Document:

Exhibit
4.2

*LOAN 1000*

 

 

MASTER SECURITY AGREEMENT

dated
as of 9/29/05(“Agreement”)

THIS AGREEMENT is between General Electric Capital
Corporation (together with its successors and assigns, if any, “Secured Party”)
and MGP Ingredients, Inc. (“Debtor”).  Secured
Party has an office at 16479 Dallas Parkway #300, Addison, TX 75001-2512.  Debtor is a corporation organized and
existing under the laws of the state of Kansas (“the State”).  Debtor’s mailing address and chief place of
business is 1300 Main Street, Atchison, KS 66002.

1.                                      CREATION OF SECURITY INTEREST.

Debtor grants to Secured Party, its successors and assigns, a security
interest in and against all property listed on any collateral schedule now or
in the future annexed to or made a part of this Agreement (“Collateral Schedule”),
and in and against all additions, attachments, accessories and accessions to
such property, all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof (all such property is individually and
collectively called the “Collateral”). 
This security interest is given to secure the payment and performance of
all debts, obligations and liabilities of any kind whatsoever of Debtor to
Secured Party, now existing or arising in the future, including but not limited
to the payment and performance of certain Promissory Notes from time to time
identified on any Collateral Schedule (collectively “Notes” and each a “Note”),
and any renewals, extensions and modifications of such debts, obligations and liabilities
(such Notes, debts, obligations and liabilities are called the “Indebtedness”).

2.                                      REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

Debtor represents, warrants and covenants as of the date of this
Agreement and as of the date of each Collateral Schedule that:

(a)           Debtor’s exact legal name is as set
forth in the preamble of this Agreement and Debtor is, and will remain, duly
organized, existing and in good standing under the laws of the State set forth
in the preamble of this Agreement, has its chief executive offices at the
location specified in the preamble, and is, and will remain, duly qualified and
licensed in every jurisdiction wherever necessary to carry on its business and
operations;

(b)           Debtor has adequate power and
capacity to enter into, and to perform its obligations under this Agreement,
each Note and any other documents evidencing, or given in connection with, any
of the Indebtedness (all of the foregoing are called the “Debt Documents”);

 

(c)           This Agreement and the other Debt Documents
have been duly authorized, executed and delivered by Debtor and constitute
legal, valid and binding agreements enforceable in accordance with their terms,
except to the extent that the enforcement of remedies may be limited under
applicable bankruptcy and insolvency laws;

(d)           No approval, consent or withholding
of objections is required from any governmental authority or instrumentality
with respect to the entry into, or performance by Debtor of any of the Debt
Documents, except any already obtained;

(e)           The entry into, and performance by,
Debtor of the Debt Documents will not (i) violate any of the organizational
documents of Debtor or any judgment, order, law or regulation applicable to
Debtor, or (ii) result in any breach of or constitute a default under any
contract to which Debtor is a party, or result in the creation of any lien,
claim or encumbrance on any of Debtor’s property (except for liens in favor of
Secured Party) pursuant to any indenture, mortgage, deed of trust, bank loan,
credit agreement, or other agreement or instrument to which Debtor is a party;

(f)            There are no suits or proceedings
pending in court or before any commission, board or other administrative agency
against or affecting Debtor which could, in the aggregate, have a material
adverse effect on Debtor, its business or operations, or its ability to perform
its obligations under the Debt Documents, nor does Debtor have reason to
believe that any such suits or proceedings are threatened;

(g)           All financial statements delivered to
Secured Party in connection with the Indebtedness have been prepared in
accordance with generally accepted accounting principles, and since the date of
the most recent financial statement, there has been no material adverse change
in Debtor’s financial condition.

