Document:

Exhibit 4.1

 

	
  Credit and Security Agreement (Committed)

  

 

 

CREDIT AND SECURITY AGREEMENT

 

BY AND BETWEEN

 

MGP INGREDIENTS, INC.,

a Kansas corporation

 

AND

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

Acting through its Wells Fargo Business Credit operating division

 

 

July 21, 2009

 

	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
  Other Definitional Terms; Rules of Interpretation

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II AMOUNT AND TERMS OF THE CREDIT FACILITY

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Revolving Advances

  	
   

  	
  16

  
	
  Section 2.2

  	
  Procedures for Requesting Advances

  	
   

  	
  16

  
	
  Section 2.3

  	
  Reserved

  	
   

  	
  16

  
	
  Section 2.4

  	
  Letters of Credit

  	
   

  	
  17

  
	
  Section 2.5

  	
  Special Account

  	
   

  	
  17

  
	
  Section 2.6

  	
  Interest; _Minimum Interest Charge; Default Interest Rate;
  Participations; Usury

  	
   

  	
  18

  
	
  Section 2.7

  	
  Fees

  	
   

  	
  19

  
	
  Section 2.8

  	
  Time for Interest Payments; Payment on Non-Business Days;
  Computation of Interest and Fees

  	
   

  	
  21

  
	
  Section 2.9

  	
  Collection of Accounts; Application to the Borrower’s
  Indebtedness

  	
   

  	
  21

  
	
  Section 2.10

  	
  Voluntary Prepayment; Reduction of the Maximum Line Amount;
  Termination of the Credit Facility by the Borrower

  	
   

  	
  21

  
	
  Section 2.11

  	
  Mandatory Prepayment

  	
   

  	
  22

  
	
  Section 2.12

  	
  Revolving Advances to Pay Indebtedness

  	
   

  	
  22

  
	
  Section 2.13

  	
  Use of Proceeds

  	
   

  	
  22

  
	
  Section 2.14

  	
  Liability Records

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III SECURITY INTEREST; OCCUPANCY; SETOFF

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Grant of Security Interest

  	
   

  	
  23

  
	
  Section 3.2

  	
  Notification of Account Debtors and Other Obligors

  	
   

  	
  23

  
	
  Section 3.3

  	
  Assignment of Insurance

  	
   

  	
  23

  
	
  Section 3.4

  	
  Occupancy

  	
   

  	
  24

  
	
  Section 3.5

  	
  License

  	
   

  	
  24

  
	
  Section 3.6

  	
  Financing Statement

  	
   

  	
  24

  
	
  Section 3.7

  	
  Setoff

  	
   

  	
  25

  
	
  Section 3.8

  	
  Collateral

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV CONDITIONS OF LENDING

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Conditions Precedent to the Initial Advances and Letter of
  Credit

  	
   

  	
  26

  
	
  Section 4.2

  	
  Conditions Precedent to All Advances and Letters of Credit

  	
   

  	
  28

  

 

i

 

	
  ARTICLE V REPRESENTATIONS AND WARRANTIES

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Existence and Power; Name; Chief Executive Office;
  Inventory and Equipment Locations; Federal Employer Identification Number and
  Organizational Identification Number

  	
   

  	
  28

  
	
  Section 5.2

  	
  Capitalization

  	
   

  	
  29

  
	
  Section 5.3

  	
  Authorization of Borrowing; No Conflict as to Law or
  Agreements

  	
   

  	
  29

  
	
  Section 5.4

  	
  Legal Agreements

  	
   

  	
  29

  
	
  Section 5.5

  	
  Subsidiaries

  	
   

  	
  29

  
	
  Section 5.6

  	
  Financial Condition; No Adverse Change

  	
   

  	
  30

  
	
  Section 5.7

  	
  Litigation

  	
   

  	
  30

  
	
  Section 5.8

  	
  Regulation U

  	
   

  	
  30

  
	
  Section 5.9

  	
  Taxes

  	
   

  	
  30

  
	
  Section 5.10

  	
  Titles and Liens

  	
   

  	
  30

  
	
  Section 5.11

  	
  Intellectual Property Rights

  	
   

  	
  30

  
	
  Section 5.12

  	
  Plans

  	
   

  	
  31

  
	
  Section 5.13

  	
  Default

  	
   

  	
  32

  
	
  Section 5.14

  	
  Environmental Matters

  	
   

  	
  32

  
	
  Section 5.15

  	
  Submissions to Lender

  	
   

  	
  33

  
	
  Section 5.16

  	
  Financing Statements

  	
   

  	
  33

  
	
  Section 5.17

  	
  Rights to Payment

  	
   

  	
  33

  
	
  Section 5.18

  	
  Financial Solvency

  	
   

  	
  33

  
	
  Section 5.19

  	
  IWGA License

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI COVENANTS

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Reporting Requirements

  	
   

  	
  34

  
	
  Section 6.2

  	
  Financial Covenants

  	
   

  	
  37

  
	
  Section 6.3

  	
  Permitted Liens; Financing Statements

  	
   

  	
  38

  
	
  Section 6.4

  	
  Indebtedness

  	
   

  	
  39

  
	
  Section 6.5

  	
  Guaranties

  	
   

  	
  39

  
	
  Section 6.6

  	
  Investments and Subsidiaries

  	
   

  	
  40

  
	
  Section 6.7

  	
  Dividends and Distributions

  	
   

  	
  40

  
	
  Section 6.8

  	
  Salaries; Stock Incentive Compensation

  	
   

  	
  41

  
	
  Section 6.9

  	
  Reserved

  	
   

  	
  41

  
	
  Section 6.10

  	
  Books and Records; Collateral Examination, Inspection and
  Appraisals

  	
   

  	
  41

  
	
  Section 6.11

  	
  Account Verification

  	
   

  	
  41

  
	
  Section 6.12

  	
  Compliance with Laws

  	
   

  	
  42

  
	
  Section 6.13

  	
  Payment of Taxes and Other Claims

  	
   

  	
  42

  
	
  Section 6.14

  	
  Maintenance of Properties

  	
   

  	
  42

  
	
  Section 6.15

  	
  Insurance

  	
   

  	
  43

  
	
  Section 6.16

  	
  Preservation of Existence

  	
   

  	
  43

  
	
  Section 6.17

  	
  Delivery of Instruments, etc.

  	
   

  	
  43

  
	
  Section 6.18

  	
  Sale or Transfer of Assets; Suspension of Business
  Operations

  	
   

  	
  43

  
	
  Section 6.19

  	
  Consolidation and Merger; Asset Acquisitions

  	
   

  	
  43

  
	
  Section 6.20

  	
  Sale and Leaseback

  	
   

  	
  43

  
	
  Section 6.21

  	
  Restrictions on Nature of Business

  	
   

  	
  44

  

 

ii

 

	
  Section 6.22

  	
  Accounting

  	
   

  	
  44

  
	
  Section 6.23

  	
  Discounts, etc.

  	
   

  	
  44

  
	
  Section 6.24

  	
  Plans

  	
   

  	
  44

  
	
  Section 6.25

  	
  Place of Business; Name

  	
   

  	
  44

  
	
  Section 6.26

  	
  Constituent Documents; S Corporation Status

  	
   

  	
  44

  
	
  Section 6.27

  	
  Performance by the Lender

  	
   

  	
  44

  
	
  Section 6.28

  	
  Bank Accounts

  	
   

  	
  45

  
	
  Section 6.29

  	
  Payments to Railroads and Railcar Owners

  	
   

  	
  45

  
	
  Section 6.30

  	
  Non-Operation at Certain Locations

  	
   

  	
  45

  
	
  Section 6.31

  	
  Non-Sale of Pet Business

  	
   

  	
  45

  
	
  Section 6.32

  	
  Grant of Mortgage Lien on Real Estate Collateral

  	
   

  	
  46

  
	
  Section 6.33

  	
  Delivery of Licensor Agreements

  	
   

  	
  46

  
	
  Section 6.34

  	
  Landlord Waiver

  	
   

  	
  46

  
	
  Section 6.35

  	
  ADM Control Agreement

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Events of Default

  	
   

  	
  47

  
	
  Section 7.2

  	
  Rights and Remedies

  	
   

  	
  49

  
	
  Section 7.3

  	
  Certain Notices

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII MISCELLANEOUS

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  No Waiver; Cumulative Remedies; Compliance with Laws

  	
   

  	
  50

  
	
  Section 8.2

  	
  Amendments, Etc.

  	
   

  	
  51

  
	
  Section 8.3

  	
  Notices, Requests, and Communications; Confidentiality

  	
   

  	
  51

  
	
  Section 8.4

  	
  Borrower Information Reporting; Confidentiality

  	
   

  	
  51

  
	
  Section 8.5

  	
  Costs and Expenses

  	
   

  	
  52

  
	
  Section 8.6

  	
  Indemnity

  	
   

  	
  53

  
	
  Section 8.7

  	
  Participants

  	
   

  	
  53

  
	
  Section 8.8

  	
  Execution in Counterparts; Telefacsimile Execution

  	
   

  	
  54

  
	
  Section 8.9

  	
  Retention of Borrower’s Records

  	
   

  	
  54

  
	
  Section 8.10

  	
  Binding Effect; Assignment; Complete Agreement; Sharing
  Information

  	
   

  	
  54

  
	
  Section 8.11

  	
  Severability of Provisions

  	
   

  	
  54

  
	
  Section 8.12

  	
  Headings

  	
   

  	
  54

  
	
  Section 8.13

  	
  Governing Law; Jurisdiction, Venue; Waiver of Jury Trial

  	
   

  	
  54

  
	
  Section 8.14

  	
  Further Documents

  	
   

  	
  55

  
	
  Section 8.15

  	
  Entire
  Agreement

  	
   

  	
  55

  

 

iii

 

CREDIT AND SECURITY AGREEMENT

 

Dated July 21, 2009

 

MGP
INGREDIENTS, INC., a Kansas corporation (the “Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (as more fully defined in Article I herein, the “Lender”)
acting through its Wells Fargo Business Credit operating division, hereby agree
as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1             Definitions.  Except as otherwise expressly provided in
this Agreement, the following terms shall have the meanings given them in this
Section:

 

“Account
Funds” is defined in Section 2.9(a).

 

“Accounts”
shall have the meaning given it under the UCC.

 

“Accounts
Advance Rate” means up to eighty-five percent (85%), or such lesser rate as the
Lender in its sole but reasonable discretion may deem appropriate from time to
time; provided that, as of any date of determination, the Accounts Advance Rate
shall be reduced by one (1) percentage point for each percentage by which
Dilution is in excess of three percent (3.0%).

 

“Advance”
means a Revolving Advance .

 

“Affiliate”
or “Affiliates” means Firebird Acquisitions, LLC, a Delaware limited liability
company, D.M. Ingredients GmbH, Midwest Grain Pipeline, Inc. and any other
Person controlled by, controlling or under common control with the Borrower,
including any Subsidiary of the Borrower. 
For purposes of this definition, “control,” when used with respect to
any specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

 

“Aggregate
Face Amount” means the aggregate amount that may then be drawn under each
outstanding Letter of Credit, assuming compliance with all conditions for
drawing.

 

“Agreement”
means this Credit and Security Agreement.

 

“Authenticated”
means (a) to have signed; or (b) to have executed or to have
otherwise adopted a symbol, or have encrypted or similarly processed a Record
in whole or in part, with the present intent of the authenticating Person to
identify the Person and adopt or accept a Record.

 

“Availability”
means the amount, if any, by which the Borrowing Base exceeds the sum of (i) the
outstanding principal balance of the Revolving Note and (ii) the L/C
Amount.

 

 

“Average
Excess Availability” means, as of any
date of determination by Lender, the average of Borrower’s Availability assuming, for purposes of calculation, that all
accounts payable which remain unpaid more than sixty (60) days after the
invoice date thereof as the close of business on such date are treated as
additional Advances outstanding on such date.

 

“Borrowing
Base” means at any time the lesser of:

 

(a)           The Maximum Line Amount; or

 

(b)           Subject to change from time
to time in the Lender’s sole but reasonable discretion, the sum of:

 

(i)            The product of
the Accounts Advance Rate times Eligible Accounts; plus

 

(ii)           The lesser of (A) the
sum of (without duplication) (1) the product of the Eligible Starch
Inventory Advance Rate times Eligible Starch Inventory, plus
(2) the product of the Eligible Protein Inventory Advance Rate times
Eligible Protein Inventory, plus (3) the
product of the Eligible Flour Inventory Advance Rate times Eligible Flour
Inventory, plus (4) the product of the
Eligible Corn Inventory Advance Rate times Eligible Corn Inventory, plus (5) the product of the Eligible Food Grade Alcohol
Inventory Advance Rate times Eligible Food Grade Alcohol Inventory plus (6) the product of the Eligible Fuel Grade Alcohol
Inventory Advance Rate times Eligible Fuel Grade Alcohol Inventory plus (7) product of the Eligible Finished Goods
Inventory Advance Rate times Eligible Finished Goods Inventory or (B) $10,000,000,
provided Eligible Inventory
which is Rail Inventory shall not exceed more than $1,800,000 at any time; less

 

(iii)          The Borrowing
Base Reserve, less

 

(iv)          The Distilled
Spirits Tax Reserve, less

 

(v)           The Rail
Reserve, less

 

(vi)          Indebtedness
that the Borrower owes to the Lender that has not yet been advanced on the
Revolving Note, and an amount that the Lender in its reasonable discretion
finds on the date of determination to be equal to the Borrower’s credit
exposure with respect to any swap, derivative, foreign exchange, hedge,
deposit, treasury management or other similar transaction or arrangement
offered to Borrower by Lender that is not described in Article II of this
Agreement.

 

“Borrowing
Base Reserve” means, as of any date of determination, such amounts (expressed
as either a specified amount or as a percentage of a specified category or
item) as the Lender, in its sole but reasonable discretion may from time to
time establish and adjust in reducing Availability (a) to reflect events,
conditions, contingencies or risks which, as determined by the Lender, do or
may affect (i) the Collateral or its value, (ii) the assets, business
or prospects of the Borrower, or (iii) the security interests and other
rights of the Lender in the Collateral (including the enforceability,
perfection and priority thereof), or (b) to reflect the Lender’s judgment
that any collateral report or financial information furnished by or on behalf
of 

 

2

 

the
Borrower to the Lender is or may have been incomplete, inaccurate or misleading
in any material respect, or (c) in respect of any state of facts that the
Lender determines constitutes a Default or an Event of Default.

 

“Business
Day” means a day on which the Federal Reserve Bank of New York is open for
business.

 

“Capital
Expenditures” means for a period, any expenditure of money during such period
for the lease, purchase or other acquisition of any capital asset, or for the
lease of any other asset whether payable currently or in the future.

 

“Collateral”
means all of the Borrower’s Accounts, chattel paper and electronic chattel
paper, deposit accounts, documents, Equipment, General Intangibles, goods,
instruments, Inventory, Investment Property, letter-of-credit rights, letters
of credit, all sums on deposit in any Collection Account, and any items in any
Lockbox; together with (i) all substitutions and replacements for and
products of any of the foregoing; (ii) in the case of all goods, all
accessions; (iii) all accessories, attachments, parts, equipment and
repairs now or hereafter attached or affixed to or used in connection with any
goods; (iv) all warehouse receipts, bills of lading and other documents of
title now or hereafter covering such goods; (v) all collateral subject to
the Lien of any Security Document; (vi) any money, or other assets of the
Borrower that now or hereafter come into the possession, custody, or control of
the Lender; (vii) all sums on deposit in the Special Account; (viii) proceeds
of any and all of the foregoing; (ix) books and records of the Borrower,
including all mail or electronic mail addressed to the Borrower; and (x) all
of the foregoing, whether now owned or existing or hereafter acquired or
arising or in which the Borrower now has or hereafter acquires any rights.  Notwithstanding the forgoing, “Collateral”
shall not include any Excluded Assets.

 

“Collection
Account” means “Collection Account” as defined in the Master Agreement for
Treasury Management Services and related Lockbox and Collection Account Service
Description or Collection Account Service Description, whichever is applicable.

 

“Commercial
Letter of Credit Agreement” means an agreement governing the issuance of
documentary letters of credit by the Lender, entered into between the Borrower
as applicant and the Lender as issuer.

 

“Commitment”
means the Lender’s commitment to make Advances to, and to issue Letters of
Credit for the account of, the Borrower.

 

“Constituent
Documents” means with respect to any Person, as applicable, such Person’s
certificate of incorporation, articles of incorporation, by-laws, certificate
of formation, articles of organization, limited liability company agreement,
management agreement, operating agreement, shareholder agreement, partnership
agreement or similar document or agreement governing such Person’s existence,
organization or management or concerning disposition of ownership interests of
such Person or voting rights among such Person’s owners.

 

“Credit
Facility” means the credit facility under which Revolving Advances and Letters
of Credit may be made available to the Borrower by the Lender under Article II.

 

3

 

“Current
Maturities of Long Term Debt” means during a period beginning and ending on
designated dates, the amount of the Borrower’s long-term debt and capitalized
leases which become due during that period.

 

“Cut-off
Time” means 11:59 a.m. Central Time.

 

“Daily
Three Month LIBOR” means, for any day, the rate of interest equal to LIBOR then
in effect for delivery for a three (3) month period. When interest is
determined in relation to Daily Three Month LIBOR, each change in the interest
rate shall become effective each Business Day that Lender determines that Daily
Three Month LIBOR has changed.

 

“Debt”
means of a Person as of a given date, all items of indebtedness or liability
which in accordance with GAAP would be included in determining total
liabilities as shown on the liabilities side of a balance sheet for such Person
and shall also include the aggregate payments required to be made by such
Person at any time under any lease that is considered a capitalized lease under
GAAP.

 

“Debt
Service Coverage Ratio” means (a) the sum of (i) Funds from
Operations and (ii) Interest Expense minus (iii) Unfinanced Capital Expenditures
minus (iv) dividends and distributions paid by Borrower during the current
test period divided by (b) the sum of (i) Current Maturities of Long
Term Debt and (ii) Interest Expense.

 

“Default”
means an event that, with giving of notice or passage of time or both, would
constitute an Event of Default.

 

“Default
Period” means any period of time beginning on the day a Default or Event of
Default occurs and ending on the date identified by the Lender in writing as
the date that such Default or Event of Default has been cured or waived.

 

“Default
Rate” means an annual interest rate in effect during a Default Period or
following the Termination Date, which interest rate shall be equal to three
percent (3%) over the applicable Floating Rate, as such rate may change from
time to time.

 

“Dilution”
means, as of any date of determination, a percentage, based upon the experience
of the trailing six-month period ending on the date of determination, which is
the result of dividing (a) actual bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to the
Accounts as determined by Lender in its sole but reasonable discretion during
such period, by (b) the Borrower’s net sales during such period (excluding
extraordinary items) plus the amount of clause (a).

 

“Director”
means a director of the Borrower..

 

“Distilled
Spirits Tax Reserve” means an amount determined by Lender in good faith to
reasonably approximate the amount of taxes which are due and unpaid in respect
of Borrower’s Inventory pursuant to 26 U.S.C. 5001 et seq.(and
any actual or effective substitutions or replacements thereof).

 

4

 

“Eligible
Accounts” means all unpaid Accounts of the Borrower arising from the sale or
lease of goods or the performance of services, net of any credits, but
excluding any such Accounts having any of the following characteristics:

 

(i)            That portion of
Accounts unpaid 90 days or more after the invoice date;

 

(ii)           That portion of
Accounts related to goods or services with respect to which the Borrower has
received notice of a claim or dispute, which are subject to a claim of offset
or a contra account, or which reflect a reasonable reserve for warranty claims
or returns;

 

(iii)          That portion of
Accounts not yet earned by the final delivery of goods or that portion of
Accounts not yet earned by the final rendition of services by the Borrower to
the account debtor, including with respect to both goods and services, progress
billings, and that portion of Accounts for which an invoice has not been sent
to the applicable account debtor;

 

(iv)          Accounts
constituting (i) proceeds of copyrightable material unless such
copyrightable material shall have been registered with the United States
Copyright Office, or (ii) proceeds of patentable inventions unless such
patentable inventions have been registered with the United States Patent and
Trademark Office;

 

(v)           Accounts owed
by any unit of government, whether foreign or domestic (except that
there shall be included in Eligible Accounts that portion of Accounts owed by
such units of government for which the Borrower has provided evidence
satisfactory to the Lender that (A) the Lender has a first priority
perfected security interest and (B) such Accounts may be enforced by the
Lender directly against such unit of government under all applicable laws);

 

(vi)          Accounts
denominated in any currency other than United States dollars;

 

(vii)         Accounts owed
by an account debtor located outside the United States or Canada which are not (A) backed
by a bank letter of credit naming the Lender as beneficiary or assigned to the
Lender, in the Lender’s possession or control, and with respect to which a
control agreement concerning the letter-of-credit rights is in effect, and
acceptable to the Lender in all respects, in its sole but reasonable
discretion, or (B) covered by a foreign receivables insurance policy
acceptable to the Lender in its sole but reasonable discretion;

 

(viii)        Accounts owed
by an account debtor that is insolvent, the subject of bankruptcy proceedings
or has gone out of business;

 

(ix)           Accounts owed
by an Owner, Subsidiary, Affiliate, Officer or employee of the Borrower;

 

(x)            Accounts not
subject to a duly perfected security interest in the Lender’s favor or which
are subject to any Lien in favor of any Person other than the Lender;

 

5

 

(xi)           That portion of
Accounts that has been restructured, extended, amended or modified;

 

(xii)          That portion of
Accounts that constitutes advertising, finance charges, service charges or
sales or excise taxes;

 

(xiii)         Accounts owed
by an account debtor, regardless of whether otherwise eligible, to the extent
that the aggregate balance of such Accounts exceeds fifteen percent (15%) of
the aggregate amount of all Accounts;

 

(xiv)        Accounts owed
by an account debtor, regardless of whether otherwise eligible, if twenty five
percent (25%) or more of the total amount of Accounts due from such debtor is
ineligible under clauses (i), (ii), or (xi) above;

 

(xv)         That portion of
Accounts that constitutes COD or credit card sales; and

 

(xvi)        Accounts, or
portions thereof, otherwise deemed ineligible by the Lender in its sole but
reasonable discretion.

 

“Eligible
Food Grade Alcohol Inventory” means all Inventory owned by Borrower consisting
of food grade alcohol which is (a) acceptable to Lender in its sole but
reasonable discretion determined in good faith for lending purposes and (b) Eligible
Inventory in all respects.

 

“Eligible
Food Grade Alcohol Inventory Advance Rate” means up to eighty percent (80%)
until August 31, 2009 and thereafter a percentage which shall
automatically decline by one percent (1%) at the end of each fourteen (14) day
period until such advance rate reaches seventy percent (70%) on January 11,
2010, and seventy percent (70%) thereafter, or such lesser rate as the Lender
in its sole but reasonable discretion may deem appropriate from time to time.

