Document:

Exhibit 4.4

 

	
  LOAN NUMBER

  	
   

  	
  LOAN NAME

  	
   

  	
  ACCT. NUMBER

  	
   

  	
  NOTE DATE

  	
   

  	
  INITIALS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MGP INGREDIENTS, INC -

  	
   

  	
   

  	
   

  	
  04/15/09

  	
   

  	
  DMW/CML

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOTE AMOUNT

  	
   

  	
  INDEX (w/Margin)

  	
   

  	
  RATE

  	
   

  	
  MATURITY DATE

  	
   

  	
  LOAN PURPOSE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  2,800,000.00

  	
   

  	
  Not Applicable

  	
   

  	
  7.000

  	
  %

  	
  09/03/09

  	
   

  	
  Commercial

  
										

 

Creditor Use Only

 

PROMISSORY NOTE

(Commercial - Single Advance)

 

DATE
AND PARTIES.  The date of
this Promissory Note (Note) is April 15, 2009.  The parties and their addresses are:

 

LENDER:

EXCHANGE NATIONAL BANK & TRUST CO.

600 COMMERCIAL ST

ATCHISON, Kansas 66002

Telephone: 913-387-6000

 

BORROWER:

MGP INGREDIENTS, INC

a Kansas Corporation

P O BOX 130

ATCHISON, KS 66002

 

1.     DEFINITIONS.  As used in this
Note, the terms have the following meanings:

 

A.    Pronouns.  The pronouns “I,” “me,” and “my” refer to
each Borrower signing this Note, individually and together. “You” and “Your”
refer to the, Lender.

 

B.    Note.  Note refers to this document, and any
extensions, renewals, modifications and substitutions of this Note.

 

C.    Loan.  Loan refers to this transaction generally,
including obligations and duties arising from the terms of all documents
prepared or submitted for this transaction such as applications, security
agreements, disclosures or notes, and this Note.

 

D.    Loan Documents.  Loan Documents refer
to all the documents executed as a part of or in connection with the Loan.

 

E.     Property.  Property is any property, real, personal or
intangible, that secures my performance of the obligations of this Loan.

 

F.     Percent.  Rates and rate change limitations are
expressed as annualized percentages.

 

2.     PROMISE TO PAY.  For value received,
I promise to pay you or your order, at your address, or at such other location
as you may designate, the principal sum of $2,800,000.00 (Principal) plus interest
from April 15, 2009 on the unpaid Principal balance until this Note
matures or this obligation is accelerated.

 

3.     INTEREST.  Interest will accrue
on the unpaid Principal balance of this Note at the rate of 7.000 percent
(Interest Rate).

 

A.    Post-Maturity Interest.  After maturity or
acceleration, interest will accrue on the unpaid Principal balance of this Note
at the Interest Rate in effect from time to time, until paid in full.

 

B.    Maximum Interest Amount.  Any amount assessed
or collected as interest under the terms of this Note will be limited to the
maximum lawful amount of interest allowed by state or federal law, whichever is
greater.  Amounts collected in excess of
the maximum lawful amount will be applied first to the unpaid Principal
balance. Any remainder will be refunded to me.

 

C.    Statutory Authority.  The amount assessed
or collected on this Note is authorized by the Kansas usury laws under Kan.
Stat. Ann. § 16-207.

 

D.    Accrual.  Interest accrues using an Actual/365 days
counting method.

 

4.     REMEDIAL CHARGES.  In addition to
interest or other finance charges, I agree that I will pay these additional
fees based on my method and pattern of payment. 
Additional remedial charges may be described elsewhere in this Note.

 

A.    Late Charge.  If a payment is more than 10 days late, I
will be charged 5.000 percent of the Unpaid Portion of Payment.  I will pay this late charge promptly but only
once for each late payment.

 

B.    Returned Payment Charges.  A(n) Returned
Payment Charges equal to $30.00.

 

5.     PAYMENT.  I agree to pay this
Note in installments of accrued interest beginning May 3, 2009, and then
on the 3rd day of each month thereafter. 
I agree to pay the entire unpaid Principal and any accrued but unpaid
interest on September 3, 2009.

 

Payments
will be rounded to the nearest $.01. 
With the final payment I also agree to pay any additional fees or
charges owing and the amount of any advances you have made to others on my
behalf.  Payments scheduled to be paid on
the 29th, 30th or 31st day of a month that contains no such day will, instead,
be made on the last day of such month.

 

Each
payment I make on this Note will be applied first to Interest that is due, then
to principal that is due, and finally to any charges that I owe other than
principal and finance charges.  If you
and I agree to a different application of payments, we will describe our
agreement on this Note.  You may change
how payments are applied in your sole discretion without notice to me.  The actual amount of my final payment will depend
on my payment record.

 

6.     PREPAYMENT.  I may prepay this
Loan in full or in part at any time.  Any
partial prepayment will not excuse any later scheduled payments until I pay in
full.

 

7.     LOAN PURPOSE.  This is a
business-purpose loan transaction.

 

8.     SECURITY.  The Loan is secured
by separate security instruments prepared together with this Note as follows:

 

A LEASEHOLD MORTGAGE DATED
APRIL 15, 2009 ON THE PROPERTY LOCATED AT 100 COMMERCIAL ST AND 200 COMMERCIAL
ST; ATCHISON, KS.

 

A MORTGAGE DATED APRIL 15,
2009 ON THE PROPERTY LOCATED AT 1301 SOUTH FRONT STREET; PEKIN, IL.

 

A PLEDGE AND SECURITY
AGREEMENT RELATING TO THE BOND ISSUED TO BORROWER IN CONNECTION WITH ISSUANCE
BY THE CITY OF ATCHISON, KANSAS OF ITS TAXABLE INDUSTRIAL REVENUE BONDS (MGP
INGREDIENTS PROJECT), SERIES 2006.

 

9.     DEFAULT.  I will be in default
if any of the following occur:

 

A.    Payments.  I fail to make a payment in full when due.

 

	
  MGP
  INGREDIENTS, INC.

  	
   

  	
   

  
	
  Kansas
  Promissory Note

  	
   

  	
  Initials
  

  	
   

  
	
  KS/4CHRISTIN00000000000111050041309N

  	
  ©1996
  Bankers System, Inc., St. Cloud, MN 

  	
   

  

 

1

 

B.    Insolvency or Bankruptcy.  The death,
dissolution or insolvency of, appointment of a receiver by or on behalf of,
application of any debtor relief law, the assignment for the benefit of
creditors by or on behalf of, the voluntary or involuntary termination of
existence by, or the commencement of any proceeding under any present or future
federal or state insolvency, bankruptcy, reorganization, composition or debtor
relief law by or against me or any co-signer, endorser, surety or guarantor of
this Note or any other obligations I have with you.

 

C.    Business Termination.  I merge, dissolve,
reorganize, end my business or existence.

 

D.    Failure to Perform.  I fail to perform
any condition or to keep any promise or covenant of this Note.

 

E.     Other Documents.  A default occurs
under the terms of any other Loan Document.

 

F.     Other Agreements.  I am in default on
any other debt or agreement I have with you.

 

G.    Misrepresentation.  I make any verbal or
written statement or provide any financial information that is untrue,
inaccurate, or conceals a material fact at the time it is made or provided.

