  In the case of a Bank’s obligation to
reimburse the Swingline Lender for Swingline Loans, a fraction (a) the
numerator of which is the amount of such Bank’s Revolving Credit Commitment at
such time, and (b) the denominator of which is the Total Revolving Credit
Commitment at such time.

 

(4)           Make Term Loans.  In the case of a Bank’s
obligation to make Term Loans, a fraction (a) the numerator of which is
such Bank’s Term Loan Commitment at such time, and (b) the denominator of
which is the Total Term Loan Commitment at such time.

 

(5)           Receive Principal or Interest on Revolving Credit
Loans or Non-Use Fee.  In the
case of a Bank’s right to receive payment of principal or interest with respect
to its outstanding Revolving Credit Loans (including any Revolving Credit Loans
arising out of Swingline Loans or Letters of Credit) or Non-Use Fees, a
fraction (a) the numerator of which is the amount of the unpaid principal
balance of such Bank’s Revolving Credit Loans giving rise to such principal and
interest payment, and (b) the denominator of which is the aggregate unpaid
principal balance of all Revolving Credit Loans giving rise to such principal
and interest payment.

 

(6)           Receive Principal or Interest on Term Loans.  In the case of a Bank’s right to receive
payment of principal and interest with respect to its outstanding  Term Loans, a fraction (a) the numerator
of which is the amount of the unpaid principal balance of such Bank’s Term Loan
giving rise to such principal and interest payment, and (b) the
denominator of which is the aggregate unpaid principal balance of all Term
Loans giving rise to such principal and interest payment.

 

(7)           Indemnification; Other.  In the case of a Bank’s obligations under Section 8.5
hereof or in any other cases not addressed in subparts (1) though (6) above,
a fraction (a) the numerator of which is the sum of such Bank’s Revolving
Credit Commitment and Term Loan Commitment at such time, and (b) the
denominator of which is the sum of the 

 

12

 

Total Revolving Credit Commitment and Total Term Loan Commitment at
such time (the foregoing fraction shall be calculated without regard to whether
such Bank or any other Bank has any Commitment to make Revolving Credit Loans
or Term Loans at such time).

 

“Refinanced Equipment Collateral” means any
Equipment that secures Permitted Debt that is refinanced with the proceeds of
any Loans.

 

“Regulation D” means Regulation D of the Board
of Governors of the Federal Reserve System as amended or supplemented from time
to time.

 

“Regulatory Change” means any change after the
Closing Date in federal, state, local or foreign laws or regulations
(including, without limitation, Regulation D), or the adoption or making after
such date of any interpretations, directives or requirements applying to a
class of banks including any Bank under any federal, state, local or foreign
laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.

 

“Reimbursement Agreement” means any application
and/or reimbursement agreement pursuant to which a Letter of Credit has been
issued, as amended, renewed, restated, replaced, consolidated or otherwise
modified from time to time.

 

“Reimbursement Obligations” means, at any date,
the obligations of the Borrowers then outstanding, or which may thereafter
arise in respect to all Letters of Credit then outstanding, to reimburse amounts
paid by the Issuing Bank in respect of any drawings under a Letter of Credit.

 

“Required Banks” means, as of any date of
determination, Banks having more than 51% of the Total Commitments, or if the
commitment of each Bank to make Loans and the obligation of the Issuing Bank to
incur LC Exposure have been terminated pursuant to Section 7.2, Banks in
the aggregate owning more than 51% of the total outstanding Obligations (with
the aggregate amount of each Bank’s risk participation in Swingline Loans and LC
Exposure being deemed “held” by such Bank for purposes of this definition);
provided that the Commitments of, and the portion of Obligations held or deemed
held by, a Bank in default on its obligations under this Agreement or the other
Credit Documents shall be excluded for purposes of making a determination of
Required Banks.

 

“Revolving Credit Commitment” means, with
respect to any Bank, the amount set forth opposite such Bank’s name under the
column “Revolving Credit Commitment” on Exhibit A hereto.

 

“Revolving Credit Loans” has the meaning
provided in Section 2.1(a) of this Agreement.

 

“Revolving Credit Notes” has the meaning
provided in Section 2.1(b) of this Agreement.

 

“Revolving Credit Termination Date” means the
third anniversary of the Closing Date; provided,
however, that, if such day is not a Business Day, the Revolving
Credit Termination Date shall be the immediately preceding Business Day.

 

“Security Agreements” means the Borrower
Security Agreement and all Guarantor Security Agreements.

 

“Senior Funded Debt” means, on the date of
determination, all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long-term liabilities, less
any 

 

13

 

such indebtedness that is
subordinated in writing to the payment of the Obligations on terms satisfactory
to the Agent.

 

“Subsidiary” means, as to any Person, any
corporation, association or other business entity in which such Person and/or
one or more of its Subsidiaries owns sufficient equity or voting interests to
enable it or them (as a group) to elect a majority of the directors (or Persons
performing similar functions) of such entity; and any partnership, limited
liability company or joint venture if more than a 50% interest in the profits
or capital thereof is owned by such Person and/or one or more of its
Subsidiaries.  Unless the context clearly
requires otherwise, any reference to a “Subsidiary” is a reference to a
Subsidiary of a Borrower.

 

“Swap Obligations” means any obligations of a
Borrower or a Guarantor due a Bank or its affiliate under or relating to any
interest rate or currency swaps or similar hedging contracts entered into from
time to time between any one or more Borrowers or Guarantors, on the one hand,
and such Bank, on the other hand.

 

“Swingline Lender” has the meaning provided in
the introductory paragraph of this Agreement.

 

“Swingline Loans” has the meaning provided in Section 2.2(a) of
this Agreement.

 

“Swingline Loan Commitment” means, as to the
Swingline Lender, its obligation to make Swingline Loans pursuant to Section 2.2
of this Agreement, in an aggregate principal amount outstanding at any time not
to exceed the amount set forth opposite such Bank’s name on Exhibit A
hereto under the column entitled “Swingline Loan Commitment.”

 

“Swingline Note” has the meaning provided in Section 2.2(b) of
this Agreement.

 

“Swingline Termination Date” means the
Revolving Credit Termination Date.

 

“Tangible Net Worth” means, at any time, (1) the
excess of a Person’s assets over its liabilities at such time, each as
determined in accordance with GAAP, minus (2) the
sum of, without duplication, (a) goodwill, including any amounts, however
designated on any balance sheet of a Person representing the excess of the
purchase price paid for assets or stock or other equity interests over the
value assigned thereto on the books of such Person, (b) patents,
copyrights, trademarks, trade names, non-compete agreements, franchises and
other similar intangibles, (c) deferred assets, other than prepaid
insurance and prepaid taxes, (d) unamortized debt discount and expense,
and (e) notes, receivables and other amounts due from Affiliates or
employees.

 

“Term Loan Commitment” means, with respect to
any Bank, the amount set forth opposite such Bank’s name under the column “Term
Loan Commitment” on Exhibit A hereto.

 

“Term Loan Maturity Date” means the fifth
anniversary of the Closing Date; provided, however, that if such day is not a Business Day, the Term
Loan Maturity Date shall be the immediately preceding Business Day.

 

“Term Loans” has the meaning provided in Section 2.4(a) of
this Agreement.

 

“Term Notes” has the meaning provided in Section 2.4(b) of
this Agreement.

 

“Total Commitment” means the sum of the Total
Revolving Credit Commitment and the Total Term Loan Commitment.

 

14

 

“Total Letter of Credit Commitment” means
$8,000,000.

 

“Total Revolving Credit Commitment” means
$40,000,000.

 

“Total Term Loan Commitment” means $25,000,000.

 

“Type” has the meaning provided in Section 2.1(c) of
this Agreement.

 

“UCC” means the Uniform Commercial Code as in
effect in the State of Missouri from time to time.

 

“Value” means, with respect to Eligible
Inventory, the lower of cost or market value determined on a first-in,
first-out basis.

 

1.2           Accounting Terms; Other.

 

(a)           General.  All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.  Unless the context clearly requires
otherwise, all references to “dollars” or “$” are to United States
dollars.  This Agreement and the other
Credit Documents shall be construed without regard to any presumption or rule requiring
construction against the party causing any such document or any portion thereof
to be drafted.  The Section and
other headings in this Agreement and any index at the beginning of this
Agreement are for convenience of reference only and shall not limit or
otherwise affect any of the terms of this Agreement.  Similarly, any page footers or headers
or similar word processing, document or page identification numbers in
this Agreement or any index or exhibit are for convenience of reference only
and shall not limit or otherwise affect any of the terms of this Agreement, nor
shall there be any requirement that any such footers or other numbers be
consistent from page to page. 
Unless the context clearly requires otherwise, any reference to a Section of
this Agreement refers to all Sections and Subsections thereunder.  Any pronoun used herein shall be deemed to
cover all genders.  Defined terms used in
this Agreement may be set forth in Section 1.1 or other Sections of this
Agreement, and all such definitions defined in the singular shall have a
corresponding meaning when used in the plural and vice versa.

 

(b)           Changes in GAAP.  If any change in GAAP at any time would
affect the computation of any financial ratio or requirement set forth in any
Credit Document, and either any Borrower or the Agent shall so request, the
Banks and the Borrowers shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP; provided, however, that, until so
amended, (1) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein, and (2) the Borrowers
shall provide to the Agent and the Banks financial statements and other
documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

Section 2

Credit Facilities

 

2.1           Revolving Credit Loans.

 

(a)           General.  Each Bank (severally, but not jointly)
agrees, subject to the terms and conditions of this Agreement, to make
revolving credit loans (collectively, the “Revolving Credit Loans”) to
the Borrowers from time to time from the Closing Date to the Business Day
immediately preceding the Revolving Credit Termination Date up to a maximum
principal amount at any time outstanding equal to 

 

15

 

such Bank’s Revolving Credit Commitment at such time; provided, however, that no Bank shall be obligated to make a
Revolving Credit Loan if: (1) the LC Exposure at such time, plus the aggregate amount of all Revolving Credit Loans,
Swingline Loans and Term Loans outstanding at such time exceeds, or would
exceed if the requested Revolving Credit Loan were to be made, the lesser of (A) Borrowing
Base at such time; or (B) the Total Commitment at such time, (2) the
LC Exposure at such time, plus the
aggregate amount of all Revolving Credit Loans and Swingline Loans outstanding
at such time exceeds, or would exceed if the requested Revolving Credit Loan is
made, the Total Revolving Credit Commitment, or (3) any Default or Event
of Default exists or would result from the making of such Revolving Credit
Loan.  Subject to the terms and
conditions of this Agreement, the Borrowers may borrow, repay and re-borrow
under the Revolving Credit Loans.

 

(b)           Revolving Credit Note.  The Revolving Credit Loans shall be evidenced
by, and shall be payable in accordance with the terms and conditions of,
promissory notes, one payable to each Bank having a Revolving Credit
Commitment, substantially in the form of Exhibit B hereto (collectively,
as amended, renewed, restated, replaced, consolidated or otherwise modified
from time to time, the “Revolving Credit Notes”).

 

(c)           Types of Loan.  Subject to the terms and conditions of this
Agreement, the Borrowers may elect to have Revolving Credit Loans disbursed as,
continued as, or converted into, as the case may be, Base Rate Loans or Libor
Loans (each such type of Loan being referred to herein as a “Type” of
Loan).  If the Borrowers fail to specify,
in accordance with the terms of this Agreement, the Type of Loan that a
Revolving Credit Loan is to be disbursed as or converted into, then, unless the
Agent elects otherwise (which election of a Loan Type shall be binding on the
Borrowers), such Revolving Credit Loan shall be disbursed as or converted into,
as the case may be, a Base Rate Loan.

 

(d)           Accordion Feature.

 

(1)           At
any time prior to one Business Day before the Revolving Credit Termination
Date, the Borrowers may effectuate a one-time increase in the Total Revolving
Credit Commitments (a “Revolving Credit Commitment Increase”), by
designating either one or more of the existing Banks (each of which, in its
sole discretion, may determine whether and to what degree to participate in
such Revolving Credit Commitment Increase) or one or more other banks or other
financial institutions (reasonably acceptable to the Agent and the Issuing
Bank) that at the time agree in the case of any such bank or financial
institution that is an existing Bank to increase its Revolving Credit
Commitment as such Bank shall so select (an “Increasing Revolving Credit
Bank”) and, in the case of any other such bank or financial institution (an
“Additional Revolving Credit Bank”), to become a party to this
Agreement; provided, however,
that (A) the aggregate amount of the Revolving Credit Commitment Increase
may not exceed $20,000,000, and (B) all Revolving Credit Commitments and
Revolving Credit Loans provided pursuant to a Revolving Credit Commitment
Increase shall be available on the same terms as those applicable to the
existing Revolving Credit Commitments and Revolving Credit Loans.  The Borrowers shall provide prompt notice of
any proposed Revolving Credit Commitment Increase to the Agent and the
Banks.  Nothing in this Section 2.1(d) shall
be construed to create any obligation on the Agent or any Bank to advance or to
commit to advance any credit to the Borrowers or to arrange for any other
Person to advance or to commit to advance any credit to the Borrowers.

 

(2)           A
Revolving Credit Commitment Increase shall become effective upon (A) the
receipt by the Agent of (1) an agreement in form and substance reasonably
satisfactory to the Agent signed by the Borrowers, each Increasing Revolving
Credit 

 

16

 

Bank and each Additional Revolving Credit Bank, setting forth the
Revolving Credit Commitments, if any, of each such Bank and setting forth the
agreement of each Additional Revolving Credit Bank to become a party to this
Agreement and to be bound by all the terms and provisions hereof binding upon
each Bank, and (2) such evidence of appropriate authorization on the part
of the Borrowers with respect to such Revolving Credit Commitment Increase as
the Agent may reasonably request, (B) the funding by each Increasing
Revolving Credit Bank and Additional Revolving Credit Bank of the Revolving
Credit Loans to be made by each such Bank to effect the prepayment requirement
set forth in Section 2.1(d)(4), and (C) receipt by the Agent of a
certificate of an officer of the Borrowers stating that, both before and after
giving effect to such Revolving Credit Commitment Increase, no Default or Event
of Default has occurred and is continuing or would result from the Revolving
Credit Commitment Increase, and that all representations and warranties made by
the Borrowers in this Agreement are true and correct in all material respects,
unless such representation or warranty relates to an earlier date which remains
true and correct as of such earlier date.

 

(3)           Notwithstanding
any provision contained herein to the contrary, from and after the date of any
Revolving Credit Commitment Increase, all calculations and payments of interest
on the Revolving Credit Loans shall take into account the actual Revolving
Credit Commitment of each Bank and the principal amount outstanding of each
Revolving Credit Loan made by such Bank during the relevant period of time.

 

(4)           If
a Revolving Credit Commitment Increase is effected as permitted under this Section 2.1(d),
the Borrowers shall prepay any Revolving Credit Loans outstanding on such
increase date to the extent necessary to keep the outstanding Revolving Credit
Loans ratable to reflect the revised percentages arising from such Revolving
Credit Commitment Increase.  Any
prepayment made by the Borrowers in accordance with this clause (4) may be
made with the proceeds of Revolving Credit Loans made by any or all the Banks
in connection with the Revolving Credit Commitment Increase occurring
simultaneously with the prepayment.

 

2.2           Swingline Loans.

 

(a)           General.  The Swingline Lender agrees, subject to the
terms and conditions of this Agreement, to make swing line loans (collectively,
the “Swingline Loans”) to the Borrowers from time to time from the
Closing Date to the Business Day immediately preceding the Swingline
Termination Date up to a maximum principal amount at any time outstanding equal
to the Swingline Loan Commitment; provided, however,
that the Swingline Lender shall not be obligated to make a Swingline Loan if: (1) the
LC Exposure at such time, plus the
aggregate amount of all Revolving Credit Loans, Swingline Loans and Term Loans
outstanding at such time, exceeds, or would exceed if the requested Swingline
Loan were to be made, the lesser of (A) the Borrowing Base at such time,
or (B) the Total Commitment at such time; (2) the LC Exposure, plus the aggregate amount of all Revolving Credit Loans and
Swingline Loans outstanding at such time exceeds, or would exceed if the
requested Swingline Loan were made, the Total Revolving Credit Commitment, (3) the
outstanding Swingline Loans at such time exceeds, or would exceed if the
requested Swingline Loan were made, the Swingline Loan Commitment, or (4) any
Default or Event of Default exists or would result from the making of such
Swingline Loan.  Subject to the terms and
conditions of this Agreement, the Borrowers may borrow, repay and re-borrow
under the Swingline Loans.

 

(b)           Swingline Note.  The Swingline Loan shall be evidenced by, and
shall be payable in accordance with the terms and conditions of, a promissory
note, payable to the Swingline Lender, 

 

17

 

substantially in the form of Exhibit C hereto (as
amended, renewed, restated, replaced, consolidated or otherwise modified from
time to time, the “Swingline Note”).

 

(c)           Type of Loan.  Swingline Loans may be outstanding only as Base
Rate Loans.

 

(d)           Banks’ Duty to Reimburse.  If the Borrowers fail to repay any Swingline
Loans in accordance with the terms of this Agreement, then the Banks shall
reimburse the Swingline Lender on demand for the unpaid amount of such
Swingline Loans.  Such reimbursements
shall be made by the Banks in accordance with their respective Pro-Rata Shares
and shall thereafter be reflected as Revolving Credit Loans of the Banks on the
books and records of the Agent.  Each
Bank shall fund its respective Pro-Rata Share of Revolving Credit Loans as
required to repay Swingline Loans outstanding to the Swingline Lender upon
demand by the Swingline Lender.  No Bank’s
obligation to fund its Pro-Rata Share of a Swingline Loan shall be affected by
any other Bank’s failure to fund its Pro-Rata Share of a Swingline Loan.  Similarly, the Borrowers’ obligation to repay
Swingline Loans shall not be affected by any Bank’s failure to reimburse the
Swingline Lender pursuant to this Section 2.2.

 

(e)           Rescinded Payment.  If any portion of any principal payment made
by a Borrower to the Swingline Lender on account of any Swingline Loan shall be
recovered by or on behalf of a Borrower from the Swingline Lender in bankruptcy
or otherwise, the loss of the amount so recovered shall be ratably shared among
all of the Banks in accordance with their respective Pro-Rata Shares.

 

(f)            Banks’ Obligations.  Each Bank acknowledges and agrees that its
obligation to refund Swingline Loans in accordance with the terms of this Section 2.2
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the existence of a Default or an
Event of Default.  Further, each Bank
agrees and acknowledges that if prior to the refunding of any outstanding Swingline
Loans pursuant to this Section 2.2, one of the events described in Section 7.1(f) shall
have occurred, each Bank will, on the date the applicable Revolving Credit Loan
would have been made, purchase an undivided participating interest in the
Swingline Loan to be refunded in an amount equal to its Pro-Rata Share of the
aggregate amount of such Swingline Loan. 
Each Bank will immediately transfer to the Swingline Lender, in
immediately available funds, the amount of its participation and upon receipt thereof
the Swingline Lender will deliver to such Bank a certificate evidencing such
participation dated the date of receipt of such funds and for such amount.  Whenever, at any time after the Swingline
Lender has received from any Bank such Bank’s participating interest in a
Swingline Loan, the Swingline Lender receives any payment on account thereof,
the Swingline Lender will distribute to such Bank its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Bank’s participating interest was
outstanding and funded).

