Document:

Exhibit 4.1.2

 

ASSIGNMENT OF MEMBERSHIP
INTERESTS

(SECURITY AGREEMENT)

 

This ASSIGNMENT OF
MEMBERSHIP INTERESTS (SECURITY AGREEMENT) is made as of the 21 day of July,
2009 by MGP INGREDIENTS, INC., a Kansas corporation (the “Grantor”)  to and in favor of WELLS FARGO BANK, NATIONAL, acting
through its Wells Fargo Business Credit operating division (hereinafter,
together with its successors and assigns, referred to as “Lender”).

 

RECITALS

 

A.                                   Grantor is the sole member of Firebird Acquisitions, LLC, a Delaware
limited liability company (“Issuer”).  Lender is contemporaneously with the
execution of this Assignment and/or may in the future make loans (the “Loans”) to Grantor pursuant to a Credit and Security
Agreement dated as of even date herewith (as the same may be amended or
otherwise modified from time to time, the “Credit Agreement”).

 

B.                                     As a condition precedent to Lender making the Loans, Lender has further
required that Grantor execute and deliver this Assignment to Lender to secure
the prompt and complete performance all of the obligations and payment of all
of the indebtedness under the Credit Agreement (all such obligations and
indebtedness are hereinafter referred to collectively as the “Liabilities”).

 

NOW, THEREFORE, in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.               Defined Terms.  As used in this Assignment, the following
terms shall have the following meanings:

 

“Assignment”
shall mean this Assignment of Membership Interests (Security Agreement), as the
same may from time to time be amended or supplemented.

 

“Code”
shall mean the Uniform Commercial Code as the same may from time to time be in
effect in the State of Minnesota.

 

“Loan
Documents” shall have the meaning specified in the Credit Agreement.

 

“Operating
Agreement” shall mean that certain Operating Agreement dated as of April 1,
2008, pursuant to which Issuer was formed, as each may be hereafter amended
from time to time in accordance with the terms of this Assignment.

 

“Proceeds”
shall mean “proceeds”, as such term is defined in the Code and, in any event,
shall include, but not be limited to, (i) any and all payments (in any
form whatsoever) made or due and payable to Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the “Pledged Collateral” (as hereinafter
defined) by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority), (ii) any and all amounts
paid or payable to 

 

 

Grantor for or in connection with any sale or other disposition of
Grantor’s interests in any Issuer and (iii) any and all other amounts from
time to time paid or payable under or in connection with any of the Pledged
Collateral.

 

“Security
Interest” shall mean the security interest granted pursuant to Section 2
hereof.

 

2.               Grant of Security Interest.  As security for the prompt and complete
payment and performance when due of the Liabilities, Grantor hereby grants to
Lender a security interest in and pledges to Lender all of the following (all
of which being herein collectively called the “Pledged
Collateral”):

 

(a)          all of Grantor’s right,
title and interest as a member in Issuer, including without limitation, all of
Grantor’s right to receive distributions at any time or from time to time of
cash and other property, real, personal or mixed, from Issuer upon complete or
partial liquidation or otherwise;

 

(b)         all of Grantor’s right,
title, and interest in specific property of Issuer;

 

(c)          all of Grantor’s right,
title and interest, if any, to participate in the management and voting of
Issuer;

 

(d)         all of Grantor’s right,
title and interest in and to:

 

(i)                                     all rights, privileges,
authority and power of Grantor as owner and holder of the items specified in
(a), (b), and (c) above, including but not limited to, all contract rights
related thereto;

 

(ii)                                  all options and other
agreements for the purchase or acquisition of any interests in Issuer; and

 

(iii)                               any document or certificate
representing or evidencing Grantor’s rights and interests in Issuer; and

 

(iv)                              to the extent not otherwise
included, all Proceeds and products of any of the foregoing.

 

3.               Representations
and Warranties.  Grantor
represents and warrants that:

 

(a)          Grantor is the sole owner of
each item of the Pledged Collateral, free and clear of any and all liens and
claims whatsoever except for the security interest granted to Lender pursuant
to this Assignment.

 

(b)         Grantor’s interests in
Issuer consist of a one hundred percent (100%) membership interest, including
the same percentage interests in all distributions by Issuer to its members of
cash or other property, whether in complete or partial liquidation or
otherwise.

 

(c)          Grantor has all power,
statutory and otherwise, to execute and deliver this Assignment, to perform
Grantor’s obligations hereunder and to subject the Pledged Collateral to 

 

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the security interest created hereby, all of which has been duly
authorized by all necessary action.

 

(d)         No amendments or supplements
have been made to Issuer’s Operating Agreement since it was originally entered
into; the Operating Agreement remains in effect; and no party to the Operating
Agreement is presently in default thereunder.

 

(e)          No authorization, approval,
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either (i) for Grantor’s granting of a
security interest in the Pledged Collateral pursuant to this Assignment for the
execution, delivery or performance of this Assignment by Grantor or (ii) for
the exercise by Lender of the rights provided for in this Assignment or the
remedies in respect of the Pledged Collateral pursuant to this Assignment
(except as may be required in connection with such disposition by laws
affecting the offering and sale of securities generally).

 

(f)            Upon the transfer of the
Pledged Collateral, or any portion thereof, to any party pursuant to Section 10
below, Issuer shall continue in existence and Issuer’s Operating Agreement
provides for such continuation.