 

H.    Judgment.  I fail to satisfy or appeal any judgment
against me.

 

I.      Forfeiture.  The Property is used in a manner or for a
purpose that threatens confiscation by a legal authority.

 

J.     Name Change.  I change my name or assume an additional name
without notifying you before making such a change.

 

K.    Property Transfer.  I transfer all or a
substantial part of my money or property.

 

L.    Property Value.  You determine in
good faith that the value of the Property has declined or is impaired.

 

M.   Material Change.  Without first
notifying you, there is a material change in my business.

 

N.    Insecurity.  You determine in good faith that a material
adverse change has occurred in my financial condition from the conditions set
forth in my most recent financial statement before the date of this Note or
that the prospect for payment or performance of the Loan is impaired for any
reason.

 

10.  DUE ON SALE OR
ENCUMBRANCE.  You may, at your option, declare the entire
balance of this Note to be immediately due and payable upon the creation of, or
contract for the creation of, any lien, encumbrance, transfer or sale of all or
any part of the Property.  This right is
subject to the restrictions imposed by federal law (12 C.F.R. 591), as
applicable.

 

11.  WAIVERS AND
CONSENT.  To the extent not prohibited by law, I waive
protest, presentment for payment, demand, notice of acceleration, notice of
intent to accelerate and notice of dishonor.

 

A.    Additional Waivers By Borrower.  In addition, I, and
any party to this Note and Loan, to the extent permitted by law, consent to
certain actions you may take, and generally waive defenses that may be
available based on these actions or based on the status of a party to this
Note.

 

(1)   You may renew or extend payments on this Note, regardless of the
number of such renewals or extensions.

 

(2)   You may release any Borrower, endorser, guarantor, surety,
accommodation maker or any other co-signer.

 

(3)   You may release, substitute or impair any Property securing this
Note.

 

(4)   You, or any institution participating in this Note, may invoke
your right of set-off.

 

(5)   You may enter into any sales, repurchases or participations of
this Note to any person in any amounts and I waive notice of such sales,
repurchases or participations.

 

(6)   I agree that any of us signing this Note as a Borrower is
authorized to modify the terms of this Note or any instrument securing,
guarantying or relating to this Note.

 

B.    No Waiver By Lender.  Your course of
dealing, or your forbearance from, or delay in, the exercise of any of your
rights, remedies, privileges or right to insist upon my strict performance of
any provisions contained in this Note, or any other Loan Document, shall not be
construed as a waiver by you, unless any such waiver is in writing and is
signed by you.

 

12.  REMEDIES.  After I default, you
may at your option do any one or more of the following.

 

A.    Acceleration.  You may make all or any part of the amount
owing by the terms of this Note immediately due.

 

B.    Sources.  You may use any and all remedies you have
under state or federal law or in any Loan Document.

 

C.    Insurance Benefits.  You may make a claim
for any and all insurance benefits or refunds that may be available on my
default.

 

D.    Payments Made On My Behalf.  Amounts advanced on
my behalf will be immediately due and may be added to the balance owing under
the terms of this Note, and accrue interest at the highest post-maturity
interest rate.

 

E.     Set-Off.  You may use the right of set-off.  This means you may set-off any amount due and
payable under the terms of this Note against any right I have to receive money
from you.

 

My
right to receive money from you includes any deposit or share account balance I
have with you; any money owed to me on an item presented to you or in your
possession for collection or exchange; and any repurchase agreement or other
non-deposit obligation.  “Any amount due
and payable under the terms of this Note” means the total amount to which you
are entitled to demand payment under the terms of this Note at the time you
set-off.

 

Subject
to any other written contract, if my right to receive money from you is also
owned by someone who has not agreed to pay this Note, your right of set-off
will apply to my interest in the obligation and to any other amounts I could
withdraw on my sole request or endorsement.

 

Your
right of set-off does not apply to an account or other obligation where my
rights arise only in a representative capacity. 
It also does not apply to any Individual Retirement Account or other
tax-deferred retirement account.

 

You
will not be liable for the dishonor of any check when the dishonor occurs
because you set-off against any of my accounts. 
I agree to hold you harmless from any such claims arising as a result of
your exercise of your right of set-off.

 

F.     Waiver.  Except as otherwise required by law, by
choosing any one or more of these remedies you do not give up your right to use
any other remedy.  You do not waive a
default if you choose not to use a remedy. 
By electing not to use any remedy, you do not waive your right to later
consider the event a default and to use any remedies if the default continues
or occurs again.

 

13.  COLLECTION EXPENSES
AND ATTORNEYS’ FEES.  On or after Default, to the extent permitted
by law, I agree to pay all expenses of collection, enforcement or protection of
your rights and remedies under this Note or any other Loan Document.  Expenses include, but are not limited to,
attorneys’ fees, court costs and other legal expenses.  These expenses are due and payable
immediately.  If not paid immediately,
these expenses will bear interest from the date of payment until paid in full
at the highest interest rate in effect as provided for in the terms of this
Note.  All fees and expenses will be
secured by the Property I have granted to you, if any.  In addition, to the extent permitted by the
United States Bankruptcy Code, I agree to pay the reasonable attorneys’ fees
incurred by you to protect your rights and interests in connection with any
bankruptcy proceedings initiated by or against me.

 

14.  COMMISSIONS.  I understand and
agree that you (or your affiliate) will earn commissions or fees on any
insurance products, and may earn such fees on other services that I buy through
you or your affiliate.

 

15.  WARRANTIES AND
REPRESENTATIONS.  I made to you the following warranties and
representations which will continue as long as this note is in effect:

 

	
   

  	
   

  	
  Initials
  

  	
   

  

 

2

 

A.    Power.  I am duly organized, and validly existing and
in good standing in all jurisdictions in which I operate.  I have the power and authority to enter into
this transaction and to carry on my business or activity as it is now being
conducted and, as applicable, am qualified to do so in each jurisdiction in
which I operate.

 

B.    Authority.  The execution, delivery and performance of
this Note and the obligation evidenced by this Note are within my powers, have
been duly authorized, have received all necessary governmental approval, will
not violate any provision of law, or order of court or governmental agency, and
will not violate any agreement to which I am a party or to which I am or any of
my Property is subject.

 

C.    Name and Place of Business.  Other than
previously disclosed in writing to you I have not changed my name or principal
place of business within the last 10 years and have not used any other trade or
fictitious name.  Without your prior
written consent, I do not and will not use any other name and will preserve my
existing name, trade names and franchises.

 

16.  INSURANCE.  I agree to obtain
the insurance described in this Loan Agreement.

 

A.    Property Insurance.  I will insure or
retain insurance coverage on the Property and abide by the insurance
requirements of any security instrument securing the Loan.

 

B.    Flood Insurance Is Required on Some or All
of the Property.  I will insure the real property securing the
Loan against hazards caused by flooding as described by other documents I sign
for the Loan.

 

C.    Insurance Warranties.  I agree to purchase
any insurance coverages that are required, in the amounts you require, as
described in this or any other documents I sign for the Loan.  I will provide you with continuing proof of
coverage.  I will buy or provide
insurance from a firm licensed to do business in the State where the Property
is located.  If I buy or provide the
insurance from someone other than you, the firm will be reasonably acceptable
to you.  I will have the insurance
company name you as loss payee on any insurance policy.  You will apply the insurance proceeds toward
what I owe you on the outstanding balance. 
I agree that if the insurance proceeds do not cover the amounts I still
owe you, I will pay the difference.  I
will keep the insurance until all debts secured by this agreement are
paid.  If I want to buy the insurance
from you, I have signed a separate statement agreeing to this purchase.