 

(g)           Subfacility of Revolving Credit
Facility.  The parties acknowledge
that the Swingline Loan facility referred to in this Section 2.2 is a
subfacility of the Revolving Credit Loan facility referred to in Section 2.1
above and, accordingly, its use by the Borrowers shall act to reduce, on a
dollar-for-dollar basis, the amount of credit otherwise available to the
Borrowers under such Revolving Credit Loan facility.

 

2.3           Letters of Credit.

 

(a)           General.  The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, to issue one or more letters of credit (each,
a “Letter of Credit”) for the account of a Borrower from the Closing
Date to one Business Day before the Revolving Credit Termination Date; provided, however, that the Issuing Bank shall not be
obligated to issue any Letter of Credit if: (1) the Borrowers’ LC Exposure
then outstanding exceeds, or would exceed with the issuance of such Letter of
Credit, the 

 

18

 

Total Letter of Credit Commitment; (2) the LC
Exposure at such time, plus the
aggregate amount of all Revolving Credit Loans, Swingline Loans and Term Loans
outstanding at such time exceeds, or would exceed with the issuance of such
Letter of Credit, the lesser of (A) the Total Commitment at such time, or (B) the
Borrowing Base at such time; (3) the LC Exposure at such time, plus the aggregate amount of Revolving Credit Loans and Swingline
Loans outstanding at such time exceeds, or would exceed if the requested Letter
of Credit is issued, the Total Revolving 
Credit Commitment; (4) there exists, or would exist with the
issuance of such Letter of Credit, any Default or Event of Default; (5) the
expiry date of such Letter of Credit occurs, or under any circumstances may
occur, on or after one Business Day before the Revolving Credit Termination
Date; (6) the Borrowers fail to execute and deliver such Reimbursement
Agreements and other documents as the Issuing Bank may request in connection
with the issuance of such Letter of Credit; or (7) the form or contents of
such Letter of Credit are not reasonably acceptable to the Issuing Bank.

 

(b)           Fee.  The Borrowers jointly and severally agree to
pay to the Agent, to be allocated among the Banks in accordance with their
respective Pro-Rata Shares, a fee in respect of each Letter of Credit issued
computed at an annual rate equal to the Applicable Margin for Libor Loans as in
effect at the end of the applicable quarter, payable quarterly, in arrears, on
the average daily LC Exposure for such quarter. 
In addition, the Borrowers shall pay or reimburse the Issuing Bank, for
its own account and not for the benefit of the Banks, for such normal and customary
costs and expenses as are incurred by the Issuing Bank in issuing, effecting
payment under or otherwise administering any Letter of Credit.

 

(c)           Subfacility of Revolving Credit
Facility.   The parties acknowledge
that the Letter of Credit facility referred to in this Section 2.3 is a
subfacility of the Revolving Credit Loan facility referred to in Section 2.1
above and, accordingly, its use by the Borrowers shall act to reduce, on a
dollar-for-dollar basis, the amount of credit otherwise available to the
Borrowers under such Revolving Credit Loan facility.

 

(d)           Issuing Bank’s Rights.  The Borrowers shall execute such letter of
credit application forms and/or letter of credit reimbursement agreements as
the Issuing Bank may request from time to time and, in any event, the Borrowers
shall be absolutely, unconditionally liable to reimburse the Issuing Bank on
demand for any liability the Issuing Bank may incur in connection with the
issuance of any Letters of Credit, including, without limitation, any draws or
other payments made thereunder, and the Borrowers assume all risks in
connection therewith, except to the extent the Issuing Bank’s honor of a draw
request under a Letter of Credit constitutes gross negligence or willful
misconduct..

 

(e)           Notice of Issuance.  If the Issuing Bank issues a Letter of Credit
under this Section 2.3, the Issuing Bank shall give notice thereof to the
Agent, who shall in turn give to each Bank prompt written or telecopy advice of
the issuance of such Letter of Credit.

 

(f)            Risk Participations.  By the issuance of a Letter of Credit, and
without any further action on the part of the Issuing Bank or the Banks in
respect thereof, the Issuing Bank shall be deemed to have granted to each Bank,
and each Bank shall be deemed to have acquired from the Issuing Bank, a
participation, to the extent of its Pro-Rata Share, in such Letter of
Credit.  In consideration and in
furtherance of the foregoing, each Bank hereby absolutely and unconditionally
agrees to pay to the Issuing Bank, in accordance with Section 2.3(g) below,
such Bank’s Pro-Rata Share of all Reimbursement Obligations; provided, however, that a Bank shall not
be obligated to make any such payment with respect to any disbursement made
under any Letter of Credit as a result of the gross negligence or willful
misconduct of the Issuing Bank.  Each
Bank acknowledges and agrees that its acquisition of participations pursuant to
this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of any Default or 

 

19

 

Event of Default hereunder, and that each such payment
shall be made without any offset, abatement, withholding, or reduction
whatsoever.

 

(g)           Payments on Risk Participations.  Promptly after it shall have ascertained that
any draft and any accompanying documents presented under a Letter of Credit
appear to be in conformity with the terms and conditions of such Letter of
Credit, the Issuing Bank shall give written or telecopy notice to the
Borrowers, the Agent, and the Banks of the receipt and amount of such draft and
the date on which payment thereon will be made. 
If the Issuing Bank shall not have received from the Borrowers the
payment required pursuant to Section 2.3(h) below by 10:00 a.m.,
Kansas City time, one Business Day after the date on which payment of a draft
present under any Letter of Credit has been made, the Issuing Bank shall
promptly so notify the Agent and each Bank, specifying in the notice to each
Bank its Pro-Rata Share of such disbursement. 
Each Bank shall pay to the Agent, not later than 2:00 p.m., Kansas
City time, on such date, such Bank’s Pro-Rata Share of such disbursement, which
the Agent shall promptly pay to the Issuing Bank.  The Issuing Bank shall promptly remit to each
Bank its Pro-Rata Share of any amount subsequently received by the Issuing Bank
in respect of any such disbursement.

 

(h)           Reimbursement for Draws.  If the Issuing Bank shall pay any draft
presented under a Letter of Credit under circumstances entitling it to
reimbursement under the applicable Reimbursement Agreement, the Borrowers shall
promptly pay to the Issuing Bank the amount of any such draft, and shall make
all other payments required by, and comply with all other terms and conditions
of, the applicable Reimbursement Agreement. 
With respect to any such payment which becomes due under the terms of
this Section 2.3(h), the Borrowers authorize the Agent, at its option, to cause
such payment to be made when due by charging such payment as an advance under
the Revolving Credit Loans.

 

(i)            Assignee Deposit Agreement.  Upon the occurrence of any Event of Default,
or the occurrence of a Default described in Section 7.1(f), an amount
equal to the amount of the LC Exposure shall without demand upon or notice to
the Borrowers, or any other Person, be deemed (as between the Issuing Bank and
the Borrowers) to have been paid by the Issuing Bank under the then outstanding
Letters of Credit (notwithstanding that such amount may not in fact have been
so paid), and the Borrowers shall be immediately obligated to reimburse the
Issuing Bank for the amount deemed to have been so paid.  If the Borrowers fail to make such deposit,
the Agent may fund such deposit by making Revolving Credit Loans with the
proceeds thereof disbursed to the Agent, which Revolving Credit Loans shall, in
any case, be an Obligation of the Borrowers to the Banks.  The foregoing rights and remedies shall be in
addition to any other rights and remedies which the Agent or any Bank may have
upon the occurrence of an Event of Default. 
Any amounts so received by the Issuing Bank pursuant to the provisions
of the foregoing sentence shall be deposited to a restricted deposit account
(the “Assignee Deposit Account”) maintained by the Agent as collateral
security for the repayment of the Obligations. 
The Borrowers shall not have any right to withdraw funds deposited in
the Assignee Deposit Account, which right shall be vested solely in the Agent,
on behalf of the Banks.  The funds
deposited in the Assignee Deposit Account pursuant to this Section 2.3(i) shall
be applied by the Agent first to fund related unsatisfied Letter of Credit
reimbursement obligations and then to any other Obligations in accordance with Section 7.3(f).

 

2.4           Term Loans.

 

(a)           General.  Each Bank (severally, but not jointly)
agrees, subject to the terms and conditions of this Agreement, to make loans
(each, a “Term Loan” and collectively, the “Term Loans”) to the
Borrowers from time to time from the Closing Date to the Business Day
immediately preceding the first anniversary of the Closing Date up to a maximum
aggregate principal amount equal to such Bank’s Term Loan Commitment at such
time; provided, however,
that no Bank shall be obligated to make a Term 

 

20

 

Loan if:  (1) the
LC Exposure at such time, plus the
aggregate amount of all Revolving Credit Loans, Swingline Loans and Term Loans
outstanding at such time exceeds, or would exceed if the requested Term Loan
were to be made, the lesser of (A) the Borrowing Base at such time, or (B) the
Total Commitment at such time; (2) the aggregate amount of Term Loans
previously made to Borrowers exceeds, or would exceed if the requested Term
Loans were made, the Total Term Loan Commitment; or (3) any Default or
Event of Default exists or would result from the making of such Term
Loans.  Borrowers may not borrow, repay
and re-borrow under the Term Loans.

 

(b)           Term Notes.  The Term Loans shall be evidenced by, and
shall be payable in accordance with the terms and conditions of, promissory
notes, one payable to each Bank having a Term Loan Commitment, substantially in
the form of Exhibit D hereto (collectively, as amended, renewed, restated,
replaced, consolidated or otherwise modified from time to time, the “Term
Notes”).

 

(c)           Types of Loan.  Subject to the terms and conditions of this
Agreement, the Borrowers may elect to have Term Loans disbursed as, continued
as, or converted into, as the case may be, Base Rate Loans or Libor Loans.  If the Borrowers fail to specify, in
accordance with the terms of this Agreement, the Type of Loan that a Term Loan
is to be disbursed as or converted into, then, unless the Agent elects otherwise
(which election of a Loan Type shall be binding on the Borrowers), such Term
Loan shall be disbursed as or converted into, as the case may be, a Base Rate
Loan.

 

(d)           Accordion Provision.

 

(1)           At
any time after the first anniversary of the Closing Date but prior to one
Business Day before the Term Loan Maturity Date, the Borrowers may effectuate a
one-time increase in the Total Term Loan Commitments (a “Term Loan
Commitment Increase”), by designating either one or more of the existing
Banks (each of which, in its sole discretion, may determine whether and to what
degree to participate in such Term Loan Commitment Increase) or one or more
other banks or other financial institutions (reasonably acceptable to the
Agent) that at the time agree, in the case of any such bank or financial
institution that is an existing Bank to increase its Term Loan Commitment as
such Bank shall so select (an “Increasing Term Loan Bank”) and, in the
case of any other such bank or financial institution (an “Additional Term
Loan Bank”), to become a party to this Agreement; provided,
however, that (A) the aggregate
amount of the Term Loan Commitment Increases may not exceed $10,000,000, and (B) all
Term Loan Commitments and Term Loans provided pursuant to a Term Loan
Commitment Increase shall be available on the same terms as those applicable to
the existing Term Loan Commitments and Term Loans.  The Borrowers shall provide prompt notice of
any proposed Term Loan Commitment Increase to the Agent and the Banks.  Nothing in this Section 2.4(d) shall
be construed to create any obligation on the Agent or any Bank to advance or
commit to advance any credit to the Borrowers or to arrange for any other
Person to advance or commit to advance any credit to the Borrowers.

 

(2)           A
Term Loan Commitment Increase shall become effective upon (A) the receipt
by the Agent of (1) an agreement in form reasonably satisfactory to the
Agent signed by the Borrowers, each Increasing Term Loan Bank and each
Additional Term Loan Bank, setting forth the Term Loan Commitments, if any, of
each such Bank and setting forth the agreement of each Additional Term Loan
Bank to become a party to this Agreement and to be bound by all of the terms
and provisions hereof binding upon each Bank, and (2) such evidence of
appropriate authorization on the part of the Borrowers with respect to such
Term Loan Commitment Increase as the Agent may reasonably request, (B) the
funding by each Increasing Term Loan Bank and Additional Term Loan 

 

21

 

Bank of the additional Term Loans to be made by each such Bank to
effect the prepayment requirement set forth in Section 2.4(d)(4), and (C) receipt
by the Agent of a certificate of an officer of the Borrowers stating that, both
before and after giving effect to such Term Loan Commitment Increase, no
Default or Event of Default has occurred and is continuing or would result from
the Term Loan Commitment Increase, and that all representations and warranties
made by the Borrowers in this Agreement are true and correct in all material
respects, unless such representation or warranty relates to an earlier date
which remains true and correct as of such earlier date.

 

(3)           Notwithstanding
any provision contained herein to the contrary, from and after the date of any
Term Loan Commitment Increase, all calculations and payments of principal and
interest on the Term Loans shall take into account the actual Term Loan
Commitment of each Bank and the principal amount outstanding of each Term Loan
made by such Bank during the relevant time period.

 

(4)           If
a Term Loan Commitment Increase is effected as permitted under this Section 2.4(d),
the Borrowers shall prepay any Term Loans outstanding on such increase date to
the extent necessary to keep the outstanding Term Loans ratable to reflect the
revised percentage allocations of the Total Term Loan Commitments arising from
the Term Loan Commitment Increase.  Any
prepayments made by the Borrowers in accordance with this clause (4) may
be made with the proceeds of Term Loans made by any or all of the Banks in
connection with the Term Loan Commitment Increase occurring simultaneously with
the prepayments.

 

Section 3

Finance Charges, Repayment And Other Terms

 

3.1           Interest Rate.

 

(a)           Applicable Rate.  Interest shall accrue on the outstanding
principal balance at the end of day of each Loan at the Applicable Rate in
effect for such Loan on such day.

 

(b)           Default Rate.  Upon or after the occurrence and during the
continuation of any Event of Default, the principal amount of each Loan shall
bear interest at a rate per annum equal to three percent (3.0%) above the
interest rate that would otherwise apply under Section 3.1(a) above
(the “Default Rate”).

 

(c)           Computation of Interest.  In all cases, interest on the outstanding
principal balance of all Loans and all other Obligations with respect to which
interest accrues pursuant to the terms of this Agreement (including, without
limitation, the face amount of all outstanding Letters of Credit) shall be
calculated on a daily basis, computed on the basis of a 360-day year for the
actual number of days elapsed (or, if the Agent so elects, on the basis of
twelve 30-day months for the actual number of days elapsed).

 

(d)           Usury.  In no contingency or event whatsoever shall
the aggregate of all amounts deemed interest hereunder or under the Notes and
charged or collected pursuant to the terms of this Agreement or any other
Credit Documents exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem
applicable thereto.  If such a court
determines that the Agent or any Bank has charged or received interest
hereunder or under the other Credit Documents in excess of the highest
applicable rate, the Agent or such Bank shall apply such excess to any other
Obligations then due and payable, whether principal, interest, fees or
otherwise, and shall 

 

22

 

refund the remainder of such excess interest, if any,
to the Borrowers, and such rate shall automatically be reduced to the maximum
rate permitted by such law.

 

3.2           Payments of Principal, Interest and Costs. 
Except as otherwise provided in this Agreement, the Borrowers jointly
and severally agree to pay the Obligations as follows:

 

(a)           Principal.

 

(1)           Revolving
Credit Loans.  The outstanding
principal balance of Revolving Credit Loans shall be paid on the Revolving
Credit Termination Date.

 

(2)           Swingline
Loans.  The outstanding principal
balance of each Swingline Loan shall be paid on the earlier to occur of (A) five
Business Days after the disbursement thereof, or (B) the Swingline
Termination Date.

 

(3)           Term
Loans.  Commencing on June 30,
2009, and on the last day of each fiscal quarter of the Borrowers thereafter,
the outstanding principal balance of the Term Loans shall be payable in equal
quarterly installments equal to 1/28th of the aggregate principal balance of
Term Loans outstanding on the first anniversary of the Closing Date (or, in the
case of Term Loans made pursuant to Section 2.4(d) of this Agreement,
1/28ths of aggregate principal balance of such Term Loans as of the date of
their disbursement); provided, however, that the payment due on the Term Loan Maturity Date
shall equal the remaining unpaid principal balance of the Term Loans
(including, Term Loans made pursuant to Section 2.4(d) of this
Agreement) together with accrued but unpaid interest thereon.

 

(b)           Interest.

 

(1)           Base
Rate Loans.  Accrued interest on the
outstanding principal balance of each Base Rate Loan shall be paid on the first
day of each month commencing in the first full month after the Base Rate Loan
was made and continuing thereafter on the same day of each month until such
principal balance has been paid in full.

 

(2)           Libor
Rate Loans.  Accrued interest on the
outstanding principal balance of each Libor Loan is payable on the last day of
the applicable Interest Period therefore, except that in the case of a Libor
Loan that has a six-month Interest Period, accrued interest shall be paid at
the end of each three-month portion thereof.

 

(c)           Other Obligations.  Costs, fees and expenses and any other
Obligations payable pursuant to this Agreement or the other Credit Documents
shall be payable as and when provided in this Agreement or the other Credit
Documents, as the case may be, or, if no specific provision for payment is
made, on demand.

 

(d)           Authorization to Debit Account.  The Borrowers hereby authorize the Agent to
debit account number 292-759-8 with Commerce for each principal and interest
payment owing under Sections 3.2(a) and 3.2(b) above and each Non-Use
Fee payment owing under Section 3.13 below, in each case as and when the
same become due and without further authorization on any Borrower’s part.

 

(e)           Fee Letter.  The Borrowers jointly and severally agree to
pay to Commerce Bank, N.A., for its own account and not as Agent for the other
Banks, the fees set forth in the Fee Letter in 

 

23

 

accordance with the terms thereof, which fees,
notwithstanding anything in this Agreement to the contrary, shall be for the
sole and exclusive benefit of Commerce Bank, N.A., and no other Person.

 

3.3           Voluntary Prepayments. 
The Borrowers have the right, without penalty or premium, to prepay the
Loans, in whole or in part, at any time and from time to time after the Closing
Date on the following terms and conditions: (a) the Borrowers shall give
the Agent at least one Business Day’s prior written notice of their intent to
prepay any Base Rate Loan and three Business Days’ notice of their intent to
prepay any Libor Loan; (b) such notice shall specify the Loan (and its
Type) to be prepaid and the amount of such prepayment and, in the case of Libor
Loans, the specific Loans to which such prepayment is to apply; (c) if the
Borrowers prepay all or any part of a Libor Loan on any day other than the last
day of the then-current Interest Period, the Borrowers shall pay the Agent (to
be allocated among the Banks in accordance with their respective Pro-Rata
Shares) the amounts due under such circumstances in accordance with Section 3.12(f) of
this Agreement; and (d) each prepayment shall be in amount of not less
than $250,000 (or, if less, the outstanding principal balance of the Loan being
prepaid).  All notices given under this
Subsection by the Borrowers are irrevocable and shall be given not later than
11:00 a.m., Kansas City time, on the day which is the required number of
Business Days specified above for such notice. 
The Agent shall promptly forward a copy of each such notice to each
Bank.