(h)           The Collateral is not, and will not
be, used by Debtor for personal, family or household purposes;

(i)            The Collateral is, and will remain,
in good condition and repair and Debtor will not be negligent in its care and
use;

(j)            Debtor is, and will remain, the sole
and lawful owner, and in possession of, the Collateral, and has the sole right
and lawful authority to grant the security interest described in this
Agreement;

(k)           The Collateral is, and will remain,
free and clear of all liens, claims and encumbrances of any kind whatsoever,
except for (i) liens in favor of Secured Party; (ii) liens for taxes not yet
due or for taxes being contested in good faith and which do not involve, in the
judgment of Secured Party, any risk of the sale, forfeiture or loss of any of
the Collateral; (iii) inchoate materialmen’s, mechanic’s, repairmen’s and
similar liens arising by operation of law in the normal course of business for
amounts which are not delinquent; and (iv) liens in favor of GE Public Finance,
Inc. related specifically to the Promissory Note and Collateral Schedule 001
dated September 24, 2004 (all of such liens are called “Permitted Liens”); and

 

2

 

(l)            Debtor is and will remain in full
compliance with all laws and regulations applicable to it including, without
limitation, (i) ensuring that no person who owns a controlling interest in or
otherwise controls Debtor is or shall be (Y) listed on the Specially Designated
Nationals and Blocked Person List maintained by the Office of Foreign Assets
Control (“OFAC”), Department of the Treasury, and/or any other similar lists
maintained by OFAC pursuant to any authorizing statute, Executive Order or
regulation, or (Z) a person designated under Section 1(b), (c) or (d) of
Executive Order No. 13224 (September 23, 2001), any related enabling
legislation or any other similar Executive Orders; and (ii) compliance with all
applicable Bank Secrecy Act (“BSA”) laws, regulations and government guidance
on BSA compliance and on the prevention and detection of money laundering
violations.

3.                                      COLLATERAL.

(a)           Until the declaration of any default,
Debtor shall remain in possession of the Collateral; except that Secured Party
shall have the right to possess (i) any chattel paper or instrument that
constitutes a part of the Collateral, and (ii) any other Collateral in which
Secured Party’s security interest may be perfected only by possession.  Secured Party may inspect any of the
Collateral during normal business hours after giving Debtor reasonable prior
notice.  If Secured Party asks, Debtor
will promptly notify Secured Party in writing of the location of any
Collateral.

(b)           Debtor shall (i) use the Collateral
only in its trade or business, (ii) maintain all of the Collateral in good
operating order and repair, normal wear and tear excepted, (iii) use and
maintain the Collateral only in compliance with manufacturers recommendations
and all applicable laws, and (iv) keep all of the Collateral free and clear of
all liens, claims and encumbrances (except for Permitted Liens).

(c)           Secured Party does not authorize and
Debtor agrees it shall not (i) part with possession of any of the Collateral
(except to Secured Party or for maintenance and repair), (ii) remove any of the
Collateral from the continental United States, or (iii) sell, rent, lease,
mortgage, license, grant a security interest in or otherwise transfer or
encumber (except for Permitted Liens) any of the Collateral.

(d)           Debtor shall pay promptly when due
all taxes, license fees, assessments and public and private charges levied or
assessed on any of the Collateral, on its use, or on this Agreement or any of
the other Debt Documents. 
Notwithstanding the foregoing, so long as there exists no default
hereunder, Debtor may have up to thirty (30) days to contest the assessment of
any taxes, license fee, assessment or public or private charge on or against
the Collateral; provided the contest is made in good faith, is diligently
pursued, and does not subject the Collateral to a material risk of
confiscation, forfeiture or seizure.  At
its option, Secured Party may discharge taxes, liens, security interests or
other encumbrances at ay time levied or placed on the Collateral and may pay for
the maintenance, insurance and preservation of the Collateral and effect
compliance with the terms of this Agreement or any of the other Debt
Documents.  Debtor agrees to reimburse
Secured Party, on demand, all costs and expenses incurred by Secured Party in 

 

3

 

connection with such payment
or performance and agrees that such reimbursement obligation shall constitute
indebtedness.

(e)           Debtor shall, at all times, keep
accurate and complete records of the Collateral, and Secured Party shall have the
right to inspect and make copies of all of Debtor’s books and records relating
to the Collateral during normal business hours, after giving Debtor reasonable
prior notice.

(f)            Debtor agrees and acknowledges that
any third person who may at any time possess all or any portion of the
Collateral shall be deemed to hold, and shall hold, the Collateral as the agent
of, and as pledge holder for, Secured Party. 
Secured Party may at any time give notice to any third person described
in the preceding sentence that such third person is holding the Collateral as
the agent of, and as pledge holder for, the Secured Party.