 

17.  APPLICABLE LAW.  This Note is
governed by the laws of Kansas, the United States of America, and to the extent
required, by the laws of the jurisdiction where the Property is located, except
to the extent such state laws are preempted by federal law.

 

18.  JOINT AND
INDIVIDUAL LIABILITY AND SUCCESSORS.  My obligation to pay the Loan is independent
of the obligation of any other person who has also agreed to pay it.  You may sue me alone, or anyone else who is
obligated on the Loan, or any number of us together, to collect the Loan.  Extending the Loan or new obligations under
the Loan, will not affect my duty under the Loan and I will still be obligated
to pay the Loan.  This Note shall inure
to the benefit of and be enforceable by you and your successors and assigns and
shall be binding upon and enforceable against me and my personal
representatives, successors, heirs and assigns.

 

19.  AMENDMENT,
INTEGRATION AND SEVERABILITY.  This Note may not be amended or modified by
oral agreement.  No amendment or
modification of this Note is effective unless made in writing and executed by
you and me.  This Note and the other Loan
Documents are the complete and final expression of the agreement.  If any provision of this Note is unenforceable,
then the unenforceable provision will be severed and the remaining provisions
will still be enforceable.

 

20.  INTERPRETATION.  Whenever used, the
singular includes the plural and the plural includes the singular.  The section headings are for convenience only
and are not to be used to interpret or define the terms of this Note.

 

21.  NOTICE, FINANCIAL
REPORTS AND ADDITIONAL DOCUMENTS.  Unless otherwise required by law, any notice
will be given by delivering it or mailing it by first class mail to the appropriate
party’s address listed in the DATE AND PARTIES section, or to any other address
designated in writing.  Notice to one
Borrower will be deemed to be notice to all Borrowers.  I will inform you in writing of any change in
my name, address or other application information.  I will provide you any financial statement or
information you request.  All financial
statements and information I give you will be correct and complete.  I agree to sign, deliver, and file any
additional documents or certifications that you may consider necessary to
perfect, continue, and preserve my obligations under this Loan and to confirm
your lien status on any Property.  Time
is of the essence.

 

22.  CREDIT INFORMATION.  I agree to supply
you with whatever information you reasonably request.  You will make requests for this information
without undue frequency, and will give me reasonable time in which to supply
the information.

 

23.  ERRORS AND
OMISSIONS.  I agree, if requested by you, to fully
cooperate in the correction, if necessary, in the reasonable discretion of you
of any and all loan closing documents so that all documents accurately describe
the loan between you and me.  I agree to
assume all costs including by way of illustration and not limitation, actual
expenses, legal fees and marketing losses for failing to reasonably comply with
your requests within thirty (30) days.

 

24.  WAIVER OF JURY
TRIAL. 
All of the parties to this Note knowingly and intentionally, irrevocably
and unconditionally, waive any and all right to a trial by jury in any
litigation arising out of or concerning this Note or any other Loan Document or
related obligation.  All of these parties
acknowledge that this section has either been brought to the attention of each
party’s legal counsel or that each party had the opportunity to do so.

 

25.  SIGNATURES.  By signing, I agree
to the terms contained in this Note. I also acknowledge receipt of a copy of
this Note.

 

 

BORROWER:

 

MGP
INGREDIENTS, INC

 

 

	
  By

  	
  /s/ Timothy W. Newkirk

  	
   

  	
  Date

  	
  4/15/09

  
	
  TIMOTHY
  W NEWKIRK, PRESIDENT & CEO

  	
   

  	
   

  

 

	
   

  	
   

  	
  Initials
  

  	
   

  

 

3Exhibit 4.4.1

 

LEASEHOLD MORTGAGE, SECURITY AGREEMENT AND FIXTURE
FILING

 

THIS LEASEHOLD MORTGAGE,
SECURITY AGREEMENT AND FIXTURE FILING (this “Leasehold Mortgage”) is made as of
April 15, 2009, by and between MGP INGREDIENTS, INC., a Kansas corporation
whose address for notice purposes is Cray Business Plaza, 100 Commercial
Street, Atchison, Kansas 66002 (the “Mortgagor”), and EXCHANGE NATIONAL BANK &
TRUST CO., whose address for notice purposes is 600 Commercial Street,
Atchison, Kansas 66002 (the “Mortgagee”);

 

WHEREAS, the City of
Atchison, Kansas (the “Issuer”) did issue its Taxable Industrial Revenue Bonds,
Series 2006 (MGP Ingredients Project), on December 28, 2006, in an
aggregate principal amount of $7,000,000 (the “Bonds”), the proceeds of which
were used to pay the costs of acquiring, purchasing, constructing and equipping
a project consisting of an office building and a technical center facility (the
“Project”) located in Atchison County, Kansas;

 

WHEREAS, pursuant to a Lease
dated as of the issue date of the Bonds, by and between the Issuer and the
Mortgagor evidenced by a Notice of Lease filed with the Register of Deeds for
Atchison County, Kansas on January 16, 2007 and recorded in Book 559, at Page 137
(collectively, the “Lease”), the Issuer has leased the Project, including the
land described in Exhibit “A” attached hereto and incorporated
herein by reference (the “Land”), the Improvements, Fixtures, Personal Property
(as said terms are defined below) to the Mortgagor in consideration for which
the Issuer, pursuant to a Trust Indenture dated as of the issue date of the
Bonds (the “Indenture”), by and between the Issuer and Commerce Bank, N.A., as
Trustee, has issued the Bonds;

 

WHEREAS, the Mortgagee has
agreed to make a loan in the total principal amount of $2,800,000 (the “Loan”)
to the Mortgagor as evidenced by that certain promissory note (the “Note”) in
the original principal amount of the Loan, dated the date hereof, made by and
between the Mortgagor in favor of the Mortgagee; and

 

WHEREAS, to secure the
payment and performance of the Secured Obligations (as defined below) and as a
condition to the making of the Loan, the Mortgagor has agreed to execute and
deliver this Leasehold Mortgage in favor of the Mortgagee.

 

1

 

NOW, THEREFORE, the
Mortgagor, for itself and its successors and assigns, in consideration of the
above and foregoing recitals, all of which are material hereto and are restated
and incorporated herein by reference, and for Ten Dollars ($10.00) and other
valuable consideration, does hereby irrevocably GRANT, BARGAIN, SELL, ALIGN,
REMISE, MORTGAGE, PLEDGE, TRANSFER, RELEASE, CONVEY, ASSIGN AND CONFIRM unto
the Mortgagee, and its successors and assigns, and grants to the Mortgagee, and
to its successors and assigns, a security interest in, all of the following
described property, which is, except where the context otherwise requires,
collectively referred to as the “Mortgaged Property,” whether now owned or held
or hereafter acquired:

 

(a)                                  The leasehold estate created
by the Lease in the Project, together with any greater or additional estate
therein as may be acquired by the Mortgagor, which includes the following
property:

 

(i)                                     The Land and any land within
the streets, roads and alleys adjoining the Land, and all and singular the
tenements, hereditaments, privileges, easements, franchises, rights, appendages
and appurtenances whatsoever belonging to or in any wise appertaining to the
Land;

 