 

3.4           Mandatory Prepayments.

 

(a)           General.  If a Borrower sells any Refinanced Equipment
Collateral, or if any such Collateral is taken by condemnation or other
governmental taking, the Borrowers shall pay to the Agent (to be allocated
among the Banks in accordance with their respective Pro-Rata Shares), as a
mandatory prepayment of the Loans,  a
sum equal to the proceeds received by any Borrower from such sale or
condemnation; provided, however,
that the foregoing prepayment requirement shall not apply to, so long as no
Event of Default is in effect, any proceeds of any condemnation or other
governmental taking which do not exceed $250,000 in the aggregate during any
calendar year.

 

(b)           Property and Casualty Insurance.  If a Borrower or Guarantor Subsidiary
receives the proceeds of any property or casualty insurance with respect to any
Collateral consisting of Inventory, the Borrowers shall pay such proceeds to
the Agent (to be allocated among the Banks in accordance with their respective
Pro-Rata Shares), as a mandatory prepayment of the Loans; provided, however, that no such prepayment
shall be required unless a prepayment is required at such time under Section 3.4(c) below.  If a Borrower receive the proceeds of any
property or casualty insurance with respect to any Collateral consisting of
Refinanced Equipment Collateral, the Borrowers shall pay such proceeds to the
Agent (to be allocated among the Banks in accordance with their respective
Pro-Rata Shares), as a mandatory prepayment of the Loans; provided,
however, that no such prepayment shall be required, so long as no
Event of Default is in effect, to any such insurance proceeds which do not
exceed $250,000 in the aggregate during any calendar year.

 

(c)           Borrowing Base; Limitations.  If, at any time, the LC Exposure plus the outstanding principal balance of all Revolving
Credit Loans, Swingline Loans and Term Loans exceeds the lesser of: (1) the
Borrowing Base at such time, or (2) the Total Commitment, the Borrowers
shall pay to the Agent an amount sufficient to reduce the aggregate unpaid
principal amount of Revolving Credit Loans or Swingline Loans by an amount
equal to such excess; and, if any excess remains after the payment of such
Revolving Credit Loans and Swingline Loans, the Borrowers shall pay to the
Agent the amount of such remaining excess as a mandatory prepayment of the Term
Loans.  Similarly:  (i) if the outstanding principal balance
of Revolving Credit Loans and Swingline Loans outstanding at any time exceeds
the Revolving Credit Commitment at such time, the Borrowers shall pay to the
Agent an amount sufficient to reduce the aggregate unpaid principal amount of
Revolving Credit Loans or Swingline Loans by an amount equal to such excess, (ii) if
the outstanding principal balance of Swingline Loans 

 

24

 

outstanding at any time exceeds the Swingline Loan
Commitment at such time, the Borrowers shall pay to the Agent an amount
sufficient to reduce the aggregate unpaid principal amount of Swingline Loans
by an amount equal to such excess, and (iii) if the outstanding principal
balance of the Term Loans outstanding at any time exceeds the Term Loan
Commitment at such time, the Borrowers shall pay to the Agent an amount
sufficient to reduce the aggregate unpaid principal amount of Term Loans by an
amount equal to such excess.

 

3.5           Method of Payment. 
All payments due under this Agreement and the other Credit Documents
shall be made in immediately available funds to the Agent at its office
described in the introductory paragraph of this Agreement unless the Agent
gives notice to the contrary.  Payments
so received at or before 1:00 p.m. Kansas City time on any Business Day
shall be deemed to have been received by the Agent on that Business Day.  Payments received after 1:00 p.m. Kansas
City time on any Business Day shall be deemed to have been received on the next
Business Day, and interest, if payable in respect of such payment, shall accrue
thereon until such next Business Day. 
The Agent shall remit to each Bank its Pro-Rata Share of all payments of
principal and interest received by the Agent on the Business Day the Agent is
deemed to have received such payment.

 

3.6           Use of Proceeds.

 

(a)           Revolving Credit Loans.  The Revolving Credit Loans and Swingline
Loans shall be used solely for purposes of: (1) repaying in full all of
MGP’s Debt under the Existing Commerce Facility; (2) funding the purchase
by MGP of its common stock as permitted under this Agreement; (3) the
Borrowers’ general working capital needs; (4) capital expenditures as
permitted under this Agreement; (5) funding Permitted Acquisitions; (6) investing
up to $15,000,000 in a joint venture relating to a coal-fired steam generation
facility in Pekin, Illinois; (7) investments in Guarantor Subsidiaries;
and (8) paying costs and expenses incurred in connection with the closing
of the transactions contemplated by this Agreement.

 

(b)           Term Loans.  The Term Loans shall be used solely for
purposes of: (1) funding the purchase by MGP of its common stock as
permitted under this Agreement; (2) funding Permitted Acquisitions; (3) investing
up to $15,000,000 in a joint venture relating to a coal-fired steam generation
facility in Pekin, Illinois; (4) investments in Guarantor Subsidiaries;
and (5) repaying in full any Debt described in subparts (4) or (7) of
the definition of Permitted Debt (a “Permitted Debt Refinancing”).

 

(c)           No Margin Loans.  Notwithstanding anything herein to the
contrary, the Borrowers shall not, directly or indirectly, use any part of the
Loan proceeds for the purpose of purchasing or carrying any margin stock within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System, or to extend credit to any Person for the purpose of purchasing or
carrying any such margin stock, or for any purpose which violates, or is
inconsistent with, Regulation X of such Board of Governors.

 

3.7           Notice and Manner of Borrowing. 
The Borrowers shall give the Agent notice of their intention to borrow
under any Revolving Credit Loan, Swingline Loan or Term Loan at least one
Business Day before each Base Rate Loan, and at least three Business Days
before each Libor Loan, in each case specifying: (1) whether the request
is for a Revolving Credit Loan, a Swingline Loan or a Term Loan; (2) the
proposed funding date of such Loan; (3) the amount of such Loan (which, (i) in
the case of a Base Rate Loan (other than a Swingline Loan), must be at least
$500,000 and in whole multiples of $100,000, (ii) in the case of a Libor
Loan, must be at least $1,000,000 and in whole multiples of $100,000, and (iii) in
the case of a Swing Line Loan, must be at least $10,000 and in whole multiples
of $10,000); (4) whether the principal amount of such Loan, together
with the principal amount of all Revolving Credit Loans, Swingline Loans, LC
Exposure and Term Loans then outstanding, exceeds the 

 

25

 

lesser
of (a) the Borrowing Base at such time, or (b) the Total Commitment; (5) if the requested Loan is a
Swingline Loan, whether the principal amount of such Swingline Loan, together
with the principal amount of all Swingline Loans then outstanding, exceeds the
Swingline Loan Commitment at such time; (6) the Type of such Loan (which,
in the case of Swingline Loans, must be a Base Rate Loan); and (7) in the
case of a Libor Loan, the duration of the Interest Period applicable thereto.  The Agent shall promptly forward a copy of
each such notice to each Bank affected thereby. 
Not later than 1:00 p.m., Kansas City time, on the date such Loan
is to be funded, each affected Bank will make available to the Agent in
immediately available funds such Bank’s Pro-Rata Share of such Loan.  After the Agent’s receipt of such funds, the
Agent shall make such Loan available to the Borrowers.  All notices given under this Section by the
Borrowers shall be irrevocable and shall be given not later than 11:00 a.m.,
Kansas City time, on the day which is not less than the number of Business Days
specified above for such notice.  For
purposes of this Section, the Borrowers agree that the Agent may rely and act
upon any request for a Loan from any individual who the Agent, absent gross
negligence or willful misconduct, believes to be a representative of the
Borrowers.  The Agent shall promptly give
notice to each Bank affected thereby of each request for a Revolving Credit
Loan or Term Loan and, in any event: (a) with respect to each Revolving
Credit Loan or Term Loan that is a Base Rate Loan, by no later than 11:00 a.m.,
Kansas City time, on the Business Day such Loan is to be made; and (b) with
respect to each Revolving Credit Loan or Term Loan that is a Libor Loan, at
least by 11:00 a.m., Kansas City time, on the second Business Day before
the Business Day such Loan is to be made. 
Notwithstanding anything in this Section to the contrary, if the
Borrowers give notice of a requested borrowing of a Swingline Loan to the
Swingline Lender by 11:00 a.m., Kansas City time, on any Business Day,
then, subject to all other terms and conditions of this Agreement, the
Swingline Lender shall disburse the requested Swingline Loan on the same
Business Day.

 

3.8           Non-Receipt of Funds by Agent.  Unless the Agent shall have received notice
from a Bank prior to the date on which such Bank is to provide funds to the
Agent for a Loan to be made by such Bank that such Bank will not make available
to the Agent such funds, the Agent may assume that such Bank has made such
funds available to the Agent on the date of such Loan in accordance with Section 3.7
of this Agreement and the Agent (in its sole discretion) may, but shall not be
obligated to, in reliance upon such assumption, make available to the Borrowers
on such date a corresponding amount.  If
and to the extent such Bank shall not have so made such funds available to the
Agent, such Bank agrees to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrowers until the date such amount is
repaid to the Agent, at the customary rate set by the Agent for the correction
of errors among banks.  If such Bank
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank’s Loan for purposes of this Agreement.  If such Bank (the “Defaulting Bank”)
does not pay such corresponding amount forthwith (a “Funding Default”),
then the Borrowers shall forthwith repay to the Agent an amount equal to the
funds not advanced by the Defaulting Bank, together with interest thereon at
the Applicable Rate from the date of such Loan until the Loan is repaid.  Once a Funding Default has occurred, then the
Agent shall no longer have the discretion under this Section 3.8 to make
funds available to the Borrowers on the assumption that the Banks will make the
corresponding funds available to the Agent. 
In no event shall the Agent be obligated to advance funds to the
Borrowers (and in no event shall any other Bank have any liability to the
Borrowers) if a Bank fails to advance its share of such funds to the Agent in
accordance with the requirements of Section 3.7 of this Agreement.

 

3.9           Capital Adequacy.  If any Bank determines that the adoption of
any law, rule or regulation regarding capital adequacy, or any change
therein or in the interpretation or application thereof or compliance by such
Bank with any request or directive regarding capital adequacy (whether or not
having the force of law) from such central bank or governmental authority, does
or shall have the effect of reducing the rate of return on such Bank’s capital
as a consequence of its obligations hereunder to a level below that which such
Bank could have achieved but for such adoption, change or compliance (taking 

 

26

 

into consideration such
Bank’s policies with respect to capital adequacy) by an amount deemed by such
Bank, in its sole discretion, to be material, then from time to time, after
submission by such Bank to the Borrowers of a written demand therefor (with a
copy to the Agent), the Borrowers shall pay to such Bank such additional amount
or amounts as will compensate such Bank for such reduction.  A certificate of the Bank claiming
entitlement to payment as set forth in this Section shall be conclusive in
the absence of manifest error.  Such
certificate shall set forth the nature of the occurrence giving rise to such
payment, the additional amount or amounts to be paid to such Bank, and the
method by which such amounts were determined. 
In determining such amount, a Bank may use any reasonable averaging and
attribution method.

 

3.10         Application of Payments and Collections. 
The Borrowers irrevocably waive the right to direct the application of
any and all payments and collections at any time or times after the Closing
Date received by the Agent or any Bank from or on behalf of a Borrower, and the
Borrowers agree that the Agent and each Bank have the continuing exclusive
right to apply and reapply any and all such payments and collections received
at any time or times after the Closing Date by the Agent or such Bank against
the Obligations, in such manner as the Agent or such Bank may deem advisable,
notwithstanding any entry by the Agent or such Bank upon any of its books and
records.  Notwithstanding the foregoing,
but subject to any contrary provisions in Section 3.4(c) of this
Agreement, so long as no Event of Default exists the Borrowers may direct the
application of a payment as between 
Revolving Credit Loans, Swingline Loans and the Term Loans, and as
between any Base Rate Loans or Libor Loans comprising such Loans.  Unless the Agent elects otherwise, any such
application by a Borrower must in writing and must be given by a Borrower to
the Agent before or contemporaneously with such payment.

 

3.11         Periodic Statement. 
The Agent may account to the Borrowers with a periodic statement of loan
balances, charges and payments made or received pursuant to this Agreement, and
any such statement rendered by the Agent shall be deemed final, binding and
conclusive upon the Borrowers unless the Agent is notified by the Borrowers in
writing to the contrary within 30 days after the date each such statement is
made available to the Borrowers.  Any
such notice by the Borrowers shall only be deemed an objection to those items
specifically objected to in such notice.

 

3.12         Libor Loans.

 

(a)           Continuation and Conversion.  The Borrowers have the right, by giving
notice to the Agent: (1) to continue an existing Libor Loan at the end of
an Interest Period into a Libor Loan for the following Interest Period, and (2) to
convert Loans of one Type into Loans of another Type; provided; however, that (a) in the
case of a continuation of, or a conversion into, a Libor Loan, such notice is
received by the Agent on or before 11:00 a.m., Kansas City time, not less
than three Business Days before the first day of the relevant Interest Period, (b) Libor
Loans may be converted only at the end of the Interest Period applicable
thereto, and (c) Swingline Loans may be outstanding only as Base Rate
Loans.

 

(b)           Minimum Amount; Maximum Number
Outstanding.  Each Libor Loan
(including, without limitation, any Loan of another Type which is converted
into a Libor Loan) shall be in an amount equal to at least $1,000,000 or a
whole multiple of $100,000 in excess thereof. If, due to principal repayment or
otherwise, the outstanding principal balance of any Libor Loan is at any time
less than $1,000,000, then such Loan may be converted by the Agent into a Base
Rate Loan. No more than five Libor Loans may be outstanding at any time.

 

(c)           Market Disruption.  Notwithstanding anything herein to the
contrary, if, prior to the determination of any Libor Rate for any Interest
Period, the Agent determines (which determination shall be conclusive) that any
condition exists which impairs the Agent’s ability to readily or reliably
ascertain the Applicable Rate for Libor Loans (whether due to disruption in the
relevant markets, 

 

27

 

suspension of quotations, or otherwise), then the
Agent shall give the Borrowers prompt notice thereof, and so long as such
condition remains in effect, the Banks shall be under no obligation to make
additional Libor Loans, to continue Libor Loans or to convert Loans into Libor
Loans, and the Borrowers shall, on the last day of the then current Interest
Period, either prepay such Libor Loans or convert such Libor Loans into Base
Rate Loans.

 

(d)           Illegality; Regulatory Change.
Notwithstanding anything herein to the contrary, if it becomes unlawful for any
Bank to honor its obligation to make or maintain Libor Loans hereunder, then
such Bank shall promptly notify the Agent, the other Bank and the Borrowers,
and such Bank’s obligation to make or continue Libor Loans, or to convert Loans
into Libor Loans, shall be suspended until such time as such Bank may again
lawfully make and maintain Libor Loans, and such Bank’s outstanding Libor Loans
shall be converted into Base Rate Loans in accordance with Subsection (e) below.  Furthermore, if, by reason of any Regulatory
Change, any Bank becomes subject to restrictions on the amount of a category of
deposits or liabilities which it may hold which includes deposits by reference
to which the interest rate on Libor Loans is determined as provided in this
Agreement or a category of assets of such Bank which includes Libor Loans,
then, if such Bank so elects by notice to the Agent, the other Bank and the
Borrowers, the obligation of such Bank to make and to continue, and to convert
Loans of any other Type into, Libor Loans shall be suspended until such
Regulatory Change ceases to be in effect; and all Libor Loans then held by such
Bank shall be converted into Base Rate Loans.

 

(e)           Affected Loans. If Libor Loans
(such Loans being herein called “Affected Loans”) are to be converted
pursuant to Subsections (c) or (d) above, the Affected Loans shall be
automatically converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for the Affected Loans (or on such earlier
date as the Agent or an affected Bank may specify to the Borrowers) and, unless
and until the Agent or the affected Bank gives notice as provided below that
the circumstances specified in Subsections (c) or (d) above which
gave rise to such conversion no longer exist: (1) to the extent that the
Affected Loans have been so converted, all payments and prepayments of
principal which would otherwise be applied to the Affected Loans shall be
applied instead to Base Rate Loans; and (2) all Loans which would
otherwise be made or continued by the Bank as Libor Loans shall be made or
continued instead as Base Rate Loans and all Loans which would otherwise be
converted into Libor Loans shall be converted instead into (or shall remain as)
Base Rate Loans.  The affected Bank
agrees to give notice to the Borrowers and the Agent promptly after the
circumstances specified in Subsections (c) or (d) above which give
rise to the conversion or non-continuation of the Affected Loans pursuant to
this Section no longer exist.

 

(f)            Breakage Costs; Funding
Indemnification.  If any Bank shall incur
any loss, cost or expense (including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or redeployment of deposits or
funds acquired by such Bank to fund or maintain any Libor Loan or the
re-lending or re-reinvestment of such deposits or amounts paid or prepaid to
such Bank) because any payment or prepayment is made in respect of any Libor
Loan on a date other than the last day of the applicable Interest Period
(whether due to voluntary prepayment, acceleration of the Loan, or otherwise)
or because the Borrowers fail to borrow any Libor Loan on the date for
borrowing specified in the relevant notice under Section 3.7, or to
continue a Libor Loan or convert a Base Rate Loan into a Libor Loan on a date
specified in the relevant notice under Section 3.12(a), then, upon demand of such Bank, the Borrowers shall pay to
such Bank such amount as will reimburse such Bank for such loss, cost or
expense.  If any Bank makes such a claim
for compensation, it shall provide to the Borrowers, with a copy to the Agent,
a certificate setting forth the amount of such loss, cost or expense in
reasonable detail and the amounts shown on such certificate shall be deemed prima facie correct.

 

3.13         Non-Use Fee. 
The Borrowers jointly and severally agree to pay to the Agent, for the
benefit of the Banks in accordance with their respective Pro-Rata Shares, on
the first day of each calendar 

 

28

 

quarter for the
immediately preceding calendar quarter, a fee (the “Non-Use Fee”) equal
to the sum of, for each day during such preceding calendar quarter, the amount
obtained by multiplying (a) the difference between the Total Revolving
Credit Commitment as then in effect and the Daily Credit Balance for such day, times (b) the Applicable Margin for
Non-Use Fee, times (c) the
fraction, 1/360.

 

3.14         Closing Fee.  The Borrowers shall pay to the Agent, for the
benefit of the Banks in accordance with their respective Pro-Rata Shares, a
closing fee equal to 15 basis points (0.0015) times the sum of the Total
Revolving Credit Comment and the Total Term Loan Commitment, which shall be
deemed fully earned and nonrefundable at the closing of the transactions
contemplated hereby and which shall be paid on the Closing Date.  Such fee shall compensate the Banks for the
costs associated with the origination, structuring, processing, approving and
closing of the transactions contemplated by this Agreement, including, but not
limited to, administrative, general overhead and lost opportunity costs, but
not including any out-of-pocket or other costs, fees or expenses for which the
Borrowers have agreed to reimburse any of the Banks or any other Persons
pursuant to any other provision of this Agreement or the other Credit Documents
or any commitment letter, letter of intent or similar agreement.