 

4.               Covenants.  Grantor covenants and agrees that from and
after the date of this Assignment and until the Liabilities are fully
satisfied:

 

(a)          Further Documentation;
Pledge of Instruments.  At
any time and from time to time, upon the written request of Lender, and at the
sole expense of Grantor, Grantor will promptly and duly execute and deliver any
and all such further instruments and documents and take such further actions as
Lender may reasonably deem desirable to obtain the full benefits of this
Assignment and of the rights and powers herein granted, including, without
limitation, the execution and filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction with
respect to the security interest granted hereby and, if otherwise required
hereunder, transferring Pledged Collateral to the possession of Lender (if a
security interest in such Pledged Collateral can be perfected by possession) or
causing Issuer to agree (in writing) that it will only comply with instructions
originated by the Lender without further consent by the Grantor.  Grantor also hereby authorizes Lender to file
any such financing or continuation statement without the signature of Grantor
to the extent otherwise permitted by applicable law.  If any amount payable under or in connection
with any of the Pledged Collateral shall be or become evidenced by any
promissory note or other instrument (other than an instrument which constitutes
chattel paper under the Code), such note or instrument shall be immediately
pledged hereunder and a security interest therein hereby granted to Lender and
shall be duly endorsed without recourse or warranty in a manner satisfactory to
Lender and delivered to Lender.  If at
any time Grantor’s right or interest in any of the Pledged Collateral becomes
an interest in real property, Grantor immediately shall execute, acknowledge
and deliver to Lender such further documents as Lender deems necessary or
advisable to create a first priority perfected mortgage lien in favor of Lender
in such real property interest.

 

(b)         Priority of Liens.  Grantor will defend the right, title and
interest hereunder of Lender, as a first priority security interest in the
Pledged Collateral, against the claims and demands of all persons whomsoever.

 

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(c)          Continuous Perfection.  Grantor will not change Grantor’s name in any
manner which might make any financing or continuation statement filed hereunder
seriously misleading within the meaning of Section 9-507 of the Code (or
any other then-applicable provision of the Code), unless Grantor shall have
given Lender at least thirty (30) days prior written notice thereof and shall
have taken all action (or made arrangements to take such action substantially
simultaneously with such change if it is impossible to take such action in
advance) necessary or reasonably requested by Lender to amend such financing
statement or continuation statement so that it is not seriously
misleading.  Grantor will not sign or
authorize the signing on Grantor’s behalf of any financing statement naming
Grantor as debtor covering all or any portion of the Pledged Collateral, except
financing statements naming Lender as secured party.

 

(d)         Transfer of Assets.  Grantor will not directly or indirectly sell,
pledge, mortgage, assign, transfer, or otherwise dispose of or create or suffer
to be created any lien, security interest, charging order, or encumbrance on
any of the Pledged Collateral or the assets of Issuer other than (i) the
liens relating to the Loans and (ii) the lien of Commerce Bank, N.A. in certain
aircraft of Issuer which exists on the date hereof.

 

(e)          Performance of Obligations.  Grantor will perform all of Grantor’s
obligations under the Operating Agreement prior to the time that any interest
or penalty would attach against Grantor or any of the Pledged Collateral as a
result of Grantor’s failure to perform any of such obligations, and Grantor
will do all things necessary to maintain Issuer as a limited liability company
under the laws of the jurisdiction of organization and to maintain Grantor’s
interest as a member in Issuer in full force and effect without diminution.

 

(f)            Operating Agreement.  Grantor will not (x) suffer or permit
any amendment or modification of the Operating Agreement without the prior
written consent of Lender, or (y) waive, release, or compromise any rights
or claims Grantor may have against any other party which arise under the
Operating Agreement.  Grantor will not
vote under the Operating Agreement to cause Issuer to dissolve, liquidate,
merge or consolidate with any other entity or take any other action under the
Operating Agreement that would adversely affect the Security Interest,
including, without limitation, the value or priority thereof.  Grantor will not permit, suffer or otherwise
consent to the issuance of any new or additional membership interests or
options or other agreements granting any right to receive membership interests
in Issuer.

 

(g)         Securities. Grantor
shall, or shall permit Lender to, promptly take all action necessary or
appropriate to cause Lender to have sole and exclusive “control” over the
Pledged Collateral, as such term is defined in Article 9 of the UCC.  At all times Grantor shall take, or shall
permit Lender to take, all action necessary or appropriate to create, perfect
and maintain a first perfected priority security interest in the Pledged
Collateral in favor of Lender.  Without
limiting the foregoing, Grantor shall deliver any and all certificates that
evidence the Pledged Collateral together with assignments separate from
certificate executed in blank relating thereto.

 

5.               Grantor’s
Powers.

 

(a)          So long as an “Event of
Default” (as hereinafter defined) shall not then exist, Grantor shall be the
sole party entitled (1) to exercise for any purpose any and all (i) voting
rights and (ii) powers, and (2) to receive any and all distributions,
in each case arising from or relating to the Pledged Collateral; provided,
however, that Grantor shall not exercise such rights or 

 

4

 

powers, or consent to any action of either Issuer that would be in
contravention of the provisions of, or constitute an Event of Default under,
this Assignment or any of the Loan Documents.

 

(b)         Upon the occurrence of an
Event of Default, unless Lender designates in writing to Grantor to the
contrary, all rights of Grantor provided in Section 5(a) hereof
shall cease, and all voting rights and powers and rights to distributions
included in the Pledged Collateral or otherwise described in such Section 5(a) shall
thereupon become vested in Lender, and Lender shall thereafter have the sole
and exclusive right and authority to exercise such voting rights and
powers.  Grantor shall execute such
documents and instruments, including but not limited to, statements that
Grantor no longer has the right to act as a member or otherwise relating to
such change as Lender may request. 
Grantor agrees that Issuer may rely conclusively upon any notice from
Lender that Lender has the right and authority to exercise all rights and
powers of Grantor as a member under the Operating Agreement.  Grantor irrevocably waives any claim or cause
of action against Issuer who deals directly with Lender following receipt of
such notice from Lender.