(ii)                                  All buildings, improvements
and other structures now located, or hereafter erected, upon the Land
(collectively, the “Improvements”);

 

(iii)                               All apparatus, fixtures,
fittings and appliances and any additions to, substitutions for, changes in or
replacements of the whole or any part thereof (but only to the extent that such
additions, substitutions, changes and replacements constitute a part of the
Project under the terms of the Lease), including, without limitation, such of
the foregoing as may be used in connection with the generation or distribution
of air, water, heat, electricity, light, fuel or refrigeration, or for
ventilation or sanitary purposes, or for the removal of dust, refuse or
garbage, now or at any time hereafter affixed or attached to, placed upon or
used in any way in connection with the use, enjoyment, occupancy or operation
of the Land and Improvements, or any portion thereof (collectively, the “Fixtures”;
and

 

(iv)                              All equipment and other
articles of personal property now or in the future constituting a part of the
Project, and all substitutions for, changes in or replacements of the whole or
any part thereof, but only to the extent that such substitutions, changes and
replacements constitute a part of the Project under the terms of the Lease
(collectively, the “Personal Property”);

 

(b)                                 The Mortgagor’s right or
option pursuant to the Lease to purchase the Project;

 

2

 

(c)                                  Any and all licenses,
permits, authorizations or approvals of any type or nature whatsoever which
relate to the use, development, operation or occupancy of the Project or the
Mortgaged Property or any portion or component thereof, and all plans and
specifications, architect’s contracts, construction contracts and other
contracts relating to the Project;

 

(d)                                 Other than the Lease, all
leases, licenses, concessions, occupancy agreements, and other agreements
(written or oral, now or at any time in effect) granted to any person in
possessory interest in or the right to use, all or part of the Mortgaged
Property, together with all related security and other deposits, herein
collectively referred to as the “Leases”;

 

(e)                                  All of the rents, revenues,
royalties, income, proceeds, profits, security and other types of deposits, and
other benefits paid or payable by parties to any lease, license, concession or
occupancy agreement, for using, leasing, licensing, possessing, operating from,
residing in, selling or otherwise enjoying the Mortgaged Property, herein
collectively referred to as the “Rents”;

 

(f)                                    All judgments, awards of
damages and settlements hereafter made as a result of or in lieu of any taking
of the Mortgaged Property or any part thereof or interest therein under the
power of eminent domain, or for any damage (whether caused by such taking or
otherwise) to the Mortgaged Property or the improvements thereon or any part
thereof or interest therein, including any award for change of grade or
streets;

 

(g)                                 The abstract of title and
title insurance policy covering the Mortgaged Property; all insurance policies
covering all or any portion of the Mortgaged Property; and all blueprints,
plans, maps, documents, books and records relating to the Mortgaged Property;

 

(h)                                 All books and records of the
Mortgagor relating to the Mortgaged Property;

 

(i)                                     All rights of the Mortgagor
to plans and specifications, designs, drawings and other matters prepared for
any construction on the Mortgaged Property;

 

(j)                                     All rights of the Mortgagor
under any contracts executed by the Mortgagor as owner with any provider of
goods or services for or in connection with any construction undertaken on, or
services performed or to be performed in connection with, the Mortgaged
Property; and

 

(k)                                  All proceeds (including
claims or demands thereto) of the conversion, voluntary or involuntary, of any
of the foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance (including unearned premiums) and condemnation awards
(including interest thereon).

 

3

 

TO HAVE AND TO HOLD the Mortgaged
Property unto the Mortgagee, and its successors and assigns forever, subject to
the Permitted Encumbrances (defined below), for the purposes and uses as set
forth in this Leasehold Mortgage, including for the purpose of securing unto
the Mortgagee and its successors and assigns, the following indebtedness,
obligations and liabilities (collectively, the “Secured Obligations”):

 

(a)                                  All indebtedness arising
pursuant to the provisions of the Note, the Pledge and Security Agreement given
by Mortgagor to Mortgagee pledging Mortgagor’s interest in the Bonds, this
Leasehold Mortgage and all other documents evidencing, securing or pertaining
to the Loan (collectively, the “Loan Documents”) together with any and all
extensions, renewals, modifications, substitutions and changes in the form
thereof;

 

(b)                                 The performance by the
Mortgagor of each covenant, agreement and obligation of the Mortgagor contained
in the Loan Documents;

 

(c)                                  The payment of all
extensions, renewals, substitutions, modifications, amendments and changes in
form of the Secured Obligations, which extensions or renewals may be from time
to time and for any term or terms, with reasonable notice to the Mortgagor;

 

(d)                                 The payment by the Mortgagor
to the Mortgagee of all sums of money advanced or paid by the Mortgagee to cure
or correct or in consequence of any default by the Mortgagor in or failure of
the Mortgagor to comply with the Loan Documents; and

 

(e)                                  The payment by the Mortgagor
to the Mortgagee of any and all amounts expended by the Mortgagee in exercising
or attempting to exercise any right or rights, remedy or remedies, granted or
otherwise available to the Mortgagee upon the default of the Mortgagor in any
of the provisions of the Loan Documents, including attorneys’ fees and litigation
costs.

 

AND TO FURTHER SECURE the
payments and performance of the Secured Obligations, the Mortgagor has
covenanted and agreed and does hereby covenant and agree, as follows:

 

Section 1.  Definitions.  Capitalized terms not otherwise defined in
this Leasehold Mortgage shall have the meanings assigned to them pursuant to Section 1.1
of the Lease.

 

Section 2.
Maintenance.  Except as
otherwise provided in the Lease, the Mortgagor shall (a) keep the Project
in good operating condition and repair, (b) not remove or demolish any
building constituting a part of the Project, (c) complete or restore
promptly and in good and workmanlike manner any building which may be damaged
or destroyed thereon, and pay when due all claims for labor performed and
materials furnished therefore, (d) comply with all laws affecting the
Project or requiring any alterations or improvements to be made thereon, (e) not
commit or permit waste thereof, (f) not commit, suffer or permit any act
upon the Project in violation of law, and (g) do all other acts which from
the character or use of the Project may be reasonably necessary, the specific
enumerations herein not excluding the general.

 

4

 

Section 3. 
Insurance.

 

(b)                                 The Mortgagor shall maintain,
with financially sound and reputable companies, insurance policies (i) insuring
the buildings, improvements and other structures constituting a part of the
Project, the Fixtures and the Personal Property against loss by fire,
explosion, theft and such other casualties and risks as are included in a “special
form” (formerly known as an “all risk” policy) policy, in an amount equal to
their full replacement cost, without deduction for physical depreciation and
such that the Mortgagor would not be deemed a co-insurer, and (ii) commercial
general liability insurance insuring the Mortgagor and the Mortgagee against
liability for personal injury and property damage with single limit coverage
for personal and bodily injury and property damage of at least $2,000,000 per
occurrence.  All such insurance shall (i) provide
that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least thirty (30) days (or ten (10) days
in the event of nonpayment of premium) after receipt by the Mortgagee of
written notice thereof, (ii) include deductibles approved by the Mortgagee
and (iii) contain a standard, non-contributory mortgagee clause naming the
Mortgagee, its successors and assigns, as an additional insured or loss payee,
as applicable.

 

(c)                                  If any improvements
constituting a part of the Project are located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or other
applicable agency, the Mortgagor shall maintain or cause to be maintained,
flood insurance in an amount no less than the maximum limit of coverage
available under the National Flood Insurance Act of 1968, as amended.