 

3.15         Joint and Several Liability;
Subordination of Reimbursement Rights. 
All Loans and all other Obligations of any Borrower shall constitute one
general obligation of all of the Borrowers. 
Notwithstanding anything to the contrary in this Agreement, the Notes or
any other Credit Document, the Borrowers shall be primarily and jointly and
severally liable for all Obligations of any Borrower to any of the Agent, the
Issuing Bank, the Swingline Lender or the Banks.  Notwithstanding the foregoing, if, and to the
extent, a Borrower is deemed to be a guarantor of another Borrower hereunder,
such Borrower’s joint liability for any Loans made or other credit extended to
or for the benefit of such other Borrower shall be deemed to be a guaranty of
payment and performance, and not of collection. 
To the fullest extent permitted by law, each Borrower hereby waives
promptness, diligence, notice of acceptance, and any other notices of any
nature whatsoever with respect to any of the Obligations, and any requirement
that the Agent, the Issuing Bank, the Swingline Lender or the Banks protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against any other Borrower, any
Guarantor, any other Person or any Collateral. 
Each Borrower agrees that any rights of subrogation, indemnification,
reimbursement or any similar rights it may have against any other Borrower with
respect to its joint and several liability, whether such rights arise under an
express or implied contract or by operation of law, shall be subject, junior
and subordinate in all respect to all Obligations of such Borrower to the
Agent, the Issuing Bank, the Swingline Lender and the Banks and that the
enforcement of such rights shall be stayed until such time as the Borrowers
shall have indefeasibly paid in full all Obligations of the Borrowers to the
Agent, the Issuing Bank, the Swingline Lender and the Banks and none of the
Banks or such other Persons shall be under any duty to extend credit to or for
the benefit of any Borrower.  The
liability of each Borrower under this Section shall be absolute and
unconditional irrespective of (a) any change in the time, manner or place
of payment of, or in any other term of, any of the Obligations, or any other
amendment or waiver of or any consent to departure from this Agreement, the
Notes or any of the other Credit Documents, (b) any exchange, release or
non-perfection of any Collateral or any release or amendment or waiver of or
consent to departure from any other guaranty, or any release of any Person
liable in whole or in part, for all or any of the Obligations, or (c) any
other circumstance which might otherwise constitute a defense available to, or
discharge of, a Borrower, a guarantor or a surety.

 

3.16         Appointment of Borrowing Agent.  Each Borrower (other than MGP) hereby
appoints MGP as such Borrower’s agent and attorney-in-fact to take any action,
execute any document or instrument, consent or agree to any amendment or other
modification of the Credit Documents or waiver of or departure from any of the
terms thereof, to perform any Obligation of the Borrowers hereunder, and to
give or receive any notice by or to any Borrower hereunder.  Without limiting the generality of the
foregoing, MGP may request Loans or incur any other Obligation for the account
of the other Borrowers, 

 

29

 

and the Borrowers shall
be fully, and jointly and severally, bound by the actions of MGP.  The Agent, the Issuing Bank, the Swingline
Lender and the  Banks shall be entitled
to rely absolutely and without duty of inquiry or investigation upon any
agreement, request, communication or other notice given by MGP under the Credit
Documents (including, without limitation, any request by MGP to make Loans to
another Borrower) until two Business Days after the Agent shall have received
written notice from the Borrowers of the revocation of this agency and power of
attorney, which revocation, in accordance with Section 7.1, shall
constitute an Event of Default.

 

3.17         Collateral and Guarantees to Secure Swap
Obligations.  Notwithstanding anything to the contrary in
this Agreement, the Security Agreements or any of the other Credit Documents,
the parties agree that: (a) the Collateral shall secure the Swap
Obligations on a pari passu basis with the other Obligations; and (b) in
the event of any foreclosure or other realization on any Collateral, for
purposes of determining the amount of Collateral proceeds allocable to the
Banks, the amount of the Swap Obligations then due a Bank or its affiliate (a “Swap
Bank”) shall be treated as if such Swap Obligations were unpaid principal
of a Loan under this Agreement that was funded entirely by the Swap Bank.  Similarly, any Guaranty shall likewise act as
a credit support for the Swap Obligations on a pari passu basis with the other
Obligations.  Any amounts collected or
otherwise recovered under any Guaranty shall be treated the same as Collateral
proceeds are treated above for purposes of allocating the amount of such
Guaranty collections that are applied to the Swap Obligations.

 

3.18         Replacement of Existing Commerce Facility. 
This Credit Agreement amends, restates and replaces the Existing
Commerce Facility; and any duty of Commerce Bank, N.A. or any other Person to
extend credit to or for the benefit of any Borrower or any other Person under
the Existing Commerce Facility is terminated. 
All Liens which secure any Borrower’s or any other Person’s obligations
under the Existing Commerce Facility or any loan, security or other documents
entered into in connection therewith (collectively, the “Existing Liens”)
shall carry forward and secure  the  Borrowers’ obligations under this Agreement
and the other Credit Documents, including, without limitation, the Obligations;
and none of the execution, delivery or performance of this Agreement or any
other Credit Document shall impair the creation, attachment, perfection and
priority of any Existing Liens; and any reference in any security agreement,
financing statements or other documents relating to any Existing Liens to
Commerce Bank, N.A. as secured party, mortgagee or the like shall be deemed to
refer to the Agent hereunder.  Notwithstanding
the foregoing, in no event shall the Existing Liens continue or otherwise act
to encumber any property to the extent such property consists of Excluded
Assets.

 

Section 4

Lending Conditions

 

4.1           Credit Documents. 
Notwithstanding anything herein or in the other Credit Documents to the
contrary, no Bank shall be obligated to make the initial Loan under this
Agreement to the Borrowers until the Agent has received the following
documents, duly executed and delivered by all parties thereto, and otherwise
reasonably satisfactory in form and content to the Agent:

 

(a)                                  Credit Agreement. 
This Agreement;

 

(b)                                 Notes.  The Notes;

 

(c)                                  Security Agreement. 
The Security Agreements;

 

(d)                                 UCC Financing Statements. 
Acknowledgment copies reflecting the filing of Financing Statement
against each Borrower and any Guarantor;

 

30

 

(e)                                  Insurance.  Copies of the
Borrowers’ and any Guarantors’ property damage insurance policies, together
with loss payable endorsements on the Agent’s standard form of loss payee
endorsement (or which are otherwise reasonably acceptable to the Agent) and
which name the Agent as sole loss payee thereunder with respect to insurable
property consisting of Collateral (for the benefit of the Banks), and copies of
the Borrowers’ and Guarantors’ liability and/or professional liability
insurance policies, together with endorsements naming the Agent (for the
benefit of the Banks) as an additional named insured thereunder;

 

(f)                                    Loan Disbursement Instructions; Borrowing
Base Certificate.  If requested by the Agent, written
instructions from the Borrowers to the Agent directing the application of
proceeds of the initial Loan made pursuant to this Agreement, and an initial
Borrowing Base Certificate from the Borrowers reflecting that the Borrowing
Base is sufficient to support the Loans and the LC Exposure on the date of such
certificate;

 

(g)                                 Opinion of Borrowers’ and Guarantors’
Counsel. The
favorable written opinion to the Agent and each Bank of Lathrop &
Gage, L.C., counsel to the Borrowers and Guarantors, if any, regarding the
Borrowers, the Guarantors, if any, the Credit Documents and the transactions
contemplated by this Agreement and the other Credit Documents;

 

(h)                                 Secretary Certificates. 
A certificate executed by the secretary of each Borrower and each
Guarantor, if any, whereby such secretary affirms that, among other things,
attached to such certificate is (1) a copy of such Borrower’s or Guarantor’s
board resolutions authorizing the borrowing of monies, the granting of Liens
and all other matters set forth in or contemplated by the Credit Documents, (2) a
copy of such Borrower’s or Guarantor’s bylaws in effect on the Closing Date, (3) a
copy of such Borrower’s or Guarantor’s articles or certificate of incorporation
and all amendments thereto, certified by the Secretary of State or other
appropriate official of such Borrower’s or Guarantor’s jurisdiction of
incorporation, and (4) a certificate of good standing for such Borrower or
Guarantor, dated on or immediately prior to the Closing Date, from the
Secretary of State of the state of incorporation of such Borrower or Guarantor;
and

 

(i)                                     Other Items. 
Such other agreements, documents and assurances as the Agent or the
Required Banks may reasonably request in connection with the transactions
described in or contemplated by the Credit Documents.

 

4.2           Additional Conditions Precedent to
Initial Loan.  Each Bank’s obligation to make the initial
Loan under this Agreement shall also be subject to the satisfaction, in the
Agent’s reasonable credit judgment, of each of the following conditions
precedent:

 

(a)                                  Since the date of the financial
statements submitted by the Borrowers to the Agent immediately prior to the
Closing Date, there shall not have occurred any material adverse change in the
existence or value of any Collateral, or any other event, condition or state of
facts which could reasonably be expected to have a Material Adverse Effect;

 

(b)                                 No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or 

 

31

 

legislative body to enjoin, restrain or prohibit, or to obtain damages
in respect of, or which is related to or arises out of this Agreement or the
other Credit Documents or the consummation of the transactions contemplated
hereby or thereby or which, in the Agent’s reasonable judgment, would make it
inadvisable to consummate the transactions contemplated by this Agreement or
the other Credit Documents; and

 

(c)                                  The Borrowers shall have paid all legal
fees and other closing or like costs and expenses of the Agent and each Bank
which the Borrowers are obligated to pay hereunder.

 

4.3           Conditions Precedent to All Loans. 
The obligation of any Bank to make each Loan under this Agreement
(including, without limitation, the initial Loan), and the obligation of the
Issuing Bank to issue any Letter of Credit, shall be subject to the further
conditions precedent that, on the date of each such Loan or Letter of Credit,
as the case may be, :

 

(a)                                  The following statements shall be true: (1) the
representations and warranties of the Borrowers contained in this Agreement and
the other Credit Documents are true and correct in all material respects on and
as of the date of such Loan as though made on and as of such date (unless such
representations or warranties relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date), and (2) there exists no Default or
Event of Default as of such date, nor would any Default or Event of Default
result from the making of the Loan requested by the Borrowers;

 

(b)                                 The Borrowers shall have signed and sent
to the Agent, if the Agent so requests, a request for advance, setting forth in
writing the amount of the Loan requested and the other information required
pursuant to this Agreement; provided, however,
that the foregoing condition precedent shall not prevent any Bank, if it so
elects in its sole discretion, from making a Loan pursuant to a non-written or
other non-conforming request for an advance from the Borrowers;

 

(c)                                  The Borrowers shall have furnished to the
Agent (with a copy to each Bank) a completed Borrowing Base Certificate in
compliance with Section 6.1(b)(3) of this Agreement; and

 

(d)                                 The Agent shall have received such other
approvals, opinions or documents as it may reasonably request.

 

The Borrowers agree that the making of a request for a
Loan, whether in writing, by telephone or otherwise, shall constitute a
certification by the Borrowers that all representations and warranties of the
Borrowers in the Credit Documents are true and correct in all material respects
as of the date thereof (unless such representations or warranties relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date), that all
required conditions to the making of the requested Loan have been met and that
no Default or Event of Default shall have occurred and be continuing.

 

32

 

Section 5

Representations And Warranties

 

5.1           Representations, Warranties and Covenants
of the Borrowers.  The Borrowers represent and warrant to the
Agent, each Bank and the Issuing Bank as follows:

 

(a)           Organization and Existence.  Each Borrower (1) is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation as reflected in the introductory paragraph of this
Agreement, (2) is in good standing in all other jurisdictions in which it
is required to be qualified to do business as a foreign corporation, except
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect, and (3) has obtained all licenses and permits and
has filed all registrations necessary to the operation of its business, except
where the failure to obtain such licenses or permits could not reasonably be
expected to have a Material Adverse Effect.

 

(b)           Authorization of Credit Documents.  The execution, delivery and performance by
each Borrower of the Credit Documents to which it is a party or by which it or
any of its property is bound (1) are within such Borrower’s corporate
powers, (2) have been duly authorized by all necessary corporate or similar
action, (3) do not contravene such Borrower’s articles or certificate of
incorporation or by-laws, or any law or contractual restriction binding on
or affecting such Borrower or its properties, and (4) do not result in or
require the creation of any Lien upon any of the Collateral other than a Lien
in favor of the Agent, for the benefit of the Banks.

 

(c)           Approval of Governmental Bodies.  Other than filing the Financing Statements as
contemplated above, no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrowers of
the Credit Documents or, except as described in Schedule 5.1(c), the exercise
by the Agent or any Bank of its rights thereunder, including, without
limitation, the sale or other disposition of any of the Collateral to any
Person.

 

(d)           Enforceability of Obligations.  The Credit Documents are the legal, valid and
binding joint and several obligations of the Borrowers enforceable against the
Borrowers in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforceability of
creditors’ rights generally and subject to the discretion of courts in applying
equitable remedies.

 

(e)           Financial Statements; Fiscal Year;
June 30, 2008 Changeover in Fiscal Year.  The consolidated financial statements of MGP
which have been furnished to the Agent or any Bank fairly present the financial
condition of the Borrowers, as of the dates reflected on the financial
statements, and fairly present the results of its operations for the period
covered thereby, all in accordance with GAAP, except for the omission of
footnotes in interim financial statements and subject to normal year-end
adjustments. All financial statements of any Guarantor which the Borrowers have
furnished or caused to be furnished to the Agent or any Bank fairly present the
financial condition of the Guarantor named therein as of the dates reflected
therein.  As of the Closing Date, there
has been no material adverse change in the financial condition or results from
operations of the Borrowers taken as a whole since the date of the most recent
consolidated financial statements of MGP submitted to the Agent or any
Bank.  The Borrowers have elected a 52/53
week fiscal year ending on the Sunday closest to each June 30.  The Borrowers’ fiscal quarters end on the
Sundays closest to September 30, December 31, March 31 and June 30.  Effective as of June 30, 2008, each
Borrower’s fiscal year will end on June 30, 2008, and from and after such
date each Borrower’s fiscal quarter shall end on September 30, December 31,
March 31 and 

 

33

 

June 30 of 
each year.  All references in this
Agreement to a Borrower’s fiscal year or fiscal quarters are to be read in
light of the foregoing.

 

(f)            Litigation.  There is no pending or threatened action or
proceeding affecting any Borrower or any Guarantor or any of their respective
properties before any court, governmental agency or arbitrator which, if
determined adversely to a Borrower or a Guarantor, could reasonably be expected
to have a Material Adverse Effect.

 

(g)           Investments.  The Borrowers have no loans to or investments
in any Person other than Permitted Investments.

 

(h)           Existing Debt.  The Borrowers have no Debt other than
Permitted Debt.

 

(i)            Taxes.  Each Borrower and each Guarantor, if any, has
filed all required federal, state, local and other tax returns and has paid, or
made adequate provision for the payment of, any taxes due pursuant thereto or
pursuant to any assessment received by a Borrower or any Guarantor except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with GAAP.

 

(j)            Stock and Records.  All outstanding capital stock of each
Borrower was and is properly issued, and all books and records of each
Borrower, including but not limited to its minute books, by-laws and books of
account, are accurate and complete in all material respects.  MGP owns all of the issued and outstanding
stock of MGPI and Midwest Grain, the preferred stock of MGP is owned as
disclosed in writing by MGP to the Agent prior to the Closing Date, and the
common stock of MGP is publicly-held and traded on NASDAQ.  No Borrower is obligated on or after the
Closing Date to redeem or otherwise acquire, or pay any dividends or make any
other distributions in respect of, any of its equity interests.  MGP has no Subsidiaries other than MGPI and
Midwest Grain.

 

(k)           Hazardous Materials.  Each Borrower and each Guarantor, if any, has
complied with all Environmental Laws and all of its facilities, leaseholds,
assets and other property comply with all Environmental Laws, except where such
failure to comply could not reasonably be expected to have a Material Adverse
Effect.  Except as disclosed in Schedule
5.1(k), there are no outstanding or threatened citations, notices or orders of
non-compliance issued to a Borrower or any Guarantor or relating to its
facilities, leaseholds, assets or other property. Each Borrower and each
Guarantor, if any, has been issued all licenses, certificates, permits or other
authorizations required under any Environmental Law or by any federal, state or
local governmental or quasi-governmental entity, except where the failure to
obtain such license, certificate, permit or other authorization could not
reasonably be expected to have a Material Adverse Effect.

 

(l)            Negative Pledges.  Except for the Credit Documents, no Borrower
or Guarantor is a party to or bound by any indenture, contract or other
instrument or agreement which prohibits the creation, incurrence or sufferance
to exist of any Lien upon any of the Collateral.

 

(m)          Title to Property; Liens.  Each Borrower and each Guarantor has good and
marketable title to all assets and other property purported to be owned by it,
and the Agent has a First Priority Lien on the Collateral subject to no other
Lien except for Permitted Liens.

 

(n)           Insolvency.  After the execution and delivery of the
Credit Documents and the disbursement of the initial Loan hereunder, no
Borrower or Guarantor will be insolvent within the meaning of the United States
Bankruptcy Code or unable to pay its debts as they mature.

 

34

 

Section 6

Covenants

 

6.1           Affirmative Covenants. 
So long as any Obligations remain unpaid or any Bank or the Issuing Bank
has any commitment to extend credit to or for the benefit of any Borrower, the
Borrowers covenant to the Agent, each Bank and the Issuing Bank as follows:

 

(a)           Compliance with Laws.  Each Borrower shall, and shall cause each of
its Subsidiaries to, comply with all applicable laws, rules, regulations and
orders affecting such Borrower or Subsidiary or its properties, including,
without limitation, all Environmental Laws, except where such failure to comply
could not reasonably be expected to have a Material Adverse Effect.  Without limiting the foregoing, each Borrower
shall, and shall cause each of its Subsidiaries to, (1) ensure that no
Person who owns a controlling interest in or otherwise controls such Borrower
or any such Subsidiary is or shall be listed on the Specially Designated Nationals
and Blocked Person List or other similar lists maintained by the Office of
Foreign Assets Control (“OFAC”), the Department of the Treasury or
included in any Executive Orders, (2) not use or permit the use of the
proceeds of the Loans to violate any of the foreign asset control regulations
of OFAC or any enabling statute or Executive Order relating thereto, and (3) comply
with all applicable Bank Secrecy Act (“BSA”) laws and regulations, as
amended.  As required by federal law and
each Bank’s policies and practices, each Bank may need to obtain, verify and
record certain customer identification information and documentation in
connection with opening or maintaining accounts, or establishing or continuing
to provide services.