 

6.               Lender’s
Appointment as Attorney-in-Fact.

 

(a)          Grantor hereby irrevocably
constitutes and appoints Lender and each officer or agent of Lender with full
power of substitution, as Grantor’s true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Grantor and in the
name of Grantor or in such attorney-in-fact’s own name, from time to time in
the discretion of each such attorney-in-fact following the occurrence of an
Event of Default, for the purpose of carrying out the terms of this Assignment,
to take any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Assignment and, without limiting the generality of the foregoing, hereby
gives each such attorney-in-fact the power and right, from and after an Event
of Default, on behalf of Grantor, without notice to or assent by Grantor, to do
the following:

 

(i)                                     to collect and otherwise
take possession of and title to any and all distributions of cash or other
property due or distributable at any time after the date hereof to Grantor as a
member from Issuer, whether in complete or partial liquidation or otherwise,
and to prosecute or defend any action or proceeding in any court of law or
equity or otherwise deemed appropriate by such attorney-in-fact for the purpose
hereof;

 

(ii)                                  to ask, demand, collect,
receive and give acceptances and receipts for any and all moneys due and to
become due under any Pledged Collateral and, in the name of Grantor or such
attorney-in-fact’s own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Pledged Collateral and to file any claim or to
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by such attorney-in-fact for the purpose of collecting any
and all such moneys due under any Pledged Collateral whenever payable;

 

(iii)                               to pay or discharge taxes,
liens, security interests or other encumbrances levied or placed on or
threatened against the Pledged Collateral, to 

 

5

 

effect any repairs or any insurance called for with respect to any of
the Pledged Collateral by the terms of this Assignment and to pay all or any
part of the premiums therefor and the costs thereof; and

 

(iv)                              (A) to direct any party
liable for any payment under any of the Pledged Collateral to make payment of
any and all moneys due and to become due thereunder directly to Lender or as such
attorney-in-fact shall direct; (B) to receive payment of and receipt for
any and all moneys, claims and other amounts due and to become due at any time
in respect of or arising out of any Pledged Collateral; (C) to commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Pledged Collateral or any
portion thereof and to enforce any other right in respect of any Pledged
Collateral; (D) to defend any suit, action or proceeding brought against
Grantor with respect to any Pledged Collateral; (E) to settle, compromise
or adjust any suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as such attorney-in-fact may
deem appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Pledged Collateral
as fully and completely as though such attorney-in fact were the absolute owner
thereof for all purposes, and to do, at the option of such attorney-in-fact at
Grantor’s expense, at any time, or from time to time, all acts and things which
such attorney-in-fact reasonably deems necessary to protect, preserve or
realize upon the Pledged Collateral and the security interest of Lender
therein, in order to effect the intent of this Assignment, all as fully and
effectively as Grantor might do.

 

Grantor hereby ratifies, to
the extent permitted by law, all that said attorney shall lawfully do or cause
to be done by virtue hereof.  This power
of attorney is a power coupled with an interest and shall be irrevocable.

 

(b)         The powers conferred on each
attorney-in-fact hereunder are solely to protect the interest in the Pledged
Collateral of Lender and shall not impose any duty upon any such attorney-in-fact
to exercise any such powers.  Each such
attorney-in-fact shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers and neither it nor any of
its officers, directors, managers, employees or agents shall be responsible to
Grantor for any act or failure to act unless such action or failure to act
constitutes gross negligence.

 

(c)          Grantor also authorizes
Lender and each officer or agent of Lender at any time and from time to time
upon the occurrence of any Event of Default, to execute, in connection with the
sale provided for in Section 10 of this Assignment, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to any of the Pledged Collateral.

 

7.               Distributions.  In the event Grantor receives any
distributions in respect of the Pledged Collateral that are made in violation
of the Credit Agreement, Grantor will hold the same in trust for Lender and
promptly transfer the property that was so distributed in the form that it was
received.

 

6

 

8.               Performance by Lender of
Grantor’s Obligations.  If
Grantor fails to perform or comply with any of Grantor’s agreements contained
herein and Lender as provided for by the terms of this Assignment shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the expenses of Lender incurred in connection with such performance
or compliance, together with interest thereon at the rate following a default
specified in the Credit Agreement in effect from time to time shall be payable
by Grantor to Lender on demand and shall constitute Liabilities secured hereby.

 

9.               Default.  Any of the following shall constitute an “Event
of Default” hereunder:

 

(a)          A failure by any Grantor to
observe or perform any obligation, covenant, condition, or agreement hereof to
be performed by Grantor which involves the payment of money;

 

(b)         A failure by any Grantor to
observe or perform any nonmonetary obligation, covenant, condition, or
agreement hereof to be performed by Grantor;

 

(c)          Any representation or
warranty made by Grantor in this Assignment is not true and correct in any
material respect; or

 

(d)         The occurrence of any “Event
of Default” under the Credit Agreement.

 

10.         Remedies, Rights Upon
Default.

 

(a)          Upon the occurrence of any
Event of Default, Lender or Lender’s designee may, at Lender’s option, elect to
become the substituted member in each or either Issuer with respect to the
Pledged Collateral and Grantor shall execute or cause to be executed all
documents necessary to evidence Lender so becoming substituted member.  If any Event of Default shall occur, Lender
or Lender’s designee may exercise in addition to all other rights and remedies
granted to them in this Assignment and in any other instrument or agreement
securing, evidencing or relating to the Liabilities, all rights and remedies of
a secured party under the Code.  Without
limiting the generality of the foregoing, Grantor expressly agrees that in any
such event Lender, without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon Grantor or any other person (all and each of
which demands, advertisements and/or notices are hereby expressly waived), may
forthwith collect, receive, appropriate and realize upon the Pledged
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or sell or otherwise dispose of and deliver said
Pledged Collateral (or contract to do so), or any part thereof, in one or more
parcels at public or private sale or sales, at any exchange or broker’s board
or at any of Lender’s offices or elsewhere at such prices as it may deem best,
for cash or on credit or for future delivery without the assumption of any
credit risk.  Grantor expressly
acknowledges that private sales may be less favorable to a seller than public
sales but that private sales shall nevertheless be deemed commercially
reasonable and otherwise permitted hereunder. 
In view of the fact that federal and state securities laws and/or other
applicable laws may impose certain restrictions on the method by which a sale
of the Pledged Collateral may be effected, Grantor agrees that upon the
occurrence of an Event of Default, Lender may, from time to time, attempt to
sell all or any part of the Pledged Collateral by means 

 

7

 

of a private placement, restricting the prospective purchasers to those
who will represent and agree that they are purchasing for investment only and
not for distribution.  In so doing,
Lender may solicit offers to buy the Pledged Collateral, or any part thereof,
for cash, from a limited number of investors deemed by Lender in its judgment,
to be financially responsible parties who might be interested in purchasing the
Pledged Collateral, and if Lender solicits such offers, then the acceptance by
Lender of the highest offer obtained therefrom shall be deemed to be a
commercially reasonable method of disposing of the Pledged Collateral.