 

(d)                                 The Mortgagor promptly shall
comply with and conform in all material respects to (i) all provisions of
each such insurance policy, and (ii) all requirements of the insurers
applicable to the Mortgagor or to any of the Mortgaged Property or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. 
The Mortgagor shall not use or permit the use of the Mortgaged Property
in any manner which would permit any insurer to cancel any insurance policy or
void coverage required to be maintained by this Leasehold Mortgage.

 

(e)                                  If the Mortgagor is in
default of its obligations to insure or deliver any such prepaid policy or
policies, then the Mortgagee, at its option upon five (5) days’ written
notice to the Mortgagor, may effect such insurance and pay the premium or
premiums therefor, and the Mortgagor shall pay to the Mortgagee on demand such
premium or premiums so paid by the Mortgagee with interest from the time of
payment at the rate specified in the Note after maturity.

 

(f)                                    If the Mortgaged Property,
or any part thereof, shall be destroyed or damaged, the Mortgagor shall give
prompt notice thereof to the Mortgagee.

 

(g)                                 In the event of foreclosure
of this Leasehold Mortgage or other transfer of title to the Mortgaged
Property, all right, title and interest of the Mortgagor in and to any
insurance policies then in force shall pass to the purchaser or grantee.

 

5

 

Section 4.  Indemnification.  The Mortgagor shall appear in and defend any
action or proceeding purporting to affect the security of this Leasehold
Mortgage or the rights or powers of the Mortgagee; and to pay all reasonable
costs, fees and expenses of the Mortgagee including, but not limited to, cost
of evidence of title and attorneys’ fees incurred by the Mortgagee in any such
action or proceeding.

 

Section 5.  Payment of Taxes, Etc.  The Mortgagor shall promptly pay and
discharge, when due, all Impositions as provided in Article VII of
the Lease, subject to the rights of the Mortgagor under Section 7.3
of the Lease to contest any Impositions.

 

Section 6.  Compliance with Lease.  The Mortgagor shall pay all Rent, Additional
Rent and other sums payable under the Lease as the same become due and perform
all other obligations of the Mortgagor under the Lease in the manner and within
the time periods specified in the Lease.

 

Section 7.  Time of the Essence.  Time is of the essence of this Leasehold
Mortgage.

 

Section 8.  Warranty as to Title.  The Mortgagor represents and warrants that (i) it
has good and marketable leasehold title to the Project subject to the terms and
conditions of the Lease, and title to the remainder of the Mortgaged Property
so that, upon compliance with recording and filing requirements, a valid first
lien on all real property interests included in the Mortgaged Property and a
valid, perfected, first priority security interest in all personal property and
fixtures and other interests therein which are subject to Article 9 of the
Uniform Commercial Code in effect in the State of Kansas (the “Commercial Code”)
then included in the Mortgaged Property shall be obtained, subject only to
those matters set forth in Schedule B of that certain commitment for title
insurance dated February 5, 2009 issued by O’Keefe-Wilson Abstracting Co., Inc.
as agent for Chicago Title Insurance Company (the “Permitted Encumbrances”), (ii) it
has full right and authority to own, occupy and operate the Mortgaged Property
subject to the terms of the Lease, and (iii) at its expense it will
warrant and defend to the Mortgagee such title to the Mortgaged Property and
the lien and interest of the Mortgagee therein and thereon against all claims
and demands whatsoever except Permitted Encumbrances and will, except as
otherwise herein expressly provided, maintain the priority of the lien of, and
the security interest granted by, this Leasehold Mortgage upon the Mortgaged
Property until the Mortgagor shall be entitled to release as provided herein.

 

Section 9.  Recordation; Financing Statements.  The Mortgagor hereby authorizes the
Mortgagee, at Mortgagor’s expense, to cause this Leasehold Mortgage, any
instruments supplemental hereto or thereto and financing statements to be
recorded, registered and filed, and to be keep recorded, registered and filed,
in such manner and in such places as may be required in order to establish,
preserve and protect (a) the lien of this Leasehold Mortgage as a valid,
first lien on all real property, fixtures and interest therein then included in
the Mortgaged Property and a valid perfected first priority security interest
in all personal property, fixtures and interests therein and all after-acquired
property included in the Mortgaged Property (including in each such case,
without limitation, any such properties acquired after the execution hereto),
proceeds of the foregoing and (b) the rights of Mortgagee hereunder.

 

6

 

Section 10.  After-Acquired Property.  All property of every kind acquired by the
Mortgagor after the date hereof, which by the terms hereof is intended to be
subject to the lien of this Leasehold Mortgage, shall immediately upon the
acquisition thereof by the Mortgagor, and without further mortgage, conveyance
or assignment, become subject to the lien of this Leasehold Mortgage as fully
as though now owned by the Mortgagor and specifically described herein.  Nevertheless, the Mortgagor shall take such
actions and execute and delivery such additional instruments as the Mortgagee
shall reasonably require to further evidence or confirm the subjection to the lien
of this Leasehold Mortgage of any such property.

 

Section 11.  Mechanics’ and Other Liens.  The Mortgagor shall not permit any mechanics’
or other liens to be filed or to exist against the Mortgaged Property by reason
of work, labor, service or materials supplied or claimed to have been supplied
to, for or in connection with the Mortgaged Property or to the Mortgagor or to
anyone holding the Mortgaged Property or any part thereof through or under the
Mortgagor.  If any such lien shall at any
time be filed, the Mortgagor shall, within thirty (30) after notice of the
filing thereof (subject to the right to contest as set forth herein), cause the
same to be discharged of record by payment, deposit, bond, order of a court of
competent jurisdiction or otherwise. 
Notwithstanding the foregoing, the Mortgagor shall have the right, at
its own expense and after prior written notice to the Mortgagee, by appropriate
proceeding duly instituted and diligently prosecuted, to contest in good faith
the validity or the amount of any such lien. 
However, if the Mortgagee shall notify the Mortgagor that, in the
opinion of the Mortgagee, by nonpayment of any such items the lien of the
Leasehold Mortgage will be materially affected or the Mortgaged Property or any
part thereof will be subject to imminent loss or forfeiture, the Mortgagor
shall promptly cause such lien to be discharged of record.

 

Section 12.  No Sale, Conveyance, Etc.  Any sale, conveyance, assignment, or transfer
of the Mortgaged Property by the Mortgagee (except for sales of items of
Personal Property so long as such items are replaced with substitute items of
Personal Property of equal or greater value, which are subject to the security
interest granted herein) without the prior written consent of the Mortgagee,
which consent may be withheld in the Mortgagee’s sole discretion, shall be null
and void.  Any attempted sale,
conveyance, assignment or transfer of the Mortgaged Property without the
Mortgagee’s consent shall, at the option of the Mortgagee, constitute an Event
of Default hereunder and all indebtedness secured hereby shall, at the
Mortgagee’s option, become immediately due and payable.  The Mortgagor shall not directly or
indirectly create or permit to remain, and will promptly discharge, any
mortgage, lien, encumbrance or charge on, pledge of, security interest in or
conditional sale or other title retention agreement with respect to the
Mortgaged Property or any part thereof or in the interest of the Mortgagor
therein or any revenues, income or profit or other sums arising from the
Mortgaged Property or any part thereof (including, without limitation, any
lien, encumbrance or charge arising by operation of law) other than:

 

(a)                                  the lien of this Leasehold
Mortgage and the rights granted herein;

 

(b)                                 liens for taxes, assessments
and other governmental charges which are not at the time required to be paid
pursuant to Article VII of the Lease;

 

7

 

(c)                                  liens of mechanics’,
materialmen, suppliers or vendors or rights thereto to the extent permitted by Section 11
hereof; and

 

(d)                                 Permitted Encumbrances.