 

(b)           Reporting Requirements.  The Borrowers shall furnish to the Agent and
each Bank:

 

(1)           Quarterly
Statements.  As soon as available and
in any event within 45 days after the end of each fiscal quarter of the
Borrowers, internally prepared quarter-end consolidated financial statements
(including, without limitation, a balance sheet, income statement and statement
of cash flows) as of the end of such fiscal quarter and for the fiscal year to
date, each certified by the chief financial officer of each Borrower; provided, however, that, so long as MGP is a reporting
company, MGP’s quarterly report on Form 10-Q delivered within such 45-day
period will satisfy this requirement;

 

(2)           Audited
Year-End Statements.  As soon as
available and in any event within 90 days after the end of each fiscal year of
the Borrowers, final audited consolidated and consolidating financial
statements (including, without limitation, a balance sheet, income statement
and statement of cash flows) as of the end of such fiscal year audited by and
bearing the unqualified opinion of independent certified accountants reasonably
satisfactory to the Agent, and a copy of any management, operation or other
letter or correspondence from such accountant to the Borrowers in connection
therewith; provided, however, that, so long as MGP
is a reporting company, MGP’s annual report on Form 10-K delivered within
such 90-day period will satisfy this requirement (except for the Borrowers’
obligation to furnish, to the extent not included in such Form 10-K, any
such management, operation or other letter or correspondence from such
accountants);

 

(3)           Borrowing
Base Certificate.  As soon as
available and in any event within 45 days after the end of each fiscal quarter,
a Borrowing Base Certificate dated as of the last day of such fiscal quarter;

 

35

 

(4)           Covenant
Compliance Certificate.  As soon as
available and in any event within 45 days after the end of each fiscal quarter
of the Borrowers, a Covenant Compliance Certificate;

 

(5)           Projections.  As soon as available and in any event within
60 days after the end of each fiscal year of the Borrowers, detailed quarterly
projections of the Borrowers’ financial condition and results of operations for
the next three fiscal years of the Borrowers, including, without, limitation,
projected balance sheets, income statements, cash flow statements and projected
Capital Expenditures; and

 

(6)           Other.  Such other information respecting the
condition or operations, financial or otherwise, of the Borrowers, or the
financial condition of any Guarantor, as the Agent or any Bank may reasonably
request from time to time.

 

All financial statements described in clauses (1) and
(2) above shall be prepared in accordance with GAAP on a basis consistent
with the financial statements of the Borrowers delivered to the Agent or any
Bank for the period ending most immediately prior to the Closing Date, except
that unaudited financial statements shall be subject to normal year-end audit
adjustments and need not contain footnotes.

 

(c)           Preservation of Business and
Corporate Existence.  Each Borrower
shall, and shall cause each of its Subsidiaries to: (1) carry on and
conduct its principal business substantially as it is now being conducted; (2) maintain
in good standing its existence and its right to transact business in those
states in which it is now or may after the Closing Date be doing business; and (3) maintain
all licenses, permits and registrations necessary to the conduct of its
business; except where the failure to so maintain its right to transact
business or to maintain such licenses, permits or registrations could not
reasonably be expected to have a Material Adverse Effect.  So long as no Default is in effect, nothing
in this Section 6.1(c) shall prohibit the MGPI Merger or any other
merger permitted under Section 6.2(d) of this Agreement.

 

(d)           Insurance.  Each Borrower shall, and shall cause each of
its Subsidiaries to, keep insured at all times with financially sound and
reputable insurers which are reasonably satisfactory to the Agent (1) all
of the Collateral of an insurable nature, including, without limitation,
Inventory, against fire and other casualties in such a manner and to the extent
that like properties are usually insured by others owning properties of a
similar character in a similar locality or as otherwise reasonably required by
the Agent, with the proceeds of such casualty insurance payable (except as
otherwise provided in Section 3.4(b) hereof) jointly to one or more
Borrowers and the Agent (with any proceeds received by the Agent to be
allocated among the Banks in accordance with their respective Pro-Rata Shares),
and (2) against liability on account of damage to persons or property
(including product liability insurance and all insurance required under all
applicable worker’s compensation laws) caused by the Borrowers, their
Subsidiaries or their respective officers, directors, employees, agents or
contractors in such a manner and to the extent that like risks are usually
insured by others conducting similar businesses in the places where the
Borrowers conduct their business or as otherwise reasonably required by the
Agent, with the Agent (for its benefit and the benefit of the Banks) being
named as an additional insured under such liability policies.  The Borrowers shall, and shall cause each of
their Subsidiaries to, cause the insurers under all of its insurance policies
to provide the Agent at least 30 days prior written notice of the termination
of any such policy before such termination shall be effective and to agree to
such other matters in respect of any such casualty insurance as provided in the
Agent’s loss payee endorsement provided to the Borrowers.  In addition, the Borrowers will, upon request
of the Agent at any time, furnish a written summary of the amount and type of
insurance carried, the names of the insurers and the policy numbers, and
deliver to the Agent certificates with respect thereto.

 

36

 

(e)           Payment of Taxes.  Each Borrower shall, and shall cause each of
its Subsidiaries to, pay and discharge, before they become delinquent, all
taxes, assessments and other governmental charges imposed upon it, its
properties, or any part thereof, or upon the income or profits therefrom and all
claims for labor, materials or supplies which if unpaid might be or become a
Lien or charge upon any of its property, except such items as it is in good
faith appropriately contesting and as to which adequate reserves have been
provided in accordance with GAAP.

 

(f)            Maintenance of Properties and
Leases.   Except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect, each
Borrower shall, and shall cause each of its Subsidiaries to: (1) maintain,
preserve and keep its properties and every part thereof in good repair, working
order and condition (except for such properties as such Borrower or Subsidiary
in good faith determines are not useful in the conduct of its business); (2) from
time to time make all necessary and customary property repairs, renewals,
replacements, additions and improvements thereto so that at all times the
efficiency thereof shall be fully preserved and maintained; and (3) maintain
all leases of real or personal property in good standing, free of any defaults
by such Borrower or Subsidiary thereunder.

 

(g)           Employee Plans.  Each Borrower shall, and shall cause each of
its Subsidiaries to: (1) notify the Agent promptly of the establishment of
any Plan, except that prior to the establishment of any “welfare plan” (as
defined in Section 3(1) of ERISA) covering any employee of such
Borrower for any period after such employee’s termination of employment other
than such period required by the Consolidated Omnibus Budget Reconciliation Act
of 1986 or “defined benefit plan” (as defined in Section 3(35) of ERISA),
it will obtain the Agent’s prior written approval of such establishment; (2) at
all times make prompt payments or contributions to meet the minimum funding
standards of Section 412 of the Internal Revenue Code of 1986, as amended,
with respect to each Plan; (3) if requested by the Agent, a copy of any
report required to be filed pursuant to Section 103 of ERISA in connection
with each Plan for each Plan year, including but not limited to the Schedule B
attached thereto, if applicable; (4) notify the Agent promptly of any “reportable
event” (as defined in ERISA) or any circumstances arising in connection with
any Plan which might constitute grounds for the termination thereof by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer the Plan, the
initiation of any audit by the Internal Revenue Service or the Department of
Labor of any Plan or transaction(s) involving or related to any Plan, or
any “prohibited transaction” as defined in Section 406 of ERISA or Section 4975(c) of
the Internal Revenue Code of 1986, as amended; (5) notify the Agent prior
to any action that could result in the assertion of liability under Subtitle E
of Title IV of ERISA caused by the complete or partial withdrawal from any
multiemployer plan or to terminate any defined benefit plan sponsored by such
Borrower or Subsidiary; and (6) promptly furnish such additional
information concerning any Plan as the Agent may from time to time reasonably
request.

 

(h)           Notice of Default.  The Borrowers shall give prompt written
notice in writing to the Agent (with a copy to each Bank) of any breach of any
of the representations, warranties or covenants in this Agreement or the other
Credit Documents or any development or the occurrence of any event, financial
or otherwise, which constitutes a Default or an Event of Default or which
constitutes a material default under any other agreement to which any Borrower
is a party or which may or shall materially and adversely affect the business,
properties or affairs of any Borrower or any Subsidiary or its ability to pay
and perform its obligations under this Agreement or the other Credit Documents.

 

(i)            Books and Records; Inspection;
Audits.  Each Borrower shall, and
shall cause each of its Subsidiaries to: (1)  maintain complete and
accurate books and financial records in accordance with GAAP (except that
interim financial statements need not contain footnotes and may be subject to
normal year-end audit adjustments); (2) during normal working hours permit the
Agent, any Bank and Persons designated by the Agent or any Bank to visit and
inspect its properties and to conduct any 

 

37

 

environmental tests or audits thereon, to inspect its
books and financial records (including its journals, orders, receipts and
correspondence which relates to its Accounts), and to discuss its affairs,
finances and Accounts and operations with its directors, officers, employees
and agents and its independent public accountants; and (3) permit the
Agent, any Bank and Persons designated by the Agent or any Bank to perform
audits of such books and financial records when and as reasonably requested by
the Agent or any Bank.  At least once
every 12 months, the Borrowers at their expense shall cause an auditor
reasonably satisfactory to the Agent to deliver to the Agent and the Banks a
report, reasonably satisfactory in form to the Agent, regarding the Inventory
and Accounts of each Borrower and Guarantor Subsidiary; provided,
however, that, so long an any Event of Default exists, Borrowers at
their expense shall cause such auditor’s report to be issued and delivered to
the Agent and the Banks at such times and as frequently as the Agent may
request.

 

(j)            Agent May Perform
Obligations; Further Assurances.  If
a Default is in effect, the Agent shall have the right, if it so elects in its
sole discretion, to pay or perform any Borrower’s Obligations hereunder or
under the other Credit Documents and each Borrower shall reimburse the Agent,
on demand, or if the Required Banks so elect, by the Banks making Revolving
Credit Loans on the Borrowers’ behalf and disbursing the same to the
appropriate Persons, for all amounts expended by or on behalf of the Agent in
connection therewith and all costs and expenses incurred by or on behalf of the
Agent in connection therewith.  Each
Borrower further agrees to execute, deliver or perform, or cause to be
executed, delivered or performed, all such documents, agreements or acts, as
the case may be, as the Agent may reasonably request from time to time to
create, perfect, continue or otherwise assure the Agent with respect to any
Lien created or purported to be created by any of the Credit Documents or to
otherwise create, evidence or assure the rights and remedies of the Agent or
any Bank under, or as contemplated by, the Credit Documents or at law or in
equity.

 

(k)           Bank Accounts.  Each Borrower shall, and shall cause each of
its Subsidiaries to, maintain at all times all of its primary operating,
administrative, cash management, collection, disbursement and other deposit
accounts with Commerce.

 

(l)            New Subsidiaries.  The Borrowers shall cause each Subsidiary
that is formed or acquired by a Borrower after the Closing Date to execute and
deliver to the Agent for the benefit of the Banks a Guaranty and a Guarantor
Security Agreement in form reasonably acceptable to the Agent, together with an
opinion of counsel in form reasonably satisfactory to the Agent covering the
due organization, valid existence and good standing of the Subsidiary, the due
authorization and execution of the Credit Documents to which the Subsidiary is
a party, the enforceability of the Credit Documents against the Subsidiary and
such other matters as the Agent may reasonably request; in each case within 20
days after such Subsidiary is formed or acquired.

 

(m)          Refinanced Equipment Collateral.  If a Permitted Debt Refinancing occurs, the
Borrowers shall promptly deliver to the Agent such lists and other information
as the Agent may reasonably request describing in reasonable detail the related
Refinanced Equipment Collateral, which Refinanced Equipment Collateral shall
constitute Collateral and secure the Obligations.  The Borrowers authorize the Agent, should it
so elect, to file such Uniform Commercial Code financing statements and/or
amendments thereto against the Borrowers as the Agent may elect covering such
Refinanced Equipment Collateral; it being understood that any such filing shall
not be a condition precedent to the creation, attachment, perfection or
priority of the Agent’s Lien on such Refinanced Equipment Collateral.

 

6.2           Negative Covenants. 
So long as any Obligations remain unpaid or any Bank or the Issuing Bank
has any commitment to extend credit to or for the benefit of any Borrower, the
Borrowers covenant to the Agent, each Bank and the Issuing Bank as follows:

 

38

 

(a)           Liens.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, create or suffer to exist any Lien, except
for Permitted Liens, upon or with respect to any of its properties, whether
such Borrower or Subsidiary owns or has an interest in such properties on the
Closing Date or at any time thereafter and regardless of whether or not such
properties are part of the Collateral.

 

(b)           Debt.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, create or suffer to exist any Debt except
for Permitted Debt.

 

(c)           Restricted Investments.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, make or permit to exist any loans or
advances to or any other investment in any Person (including any shareholders
of such Borrower or Subsidiary or any of their respective Affiliates), except
Permitted Investments.

 

(d)           Structure; Disposition of Assets.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, merge or consolidate with or otherwise
acquire, or be acquired by, any other Person; provided,
however, that (1) the foregoing shall not prohibit a Borrower
from making a Permitted Acquisition, (2) a Borrower (other than MGP) may
merge into MGP or into another Borrower, and (3) a Subsidiary of a
Borrower may merge into another Subsidiary that is a Guarantor Subsidiary or
into a Borrower.  In no event shall MGP
merge or consolidate with any other Person unless MGP is the surviving
entity.  No Borrower shall, and no
Borrower shall permit any of its Subsidiaries to, sell, lease or otherwise
transfer all or any part of its properties, real or personal, other than, so
long as no Event of Default exists, (1) the sale of Inventory in the
ordinary course of such Borrower’s or Subsidiary’s business, (2) the
disposition of obsolete equipment, (3) the licensing or other transfer of
intellectual property rights in the ordinary course of such Borrower’s or
Subsidiary’s business, (4) the sale of the KCIT Facility, and (5) the
sale of Excluded Assets – other than those described in subparts (2), (3) or
(4) immediately above – provided that either (i) the fair market
value of all such Excluded Assets sold during any calendar year does not exceed
$5,000,000, or (ii) the percentage of MGP’s consolidated net income (based
on the preceding calendar year) attributable to all such Excluded Assets sold
during any calendar year does not exceed 10%.

 

(e)           Sale-Leasebacks; New Business.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, enter into any sale and leaseback
transaction with respect to any of its properties, or manufacture any goods,
render any services or otherwise enter into any business which is not
substantially similar to that existing on the Closing Date.

 

(f)            Issuance of Securities.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, issue any capital stock, create any new
class of stock or issue any other securities without giving the Agent prior
written notice thereof, except the issuance of stock options and restricted
stock awards by MGP to employees pursuant to benefit plans in effect from time
to time.

 

(g)           Conflicting Agreements.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, enter into any agreement containing any term
or condition that conflicts with any provision of this Agreement or any of the
other Credit Documents.

 

(h)           Changes in Accounting Principles;
Fiscal Year.  No Borrower shall, and
no Borrower shall permit any of its Subsidiaries to, make any change in its
principles or methods of accounting as currently in effect, except such changes
as are required by GAAP, nor shall any Borrower or its Subsidiary, without
first obtaining the Agent’s prior written consent, change its fiscal year
except for the change described in Section 5.1(e) of this Agreement.

 

39

 

(i)            Transactions With Affiliates.  No Borrower shall, and no Borrower shall
permit any of its Subsidiaries to, enter into or be a party to any transaction
or arrangement, including without limitation, the purchase, sale or exchange of
property of any kind or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
such Borrower’s or Subsidiary’s business and upon fair and reasonable terms
substantially as favorable to such Borrower or Subsidiary as those which would
be obtained in a comparable arms-length transaction with a non-Affiliate; provided, however, that the foregoing shall not prohibit or
restrict any transaction or arrangement between or among any Borrowers and/or
any Guarantor Subsidiaries.

 

(j)            Distributions; Redemptions.  Without first obtaining the Required Banks’
written consent, no Borrower or any of its Subsidiaries shall pay any dividends
on or make any other distributions in respect of any stock or other equity
interests of such Borrower or Subsidiary or redeem or otherwise acquire any
such stock or other equity interests, provided,
however, that: (i) so long as no Default or Event of Default
exists or would result therefrom, (A) MGP may pay dividends to its
shareholders in the ordinary course of its business, and (B) MGP may
purchase its common stock, provided that the aggregate amount of such purchases
from the Closing Date to the Term Loan Maturity Date does not exceed
$25,000,000, and (ii) so long as each of MGPI and Midwest Grain is a
wholly-owned subsidiary of MGP, such Persons may pay dividends or make other
distributions to MGP.

 

6.3           Specific Financial Covenants. 
So long as any Obligations remain unpaid or any Bank or the Issuing Bank
has any commitment to extend credit to or for the benefit of any Borrower, the
Borrowers covenant to the Agent, each Bank and the Issuing Banks as follows:

 

(a)           Capital Expenditures.  The aggregate amount of Capital Expenditures
by MGP and its consolidated subsidiaries on a consolidated basis shall not
exceed $20,000,000 during any four consecutive fiscal quarters.

 

(b)           Fixed Charge Coverage.  MGP and its consolidated subsidiaries on a
consolidated basis shall maintain, at the end of each fiscal quarter for the
four fiscal quarters then ending, a Fixed Charge Coverage Ratio of not less
than 1.50 to 1.

 

(c)           Working Capital.  MGP and its consolidated subsidiaries on a
consolidated basis shall maintain, at the end of each fiscal quarter, (1) current
assets, minus (2) the sum of (i) current
liabilities, and (ii) to the extent not a current liability, the unpaid
principal balance of Revolving Credit Loans and Swingline Loans, of not less
than $40,000,000.

 

(d)           Tangible Net Worth.  MGP and its consolidated subsidiaries on a
consolidated basis shall maintain, at the end of each of fiscal quarter, a
Tangible Net Worth of not less than (1) $135,000,000, plus (2) an amount equal to 50%
of their cumulative consolidated net income (but not loss) for all fiscal
quarters ending on or after June 30, 2008, minus
(3) an amount equal to cumulative permitted stock purchases for all fiscal
quarters ending on or after June 30, 2008.

 

(e)           Leverage Ratio.  MGP and its consolidated subsidiaries on a
consolidated basis shall maintain, at the end of each fiscal quarter, a
Leverage Ratio of not more than 3.00 to 1.