 

“Eligible
Fuel Grade Alcohol Inventory” means all Inventory owned by Borrower consisting
of fuel grade alcohol which is (a) acceptable to Lender in its sole but
reasonable discretion determined in good faith for lending purposes and (b) Eligible
Inventory in all respects.

 

“Eligible
Fuel Grade Alcohol Inventory Advance Rate” means up to seventy percent (70%),
or such lesser rate as the Lender in its sole but reasonable discretion may
deem appropriate from time to time.

 

“Eligible
Corn Inventory” means all Inventory owned by Borrower consisting of corn which
is (a) acceptable to Lender in its sole but reasonable discretion
determined in good faith for lending purposes, (b) Eligible Inventory in
all respects and (c) Raw Materials Inventory.

 

“Eligible
Corn Inventory Advance Rate” means up to seventy five percent (75%), or such
lesser rate as the Lender in its sole but reasonable discretion may deem
appropriate from time to time.

 

6

 

“Eligible
Finished Goods Inventory” means all Inventory owned by Borrower consisting of a
finished product (which finished product is to be held by Borrower for sale,
lease or furnishing under a contract for service in the ordinary course of
Borrower’s business)  which is (a) acceptable
to Lender in its sole but reasonable discretion determined in good faith for
lending purposes and (b) Eligible Inventory in all respects (other than
Eligible Food Grade Alcohol Inventory, Eligible Fuel Grade Alcohol Inventory,
Eligible Protein Inventory and Eligible Starch Inventory).

 

“Eligible
Finished Goods Inventory Advance Rate” means up to sixty percent (60%), or such
lesser rate as the Lender in its sole but reasonable discretion may deem
appropriate from time to time.

 

“Eligible
Flour Inventory” means all Inventory owned by Borrower consisting of flour
which is (a) acceptable to Lender in its sole but reasonable discretion
determined in good faith for lending purposes, (b) Eligible Inventory in
all respects and (c) Raw Materials Inventory.

 

“Eligible
Flour Inventory Advance Rate” means up to sixty five percent (65%), or such
lesser rate as the Lender in its sole but reasonable discretion may deem
appropriate from time to time.

 

“Eligible
Inventory” means all Inventory of the Borrower, valued at the lower of cost or
market in accordance with GAAP; but excluding any Inventory having any of the
following characteristics:

 

(i)            Inventory that
is: in-transit; located at any warehouse, job site or other premises not
approved by the Lender in writing (and for which Lender has received an
acceptable lien waiver); not subject to a duly perfected first priority
security interest in the Lender’s favor (other than Liens on Inventory
consisting of distilled spirits arising under 26 USC 5004 which have reduced
the Borrowing Base in accordance with its terms); subject to any lien or
encumbrance that is subordinate to the Lender’s first priority security
interest; covered by any negotiable or non-negotiable warehouse receipt, bill
of lading or other document of title; on consignment from any Person; on
consignment to any Person or subject to any bailment unless such consignee or
bailee has executed an agreement with the Lender;

 

(ii)           Supplies,
packaging, maintenance parts or sample Inventory, fabricated parts Inventory,
or customer supplied parts or Inventory;

 

(iii)          Work-in-process
Inventory;

 

(iv)          Inventory that
is damaged, contaminated, discontinued, rejected, defective, obsolete, slow
moving or not currently saleable in the normal course of the Borrower’s
operations, or the amount of such Inventory that has been reduced by shrinkage;

 

(v)           Inventory that
the Borrower has returned, has attempted to return, is in the process of
returning or intends to return to the vendor thereof;

 

(vi)          Inventory that
is live;

 

7

 

(vii)         Inventory
manufactured by the Borrower pursuant to a license unless the applicable
licensor has agreed in writing to permit the Lender to exercise its rights and
remedies against such Inventory;

 

(viii)        Inventory that
is subject to a Lien in favor of any Person other than the Lender (other than
Liens on Inventory consisting of distilled spirits arising under 26 USC 5004
which have reduced the Borrowing Base in accordance with its terms);

 

(ix)           Inventory
stored at (a) locations holding less than ten (10%) of the aggregate value
of the Borrower’s Inventory, (b) the Pekin Plant, (c) the Flour Mill
or (d) the KCK Facility; and

 

(x)            Inventory
otherwise deemed ineligible by the Lender in its sole but reasonable
discretion.

 

Notwithstanding anything contained herein to the contrary, for purposes
of Eligible Inventory, “in-transit” shall not be deemed to include Rail
Inventory located at the Rail Staging Area.

 

“Eligible
Protein Inventory” means all Inventory owned by Borrower consisting of protein
which is (a) acceptable to Lender in its sole but reasonable discretion
determined in good faith for lending purposes and (b) Eligible Inventory
in all respects.

 

“Eligible
Protein Inventory Advance Rate” means up to sixty five percent (65%), or such
lesser rate as the Lender in its sole but reasonable discretion may deem
appropriate from time to time.

 

“Eligible
Starch Inventory” means all Inventory owned by Borrower consisting of starch
which is (a) acceptable to Lender in its sole but reasonable discretion
determined in good faith for lending purposes and (b) Eligible Inventory
in all respects.

 

“Eligible
Starch Inventory Advance Rate” means up to sixty percent (60%), or such lesser
rate as the Lender in its sole but reasonable discretion may deem appropriate
from time to time.

 

“Environmental
Law” means any federal, state, local or other governmental statute, regulation,
law or ordinance dealing with the protection of human health and the environment.

 

“Equipment”
shall have the meaning given it under the UCC.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated) that is a
member of a group which includes the Borrower and which is treated as a single
employer under Section 414 of the IRC.

 

“Event
of Default” is defined in Section 7.1.

 

8

 

“Excluded
Assets” means (a) the KCK Equipment, (b) Pet Business IP and (c) the
Borrower’s equity interest in D.M. Ingredients GmbH, as such definition may be
amended pursuant to Section 6.31.

 

“Financial
Covenants” means the covenants set forth in Section 6.2.

 

“Floating
Rate” means an interest rate equal to the sum of (i) Daily Three Month
LIBOR, which interest rate shall change whenever Daily Three Month LIBOR
changes, plus (ii) five percent (5.0%), subject to a minimum interest rate
of five and one half of one percent (5.5%), which will apply regardless of
fluctuations in Daily Three Month LIBOR that would otherwise cause the interest
rate of the Revolving Note to be less than this minimum interest rate floor.

 

“Floating
Rate Advance” means an Advance bearing interest at the Floating Rate.

 

“Flour
Mill” means those Premises of Borrower located at 1100 Main Street in Atchison,
Kansas.

 

“Funding
Date” is defined in Section 2.1.

 

“Funds
from Operations” means for a given period, the sum of (i) Net Income, (ii) depreciation
and amortization, (iii) any increase (or decrease) in deferred income
taxes, (iv) any increase (or decrease) in lifo reserves, and (v) other
non-cash items, each as determined for such period in accordance with GAAP.

 

“GAAP”
means generally accepted accounting principles, applied on a basis consistent
with the accounting practices applied in the financial statements described in Section 5.6.

 

“General
Intangibles” shall have the meaning given it under the UCC.

 

“Guarantor”
means every Person now or in the future who agrees to guaranty the
Indebtedness.

 

“Guaranty”
means each unconditional continuing guaranty executed by a Guarantor in favor
of the Lender.

 

“Hazardous
Substances” means pollutants, contaminants, hazardous substances, hazardous
wastes, petroleum and fractions thereof, and all other chemicals, wastes,
substances and materials listed in, regulated by or identified in any
Environmental Law.

 

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

 

9

 

“Indemnified
Liabilities” is defined in Section 8.6

 

“Indemnitees”
is defined in Section 8.6.

 

“IRC”
means the Internal Revenue Code of 1986, as amended from time to time.

 

“Infringement”
or “Infringing” when used with respect to Intellectual Property Rights means
any infringement or other violation of Intellectual Property Rights.

 

“Intellectual
Property Rights” means all actual or prospective rights arising in connection
with any intellectual property or other proprietary rights, including all
rights arising in connection with copyrights, patents, service marks, trade
dress, trade secrets, trademarks, trade names or mask works.

 

“Interest
Expense” means for a fiscal year-to-date period, the Borrower’s total gross
interest expense during such period (excluding interest income), and shall in
any event include (i) interest expensed (whether or not paid) on all Debt
and (ii) the portion of any capitalized lease obligation allocable to
interest expense.

 

“Interest
Payment Date” is defined in Section 2.8(a).

 

“Inventory”
shall have the meaning given it under the UCC.

 

“Investment
Property” shall have the meaning given it under the UCC.

 

“KCK
Equipment” means Equipment owned by Borrower which is (a) listed on Exhibit D
attached hereto and (b) actually located at the KCK Facility.

 

“KCK
Facility” means Borrower’s Premises located at 16 Kansas Avenue in Kansas City,
Kansas.

 

“L/C
Amount” means the sum of (i) the Aggregate Face Amount of any outstanding
Letters of Credit, plus (ii) the amount of each Obligation of
Reimbursement that either remains unreimbursed or has not been paid through a
Revolving Advance on the Credit Facility.

 

“L/C
Application” means an application for the issuance of standby or documentary
letters of credit pursuant to the terms of a Standby Letter of Credit Agreement
or a Commercial Letter of Credit Agreement in form acceptable to the Lender.

 

“Lender”
means Wells Fargo Bank, National Association in its broadest and most
comprehensive sense as a legal entity, and is not limited in its meaning to
Lender’s Wells Fargo Business Credit operating division, or to any other
operating division of Lender.

 

“Letter
of Credit” is defined in Section 2.4(a).

 

“LIBOR”
means the rate per annum (rounded upward, if necessary, to the nearest whole
1/8th of one percent (1%)) determined pursuant to
the following formula:

 

10

 

	
  LIBOR
  =

  	
  Base LIBOR

  	
   

  
	
   

  	
  100% - LIBOR Reserve Percentage

  	
   

  

 

(a)           “Base LIBOR”
means the rate per annum for United States dollar deposits quoted by Lender for
the purpose of calculating the effective Floating Rate for loans that reference
Daily Three Month LIBOR as the Inter-Bank Market Offered Rate in effect from
time to time for three (3) month delivery of funds in amounts
approximately equal to the principal amount of such loans.  Borrower understands and agrees that Lender
may base its quotation of the Inter-Bank Market Offered Rate upon such offers
or other market indicators of the Inter-Bank Market as Lender in its discretion
deems appropriate, including but not limited to the rate offered for U.S.
dollar deposits on the London Inter-Bank Market.

 

(b)           “LIBOR Reserve
Percentage” means the reserve percentage prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities”
(as defined in Regulation D of the Federal Reserve Board, as amended), adjusted
by Lender for expected changes in such reserve percentage during the applicable
term of the Revolving Note.

 

“Licensed
Intellectual Property” is defined in Section 5.11(c).

 

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

 

“Loan
Documents” means this Agreement, the Revolving Note, each Guaranty, each
Subordination Agreement, each L/C Application, each Standby Letter of Credit
Agreement and each Commercial Letter of Credit Agreement and the Security
Documents, together with every other agreement, note, document, contract or
instrument to which the Borrower now or in the future may be a party and which
is required by the Lender.

 

“Loan
Year” is defined in Section 2.6(c).

 

“Loan
Manager” means the treasury management service defined in the Master Agreement
for Treasury Management Services and related Loan Manager Service Description.

 

“Lockbox”
means “Lockbox” as defined in the Master Agreement for Treasury Management
Services and related Lockbox and Collection Account Service Description.

 

“Master
Agreement for Treasury Management Services” means the Master Agreement for
Treasury Management Services, the related Acceptance of Services, and the Service
Description governing each treasury management service used by Company.

 

“Maturity
Date” means July 20, 2012.

 

11

 

“Maximum
Line Amount” means $25,000,000 unless this amount is reduced pursuant to Section 2.10,
in which event it means such lower amount.

 

“Minimum
Interest Charge” is defined in Section 2.6(c).

 

“Multiemployer
Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA) to which the Borrower or any ERISA Affiliate contributes or is obligated
to contribute.

 

“Net
Income” means fiscal year-to-date after-tax net income from continuing
operations, including extraordinary losses but excluding extraordinary gains,
all as determined in accordance with GAAP. 
For the Borrower’s fiscal year ended June 30, 2010, gain or loss
from the sale of capital assets shall not be included in Net Income.

 

“Obligation
of Reimbursement” means the obligation of the Borrower to reimburse the Lender
pursuant to the terms of the Standby Letter of Credit Agreement and the
Commercial Letter of Credit Agreement and any applicable L/C Application.

 

“Officer”
means with respect to the Borrower, an officer if the Borrower is a
corporation, a manager if the Borrower is a limited liability company, or a
partner if the Borrower is a partnership.

 

“OFAC”
is defined in Section 6.12(c).

 

“Operating
Account” is defined in Section 2.2(a), and maintained in accordance with
the terms of Lender’s Commercial Account Agreement in effect for demand deposit
accounts.

 

“Overadvance”
means the amount, if any, by which the outstanding principal balance of the
Revolving Note, plus the L/C Amount, is in excess of the then-existing
Borrowing Base.

 

“Owned
Intellectual Property” is defined in Section 5.11(a).

 

“Owner”
means with respect to the Borrower, each Person having legal or beneficial
title to five percent (5%) or more of the ownership interest in the Borrower or
a right to acquire such an interest.

 

“Patent
and Trademark Security Agreement” means each Patent and Trademark Security
Agreement now or hereafter executed by the Borrower in favor of the Lender,
which includes the Pet Business IP Agreement.

 

“Pet
Business” is defined in Section 6.31.

 

“Pet
Business Sale” is defined in Section 6.31.

 

“Pet
Business IP” means the Intellectual Property Rights relating to the Pet
Business set forth on Exhibit E attached hereto.

 

“Pet
Business IP Agreement” means a Trademark and Patent Security Agreement covering
the Pet Business IP.

 

12

 

“Pekin
Plant” means those Premises of Borrower located at 1301 South Front Street in
Pekin, Illinois.

 

“Pension
Plan” means a pension plan (as defined in Section 3(2) of ERISA)
maintained for employees of the Borrower or any ERISA Affiliate and covered by
Title IV of ERISA.

 

“Permitted
Lien” and “Permitted Liens” are defined in Section 6.3(a).

 

“Person”
means any individual, corporation, partnership, joint venture, limited
liability company, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

 

“Plan”
means an employee benefit plan (as defined in Section 3(3) of ERISA)
maintained for employees of the Borrower or any ERISA Affiliate.

 

“Premises”
means all locations where the Borrower conducts its business or has any rights
of possession, including the locations legally described in Exhibit C
attached hereto.

 

“Rail
Inventory” means Eligible Food Grade Alcohol Inventory or Eligible Fuel Grade
Alcohol Inventory which is located in rail cars at locations acceptable to
Lender in its sole but reasonable discretion.

 

“Rail
Reserve” means $175,000 or such other amount as the Lender may from time to
time establish in its sole but reasonable discretion as an amount sufficient
offset certain costs of exercising rights and remedies in respect of Inventory
of the Borrower located or anticipated to be located on or in railcars from
time to time.

 

“Rail
Staging Area” means (i) that certain CSX Corporation rail siding located
adjacent to the premises of Reckitt Benckiser at 799 Route 206, Belle Meade,
NJ  08502, (ii) that certain CSX Corporation rail siding located
adjacent to the premises of Dundee Foods, LLC at 74 Seneca Street, Dundee,
NY  14837 and (iii) that certain CSX Corporation rail siding located
adjacent to the premises of Cone Solvents at 6185 Cockrill Bend Circle,
Nashville, TN  37209.

 

“Raw
Materials Inventory” shall mean raw materials held for the purpose of
production into a finished product (which finished product is to be held by
Borrower for sale, lease or furnishing under a contract for service in the
ordinary course of Borrower’s business), but which have not yet been subject to
the commencement of such production, and which are new and unused and free from
defects which would, in Lender’s sole determination determined in good faith,
affect their market value.

 

“Real
Estate Collateral” means all real estate owned by Borrower, except the KCK
Facility.

 

“Reportable
Event” means a reportable event (as defined in Section 4043 of ERISA), other
than an event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the Pension Benefit Guaranty Corporation.

 

“Revolving
Advance” is defined in Section 2.1.

 

13

 

“Revolving
Note” means the Borrower’s revolving promissory note, payable to the order of
the Lender in substantially the form of Exhibit A hereto, as same may be
renewed and amended from time to time, and all replacements thereto.

 

“Security
Documents” means this Agreement, the Wholesale Lockbox and Collection Account
Agreement,  the Patent and Trademark Security
Agreement and any other document delivered to the Lender from time to time to
secure the Indebtedness.

 

“Security
Interest” is defined in Section 3.1.

 

“Special
Account” means a specified cash collateral account maintained with Lender or
another financial institution acceptable to the Lender in connection with
Letters of Credit, as contemplated by Section 2.5.

 

“Standby
Letter of Credit Agreement” means an agreement governing the issuance of
standby letters of credit by Lender entered into between the Borrower as
applicant and Lender as issuer.

 

“Subordinated
Creditors” means the Cloud Clay, Jr. Trust, the Union Pacific Railroad,
Ameren, and every other Person now or in the future who agrees to subordinate
indebtedness of the Borrower held by that Person to the payment of the
Indebtedness.

 

“Subordinated
Debt” means indebtedness due to Company that has been subordinated to Lender by
a Subordinated Creditor pursuant to a Subordination Agreement.

 

“Subordination
Agreement” means a subordination agreement executed by a Subordinated Creditor
in favor of the Lender and acknowledged by the Borrower.

 

“Subsidiary”
means any Person of which more than fifty percent (50%) of the outstanding
ownership interests having general voting power under ordinary circumstances to
elect a majority of the board of directors or the equivalent of such Person,
regardless of whether or not at the time ownership interests of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency, is at the time directly or indirectly owned by the Borrower,
by the Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries.

 

“Swap
Contract” means:  (a) any and all
rate swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts, or any other similar transactions or any combination
of any of the foregoing (including any options to enter into any of the
foregoing), whether or not any such transaction is governed by or subject to
any master agreement; and (b) any and all transactions of any kind, and
the related confirmations, that are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange 

 

14

 

Master
Agreement, or any other master agreement including any such obligations or
liabilities under any such master agreement (in each case, together with any
related schedules).

 

“Termination
Date” means the earliest of (i) the Maturity Date, (ii) the date the
Borrower terminates the Credit Facility, or (iii) the date the Lender
demands payment of the Indebtedness, following an Event of Default, pursuant to
Section 7.2.

 

“UCC”
means the Uniform Commercial Code in effect in the state designated in this
Agreement as the state whose laws shall govern this Agreement, or in any other
state whose laws are held to govern this Agreement or any portion of this
Agreement.

 

“Unfinanced
Capital Expenditures” means for a period, any expenditure of money during such
period for the purchase or construction of assets, or for improvements or
additions to such assets, which are not financed with borrowed funds and are
capitalized on Company’s balance sheet.

 

“Unused
Amount” is defined in Section 2.7(b).

 

“Wholesale
Lockbox and Collection Account Agreement” means the Wholesale Lockbox and
Collection Account Agreement by and between the Borrower and the Lender.

 

Section 1.2             Other Definitional Terms; Rules of
Interpretation.  The words “hereof”,
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  All
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with GAAP.  All terms
defined in the UCC and not otherwise defined herein have the meanings assigned
to them in the UCC.  References to
Articles, Sections, subsections, Exhibits, Schedules and the like, are to
Articles, Sections and subsections of, or Exhibits or Schedules attached to,
this Agreement unless otherwise expressly provided.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  Unless the context in which used herein
otherwise clearly requires, “or” has the inclusive meaning represented by the
phrase “and/or”.  Defined terms include
in the singular number the plural and in the plural number the singular.  Reference to any agreement (including the
Loan Documents), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in accordance
with the terms thereof (and, if applicable, in accordance with the terms hereof
and the other Loan Documents), except where otherwise explicitly provided, and
reference to any promissory note includes any promissory note which is an
extension or renewal thereof or a substitute or replacement therefor.  Reference to any law, rule, regulation,
order, decree, requirement, policy, guideline, directive or interpretation
means as amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect on the determination date, including rules and
regulations promulgated thereunder.

 

15

 

ARTICLE II

 

AMOUNT AND TERMS OF THE
CREDIT FACILITY

 

Section 2.1             Revolving Advances.  The Lender agrees, subject to the terms and
conditions of this Agreement, to make advances (“Revolving Advances”) to the
Borrower from time to time from the date that all of the conditions set forth
in 4.1 are satisfied (the “Funding Date”) to and until (but not including) the
Termination Date in an amount not in excess of the Maximum Line Amount.  The Lender shall have no obligation to make a
Revolving Advance to the extent that the amount of the requested Revolving
Advance exceeds Availability.  The
Borrower’s obligation to pay the Revolving Advances shall be evidenced by the
Revolving Note and shall be secured by the Collateral.  Within the limits set forth in this Section 2.1,
the Borrower may borrow, prepay pursuant to Section 2.10, and reborrow.

 

Section 2.2             Procedures for Requesting
Advances.

 

(a)           Advances Credited to Operating Account.  All Advances, shall be credited to Borrower’s
demand deposit account maintained with Lender (the “Operating Account”), unless
the parties agree in an Authenticated Record to disburse to another account.

 

(b)           Advances upon Borrower’s
Request.  Borrower may request one or
more Advances on any Business Day.  No
request for an Advance will be deemed received until Lender acknowledges
receipt, and Borrower, if requested by Lender, confirms the request in an
Authenticated Record.  Borrower shall
repay all Advances, even if the Person requesting the Advance on behalf of
Borrower lacked authorization.  Borrower
may request an Advance at the Floating Rate no later than the Cut-off Time on
the Business Day on which Borrower wants the Floating Rate Advance to be
funded.

 

(c)           Advances through Loan
Manager.  If Lender and Borrower have
separately agreed that Borrower will use the Lender Loan Manager service (“Loan
Manager”), Advances will be initiated by Lender and credited to the Operating
Account as Floating Rate Advances as of the end of each Business Day in an
amount sufficient to maintain an agreed upon ledger balance in the Operating
Account, subject only to Availability. 
If Lender terminates Borrower’s access to Loan Manager, Borrower may
continue to request Advances as provided in Section 2.2(b).  Lender shall have no obligation to make an Advance
through Loan Manager during a Default Period, or in an amount in excess of
Availability, and may terminate Loan Manager at any time in its sole but
reasonable discretion.  Advances through
Loan Manager shall not be made as Fixed Rate Advances.