 

Any
mortgage, lien, encumbrance, charge, pledge, security interest or title
retention agreement with respect to the Mortgaged Property, or any part
thereof, granted or created by the Mortgagor without the prior written consent
of the Mortgagee shall be null and void to the extent permitted by law.  Any attempt at the making thereof shall, at
the option of the Mortgagee, constitute an Event of Default hereunder and all
indebtedness secured hereby shall, at the Mortgagee’s option, become
immediately due and payable.

 

Section 13.  Security Agreement and Financing Statement.  This Leasehold Mortgage shall constitute a
security agreement and fixture filing pursuant to the Commercial Code in effect
from time to time for any of the items specified herein as part of the
Mortgaged Property which, under applicable law, may be subject to a security
interest pursuant to the Commercial Code.

 

FOR PURPOSES OF THE COMMERCIAL CODE THE FOLLOWING
INFORMATION IS FURNISHED:

 

(a)                                  The name and address of the
record owner of the real estate described in this instrument are:

 

City
of Atchison, Kansas

515
Kansas Avenue

Atchison,
Kansas 66002

 

(b)                                 The names and
address of Mortgagor (debtor) are:

 

MGP
Ingredients, Inc.

100
Commercial Street

Atchison,
Kansas 660021

 

(c)                                  The name and
address of Mortgagee (secured party) are:

 

Exchange
National Bank & Trust Co.

600
Commercial Street

Atchison,
Kansas 66002

 

(d)                                 Information concerning the
security interest evidenced by this instrument maybe obtained from Mortgagee at
its address above.

 

(e)                                  This document covers assets
and personal property which are, or are to become, fixtures.

 

8

 

Section 14.  Assignment of Leases and Rents.  In furtherance of and in
addition to the assignment made by the Mortgagor elsewhere in this Leasehold
Mortgage, the Mortgagor hereby absolutely and unconditionally assigns, sells,
transfers and conveys to the Mortgagee all of its right, title and interest in
and to all Leases, whether now existing or hereafter entered into, and all of
its right, title and interest in and to all Rents. This assignment is an
absolute assignment and not an assignment for additional security only.  So long as no Event of Default shall have
occurred and be continuing, the Mortgagor shall have a revocable license from
the Mortgagee to exercise all rights extended to the landlord under the Leases,
including the right to receive and collect all Rents and to hold the Rents in
trust for use in the payment and performance of the Secured Obligations and to
otherwise use the same. The foregoing license is granted subject to the
conditional limitation that no Event of Default shall have occurred and be
continuing. Upon the occurrence and during the continuance of an Event of
Default, whether or not legal proceedings have commenced, and without regard to
waste, adequacy of security for the Secured Obligations or solvency of the
Mortgagor, the license herein granted shall automatically expire and terminate,
without notice to the Mortgagor by the Mortgagee (any such notice being hereby
expressly waived by the Mortgagor to the extent permitted by applicable law).

 

Section 15.  No Claim for Performance.  Nothing contained herein shall constitute any
request by Mortgagee, express or implied, for the performance of any labor or
services or the furnishings of any materials or other property in respect to
the Mortgaged Property or any part thereof or be construed to give the
Mortgagor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or
other property in such fashion as would provide the basis for any claim either
against the Mortgagee or that any lien based on the performance of such labor
or services or the furnishing of any such materials or other property is prior
to the lien of this Leasehold Mortgage.

 

Section 16.  Obligations Secured.  This Leasehold Mortgage is intended to secure
the Secured Obligations and future advances under the Secured Obligations
pursuant to K.S.A. 58-2336 and any amendments thereto.   The maximum principal amount of the Secured
Obligations, exclusive of interest thereon and advances made for the payment of
taxes, assessments, insurance premiums, fees and costs incurred for the
protection of the Mortgaged Property, which may be outstanding at any time, is
$2,800,000.

 

Section 17.  Partial Release.  At any time or from time to time, and without
notice, upon written request of the Mortgagor, and without liability therefor,
and without affecting the liability of any person for payment or performance of
the Secured Obligations, and without affecting the security of this Leasehold
Mortgage for the full amount secured hereby on all the Mortgaged Property
remaining subject hereto, and without the necessity that any sum representing
the value or any portion of the Mortgaged Property affected by the action of
the Mortgagee be credited on the Secured Obligations, the Mortgagee may consent
to the release of any portion of the Mortgaged Property from the lien of this
Leasehold Mortgage.

 

Section 18.  Discharge.  When the Secured Obligations have been fully
paid, performed and discharged and upon payment of any fees and expenses due
the Mortgagee, these presents shall be released at the expense of the
Mortgagor.

 

9

 

Section 19.  Damage, Destruction or Condemnation.

 

(a)                                  The Mortgagor shall give the
Mortgagee prompt notice of any damage to or destruction of the Mortgaged
Property and in case of loss covered by policies of insurance the Mortgagee is
hereby authorized at its option to settle and adjust any claim arising out of
such policies and collect and receipt for the proceeds payable therefrom.  Any expense incurred by the Mortgagee in the
adjustment and collection of insurance proceeds (including the cost of any
independent appraisal of the loss or damage on behalf of the Mortgagee) shall
be reimbursed to the Mortgagee first out of any proceeds.  The proceeds or any part thereof shall be
applied to reduction of the Secured Obligations or to the restoration or repair
of the Mortgaged Property, the choice of application to be solely at the
discretion of the Mortgagee.

 

(b)                                 The Mortgagor shall give the
Mortgagee prompt notice of any actual or threatened condemnation or eminent
domain proceedings affecting the Mortgaged Property and hereby assigns,
transfers, and sets over to the Mortgagee the entire proceeds of any award or
claim for damages or settlement in lieu thereof for all or any part of the
Mortgaged Property taken or damaged under such eminent domain or condemnation
proceedings, the Mortgagee being hereby authorized to intervene in any such
action and to collect and receive from the condemning authorities and give
proper receipts and acquittances for such proceeds.  The Mortgagor will not enter into any
agreements with the condemning authority permitting or consenting to the taking
of the Mortgaged Property or agreeing to a settlement unless prior written
consent of the Mortgagee is obtained. 
Any expenses incurred by the Mortgagee in intervening in such action or
collecting such proceeds, including reasonable attorney’s fees, shall be
reimbursed to the Mortgagee first out of the proceeds.  The proceeds or any part thereof shall be
applied upon or in reduction of the Secured Obligations or to the restoration
or repair of the Mortgaged Property, the choice of application to be solely at
the discretion of the Mortgagee.