 

40

 

Section 7

Default

 

7.1           Events of Default. 
Each of the following events shall constitute an Event of Default
hereunder:

 

(a)            Monetary Default.  Any Borrower fails to pay any monetary
Obligation under any of the Credit Documents within five days after its due
date; or

 

(b)           Material Non-Monetary Default.  Any Borrower fails to perform or observe any
term, covenant or other provision contained in Sections 6.1(b), 6.1(c), 6.1(d),
6.1(e), 6.1(h), 6.1(i), 6.1(k), 6.1(l), 6.2 or 6.3 of this Agreement in
accordance with the terms thereof; or

 

(c)            Other Non-Monetary Default.  (1) Any Borrower fails to perform or
observe any other term, covenant or other provision in any Credit Document
(other than any term, covenant or provision addressed in Subsections (a) or
(b) above) in accordance with the terms thereof and, if such default is
curable, the Borrowers fail to cure such default within 30 days after written
notice from the Agent or any Bank specifying in reasonable detail the nature of
such default is received by a Borrower; or (2) any “Event of Default” (as
such term is defined in any other Credit Document to which any Borrower or any
Guarantor is a party) occurs, or any Borrower or any Guarantor fails to perform
or observe any obligation, term or other provision of any Credit Document
beyond any applicable grace, cure or notice period; or

 

(d)           Misrepresentation.  Any representation or warranty made or
furnished by any Borrower or any Guarantor in connection with this Agreement or
any of the other Credit Documents proves to be incorrect, incomplete or
misleading in any material respect when made or deemed made, or any such
representation or warranty becomes incorrect, incomplete or misleading in any
material respect and a Borrower or any Guarantor, as the case may be, fails to
give the Agent prompt written notice thereof; or

 

(e)            Cross-Default.  Any Borrower fails to pay any Debt (other
than a monetary Obligation due under the Credit Documents, as contemplated by
Subsection (a) above) the outstanding principal balance of which exceeds
$1,500,000 or to perform or observe any other obligation or term in respect of
such Debt, and, as a result of any such failure, the holder of such Debt (i) accelerates
the maturity thereof or requires a Borrower or some other Person to purchase or
otherwise acquire such Debt, or (ii) is entitled to accelerate the
maturity thereof or is entitled to require a Borrower or some other Person to
purchase or otherwise acquire such Debt; provided, however,
that no Event of Default shall occur under the preceding clause (ii) if (A) such
Borrower or Subsidiary gives the Agent written notice of such failure to pay,
perform or observe within 15 days after the occurrence thereof, and (B) within
30 days after the occurrence of such failure, such Borrower or Subsidiary
delivers written evidence to the Agent that the Holder of such Debt has waived
such failure; or

 

(f)            Insolvency.  Any Borrower or any Guarantor ceases to be
solvent or suffers the appointment of a receiver, trustee, custodian or similar
fiduciary or makes an assignment for the benefit of creditors; or any petition
for an order for relief is filed by or against any Borrower or any Guarantor
under the federal Bankruptcy Code or any similar state insolvency statute
(except, in the case of a petition filed against a Borrower or any Guarantor,
if such proceeding is dismissed within 60 days after the petition is filed,
unless prior thereto an order for relief is entered under the federal
Bankruptcy Code); or any Borrower or any Guarantor makes any offer of
settlement, extension or composition to their respective unsecured creditors
generally; or

 

41

 

(g)           Change of Control.   MGP shall cease to own all of the issued and
outstanding equity interests of each of MGPI and Midwest Grain; provided that a
merger permitted under Section 6.2(d) of this Agreement shall not
constitute an Event of Default under this subpart (g); or

 

(h)           Guaranty.  Any Guarantor revokes or attempts to revoke
(in whole or in part) the Guaranty or Guarantor Security Agreement signed by
such Guarantor, or repudiates (in whole or in part) such Guarantor’s liability
thereunder or is in default under the terms thereof or dies or is judicially
declared incompetent; or

 

(i)             Judgments.  Any judgment, decree or order for the payment
of money shall be rendered against any Borrower or any Guarantor in an amount
in excess of $1,000,000 (or the equivalent in any other currency) and (1) enforcement
proceedings shall have been commenced by any creditor upon such judgment,
decree or order, or (2) there shall be any period of 30 consecutive days
during which such judgment, decree or order shall remain unsatisfied or during
which a stay or enforcement of such judgment, decree or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

 

(j)             Revocation of Agency.  Any Borrower revokes or limits, or takes any
action purporting to revoke or limit, the appointment or authority of MGP as
such Borrower’s agent for purposes of borrowing money or taking any other
action described in or contemplated by Section 3.16 hereof; or

 

(k)            Lien.  The Agent (for the benefit of the Banks)
shall cease to have a First Priority Lien on the Collateral subject to no other
Lien except for Permitted Liens.

 

7.2           Obligation to Lend; Acceleration. 
Upon or after the occurrence and during the continuation of any Default,
the Agent may (and the Agent shall if so directed by the Required Banks)
declare the obligation of each Bank to make Loans or to otherwise extend credit
hereunder to be terminated, whereupon the same shall forthwith terminate, or
reduce advance rates or otherwise reduce the Borrowing Base by such amounts as
the Agent elects (or as the Required Banks direct) from time to time.  Upon or after the occurrence and during the
continuation of any Event of Default, the Agent may (and the Agent shall if so
directed by the Required Banks) declare the Notes, all interest thereon, and
all other Obligations to be forthwith due and payable, whereupon the Notes, all
such interest thereon and all such other Obligations shall become and be
forthwith due and payable, without presentment, protest or further notice or
demand of any kind, all of which are waived by the Borrowers.

 

7.3           Remedies.  Upon or after
the occurrence and during the continuation of any Event of Default, the Agent
(for the benefit of the Banks) has and may exercise from time to time the
following rights and remedies:

 

(a)            All of the rights and remedies of a
secured party under the UCC or under other applicable law, and all other legal
and equitable rights to which the Agent or any Bank may be entitled, all of
which rights and remedies shall be cumulative, and none of which shall be
exclusive, and all of which shall be in addition to any other rights or remedies
contained in this Agreement or any of the other Credit Documents.

 

(b)           The right to notify the Account
Debtors that the Accounts have been assigned to the Agent and collect (for the
benefit of the Banks) the Accounts directly in its own name and may charge all
collection costs and expenses, including attorneys’ fees, to the
Borrowers.  The Agent has no duty to
protect, insure, collect or realize upon the Accounts or preserve rights in
them.

 

(c)            The right to take immediate
possession of the Collateral, and (1) to require the Borrowers to assemble
the Collateral, at the Borrowers’ expense, and make it available to the Agent
at a 

 

42

 

place designated by the Agent which is reasonably
convenient to both parties, and (2) to enter upon and use any premises in
which any Borrower has an ownership, leasehold or other interest, or wherever
any of the Collateral shall be located, and to store, remove, abandon,
manufacture, sell, dispose of or otherwise use all or any part of the
Collateral on such premises without the payment of rent or any other fees by
the Agent or any Bank to any Borrower or any other Person for the use of such
premises or such Collateral.

 

(d)           The right to sell or otherwise
dispose of all or any Inventory or other Collateral in its then condition, or
after any further manufacturing or processing thereof, at public or private
sale or sales, with such notice as may be required by law, in lots or in bulk,
for cash or on credit, all as the Agent, in its sole discretion, may deem
advisable.  The Borrowers agree that not
less than 10 days prior written notice to the affected Borrower of any public
or private sale or other disposition of such Collateral shall be reasonable
notice thereof, and such sale shall be at such locations as the Agent may
designate in such notice.  The Agent has
the right to conduct such sales on any Borrower’s premises, without charge
therefor, and such sales may be adjourned from time to time in accordance with
applicable law.  The Agent has the right
to sell, lease or otherwise dispose of such Collateral, or any part thereof,
for cash, credit or any combination thereof, and the Agent or any Bank may
purchase all or any part of such Collateral at public or, if permitted by law,
private sale and, in lieu of actual payment of such purchase price, may set-off
or credit the amount of such price against the Obligations.

 

(e)            The Agent is granted a license or
other right to use, without charge, all of each Borrower’s labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, or any property of a similar nature as it pertains to the
Collateral or any other property of such Borrower, in storing, removing,
transporting, manufacturing, advertising, selling or otherwise using the
Collateral, and such Borrower’s rights in and under such property shall inure
to the Agent’s benefit.

 

(f)            The proceeds realized from the sale
of any Collateral or any enforcement of any Guaranty shall be applied, after
the Agent is in receipt of good funds, as follows: first, to the
reasonable costs, expenses and attorneys’ fees and expenses incurred by the
Agent or any Bank for collection and for acquisition, completion, manufacture,
protection, removal, storage, sale and delivery of the Collateral; second,
to any fees or expenses due the Agent or any Bank under the Credit Documents; third,
to interest due upon any of the Obligations; fourth, to the principal of
the Obligations; fifth, to the Agent or any of the Banks and/or any of
their respective affiliates, as the case may be, for any Obligations due such
Person or Persons not included in the foregoing; and sixth, and finally,
to any Borrower or any other Person, to the extent such Person is lawfully
entitled to any remaining proceeds.  If
any deficiency shall arise, the Borrowers and any Guarantor shall remain
jointly and severally liable therefor.

 

7.4           Right of Setoff. 
Upon or after the occurrence and during the continuation of any Event of
Default, the Agent and each Bank is authorized at any time and from time to
time, without notice to the Borrowers (any such notice being waived by the
Borrowers), to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by the Agent or such Bank to or for the credit or the account of any
Borrower against any and all of the Obligations irrespective of whether or not
the Agent or such Bank has made any demand under this Agreement or the other
Credit Documents and although such Obligations may be unmatured.  The rights of the Agent and the Banks under
this Section are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which the Agent or the Banks may
have.

 

43

 

Section 8

Agency Provisions

 

8.1           Authorization and Action.  Each Bank hereby irrevocably appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to such Agent by the terms
hereof, together with such powers as are reasonably incidental thereto.  The duties of each Agent shall be mechanical
and administrative in nature and no Agent by reason of this Agreement shall be
a trustee or fiduciary for any Bank.  The
Agents shall have no duties or responsibilities except those expressly set
forth herein.  As to any matters not
expressly provided for by this Agreement (including, without limitation, enforcement
or collection of the Notes), the Agents shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or so refraining from acting)
upon the instructions of all of the Banks; provided,
however, that the Agents shall
not be required to take any action which exposes the Agents to personal
liability or which is contrary to this Agreement or applicable law.

 

8.2           Liability of Agent.  Neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted
to be taken by the Agent or any such Person under or in connection with any
Credit Document in the absence of its or such Person’s own gross negligence or
willful misconduct.  Without limiting the
generality of the foregoing, the Agent: (1) may treat each Bank which is a
signatory hereto as a Bank hereunder until the Agent receives written notice of
the assignment or transfer of such Bank’s interest in form satisfactory to the
Agent; (2) may consult with legal counsel (including, without limitation,
counsel for the Borrowers), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (3) make no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements, warranties or
representations made by any other Person in or in connection with any Credit
Document; (4) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Credit Document on the part of the Borrowers, or to inspect any property
(including the books and records) of the Borrowers; (5) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, perfection, sufficiency or value of any Credit
Document or any other instrument or document furnished pursuant thereto; and (6) shall
incur no liability under or in respect of this Agreement by acting upon any
notice, consent, certificate or other instrument or writing (which may be sent
by telegram, telex or facsimile transmission) believed by it to be genuine and
signed or sent by the proper party or parties.

 

8.3           Rights of the Agent as Bank.  With respect to its Commitment and any Loans
made by it, the Agent shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent.  Except as may be otherwise
expressly provided herein, the Agent and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage
in any kind of business with the Borrowers, any of their respective Affiliates,
and any Person who may do business with or own securities of any Borrower, all
as if Commerce were not the Agent and without any duty to account therefor to
the Banks.

 

8.4           Independent Credit Decisions.  Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Credit
Documents to which it is a party or which run in its favor.  Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement or the other Credit Documents. 
Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by 

 

44

 

the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of any Borrower, Guarantor or any other Person liable with respect to
the Obligations or any of their respective Affiliates which may come into the
possession of the Agent or any of its affiliates.

 

8.5           Indemnification.  The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrowers), to the extent of their respective
Pro-Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or the other Credit Documents or any action taken or
omitted by the Agent under this Agreement or the other Credit Documents,
provided that no Bank shall be liable for any portion of any of the foregoing
resulting from the Agent’s gross negligence or willful misconduct.  Without limitation of the foregoing, each
Bank agrees to reimburse the Agent (to the extent not reimbursed by the
Borrowers) promptly upon demand for its Pro-Rata Share of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, administration or enforcement of, or legal advice in respect of rights
or responsibilities under, this Agreement or the other Credit Documents.  For the avoidance of doubt, the foregoing
indemnities include all losses arising out of the Agent’s own negligence.

 

8.6           Successor Agent.  The Agent may resign at any time by giving at
least 60 days’ prior written notice thereof to the Banks and the Borrowers, and
may be removed at any time with or without cause by all of the Banks.  Upon any such resignation or removal, the
Banks shall have the right to appoint a successor Agent.  If no successor Agent shall have been so
appointed by the Banks, and shall have accepted such appointment, within 30
days after the retiring Agent’s giving of notice of resignation or the Banks’
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which in either case shall be a commercial
bank organized under the laws of the United States of America or of any state
thereof and having capital, surplus and undivided profits in an aggregate
amount not less than $40,000,000.  Upon
the acceptance of any appointment as the Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the
Agreement.  After any retiring Agent’s
resignation or removal hereunder as the Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent under this Agreement.

 

8.7           Sharing of Payments.  If any Bank shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff or
otherwise) on account of Obligations in excess of its Pro-Rata Share of
payments on account of the Obligations obtained by all the Banks, such Bank
shall purchase from the other Banks such participations in the Obligations held
by them as shall be necessary to cause such purchasing Bank to share the excess
payment ratably with each of the other Banks, provided,
however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Bank, such
purchase from each Bank shall be rescinded and each Bank shall repay to the purchasing
Bank the purchase price to the extent of such recovery together with an amount
equal to such Bank’s ratable share (according to the proportion of (1) the
amount of such Bank’s required repayment to (2) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so
recovered.  The Borrowers agree that any
Bank so purchasing a participation from another Bank pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Bank were the direct creditor of the Borrowers in the amount of such
participation.

 

45

 

Section 9

Miscellaneous

 

9.1           Notices.  Except as otherwise provided herein, all
notices, requests and demands to or upon a party to this Agreement to be
effective shall be in writing and shall be deemed validly given upon receipt
thereof, whether by personal delivery, U.S. mail, fax, other electronic
transmission or otherwise, in each case addressed as follows:

 

	
   

  	
  If to Commerce, the
  Agent, the Swingline Lender or the Issuing Bank:

  
	
   

  	
   

  
	
   

  	
  Commerce
  Bank, N.A.

  
	
   

  	
  1000
  Walnut Street

  
	
   

  	
  Kansas
  City, Missouri 64106

  
	
   

  	
  Attn:
  Wayne Lewis

  
	
   

  	
  Fax
  No.: (816) 234-7290

  
	
   

  	
   

  
	
   

  	
  with a copy (which shall not constitute notice) to:

  
	
   

  	
   

  
	
   

  	
  Stinson Morrison Hecker LLP

  
	
   

  	
  1201 Walnut, Suite 2900

  
	
   

  	
  Kansas City, Missouri 64106-2150

  
	
   

  	
  Attn.: Mark Ovington, Esq.

  
	
   

  	
  Fax No.: (816) 412-8148

  
	
   

  	
   

  
	
   

  	
  If to Borrowers:

  
	
   

  	
   

  
	
   

  	
  MGP
  Ingredients, Inc.

  
	
   

  	
  Cray Business
  Plaza

  
	
   

  	
  100 Commercial
  Street

  
	
   

  	
  Atchison, Kansas
  66002

  
	
   

  	
  Fax No.: (913)
  360-5729

  

 

or to such other address or telecopy number as each
party may designate for itself by like notice given in accordance with this
Section.

 

9.2           Power of Attorney.  Each Borrower irrevocably designates, makes,
constitutes and appoints the Agent, and all Persons designated by the Agent, as
such Borrower’s true and lawful attorney and agent-in-fact (such power of
attorney and agency being coupled with an interest and therefore irrevocable
until the Obligations have been indefeasibly paid in full and no Bank has any
duty to extend credit to or for the benefit of any Borrower), and the Agent, and
any Persons designated by the Agent, may, at any time after the occurrence and
during the continuation of an Event of Default, and without notice to or the
consent of the Borrowers and in either the name of any Borrower or the Agent,
but at the cost and expense of the Borrowers, (1) pay and perform any
Obligation to be paid or performed under any of the Credit Documents, (2) to
the extent the Collateral consists of Accounts, demand payment of all such
Accounts from the Account Debtors, enforce payment of the Accounts by legal
proceedings or otherwise, and generally exercise all of the Borrowers’ rights
and remedies with respect to the collection of the Accounts, (3) settle,
adjust, compromise, discharge or release any Accounts or other Collateral or
any legal proceedings brought to collect any of the Accounts or other
Collateral, (4) sell or otherwise transfer any Collateral upon such terms,
for such amounts and at such time or times as the Agent deems advisable, (5) take
control, in any manner, of any item of payment or proceeds relating to any
Collateral, (6) prepare, file and sign any Borrower’s name to a proof of
claim in bankruptcy or similar document 

 

46

 

against any Account
Debtor or to any notice of Lien, assignment or satisfaction of Lien or similar
document in connection with any of the Collateral, (7) receive, open and
process all mail addressed to any Borrower and to notify postal authorities to
change the address for delivery thereof to such address as the Agent may
designate, (8) endorse the name of any Borrower upon any of the items of
payment or proceeds relating to any Collateral and deposit the same to the
account of the Agent on account of the Obligations, (9) endorse the name
of any Borrower upon any chattel paper, document, instrument, invoice, freight
bill, bill of lading or similar document or agreement relating to Accounts,
Inventory and any other Collateral, (10) use the information recorded on
or contained in any data processing equipment and computer hardware and
software relating to any Collateral and to which any Borrower has access, (11)
make and adjust claims under policies of insurance with respect to Collateral,
and (12) do all other acts and things necessary, in the Agent’s reasonable
determination, to fulfill the Borrowers’ obligations under this Agreement.

 

9.3           Indemnity.  Each Borrower agrees to indemnify, defend and
hold harmless the Agent, each Bank and the Issuing Bank and each shareholder,
director, officer, employee, agent, attorney and other representative of or
contractor for the Agent, each Bank and the Issuing Bank from and against any
and all damages, settlement amounts, expenses (including, without limitation,
attorney’s fees and court costs), other losses, claims or other assertions of
liability of any nature whatsoever incurred by or on behalf of or asserted
against, as the case may be, any one or more of such indemnified parties at any
time arising in whole or in part out of any Borrower’s failure to observe,
perform or discharge any duties under any of the Credit Documents or any
misrepresentation made by or on behalf of any Borrower under any of the Credit
Documents.  Without limiting the
generality of the foregoing, this indemnity shall extend to any claims asserted
against the Agent, any Bank or the Issuing Bank or such other indemnitees by
any Person under any Environmental Laws or similar laws by reason of any
Borrower’s or any other Person’s failure to comply with laws applicable to
Hazardous Substances.  Each Borrower
further agrees to indemnify, defend and hold harmless the Agent, each Bank and
the Issuing Bank and each shareholder, director, officer, employee, agent,
attorney and other representative of or contractor for the Agent, each Bank and
the Issuing Bank from and against any and all damages, settlement amounts,
expenses (including, without limitation, attorneys’ fees and court costs),
other losses, claims or other assertions of liability of any nature whatsoever
incurred by or on behalf of or asserted against, as the case may be, any one or
more of such indemnified parties at any time in connection with any one or more
indemnified parties’ actions or inactions relating in any respect to this
Agreement, any of the other Credit Documents or any of the transactions
described in or contemplated by any of the foregoing (including, without
limitation, any such losses incurred by any one or more indemnified parties
arising out of any claim by any Guarantor), except to the extent such losses
arise out of such indemnified party’s gross negligence or willful
misconduct.  For the avoidance of doubt,
the foregoing indemnity includes losses arising out of the indemnified party’s
own negligence.  All indemnities given by
the Borrowers under the Credit Documents, including, without limitation, the
indemnities set forth in this Section, shall survive the repayment of the
Obligations and the termination of this Agreement.

 

9.4           Entire Agreement; Modification of
Agreement; Sale of Interest.

 

(a)           This Agreement and the other Credit
Documents, together with all other instruments, agreements and certificates
executed by the parties in connection therewith or with reference thereto,
embodies the entire agreement between the parties hereto and thereto with
respect to the subject matter hereof and thereof and supersedes all prior
agreements, understandings and inducements, whether express or implied, oral or
written.