4.                                      INSURANCE.

(a)           Debtor shall at all times bear the
entire risk of any loss, theft, damage to, or destruction of, any of the
Collateral from any cause whatsoever.

(b)           Debtor agrees to keep the Collateral
insured against loss or damage by fire and extended coverage perils, theft,
burglary, and for any or all Collateral which are vehicles, for risk of loss by
collision, and if requested by Secured Party, against such other risks as
Secured Party may reasonably require. 
The insurance coverage shall be in an amount no less than the full
replacement value of the Collateral, and deductible amounts, insurers and policies
shall be acceptable to Secured Party. 
Debtor shall deliver to Secured Party policies or certificates of
insurance evidencing such coverage.  Each
policy shall name Secured Party as a loss payee, shall provide for coverage to
Secured Party regardless of the breach by Debtor of any warranty or
representation made therein, shall not be subject to co-insurance, and shall
provide that coverage may not be canceled or altered by the insurer except upon
thirty (30) days prior written notice to Secured Party.  Debtor appoints Secured Party as its attorney-in-fact
to make proof of loss, claim for insurance and adjustments with insurers, and
to receive payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments. 
Secured Party shall not act as Debtor’s attorney-in-fact unless Debtor
is in default.  Proceeds of insurance
shall be applied, at the option of Secured Party, to repair or replace the
Collateral or to reduce any of the Indebtedness.

5.                                      REPORTS.

(a)           Debtor shall promptly notify Secured
Party of (i) any change in the name of Debtor, (ii) any change in the state of
its incorporation, organization or registration, (iii) any relocation of its
chief executive offices, (iv) any relocation of any of the Collateral, (v) any
of the Collateral being lost, stolen, missing, destroyed, materially damaged or
worn out, or (vi) any lien, claim or encumbrance other than Permitted Liens
attaching to or being made against any of the Collateral.

 

4

 

(b)           Debtor will deliver to Secured Party
Debtor’s complete financial statements, certified by a recognized firm of
certified public accountants, within ninety (90) days of the close of each
fiscal year of Debtor.  If Secured Party
requests, Debtor will deliver to Secured Party copies of Debtor’s quarterly
financial reports, certified by Debtor’s chief financial officer, within ninety
(90) days after the close of each of Debtor’s fiscal quarter. Debtor will
deliver to Secured Party copies of all Forms 10-K and 10-Q, if any, within 30
days after the dates on which they are filed with the Securities and Exchange
Commission.

6.                                      FURTHER ASSURANCES.

(a)           Debtor shall, upon request of Secured
Party, furnish to Secured Party such further information, execute and deliver
to Secured Party such documents and instruments (including, without limitation,
Uniform Commercial Code financing statements) and shall do such other acts and
things as Secured Party may at any time reasonably request relating to the
perfection or protection of the security interest created by this Agreement or
for the purpose of carrying out the intent of this Agreement.  Without limiting the foregoing, Debtor shall
cooperate and do all acts deemed necessary or advisable by Secured Party to
continue in Secured Party a perfected first security interest in the
Collateral, with the exception of liens in favor of GE Public Finance, Inc.
related specifically to the Promissory Note and Collateral Schedule 001 dated
September 24, 2004, and shall obtain and furnish to Secured Party any subordinations,
releases, landlord waivers, lessor waivers, mortgagee waivers, or control
agreements, and similar documents as may be from time to time requested by, and
in form and substance satisfactory to, Secured Party.

(b)           Debtor authorizes Secured Party to
file a financing statement and amendments thereto describing the Collateral and
containing any other information, required by the applicable Uniform Commercial
Code.  Debtor irrevocably grants to
Secured Party the power to sign Debtor’s name and generally to act on behalf of
Debtor to execute and file applications for title, transfers of title,
financing statements, notices of lien and other documents pertaining to any or
all of the Collateral; this power is coupled with Secured Party’s interest in the
Collateral.  Debtor shall, if any
certificate of title be required or permitted by law for any of the Collateral,
obtain and promptly deliver to Secured Party such certificate showing the lien
of this Agreement with respect to the Collateral.  Debtor ratifies its prior authorization for
Secured Party to file financing statements and amendments thereto describing
the Collateral and containing any other information required by the Uniform
Commercial Code if filed prior to the date hereof.