 

Lender or Lender’s designee
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of said Pledged Collateral so sold, free of any right or equity of
redemption, which equity of redemption Grantor hereby releases.  Grantor further agrees, at the request of
Lender, to assemble the Pledged Collateral and make it available to Lender at
places which Lender shall reasonably select, whether at Grantor’s premises or
elsewhere.  Lender shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale as provided in Section 10(d) of this Assignment.  Only after so paying over such net proceeds
and after the payment by Lender of any other amount required by any provision
of law, including Section 9-608(1)(C) of the Code, need Lender
account for the surplus, if any, to Grantor. 
To the extent permitted by applicable law, Grantor waives all claims,
damages, and demands against Lender arising out of the repossession, retention
or sale of the Pledged Collateral except in each case such as arise out of the
gross negligence or willful misconduct of Lender.   Any notification of intended disposition of
any of the Pledged Collateral required by law will be deemed to be a reasonable
authenticated notification of disposition if given at least ten (10) days
prior to such disposition and such notice shall (i) describe Lender and
Grantor, (ii) describe the Pledged Collateral that is the subject of the
intended disposition, (iii) state the method of the intended disposition, (iv) state
that Grantor is entitled to an accounting of the Liabilities and state the
charge, if any, for an accounting and (v) state the time and place of any
public disposition or the time after which any private sale is to be made.  Lender may disclaim any warranties that might
arise in connection with the sale, lease or other disposition of the Pledged Collateral
and has no obligation to provide any warranties at such time.

 

(b)         Grantor also agrees to pay
all costs of Lender, including reasonable attorneys’ fees and expenses,
incurred with respect to the collection of any of the Liabilities or the
enforcement of any of Lender’s rights hereunder.

 

(c)          Grantor hereby waives
presentment, demand, or protest (to the extent permitted by applicable law) of
any kind in connection with this Assignment or any Pledged Collateral.  Except for notices provided for herein, Grantor
hereby waives notice (to the extent permitted by applicable law) of any kind in
connection with this Assignment.

 

(d)         The proceeds of any sale,
disposition or other realization upon all or any part of the Pledged Collateral
shall be distributed by Lender in the following order of priorities:

 

first, to Lender in an amount sufficient to pay in full
the expenses of Lender in connection with such sale, disposition or other
realization, including all expenses, liabilities and advances incurred or made
by Lender in connection therewith, including reasonable attorneys’ fees and
expenses;

 

8

 

second, to Lender until the other Liabilities are paid in
full; and

 

finally, upon payment in full of all of the Liabilities, to
Grantor, or its representative or as a court of competent jurisdiction or
Grantor may direct.

 

Grantor agrees to indemnify
and hold harmless Lender, its directors, managers, officers, employees, agents
and parent, and subsidiary corporations, and each of them, from and against any
and all liabilities, obligations, claims, damages, or expenses incurred by any
of them arising out of or by reason of entering into this Assignment or the
consummation of the transactions contemplated by this Assignment and to pay or
reimburse Lender for the fees and disbursements of counsel incurred in
connection with any investigation, litigation or other proceedings (whether or
not Lender is a party thereto) arising out of or by reason of any of the
aforesaid.  Lender will promptly give
Grantor written notice of the assertion of any claim which it believes is
subject to the indemnity set forth in this Section 10 and will upon
the request of Grantor promptly furnish Grantor with all material in its
possession relating to such claim or the defense thereof to the extent that
Lender may do so without breach of duty to others.  Any amounts properly due under this Section 10
shall be payable to Lender immediately upon demand.

 

11.         Limitation on Lender’s Duty
in Respect of Pledged Collateral.  Except as expressly provided in the Code,
Lender shall have no duty as to any Pledged Collateral in its possession or
control or in the possession or control of any agent or nominee of Lender or as
to any income thereon or as to the preservation of rights against prior parties
or any other rights pertaining thereto.

 

12.         Notices.  Any notice or other communication required or
permitted to be given shall be in writing addressed to the respective party as
set forth below and may be personally served, telecopied or sent by overnight
courier or U.S. Mail and shall be deemed given: 
(a) if served in person, when served; (b) if telecopied, on
the date of transmission if before 3:00 p.m. (Chicago time) on a business
day; provided, that a hard copy of such notice is also sent pursuant to
clause (c) or (d) below; (c) if by overnight courier, on the
first business day after delivery to the courier; or (d) if by U.S. Mail,
on the fourth (4th) day after deposit in the mail, postage prepaid, certified
mail, return receipt requested.

 

	
  Notices
  to Grantor:

  	
  MGP Ingredients, Inc.

  
	
   

  	
  100
  Commercial Street

  
	
   

  	
  Atchison,
  KS 66002

  
	
   

  	
  Attention:
  Dick Larson

  
	
   

  	
  Telecopier: (913) 360-5661

  
	
   

  	
   

  
	
  Notices
  to Lender:

  	
  Wells
  Fargo Bank, National Association

  
	
   

  	
  MAC N9312-040

  
	
   

  	
  109 South 7th Street, 4th Floor

  
	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
  Attention: Becky A. Koehler

  
	
   

  	
  Telecopier:
  (612) 341-2472

  

 

9

 

Any party may change its
respective address for the giving of notice to another address by giving at
least 10 business days’ notice of such change.