 

(b)           No amendment or waiver of any
provision of this Agreement or any other Credit Document, and no consent to any
departure by any Borrower or Guarantor therefrom, shall be effective unless in
writing signed by the Required Banks and Borrowers or the applicable Guarantor,
as the case 

 

47

 

may be, and notice thereof having been given to the
Agent, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver
or consent shall:

 

(1)           waive
any condition set forth in Section 4.1 or 4.2 without the written consent
of each Bank;

 

(2)           extend
or increase the Commitment of any Bank (or reinstate any Commitment terminated
pursuant to Section 7.2) without the written consent of such Bank;

 

(3)           postpone
the date fixed by this Agreement or any other Credit Document for any payment
(excluding mandatory prepayments) of principal, interest, fees or other amounts
due the Banks (or any of them) hereunder or under any other Credit Document
without the written consent of each Bank directly affected thereby;

 

(4)           reduce
the principal of, or any rate of interest specified herein on, any Loan, or
(subject to clause (iii) of the second proviso of this Section 9.4(b)),
any fees or other amounts payable hereunder or under any other Credit Document,
without the written consent of each Bank directly affected thereby; provided, however, that
only the consent of the Required Banks shall be necessary (i) to amend the
definition of “Default Rate” or to waive any obligation of the Borrowers to pay
interest at the Default Rate, or (ii) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Loan or to reduce any
fees payable hereunder;

 

(5)           amend
any provision hereunder in a manner that would alter the pro rata sharing of
payments required hereby without the written consent of each Bank;

 

(6)           change
any provision of this Section 9.4(b) or the definition of “Required
Banks” or any other provision hereof specifying the number or percentage of
Banks required to amend, waiver or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Bank; or

 

(7)           release
any Guarantor from any Guaranty or release the Liens on all or substantially
all of the Collateral in any transaction or series of related transactions
except in accordance with the terms of the Credit Documents, without the
written consent of each Bank;

 

and, provided  further that: (i) no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank in addition to the
Banks required above, affect the rights or duties of the Issuing Bank under
this Agreement or any document relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Swingline Lender in addition to the Banks required
above, effect the rights or duties of the Swingline Lender under this
Agreement, (iii) no amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to the Banks required above, effect the
rights or duties of the Agent under this Agreement or the other Credit
Documents.  Notwithstanding anything to
the contrary contained herein, no Bank that is in default on its obligations
under this Agreement or any other Credit Document shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that
the Commitment of such Bank may not be increased or extended without the
consent of such Bank.

 

48

 

(c)           The Borrowers may not directly or
indirectly sell, assign or transfer any of their respective interests in or
rights under this Agreement or any of the other Credit Documents. Each Borrower
consents to any Bank’s participation, sale or other transfer of all or any
portion of its interests under the Credit Documents to any Person or Persons at
any time.  Notwithstanding the foregoing,
unless an Event of Default has occurred no Bank shall participate, sell or
otherwise transfer all or any portion of its interests under the Credit
Documents to any Person without obtaining the prior written consent of MGP,
which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that MGP’s consent shall not be required
with respect to any Bank’s participation, sale or other transfer (i) to
any other Bank or any Person that is an Affiliate of any Bank, (ii) made
in connection with any sale or similar transfer of such Bank’s assets generally
or any material portion of its assets, or (iii) made in connection with
any legal or regulatory requirement, including, without limitation, limitations
on loans to one borrower or to affiliated persons; nor shall MGP’s consent be
required in connection with any Bank’s pledge of or grant of a security
interest in all or any portion of it rights under this Agreement to secure
obligations of such Bank, including any such pledge or grant to a Federal
Reserve Bank.

 

9.5           Reimbursement of Expenses.  If, at any time or times prior or subsequent
to the Closing Date, and regardless of whether an Event of Default then exists
or any of the transactions contemplated hereunder are concluded, the Agent or
any Bank employs counsel for advice or other representation, or incurs
reasonable legal and/or appraisers’, liquidators’, engineers’ expenses and/or
other costs or out-of-pocket expenses in connection with: (a) the
negotiation and preparation of this Agreement and any of the other Credit
Documents or any amendment or other modification of this Agreement or any of
the other Credit Documents; (b) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by the Agent, any Bank, any Borrower
or any other Person) in any way relating to the Collateral, this Agreement, any
of the other Credit Documents or the affairs of any Borrower or any Guarantor; (c) any
attempt to enforce any rights of the Agent or any Bank against any Borrower,
any Guarantor or any other Person which may be obligated to the Agent or any
Bank by virtue of this Agreement or any of the other Credit Documents,
including, without limitation, any Account Debtors, irrespective of whether
litigation is commenced in pursuance of such rights; or (d) any attempt to
inspect, verify, protect, preserve, restore, collect, sell, manufacture,
liquidate or otherwise dispose of or realize upon the Collateral (all of which
are hereinafter collectively referred to as the “Expenses”); then, in
any and each such event, the Borrowers shall pay such Expenses to the Agent,
and such Expenses shall be additional Obligations and be secured by the
Collateral and may be funded, if the Agent so elects, by the Banks making
Revolving Credit Loans under this Agreement on the Borrowers’ behalf and paying
the same to the Persons to whom such Expenses are payable; provided,
however, that only the Agent shall be entitled to recover Expenses
arising under subpart (a) above. 
Additionally, if any taxes (excluding taxes imposed upon or measured by
the income of the Agent or any Bank) shall be payable on account of the
execution or delivery of this Agreement or the other Credit Documents, or the
execution, delivery, issuance or recording of any of the Credit Documents, or
the creation of any of the Obligations hereunder, by reason of any federal,
state or local statute or other law existing on or after the Closing Date, the
Borrowers will pay all such taxes, including, but not limited to, any interest
and penalties thereon, and will indemnify and hold the Agent, the Banks and the
Issuing Bank harmless from and against all liabilities in connection therewith.

 

9.6           Indulgences Not Waivers.  The failure of the Agent or any Bank, at any
time or times on or after the Closing Date, to require strict performance by
the Borrowers or the Guarantors of any provision of this Agreement or the other
Credit Documents shall not waive, affect or diminish any right of the Agent or
any Bank thereafter to demand strict compliance and performance therewith.  Any suspension or waiver by the Agent or any
Bank of a Default or an Event of Default by the Borrowers or the Guarantors
under this Agreement or any of the other Credit Documents shall not suspend,
waive or affect any other Default or Event of Default by the Borrowers or the
Guarantors under this Agreement or any of the other Credit Documents, whether
the same is prior or subsequent thereto and whether of the same or of a
different type.  None of the
undertakings, agreements, warranties, covenants and 

 

49

 

representations of the
Borrowers or the Guarantors contained in this Agreement or any of the other
Credit Documents and no Default or Event of Default by the Borrowers or the
Guarantors under this Agreement or any of the other Credit Documents shall be
deemed to have been suspended or waived by the Agent or any Bank, unless such
suspension or waiver is by an instrument in writing specifying such suspension
or waiver and is signed by a duly authorized representative of the Agent and
each Bank and directed and delivered to the Borrowers and/or the Guarantors.

 

9.7           Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

 

9.8           Successors and Assigns.  This Agreement and the other Credit Documents
shall be binding upon and inure to the benefit of the successors and assigns of
the Agent, each Bank and each Borrower. 
This provision, however, shall not be deemed to modify Section 9.4
hereof.

 

9.9           General Waivers by Borrowers.  Except as otherwise expressly provided for in
this Agreement, each Borrower waives: (a) presentment, protest, demand for
payment, notice of dishonor demand and protest and notice of presentment,
default, notice of nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper, accounts receivable,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by the Agent or any Bank on which any Borrower may in any way be
liable and ratifies and confirms whatever the Agent or any Bank may do in this
regard; (b) notice prior to taking possession or control of the Collateral
or any bond or security which might be required by any court prior to allowing
the Agent or any Bank to exercise any remedies, including the issuance of an
immediate writ of possession; (c) the benefit of all valuation,
appraisement and exemption laws; and (d) any and all other notices, demands
and consents in connection with the delivery, acceptance, performance, default
or enforcement of this Agreement or any of the other Credit Documents and/or
any rights of the Agent or any Bank in respect of the Collateral.  Subject to the following sentence, each
Borrower also waives any right of setoff or similar right it may at any time
have against the Agent or any Bank as a defense to the payment or performance
of the Obligations.  If a Borrower now or
hereafter has any claim against the Agent or any Bank giving rise to any such
right of setoff or similar right, the Borrowers agree not to assert such claim
as a defense to or a right of setoff with respect to the Obligations under the
Credit Documents or otherwise, and to instead assert any such claim, if the
Borrower so elects to assert such claim, in a separate proceeding against the
Agent or the Bank, as the case may be, and not as a part of any proceeding or
as a defense to any claim initiated by the Agent or any Bank to enforce any of
their respective rights and remedies under the Credit Documents.

 

9.10         Collateral Protection Act Notice.  The following notice is given pursuant to Mo.
Rev. Stat. § 427.120:  “UNLESS YOU
PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US,
WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR
COLLATERAL.  THIS INSURANCE MAY, BUT NEED
NOT, PROTECT YOUR INTERESTS.  THE
COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM
THAT IS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL.  YOU MAY LATER CANCEL ANY INSURANCE
PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED
INSURANCE AS REQUIRED BY OUR AGREEMENT. 
IF WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR
THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY
OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE
INSURANCE, 

 

50

 

UNTIL THE EFFECTIVE DATE
OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED
TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION.  THE COSTS OF THE INSURANCE MAY BE MORE
THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.”

 

9.11         Mo. Rev. Stat. § 432.047 Statement.  The following statement is given pursuant to
Mo. Rev. Stat. § 432.047:  “ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR
RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH
IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT.  TO PROTECT YOU (BORROWER(S)) AND US
(CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER
AGREE IN WRITING TO MODIFY IT.”

 

9.12         Incorporation by Reference.  All of the terms of the other Credit
Documents are incorporated in and made part of this Agreement by reference; provided, however, that to the extent of any inconsistency
between this Agreement and such other Credit Documents, this Agreement shall
prevail and govern.

 

9.13         Execution in Counterparts; Facsimile
Signatures.  This Agreement and the
other Credit Documents may be executed in any number of counterparts and by
different parties thereto, each of which when so executed and delivered shall
be deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. 
A signature of a party to any of the Credit Documents sent by facsimile
or other electronic transmission shall be deemed to constitute an original and
fully effective signature of such party.

 

9.14         Governing Law; Consent to Forum.  This Agreement shall be governed by the laws
of the State of Missouri without giving effect to any choice of law rules thereof.  As part of the consideration for new value
this day received, each Borrower consents to the jurisdiction of any state or
federal court located within Jackson County, Missouri (collectively, the “Chosen
Forum”), and waives personal service of any and all process upon it and
consents that all such service of process be made by certified or registered
mail directed to the Borrowers at the address stated in Section 9.1 hereof
and service so made shall be deemed to be completed upon delivery thereto.  Each Borrower waives any objection to
jurisdiction and venue of any action instituted against it as provided herein
and agrees not to assert any defense based on lack of jurisdiction or
venue.  Each Borrower further agrees not
to assert against the Agent or any Bank (except by way of a defense or
counterclaim in a proceeding initiated by the Agent or such Bank) any claim or
other assertion of liability relating to any of the Credit Documents, the
Obligations, the Collateral or the actions or inactions of the Agent or any
Bank in respect of any of the foregoing in any jurisdiction other than the
Chosen Forum.

 

9.15         Waiver of Jury Trial; Limitation on
Damages.  To the fullest extent permitted by law, and
as separately bargained-for consideration, each Borrower waives any right to
trial by jury (which the Agent and each Bank also waives) in any action, suit,
proceeding or counterclaim of any kind arising out of or otherwise relating to
any of the Credit Documents, the Obligations, the Collateral or the actions or
inactions of the Agent or any Bank in respect of any of the foregoing.    To effectuate the foregoing, each Borrower
grants the Agent an irrevocable power of attorney to file, as attorney-in-fact
for such Borrower, a copy of this Agreement in any Missouri court pursuant to
Mo. Rev. Stat. § 510.190 and Rule 69.01, V.A.M.R. and/or any other
applicable law, and the copy of this Agreement so filed shall conclusively be 

 

51

 

deemed to constitute each
Borrower’s waiver of trial by jury in any proceeding arising out of or
otherwise relating to any of the Credit Documents, the Obligations, the
Collateral or the Agent or any Bank’s actions or inactions in respect of any of
the foregoing.  To the fullest extent permitted by law, and as separately
bargained-for consideration, each
Borrower also waives any right it may have at any time to claim or recover in
any litigation or other dispute involving the Agent and/or any Bank, whether
the underlying claim or dispute sounds in contract, tort or otherwise, any
special, exemplary, punitive or consequential damages or any damages other than,
or in addition to, actual damages.  The
Borrowers acknowledges that the Agent and each Bank is relying upon and would
not enter into the transactions described in the Credit Documents on the terms
and conditions set forth therein but for the Borrowers’ waivers and agreements
under this Section.

 

9.16         USA Patriot Act Notice.  The Agent and the Banks notify the Borrowers
that, pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 signed into law October 26, 2001) (the “Act”), they are or
may be required to obtain, verify and record information that identifies each
Borrower, which information includes the name and address of each Borrower and
other information that will allow the Agent and the Banks to identify the
Borrowers and the Guarantors in accordance with the Act.  Each Borrower agrees to provide such
information and take such other action as the Agent may request from time to
time to enable the Agent and the Bank to comply with the provisions of the Act
with respect to the transactions described in the Credit Documents.

 

9.17         Confidentiality.  Each of the Agent, the Issuing Bank, the
Swingline Lender and the other Banks agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a) to
its Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and representatives (it being understood
that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d) to
any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Credit Document or any action or
proceeding relating to this Agreement or any other Credit Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
permitted assignee of or participant in, or any prospective permitted assignee
of or participant in, any of its rights or obligations under this Agreement, (g) with
the consent of MGP, or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section, or (ii) becomes
available to the Agent,  the Issuing
Bank, the Swingline Lender or any Bank or any of their respective Affiliates on
a nonconfidential basis from a source other than a Borrower or Guarantor or any
Subsidiary thereof.

 

                For purposes of this Section, “Information”
means all information received from a Borrower, a Guarantor or any Subsidiary
thereof relating to any Borrower, Guarantor or any Subsidiary thereof or any of
their respective businesses, other than any such information that is available
to the Agent,  the Issuing Bank, the
Swingline Lender or any Bank on a nonconfidential basis prior to disclosure by
such Borrower, Guarantor or any Subsidiary, provided that, in the case of
information received from a Borrower, Guarantor or any Subsidiary after the
date hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

                Each
of the Agent,  the Issuing Bank, the
Swingline Lender, and Banks acknowledges that (a) the Information may
include material non-public information concerning a Borrower, Guarantor, or 

 

52

 

Subsidiary thereof, as the case may be, and (b) it
will handle such material non-public information in accordance with applicable
law, including Federal and state securities Laws.

 

[signature page(s) to
follow]

 

53

 

IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly authorized representatives
as of the date first above written.

 

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Robert Zonneveld

  
	
   

  	
   

  	
  Name: Robert Zonneveld

  
	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  	
   

  
	
   

  	
  MGP INGREDIENTS OF
  ILLINOIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Robert Zonneveld

  
	
   

  	
   

  	
  Name: Robert Zonneveld

  
	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIDWEST GRAIN PIPELINE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Robert Zonneveld

  
	
   

  	
   

  	
  Name: Robert Zonneveld

  
	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMMERCE BANK, N.A.,

  
	
   

  	
  as Agent, Issuing Bank,
  Swingline Lender and a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Wayne C. Lewis

  
	
   

  	
       Name:
  Wayne C. Lewis

  
	
   

  	
       Title: Vice President

  
	
   

  	
   

  
	
   

  	
  BMO CAPITAL MARKETS
  FINANCING, INC.,

  
	
   

  	
  as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Corey Noland

  
	
   

  	
   

  	
  Name: Corey Noland

  
	
   

  	
   

  	
  Title: vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK,

  
	
   

  	
  as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Michael
  Leong

  
	
   

  	
   

  	
  Name: Micahel
  Leong

  
	
   

  	
   

  	
  Title: Vice President

  

 

Credit Agreement – Signature Page

 

 

Exhibit A

 

(Banks and
Commitments)

 

	
  Bank

  	
   

  	
  Revolving Credit

  Commitment

  	
   

  	
  Letter of Credit

  Commitment*

  	
   

  	
  Swingline Loan

  Commitment*

  	
   

  	
  Term Loan

  Commitment

  	
   

  	
  Bank’s Total

  Commitment

  	
   

  
	
  Commerce Bank,
  N.A.

  	
   

  	
  $

  	
  15,400,000

  	
   

  	
  $

  	
  3,080,000

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  9,625,000

  	
   

  	
  $

  	
  25,025,000

  	
   

  
	
  BMO Capital
  Markets Financing, Inc.

  	
   

  	
  $

  	
  12,300,000

  	
   

  	
  $

  	
  2,460,000

  	
   

  	
  0

  	
   

  	
  $

  	
  7,687,500

  	
   

  	
  $

  	
  19,987,500

  	
   

  
	
  National City
  Bank

  	
   

  	
  $

  	
  12,300,000

  	
   

  	
  $

  	
  2,460,000

  	
   

  	
  0

  	
   

  	
  $

  	
  7,687,500

  	
   

  	
  $

  	
  19,987,500

  	
   

  
	
  Totals:

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  $

  	
  8,000,000

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  65,000,000

  	
   

  

 

*                                         As more particularly described in the Agreement,
the Letter of Credit Commitment and the Swingline Loan Commitment are each
subcommitments under the Total Revolving Credit Commitment.  Accordingly, extensions of credit under the
Letter of Credit Commitment or the Swingline Loan Commitment act to reduce, on
a dollar-for-dollar basis, the amount of credit otherwise available under the
Total Revolving Credit Commitment.

 

 

Exhibit B

 

[Form of Revolving Credit Note]

 

REVOLVING CREDIT NOTE

 

	
  $                                                  

  	
  May 5, 2008

  

 

For value received, the undersigned, MGP Ingredients, Inc.,
a Kansas corporation, MGP Ingredients of Illinois, Inc., an Illinois
corporation, and Midwest Grain Pipeline, Inc., a Kansas corporation
(collectively, the “Borrowers”), jointly and severally promise to pay to
the order of
                                      
a
                              
                          
                    
(the “Bank”; which term shall include any subsequent holder hereof), in
lawful money of the United States of America, the principal sum of
                                        and
No/100 Dollars
($                                )
or, if different, the principal amount outstanding and due the Bank under Section 2.1
of the Credit Agreement referred to below.

 

This Revolving Credit Note (the “Note”) is a
Revolving Credit Note referred to in, is issued pursuant to, and is subject to
the terms and conditions of, the Credit Agreement, dated on or about the date
hereof, among the Borrowers, the Banks party thereto and Commerce Bank, N.A.,
as the Agent, the Issuing Bank and the Swingline Lender, as the same may be
amended, renewed, restated, replaced, consolidated or otherwise modified from
time to time (the “Credit Agreement”).  To the extent of any conflict between
the terms and conditions of this Note and the terms and conditions of the
Credit Agreement, the terms and conditions of the Credit Agreement shall
prevail and govern.  Capitalized terms
used but not defined in this Note have the meanings given to them in the Credit
Agreement.

 

Interest shall accrue on the outstanding principal
balance of this Note as provided in the Credit Agreement.  Principal, interest and all other amounts, if
any, payable in respect of this Note shall be payable as provided in the Credit
Agreement.  The Borrowers’ right, if any,
to prepay this Note is subject to the terms and conditions of the Credit
Agreement.