(c)           Debtor shall indemnify and defend the
Secured Party, its successors and assigns, and their respective directors,
officers and employees, from and against all claims, actions and suits
(including, without limitation, related attorneys’ fees) of any kind whatsoever
arising, directly or indirectly, in connection with any of the Collateral.

 

5

7.                                      DEFAULT AND REMEDIES.

(a)           Debtor shall be in default under this
Agreement and each of the other Debt Documents if:

(i)            Debtor fails to pay within 10 days
after its due date any installment or other amount due or coming due under any
of the Debt Documents;

(ii)           Debtor, without the prior written
consent of Secured Party, attempts to or does sell, rent, lease, license,
mortgage, grant a security interest in, or otherwise transfer or encumber
(except for Permitted Liens) any of the Collateral;

(iii)          Debtor breaches any of its insurance
obligations under Section 4;

(iv)          Debtor breaches any of its other
obligations under any of the Debt Documents and fails to cure that breach
within thirty (30) days after written notice from Secured Party;

(v)           Any warranty, representation or
statement made by Debtor in any of the Debt Documents or otherwise in
connection with any of the Indebtedness shall be false or misleading in any
material respect;

(vi)          Any of the Collateral is subjected to
attachment, execution, levy, seizure or confiscation in any legal proceeding or
otherwise, or if any legal or administrative proceeding is commenced against
Debtor or any of the Collateral, which in the good faith judgment of Secured
Party subjects any of the Collateral to a material risk of attachment,
execution, levy, seizure or confiscation and no bond is posted or protective
order obtained to negate such risk;

(vii)         Debtor breaches or is in default under
any other agreement between Debtor and Secured Party;

(viii)        Debtor or any guarantor or other obligor
for any of the Indebtedness (collectively “Guarantor”) dies or is declared
incompetent (if an individual), or dissolved, terminates its existence, becomes
insolvent or ceases to do business as a going concern;

(ix)           A receiver is appointed for all or
any part of the property of Debtor or any Guarantor, or Debtor or any Guarantor
makes any assignment for the benefit of creditors;

(x)            Debtor or any Guarantor files a
petition under any bankruptcy, insolvency or similar law or any such petition
is filed against Debtor or any Guarantor and is not dismissed within forty-five
(45) days;

(xi)           Debtor’s improper filing of an amendment
or termination statement relating to a filed financing statement describing the
Collateral;

 

6

 

(xii)          Any Guarantor revokes or attempts to
revoke its guaranty of any of the indebtedness or fails to observe or perform
any covenant, condition or agreement to be performed under any guaranty or
other related document to which it is a party;

(xiii)         Debtor is declared in default under any
other material obligation for (A) borrowed money, (B) the deferred purchase
price of property or (C) payments due under any lease agreement;

(xiv)        There is any merger or consolidation of
Debtor or any Guarantor without prior written consent of Secured Party, which
shall not be unreasonably withheld.

(b)           If Debtor is in default, the Secured
Party, at its option, may declare any or all of the Indebtedness to be
immediately due and payable, without demand or notice to Debtor or any
Guarantor.  The accelerated obligations
and liabilities shall bear interest (both before and after any judgment) until
paid in full at the lower of eighteen percent (18%) per annum or the maximum
rate not prohibited by applicable law.

(c)           After default, Secured Party shall
have all of the rights and remedies of a Secured Party under the Uniform
Commercial Code, and under any other applicable law.  Without limiting the foregoing, Secured Party
shall have the right to (i) notify any account debtor of Debtor or any obligor
on any instrument which constitutes part of the Collateral to make payment to
the Secured Party, (ii) with or without legal process, enter any premises where
the Collateral may be and take possession of and remove the Collateral from the
premises or store it on the premises, (iii) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and purchase at
said sale, or (iv) lease or otherwise dispose of all or part of the Collateral,
applying proceeds from such disposition to the obligations then in
default.  If requested by Secured Party,
Debtor shall promptly assemble the Collateral and make it available to Secured
Party at a place to be designated by Secured Party which is reasonably
convenient to both parties.  Secured
Party may also render any or all of the Collateral unusable at the Debtor’s
premises and may dispose of such Collateral on such premises without liability
for rent or costs.  Any notice that
Secured Party is required to give to Debtor under the Uniform Commercial Code
of the time and place of any public sale or the time after which any private
sale or other intended disposition of the Collateral is to be made shall be
deemed to constitute reasonable notice if such notice is given to the last
known address of Debtor at least five (5) days prior to such action.