 

(d)           Protective Advances;
Advances to Pay Indebtedness Due.  Lender may initiate an Advance in its sole
but reasonable discretion for any reason at any time, without Borrower’s
compliance with any of the conditions of this Agreement, and (i) disburse
the proceeds directly to third Persons in order to protect Lender’s interest in
Collateral or to perform any of Borrower’s obligations under this Agreement, or
(ii) apply the proceeds to the amount of any Indebtedness then due and
payable to Lender.

 

Section 2.3             Reserved.

 

16

 

Section 2.4             Letters of Credit.

 

(a)           The Lender agrees, subject
to the terms and conditions of this Agreement, to issue, at any time after the
Funding Date and prior to the Termination Date, one or more irrevocable standby
or documentary letters of credit (each, a “Letter of Credit”) for the Borrower’s
account.  The Lender will not issue any
Letter of Credit if the face amount of the Letter of Credit to be issued would
exceed the lesser of:

 

(i)            $5,000,000 less the L/C Amount, or

 

(ii)           Availability.

 

Each
Letter of Credit, if any, shall be issued pursuant to a separate L/C
Application made by the Borrower.  The
terms and conditions set forth in each such L/C Application shall supplement
the terms and conditions of the Standby Letter of Credit Agreement or the
Commercial Letter of Credit Agreement, as applicable.

 

(b)           No Letter of Credit shall be
issued with an expiry date later than one (1) year from the date of
issuance or the Maturity Date in effect as of the date of issuance, whichever
is earlier.

 

(c)           Any request for issuance of
a Letter of Credit shall be deemed to be a representation by the Borrower that
the conditions set forth in Section 4.2 have been satisfied as of the date
of the request.

 

(d)           If a draft is submitted
under a Letter of Credit when the Borrower is unable, because a Default Period
exists or for any other reason, to obtain a Revolving Advance to pay the
Obligation of Reimbursement, the Borrower shall pay to the Lender on demand and
in immediately available funds, the amount of the Obligation of Reimbursement
together with interest, accrued from the date of the draft until payment in
full at the Default Rate. 
Notwithstanding the Borrower’s inability to obtain a Revolving Advance
for any reason, the Lender may, in its sole but reasonable discretion, make a
Revolving Advance in an amount sufficient to discharge any outstanding
Obligation of Reimbursement and any accrued but unpaid interest and fees
payable with respect to same.

 

Section 2.5             Special Account.  If the Credit Facility is terminated for any
reason while any Letter of Credit is outstanding, the Borrower shall thereupon
pay the Lender in immediately available funds for deposit in the Special
Account an amount equal to the L/C Amount plus any anticipated fees and
costs.  If the Borrower fails to promptly
make any such payment in the amount required hereunder, then the Lender may
make a Revolving Advance against the Credit Facility in an amount sufficient to
fulfill this obligation and deposit the proceeds to the Special Account.  The Special Account shall be an interest
bearing account either maintained with the Lender or with a financial
institution acceptable to the Lender. 
Any interest earned on amounts deposited in the Special Account shall be
credited to the Special Account.  The
Lender may apply amounts on deposit in the Special Account at any time or from
time to time to the Indebtedness in the Lender’s sole but reasonable
discretion.  The Borrower may not
withdraw any amounts on deposit in the Special Account as long as the Lender
maintains a security interest therein. 
The Lender agrees to transfer any balance in the Special Account to the
Borrower when the Lender is required to release its security interest in the Special
Account under applicable law.

 

17

 

Section 2.6             Interest; _Minimum
Interest Charge; Default Interest Rate; Participations; Usury.

 

(a)           Interest.  Except as provided in Section 2.6(d) and
Section 2.6(g), the principal amount of each Advance shall bear interest
as a Floating Rate Advance.

 

(b)           Reserved.

 

(c)           Minimum
Interest Charge.  Notwithstanding
any other terms of this Agreement to the contrary, the Borrower shall pay to
the Lender interest of not less than $500,000 per Loan Year (the “Minimum
Interest Charge”) during the term of this Agreement, and the Borrower shall pay
any deficiency between the Minimum Interest Charge and the amount of interest
otherwise calculated under Section 2.6(a) on each anniversary of the
Funding Date and on the Termination Date. 
When calculating this deficiency, the Default Rate, if applicable, shall
be disregarded, and any interest that accrues on a payment following its
receipt on those days specified in Section 2.9(c) shall be excluded
in determining the total amount of interest otherwise calculated under Section 2.6(a).  As used in this subsection (c), “Loan Year”
means each one-year period ending on an anniversary of the Funding Date.

 

(d)           Default
Interest Rate.  At any time
during any Default Period or following the Termination Date, in the Lender’s
sole but reasonable discretion and without waiving any of its other rights or
remedies, the principal of the Revolving Note shall bear interest at the
Default Rate or such lesser rate as the Lender may determine, effective as of
the first day of the fiscal month in which any Default Period begins through
the last day of such Default Period, or any shorter time period that the Lender
may determine.  The decision of the
Lender to impose a rate that is less than the Default Rate or to not impose the
Default Rate for the entire duration of the Default Period shall be made by the
Lender in its sole but reasonable discretion and shall not be a waiver of any
of its other rights and remedies, including its right to retroactively impose
the full Default Rate for the entirety of any such Default Period or following
the Termination Date.

 

(e)           Reserved.

 

(f)            Participations.  If any Person shall acquire a participation
in the Advances or the Obligation of Reimbursement, the Borrower shall be
obligated to the Lender to pay the full amount of all interest calculated under
this Section 2.6, along with all other fees, charges and other amounts due
under this Agreement, regardless if such Person elects to accept interest with
respect to its participation at a lower rate than that calculated under this Section 2.6,
or otherwise elects to accept less than its prorata share of such fees, charges
and other amounts due under this Agreement.

 

(g)           Usury.  In any event no rate change shall be put into
effect which would result in a rate greater than the highest rate permitted by
law.  Notwithstanding anything to the
contrary contained in any Loan Document, all agreements which either now are or
which shall become agreements between the Borrower and the Lender are hereby
limited so that in no contingency or event whatsoever shall the total liability
for payments in the nature of interest, additional interest and other charges
exceed the applicable limits imposed by any applicable usury laws.  If any payments in the nature of interest,
additional interest and other charges made under any Loan 

 

18

 

Document are held to be in
excess of the limits imposed by any applicable usury laws, it is agreed that
any such amount held to be in excess shall be considered payment of principal
hereunder, and the indebtedness evidenced hereby shall be reduced by such
amount so that the total liability for payments in the nature of interest,
additional interest and other charges shall not exceed the applicable limits
imposed by any applicable usury laws, in compliance with the desires of the
Borrower and the Lender.  This provision
shall never be superseded or waived and shall control every other provision of
the Loan Documents and all agreements between the Borrower and the Lender, or
their successors and assigns.

 

Section 2.7             Fees.

 

(a)           Origination
Fee.  The Borrower shall pay the
Lender a fully earned and non-refundable origination fee of $250,000, due and
payable upon the execution of this Agreement. 
The Lender has received $75,000 toward payment of this fee and the fees,
costs and expenses described in Section 2.7, Section 8.5, and Section 8.6.

 

(b)           Unused Line
Fee.  For the purposes of this Section 2.7(b),
“Unused Amount” means the Maximum Line Amount reduced by outstanding Revolving
Advances and the L/C Amount.  The
Borrower agrees to pay to the Lender an unused line fee at the rate of one half
of one percent (0.50%) per annum on the average daily Unused Amount from the
date of this Agreement to and including the Termination Date, due and payable
monthly in arrears on the first day of the month and on the Termination Date.

 

(c)           Reserved.

 

(d)           Collateral
Exam Fees.  The
Borrower shall pay the Lender  fees in
connection with any collateral exams, audits or inspections conducted by or on
behalf of the Lender of any Collateral or the Borrower’s operations or business
at the rates established from time to time by the Lender (which fees are
currently $125 per hour per collateral examiner), together with any related
out-of-pocket costs and expenses incurred by the Lender.

 

(e)           Reserved.

 

(f)            Letter of
Credit Fees.  The
Borrower shall pay to the Lender a fee with respect to each Letter of Credit
that has been issued which shall be calculated on a per diem basis at an annual
rate equal to three percent (3.0%) of the Aggregate Face Amount, from and
including the date of issuance of the Letter of Credit until the date that the
Letter of Credit terminates or is returned to the Lender, which fee shall be
due and payable monthly in arrears on the first day of each month and on the
date that the Letter of Credit terminates or is returned to the Lender;
provided, however, effective as of the first day of the fiscal month in which
any Default Period begins through the last day of such Default Period, or any
shorter time period that the Lender may determine, in the Lender’s sole but
reasonable discretion and without waiving any of its other rights and remedies,
such fee shall increase to six percent (6.0%) of the Aggregate Face
Amount.  The foregoing fee shall be in
addition to any other fees, commissions and charges imposed by Lender with
respect to such Letter of Credit.

 

(g)           Letter of
Credit Administrative Fees.  The Borrower shall pay all administrative
fees charged by Lender in connection with the honoring of drafts under any
Letter 

 

19

 

of Credit, amendments
thereto, transfers thereof and all other activity with respect to the Letters
of Credit at the then — current rates published by Lender for such services
rendered on behalf of customers of Lender generally.

 

(h)           Termination
and Line Reduction Fees.   If (i) the
Lender terminates the Credit Facility during a Default Period, or if (ii) the
Borrower terminates or reduces the Credit Facility on a date prior to the
Maturity Date, then the Borrower shall pay the Lender as liquidated damages and
not as a penalty a termination fee in an amount equal to a percentage of the
Maximum Line Amount (or the reduction of the Maximum Line Amount, as the case
may be) calculated as follows:  (A) three
percent (3.0%) if the termination or reduction occurs on or before the first
anniversary of the Funding Date; (B) two percent (2.0%) if the termination
or reduction occurs after the first anniversary of the Funding Date, but on or
before the second anniversary of the Funding Date; and (C) one percent
(1.0%) if the termination or reduction occurs after the second anniversary of
the Funding Date; provided commencing on the date
which is eighteen (18) months from the date hereof, if the Borrower refinances
the Credit Facility, in its entirety, with an operating division of the Lender
other than Wells Fargo Business Credit, such refinance shall not be deemed a
termination or prepayment requiring the payment of termination and/or
prepayment fees.

 

(i)            Reserved.

 

(j)            Reserved.

 

(k)           Overadvance
Fees.  The Borrower shall pay an
Overadvance fee in the amount of $500.00 for each day or portion thereof during
which an Overadvance exists, regardless of how the Overadvance arises or
whether or not the Overadvance has been agreed to in advance by the Lender. The
acceptance of payment of an Overadvance fee by the Lender shall not be deemed to
constitute either consent to the Overadvance or a waiver of the resulting Event
of Default, unless the Lender specifically consents to the Overadvance in
writing and waives the Event of Default on whatever conditions the Lender deems
appropriate.

 

(l)            Other Fees
and Charges.  The Lender
may from time to time impose additional fees and charges as consideration for
Advances made in excess of Availability or for other events that constitute an
Event of Default or a Default hereunder, including fees and charges for the
administration of Collateral by the Lender, and fees and charges for the late
delivery of reports, which may be assessed in the Lender’s sole but reasonable
discretion on either an hourly, periodic, or flat fee basis, and in lieu of or
in addition to imposing interest at the Default Rate.

 

(m)          Treasury
Management Fees.  The
Borrower will pay service fees to the Lender for treasury management services
provided to it by the Lender pursuant to the Master Agreement for Treasury
Management Services entered into between the Borrower and the Lender, or, if a
Master Agreement for Treasury Management Services has not been entered into,
the Borrower will pay services fees for its use of the Loan Manager service,
the Ready Remit service, or any other service that the Lender may provide to
the Borrower under this Agreement or any other agreement entered into by the
parties, in the amount prescribed in the Lender’s current service fee schedule.

 

20

 

Section 2.8             Time for Interest Payments;
Payment on Non-Business Days; Computation of Interest and Fees.

 

(a)           Time For
Interest Payments.  Accrued and
unpaid interest shall be due and payable on the first day of each month and on
the Termination Date (each an “Interest Payment Date”), or if any such day is
not a Business Day, on the next succeeding Business Day. Interest will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of advance to the Interest Payment Date.  If an Interest Payment Date is not a Business
Day, payment shall be made on the next succeeding Business Day.

 

(b)           Payment on
Non-Business Days.  Whenever
any payment to be made hereunder shall be stated to be due on a day which is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest on the Advances or the fees hereunder, as the case may
be.

 

(c)           Computation
of Interest and Fees.  Interest
accruing on the outstanding principal balance of the Advances and fees
hereunder outstanding from time to time shall be computed on the basis of
actual number of days elapsed in a year of 360 days.

 

Section 2.9             Collection of Accounts;
Application to the Borrower’s Indebtedness.

 

(a)           The Collection Account.  Borrower has granted a security interest to
Lender in the Collateral, including without limitation, all Accounts. Except as
otherwise agreed by both parties in an Authenticated Record, all Proceeds of
Accounts and other Collateral, upon receipt or collection, shall be deposited
each Business Day into the Collection Account. 
Funds so deposited (“Account Funds”) are the property of Lender, and may
only be withdrawn from the Collection Account by Lender.

 

(b)           Payment of Accounts by
Borrower’s Account Debtors.  Borrower shall instruct all account debtors
to make payments either directly to the Lockbox for deposit by Lender directly
to the Collection Account, or instruct them to deliver such payments to Lender
by wire transfer, ACH, or other means as Lender may direct for deposit to the
Collection Account or for direct application to the Revolving Note.  If Borrower receives a payment or the
Proceeds of Collateral directly, Borrower will promptly deposit the payment or
Proceeds into the Collection Account. Until deposited, it will hold all such
payments and Proceeds in trust for Lender without commingling with other funds
or property.  All deposits held in the
Collection Account shall constitute Proceeds of Collateral and shall not
constitute the payment of Indebtedness.

 

(c)           Application of Payments to
Revolving Note.  Lender will
withdraw Account Funds deposited to the Collection Account and pay down
borrowings on the Revolving Note by applying them to the Revolving Note on the
first Business Day following the Business Day of deposit to the Collection
Account, or, if payments are received by Lender that are not first deposited to
the Collection Account pursuant to any treasury management service provided to
Borrower by Lender, such payments shall be applied to the Revolving Note as
provided in the Master Agreement for Treasury Management Services and the
relevant service description.

 

Section 2.10           Voluntary Prepayment;
Reduction of the Maximum Line Amount; Termination of the Credit Facility by the
Borrower.  Except as
otherwise provided herein, the 

 

21

 

Borrower may prepay the Advances in whole at any time or from time to
time in part.  The Borrower may terminate
the Credit Facility or reduce the Maximum Line Amount at any time if it (i) gives
the Lender at least 90 days advance written notice prior to the proposed
Termination Date, and (ii) pays the Lender applicable termination,
prepayment and Maximum Line Amount reduction fees in accordance with the terms
of this Agreement.  Any reduction in the
Maximum Line Amount shall be in multiples of $100,000, and with a minimum
reduction of at least $500,000.   If the
Borrower terminates the Credit Facility or reduces the Maximum Line Amount to
zero, all Indebtedness shall be immediately due and payable, and if the
Borrower gives the Lender less than the required 90 days advance written
notice, then the interest rate applicable to borrowings evidenced by Revolving
Note shall be the Default Rate for the period of time commencing 90 days prior
to the proposed Termination Date through the date that the Lender actually
receives such written notice.  If the
Borrower does not wish the Lender to consider renewal of the Credit Facility on
the next Maturity Date, then the Borrower shall give the Lender at least 90
days written notice prior to the Maturity Date that it will not be requesting
renewal.  If the Borrower fails to give
the Lender such timely notice, then the interest rate applicable to borrowings
evidenced by the Revolving Note shall be the Default Rate for the period of
time commencing 90 days prior to the Maturity Date through the date that the
Lender actually receives such written notice.

 

Section 2.11           Mandatory Prepayment.  Without notice or demand, unless the Lender
shall otherwise consent in a written agreement that sets forth the terms and
conditions which the Lender in its discretion may deem appropriate, including
without limitation the payment of an Overadvance fee, if an Overadvance shall
at any time exist with respect to the Credit Facility, then the Borrower shall (i) first,
immediately prepay the Revolving Advances to the extent necessary to eliminate
such excess; and (ii) if prepayment in full of the Revolving Advances is
insufficient to eliminate such excess (due, for example, to the L/C Amount),
pay to the Lender in immediately available funds for deposit in the Special
Account an amount equal to the remaining excess.  Any voluntary or mandatory prepayment received
by the Lender may be applied to the Indebtedness, in such order and in such
amounts as the Lender in its sole but reasonable discretion may determine from
time to time.

 

Section 2.12           Revolving Advances to Pay
Indebtedness. 
Notwithstanding the terms of Section 2.1, the Lender may, in its
discretion at any time or from time to time, without the Borrower’s request and
even if the conditions set forth in Section 4.2 would not be satisfied,
make a Revolving Advance in an amount equal to the portion of the Indebtedness
from time to time due and payable.

 

Section 2.13           Use of Proceeds.  The Borrower shall use the proceeds of
Advances and each Letter of Credit to pay off its existing Lender, support
Letters of Credit and for ordinary working capital purposes.

 

Section 2.14           Liability Records.  The Lender may maintain from time to time, at
its discretion, records as to the Indebtedness. 
All entries made on any such record shall be presumed correct until the
Borrower establishes the contrary.  Upon
the Lender’s demand, the Borrower will admit and certify in writing the exact
principal balance of the Indebtedness that the Borrower then asserts to be
outstanding.  Any billing statement or
accounting rendered by the 

 

22

 

Lender shall be conclusive and fully binding on the Borrower unless the
Borrower gives the Lender specific written notice of exception within 30 days
after receipt.

 

ARTICLE
III

SECURITY
INTEREST; OCCUPANCY; SETOFF

 

Section 3.1             Grant of Security Interest.  The Borrower hereby pledges, assigns and
grants to the Lender, a lien and security interest (collectively referred to as
the “Security Interest”) in the Collateral, as security for the payment and
performance of: (a) all present and future Indebtedness of the Borrower to
the Lender; (b) all obligations of the Borrower and rights of the Lender
under this Agreement; and (c) all present and future obligations of the
Borrower to the Lender of other kinds. Upon request by the Lender, the Borrower
will grant to the Lender a security interest in all commercial tort claims that
the Borrower may have against any Person.

 

Section 3.2             Notification of Account
Debtors and Other Obligors.  The Lender may at any time (from and after
the occurrence of a Default or Event of Default) notify any account debtor or
other Person obligated to pay the amount due that such right to payment has
been assigned or transferred to the Lender for security and shall be paid
directly to the Lender.  The Borrower
will join in giving such notice if the Lender so requests.  At any time after the Borrower or the Lender
gives such notice to an account debtor or other obligor, the Lender may, but
need not, in the Lender’s name or in the Borrower’s name, demand, sue for,
collect or receive any money or property at any time payable or receivable on
account of, or securing, any such right to payment, or grant any extension to,
make any compromise or settlement with or otherwise agree to waive, modify,
amend or change the obligations (including collateral obligations) of any such
account debtor or other obligor.  From
and after the occurrence of a Default or Event of Default, the Lender may, in
the Lender’s name or in the Borrower’s name, as the Borrower’s agent and
attorney-in-fact, notify the United States Postal Service to change the address
for delivery of the Borrower’s mail to any address designated by the Lender,
otherwise intercept the Borrower’s mail, and receive, open and dispose of the
Borrower’s mail, applying all Collateral as permitted under this Agreement and
holding all other mail for the Borrower’s account or forwarding such mail to
the Borrower’s last known address.

 

Section 3.3             Assignment of Insurance.  As additional security for the payment and
performance of the Indebtedness, the Borrower hereby assigns to the Lender any
and all monies (including proceeds of insurance and refunds of unearned
premiums) due or to become due under, and all other rights of the Borrower with
respect to, any and all policies of insurance now or at any time hereafter
covering the Collateral or any evidence thereof or any business records or
valuable papers pertaining thereto, and the Borrower hereby directs the issuer
of any such policy to pay all such monies directly to the Lender.  At any time, whether or not a Default Period
then exists, the Lender may (but need not), in the Lender’s name or in the
Borrower’s name, execute and deliver proof of claim, receive all such monies,
endorse checks and other instruments representing payment of such monies, and adjust,
litigate, compromise or release any claim against the issuer of any such
policy.  Any monies received as payment
for any loss under any insurance policy mentioned above (other than liability
insurance policies) or as payment of any award or compensation for condemnation
or taking by eminent domain, shall be paid over to the Lender to be applied, at
the option of the Lender, either to the prepayment of the 

 

23

 

Indebtedness or shall be disbursed to the Borrower under staged payment
terms reasonably satisfactory to the Lender for application to the cost of
repairs, replacements, or restorations. 
Any such repairs, replacements, or restorations shall be effected with
reasonable promptness and shall be of a value at least equal to the value of
the items or property destroyed prior to such damage or destruction.

 

Section 3.4             Occupancy.

 

(a)           The Borrower hereby
irrevocably grants to the Lender the right to take exclusive possession of the
Premises at any time during a Default Period without notice or consent.

 

(b)           The Lender may, during a
Default Period, use the Premises only to hold, process, manufacture, sell, use,
store, liquidate, realize upon or otherwise dispose of items that are
Collateral and for other purposes that the Lender may in good faith deem to be
related or incidental purposes.

 

(c)           The Lender’s right to hold
the Premises shall cease and terminate upon the earlier of (i) payment in
full and discharge of all Indebtedness and termination of the Credit Facility,
and (ii) final sale or disposition of all items constituting Collateral
and delivery of all such items to purchasers.

 

(d)           The Lender shall not be
obligated to pay or account for any rent or other compensation for the
possession, occupancy or use of any of the Premises; provided, however,
that if the Lender does pay or account for any rent or other compensation for
the possession, occupancy or use of any of the Premises, the Borrower shall
reimburse the Lender promptly for the full amount thereof.  In addition, the Borrower will pay, or
reimburse the Lender for, all taxes, fees, duties, imposts, charges and
expenses at any time incurred by or imposed upon the Lender by reason of the
execution, delivery, existence, recordation, performance or enforcement of this
Agreement or the provisions of this Section 3.4.

 

Section 3.5             License.  Without limiting the generality of any other
Security Document, the Borrower hereby grants to the Lender a non-exclusive,
worldwide and royalty-free license to use or otherwise exploit all Intellectual
Property Rights of the Borrower for the purpose of:  (a) completing the manufacture of any
in-process materials during any Default Period so that such materials become
saleable Inventory, all in accordance with the same quality standards
previously adopted by the Borrower for its own manufacturing and subject to the
Borrower’s reasonable exercise of quality control; and (b) selling,
leasing or otherwise disposing of any or all Collateral during any Default
Period.