 

Section 20.  Events of Default.  Any one or more of the following events shall
be an “Event of Default” under this Leasehold Mortgage:

 

(a)                                  The occurrence of an Event
of Default under the Note or any other Loan Document;

 

(b)                                 The occurrence of an Event
of Default as defined in the Indenture or the Lease;

 

(c)                                  Any representation made by
Mortgagor in this Leasehold Mortgage or any other Loan Document is untrue or
inaccurate in any material respect at the time made;

 

(d)                                 The Mortgagor fails to
comply with or perform any of the terms, conditions or covenants of this
Leasehold Mortgage and such failure shall continue for a period of ten (10) days
after notice thereof to the Mortgagor; provided, if the same is not susceptible
of cure within said 

 

10

 

time period and the same may be cured within a reasonable period of
time thereafter the time period shall be extended for such additional time as
is reasonably necessary to effectuate such cure provided such curative action
is promptly taken in good faith and diligently prosecuted to completion and the
security afforded by this Leasehold Mortgage and the interest of the Mortgagee
is not in jeopardy or subject to forfeiture.

 

Section 21.  Remedies.  Upon any Event of Default, the Mortgagee may
exercise any or all or any combination of the remedies conferred upon or
reserved to it under this Leasehold Mortgage, or any other Loan Document, or
now or hereafter existing at law or in equity. 
Without limitation, the Mortgagee may (a) declare the entire unpaid
principal balance of the indebtedness secured hereby immediately due and
payable without notice or demand, the same being expressly waived by the
Mortgagor; (b) proceed at law or equity to collect all indebtedness secured
by this Leasehold Mortgage, whether at maturity or by acceleration; (c) enforce
and foreclose the security interest and lien of this Leasehold Mortgage as
against all or any part of the Mortgaged Property; (d) be entitled to (i) a
judgment for the Secured Obligations, and all costs, fees and expenses,
including, but not limited to, reasonable attorney’s fees and litigation costs
incurred in connection therewith and the enforcement of such judgment, and (ii) a
decree for the sale of the Mortgaged Property in satisfaction of said judgment,
foreclosing all rights and equities in and to the Mortgaged Property of
Mortgagor, its successors and assigns, and all persons claiming under them; (e) be
entitled to the appointment of a receiver for all or any part of the Mortgaged
Property, whether such receivership is incidental to a proposed sale of the
Mortgaged Property or otherwise, and the Mortgagor hereby consents to the
appointment of such a receiver and covenants not to oppose any such
appointment; (f) to the extent permitted under the applicable law, enter
upon and take possession of the Mortgaged Property or any part thereof by
summary proceedings, ejectment or otherwise, and remove the Mortgagor and all
other persons and any and all property therefrom and hold, operate and manage
the same and receive all revenues, income or profits accruing with respect
thereto or any part thereof; and (g) exercise any rights, powers and
remedies it may have as a secured party under the Commercial Code or other
similar laws in effect, including, without limitation, the option of proceeding
as to both the Personal Property and the Fixtures in accordance with the
Mortgagee’s rights with respect to real property.  The Mortgagee shall not be under any
liability for or by reason of any such taking of possession, entry, removal or
holding, operation or management.  In
exercising any of its rights or remedies available under this Leasehold
Mortgage or at law or in equity, the Mortgagor shall be responsible for all
costs and expenses incurred by the Mortgagee, including without limitation
attorneys’ fees, litigation costs, title searches, environmental assessments
and investigations, and court costs.

 

Upon the occurrence of an
Event of Default, at the option of the Mortgagee, the entire unpaid principal
balance of the Secured Obligations secured hereby shall become immediately due
and payable, without prior presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived by the Mortgagor.

 

Section 22.  Waiver of Appraisement; Valuation.  The Mortgagor does hereby waive, to the full
extent it may lawfully do so, the benefit of all appraisement, valuation, stay
and extension laws now or hereafter in force and all rights of marshaling of
assets in any sale of the Mortgaged Property, any part thereof or any interest
therein, and any court having jurisdiction to 

 

11

 

enforce
and foreclose the security interest and lien hereof may sell the Mortgaged
Property in part or as an entirety.

 

Section 23.  Application of Proceeds.  Any moneys (including, without limitation,
the proceeds of any sale of the Mortgaged Property, any part thereof or any
interest therein) received pursuant to the exercise of any remedies provided in
this Leasehold Mortgage or by law shall be applied as follows:

 

FIRST:  To pay for all costs, fees and expenses
including, but not limited to, attorney’s fees and disbursements associated
with the collection of such moneys incurred by or on behalf of the Mortgagee,
its agents and attorneys, together with interest.

 

SECOND:  To the payment of any and all Secured
Obligations.

 

THIRD:  To the payment to the party whomsoever may be
lawfully entitled to receive the same.

 

Section 24.  Remedies Cumulative.  Each right, power and remedy of the Mortgagee
provided for in this Leasehold Mortgage or now or hereafter existing at law, in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy now or hereafter existing
at law, in equity or otherwise, and the exercise or beginning of the exercise
or partial exercise by the Mortgagee of any one or more of such rights, powers
or remedies shall not preclude the simultaneous or later exercise by the Mortgagee
of any rights, powers or remedies.

 

Section 25.  Provisions Subject to Applicable Law.  All rights, powers and remedies provided
herein may be exercised only to the extent that the exercise thereof does not
violate any applicable law and are intended to be limited to the extent
necessary so that they will not render this Leasehold Mortgage invalid,
unenforceable or not entitled to be recorded, registered or filed under any
applicable law.

 

Section 26.  No Waiver by Mortgagee.  No failure by the Mortgagee to insist upon
the strict performance of any term of this Leasehold Mortgage or to exercise
any right, power or remedy consequent upon a breach hereof shall constitute a
waiver of any such term or of any such breach. 
No waiver of any breach shall affect or alter this Leasehold Mortgage,
which shall continue in full force and effect with respect to any other then
existing or subsequent breach.

 

Section 27.  Discontinuance of Proceedings and Restoration
of Status Quo.  In case the
Mortgagee shall have proceeded to enforce any right, power or remedy under this
Leasehold Mortgage by foreclosure, entry or otherwise, and such proceedings
shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Mortgagee, then and in every case the Mortgagor and
the Mortgagee shall be restored to their former positions and rights hereunder,
and all rights, power and remedies of the Mortgagee shall continue as if no
such proceeding had been taken.

 

Section 28.  No Liability.  The Mortgagee shall not have any liability
for any loss, damage, injury, costs, fees or expense resulting from any action
or omission to act by it or its 

 

12

 

representatives,
whether or not negligent, which was taken or omitted in good faith pursuant to
this Leasehold Mortgage.

 

Section 29.  General Covenant.  The Mortgagor will perform, comply with and
abide by all of the agreements, conditions and covenants contained and set
forth in the Lease, the Indenture, this Leasehold Mortgage and the other Loan
Documents.

 

Section 30.  Indemnification of Mortgagee.  The Mortgagor shall indemnify, defend and
save the Mortgagee harmless from and against all Claims (defined below) by or
on behalf of any person, firm or corporation arising from the conduct or
management of, or from any work or thing done in, on or about, the Mortgaged
Property, and against and from all Claims arising from (a) any condition
of the Mortgaged Property, (b) any breach or default on the part of the Mortgagor
in the performance of any of its obligations under this Leasehold Mortgage, (c) any
contracts entered into in connection with the acquisition, remodeling and
construction of the Mortgaged Property, (d) any act or omission of the
Mortgagor or of any of its agents, contractors, servants, employees or
licensees, and (e) any act or omission of any assignee or sublessee of the
Mortgagor, or of any agents, contractors, servants, employees or licensees of
any assignee or sublessee of the Mortgagor. 
The Mortgagor shall indemnify, defend and save the Mortgagee harmless
from and against all claims, demands, liabilities, judgments, losses, costs,
fees and expenses, including attorneys fees and litigation costs (collectively,
“Claims”) (except those which have arisen from the willful misconduct or gross
negligence of Mortgagee) incurred in or in connection with any of the
foregoing.