(d)           Proceeds from any sale or lease or
other disposition shall be applied: first, to all costs of repossession,
storage, and disposition including without limitation attorneys’, appraisers’,
and auctioneers’ fees; second, to discharge the obligations then in default;
third, to discharge any other Indebtedness of Debtor to Secured Party, whether
as obligor, endorser, guarantor, surety or indemnitor; fourth, to expenses
incurred in paying or settling liens and claims against the Collateral; and
lastly, to Debtor, if there exists any surplus. 
Debtor shall remain fully liable for any deficiency.

(e)           Debtor agrees to pay all reasonable
attorneys’ fees and other costs incurred by Secured Party in connection with
the enforcement, assertion, defense or 

 

7

 

preservation of Secured
Party’s rights and remedies under this Agreement, or if prohibited by law, such
lesser sum as may be permitted.  Debtor
further agrees that such fees and costs shall constitute Indebtedness.

(f)            Secured Party’s rights and remedies
under this Agreement or otherwise arising are cumulative and may be exercised
singularly or concurrently.  Neither the
failure nor any delay on the part of the Secured Party to exercise any right,
power or privilege under this Agreement shall operate a waiver, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise of that or any other right, power or privilege.  SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED
ANY OF ITS RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT
OR PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED
BY SECURED PARTY.  A waiver on any one
occasion shall not be construed as a bar to or waiver of any right or remedy on
any future occasion.

(g)           DEBTOR AND SECURED PARTY
UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT
DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR
AND SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY
RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN
DEBTOR AND SECURED PARTY, THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.  THIS WAIVER IS IRREVOCABLE.  THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY
OR IN WRITING.  THE WAIVER ALSO SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.  THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

8.                                      MISCELLANEOUS.

(a)           This Agreement, any Note and/or any
of the other Debt Documents may be assigned, in whole or in part, by Secured
Party without notice to Debtor, and Debtor agrees not to assert against any
such assignee, or assignee’s assigns, any defense, set-off, recoupment claim or
counterclaim which Debtor has or may at any time have against Secured Party for
any reason whatsoever.  Debtor agrees
that if Debtor receives written notice of an assignment from Secured Party,
Debtor will pay all amounts payable under any assigned Debt Documents to such
assignee or as instructed by Secured Party. 
Debtor also agrees to confirm in writing receipt of the notice of
assignment as may be reasonably requested by Secured Party or assignee.

 

8

 

(b)           All notices to be given in connection
with this Agreement shall be in writing, shall be addressed to the parties at
their respective addresses set forth in this Agreement (unless and until a
different address may be specified in a written notice to the other party), and
shall be deemed given (i) on the date of receipt if delivered in hand or by
facsimile transmission, (ii) on the next business day after being sent by
express mail, and (iii) on the fourth business day after being sent by regular,
registered or certified mail.  As used
herein, the term “business day” shall mean and include any day other than
Saturdays, Sundays, or other days on which commercial banks in New York, New
York are required or authorized to be closed.

(c)           Secured Party may correct patent
errors and fill in all blanks in this Agreement or in any Collateral Schedule
consistent with the agreement of the parties.

(d)           Time is of the essence of this
Agreement.  This Agreement shall be
binding, jointly and severally, upon all parties described as the “Debtor” and
their respective heirs, executors, representatives, successors and assigns, and
shall inure to the benefit of Secured Party, its successors and assigns.

(e)           This Agreement and its Collateral
Schedules constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersede all prior understandings
(whether written, verbal or implied) with respect to such subject matter.  THIS AGREEMENT AND ITS COLLATERAL SCHEDULES
SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT ONLY BY
A WRITING SIGNED BY BOTH PARTIES. 
Section headings contained in this Agreement have been included for
convenience only and shall not affect the construction or interpretation of this
Agreement.