 

Section 3.6             Financing Statement.  The Borrower authorizes the Lender to file
from time to time, such financing statements against collateral described as “all
personal property” or “all assets” or describing specific items of collateral
including commercial tort claims as the Lender deems necessary or useful to
perfect the Security Interest, provided such filings omit the Excluded
Assets.  All financing statements filed
before the date hereof to perfect the Security Interest were authorized by the
Borrower and are hereby re-authorized.  A
carbon, photographic or other reproduction of this Agreement or of any
financing statements signed by the Borrower is sufficient as a financing
statement and may be filed as a financing statement in any state to 

 

24

 

perfect the security interests granted hereby.  For this purpose, the Borrower represents and
warrants that the following information is true and correct:

 

Name and address of Debtor:

 

MGP Ingredients, Inc.

100 Commercial Street

Atchison, KS 66002

Federal Employer Identification No.  48-0531200

Organizational Identification No.  0083220

 

Name and address of Secured Party:

 

Wells Fargo Bank, National Association

MAC N9312-040

109 South 7th Street, 4th Floor

Minneapolis, MN 55402

Attn: Becky A. Koehler

Federal Employer
Identification No. 41-1237652

 

Section 3.7             Setoff.  The Lender may at any time or from time to
time, at its sole but reasonable discretion and without demand and without
notice to anyone, setoff any liability owed to the Borrower by the Lender,
whether or not due, against any Indebtedness, whether or not due.  In addition, each other Person holding a
participating interest in any Indebtedness shall have the right to appropriate
or setoff any deposit or other liability then owed by such Person to the
Borrower, whether or not due, and apply the same to the payment of said
participating interest, as fully as if such Person had lent directly to the
Borrower the amount of such participating interest.

 

Section 3.8             Collateral.  This Agreement does not contemplate a sale of
accounts, contract rights or chattel paper, and, as provided by law, the
Borrower is entitled to any surplus and shall remain liable for any deficiency.  The Lender’s duty of care with respect to Collateral
in its possession (as imposed by law) shall be deemed fulfilled if it exercises
reasonable care in physically keeping such Collateral, or in the case of
Collateral in the custody or possession of a bailee or other third Person,
exercises reasonable care in the selection of the bailee or other third Person,
and the Lender need not otherwise preserve, protect, insure or care for any
Collateral.  The Lender shall not be
obligated to preserve any rights the Borrower may have against prior parties,
to realize on the Collateral at all or in any particular manner or order or to
apply any cash proceeds of the Collateral in any particular order of
application.  The Lender has no
obligation to clean-up or otherwise prepare the Collateral for sale.  The Borrower waives any right it may have to
require the Lender to pursue any third Person for any of the Indebtedness.

 

25

 

ARTICLE
IV

CONDITIONS OF LENDING

 

Section 4.1             Conditions Precedent to the
Initial Advances and Letter of Credit. 
The Lender’s obligation to make the initial Advances or to cause any
Letters of Credit to be issued shall be subject to the condition precedent that
the Lender shall have received all of the following, each properly executed by
the appropriate party and in form and substance satisfactory to the Lender:

 

(a)           This Agreement.

 

(b)           The Revolving Note.

 

(c)           A Standby Letter of Credit Agreement and a Commercial
Letter of Credit Agreement, and L/C Application for each Letter of Credit that
the Borrower wishes to have issued thereunder.

 

(d)           A true and correct copy of any and all leases pursuant to
which the Borrower is leasing the Premises, together with a landlord’s
disclaimer and consent with respect to each such lease.

 

(e)           A true and correct copy of any and all mortgages pursuant
to which the Borrower has mortgaged the Premises, together with a mortgagee’s
disclaimer and consent with respect to each such mortgage.

 

(f)            A true and correct copy of any and all agreements
pursuant to which the Borrower’s property is in the possession of any Person
other than the Borrower, together with, in the case of any goods held by such
Person for resale, (i) a consignee’s acknowledgment and waiver of Liens, (ii) UCC
financing statements sufficient to protect the Borrower’s and the Lender’s
interests in such goods, and (iii) UCC searches showing that no other
secured party has filed a financing statement against such Person and covering
property similar to the Borrower’s other than the Borrower, or if there exists
any such secured party, evidence that each such secured party has received
notice from the Borrower and the Lender sufficient to protect the Borrower’s
and the Lender’s interests in the Borrower’s goods from any claim by such
secured party.

 

(g)           An acknowledgment and waiver of Liens from each warehouse
in which the Borrower is storing Inventory.

 

(h)           A true and correct copy of any and all agreements pursuant
to which the Borrower’s property is in the possession of any Person other than
the Borrower, together with, (i) an acknowledgment and waiver of Liens
from each subcontractor who has possession of the Borrower’s goods from time to
time, (ii) UCC financing statements sufficient to protect the Borrower’s
and the Lender’s interests in such goods, and (iii) UCC searches showing
that no other secured party has filed a financing statement covering such
Person’s property other than the Borrower, or if there exists any such secured
party, evidence that each such secured party has 

 

26

 

received notice from the
Borrower and the Lender sufficient to protect the Borrower’s and the Lender’s
interests in the Borrower’s goods from any claim by such secured party.

 

(i)            An acknowledgment and agreement from each licensor in
favor of the Lender, together with a true, correct and complete copy of all
license agreements.

 

(j)            The Wholesale Lockbox and Collection Account Agreement.

 

(k)           The Master Agreement for Treasury Management Services.

 

(l)            Blocked account and control agreements with each bank at
which the Borrower maintains deposit accounts.

 

(m)          A Patent and Trademark Security Agreement.

 

(n)           The Pet Business IP Agreement.

 

(o)           The Subordination Agreements.

 

(p)           Current searches of appropriate filing offices showing
that (i) no Liens have been filed and remain in effect against the
Borrower except Permitted Liens or Liens held by Persons who have agreed in
writing that upon receipt of proceeds of the initial Advances, they will
satisfy, release or terminate such Liens in a manner satisfactory to the
Lender, and (ii) the Lender has duly filed all financing statements
necessary to perfect the Security Interest, to the extent the Security Interest
is capable of being perfected by filing.

 

(q)           A certificate of the Borrower’s Secretary or Assistant
Secretary certifying that attached to such certificate are (i) the
resolutions of the Borrower’s Directors and, if required, Owners, authorizing
the execution, delivery and performance of the Loan Documents, (ii) true,
correct and complete copies of the Borrower’s Constituent Documents, and (iii) examples
of the signatures of the Borrower’s Officers or agents authorized to execute
and deliver the Loan Documents and other instruments, agreements and
certificates, including Advance requests, on the Borrower’s behalf.

 

(r)            A current certificate issued by the Secretary of State of
Kansas, certifying that the Borrower is in compliance with all applicable
organizational requirements of the State of Kansas.

 

(s)           Evidence that the Borrower is duly licensed or qualified
to transact business in all jurisdictions where the character of the property
owned or leased or the nature of the business transacted by it makes such
licensing or qualification necessary.

 

(t)            A certificate of an Officer of the Borrower confirming,
in his or her capacity as an Officer, the representations and warranties set
forth in Article V.

 

(u)           Certificates of the insurance required hereunder, with all
hazard insurance containing a lender’s loss payable endorsement in the Lender’s
favor and with all liability insurance naming the Lender as an additional
insured.

 

27

 

(v)           Payment of all fees due under the terms of this Agreement
through the date of the initial Advance or the issuance of any Letter of Credit
hereunder, and payment of all expenses incurred by the Lender through such date
and that are required to be paid by the Borrower under this Agreement.

 

(w)          Evidence that after making the initial Revolving Advance,
satisfying all obligations owed to the Borrower’s prior lender, satisfying all
trade payables older than 30 days from due date (or otherwise restructured in a
form and substance acceptable to Lender), book overdrafts and closing costs,
Availability shall be not less than $3,000,000.

 

(x)            Borrower’s projected balance sheets, income statements,
statements of cash flow and projected Availability for each month of the
succeeding twelve (12) month period from the Closing Date, each in reasonable
detail.

 

(y)           Review of the projections in the immediately proceeding
sentence and an operating plan by an external consultant acceptable to Lender.

 

(z)            Agriculture industries review by appropriate personnel of
the Lender.

 

(aa)         A Letter from Deloitte outlining their opinion on the tax
return of Borrower expected to by filed by Borrower in September 2009 for
approximately $5,500,000.

 

(bb)         A Customer Identification Information form and such other
forms and verification as the Lender may need to comply with the U.S.A. Patriot
Act.

 

(cc)         Such other documents as the Lender in its sole but
reasonable discretion may require.

 

Section 4.2             Conditions Precedent to All
Advances and Letters of Credit.  The
Lender’s obligation to make each Advance or to cause the issuance of a Letter
of Credit shall be subject to the further conditions precedent that:

 

(a)           the representations and warranties contained in Article V
are correct on and as of the date of such Advance or issuance of a Letter of
Credit as though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date; and

 

(b)           no event has occurred and is continuing, or would result
from such Advance or issuance of a Letter of Credit which constitutes a Default
or an Event of Default.

 

ARTICLE
V

REPRESENTATIONS AND
WARRANTIES

 

The Borrower represents and warrants to the Lender
as follows:

 

Section 5.1             Existence and Power; Name; Chief
Executive Office; Inventory and Equipment Locations; Federal Employer
Identification Number and Organizational Identification Number.  The Borrower is a corporation, duly
organized, validly existing and in good standing 

 

28

 

under the laws of the State of Kansas and is duly licensed or qualified
to transact business in all jurisdictions where the character of the property
owned or leased or the nature of the business transacted by it makes such
licensing or qualification necessary. 
The Borrower has all requisite power and authority to conduct its
business, to own its properties and to execute and deliver, and to perform all
of its obligations under, the Loan Documents. 
For the five (5) year period prior to the Funding Date, the
Borrower has done business solely under the names set forth in Schedule
5.1.  The Borrower’s chief executive
office and principal place of business is located at the address set forth in
Schedule 5.1, and all of the Borrower’s records relating to its business or the
Collateral are kept at that location. 
All Inventory and Equipment is located at that location or at one of the
other locations listed in Schedule 5.1. 
The Borrower’s federal employer identification number and organization
identification number are correctly set forth in Section 3.6.

 

Section 5.2             Capitalization.  Schedule 5.2 constitutes a correct and
complete list of (a) all ownership interests of the Borrower equal to or
greater than five percent (5%) of the aggregate ownership interests in
Borrower, and (b) all rights (other than the public market) to acquire
ownership interests equal to or greater than five percent (5%).  Schedule 5.2 will include the record holder,
number of interests and percentage interests on a fully diluted basis with
respect to each of (a) and (b) above, and will include an
organizational chart showing the ownership structure of all Subsidiaries of the
Borrower.

 

Section 5.3             Authorization of Borrowing; No
Conflict as to Law or Agreements. 
The execution, delivery and performance by the Borrower of the Loan
Documents and the borrowings from time to time hereunder have been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the Borrower’s Owners; (ii) require any
authorization, consent or approval by, or registration, declaration or filing
with, or notice to, any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any third party (other than
consents required by the holders of Permitted Indebtedness for Lender to take a
Lien in the Real Estate Collateral, which consents Borrower shall not be
required to obtain until the date which is thirty (30) days past the Funding
Date), except such authorization, consent, approval, registration, declaration,
filing or notice as has been obtained, accomplished or given prior to the date
hereof; (iii) violate any provision of any law, rule or regulation
(including Regulation X of the Board of Governors of the Federal Reserve
System) or of any order, writ, injunction or decree presently in effect having
applicability to the Borrower or of the Borrower’s Constituent Documents; (iv) result
in a breach of or constitute a default under any indenture or loan or credit
agreement or any other material agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected;
or (v) result in, or require, the creation or imposition of any Lien
(other than the Security Interest) upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower.

 

Section 5.4             Legal Agreements.  This Agreement constitutes and, upon due
execution by the Borrower, the other Loan Documents will constitute the legal,
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms.

 

Section 5.5             Subsidiaries.  Except as set forth in Schedule 5.5 hereto,
the Borrower has no Subsidiaries.

 

29

 

Section 5.6             Financial Condition; No Adverse
Change.  The Borrower has furnished
to the Lender its audited financial statements for its fiscal year ended June 30,
2008 and unaudited financial statements for the fiscal-year-to-date period
ended May 31, 2009 and those statements fairly present the Borrower’s
financial condition on the dates thereof and the results of its operations and
cash flows for the periods then ended and were prepared in accordance with
GAAP.  Since the date of the most recent
financial statements, there has been no material adverse change in the Borrower’s
business, properties or condition (financial or otherwise).

 

Section 5.7             Litigation.  There are no actions, suits or proceedings
pending or, to the Borrower’s knowledge, threatened against or affecting the
Borrower or any of its Affiliates or the properties of the Borrower or any of
its Affiliates before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which, if determined
adversely to the Borrower or any of its Affiliates, would result in a final
judgment or judgments against the Borrower or any of its Affiliates in an
amount in excess of $100,000, apart from those matters specifically listed in
Schedule 5.7 as of the Funding Date or after the Funding Date, which have not
been disclosed to Lender in writing.

 

Section 5.8             Regulation U.  The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.

 

Section 5.9             Taxes.  The Borrower and its Affiliates have paid or
caused to be paid to the proper authorities when due all federal, state and
local taxes (including without limitation, taxes pursuant to 26 U.S.C. 5001 et seq.and any actual or effective substitutions or
replacements thereof) required to be paid and have withheld or caused to be
withheld all federal, state and local taxes (including without limitation,
taxes pursuant to 26 U.S.C. 5001 et seq.and any
actual or effective substitutions or replacements thereof) required to be
withheld by each of them.  The Borrower
and its Affiliates have filed all federal, state and local tax returns which to
the knowledge of the Officers of the Borrower or any Affiliate, as the case may
be, are required to be filed, and the Borrower and its Affiliates have paid or
caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by any of them to the extent such
taxes have become due.

 

Section 5.10           Titles and Liens.  The Borrower has good and absolute title to
all Collateral free and clear of all Liens other than Permitted Liens.  No financing statement naming the Borrower as
debtor is on file in any office except to perfect only Permitted Liens.

 

Section 5.11           Intellectual Property Rights.

 

(a)           Owned Intellectual
Property.  Schedule 5.11 is a
complete list of all patents, applications for patents, trademarks,
applications to register trademarks, service marks, applications to register
service marks, mask works, trade dress and copyrights for which the Borrower is
the owner of record (the “Owned Intellectual Property”).  Except as disclosed on Schedule 5.11, (i) the
Borrower owns the Owned Intellectual Property free and clear of all
restrictions (including covenants not to sue a third party), court orders,
injunctions, decrees, writs 

 

30

 

or Liens, whether by written
agreement or otherwise, (ii) no Person other than the Borrower owns or has
been granted any right in the Owned Intellectual Property, (iii) all Owned
Intellectual Property is valid, subsisting and enforceable and (iv) the
Borrower has taken all commercially reasonable action necessary to maintain and
protect the Owned Intellectual Property.

 

(b)           Agreements with
Employees and Contractors. 
The Borrower has entered into a legally enforceable agreement with each
of its employees and subcontractors obligating each such Person to assign to
the Borrower, without any additional compensation, any Intellectual Property
Rights created, discovered or invented by such Person in the course of such
Person’s employment or engagement with the Borrower (except to the extent
prohibited by law), and further requiring such Person to cooperate with the
Borrower, without any additional compensation, in connection with securing and
enforcing any Intellectual Property Rights therein; provided, however,
that the foregoing shall not apply with respect to employees and subcontractors
whose job descriptions are of the type such that no such assignments are
reasonably foreseeable.

 

(c)           Intellectual Property
Rights Licensed from Others. 
Schedule 5.11 is a complete list of all agreements under which the
Borrower has licensed Intellectual Property Rights from another Person (“Licensed
Intellectual Property”) other than readily available, non-negotiated licenses
of computer software and other intellectual property used solely for performing
accounting, word processing and similar administrative tasks (“Off-the-shelf
Software”) and a summary of any ongoing payments the Borrower is obligated to
make with respect thereto.  Except as
disclosed on Schedule 5.11 and in written agreements, copies of which have been
given to the Lender, the Borrower’s licenses to use the Licensed Intellectual
Property are free and clear of all restrictions, Liens, court orders,
injunctions, decrees, or writs, whether by written agreement or otherwise.  Except as disclosed on Schedule 5.11, the
Borrower is not obligated or under any liability whatsoever to make any
payments of a material nature by way of royalties, fees or otherwise to any
owner of, licensor of, or other claimant to, any Intellectual Property Rights.

 

(d)           Other Intellectual
Property Needed for Business. 
Except for Off-the-shelf Software and as disclosed on Schedule 5.11, the
Owned Intellectual Property and the Licensed Intellectual Property constitute
all Intellectual Property Rights used or necessary to conduct the Borrower’s
business as it is presently conducted or as the Borrower reasonably foresees
conducting it.

 

(e)           Infringement.  Except as disclosed on Schedule 5.11, the
Borrower has no knowledge of, and has not received any written claim or notice
alleging, any Infringement of another Person’s Intellectual Property Rights
(including any written claim that the Borrower must license or refrain from
using the Intellectual Property Rights of any third party) nor, to the Borrower’s
knowledge, is there any threatened claim or any reasonable basis for any such
claim.

 

Section 5.12           Plans.  Except as disclosed to the Lender in writing
prior to the date hereof, neither the Borrower nor any ERISA Affiliate (a) maintains
or has maintained any Pension Plan, (b) contributes or has contributed to
any Multiemployer Plan or (c) provides or has provided post-retirement
medical or insurance benefits with respect to employees or former 

 

31

 

employees (other than benefits required under Section 601 of
ERISA, Section 4980B of the IRC or applicable state law).  Neither the Borrower nor any ERISA Affiliate
has received any notice or has any knowledge to the effect that it is not in
full compliance with any of the requirements of ERISA, the IRC or applicable
state law with respect to any Plan.  No
Reportable Event exists in connection with any Pension Plan.  Each Plan which is intended to qualify under
the IRC is so qualified, and no fact or circumstance exists which may have an
adverse effect on the Plan’s tax qualified status.  Neither the Borrower nor any ERISA Affiliate
has (i) any accumulated funding deficiency (as defined in Section 302
of ERISA and Section 412 of the IRC) under any Plan, whether or not
waived, (ii) any liability under Section 4201 or 4243 of ERISA for
any withdrawal, partial withdrawal, reorganization or other event under any
Multiemployer Plan or (iii) any liability or knowledge of any facts or
circumstances which could result in any liability to the Pension Benefit
Guaranty Corporation, the Internal Revenue Service, the Department of Labor or
any participant in connection with any Plan (other than routine claims for
benefits under the Plan).

 

Section 5.13           Default.  The Borrower is in compliance with all
provisions of all agreements, instruments, decrees and orders to which it is a
party or by which it or its property is bound or affected, the breach or
default of which could have a material adverse effect on the Borrower’s
financial condition, properties or operations.

 

Section 5.14           Environmental Matters.

 

(a)           Except as disclosed on Schedule 5.14, there are not
present in, on or under the Premises any Hazardous Substances in such form or
quantity as to create any material liability or obligation for either the
Borrower or the Lender under the common law of any jurisdiction or under any
Environmental Law, and no Hazardous Substances have ever been stored, buried,
spilled, leaked, discharged, emitted or released in, on or under the Premises
in such a way as to create any such material liability.

 

(b)           Except as disclosed on Schedule 5.14, the Borrower has not
disposed of Hazardous Substances in such a manner as to create any material
liability under any Environmental Law.

 

(c)           Except as disclosed on Schedule 5.14, there have not
existed in the past, nor are there any threatened or impending requests,
claims, notices, investigations, demands, administrative proceedings, hearings
or litigation relating in any way to the Premises or the Borrower, alleging
material liability under, violation of, or noncompliance with any Environmental
Law or any license, permit or other authorization issued pursuant thereto.

 

(d)           Except as disclosed on Schedule 5.14, the Borrower’s
businesses are and have in the past always been conducted in accordance with
all Environmental Laws and all licenses, permits and other authorizations
required pursuant to any Environmental Law and necessary for the lawful and
efficient operation of such businesses are in the Borrower’s possession and are
in full force and effect, nor has the Borrower been denied insurance on grounds
related to potential environmental liability. 
No permit required under any Environmental Law is scheduled to expire
within 12 months (excepting permits that renew annually in accordance with
their terms, each of 

 

32

 

which is disclosed on
Schedule 5.14) and there is no threat that any such permit will be withdrawn,
terminated, limited or materially changed.

 

(e)           Except as disclosed on Schedule 5.14, the Premises are not
and never have been listed on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System or any
similar federal, state or local list, schedule, log, inventory or database.

 

(f)            The Borrower has delivered to the Lender all
environmental assessments, audits, reports, permits, licenses and other
documents describing or relating in any way to the Premises or the Borrower’s
businesses.

 

Section 5.15           Submissions to Lender.  All financial and other information provided
to the Lender by or on behalf of the Borrower in connection with the Borrower’s
request for the credit facilities contemplated hereby (i) is true and
correct in all material respects (or if such financial and other information
was true and correct in all material respects when submitted, but such
information has since changed, Borrower has delivered to Lender such
information required to make such previously submitted information true and
correct in all material respects), (ii) does not omit any material fact
necessary to make such information not misleading and, (iii) as to
projections, valuations or proforma financial statements, presents a good faith
opinion as to such projections, valuations and proforma condition and results.

 

Section 5.16           Financing Statements.  The Borrower has authorized the filing of
financing statements sufficient when filed to perfect the Security Interest and
the other security interests created by the Security Documents to the extent
such Security Interests are capable of being perfected by filing financing
statements.  When such financing
statements are filed in the offices noted therein, the Lender will have a valid
and perfected security interest in all Collateral which is capable of being
perfected by filing financing statements. 
None of the Collateral is or will become a fixture on real estate,
unless a sufficient fixture filing is in effect with respect thereto.

 

Section 5.17           Rights to Payment.  Each right to payment and each instrument,
document, chattel paper and other agreement constituting or evidencing Collateral
is (or, in the case of all future Collateral, will be when arising or issued)
the valid, genuine and legally enforceable obligation, subject to no defense,
setoff or counterclaim, of the account debtor or other obligor named therein or
in the Borrower’s records pertaining thereto as being obligated to pay such
obligation.