 

13.         Severability.  Any provision of this Assignment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

14.         No Waiver; Cumulative
Remedies.  Lender
shall not, by any act, delay, omission or otherwise, be deemed to have waived
any of its rights or remedies hereunder. 
No waiver hereunder shall be valid except to the extent therein set
forth.  A waiver of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Lender would otherwise have had on any future occasion.  No failure to exercise nor any delay in
exercising on the part of Lender any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.  Except to the extent that Lender has
specifically and expressly waived such remedies in this Assignment or
otherwise, the rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.  Lender may
resort to and realize on the Pledged Collateral simultaneously with any acts or
proceedings initiated by Lender in its sole and conclusive discretion to resort
to or realize upon any other sources of repayment of the Liabilities,
including, but not limited to, collateral granted by other security agreements
and the personal liability of Grantor and any person or corporation which has
guaranteed repayment of the Liabilities. 
None of the terms or provisions of this Assignment may be waived,
altered, modified or amended except by an instrument in writing, duly executed
by Grantor and Lender.

 

15.         Successors and Assigns;
Governing Law.  This
Assignment and all obligations of Grantor hereunder shall be binding upon the
successors and assigns of Grantor, except that Grantor shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of Lender and shall, together with the rights and remedies of Lender
hereunder, inure to the benefit of Lender and its respective successors and
assigns.  Neither this Assignment nor
anything set forth herein is intended to, nor shall it, confer any rights on
any person or entity other than the parties hereto and all third party rights
are expressly negated.

 

16.         Termination.  This Assignment, and the assignments, pledges
and security interests created or granted hereby, shall terminate when the
Liabilities shall have been fully paid and satisfied, at which time Lender
shall release and reassign (without recourse upon, or any warranty whatsoever
by, Lender), and deliver to Grantor all Pledged Collateral and related
documents then in the custody or possession of Lender, including termination
statements under the Code, all without recourse upon, or warranty whatsoever,
by Lender and at the cost and expense of Grantor.

 

17.         Injunctive Relief.  Grantor recognizes that in the event Grantor
fails to perform, observe or discharge any of Grantor’s obligations hereunder,
no remedy of law will 

 

10

 

provide adequate relief to Lender, and agrees that Lender shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.

 

18.         Waiver of Subrogation.  Grantor shall have no rights of subrogation
as to any of the Pledged Collateral until full and complete performance and
payment of the Liabilities.

 

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

 

20.         Governing Law; Jurisdiction;
Consent to Service of Process.

 

(a)                                  This Assignment
shall be governed by, and construed in accordance with, the laws of the State
of Minnesota, without regard to principles of conflicts of law.  Grantor irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
courts of the State of Minnesota sitting in Hennepin County, Minnesota and of
the United States District Court for the District of Minnesota, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Assignment or any other Loan Document to which each is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
state courts or, to the fullest extent permitted by applicable Law, in such
Federal courts.  Each of the parties
hereto agrees that a final judgment in any such 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.  Nothing in
this Assignment or in any other Loan Document shall affect any right that
Lender may otherwise have to bring any action or proceeding relating to this
Assignment or any other Loan Document against any Loan Party or any of its
properties in the courts of any other jurisdiction.

 

(b)                                 Grantor hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Assignment or the other Loan Documents in any court referred to in
paragraph (1) of this section.  The
parties hereto hereby irrevocably waive, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

 

(c)                                  Grantor
irrevocably consents to service of process in the manner provided for notices
in the Credit Agreement.  Nothing in this
Assignment will affect the right of any party hereto to serve process in any
other manner permitted by applicable Law.

 

21.         WAIVER OF JURY TRIAL; OTHER WAIVER.  TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO
HEREBY WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM.  THE PARTIES HERETO REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH 

 

11

 

KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS.  IN THE EVENT OF LITIGATION, A COPY OF THIS
ASSIGNMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS ASSIGNMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

[signature page to follow]

 

 

12

 

IN
WITNESS WHEREOF, Grantor has executed this Assignment or has caused the same to
be executed by Grantor’s duly authorized representative(s) as of the date
first above written.

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
  a Kansas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
  Name:
  Timothy W. Newkirk

  
	
   

  	
  Its
  President

  

 

 

Signature Page Assignment
of Membership Interests

 

 

ACKNOWLEDGEMENT

 

The undersigned hereby (a) acknowledges
receipt of a copy of the foregoing Assignment of Membership Interests (Security
Agreement), (b) waives any rights or requirement at any time hereafter to
receive a copy of such Assignment of Membership Interests (Security Agreement)
in connection with the registration of any Pledged Collateral (as defined
therein) in the name of Wells Fargo Bank, National Association or its nominee
or the exercise of voting rights by Wells Fargo Bank, National Association, and
(c) agrees promptly to note on its books and records the transfer of the
security interest in the membership interests of the undersigned as provided in
such Assignment of Membership Interests (Security Agreement), including the
following legend:

 

PURSUANT TO THAT CERTAIN ASSIGNMENT OF MEMBERSHIP INTERESTS (SECURITY
AGREEMENT) DATED AS OF JULY       , 2009 (AS FROM
TIME TO TIME AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED), GRANTOR
HAS UNDER THE CIRCUMSTANCES SPECIFIED IN SUCH ASSIGNMENT AGREEMENT EMPOWERED
WELLS FARGO BANK, NATIONAL ASSOCIATION TO VOTE THE MEMBERSHIP INTERESTS AND
EXERCISE ANY OTHER RIGHTS WITH RESPECT TO THE MEMBERSHIP INTERESTS OWNED BY GRANTOR
PURSUANT TO SUCH ASSIGNMENT OF MEMBERSHIP INTERESTS (SECURITY AGREEMENT)
WITHOUT FURTHER CONSENT BY GRANTOR.