(f)            This Agreement shall continue in
full force and effect until all of the Indebtedness has been indefeasibly paid
in full to Secured Party or its assignee. 
The surrender, upon payment or otherwise, of any Note or any of the
other documents evidencing any of the Indebtedness shall not affect the right
of Secured Party to retain the Collateral for such other Indebtedness as may
then exist or as it may be reasonably contemplated will exist in the
future.  This Agreement shall
automatically be reinstated if Secured Party is ever required to return or
restore the payment of all or any portion of the Indebtedness (all as though
such payment had never been made).

(g)           THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT
(WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE
LOCATION OF THE COLLATERAL.

IN WITNESS WHEREOF, Debtor and Secured Party,
intending to be legally bound hereby, have duly executed this Agreement in one
or more counterparts, each of which shall be deemed to be an original, as of
the day and year first aforesaid.

 

9

 

	
  SECURED PARTY:

  	
  DEBTOR:

  
	
   

  	
   

  
	
  General Electric Capital
  Corporation

  	
  MGP Ingredients, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Chris Jones

  	
   

  	
  By: 

  	
  /s/ Brian T. Cahill

  	
   

  
	
   

  	
   

  
	
  Name:Chris Jones

  	
  Name:Brian T. Cahill

  
	
   

  	
   

  
	
  Title:Senior Risk Analyst

  	
  Title:CFO

  
						

 

10

 

*LOAN
3009*

 

COLLATERAL SCHEDULE NO. 001

THIS COLLATERAL SCHEDULE NO. 001 is annexed to and made a
part of that certain Master Security Agreement dated as of 9/29/05 between
General Electric Capital Corporation, together with its successors and assigns,
if any, as Secured Party and MGP Ingredients, Inc. as Debtor and describes
collateral in which Debtor has granted Secured Party a security interest in
connection with the Indebtedness (as defined in the Security Agreement)
including without limitation that certain Promissory Note dated 9/29/05 in the
original principal amount of $7,000,000.00.

	
  Quantity

  	
   

  	
  Manufacturer

  	
   

  	
  Serial Number

  	
   

  	
  Year/Model and Type of Equipment

  	
   

  
	
  See Attached Exhibit A

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

and
including all additions, attachments, accessories and accessions thereto, and
any and all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof.

	
  SECURED PARTY:

  	
  DEBTOR:

  
	
   

  	
   

  
	
  General Electric Capital
  Corporation

  	
  MGP Ingredients, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Chris Jones

  	
   

  	
  By: 

  	
  /s/ Brian T. Cahill

  	
   

  
	
   

  	
   

  
	
  Name:Chris Jones

  	
  Name:Brian T. Cahill

  
	
   

  	
   

  
	
  Title:Senior Risk Analyst

  	
  Title:CFO

  
	
   

  	
   

  
	
  Date: 9/29/05

  	
  Date: 9/28/05

  
						

 

11

 

Exhibit
A

	
  Make

  	
   

  	
  Model

  	
   

  	
  S/N

  	
   

  	
  Description

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2005
  Injection Molding & Compounding Line

  
	
  Krauss
  Maffei

  	
   

  	
  KM650/3500/C2IMC

  	
   

  	
  61005733

  	
   

  	
  728
  ton injection molding machine; 103 oz. Shot size, 1,000mm x 930mm tie bar
  spacing, 1,400mm x 1,440mm platen size, 1,750mm maximum daylight, 600mm
  minimum daylight; with Loss-in-Weight Colortonic hopper feed, and Krauss
  Maffei model MC4 1.7 CNC Control; Colortronic Graviblend Food processing
  blender, S/N 04K41-68-1110, with (8) stainless steel mixing canisters, tote
  bag mixer including 2-chain hoist, Mucon material release head, and 25’
  inclined auger screw conveyor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1994
  Wenger TX80B Extrusion Line

  
	
  Wenger

  	
   

  	
  TX80B

  	
   

  	
  98380

  	
   