 

Section 5.18           Financial Solvency.  Both before and
after giving effect to the Loans and all of the transactions contemplated in
the Loan Documents, none of the Borrower or its Affiliates:

 

(a)           Was or will be “insolvent”, as that term is used and
defined in Section 101(32) of the United States Bankruptcy Code and Section 2
of the Uniform Fraudulent Transfer Act;

 

(b)           Has unreasonably small capital or is engaged or about to
engage in a business or a transaction for which any remaining assets of the
Borrower or such Affiliate are unreasonably small;

 

33

 

(c)           By executing, delivering or performing its obligations
under the Loan Documents or other documents to which it is a party or by taking
any action with respect thereto, intends to, nor believes that it will, incur
debts beyond its ability to pay them as they mature;

 

(d)           By executing, delivering or performing its obligations
under the Loan Documents or other documents to which it is a party or by taking
any action with respect thereto, intends to hinder, delay or defraud either its
present or future creditors; and

 

(e)           At this time contemplates filing a petition in bankruptcy
or for an arrangement or reorganization or similar proceeding under any law of
any jurisdiction, nor, to the best knowledge of the Borrower, is the subject of
any actual, pending or threatened bankruptcy, insolvency or similar proceedings
under any law of any jurisdiction.

 

Section 5.19           IWGA License.  The Borrower no
longer uses the Field Limited Sub-License Agreement dated as of May 1,
1998, by and between the Borrower and IWGA Marketing, Corp. or any Intellectual
Property Rights described therein.

 

ARTICLE
VI

COVENANTS

 

So long as the Indebtedness shall remain unpaid, or
the Credit Facility shall remain outstanding, the Borrower will comply with the
following requirements, unless the Lender shall otherwise consent in writing:

 

Section 6.1             Reporting Requirements.  The Borrower will deliver, or cause to be
delivered, to the Lender each of the following, which shall be in form and
detail acceptable to the Lender:

 

(a)           Annual Financial
Statements.  As soon as
available, and in any event within 120 days after the end of each fiscal year
of the Borrower, the Borrower’s audited financial statements with the
unqualified opinion of independent certified public accountants selected by the
Borrower and acceptable to the Lender, which annual financial statements shall
include the Borrower’s balance sheet as at the end of such fiscal year and the
related statements of the Borrower’s income, retained earnings and cash flows
for the fiscal year then ended, prepared, if the Lender so requests, on a
consolidated basis to include any Subsidiaries, all in reasonable detail and
prepared in accordance with GAAP, together with (i) copies of all
management letters prepared by such accountants; (ii) a report signed by
such accountants stating that in making the investigations necessary for said
opinion they obtained no knowledge, except as specifically stated, of any
Default or Event of Default and all relevant facts in reasonable detail to
evidence, and the computations as to, whether or not the Borrower is in
compliance with the Financial Covenants; and (iii) a certificate of the
Borrower’s chief financial officer stating that such financial statements have
been prepared in accordance with GAAP, fairly represent the Borrower’s
financial position and the results of its operations, and whether or not such
Officer has knowledge of the occurrence of any Default or Event of Default and,
if so, stating in reasonable detail the facts with respect thereto.

 

34

 

(b)           Monthly Financial
Statements.  As soon as
available and in any event within 20 days after the end of each month, the
unaudited/internal balance sheet and statements of income and retained earnings
of the Borrower as at the end of and for such month and for the year to date
period then ended, prepared, if the Lender so requests, on a consolidated basis
to include any Subsidiaries, in reasonable detail and stating in comparative
form the figures for the corresponding date and periods in the previous year,
all prepared in accordance with GAAP, subject to year-end audit adjustments and
which fairly represent the Borrower’s financial position and the results of its
operations; and accompanied by a certificate of the Borrower’s chief financial
officer, substantially in the form of Exhibit B hereto stating (i) that
such financial statements have been prepared in accordance with GAAP, subject
to year-end audit adjustments, and fairly represent the Borrower’s financial
position and the results of its operations, (ii) whether or not such
Officer has knowledge of the occurrence of any Default or Event of Default not
theretofore reported and remedied and, if so, stating in reasonable detail the
facts with respect thereto, and (iii) all relevant facts in reasonable
detail to evidence, and the computations as to, whether or not the Borrower is
in compliance with the Financial Covenants.

 

(c)           Collateral Reports.  No later than 15 days after each month end
(or more frequently if Lender shall request it), detailed agings and
certification of Borrower’s accounts receivable and accounts payable, a
detailed inventory report (by category and location), an inventory
certification report, and a calculation of Borrower’s Accounts, Eligible
Accounts, Inventory and Eligible Inventory as of the end of that month or
shorter time period requested by Lender. 
All information required under this subsection 6.1(c) shall be
submitted by Borrower through Lender’s CEO portal.

 

(d)           Projections.  No later than 30 days prior to
each fiscal year end, the Borrower’s projected balance sheets, income
statements, statements of cash flow and projected Availability for each month
of the succeeding fiscal year, each in reasonable detail.  Such items will be  certified by the Officer who is the Borrower’s
chief financial officer as being the most accurate projections available and
identical to the projections used by the Borrower for internal planning
purposes and be delivered with a statement of underlying assumptions and such
supporting schedules and information as the Lender may in its discretion require.

 

(e)           Supplemental Reports.  Weekly, or more frequently if the Lender so
requires, the Borrower’s “daily collateral reports,” receivables schedules,
collection reports, and if the Lender so requires, copies of individual
invoices to account debtors, signed and dated shipment documents and delivery
receipts for goods sold to said account debtors.

 

(f)            Litigation.  Immediately after the commencement thereof,
notice in writing of all litigation and of all proceedings before any
governmental or regulatory agency affecting the Borrower (i) of the type
described in Section 5.14(c) or (ii) which seek a monetary
recovery against the Borrower in excess of $100,000.

 

(g)           Defaults.  When any Officer of the Borrower becomes
aware of the probable occurrence of any Default or Event of Default, and no
later than 3 days after such Officer becomes aware of such Default or Event of
Default, notice of such occurrence, together with a detailed statement by a
responsible Officer of the Borrower of the steps being taken by the Borrower to
cure the effect thereof.

 

35

 

(h)           Plans.  As soon as possible, and in any event within
30 days after the Borrower knows or has reason to know that any Reportable
Event with respect to any Pension Plan has occurred, a statement signed by the
Officer who is the Borrower’s chief financial officer setting forth details as
to such Reportable Event and the action which the Borrower proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event to the Pension Benefit Guaranty Corporation.  As soon as possible, and in any event within
10 days after the Borrower fails to make any quarterly contribution required
with respect to any Pension Plan under Section 412(m) of the IRC, the
Borrower will deliver to the Lender a statement signed by the Officer who is
the Borrower’s chief financial officer setting forth details as to such failure
and the action which the Borrower proposes to take with respect thereto,
together with a copy of any notice of such failure required to be provided to
the Pension Benefit Guaranty Corporation. 
As soon as possible, and in any event within ten days after the Borrower
knows or has reason to know that it has or is reasonably expected to have any
liability under Sections 4201 or 4243 of ERISA for any withdrawal, partial
withdrawal, reorganization or other event under any Multiemployer Plan, the
Borrower will deliver to the Lender a statement of the Borrower’s chief
financial officer setting forth details as to such liability and the action
which the Borrower proposes to take with respect thereto.

 

(i)            Disputes.  Promptly upon knowledge thereof, notice of (i) any
disputes or claims by the Borrower’s customers exceeding $100,000 individually
or $500,000 in the aggregate during any fiscal year; (ii) credit memos;
and (iii) any goods returned to or recovered by the Borrower.

 

(j)            Officers
and Directors.  Promptly
upon knowledge thereof, notice of any change in the persons constituting the
Borrower’s Officers and Directors.

 

(k)           Collateral.  Promptly upon knowledge thereof, notice of
any loss of or material damage to any Collateral or of any substantial adverse
change in any Collateral or the prospect of payment thereof.

 

(l)            Commercial
Tort Claims.  Promptly
upon knowledge thereof, notice of any commercial tort claims it may bring
against any Person seeking damages or other monies in excess of $100,000,
including the name and address of each defendant, a summary of the facts, an
estimate of the Borrower’s damages, copies of any complaint or demand letter
submitted by the Borrower, and such other information as the Lender may
request.

 

(m)          Intellectual
Property.

 

(i)            30 days prior written notice of Borrower’s intent to
acquire material Intellectual Property Rights; except for transfers permitted
under Section 6.18, the Borrower will give the Lender 30 days prior
written notice of its intent to dispose of material Intellectual Property
Rights and upon request shall provide the Lender with copies of all proposed
documents and agreements concerning such rights.

 

(ii)           Promptly upon knowledge thereof, notice of (A) any
Infringement of its Intellectual Property Rights by others, (B) claims
that the Borrower is Infringing another 

 

36

 

Person’s Intellectual Property Rights and (C) any threatened
cancellation, termination or material limitation of its Intellectual Property
Rights.

 

(iii)          Promptly upon receipt, copies of all registrations
and filings with respect to its Intellectual Property Rights.

 

(n)           Reports to
Owners.  Promptly upon their
distribution, copies of all financial statements, reports and proxy statements
which the Borrower shall have sent to its Owners.

 

(o)           SEC Filings.  Promptly after the sending or filing thereof,
copies of all regular and periodic reports which the Borrower shall file with
the Securities and Exchange Commission or any national securities exchange.

 

(p)           US Treasury
Filings.  Promptly after the sending
or filing thereof, copies of all regular and periodic reports which the
Borrower shall file with the United States Department of the Treasury or such
other governmental authority relating to Borrower’s production of Inventory
consisting of food and fuel grade alcohol.

 

(q)           Reports
Regarding Taxes on Distilled Spirits.  Without
limiting any of the other delivery requirements hereunder, Borrower will
provide Lender within one (1) Business Day after such report is required
by the applicable government authority or the same day if the next calendar day
is not a Business Day, with a report, in a reasonably form acceptable to
Lender, setting forth Borrower’s then current tax liability pursuant to 26
U.S.C. 5001 et seq.(and any actual or effective
substitutions or replacements thereof) with respect to Borrower’s
Inventory.  The foregoing report will
provide the Borrower’s applicable tax liability and the methods utilized by
Borrower to determine such tax liability.

 

(r)            Violations
of Law.  Promptly upon knowledge
thereof, notice of the Borrower’s violation of any law, rule or
regulation, the non-compliance with which could materially and adversely affect
the financial condition, properties or operations of the Borrower.

 

(s)           Hedging
Positions.  Weekly, or
more frequently if the Lender so requires, a current report of Borrower’s open
hedging positions in a form an substance acceptable to Lender in its sole but
reasonable discretion, and if the Lender so requires, copies of statements of
all hedging and commodities accounts of Borrower.

 

(t)            Other
Reports.  From time to time, with
reasonable promptness, any and all receivables schedules, inventory reports,
collection reports, deposit records, equipment schedules, copies of invoices to
account debtors, shipment documents and delivery receipts for goods sold, and
such other material, reports, records or information as the Lender may request.

 

Section 6.2             Financial Covenants.

 

(a)           Minimum Net
Income.  The Borrower will achieve for
each period described below, Net Income of not less than the amount set forth
for each such period (numbers appearing between “< >“ are negative):

 

37

 

	
  Period

  	
   

  	
  Minimum Net Income

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7/1/2009
  Through 7/31/2009

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  7/1/2009
  Through 8/31/2009

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  7/1/2009
  Through 9/30/2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  7/1/2009
  Through 10/31/2009

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  7/1/2009
  Through 11/30/2009

  	
   

  	
  $

  	
  1,350,000

  	
   

  
	
  7/1/2009
  Through 12/31/2009

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
  7/1/2009
  Through 1/31/2010

  	
   

  	
  $

  	
  1,800,000

  	
   

  
	
  7/1/2009
  Through 2/28/2010

  	
   

  	
  $

  	
  2,200,000

  	
   

  
	
  7/1/2009
  Through 3/31/2010

  	
   

  	
  $

  	
  2,575,000

  	
   

  
	
  7/1/2009
  Through 4/30/2010

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  7/1/2009
  Through 5/31/2010

  	
   

  	
  $

  	
  3,250,000

  	
   

  
	
  7/1/2009
  Through 6/30/2010

  	
   

  	
  $

  	
  3,500,000

  	
   

  
	
  7/1/2010
  Through 7/31/2010

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  7/1/2010
  Through 8/31/2010

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  7/1/2010
  Through 9/30/2010

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

(b)           Minimum
Debt Service Coverage Ratio.  The Borrower will maintain, as of each fiscal
year end, a Debt Service Coverage Ratio of not less than 1.15 to 1.0.

 

(c)           Capital
Expenditures.  The
Borrower will not incur or contract to incur Capital Expenditures of more than
$4,500,000 in the aggregate during any fiscal year.

 

Section 6.3             Permitted Liens; Financing
Statements.

 

(a)           The Borrower will not
create, incur or suffer to exist any Lien upon or of any of its assets, now
owned or hereafter acquired, to secure any indebtedness; excluding, however,
from the operation of the foregoing, the following (each a “Permitted Lien”;
collectively, “Permitted Liens”):

 

(i)            In the case of any of the Borrower’s property which
is not Collateral, covenants, restrictions, rights, easements and minor
irregularities in title which do not materially interfere with the Borrower’s
business or operations as presently conducted;

 

(ii)           Liens in existence on the date hereof and listed in
Schedule 6.3 hereto, securing indebtedness for borrowed money permitted under
this Agreement;

 

(iii)          The Security Interest and Liens created by the
Security Documents;

 

(iv)          Purchase money Liens relating to the acquisition of
machinery and equipment of the Borrower not exceeding the lesser of cost or
fair market value thereof and so long as no Default Period is then in existence
and none would exist immediately after such acquisition;

 

(v)           Liens for taxes, assessments or governmental charges
(including without limitation, liens on Borrower’s Inventory for taxes arising
under to 26 U.S.C. 5001 et seq.and any
actual or effective substitutions or replacements thereof) not delinquent or 

 

38

 

being contested in good faith and by appropriate proceedings and for
which adequate reserves are maintained in accordance with GAAP and are held by
Lender;

 

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

 

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

 

(viii)        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 (A) which are not more than 30
days past due (and if such Liens permitted under this Section 6.3(a)(viii) effect
Collateral included in the Borrowing Base, reserves have been established by
Lender) or (B) which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves are maintained in
accordance with GAAP and are held by Lender;

 

(b)           The Borrower will not amend
any financing statements in favor of the Lender except as permitted by law.

 

Section 6.4             Indebtedness.  The Borrower will not incur, create, assume
or permit to exist any indebtedness or liability on account of deposits or
advances or any indebtedness for borrowed money or letters of credit issued on
the Borrower’s behalf, or any other indebtedness or liability evidenced by
notes, bonds, debentures or similar obligations, except:

 

(a)           Any existing or future
Indebtedness or any other obligations of the Borrower to the Lender;

 

(b)           Any indebtedness of the
Borrower in existence on the date hereof and listed in Schedule 6.4 hereto; and

 

(c)           Any indebtedness relating to
Permitted Liens.

 

(d)           Swap Contracts solely to the
extent such Swap Contracts:  (i) are
(or were) entered into by Borrower in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by Borrower,
and not for purposes of speculation or taking a “market view”; and (ii) do
not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting
party.

 

Section 6.5             Guaranties.  The Borrower will not assume, guarantee,
endorse or otherwise become directly or contingently liable in connection with
any obligations of any other Person, except:

 

39

 

(a)           The endorsement of
negotiable instruments by the Borrower for deposit or collection or similar
transactions in the ordinary course of business; and

 

(b)           Guaranties, endorsements and
other direct or contingent liabilities in connection with the obligations of
other Persons, in existence on the date hereof and listed in Schedule 6.4
hereto.

 

Section 6.6             Investments and Subsidiaries.  The Borrower will not make or permit to exist
any loans or advances to, or make any investment or acquire any interest
whatsoever in, any other Person or Affiliate, including any partnership or
joint venture, nor purchase or hold beneficially any stock or other securities
or evidence of indebtedness of any other Person or Affiliate, except:

 

(a)           Investments in direct
obligations of the United States of America or any agency or instrumentality
thereof whose obligations constitute full faith and credit obligations of the
United States of America having a maturity of one year or less, commercial
paper issued by U.S.  corporations rated “A-1”
or “A-2” by Standard & Poor’s Ratings Services or “P-1” or “P-2” by
Moody’s Investors Service or certificates of deposit or bankers’ acceptances
having a maturity of one year or less issued by members of the Federal Reserve
System having deposits in excess of $100,000,000 (which certificates of deposit
or bankers’ acceptances are fully insured by the Federal Deposit Insurance
Corporation);

 

(b)           Travel advances or loans to
the Borrower’s Officers and employees not exceeding at any one time an
aggregate of $200,000;

 

(c)           Prepaid rent not exceeding
one month or security deposits; and

 

(d)           Current investments in the
Subsidiaries and/or Affiliates in existence on the date hereof, which are
detailed on Schedule 5.5 hereto;

 

(e)           Hedging programs to the
extent permitted by Section 6.4(d); and

 

(f)            Investments
in D.M. Ingredients GmbH, provided that the amount of such investments does not
exceed $365,000 on the Closing Date.  In
addition Borrower shall be permitted to make an additional Investment of
175,000 Euros in D.M. Ingredients GmbH provided no Default or Event of Default
exists.

 

Section 6.7             Dividends and Distributions.  The Borrower will not declare or pay any
dividends (other than dividends payable solely in stock of the Borrower) on any
class of its stock, or make any payment on account of the purchase, redemption
or other retirement of any shares of such stock, or other securities or
evidence of its indebtedness or make any distribution in respect thereof,
either directly or indirectly, provided
Borrower may otherwise declare and pay dividends if (A) no Borrower
Default has occurred or would occur as a result of any such dividend, (B) Borrower
shall have had Average Excess Availability of not less than $10,000,000 for the
60 day period prior to such dividend, (iii) on the date of such dividend
and after giving effect to such dividend, Borrower shall have Average Excess
Availability of not less than $5,000,000 and (iv) on the date of such
dividend, Borrower shall have paid all accounts payable which remain unpaid
more than thirty (30) days after the invoice date.

 

40

 

Section 6.8             Salaries; Stock Incentive
Compensation.  The
Borrower will not pay excessive or unreasonable salaries, bonuses, commissions,
consultant fees or other compensation; or increase the salary, bonus,
commissions, consultant fees or other compensation of any Director, Officer or
consultant, or any member of their families, except in accordance with Schedule
6.8 or 6.8A, or pay any such increase from any source other than profits
earned in the year of payment.  The
Borrower may make awards of stock in the Borrower to its Officers and Directors
as compensation in accordance with Schedule 6.8 or 6.8B provided no
Borrower Default has occurred or would occur as a result of any such issuances.

 

Section 6.9             Reserved.

 

Section 6.10           Books and Records;
Collateral Examination, Inspection and Appraisals.

 

(a)           The Borrower will keep
accurate books of record and account for itself pertaining to the Collateral
and pertaining to the Borrower’s business and financial condition and such
other matters as the Lender may from time to time request in which true and
complete entries will be made in accordance with GAAP and, upon the Lender’s
request, will permit any officer, employee, attorney, accountant or other agent
of the Lender to audit, review, make extracts from or copy any and all company
and financial books and records of the Borrower at all times during ordinary
business hours, to send and discuss with account debtors and other obligors
requests for verification of amounts owed to the Borrower, and to discuss the
Borrower’s affairs with any of its Directors, Officers, employees or agents.

 

(b)           The Borrower hereby
irrevocably authorizes all accountants and third parties to disclose and
deliver to the Lender or its designated agent, at the Borrower’s expense, all
financial information, books and records, work papers, management reports and
other information in their possession regarding the Borrower.

 

(c)           The Borrower will permit the
Lender or its employees, accountants, attorneys or agents, to examine and
inspect any Collateral or any other property of the Borrower at any time during
ordinary business hours.

 

(d)           The Lender may also, from
time to time, obtain at the Borrower’s expense an appraisal of Collateral by an
appraiser acceptable to the Lender in its sole but reasonable discretion.

 

Section 6.11           Account Verification.

 

(a)           The Lender or its agent may
at any time and from time to time send or require the Borrower to send requests
for verification of accounts or notices of assignment to account debtors and
other obligors.  The Lender or its agent
may also at any time and from time to time telephone account debtors and other
obligors to verify accounts.

 

(b)           The Borrower shall pay when
due each account payable due to a Person holding a Permitted Lien (as a result
of such payable) on any Collateral.

 

41

 

Section 6.12           Compliance with Laws.

 

(a)           The Borrower shall (i) comply,
and cause each Subsidiary to comply, with the requirements of applicable laws
and regulations, the non compliance with which would materially and adversely
affect its business or its financial condition and (ii) use and keep the
Collateral, and require that others use and keep the Collateral, only for lawful
purposes, without violation of any federal, state or local law, statute or
ordinance.

 

(b)           Without limiting the
foregoing undertakings, the Borrower specifically agrees that it will comply,
and cause each Subsidiary to comply, with all applicable Environmental Laws and
obtain and comply with all permits, licenses and similar approvals required by
any Environmental Laws, and will not generate, use, transport, treat, store or
dispose of any Hazardous Substances in such a manner as to create any material
liability or obligation under the common law of any jurisdiction or any
Environmental Law.

 

(c)           The Borrower shall (i) ensure,
and cause each Subsidiary to ensure, that no Owner 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, (ii) not use or permit
the use of the proceeds of the Credit Facility or any other financial
accommodation from the Lender to violate any of the foreign asset control
regulations of OFAC or other applicable law, (iii) comply, and cause each
Subsidiary to comply, with all applicable Bank Secrecy Act laws and
regulations, as amended from time to time, and (iv) otherwise comply with
the USA Patriot Act as required by federal law and the Lender’s policies and
practices.

 

Section 6.13           Payment of Taxes and Other
Claims.  The Borrower will pay or
discharge, when due, (a) all taxes, assessments and governmental charges
levied or imposed upon it or upon its income or profits, upon any properties
belonging to it (including the Collateral) or upon or against the creation,
perfection or continuance of the Security Interest, prior to the date on which
penalties attach thereto, (b) all federal, state and local taxes required
to be withheld by it, and (c) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon any properties of
the Borrower; provided, that the Borrower shall not be required to pay any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which proper
reserves have been made.

 

Section 6.14           Maintenance of Properties.

 

(a)           The Borrower will keep and
maintain the Collateral and all of its other properties necessary or useful in
its business in good condition, repair and working order (normal wear and tear
excepted) and will from time to time replace or repair any worn, defective or
broken parts; provided, however, that nothing in this covenant
shall prevent the Borrower from discontinuing the operation and maintenance of
any of its properties if such discontinuance is, in the Borrower’s judgment,
desirable in the conduct of the Borrower’s business and not disadvantageous in
any material respect to the Lender.  The
Borrower will take all commercially reasonable steps necessary to protect and
maintain its Intellectual Property Rights.