 

 

	
  Dated:
  July 21, 2009

  	
  FIREBIRD
  ACQUISITIONS, LLC

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
  Name

  	
  Timothy
  W. Newkirk

  
	
   

  	
  Its

  	
  President
  & CEO

  

 

 

Acknowledgment Assignment of Membership InterestsExhibit 4.1.3

 

STOCK PLEDGE AGREEMENT

 

THIS STOCK PLEDGE AGREEMENT (“Agreement”) is
made as of this 21 day of July, 2009, by MGP INGREDIENTS, INC., a Kansas
corporation (hereinafter referred to as a “Pledgor”), to
WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”).

 

PRELIMINARY STATEMENTS:

 

(1)                                  Pledgor is the owner of the number of
shares in Midwest Grain Pipeline, Inc., a Kansas corporation (“Company”), set forth on the attached Schedule 1 (the “Shares”).  Wells Fargo
is contemporaneously with the execution of this Agreement and/or may in the
future make loans to Pledgor pursuant to a Credit Agreement dated as of even
date herewith (as the same may be amended or otherwise modified from time to
time, the “Credit Agreement”) between Pledgor
and Wells Fargo.  Capitalized terms used
herein, unless otherwise defined herein, shall have the meanings ascribed to
such terms in the Credit Agreement.

 

(2)                                  The extension
and/or continued extension of credit, as aforesaid, by Wells Fargo is necessary
and desirable to the conduct and operation of the business of Pledgor.

 

(3)                                  It is a
condition precedent to the Credit Agreement that Pledgor shall make the pledge
contemplated by this Agreement.

 

NOW, THEREFORE, in consideration of the premises and in order to induce
Wells Fargo to enter into the Credit Agreement, Pledgor hereby covenants to
Wells Fargo as follows:

 

SECTION 1.  Pledge.  Pledgor hereby pledges to Wells Fargo and
grants to Wells Fargo a security interest in all of Pledgor’s now owned or
hereinafter acquired right, title and interest in and to the following (the “Pledged Collateral”):

 

(a)                                  the Shares
described in Schedule 1 hereto;

 

(b)                                 the proceeds,
if and when received, of the Shares and other instruments and documents
representing the Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Shares;

 

(c)                                  the proceeds,
if and when received, of all additional shares of stock of Company from time to
time acquired by Pledgor in any manner, the certificates and other instruments
and documents representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares;

 

 

(d)                                 the proceeds,
if and when received, of all shares of stock from time to time received or
acquired by Pledgor in any manner resulting from the acquisition or formation
by the issuer of the Shares of a subsidiary, the certificates and other
instruments and documents representing such shares and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares; and

 

(e)                                  all other
property hereafter delivered to Wells Fargo in substitution for or in addition
to any of the foregoing, all certificates, certificates of deposit, notes,
instruments and documents representing or evidencing such property, and all
cash, securities, interest, dividends, rights and other property at any time
and from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all thereof.

 

SECTION 2.  Security for
Obligations.  This Agreement secures
the payment and performance of all of the “Indebtedness” under the Credit
Agreement (which shall be deemed to include for all purposes, any guaranty of
the Obligations executed, if at all, by Pledgor in favor of Wells Fargo) (the “Obligations”).  For
the purposes of this Agreement, the term “Event of Default” is defined to mean:

 

A.                                   A failure by
any Pledgor to observe or perform any obligation, covenant, condition, or
agreement hereof to be performed by Pledgor which involves the payment of
money;

 

B.                                     A failure by
any Pledgor to observe or perform any nonmonetary obligation, covenant,
condition, or agreement hereof to be performed by Pledgor;

 

C.                                     Any
representation or warranty made by Pledgor in this Assignment is not true and
correct in any material respect; or

 

D.                                    The occurrence
of any “Event of Default” under the Credit Agreement.

 

SECTION 3.  Delivery of
Pledged Collateral.  All share
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered to and held by Wells Fargo pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Wells Fargo. 
Wells Fargo shall have the right, at any time after the occurrence of an
Event of Default, in its discretion, to transfer to or to register in the name
of Wells Fargo or any of its nominees any or all of the Pledged Collateral.

 

SECTION 4.  Representations
and Warranties.  Pledgor represents
and warrants as follows:

 

(a)                                  The Shares have
been duly authorized and validly issued and are fully paid and non-assessable.

 

2

 

(b)                                 Pledgor is and
will be at all times the legal and beneficial owner of the Shares and the
Pledged Collateral free and clear of any lien, security interest, option or
other charge or encumbrance, except for security interests created in favor of
Wells Fargo or as otherwise permitted pursuant to the terms of the Loan
Documents.

 

(c)                                  The pledge
pursuant to this Agreement of any Pledged Collateral coupled with the execution
of blank stock powers and Wells Fargo’s possession of all original shares,
creates or will create a valid and perfected first priority security interest
in the Pledged Collateral, securing the payment of the Obligations.

 

(d)                                 No
authorization, approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either (i) for
the pledge by Pledgor of the Pledged Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by Pledgor or (ii) for
the exercise by Wells Fargo of the rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with such disposition by laws
affecting the foreclosure of security interests generally).

 

(e)                                  The certificate
numbers and other information concerning the Shares are contained in Schedule
1 attached hereto and incorporated herein.

 

SECTION 5.  Further
Assurances.  Pledgor agrees that at
any time and from time to time, at the expense of Pledgor, Pledgor will
promptly execute and deliver all further instruments, certificates and
documents and take all further action that may be reasonably necessary or
desirable or that Wells Fargo may reasonably request in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Wells Fargo to exercise and enforce its rights and remedies hereunder
and under the Credit Agreement, the other Loan Documents and any guaranty
executed by Pledgor in favor of Wells Fargo with respect to the Obligations.