  	
  Extruder
  with (7) zones, twin screw, 25:1 L/D ratio, 3 1:1 gear ratio, 80mm diameter
  screw, water cooling system, 300lb capacity food hopper, pneumatic transfer
  system; Stainless steel mixer, 40”X60”, skid mounted, with Prater model 91-A
  Mixer, S/N 395320; MAC 200 cubic foot stainless steel hopper with (8)
  AccuRate measurement feeders, two (2) Wenger 100-gallon liquid blending
  stainless steel tanks, each with Lightnin’ mixer/aerator; (2) Wenger 50
  gallon stainless steel tanks, each with Brawn 1⁄2 hp agitator; 150 gallon
  liquid blending stainless steel tank with Lightnin’ aerator; (2) Wenger 500
  gallon liquid blending stainless steel tanks, each with Lightnin’ aerator;
  computer process control

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

12

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1993
  Wenger TX85 Extrusion Line

  
	
  Wenger

  	
   

  	
  TX85

  	
   

  	
  97670

  	
   

  	
  100
  hp extruder with (5) zones, twin screw, 25:1 T/D ratio, 3.1:1 gear ratio,
  85mm diameter of screw with vented barrel, water cooling system, 300 lb
  capacity Wenger feed hopper, and Wenger APM controls; 10”X15’ power belt
  conveyor, Extrusion Services embosser with 60” pneumatic embossing head, 10”
  power belt conveyor and enclosure; Extrusion Services 10” cutter; Hauser
  model linear drive HPLA 180 robotic gantry lifter with Allen Bradley model
  PanelView Plus 1500 push button control and 40’X10” power belt conveyor,
  Bryant model 52504 24” plastic belt transfer conveyor and 24” stainless steel
  vibratory table; Meyer model PA-452-18-S 100’ bucket elevator, S/N 5204, with
  Safeline metal detector; 12’ stainless steel spiral conveyor; Bartlet model
  IM/S-9-14 pouch line, S/N 3607 with dual pouch infeed, 3.5” X 20’ plastic
  power belt conveyor, Safeline metal detector, (2) Mettler Toledo model
  micromate high speed scales, and 12”X6’ plastic belt type outfeed conveyor,
  Ishada model CCW-M-216B-D/30-PB overhead checkweigher with overhead conveyor,
  ink jet printer, 14-position multi-head checkweigher, and Safeline metal
  detector; Delta Systems flow wrapper with 3” chain conveyor, heat shrink
  tunnel, infeed conveyor, and Delta Systems soft flow digital display

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1997
  Wenger TX144A Extrusion Line

  
	
  Wenger

  	
   

  	
  TX144A

  	
   

  	
  10205

  	
   

  	
  300
  hp extruder with (4) zones, twin screw, 19.51 L/D ratio, 3 107:1 gear ratio,
  144mm diameter of screw, water cooling system, 800 lb capacity feed hipper,
  Wenger APM control; Flotronics stainless steel feed hopper with AccuRate
  measurement feeders; Wenger 40”X60” stainless steel mixer, skid mounted, MAC
  stainless steel feed hopper, (3) Wenger 150 gallon stainless steel liquid
  blending tanks, each with agitator; T & C Machine 200-gallon liquid
  blending stainless steel tank, S/N TCFP990123 with agitator; Wenger 2-pass
  stainless steel dryer/cooler, 132” width, with overhead blowers; 200 cubic
  foot stainless steel hopper’ 14-head checkweigher; Bemis Packaging Machinery
  model 7115XC packaging machine, S/N 7115XC28-F with 36”X12’ bag magazine belt
  type conveyor, vacuum bag lift attachment, Bemis model 3313887 bag sealer,
  S/N 3313887, Marsh ink jet printer, Safeline metal detection system, belt
  conveyor, Mettler Toledo model Panther Plus 60-lb bag weigher, 48”X5’; Bemis
  model 3033A46 belt type transfer conveyor, Bemis model 3028 bag flattener,
  S/N 3028A104, and power belt type outfeed conveyor

  

All
of Debtor’s equipment whether now owned and/or hereafter acquired that is at
any time located at the facility commonly known as 16 Kansas Avenue, Wyandotte
County, Kansas and as more specifically described on the Schedule A attached
hereto and incorporated herein, and including all additions, attachments,
accessories and accessions thereto, and any and all substitutions, replacements
or exchanges therefore, and all insurance and/or other proceeds thereof by and
between Debtor and Secured Party whether now owned or hereafter acquired.