 

42

 

(b)           The Borrower will defend the
Collateral against all Liens, claims or demands of all Persons (other than the
Lender) claiming the Collateral or any interest therein (other than Permitted
Liens).  The Borrower will keep all
Collateral free and clear of all Liens except Permitted Liens.  The Borrower will take all commercially
reasonable steps necessary to prosecute any Person Infringing its Intellectual
Property Rights and to defend itself against any Person accusing it of
Infringing any Person’s Intellectual Property Rights.

 

Section 6.15           Insurance.  The Borrower shall at all times maintain
insurance with insurers acceptable to Lender, in such amounts and on such terms
(including deductibles) as Lender in its sole but reasonable discretion may
require and including, as applicable and without limitation, business
interruption insurance (including force majeure coverage), hazard coverage on
an “all risks” basis for all tangible Collateral, and theft and physical damage
coverage for Collateral consisting of motor vehicles.  All insurance policies must contain an
appropriate lender’s interest endorsement or clause, and name Lender as an
additional insured.

 

Section 6.16           Preservation of Existence.  The Borrower will preserve and maintain its
existence and all of its rights, privileges and franchises necessary or
desirable in the normal conduct of its business and shall conduct its business
in an orderly, efficient and regular manner.

 

Section 6.17           Delivery of Instruments,
etc.  Upon request by the Lender, the
Borrower will promptly deliver to the Lender in pledge all instruments,
documents and chattel paper constituting Collateral, duly endorsed or assigned
by the Borrower.

 

Section 6.18           Sale or Transfer of Assets;
Suspension of Business Operations.  The Borrower will not sell, lease, assign,
transfer or otherwise dispose of (i) the stock of any Subsidiary, (ii) all
or a substantial part of its assets, or (iii) any Collateral or any
interest therein (whether in one transaction or in a series of transactions) to
any other Person other than the sale of Inventory in the ordinary course of
business and will not liquidate, dissolve or suspend business operations.  The Borrower will not transfer any part of
its ownership interest in any Intellectual Property Rights and will not permit
any agreement under which it has licensed Licensed Intellectual Property to
lapse, except that the Borrower may transfer such rights or permit such
agreements to lapse if it shall have reasonably determined that the applicable
Intellectual Property Rights are no longer useful in its business.  If the Borrower transfers any Intellectual
Property Rights for value, the Borrower will pay over the proceeds to the
Lender for application to the Indebtedness. 
The Borrower will not license any other Person to use any of the
Borrower’s Intellectual Property Rights, except that the Borrower may grant
licenses in the ordinary course of its business in connection with sales of
Inventory or provision of services to its customers.

 

Section 6.19           Consolidation and Merger;
Asset Acquisitions.  The
Borrower will not consolidate with or merge into any Person, or permit any
other Person to merge into it, or acquire (in a transaction analogous in
purpose or effect to a consolidation or merger) all or substantially all the
assets of any other Person.

 

Section 6.20           Sale and Leaseback.  The Borrower will not enter into any
arrangement, directly or indirectly, with any other Person whereby the Borrower
shall sell or transfer any real or personal property, whether now owned or
hereafter acquired, and then or thereafter rent or 

 

43

 

lease as lessee such property or any part thereof or any other property
which the Borrower intends to use for substantially the same purpose or
purposes as the property being sold or transferred.

 

Section 6.21           Restrictions on Nature of
Business.  The
Borrower will not engage in any line of business materially different from that
presently engaged in by the Borrower and will not purchase, lease or otherwise
acquire assets not related to its business.

 

Section 6.22           Accounting.  The Borrower will not adopt any material
change in accounting principles other than as required by GAAP.  The Borrower will not adopt, permit or
consent to any change in its fiscal year.

 

Section 6.23           Discounts, etc.  After notice from the Lender, the Borrower
will not grant any discount, credit or allowance to any customer of the
Borrower or accept any return of goods sold. 
The Borrower will not at any time modify, amend, subordinate, cancel or
terminate the obligation of any account debtor or other obligor of the
Borrower.

 

Section 6.24           Plans.  Except as disclosed to the Lender in writing
prior to the date hereof, neither the Borrower nor any ERISA Affiliate will (i) adopt,
create, assume or become a party to any Pension Plan, (ii) incur any
obligation to contribute to any Multiemployer Plan, (iii) incur any
obligation to provide post-retirement medical or insurance benefits with
respect to employees or former employees (other than benefits required by law)
or (iv) amend any Plan in a manner that would materially increase its
funding obligations.

 

Section 6.25           Place of Business; Name.  The Borrower will not transfer its chief
executive office or principal place of business, or move, relocate, close or
sell any business location.  The Borrower
will not permit any tangible Collateral or any records pertaining to the
Collateral to be located in any state or area in which, in the event of such
location, a financing statement covering such Collateral would be required to
be, but has not in fact been, filed in order to perfect the Security
Interest.  The Borrower will not change
its name or jurisdiction of organization.

 

Section 6.26           Constituent Documents; S
Corporation Status.  The
Borrower will not amend its Constituent Documents.  The Borrower will not become an S
Corporation.

 

Section 6.27           Performance by the Lender.  If the Borrower at any time fails to perform
or observe any of the foregoing covenants contained in this Article VI or
elsewhere herein, and if such failure shall continue for a period of ten
calendar days after the Lender gives the Borrower written notice thereof (or in
the case of the agreements contained in Section 6.13 and Section 6.15,
immediately upon the occurrence of such failure, without notice or lapse of
time), the Lender may, but need not, perform or observe such covenant on behalf
and in the name, place and stead of the Borrower (or, at the Lender’s option,
in the Lender’s name) and may, but need not, take any and all other actions
which the Lender may reasonably deem necessary to cure or correct such failure
(including the payment of taxes, the satisfaction of Liens, the performance of
obligations owed to account debtors or other obligors, the procurement and
maintenance of insurance, the execution of assignments, security agreements and
financing statements, and the endorsement of instruments); and the Borrower
shall thereupon pay to the Lender on demand the 

 

44

 

amount of all monies expended and all costs and expenses (including
reasonable attorneys’ fees and legal expenses) incurred by the Lender in
connection with or as a result of the performance or observance of such
agreements or the taking of such action by the Lender, together with interest
thereon from the date expended or incurred at the Default Rate.  To facilitate the Lender’s performance or
observance of such covenants of the Borrower, the Borrower hereby irrevocably
appoints the Lender, or the Lender’s delegate, acting alone, as the Borrower’s
attorney in fact (which appointment is coupled with an interest) with the right
(but not the duty) from time to time to create, prepare, complete, execute,
deliver, endorse or file in the name and on behalf of the Borrower any and all
instruments, documents, assignments, security agreements, financing statements,
applications for insurance and other agreements required to be obtained,
executed, delivered or endorsed by the Borrower hereunder.

 

Section 6.28           Bank Accounts. On or before
the date which is thirty (30) days from the date of this Agreement, Borrower
will deliver to Lender evidence that Borrower has closed any and all deposit
accounts maintained by Borrower with Commerce Bank or any financial institution
other than Lender.

 

Section 6.29           Payments to Railroads and
Railcar Owners.  Borrower
shall cause all amounts due to each railroad owner or operator or to each
lessor of railcars which are used by Borrower for the shipping of Borrower’s
Inventory to be paid as and when due (the “Rail Invoices”).  Borrower shall certify in each Compliance
Certificate delivered in accordance with Section 6.1 that all such
Rail Invoices that are due have been paid and deliver evidence satisfactory to
Lender in its sole but reasonable discretion that such Rail Invoices have been
paid.

 

Section 6.30           Non-Operation at Certain
Locations.  Borrower
has advised Lender that it no longer plans to operate the Pekin Plant or the
Flour Mill.  Borrower shall not commence
operations at the Pekin Plant or Flour Mill or cause Inventory to be located at
such locations.

 

Section 6.31           Non-Sale of Pet Business.  Borrower has represented to Lender that prior
to August 15, 2009, Borrower intends to sell certain assets related to its
pet business located at the KCK Facility (“Pet Business”).  Borrower has entered into that certain Letter
of Intent for the proposed sale of the Pet Business, including the KCK
Facility, KCK Equipment and Pet Business IP, with Sergeant’s Pet Care Products, Inc.
(the “Pet Business Sale”).  Based upon Borrower’s representations to
Lender regarding the Pet Business Sale, Lender has consented to certain Pet
Business Assets to be Excluded Collateral. 
Borrower shall complete the Pet Business Sale on or before September 30,
2009, on terms acceptable to Lender in its sole but reasonable discretion.  In addition to any Event of Default caused
thereby, if the Pet Business Sale is not completed by Borrower on or before September 30,
2009 as set forth herein:

 

(a)           The Lender shall be
authorized to record the Pet Business IP Agreement with the United States
Patent and Trademark office. 
Notwithstanding anything contained in the Loan Documents to the
contrary, the Lender agrees that the Pet Business IP Agreement shall not be
effective, and Borrower shall not be deemed to have granted to Lender a
security interest in the Pet Business IP, unless and until the Borrower fails
to complete the Pet Business Sale as set forth herein on or before September 30,
2009.

 

45

 

(b)           The definition of Excluded Assets shall immediately
be deemed to be amended, without further action of Borrower or Lender to read
as follows:

 

“Excluded
Assets” means (i) the KCK Equipment and (ii) the Borrower’s equity
interest in D.M. Ingredients GmbH.

 

(c)           The Borrower shall deliver
to Lender a mortgagee disclaimer and consent from GE Capital Public Finance, Inc.
in a form and substance acceptable to Lender in its sole but reasonable
discretion.

 

Section 6.32           Grant of
Mortgage Lien on Real Estate Collateral.  On or before the date which is thirty (30)
days after the Funding Date, the Borrower shall have delivered to Lender, each in a form
and substance acceptable to Lender in its sole but reasonable
discretion:

 

(a)           Executed mortgages covering
the Real Estate Collateral and evidence that counterparts of such mortgages
have been recorded in all places necessary or desirable, in the judgment of the
Lender, to create an enforceable Lien, on each parcel of the Real Estate
Collateral, which is not subordinate to any Lien except Permitted Liens, in
favor of the Lender.

 

(b)           An executed environmental
indemnity agreement covering the Real Estate Collateral;

 

(c)           An American Land Title
Association title commitment for the Real Estate Collateral;

 

(d)           A copy any existing survey
of the Real Estate Collateral in possession of Borrower;

 

(e)           A flood hazard determination
form, confirming whether or not such parcel is in a flood hazard area and
whether or not flood insurance must be obtained, and, if the any portion of the
Real Estate Collateral is located in a flood hazard
area; and

 

(f)            Such other documents or
agreements as the Lender in its sole but reasonable discretion may require.

 

Section 6.33           Delivery of Licensor
Agreements.  On or
before the date which is thirty (30) days after the Funding Date, the Borrower
shall have delivered to Lender, each in a form and substance acceptable to
Lender in its sole but reasonable discretion, Licensor Agreements relating to
certain Licensed Intellectual Property from each of (i) Kansas State
University Research Foundation and (ii) Regents of the University of
Minnesota a constitutional corporation under the laws of the State of
Minnesota.

 

Section 6.34           Landlord Waiver.  On or before the date which is thirty (30)
days after the Funding Date, Borrower shall deliver to Lender a landlord waiver
from the City of Atchison and Commerce Bank as trustee, for Borrower’s Premises
located at 100 and 200 Commercial Street in Atchison, Kansas 66002, which
waiver, shall, among other things, waive the lien of such landlord in the
Collateral and otherwise be in a form and substance acceptable to Lender in its
sole but reasonable discretion.

 

46

 

Section 6.35           ADM Control Agreement.  On or before the date which is three (3) days
after the Funding Date, Borrower shall deliver to Lender a account control from
ADM Investor Services, Inc. in a form and substance acceptable to Lender
in its sole but reasonable discretion.

 

ARTICLE VII

 

EVENTS
OF DEFAULT, RIGHTS AND REMEDIES

 

Section 7.1             Events of Default.  “Event of Default”, wherever used herein,
means any one of the following events:

 

(a)           Default in the payment of
the Revolving Note, any Obligation of Reimbursement, or any default with
respect to any other Indebtedness due from Borrower to Lender as such
Indebtedness becomes due and payable;

 

(b)           Default in the performance,
or breach, of any covenant or agreement of the Borrower contained in this
Agreement;

 

(c)           An Overadvance arises as the
result of any reduction in the Borrowing Base, or arises in any manner on terms
not otherwise approved of in advance by the Lender in writing;

 

(d)           At any time during any
twenty-four month period, individuals who at the beginning of such period
constituted the board of Directors of the Borrower (together with any new
Directors whose election to such board of Directors, or whose nomination for
election was approved by a vote of two thirds of the Directors then still in
office who were either Directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of Directors of the Borrower then
in office;

 

(e)           Any Financial Covenant shall
become inapplicable due to the lapse of time and the failure of the Lender and
the Borrower to come to any agreement to amend any such covenant to cover
future periods that is acceptable to the Lender in the Lender’s sole but
reasonable discretion;

 

(f)            The Borrower or any
Guarantor shall be or become insolvent, or admit in writing its or his
inability to pay its or his debts as they mature, or make an assignment for the
benefit of creditors; or the Borrower or any Guarantor shall apply for or
consent to the appointment of any receiver, trustee, or similar officer for it
or him or for all or any substantial part of its or his property; or such
receiver, trustee or similar officer shall be appointed without the application
or consent of the Borrower or such Guarantor, as the case may be; or the
Borrower or any Guarantor shall institute (by petition, application, answer,
consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding relating
to it or him under the laws of any jurisdiction; or any such proceeding shall
be instituted (by petition, application or otherwise) against the Borrower or
any such Guarantor; or any judgment, writ, warrant of attachment or execution
or similar process shall be issued or levied against a substantial part of the
property of the Borrower or any Guarantor;

 

47

 

(g)           A petition shall be filed by
or against the Borrower or any Guarantor under the United States Bankruptcy
Code or the laws of any other jurisdiction naming the Borrower or such
Guarantor as debtor;

 

(h)           The failure of Borrower to
pay on or before when due, declared due or demanded by any municipal, state or
federal agency any taxes, payments, fees or other amounts including but not
limited to all taxes due pursuant to 26 U.S.C. 5001 et seq.(and
any actual or effective substitutions or replacements thereof).

 

(i)            Any representation or
warranty made by the Borrower in this Agreement, by any Guarantor in any
Guaranty delivered to the Lender, or by the Borrower (or any of its Officers)
or any Guarantor in any agreement, certificate, instrument or financial
statement or other statement contemplated by or made or delivered pursuant to
or in connection with this Agreement or any such Guaranty shall be incorrect in
any material respect, provided
notwithstanding anything contained herein to the contrary, Borrower shall have
thirty (30) days from the occurrence of any event required to be disclosed by
Schedule 5.2, 5.11 or 5.14 to provide such updated disclosures to Lender;

 

(j)            The rendering against the
Borrower of an arbitration award, a final judgment, decree or order for the
payment of money in excess of $50,000 and the continuance of such arbitration
award, judgment, decree or order unsatisfied and in effect for any period of 30
consecutive days without a stay of execution;

 

(k)           A default under any bond,
debenture, note or other evidence of material indebtedness of the Borrower owed
to any Person other than the Lender, or under any indenture or other instrument
under which any such evidence of indebtedness has been issued or by which it is
governed, or under any material lease or other contract, and the expiration of
the applicable period of grace, if any, specified in such evidence of
indebtedness, indenture, other instrument, lease or contract;

 

(l)            Any Reportable Event, which
the Lender determines in good faith might constitute grounds for the
termination of any Pension Plan or for the appointment by the appropriate
United States District Court of a trustee to administer any Pension Plan, shall
have occurred and be continuing 30 days after written notice to such effect
shall have been given to the Borrower by the Lender; or a trustee shall have
been appointed by an appropriate United States District Court to administer any
Pension Plan; or the Pension Benefit Guaranty Corporation shall have instituted
proceedings to terminate any Pension Plan or to appoint a trustee to administer
any Pension Plan; or the Borrower or any ERISA Affiliate shall have filed for a
distress termination of any Pension Plan under Title IV of ERISA; or the
Borrower or any ERISA Affiliate shall have failed to make any quarterly
contribution required with respect to any Pension Plan under Section 412(m) of
the IRC, which the Lender determines in good faith may by itself, or in
combination with any such failures that the Lender may determine are likely to
occur in the future, result in the imposition of a Lien on the Borrower’s
assets in favor of the Pension Plan; or any withdrawal, partial withdrawal,
reorganization or other event occurs with respect to a Multiemployer Plan which
results or could reasonably be expected to result in a material liability of
the Borrower to the Multiemployer Plan under Title IV of ERISA;

 

48

 

(m)          An event of default shall
occur under any Security Document;

 

(n)           Default in the payment of
any amount owed by the Borrower to the Lender other than any Indebtedness
arising hereunder;

 

(o)           Any Guarantor shall
repudiate, purport to revoke or fail to perform any obligation under such
Guaranty in favor of the Lender, any individual Guarantor shall die or any
other Guarantor shall cease to exist;

 

(p)           The Borrower shall take or
participate in any action which would be prohibited under the provisions of any
Subordination Agreement or make any payment with respect to indebtedness that
has been subordinated pursuant to any Subordination Agreement;

 

(q)           The Lender believes in good
faith that the prospect of payment in full of any part of the Indebtedness, or
that full performance by the Borrower under the Loan Documents, is impaired, or
that there has occurred any material adverse change in the business or
financial condition of the Borrower;

 

(r)            There has occurred any
breach, default or event of default by or attributable to, any Affiliate under
any agreement between the Affiliate and the Lender; or

 

(s)           The indictment of any
Director, Officer, Guarantor, or any Owner of the Borrower for a felony offence
under state or federal law; or

 

(t)            Tim Newkirk (i) shall
cease to be actively engaged in the Borrower’s day-to-day business activities
for the period ending one (1) year from the Funding Date or (ii) shall
cease to be actively engaged in the Borrower’s day-to-day business activities
and Borrower fails to hire a successor acceptable to Lender in its sole but
reasonable discretion within ninety (90) days.

 

Section 7.2             Rights and Remedies.  During any Default Period, the Lender may
exercise any or all of the following rights and remedies:

 

(a)           The Lender may, by notice to
the Borrower, declare the Commitment to be terminated, whereupon the same shall
forthwith terminate;

 

(b)           The Lender may, by notice to
the Borrower, declare the Indebtedness to be forthwith due and payable,
whereupon all Indebtedness shall become and be forthwith due and payable,
without presentment, notice of dishonor, protest or further notice of any kind,
all of which the Borrower hereby expressly waives;

 

(c)           The Lender may, without notice
to the Borrower and without further action, apply any and all money owing by
the Lender to the Borrower to the payment of the Indebtedness;

 

(d)           The Lender may exercise and
enforce any and all rights and remedies available upon default to a secured party
under the UCC, including the right to take possession of Collateral, or any
evidence thereof, proceeding without judicial process or by judicial process
(without a prior hearing or notice thereof, which the Borrower hereby expressly
waives) and the right to sell, lease or otherwise dispose of any or all of the
Collateral (with or without giving any 

 

49

 

warranties as to the Collateral, title to the
Collateral or similar warranties), and, in connection therewith, the Borrower
will on demand assemble the Collateral and make it available to the Lender at a
place to be designated by the Lender which is reasonably convenient to both
parties;

 

(e)           The Lender may make demand
upon the Borrower and, forthwith upon such demand, the Borrower will pay to the
Lender in immediately available funds for deposit in the Special Account
pursuant to Section 2.5 an amount equal to the aggregate maximum amount
available to be drawn under all Letters of Credit then outstanding, assuming
compliance with all conditions for drawing thereunder;

 

(f)            The Lender may exercise and
enforce its rights and remedies under the Loan Documents;

 

(g)           The Lender may without
regard to any waste, adequacy of the security or solvency of the Borrower, apply
for the appointment of a receiver of the Collateral, to which appointment the
Borrower hereby consents, whether or not foreclosure proceedings have been
commenced under the Security Documents and whether or not a foreclosure sale
has occurred; and

 

(h)           The Lender may exercise any
other rights and remedies available to it by law or agreement.

 

Notwithstanding
the foregoing, upon the occurrence of an Event of Default described in Section 7.1(f) or
(g), the Indebtedness shall be immediately due and payable automatically
without presentment, demand, protest or notice of any kind.  If the Lender sells any of the Collateral on
credit, the Indebtedness will be reduced only to the extent of payments
actually received.  If the purchaser
fails to pay for the Collateral, the Lender may resell the Collateral and shall
apply any proceeds actually received to the Indebtedness.

 

Section 7.3             Certain Notices.  If notice to the Borrower of any intended
disposition of Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given (in the manner specified in Section 8.3) at least ten calendar days
before the date of intended disposition or other action.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.1             No Waiver; Cumulative
Remedies; Compliance with Laws.  No failure or delay by the Lender in
exercising any right, power or remedy under the Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy under the Loan Documents.  The remedies provided in the Loan Documents
are cumulative and not exclusive of any remedies provided by law.  The Lender may comply with any applicable
state or federal law requirements in connection with a disposition of the
Collateral and such compliance will not be considered adversely to affect the
commercial reasonableness of any sale of the Collateral.

 

50

 

Section 8.2             Amendments, Etc.  No amendment, modification, termination or
waiver of any provision of any Loan Document or consent to any departure by the
Borrower therefrom or any release of a Security Interest shall be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.  No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.

 

Section 8.3             Notices, Requests, and
Communications; Confidentiality.  Except as otherwise expressly provided in
this Agreement:

 

(a)           Delivery of
Notices, Requests and Communications.  Any notice, request, demand, or other
communication by either party that is required under the Loan Documents, or any
other document or agreement described in or related to this Agreement, to be in
the form of a Record (but excluding any Record containing information Borrower
must report to Lender under Section 6.1) may be delivered (i) in
person, (ii) by first class U.S. mail, (iii) by overnight courier of
national reputation, or (iv) by fax, or the Record may be sent as an Electronic
Record and delivered (v) by an encrypted e-mail, or (vi) through
Lender’s Commercial Electronic Office® (“CEO®”) portal or other secure electronic channel to which
the parties have agreed.

 

(b)           Addresses
for Delivery.  Delivery of
any Record under this Section 7.4 shall be made to the appropriate address
set forth on the last page of this Agreement (which either party may
modify by a Record sent to the other party), or through Lender’s CEO portal or other secure electronic channel to which the
parties have agreed.