 

SECTION 6.  Pledgor’s
Rights; Dividends; Etc.  (a) So
long as no Event of Default shall have occurred and be continuing:

 

(i)                                     Pledgor shall
be entitled to exercise any rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement
including the right to vote the Shares for any purpose allowed under Company’s
Certificate of Incorporation, Bylaws or applicable law; provided, however, that
Pledgor shall not exercise or refrain from exercising any such right if such
action would create any lien in favor of any person in respect of the Pledged
Shares except as permitted herein or restrict the ability of Wells Fargo to
transfer the Pledged Collateral or any proceeds thereof.

 

(ii)                                  Pledgor shall
be entitled to receive and retain any and all interest, dividends and
distributions in respect of the Pledged Collateral; provided, however, that any
and all:

 

3

 

(A)                              proceeds,
distributions and interest paid or payable other than in cash in respect of,
and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral;

 

(B)                                proceeds and
distributions paid or payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in surplus; and

 

(C)                                cash paid,
payable or otherwise distributed in respect of principal of, or in redemption
of, or in exchange for any Pledged Collateral,

 

shall be, and shall be forthwith delivered to Wells Fargo to hold as,
Pledged Collateral and shall, if and when received by Pledgor, be received in
trust for the benefit of Wells Fargo, be segregated from the other property or
funds of Pledgor, and be forthwith delivered to Wells Fargo as Pledged
Collateral in the same form as so received (with any necessary endorsement).

 

(b)                                 Upon the
occurrence and during the continuance of an Event of Default:

 

(i)                                     All rights of
Pledgor to receive the interest, dividends and distributions on the Pledged
Collateral which Pledgor would otherwise be authorized to receive and retain
pursuant to Section 6(a)(ii) shall cease, and all such rights
shall thereupon become vested in Wells Fargo which shall thereupon have the
sole right to receive and hold as Pledged Collateral such dividends, interest,
distributions and payments.

 

(ii)                                  All interest,
dividends, distributions and payments which are received by Pledgor contrary to
the provisions of paragraph (i) of this Section 6(b) shall
be received in trust for the benefit of Wells Fargo, shall be segregated from
other funds of Pledgor and shall be forthwith paid over to Wells Fargo as
Pledged Collateral in the same form as so received (with any necessary
endorsement).

 

SECTION 7.  Transfers and
Other Liens; Notice to Prior Secured Party. 
Pledgor agrees Pledgor will not create or permit to exist any lien,
security interest, or other charge or encumbrance upon or with respect to any
of the Pledged Collateral, except for the security interest under this
Agreement and except as otherwise permitted under the Credit Agreement.

 

SECTION 8.  Wells Fargo
Appointed Attorney-in-Fact.  Upon the
occurrence of an Event of Default, Pledgor hereby irrevocably appoints Wells
Fargo Pledgor’s attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in Wells
Fargo’s discretion, to take any action and to execute any instrument which
Wells Fargo may in its sole but reasonable discretion deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation, to demand, receive, endorse, hold and collect all instruments made
payable to Pledgor representing any dividend or other distribution in respect
of the Pledged Collateral or any part thereof and to give full discharge for
the same.

 

4

 

SECTION 9.  Wells Fargo May Perform.  If Pledgor fails to perform any agreement
contained herein, Wells Fargo may itself perform, or cause performance of, such
agreement, and the reasonable expenses of Wells Fargo incurred in connection
therewith shall be payable by Pledgor in accordance with Section 13.

 

SECTION 10.  Reasonable
Care.  Wells Fargo shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which Wells Fargo accords its own property, it
being understood that Wells Fargo shall have no responsibility for (a) ascertaining
or taking action with respect to maturities, tenders or other matters relative
to any Pledged Collateral, whether or not Wells Fargo has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral.

 

SECTION 11.  Remedies.  If any Event of Default shall have occurred
and be continuing:

 

(a)                                  Wells Fargo may
exercise in respect of the Pledged Collateral, in addition to other rights and
remedies provided for herein and as otherwise available to it at law or in
equity, all the rights and remedies of a secured party on default under the
Uniform Commercial Code in effect in the State of Minnesota at that time, and
Wells Fargo may also, without notice as specified below, execute upon and apply
(for itself or any designee it elects) the Pledged Collateral directly toward
the payment of the Obligations, and sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of Wells Fargo’s offices or elsewhere, for cash, on
credit or for future delivery, and at such price or prices and upon such other
terms as Wells Fargo may deem commercially reasonable.  Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) days’ notice to Pledgor
of the time and place of any public sale and one publication in a local
newspaper, or at least ten (10) days’ notice of the time after which any
private sale is to be made, shall constitute reasonable notification.  Wells Fargo shall not be obligated to make
any sale of Pledged Collateral regardless of notice of sale having been given.  Wells Fargo may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

 

(b)                                 Any cash held
by Wells Fargo as Pledged Collateral and all cash proceeds received by Wells
Fargo in respect of any sale of, collection from, or other realization upon all
or any part of the Pledged Collateral may, in the discretion of Wells Fargo, be
held by Wells Fargo as collateral for, and then or at any time thereafter
applied (after payment of any amounts payable to Wells Fargo pursuant to Section 13)
in whole or in part by Wells Fargo against, all or any part of the Obligations
in such order as Wells Fargo shall elect. 
Any surplus of such cash or cash proceeds held by Wells Fargo and
remaining after payment in full of all the Obligations shall be paid over to
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.

 

SECTION 12.  Indemnification.  Neither Wells Fargo nor any of its directors,
officers, agents or employees, shall be liable for any action taken or omitted
to be taken by it

 

5

 

hereunder
or in connection therewith, except for its own gross negligence or willful
misconduct.  Pledgor hereby agrees to
indemnify and hold harmless Wells Fargo and any such agents of Wells Fargo from
and against any and all liability incurred by Wells Fargo hereunder or in
connection herewith, unless such liability shall be due to the gross negligence
or willful misconduct on the part of Wells Fargo.