 

13Exhibit
4.3

CROSS-COLLATERAL AND CROSS-DEFAULT AGREEMENT

General Electric Capital
Corporation &

GE Capital Public Finance, Inc.

16479 Dallas Parkway #300

Addison, TX  75001-2512

Gentlemen:

You, General Electric Capital Corporation and GE Capital Public Finance,
Inc. (and/or each of your successors or assigns, hereinafter referred to
individually and collectively as, “you”) have entered into or purchased one or
more conditional sale contracts, lease agreements, chattel mortgages, security
agreements, notes and other choses in action (herein designated “Accounts”)
arising from the bona fide sale or lease to us, by various vendors or lessors,
of equipment and inventory (herein designated “Collateral”) and/or you have
made direct loans to or otherwise extended credit to us evidenced by Accounts
creating security interests in Collateral.

In order to induce you to extend our time of payment on one or more
Accounts and/or to make additional loans to us and/or to purchase additional
Accounts and/or to lease us additional equipment, and in consideration of your
so doing, and for other good and valuable consideration, the receipt of which
we hereby acknowledge, we agree as follows:

All presently existing and hereafter acquired Collateral in which you
have or shall have a security interest shall secure the payment and performance
of all of our liabilities and obligations to you of every kind and character,
whether joint or several, direct or indirect, absolute or contingent, due or to
become due, and whether under presently existing or hereafter created Accounts
or agreements, or otherwise.

We further agree that your security interest in the property covered by
any Account now held or hereafter acquired by you shall not be terminated in
whole or in part until and unless all indebtedness of every kind, due or to
become due, owed by us to you is fully paid and satisfied and the terms of
every Account have been fully performed by us. 
It is further agreed that you are to retain your security interest in
all property covered by all Accounts held or acquired by you, as security for
payment and performance under each such Account, notwithstanding the fact that
one or more of such Accounts may become fully paid.

This instrument is intended to create cross-default and cross-security
between and among all the within described Accounts now owned or hereafter
acquired by you.

A default under any Account or agreement shall be deemed to be a
default under all other Accounts and agreements.  A default shall result if we fail to pay any
sum when due on any Account or agreement, or if we breach any of the other
terms and conditions thereof, or if we become insolvent, cease to do business
as a going concern, make an assignment for the benefit of creditors, or if a
petition for a receiver or in bankruptcy is filed by or against us, or if any
of our property is seized, attached or levied upon.  Upon 

 

our default any or all Accounts and
agreements shall, at your option, become immediately due and payable without
notice or demand to us or any other party obligated thereon, and you shall have
and may exercise any and all rights and remedies of a secured party under the
Uniform Commercial Code as enacted in the applicable jurisdiction and as
otherwise granted to you under any Account or other agreement.  We hereby waive, to the maximum extent
permitted by law, notices of default, notices of repossession and sale or other
disposition of collateral, and all other notices, and in the event any such
notice cannot be waived, we agree that if such notice is mailed to us postage
prepaid at the address shown below at least five (5) days prior to the exercise
by you of any of your rights or remedies, such notice shall be deemed to be
reasonable and shall fully satisfy any requirement for giving notice.

All rights granted to you hereunder shall be cumulative and not
alternative, shall be in addition to and shall in no manner impair or affect
your rights and remedies under any existing Account, agreement, statute or rule
of law.

This agreement may not be varied or altered nor its provisions waived
except by your duly executed written agreement. 
This agreement shall inure to the benefit of your successors and assigns
and shall be binding upon our heirs, administrators, executors, legal
representatives, successors and assigns.

IN WITNESS WHEREOF, this agreement is executed
this 29th day of  September, 2005.

	
   

  	
  MGP
  Ingredients, Inc.

  
	
   

  	
  (Name
  of Proprietorship, Partnership or Corporation, as applicable)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Brian T. Cahill

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  Title:CFO

  
	
   

  	
  (Owner,
  Partner or Officer, as applicable)

  
	
   

  	
   

  
	
   

  	
  Address:
  

  	
  1300
  Main Street

  Atchison, KS 66002

  
	
   

  	
   

  	
   

  
				

 

2

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