 

(c)           Date of
Receipt. 
Each Record sent pursuant to the terms of this Section 8.3
will be deemed to have been received on (i) the date of delivery if
delivered in person, (ii) the date deposited in the mail if sent by mail, (iii) the
date delivered to the courier if sent by overnight courier, (iv) the date
of transmission if sent by fax, or (v) the date of transmission, if sent
as an Electronic Record by electronic mail or through Lender’s CEO portal or similar secure electronic channel to which the
parties have agreed; except that any request for an Advance or any other
notice, request, demand or other communication from Borrower required under Section 1,
and any request for an accounting under Section 9-210 of the UCC, will not
be deemed to have been received until actual receipt by Lender on a Business
Day by an authorized employee of Lender.

 

(d)           Confidentiality
of Unencrypted E-mail. 
Borrower acknowledges that if it sends an Electronic Record to Lender
without encryption by e-mail or as an e-mail file attachment, there is a risk
that the Electronic Record may be received by unauthorized Persons, and that by
so doing it will be deemed to have accepted this risk and the consequences
of any such unauthorized disclosure.

 

Section 8.4             Borrower Information
Reporting; Confidentiality.  Except as otherwise expressly provided in
this Agreement:

 

(b)           Delivery of
Borrower Information Records.  Any information that Borrower is required to
deliver under Section 6.1 in the form of a Record may be delivered to
Lender (i) in person, or by (ii) first class U.S. mail, (iii) overnight
courier of national reputation, or (iv) fax, or 

 

51

 

the Record may be sent as an Electronic
Record (v) by encrypted e-mail, or (vi) through the file upload
service of Lender’s CEO portal or
other secure electronic channel to which the parties have agreed.

 

(c)           Addresses
for Delivery.  Delivery of
any Record to Lender under this Section 8.4 shall be made to the
appropriate address set forth on the last page of this Agreement (which
Lender may modify by a Record sent to Borrower), or through Lender’s CEO portal or other secure electronic channel to which the
parties have agreed.

 

(d)           Date of
Receipt. 
Each Record sent pursuant to this section will be deemed to
have been received on (i) the date of delivery to an authorized employee
of Lender, if delivered in person, or by U.S. mail, overnight courier, fax, or
e-mail; or (ii) the date of transmission, if sent as an Electronic Record through
Lender’s CEO portal or similar secure electronic
channel to which the parties have agreed.

 

(e)           Authentication
of Borrower Information Records.  Borrower shall Authenticate any Record
delivered (i) in person, or by U.S. mail, overnight courier, or fax, by
the signature of the Officer or employee of Borrower who prepared the Record; (ii) as
an Electronic Record sent via encrypted e-mail, by the signature of the Officer
or employee of Borrower who prepared the Record by any file format signature
that is acceptable to Lender, or by a separate certification signed and sent by
fax; or (iii) as an Electronic Record via the file upload service of
Lender’s CEO portal or similar secure electronic
channel to which the parties have agreed, through such credentialing process as
Lender and Borrower may agree to under the CEO agreement.

 

(f)            Certification
of Borrower Information Records.   Any Record (including
without limitation any Electronic Record) Authenticated and delivered to Lender
under this Section 8.4 will be deemed to have been certified as materially
true, correct, and complete by Borrower and each Officer or employee of
Borrower who prepared and Authenticated the Record on behalf of Borrower, and
may be legally relied upon by Lender without regard to method of delivery or
transmission.

 

(g)           Confidentiality
of Borrower Information Records Sent by Unencrypted E-mail.  Borrower acknowledges that if it sends an
Electronic Record to Lender without encryption by e-mail or as an e-mail file
attachment, there is a risk that the Electronic Record may be received by
unauthorized Persons, and that by so doing it will be deemed to have accepted
this risk and the consequences of any such unauthorized disclosure.  Borrower acknowledges that it may deliver
Electronic Records containing Borrower information to Lender by e-mail pursuant
to any encryption tool acceptable to Lender and Borrower, or through Lender’s CEO portal file upload service without risk of unauthorized
disclosure.

 

Section 8.5             Costs and Expenses.  The Borrower shall pay on demand all costs
and expenses, including reasonable attorneys’ fees, incurred by the Lender in
connection with the Indebtedness, this Agreement, the Loan Documents, any
Letter of Credit and any other document or agreement related hereto or thereto,
and the transactions contemplated hereby, including all such costs, expenses
and fees incurred in connection with the negotiation, preparation, execution,
amendment, administration, performance, collection and enforcement of the
Indebtedness and all 

 

52

 

such
documents and agreements and the creation, perfection, protection,
satisfaction, foreclosure or enforcement of the Security Interest.

 

Section 8.6             Indemnity.  In addition to the payment of expenses
pursuant to Section 8.5, the Borrower shall indemnify, defend and hold
harmless the Lender, and any of its participants, parent corporations,
subsidiary corporations, affiliated corporations, successor corporations, and
all present and future officers, directors, employees, attorneys and agents of
the foregoing (the “Indemnitees”) from and against any of the following
(collectively, “Indemnified Liabilities”):

 

(i)            Any and all
transfer taxes, documentary taxes, assessments or charges made by any governmental
authority by reason of the execution and delivery of the Loan Documents or the
making of the Advances;

 

(ii)           Any claims,
loss or damage to which any Indemnitee may be subjected if any representation
or warranty contained in Section 5.14 proves to be incorrect in any
respect or as a result of any violation of the covenant contained in Section 6.12(b) ;
and

 

(iii)          Any and all
other liabilities, losses, damages, penalties, judgments, suits, claims, costs
and expenses of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel) in connection with the foregoing and any other
investigative, administrative or judicial proceedings, whether or not such
Indemnitee shall be designated a party thereto, which may be imposed on,
incurred by or asserted against any such Indemnitee, in any manner related to
or arising out of or in connection with the making of the Advances and the Loan
Documents or the use or intended use of the proceeds of the Advances.  Notwithstanding the foregoing, the Borrower
shall not be obligated to indemnify any Indemnitee for any Indemnified
Liability caused by the gross negligence or willful misconduct of such
Indemnitee.

 

If
any investigative, judicial or administrative proceeding arising from any of
the foregoing is brought against any Indemnitee, upon such Indemnitee’s
request, the Borrower, or counsel designated by the Borrower and satisfactory
to the Indemnitee, will resist and defend such action, suit or proceeding to
the extent and in the manner directed by the Indemnitee, at the Borrower’s sole
costs and expense.  Each Indemnitee will
use its best efforts to cooperate in the defense of any such action, suit or
proceeding.  If the foregoing undertaking
to indemnify, defend and hold harmless may be held to be unenforceable because
it violates any law or public policy, the Borrower shall nevertheless make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  The Borrower’s obligations under this Section 8.6
shall survive the termination of this Agreement and the discharge of the
Borrower’s other obligations hereunder.

 

Section 8.7             Participants.  The Lender and its participants, if any, are
not partners or joint venturers, and the Lender shall not have any liability or
responsibility for any obligation, act or omission of any of its
participants.  All rights and powers
specifically conferred upon the Lender may be transferred or delegated to any
of the Lender’s participants, successors or assigns.

 

53

 

Section 8.8             Execution in Counterparts;
Telefacsimile Execution.  This
Agreement and other Loan Documents may be executed in any number of
counterparts, 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. 
Delivery of an executed counterpart of this Agreement or any other Loan
Document by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Agreement or such other Loan
Document.  Any party delivering an
executed counterpart of this Agreement or any other Loan Document by telefacsimile
also shall deliver an original executed counterpart of this Agreement or such
other Loan Document but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Agreement or such other Loan Document.

 

Section 8.9             Retention of Borrower’s
Records.  The Lender shall have no
obligation to maintain any electronic records or any documents, schedules,
invoices, agings, or other papers delivered to the Lender by the Borrower or in
connection with the Loan Documents for more than 30 days after receipt by the
Lender.  If there is a special need to
retain specific records, the Borrower must inform the Lender of its need to
retain those records with particularity, which must be delivered in accordance
with the notice provisions of Section 8.3 within 30 days of the Lender
taking control of same.

 

Section 8.10           Binding Effect; Assignment;
Complete Agreement; Sharing Information.  The Loan Documents shall be binding upon and
inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights thereunder or any interest therein without the Lender’s prior
written consent.  To the extent permitted
by law, the Borrower waives and will not assert against any assignee any
claims, defenses or set-offs which the Borrower could assert against the
Lender.  This Agreement shall also bind
all Persons who become a party to this Agreement as a borrower.  This Agreement, together with the Loan
Documents, comprises the complete and integrated agreement of the parties on
the subject matter hereof and supersedes all prior agreements, written or oral,
on the subject matter hereof.  To the
extent that any provision of this Agreement contradicts other provisions of the
Loan Documents, this Agreement shall control. Without limiting the Lender’s
right to share information regarding the Borrower and its Affiliates with the
Lender’s participants, accountants, lawyers and other advisors, the Lender and
each direct and indirect subsidiary of Wells Fargo & Company may share
with each other any information that they may have in their possession
regarding the Borrower and its Affiliates, and the Borrower waives any right of
confidentiality it may have with respect to all such sharing of information.

 

Section 8.11           Severability of Provisions.  Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.

 

Section 8.12           Headings.  Article, Section and subsection headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.

 

Section 8.13           Governing Law; Jurisdiction,
Venue; Waiver of Jury Trial.  The Loan Documents shall be governed by and
construed in accordance with the substantive laws (other than conflict laws) of
the State of Minnesota.  The parties
hereto hereby (i) consent to the 

 

54

 

personal
jurisdiction of the state and federal courts located in the State of Minnesota
in connection with any controversy related to this Agreement; (ii) waive
any argument that venue in any such forum is not convenient; (iii) agree
that any litigation initiated by the Lender or the Borrower in connection with
this Agreement or the other Loan Documents may be venued in either the state or
federal courts located in the City of Minneapolis, County of Hennepin , Minnesota; and (iv) agree
that a final judgment in any such suit, action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

 

Section 8.14           Further Documents.  The Borrower will from time to time execute,
deliver, endorse and authorize the filing of any and all instruments,
documents, conveyances, assignments, security agreements, financing statements,
control agreements and other agreements and writings that the Lender may reasonably
request in order to secure, protect, perfect or enforce the Security Interest
or the Lender’s rights under the Loan Documents (but any failure to request or
assure that the Borrower executes, delivers, endorses or authorizes the filing
of any such item shall not affect or impair the validity, sufficiency or
enforceability of the Loan Documents and the Security Interest, regardless of
whether any such item was or was not executed, delivered or endorsed in a
similar context or on a prior occasion).

 

Section 8.15           Entire
Agreement.    The
following notice is included in compliance with K.S.A. 16-117 and K.S.A.
16-118:

 

“THIS WRITTEN AGREEMENT IS THE FINAL EXPRESSION OF THE CREDIT AGREEMENT
BETWEEN THE PARTIES HERETO AS THE SAME EXISTS TODAY AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE PARTIES
HERETO.  THE FOLLOWING SPACE (WHICH THE
PARTIES HERETO AGREE IS SUFFICIENT SPACE) IS PROVIDED FOR THE PLACEMENT OF
NONSTANDARD TERMS, IF ANY (IF THERE ARE NO NONSTANDARD TERMS TO BE ADDED, STATE
“NONE”):

 

NONE

 

 

BY SIGNING BELOW, THE PARTIES HERETO HEREBY AFFIRM THAT THERE IS NO
UNWRITTEN ORAL CREDIT AGREEMENT BETWEEN THEMSELVES WITH RESPECT TO THE SUBJECT
MATTER OF THIS WRITTEN CREDIT AGREEMENT.

 

[Signature Page Follows]

 

55

 

THE
BORROWER AND THE LENDER WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW
OR IN EQUITY OR IN ANY OTHER PROCEEDING BASED ON OR PERTAINING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date set forth
in the initial caption of this Agreement.

 

 

	
  100
  Commercial Street

  	
   

  	
  MGP
  INGREDIENTS, INC.

  
	
  Atchison,
  KS 66002

  	
   

  	
  a
  Kansas corporation

  
	
  Telecopier: (913)
  360-5661

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Dick Larson

  	
   

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
  e-mail:
  dick.larson@mgpingredients.com

  	
   

  	
  Name:

  	
  Timothy
  W. Newkirk

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  
	
  Wells Fargo Business Credit

  	
   

  	
   

  
	
  MAC
  N9312-040

  	
   

  	
   

  
	
  109
  South 7th Street, 4th Floor

  	
   

  	
   

  
	
  Minneapolis,
  MN 55402

  	
   

  	
  By:

  	
  /s/ Becky A. Koehler

  
	
  Telecopier: (612) 341-2472

  	
   

  	
  Name:

  	
  Becky
  A. Koehler

  
	
  Attention: Becky
  A. Koehler

  	
   

  	
  Its:

  	
  Vice President

  
	
  e-mail: becky.a.koehler@wellsfargo.com

  	
   

  	
   

  

 

56

 

Table of Exhibits and Schedules

 

	
  Exhibit A

  	
  Form of
  Revolving Note

  
	
   

  	
   

  
	
  Exhibit B

  	
  Compliance
  Certificate

  
	
   

  	
   

  
	
  Exhibit C

  	
  Premises

  
	
   

  	
   

  
	
  Exhibit D

  	
  KCK
  Equipment

  
	
   

  	
   

  
	
  Exhibit E

  	
  Pet
  Business IP

  
	
   

  	
   

  
	
  Schedule
  5.1

  	
  Trade
  Names, Chief Executive Office, Principal Place of Business, and Locations of
  Collateral

  
	
   

  	
   

  
	
  Schedule
  5.2

  	
  Capitalization
  and Organizational Chart

  
	
   

  	
   

  
	
  Schedule
  5.5

  	
  Subsidiaries

  
	
   

  	
   

  
	
  Schedule
  5.7

  	
  Litigation
  Matters

  
	
   

  	
   

  
	
  Schedule
  5.11

  	
  Intellectual
  Property Disclosures

  
	
   

  	
   

  
	
  Schedule
  5.11A

  	
  Owned
  Trademarks and Trademark Applications

  
	
   

  	
   

  
	
  Schedule
  5.11B

  	
  Owned
  Patents and Patent Applications

  
	
   

  	
   

  
	
  Schedule
  5.14

  	
  Environmental
  Matters

  
	
   

  	
   

  
	
  Schedule
  6.3

  	
  Permitted
  Liens

  
	
   

  	
   

  
	
  Schedule
  6.4

  	
  Permitted
  Indebtedness and Guaranties

  
	
   

  	
   

  
	
  Schedule
  6.8A

  	
  Compensation
  Program and Guidelines

  
	
   

  	
   

  
	
  Schedule
  6.8B

  	
  Stock
  Incentive Program and Guidelines

  
			

 

 

Exhibit A to Credit and Security Agreement

 

REVOLVING NOTE

 

	
  $25,000,000

  	
   

  	
  July 21, 2009

  

 

For
value received, the undersigned, MGP INGREDIENTS, INC., a Kansas corporation
(the “Borrower”), hereby promises to pay to the order of WELLS FARGO BANK,
NATIONAL ASSOCIATION (the “Lender”), acting through its Wells Fargo Business
Credit operating division, on the Termination Date referenced in the Credit and
Security Agreement dated the same date as this Revolving Note that was entered
into by the Lender and the Borrower (as amended from time to time, the “Credit
Agreement”), at Lender’s office located at MAC N9312-040, 109 South 7th Street,
4th Floor, Minneapolis, MN 55402 , or at any other place designated at any time
by the holder hereof, in lawful money of the United States of America and in
immediately available funds, the principal sum of TWENTY FIVE MILLION AND
NO/100 DOLLARS ($25,000,000) or the aggregate unpaid principal amount of all
Revolving Advances made by the Lender to the Borrower under the Credit
Agreement, together with interest on the principal amount hereunder remaining
unpaid from time to time, computed on the basis of the actual number of days
elapsed and a 360-day year, from the date hereof until this Revolving Note is
fully paid at the rate from time to time in effect under the Credit Agreement.

 

This
Revolving Note is the Revolving Note referenced in the Credit Agreement, and is
subject to the terms of the Credit Agreement, which provides, among other
things, for acceleration hereof. 
Principal and interest due hereunder shall be payable as provided in the
Credit Agreement, and this Revolving Note may be prepaid only in accordance
with the terms of the Credit Agreement. 
This Revolving Note is secured, among other things, pursuant to the
Credit Agreement and the Security Documents as therein defined, and may now or
hereafter be secured by one or more other security agreements, mortgages, deeds
of trust, assignments or other instruments or agreements.

 

The
Borrower shall pay all costs of collection, including reasonable attorneys’
fees and legal expenses if this Revolving Note is not paid when due, whether or
not legal proceedings are commenced.

 

Presentment
or other demand for payment, notice of dishonor and protest are expressly
waived.

 

	
   

  	
  MGP
  INGREDIENTS, INC.

  
	
   

  	
  a
  Kansas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
  Name:

  	
  Timothy
  W. Newkirk

  
	
   

  	
  Its:

  	
  President

  

 

A-1

 

Exhibit B to Credit and Security Agreement

 

COMPLIANCE CERTIFICATE

 

	
  To:

  	
  Wells
  Fargo Bank, National Association

  
	
  Date:

  	
  [                                      ,
  20   ]

  
	
  Subject:

  	
  Financial
  Statements

  

 

In
accordance with our Credit and Security Agreement dated
                ,
2009(as amended from time to time, the “Credit Agreement”), attached are the
financial statements of MGP INGREDIENTS, INC., a Kansas corporation (the “Borrower”)
dated [                                  ,
20      ](the “Reporting Date”) and the
year-to-date period then ended (the “Current Financials”).  All terms used in this certificate have the
meanings given in the Credit Agreement.

 

A.            Preparation
and Accuracy of Financial Statements.  I certify that the Current Financials have
been prepared in accordance with GAAP, subject to year-end audit adjustments,
and fairly present the Borrower’s financial condition as of the Reporting Date.

 

B.            Name of
Borrower; Merger and Consolidation Related Issues.  I certify that:

 

(Check
one)

 

o            The Borrower has not, since
the date of the Credit Agreement, changed its name or jurisdiction of
organization, nor has it consolidated or merged with another Person.

 

o            The Borrower has, since the
date of the Credit Agreement, either changed its name or jurisdiction of
organization, or both, or has consolidated or merged with another Person, which
change, consolidation or merger: o was consented to in advance
by Lender in writing, and/or o is more fully described in
the statement of facts attached to this Certificate.

 

C.                                    Events
of Default.  I certify
that:

 

(Check
one)

 

o            I have no knowledge of the
occurrence of a Default or an Event of Default under the Credit Agreement,
except as previously reported to the Lender in writing.

 

o            I have knowledge of a
Default or an Event of Default under the Credit Agreement not previously
reported to the Lender in writing, as more fully described in the statement of
facts attached to this Certificate, and further, I acknowledge that the Lender may
under the terms of the Credit Agreement impose the Default Rate at any time
during the resulting Default Period.

 

D.                                    Litigation
Matters.  I certify that:

 

B-1

 

(Check
one)

 

o            I have no knowledge of any
material adverse change to the litigation exposure of the Borrower or any of
its Affiliates or of any Guarantor.

 

o            I have knowledge of material
adverse changes to the litigation exposure of the Borrower or any of its
Affiliates or of any Guarantor not previously disclosed in Schedule 5.7, as
more fully described in the statement of facts attached to this Certificate.

 

E.             Financial
Covenants.  I further
certify that:

 

(Check
and complete each of the following)

 

1.             Minimum Net Income.  Pursuant to Section 6.2(b) of the
Credit Agreement, as of the Reporting Date, the Borrower’s Net Income was [$            
  ], which o satisfies o does not
satisfy the requirement that Net Income be not less than the
amount set forth in the table below (numbers appearing between “< >“ are
negative) on the Reporting Date:

 

	
  Period

  	
   

  	
  Minimum Net Income

  	
   

  
	
  7/1/2009 Through 7/31/2009

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  7/1/2009 Through 8/31/2009

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  7/1/2009 Through 9/30/2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  7/1/2009 Through
  10/31/2009

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  7/1/2009 Through
  11/30/2009

  	
   

  	
  $

  	
  1,350,000

  	
   

  
	
  7/1/2009 Through
  12/31/2009

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
  7/1/2009 Through 1/31/2010

  	
   

  	
  $

  	
  1,800,000

  	
   

  
	
  7/1/2009 Through 2/28/2010

  	
   

  	
  $

  	
  2,200,000

  	
   

  
	
  7/1/2009 Through 3/31/2010

  	
   

  	
  $

  	
  2,575,000

  	
   

  
	
  7/1/2009 Through 4/30/2010

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  7/1/2009 Through 5/31/2010

  	
   

  	
  $

  	
  3,250,000

  	
   

  
	
  7/1/2009 Through 6/30/2010

  	
   

  	
  $

  	
  3,500,000

  	
   

  
	
  7/1/2010 Through 7/31/2010

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  7/1/2010 Through 8/31/2010

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  7/1/2010 Through 9/30/2010

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

2.             Minimum Debt Service Coverage
Ratio.  Pursuant to Section 6.2(b) of
the Credit Agreement, as of the Reporting Date, the Borrower’s Debt Service
Coverage Ratio was
[            
  ]to 1.00, which o satisfies o does not
satisfy the requirement that such ratio be not less than 1.15 to 1.00 on the
Reporting Date.

 

3.             Capital Expenditures.  Pursuant to Section 6.2(c) of the
Credit Agreement, for the year-to-date period ending on the Reporting Date, the
Borrower has expended or contracted to expend during the fiscal  year ended [                              ,
20      ,  ] for Capital
Expenditures, [  $                                      ]
in the aggregate, which o satisfies o does not
satisfy the 

 

B-2

 

requirement that such expenditures not exceed
$4,500,000 in the aggregate during any fiscal year.

 

4.             Salaries.  The Borrower has not paid excessive or
unreasonable salaries, bonuses, commissions, consultant fees or other
compensation, or increased the salary, bonus, commissions, consultant fees or
other compensation of any Director, Officer or consultant, or any member of
their families, by more than ten percent (10%) as of the Reporting Date over
the amount paid in the Borrower’s previous fiscal year, either individually or
for all such persons in the aggregate, and has not paid any increase from any
source other than profits earned in the year of payment, and as a consequence
Borrower o is o is not in
compliance with Section 6.8 of the Credit Agreement.

 

5.             Rail Invoices.  The Borrower has paid all Rail Invoices as
such Rail Invoices became due.  Attached
hereto are copies of all unpaid Rail Invoices and evidence of payment of all
Rail Invoices which became due since the delivery of the last Compliance
Certificate.

 

6.             Tax Due on Alcohol Inventory.  During the one month period ending on the
Reporting Date, Borrower has produced
[                            ]
proof gallons of food and fuel grade alcohol. 
The Borrower has paid all taxes arising from the Borrower’s production
or possession of Inventory which consists of food and fuel grade alcohol except
for taxes in the amount of
[$                      ]
which are set forth in detail on a schedule attached hereto.