 

SECTION 13.  Expenses.  Pledgor will upon demand pay to Wells Fargo
the amount of any and all reasonable expenses, including the reasonable fees
and expenses of its counsel and of any experts and agents, which Wells Fargo
may incur in connection with (a) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (b) the exercise or enforcement of any of the rights of Wells
Fargo hereunder, or (c) the failure by Pledgor to perform or observe any
of the provisions hereof.

 

SECTION 14.  Security
Interest Absolute.  (a)  All
rights of Wells Fargo and security interests hereunder, and all obligations of
Pledgor hereunder, shall be absolute and unconditional irrespective of:

 

(i)                                     any lack of
validity or enforceability of the Credit Agreement, Loan Documents, any
guaranty executed by Pledgor in favor of Wells Fargo or any other agreement or
instrument relating to any of the foregoing;

 

(ii)                                  any change in
the time, manner or place of payment of, or in any other term of, all or any of
the Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, Loan Documents, or any guaranty executed
by Pledgor in favor of Wells Fargo;

 

(iii) any exchange,
release or non-perfection of any other collateral, or any release or amendment
or waiver of or consent to departure from any guaranty, for all or any of the
Obligations; or

 

(iv)                              any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, Pledgor or any guarantor or co-maker in respect of the
Obligations or Pledgor in respect of this Agreement.

 

(b)                                 Wells Fargo
may, furthermore, from time to time, whether before or after any of the
Obligations shall become due and payable, without notice to Pledgor, take all
or any of the following actions:  (i) retain
or obtain a security interest in any property, in addition to the Pledged
Collateral, to secure any of the Obligations, (ii) retain or obtain the
primary or secondary liability of any party or parties with respect to any of
the Obligations, (iii) extend or renew for any period (whether or not
longer than the original period) or exchange any of the Obligations or release
or compromise any obligation of any nature of any party with respect thereto, (iv) surrender,
release or exchange all or any part of any property, in addition to the Pledged
Collateral, securing any of the Obligations, or compromise or extend or renew
for any period (whether or not longer than the original period) any obligations
of any nature of any party with respect to any such property, and (v) resort
to the Pledged Collateral for payment of any of the

 

6

 

Obligations
whether or not it shall have resorted to any other property securing the
Obligations or shall have proceeded against any party primarily or secondarily
liable on any of the Obligations.

 

SECTION 15.  Amendments;
Etc.  No amendment or waiver of any
provision of this Agreement nor consent to any departure by Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed
by Wells Fargo, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

SECTION 16.  Addresses
for Notices.  All notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile, as follows: (i) if to Pledgor, to it c/o Company as
provided in the Credit Agreement, and (ii) if to Wells Fargo as provided
in the Credit Agreement.  All notices and
other communications given to any party hereto in accordance with the
provisions hereof shall be deemed to have been given on the date of receipt.

 

SECTION 17.  Continuing
Security Interest.  This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(a) remain in full force and effect until payment in full of the
Obligations and the termination of any commitment by Wells Fargo with respect
thereto, (b) be binding upon Pledgor, Pledgor’s successors, transferees
and assigns, and (c) inure, together with the rights and remedies of Wells
Fargo hereunder, to the benefit of Wells Fargo and its successors, transferees
and assigns.

 

SECTION 18.  Governing
Law; Jurisdiction; Consent to Service of Process.

 

1.                                       This Agreement
shall be governed by, and construed in accordance with, the laws of the State
of Minnesota, without regard to principles of conflicts of law.  Pledgor irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
courts of the State of Minnesota sitting in Hennepin County, Minnesota and of
the United States District Court for the District of Minnesota, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document to which each is a party,
or for recognition or enforcement of any judgment, and each of the parties
hereto irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such state courts or,
to the fullest extent permitted by applicable Law, in such Federal courts.  Each of the parties hereto agrees that a
final judgment in any such 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.  Nothing in this Agreement
or in any other Loan Document shall affect any right that Wells Fargo may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Loan Party or any of its properties in the
courts of any other jurisdiction.

 

2.                                       Pledgor hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any court referred to in
paragraph (1) of 

 

7

 

this section.  The parties hereto hereby irrevocably waive,
to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

3.                                       Pledgor
irrevocably consents to service of process in the manner provided for notices
in the Credit Agreement.  Nothing in this
Agreement will affect the right of any party hereto to serve process in any
other manner permitted by applicable Law.

 

SECTION 19.  WAIVER OF JURY TRIAL; OTHER WAIVER.  TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES
HERETO HEREBY WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM.  THE PARTIES HERETO REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS.  IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

[Signature page follows]

 

8

 

IN
WITNESS WHEREOF, Pledgor has executed this Agreement as of the date first
written above.

 

	
   

  	
  MGP INGREDIENTS, INC.

  
	
   

  	
  a Kansas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
  Name:
  Timothy W. Newkirk

  
	
   

  	
  Its President

  

 

9

 

SCHEDULE 1

 

	
  Issuer

  	
   

  	
  Registered Owner

  	
   

  	
  Percent

  Ownership

  	
   

  	
  Pledged

  Shares

  	
   

  
	
  Midwest
  Grain Pipeline, Inc., a Kansas corporation

  	
   

  	
  MGP
  Ingredients, Inc., a Kansas corporation

  	
   

  	
  100

  	
  %

  	
  5,000

  	
   

  

 

 

STOCK POWER

 

FOR VALUE RECEIVED,
                                          
hereby sells, assigns and transfers unto
                                                           (      )
Shares of the common stock of Midwest Grain Pipeline, Inc., a Kansas
corporation, standing in its name on the books of said corporation represented
by Certificate No.               
herewith and does hereby irrevocably constitute and appoint
                                              
attorney to transfer the said stock on the books of the within named Company
with full power of substitution in the premises.

 

Dated
                    
        ,

 

 

MGP INGREDIENTS, INC.

a Kansas corporation

 

 

	
  By:

  	
   

  	
   

  
	
  Name:
  Timothy W. Newkirk

  	
   

  
	
  Its
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  In
  Presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Witness

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"}]]