 

The termination of the Credit Agreement or the
occurrence of an Event of Default shall entitle the Agent, at its option, to
declare the then outstanding principal balance hereof, all accrued interest
thereon, and all other amounts, if any, payable in respect of this Note to be,
and the same shall thereupon become, immediately due and payable without notice
to or demand on the Borrowers, all of which the Borrowers waive.

 

Time is of the essence with respect to this Note.  To the fullest extent permitted by applicable
law, each Borrower, for itself and its successors and assigns, waives
presentment, demand, protest, notice of dishonor, and any and all other
notices, demands and consents in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and consents to any
extensions of time, renewals, releases of any parties to or guarantors of this
Note, waivers and any other modifications that may be granted or consented to
by the Agent or the Bank from time to time in respect of the time of payment or
any other provision of this Note.

 

This Note shall be governed by the laws of the State
of Missouri, without giving effect to any choice of law rules thereof.

 

[signature page to follow]

 

 

IN WITNESS WHEREOF, the Borrowers have executed and
delivered this Note as of the date first above written.

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MGP INGREDIENTS OF
  ILLINOIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIDWEST GRAIN PIPELINE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Exhibit C

 

[Form of Swingline Note]

 

SWINGLINE NOTE

 

	
  $5,000,000

  	
   

  	
  May 5, 2008

  

 

For value received, the undersigned, MGP Ingredients, Inc.,
a Kansas corporation, MGP Ingredients of Illinois, Inc., an Illinois
corporation, and Midwest Grain Pipeline, Inc., a Kansas corporation
(collectively, the “Borrowers”), jointly and severally promise to pay to
the order of Commerce Bank, N.A., a national banking association (the “Swingline
Lender”; which term shall include any subsequent holder hereof), in lawful
money of the United States of America, the principal sum of Five Million and
00/100 Dollars ($5,000,000.00) or, if different, the principal amount
outstanding under Section 2.2 of the Credit Agreement referred to below.

 

This Swingline Note (the “Note”) is the
Swingline Note referred to in, is issued pursuant to, and is subject to the
terms and conditions of, the Credit Agreement, dated on or about the date
hereof, among the Borrowers, the Banks party thereto and Commerce Bank, N.A.,
as the Agent, the Issuing Bank and the Swingline Lender, as the same may be
amended, renewed, restated, replaced, consolidated or otherwise modified from
time to time (the “Credit Agreement”).  To the extent of any conflict
between the terms and conditions of this Note and the terms and conditions of
the Credit Agreement, the terms and conditions of the Credit Agreement shall
prevail and govern.  Capitalized terms
used but not defined in this Note have the meanings given to them in the Credit
Agreement.

 

Interest shall accrue on the outstanding principal
balance of this Note as provided in the Credit Agreement.  Principal, interest and all other amounts, if
any, payable in respect of this Note shall be payable as provided in the Credit
Agreement.  The Borrowers’ right, if any,
to prepay this Note is subject to the terms and conditions of the Credit
Agreement.

 

The termination of the Credit Agreement or the
occurrence of an Event of Default shall entitle the Agent, at its option, to
declare the then outstanding principal balance hereof, all accrued interest
thereon, and all other amounts, if any, payable in respect of this Note to be,
and the same shall thereupon become, immediately due and payable without notice
to or demand on the Borrowers, all of which the Borrowers waive.

 

Time is of the essence with respect to this Note.  To the fullest extent permitted by applicable
law, each Borrower, for itself and its successors and assigns, waives
presentment, demand, protest, notice of dishonor, and any and all other
notices, demands and consents in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and consents to any
extensions of time, renewals, releases of any parties to or guarantors of this
Note, waivers and any other modifications that may be granted or consented to
by the Agent or the Bank from time to time in respect of the time of payment or
any other provision of this Note.

 

This Note shall be governed by the laws of the State
of Missouri, without giving effect to any choice of laws rule thereof.

 

[signature page to follow]

 

 

IN WITNESS WHEREOF, the Borrowers have executed and
delivered this Note as of the date first above written.

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MGP INGREDIENTS OF
  ILLINOIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIDWEST GRAIN PIPELINE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Exhibit D

 

[Form of Term Note]

 

TERM NOTE

 

	
  $                                        

  	
  May 5, 2008

  

 

For value received, the undersigned, MGP Ingredients, Inc.,
a Kansas corporation, MGP Ingredients of Illinois, Inc., an Illinois
corporation, and Midwest Grain Pipeline, Inc., a Kansas corporation
(collectively, the “Borrowers”), jointly and severally promise to pay to
the order of
                                    
a
                                          
(the “Bank”, which term shall include any subsequent holder hereof), in
lawful money of the United State of America, the principal sum of
                                      
and       /100 Dollars
($                                        )
or, if different, the principal amount outstanding and due the Bank under Section 2.4
of the Credit Agreement referred to below.

 

This Term Note (the “Note”) is a Term Note
referred to in, is issued pursuant to and is subject to the terms and
conditions of the Credit Agreement, dated on or about the date hereof, among
the Borrowers, the Banks party thereto and Commerce Bank, N.A., as the Agent,
as the same may be amended, renewed, restated, replaced, consolidated or
otherwise modified from time to time (the “Credit Agreement”).  To the extent of any conflict between the
terms and conditions of this Note and the terms and conditions of the Credit
Agreement, the terms and conditions of the Credit Agreement shall prevail and
govern.  Capitalized terms used but not
defined in this Note have the meanings given to them in the Credit Agreement.

 

Interest shall accrue on the outstanding principal
balance of this Note as provided in the Credit Agreement.  Principal, interest and all other amounts, if
any, payable in respect of this Note shall be payable as provided in the Credit
Agreement.  The Borrowers’ right, if any,
to prepay this Note is subject to the terms and conditions of the Credit
Agreement.

 

The termination of the Credit Agreement or the
occurrence of an Event of Default shall entitle the Agent, at its option, to
declare the then outstanding principal balance hereof, all accrued interest
thereon, and all other amounts, if any, payable in respect of this Note to be,
and the same shall thereupon become, immediately due and payable without notice
to or demand on the Borrowers, all of which the Borrowers waive.

 

Time is of the essence with respect to this Note.  To the fullest extent permitted by applicable
law, each Borrower, for itself and its successors and assigns, waives
presentment, demand, protest, notice of dishonor, and any and all other
notices, demands and consents in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and consents to any
extensions of time, renewals, releases of any parties to or guarantors of this
Note, waivers and any other modifications that may be granted or consented to
by the Agent or the Bank from time to time in respect of the time of payment or
any other provision of this Note.

 

This Note shall be governed by the laws of the State
of Missouri, without giving effect to any choice of law rules thereof.

 

[signature page to
follow]

 

 

IT WITNESS WHEREOF, the Borrowers have executed and
delivered this Note as of the date first above written.

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MGP INGREDIENTS OF
  ILLINOIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIDWEST GRAIN PIPELINE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Exhibit E

 

[Form of Borrowing Base Certificate]

 

BORROWING BASE CERTIFICATE

 

(for the fiscal quarter ended
        )

 

This Borrowing Base Certificate (the “Certificate”)
is delivered pursuant to Section 6.1(b)(3) of the Credit Agreement,
dated as of May 5, 2008 (the “Credit Agreement”), among MGP
Ingredients, Inc., a Kansas corporation, MGP Ingredients of Illinois, Inc.,
an Illinois corporation, and Midwest Grain Pipeline, Inc., a Kansas
corporation (collectively, the “Borrowers”), the Banks party thereto,
and Commerce Bank, N.A., as the Agent, the Issuing Bank and the Swingline
Lender, as the same may be amended from time to time.  Capitalized terms used but not defined in
this Certificate have the meanings given to them in the Credit Agreement.

 

The undersigned hereby certifies that he or she is the
chief financial officer, treasurer or corporate controller of each Borrower and,
as such, is authorized to execute and deliver this Certificate on behalf of the
Borrowers, and that the Borrowing Base, at the quarter-end indicated above, is
$                                ,
and that the such Borrowing Base was determined as set forth in the spreadsheet
attached hereto as Exhibit A.

 

This Certificate is delivered to and may be
conclusively relied upon by the Agent and each Bank.

 

IN WITNESS WHEREOF, the undersigned has executed this
certificate on behalf of the Borrowers on
                                ,
20      .

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
  MGP INGREDIENTS OF
  ILLINOIS, INC.

  
	
   

  	
  MIDWEST GRAIN PIPELINE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT A

TO
BORROWING BASE CERTIFICATE

 

	
   

  	
   

  	
  MGP

  	
   

  	
  MGPI

  	
   

  	
  Midwest Grain

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounts
  Receivable:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A. Total
  Accounts Receivable

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B. Ineligible
  Accounts Receivable:

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  1

  	
  .

  	
  Accounts Over 90 days Past Due

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  2

  	
  .

  	
  Affiliate/Intercompany/Employee Accounts

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  3

  	
  .

  	
  Conditional Payment Accounts (Ex.: Bill and Hold)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  4

  	
  .

  	
  Foreign accounts not supported

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  5 

  	
  .

  	
  Governmental Accounts not properly assigned

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  6

  	
  .

  	
  Accounts in bankruptcy

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  7 

  	
  .

  	
  Accounts exceeding concentration limit

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  8

  	
  .

  	
  25% or more of Account is not Eligible

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  9

  	
  .

  	
  Accounts Subject to Right of Offset (accounts with
  suppliers)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  10

  	
  .

  	
  Other:

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  11

  	
  .

  	
  Total Ineligible Accounts Receivable (Sum B-1 to
  B-10)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  12

  	
  .

  	
  Eligible Accounts Receivable (A – B11)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  13

  	
  .

  	
  Margined Eligible Accounts Receivable (85%)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Inventory

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C. Total
  Inventory

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  D. Ineligible
  Inventory

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.
  Discontinued/Obsolete FG or Raw Material Inventory

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  2.
  Work-in-process

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  3. Inventory not
  located in the United States

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  4. Inventory
  consigned by vendors to borrower

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  5. Alcohol Tax
  (26 USC 5001)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  6. Other

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  7. Total
  Ineligible Inventory (Sum D1 to D6)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  8. Total
  Eligible Inventory (C minus D7)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  9. Margined Eligible Inventory

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a. 65% of the
  Value of Eligible Inventory consisting of flour

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  b. 75% of the
  Value of Eligible Inventory consisting of corn

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  c. 75% of the
  Value of Eligible Inventory consisting of wheat

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  d. 80% of the
  Value of Eligible Inventory consisting of alcohol (food grade or ethanol)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  

 

 

	
  e. 75% of the
  Value of Eligible Inventory consisting of feed

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  f. 65% of the
  Value of Eligible Inventory consisting of protein (wheat gluten)

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  g. 60% of the
  Value of Eligible Inventory consisting of starch

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  h. 60% of the
  Value of Eligible Inventory consisting of other finished goods

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  i. TOTAL

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  Revolving Credit
  Borrowing Base (sum of B13 and D9)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  F.

  	
  Total Revolving
  Credit Commitment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  G.

  	
  Borrowers’ Maximum Revolving Credit Availability
  (Lesser of E or F)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  H.

  	
  Aggregate amount of outstanding Revolving Credit
  Loans, Swingline Loans, LC Exposure and Term Loans

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  I.

  	
  Unused Revolving Credit Availability (G minus H)
  (Negative amount requires mandatory repayment)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  —

  	
   

  

 

This Borrowing
Base Certificate is dated the
                            
day of                                                       
20          .

 

MGP
Ingredients, Inc.

 

	
  By:

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
				

 

 

Exhibit F

 

[Form of
Covenant Compliance Certificate]

 

COVENANT COMPLIANCE CERTIFICATE

 

(for
the fiscal quarter ended
              )

 

This Covenant Compliance Certificate (the “Certificate”)
is delivered pursuant to Section 6.1(b)(4) of the Credit Agreement,
dated as of May 5, 2008 (the “Credit Agreement”), among MGP
Ingredients, Inc., a Kansas corporation, MGP Ingredients of Illinois, Inc.,
an Illinois corporation, and Midwest Grain Pipeline, Inc., a Kansas
corporation (collectively, the “Borrowers”), the Banks party thereto,
and Commerce Bank, N.A., as the Agent, the Issuing Bank and the Swingline
Lender, as the same may be amended from time to time.  Capitalized terms used but not defined in
this Certificate have the meanings given to them in the Credit Agreement.

 

The undersigned hereby certifies that he or she is the
chief financial officer, treasurer or corporate controller of each Borrower
and, as such, is authorized to execute and deliver this Certificate on behalf
of the Borrowers, and that:

 

1.                                       Capital Expenditures. The following amount reflects the
consolidated financial results of MGP and its consolidated subsidiaries, for
purposes of Section 6.3(a) of the Credit Agreement, for the four
fiscal quarters ending on the last day of fiscal quarter referred to above:

 

	
  (a)

  	
   

  	
  Capital Expenditures

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance:   Is line 1(a) equal
  to or less than $20,000,000?

  	
   

  	
  [yes/no]

  	
   

  

 

2.                                       Fixed Charge Coverage Ratio. 
The following amounts reflect the consolidated financial results of MGP
and its consolidated subsidiaries, for purposes of Section 6.3(b) of
the Credit Agreement, for the four fiscal quarters ending on the last day of
fiscal quarter referred to above:

 

	
  (a)

  	
   

  	
  Adjusted EBITDA (from line 6(j))

  	
   

  	
  $

  	
   

  
	
  (b)

  	
   

  	
  minus dividends by
  MGP

  	
   

  	
  $

  	
   

  
	
  (c)

  	
   

  	
  minus federal, state and local taxes

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  total adjustments

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  (sum of lines 2(b) and 2(c))

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Modified Adjusted EBITDA

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  (line 2(a) minus line
  2(d))

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Fixed Charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  ratio of line 2(e) to line 2(f)

  	
   

  	
   

  	
  to 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance:   Is  line 2(g) equal
  to or greater than 1.5 to 1?

  	
   

  	
  [yes/no]

  	
   

  

 

 

3.                                       Working Capital. The following amounts reflect the
consolidated financial results of MGP and its consolidated subsidiaries, for
purposes of Section 6.3(c) of the Credit Agreement, as of the last
day of the fiscal quarter referred to above:

 

	
  (a)

  	
   

  	
  current assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  current liabilities (including balance of Revolving
  Credit Loans and Swingline Loans if not otherwise a current liability)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  line 3(a) minus
  line 3(b)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance:    Is line 3(c) equal to
  or greater than $40,000,000?

  	
   

  	
  [yes/no]

  	
   

  

 

4.                                       Tangible Net Worth. 
The following amounts reflect the consolidated financial results of MGP
and its consolidated subsidiaries, for purposes of Section 6.3(d) of
the Credit Agreement, as of the last day of the fiscal quarter referred to
above:

 

	
  (a)

  	
   

  	
  GAAP net worth

  	
   

  	
  $

  	
   

  
	
  (b)

  	
   

  	
  minus goodwill

  	
   

  	
  $

  	
   

  
	
  (c)

  	
   

  	
  minus intellectual property intangibles

  	
   

  	
  $

  	
   

  
	
  (d)

  	
   

  	
  minus deferred assets

  	
   

  	
  $

  	
   

  
	
  (e)

  	
   

  	
  [omitted]

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  minus amounts due from affiliates

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  adjustments (sum of lines 4(b) through 4(f))

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  Tangible Net Worth

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  (line 4(a) minus line
  4(g))

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  baseline requirement

  	
   

  	
  $

  	
  135,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (j)

  	
   

  	
  plus 50% of cumulative net income (but not loss) for
  fiscal quarters ending on or after 6/30/08

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (k)

  	
   

  	
  minus cumulative stock purchases for fiscal quarters
  ending on or after 6/30/08

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (l)

  	
   

  	
  required Tangible Net Worth

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (line 4(i) plus
  line 4(j) minus line 4(k))

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance:   Does line 4(h) exceed line 4(l)?

  	
   

  	
  [yes/no]

  	
   

  
							

 

 

5.                                       Leverage Ratio. The following amounts reflect the
consolidated financial results of MGP and its consolidated subsidiaries, for
purposes of Section 6.3(e) of the Credit Agreement, for the four
fiscal quarters ending on the last day of fiscal quarter referred to above:

 

	
  (a)

  	
   

  	
  Senior Funded Debt

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Adjusted EBITDA (line 6(j))

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  ratio of line 5(a) to line 5(b)

  	
   

  	
   

  	
  to 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance:   Is line 5(c) less than or equal to
  3.0 to 1?

  	
   

  	
  [yes/no]

  	
   

  
							

 

6.                                       Calculation of Adjusted EBITDA. 
For purposes of lines 2(a) and 5(b) above, Adjusted EBITDA is
calculated as follows:

 

	
   

  	
   

  	
   

  	
   

  	
  This Quarter

  	
   

  	
  Last 4 Quarters

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  net income

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  (b)

  	
   

  	
  plus interest expense

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  (c)

  	
   

  	
  plus federal, state and local taxes

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  (d)

  	
   

  	
  plus depreciation and amortization

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  total adjustments

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (sum of lines 6(b) through 6(d))

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  EBITDA

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (line 6(a) plus
  line 6(e))

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  plus other non-cash losses

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  (h)

  	
   

  	
  minus other non-cash gains

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  (i)

  	
   

  	
  plus or minus
  extraordinary items

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  (j)

  	
   

  	
  Adjusted EBITDA (line 6(f), plus
  line 6(g), minus line 6(h), plus or minus line 6(i))

  	
   

  	
  $

  	
   

  	
  $

  	
   

  

 

8.                                       Financial Statements 
The financial statements described in Section 6.1(b) of the
Credit Agreement for the Borrowers for the end of the fiscal quarter or the
fiscal year referred to above, which are attached hereto and are incorporated
herein by this reference, fairly present the consolidated financial condition
and results of operations of the Borrowers in accordance with GAAP consistently
applied, as at the end of, and for, such period (subject, in the case of
interim statements, to normal year-end audit adjustments and to the absence of
footnote disclosures).

 

9.                                       Other Compliance. 
A review of the activities of the Borrowers during the period since the
date of the last Covenant Compliance Certificate has been made at my direction
and under my supervision with a view to determining whether the Borrowers have
kept, observed and performed all of their obligations under the Credit
Agreement and all other Credit Documents to which they are a party, and to the
best of my knowledge after due inquiry and investigation, (a) each
Borrower has kept, observed and performed all of its obligations under the
Credit Agreement and all other Credit Documents to which 

 

 

it is a party, (b) no Default or Event of Default has occurred and
is continuing, and (c) all representations and warranties made by each
Borrower in the Credit Agreement and the other Credit Documents to which it is
a party are true and correct as of the date of this Certificate.

 

10.           Reliance.  This Certificate is delivered to and may be
conclusively relied upon by the Agent and each Bank.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the undersigned has executed this
certificate on behalf of the Borrowers on
                                 ,
20         .

 

 

MGP INGREDIENTS, INC.

MGP INGREDIENTS OF ILLINOIS, INC.

MIDWEST GRAIN PIPELINE, INC.

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule
1(b)

 

 

Schedule
5.1(c)

 

 

Schedule
5.1(h)

 

 

Schedule
5.1(k)

 

 

Schedule
5.1(m)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}]]