 

Attached
are statements of all relevant facts and computations in reasonable detail
sufficient to evidence Borrower’s compliance with the financial covenants
referred to above, which computations were made in accordance with GAAP.

 

	
   

  	
  MGP
  INGREDIENTS, INC.

  
	
   

  	
  a
  Kansas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its Chief Financial Officer

  

 

B-3Exhibit
4.1.1

 

PATENT AND TRADEMARK
SECURITY AGREEMENT

 

This Agreement, dated as of July 21, 2009, is made by and between MGP
INGREDIENTS, INC., a Kansas corporation having a business location at the
address set forth below next to its signature (the “Debtor”),
and Wells Fargo Bank, National Association (the “Wells Fargo”),
and having a business location at the address set forth below next to its
signature.

 

Recitals

 

Company and Wells Fargo are parties to a Credit and Security Agreement
of even date herewith (as the same may hereafter be amended, supplemented or
restated from time to time, the “Credit Agreement”) setting forth the terms on
which Wells Fargo may now or hereafter extend credit to or for the account of
Company.

 

As a condition to extending credit to or for the account of Company,
Wells Fargo has required the execution and delivery of this Agreement by
Company.

 

ACCORDINGLY, in consideration of the mutual covenants contained in the
Loan Documents and herein, the parties hereby agree as follows:

 

1.                                       Definitions. All terms
defined in the Recitals hereto or in the Credit Agreement that are not
otherwise defined herein shall have the meanings given to them therein. In
addition, the following terms have the meanings set forth below:

 

“Patents” means
all of Company’s right, title and interest in and to patents or applications
for patents, fees or royalties with respect to each, and including without
limitation the right to sue for past infringement and damages therefor, and
licenses thereunder, all as presently existing or hereafter arising or
acquired, including without limitation the patents listed on Exhibit A.

 

“Security Interest”
has the meaning given in Section 2.

 

“Trademarks” means all of Company’s
right, title and interest in and to: (i) trademarks, service marks,
collective membership marks, registrations and applications for registration
for each, and the respective goodwill associated with each, (ii) licenses,
fees or royalties with respect to each, (iii) the right to sue for past,
present and future infringement, dilution and damages therefor, and (iv) licenses
thereunder, all as presently existing or hereafter arising or acquired,
including, without limitation, the marks listed on Exhibit B.

 

2.                                       Security
Interest. Company hereby irrevocably pledges and assigns to,
and grants Wells Fargo a security interest (the “Security Interest”) with power
of sale to the extent permitted by law, in the Patents and in the Trademarks to
secure payment of the Indebtedness. As set forth in the Credit Agreement, the
Security Interest is coupled with a security interest in substantially all of
the personal property of Company.  This
Agreement grants only the Security 

 

 

Interest
herein described, is not intended to and does not affect any present transfer
of title of any trademark registration or application and makes no assignment
and grants no right to assign or perform any other action with respect to any
intent to use trademark application, unless such action is permitted under 15
U.S.C. § 1060.

 

3.                                       Representations,
Warranties and Agreements. Company represents, warrants and agrees as
follows:

 

(a)                                  Existence;
Authority. Company is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation, and
this Agreement has been duly and validly authorized by all necessary corporate
action on the part of Company.

 

(b)                                 Patents.
Exhibit A accurately lists all Patents owned or
controlled by Company as of the date hereof, or to which Company has a right as
of the date hereof to have assigned to it, and accurately reflects the
existence and status of applications and letters patent pertaining to the
Patents as of the date hereof. If after the date hereof, Company owns, controls
or has a right to have assigned to it any Patents not listed on Exhibit A,
or if Exhibit A ceases to accurately reflect the existence and
status of applications and letters patent pertaining to the Patents, then
Company shall within 60 days provide written notice to Wells Fargo with a
replacement Exhibit A, which upon acceptance by Wells Fargo shall
become part of this Agreement.

 

(c)                                  Trademarks.  Exhibit B
accurately lists all Trademarks owned or controlled by Company as of the date
hereof and accurately reflects the existence and status of Trademarks and all
applications and registrations pertaining thereto as of the date hereof;
provided, however, that Exhibit B need not list common law marks
(i.e., Trademarks for which there are no applications or registrations) which
are not material to Company’s or any Affiliate’s business(es).  If after the date hereof, Company owns or
controls any Trademarks not listed on Exhibit B (other than common
law marks which are not material to Company’s or any Affiliate’s business(es)),
or if Exhibit B ceases to accurately reflect the existence and
status of applications and registrations pertaining to the Trademarks, then
Company shall promptly provide written notice to Wells Fargo with a replacement
Exhibit B, which upon acceptance by Wells Fargo shall become part
of this Agreement.

 

(d)                                 Affiliates. As of the
date hereof, no Affiliate (other than D.M. Ingredients GmbH, to the extent set
forth in Schedule 5.11 to the Credit Agreement) owns, controls, or has a
right to have assigned to it any items that would, if such item were owned by
Company, constitute Patents or Trademarks. If after the date hereof any
Affiliate owns, controls, or has a right to have assigned to it any such items,
then Company shall promptly either: (i) cause such Affiliate (other than
D.M. Ingredients GmbH) to assign all of its rights in such item(s) to
Company; or (ii) notify Wells Fargo of such item(s) and cause such
Affiliate to execute and deliver to Wells Fargo a patent and trademark security
agreement substantially in the form of this Agreement.

 

2

 

(e)                                  Title. Except as set
forth in Schedule 5.11 to the Credit Agreement,  Company
has absolute title to each Patent and each Trademark listed on Exhibits A
and B, free and clear of all Liens except Permitted Liens. Company (i) will
have, at the time Company acquires any rights in Patents or Trademarks
hereafter arising, absolute title to each such Patent or Trademark free and
clear of all Liens except Permitted Liens, and (ii) will keep all Patents
and Trademarks free and clear of all Liens except Permitted Liens.

 

(f)                                    No
Sale. Except as permitted in the Credit Agreement, Company will not assign,
transfer, encumber or otherwise dispose of the Patents or Trademarks, or any
interest therein, without Wells Fargo’s prior written consent.

 

(g)                                 Defense.
Company will at its own expense and using commercially reasonable
efforts, protect and defend the Patents and Trademarks against all claims or
demands of all Persons other than those holding Permitted Liens.

 

(h)                                 Maintenance.
Company will at its own expense maintain the Patents and the Trademarks
to the extent reasonably advisable in its business including, but not limited
to, filing all applications to obtain letters patent or trademark registrations
and all affidavits, maintenance fees, annuities, and renewals possible with
respect to letters patent, trademark registrations and applications
therefor.  Company covenants that it will
not abandon nor fail to pay any maintenance fee or annuity due and payable on
any Patent or Trademark, nor fail to file any required affidavit or renewal in
support thereof, without first providing Wells Fargo:  (i) sufficient written notice, of at
least 30 days, to allow Wells Fargo to timely pay any such maintenance fees or
annuities which may become due on any Patents or Trademarks, or to file any
affidavit or renewal with respect thereto, and (ii) a separate written
power of attorney or other authorization to pay such maintenance fees or
annuities, or to file such affidavit or renewal, should such be necessary or
desirable.

 

(i)                                     Wells
Fargo’s Right to Take Action. If Company fails to
perform or observe any of its covenants or agreements set forth in this Section 3,
and if such failure continues for a period of ten (10) calendar days after
Wells Fargo gives Company written notice thereof (or, in the case of the
agreements contained in subsection (h), immediately upon the occurrence of such
failure, without notice or lapse of time), or if Company notifies Wells Fargo
that it intends to abandon a Patent or Trademark, Wells Fargo may (but need
not) perform or observe such covenant or agreement or take steps to prevent
such intended abandonment on behalf and in the name, place and stead of Company
(or, at Wells Fargo’s option, in Wells Fargo’s own name) and may (but need not)
take any and all other actions which Wells Fargo may reasonably deem necessary
to cure or correct such failure or prevent such intended abandonment.

 

(j)                                     Costs
and Expenses. Except to the extent that the effect of such payment
would be to render any loan or forbearance of money usurious or otherwise
illegal under any applicable law, Company shall pay Wells Fargo on demand the
amount of all moneys expended and all costs and expenses (including reasonable
attorneys’ fees and

 

3

 

disbursements) incurred by
Wells Fargo in connection with or as a result of Wells Fargo’s taking action
under subsection (i) or exercising its rights under Section 6,
together with interest thereon from the date expended or incurred by Wells
Fargo at the Default Rate.

 

(k)                                  Power
of Attorney. To facilitate Wells Fargo’s taking action under subsection
(i) and exercising its rights under Section 6, Company
hereby irrevocably appoints (which appointment is coupled with an interest)
Wells Fargo, or its delegate, as the attorney-in-fact of Company with the right
(but not the duty) from time to time to create, prepare, complete, execute,
deliver, endorse or file, in the name and on behalf of Company, any and all instruments,
documents, applications, financing statements, and other agreements and
writings required to be obtained, executed, delivered or endorsed by Company
under this Section 3, or, necessary for Wells Fargo, after an Event
of Default, to enforce or use the Patents or Trademarks or to grant or issue
any exclusive or non-exclusive license under the Patents or Trademarks to any
third party, or to sell, assign, transfer, pledge, encumber or otherwise
transfer title in or dispose of the Patents or Trademarks to any third party.
Company hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof. The power of attorney granted herein shall terminate
upon the termination of the Credit Agreement as provided therein and the payment
and performance of all Indebtedness.

 

4.                                       Debtor’s Use of
the Patents and Trademarks. Company shall be permitted
to control and manage the Patents and Trademarks, including the right to
exclude others from making, using or selling items covered by the Patents and
Trademarks and any licenses thereunder, in the same manner and with the same
effect as if this Agreement had not been entered into, so long as no Event of
Default occurs and remains uncured.

 

5.                                       Events of
Default. Each of the following occurrences shall constitute an event of
default under this Agreement (herein called “Event of
Default”):  (a) an Event
of Default, as defined in the Credit Agreement, shall occur; or (b) Company
shall fail promptly to observe or perform any covenant or agreement herein
binding on it; or (c) any of the representations or warranties contained
in Section 3 shall prove to have been incorrect in any material
respect when made.

 

6.                                       Remedies. Upon the
occurrence of an Event of Default and at any time thereafter, Wells Fargo may,
at its option, take any or all of the following actions:

 

(a)                                  Wells Fargo may
exercise any or all remedies available under the Credit Agreement.

 

(b)                                 Wells Fargo may
sell, assign, transfer, pledge, encumber or otherwise dispose of the Patents
and Trademarks.

 

(c)                                  Wells Fargo may
enforce the Patents and Trademarks and any licenses thereunder, and if Wells
Fargo shall commence any suit for such enforcement, Company shall, at the
request of Wells Fargo, do any and all lawful acts and execute any and all
proper documents required by Wells Fargo in aid of such enforcement.

 

4

 

7.                                       Miscellaneous. This
Agreement can be waived, modified, amended, terminated or discharged, and the
Security Interest can be released, only explicitly in a writing signed by Wells
Fargo. A waiver signed by Wells Fargo shall be effective only in the specific
instance and for the specific purpose given. Mere delay or failure to act shall
not preclude the exercise or enforcement of any of Wells Fargo’s rights or
remedies. All rights and remedies of Wells Fargo shall be cumulative and may be
exercised singularly or concurrently, at Wells Fargo’s option, and the exercise
or enforcement of any one such right or remedy shall neither be a condition to
nor bar the exercise or enforcement of any other. All notices to be given to
Debtor under this Agreement shall be given in the manner and with the effect
provided in the Credit Agreement. Wells Fargo shall not be obligated to
preserve any rights Company may have against prior parties, to realize on the
Patents and Trademarks at all or in any particular manner or order, or to apply
any cash proceeds of Patents and Trademarks in any particular order of
application. This Agreement shall be binding upon and inure to the benefit of
Company and Wells Fargo and their respective participants, successors and
assigns and shall take effect when signed by Company and delivered to Wells
Fargo, and Company waives notice of Wells Fargo’s acceptance hereof. Wells Fargo
may execute this Agreement if appropriate for the purpose of filing, but the
failure of Wells Fargo to execute this Agreement shall not affect or impair the
validity or effectiveness of this Agreement. A carbon, photographic or other
reproduction of this Agreement or of any financing statement signed by Company
shall have the same force and effect as the original for all purposes of a
financing statement. This Agreement shall be governed by the internal law of
Minnesota without regard to conflicts of law provisions. If any provision or
application of this Agreement is held unlawful or unenforceable in any respect,
such illegality or unenforceability shall not affect other provisions or
applications which can be given effect and this Agreement shall be construed as
if the unlawful or unenforceable provision or application had never been
contained herein or prescribed hereby. All representations and warranties
contained in this Agreement shall survive the execution, delivery and
performance of this Agreement and the creation and payment of the Indebtedness.

 

[Signatures follow]

 

5

 

THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT.

 

IN WITNESS WHEREOF, the parties have executed
this Patent and Trademark Security Agreement as of the date written above.

 

	
  100
  Commercial Street

  	
  MGP INGREDIENTS, INC.

  
	
  Atchison,
  KS 66002

  	
  a
  Kansas corporation

  
	
  Telecopier: (913) 360-5661

  	
   

  
	
   

  	
   

  
	
  Attention: Dick Larson

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
  e-mail:
  dick.larson@mgpingredients.com

  	
  Name:
  Timothy W. Newkirk

  
	
   

  	
  Its
  President

  

 

	
  STATE OF MISSOURI

  	
  )

  
	
   

  	
  )

  
	
  COUNTY OF JACKSON

  	
  )

  

 

The foregoing instrument was acknowledged
before me this 21 day of July, 2009, by Timothy W. Newkirk, the President of
MGP Ingredients, Inc., a Kansas corporation, on behalf of the corporation.

 

	
   

  	
  /s/ Martisua Ann
  Lager

  
	
   

  	
   

  
	
   

  	
  Notary Public

  

 

6

 

	
  Wells Fargo Bank, National Association 

  	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  
	
  Wells Fargo Business Credit

  	
   

  	
   

  
	
  MAC
  N9312-040

  	
   

  	
   

  
	
  109
  South 7th Street, 4th Floor

  	
   

  	
   

  
	
  Minneapolis,
  MN 55402

  	
   

  	
  By:

  	
  /s/ Becky A. Koehler

  
	
  Telecopier: (612) 341-2472

  	
   

  	
   

  	
  Becky A. Koehler, Vice President

  
	
  Attention: Becky A. Koehler

  	
   

  	
   

  
	
  e-mail: becky.a.koehler@wellsfargo.com

  	
   

  	
   

  

 

 

	
  STATE OF MINNESOTA

  	
  )

  
	
   

  	
   

  	
  )

  
	
  COUNTY OF HENNEPIN

  	
  )

  
			

 

The foregoing instrument was acknowledged
before me this 21 day of July, 2009, by Becky A.
Koehler, a Vice President of Wells Fargo Bank, National
Association, on behalf of the national association.

 

	
   

  	
  /s/ Constance Nesbitt

  
	
   

  	
   

  
	
   

  	
  Notary Public

  

 

7

 

EXHIBIT A

 

UNITED STATES ISSUED PATENTS

 

	
  Title

  	
   

  	
  Patent Number

  	
   

  	
  Issue Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Alcohol-Free Wet Extraction of Gluten Dough Into
  Gliadin and Glutenin

  	
   

  	
  5610277

  	
   

  	
  03/11/1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Modified Wheat Glutens and Use Thereof In
  Fabrication of Films

  	
   

  	
  5747648

  	
   

  	
  05/05/1998

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Modified Wheat Glutens and Use Thereof in
  Fabrication of Films

  	
   

  	
  5965708

  	
   

  	
  10/12/1999

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Modified Wheat Glutens and Use Thereof in
  Fabrication of Films

  	
   

  	
  5977312

  	
   

  	
  11/02/1999

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Gliadin-Containing Hairspray

  	
   

  	
  5780013

  	
   

  	
  07/14/1998

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Gliadin-Containing Cosmetic Formulations

  	
   

  	
  5945086

  	
   

  	
  08/31/1999

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Protein/Starch Paper Coating Compositions and
  Method of Use Thereof

  	
   

  	
  6517625

  	
   

  	
  02/11/2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Protein/Starch Paper Coating Compositions and Method
  of Use Thereof

  	
   

  	
  6605367

  	
   

  	
  08/12/2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Microwaveable Bread Products

  	
   

  	
  6482454

  	
   

  	
  11/19/2002

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Hydrolyzed Jojoba Protein

  	
   

  	
  6552171

  	
   

  	
  04/22/2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Method of Preparing Hydrolyzed Jojoba Protein

  	
   

  	
  6716599

  	
   

  	
  04/06/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Hydrolyzed Jojoba Protein

  	
   

  	
  6800736

  	
   

  	
  10/05/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Method of Preparing Hydrolyzed Jojoba Protein

  	
   

  	
  6821525

  	
   

  	
  11/23/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Formulations Including Hydrolyzed Jojoba Protein

  	
   

  	
  6649177

  	
   

  	
  11/18/2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Liquid Foam Builder Containing Hydrolyzed Grain
  Protein

  	
   

  	
  6749842

  	
   

  	
  06/15/2004

  	
   

  

 

 

	
  16.

  	
  Unhydrolyzed Jojoba Protein Products Having High
  Simmondsin Concentration

  	
   

  	
  6982164

  	
   

  	
  01/03/2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  Unhydrolyzed
  Jojoba Protein Products Having High Simmondsin Concentration and Methods of
  Producing the Same

  	
   

  	
  6955913

  	
   

  	
  10/18/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  Method of Hydrolyzing Jojoba Protein

  	
   

  	
  7238516

  	
   

  	
  07/03/2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  Cosmetic Formulation Containing Unhydrolyzed
  Jojoba Protein

  	
   

  	
  7070794

  	
   

  	
  07/04/2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  Process for Preparing Hybrid Proteins

  	
   

  	
  7534459

  	
   

  	
  05/19/2009

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Emulsion Stabilizing Starch Products

  	
   

  	
  6809197

  	
   

  	
  10/26/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  Polyvalent Metal-Substituted Starch Products

  	
   

  	
  7166305

  	
   

  	
  01/23/2007

  	
   

  

 

UNITED STATES PATENT
APPLICATIONS

 

	
  Title

  	
   

  	
  Serial Number

  	
   

  	
  Filing Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  High-Protein,
  Low-Carbohydrate Bakery Products

  	
   

  	
  11/830,507

  	
   

  	
  6/30/2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Process
  for Preparing Hybrid Proteins

  	
   

  	
  11/459,198

  	
   

  	
  6/21/2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Process
  for Preparing Hybrid Proteins

  	
   

  	
  11/777,176

  	
   

  	
  6/12/2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Resistant
  Starch-Hydrocolloid Blends and Uses Thereof

  	
   

  	
  11/689,620

  	
   

  	
  3/22/2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Thermotolerant
  Starch-Polyester Composites and Methods of Making Same

  	
   

  	
  11/585,369

  	
   

  	
  10/24/2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Starch-Plastic
  Composite Resins and Profiles Made by Extrusion

  	
   

  	
  11/339,367

  	
   

  	
  1/25/2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Pregelatinized
  Chemically Modified Resistant Starch Products and Uses Thereof

  	
   

  	
  11/294,314

  	
   

  	
  12/5/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Mineral-Bound
  Starch Compositions and Methods of Making the Same

  	
   

  	
  11/146,623

  	
   

  	
  6/7/2005

  	
   

  

 

2

 

	
  9.

  	
  Expanded
  Products with High Protein Content

  	
   

  	
  11/115,441

  	
   

  	
  4/27/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Reversibly
  Swellable Granular Starch-Lipid Composites and Methods of Making the Same

  	
   

  	
  11/146,671

  	
   

  	
  6/7/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Wheat
  Protein Isolates and their Modified Forms and Methods of Making

  	
   

  	
  11/059,166

  	
   

  	
  2/16/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  High-Protein,
  Reduced Carbohydrate Dessert and Other Food Products

  	
   

  	
  10/851,896

  	
   

  	
  5/21/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  High-Protein,
  Reduced Carbohydrate Bread and Other Food Products

  	
   

  	
  10/851/899

  	
   

  	
  5/21/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  High-protein,
  reduced-carbohydrated flat bakery and other food products

  	
   

  	
  10/851,887

  	
   

  	
  5/21/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  High-Protein,
  Reduced-Carbohydrate Bakery and Other Food Products

  	
   

  	
  10/851,847

  	
   

  	
  5/21/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  Composition
  and Method for Making High-Protein and Low-Carbohydrate Food Products

  	
   

  	
  10/983,506

  	
   

  	
  11/5/2004

  	
   

  

 

3

 

EXHIBIT B

 

UNITED STATES ISSUED
TRADEMARKS, SERVICE MARKS

 

AND COLLECTIVE MEMBERSHIP
MARKS

 

REGISTRATIONS

 

	
  Mark

  	
   

  	
  Registration Number

  	
   

  	
  Registration Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  ARISE

  	
   

  	
  2681958

  	
   

  	
  01/28/2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  COSMOGEL

  	
   

  	
  2795149

  	
   

  	
  12/16/2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  FIBERRITE

  	
   

  	
  3259490

  	
   

  	
  07/03/2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  FIBERSYM

  	
   

  	
  3143069

  	
   

  	
  09/12/2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  FIBERSYM and Design (highly stylized S)

  	
   

  	
  3086500

  	
   

  	
  04/25/2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  FOAM PRO

  	
   

  	
  2083385

  	
   

  	
  07/29/1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  MGP INGREDIENTS

  	
   

  	
  3032619

  	
   

  	
  12/20/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  MGP INGREDIENTS, INC. and Design

  	
   

  	
  3020190

  	
   

  	
  11/29/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  MIDWEST GRAIN PRODUCTS

  	
   

  	
  2926087

  	
   

  	
  02/08/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  OMNI-SMOOTH

  	
   

  	
  2891247

  	
   

  	
  10/05/2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  PASTA POWER

  	
   

  	
  2243169

  	
   

  	
  05/04/1999

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  POLYTRITICUM

  	
   

  	
  2355989

  	
   

  	
  06/06/2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  TERRATEK

  	
   

  	
  3265875

  	
   

  	
  07/17/2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  WHEATEX

  	
   

  	
  2076023

  	
   

  	
  07/01/1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  WHEATEX

  	
   

  	
  3450542

  	
   

  	
  06/17/2008

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  GELBIND

  	
   

  	
  2135094

  	
   

  	
  07/15/1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  CURE PRO

  	
   

  	
  2143582

  	
   

  	
  03/10/1998

  	
   

  

 

 

APPLICATIONS

 

COLLECTIVE MEMBERSHIP MARKS

 

UNREGISTERED MARKS

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]