 

Section 31.  Recorded Instruments.  The Mortgagor will promptly perform and
observe, or cause to be performed and observed, all of the terms, covenants and
conditions of all instruments or record affecting the Mortgaged Property other
than noncontractual encumbrances hereafter affecting the Mortgaged Property,
the validity or enforceability of which the Mortgagor is contesting and which
does not affect the security of this Leasehold Mortgage or impose any duty or
obligation upon the Mortgagor or any tenant under a lease of the Mortgaged
Property.  The Mortgagor shall do or
cause to be done all things reasonably required to preserve intact and
unimpaired and to renew any and all rights-of-way, easements, grants,
appurtenances, privileges, licenses, franchises and other interests and rights
in favor of or constituting any portion of the Mortgaged Property.  The Mortgagor will not, without the prior
written consent of Mortgagee, initiate, join in or consent to any private
restrictive covenant or other public or private restriction as to the use of
the Mortgaged Property.  The Mortgagor
shall, however, comply with all lawful restrictive covenants and zoning
ordinances and other public or private restrictions affecting the Mortgaged
Property.

 

Section 32.  Mortgagee’s Rights To Perform Mortgagor’s
Covenants.  If the
Mortgagor shall fail to pay or cause payment to be made in accordance with the
terms of the Lease or this Leasehold Mortgage, or to perform or observe any
other term, covenant, condition or obligation required to be performed or
observed by the Mortgagor under such documents before the expiration of any
applicable cure period, without limiting any other provision of this Leasehold
Mortgage, and without waiving or releasing the Mortgagor from any obligation or
default hereunder, upon five (5) days’ notice to the Mortgagor (or without
notice in case of emergency), the Mortgagee (or any receiver of the Mortgaged
Property) shall have the right, but not the obligation, to make any such
payment, or to perform any other act or take any appropriate 

 

13

 

action,
including, without limitation, entry and performance of work on the Mortgaged
Property, as it, in its sole discretion, may deem necessary to cause such term,
covenant, condition or obligation to be promptly performed or observed on
behalf of the Mortgagor or to protect the security of this Leasehold
Mortgage.  All moneys expended by the
Mortgagee in exercising its rights under this Section (including, but not
limited to, legal expenses and disbursements), together with interest from the
date of each such expenditure, shall be paid by the Mortgagor to the Mortgagee
upon demand and shall be secured by this Leasehold Mortgage.

 

Section 33.  Binding Effect.  This Leasehold Mortgage applies to, inures to
the benefit of and binds all parties hereto, their heirs, legatees, devisees,
administrators, executors, successors and assigns.  In this Leasehold Mortgage, whenever the
context so requires, the masculine gender includes the feminine and neuter, and
the singular number includes the plural.

 

Section 34.  Other Instruments.  The Mortgagor shall execute and deliver, in
recordable form if requested, such further instruments and do such further acts
as may be necessary or desirable or as may be reasonably requested by the
Mortgagee to carry out more effectively the purpose of this Leasehold Mortgage
and to subject to the lien created by this Leasehold Mortgage any properties,
rights and interests covered or intended to be covered hereby.

 

Section 35.  Compliance with Law; Hazardous Substances.  The Mortgagor shall comply with all
Environmental Law (as defined in the Lease) covenants, conditions and
restrictions affecting the Mortgaged Property or the operation thereof, and
shall pay all fees or charges of any kind in connection therewith.  Mortgagor will perform and comply promptly
with, and cause the Project to be maintained, used and operated in accordance
with, any and all (i) present and future Environmental Law and
requirements of every duly constituted governmental or quasi-governmental
authority or agency applicable to Mortgagor or the Project, including without
limitation, all applicable federal, state and local laws pertaining to air and
water quality, hazardous waste, waste disposal, asbestos, petroleum products
and derivatives, air emissions and other environmental matters, all zoning and other
land use matters, and rules, regulations and ordinances of the United States
Environmental Protection Agency and all other applicable federal, state and
local agencies and bureaus; (ii) similarly applicable orders, rules and
regulations of any regulatory, licensing, accrediting, insurance underwriting
or rating organization or other body exercising similar functions; (iii) similarly
applicable duties or obligations of any kind imposed under any Permitted
Encumbrances, or otherwise by law, covenant, condition, agreement or easement,
public or private; and (iv) policies of insurance at any time in force
with respect to the Project.  If
Mortgagor receives any notice that Mortgagor or the Project is in default under
or is not in compliance with any of the foregoing, or receives notice of any
proceeding initiated under or with respect to any of the foregoing, Mortgagor
will promptly furnish a copy of such notice to Mortgagee.

 

Mortgagor hereby represents
and warrants that neither Mortgagor nor, to the best of Mortgagor’s knowledge,
any previous owner of the Project, used, generated, stored or disposed of, on,
under or about the Project any Hazardous Substances (as defined in the Lease)
except in accordance with all applicable Environmental Law.  Further, Mortgagor agrees that it will not
permit the storage of any toxic and/or Hazardous Substances in, on and/or
around the Project now or at any future time except in accordance with all
applicable Environmental Law and will indemnify, defend and hold Mortgagee harmless
from and against any loss, liability, cost, fees, 

 

14

 

expense
or action(s), including attorneys fees, which may result in connection with
Hazardous Substances and/or toxic material(s) as they relate to the
Project.  Mortgagor has no knowledge of
the existence of any underground storage tanks of the Project.

 

If at any time it is
determined that there are any toxic and/or Hazardous Substances located at or
on the Project, Mortgagor shall diligently commence to take such action, at its
sole expense, to comply with all Environmental Law pertaining to such
substances.  Failure of Mortgagor to
comply with all Environmental Law, shall constitute and be a default under this
Leasehold Mortgage and Mortgagee, in lieu of foreclosure shall have the option
to require specific performance of Mortgagor’s obligations hereunder.

 

Mortgagor represents and
warrants that it has obtained all required licenses, permits, franchise
agreements and other agreements presently necessary to operate the Project as
it is presently being operated. 
Mortgagor agrees to provide Mortgagee with written notice of any
suspension, revocation, termination or default under any such agreements or any
threatened suspension, revocation, termination or default thereunder.

 

Section 36.  Notices.  All notices, certificates, requests or other
communications among the Mortgagee and the Mortgagor required to be given
hereunder shall be sufficiently given and shall be deemed given two (2) days
after mailed by registered or certified mail, return receipt requested, postage
prepaid, addressed as set forth in the first paragraph hereof.  The Mortgagee and the Mortgagor may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates, requests or other communications shall be
sent.

 

Section 37.  Invalidity in Part.  In the event any provision of this Leasehold
Mortgage shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.

 

Section 38.  Amendment.  This Leasehold Mortgage may not be
effectively amended, changed, modified, altered or terminated except in writing
signed by both the Mortgagor and the Mortgagee.

 

Section 39.  Exercise of Option.  To the extent that the Mortgagor has or may
acquire any rights or options to renew or extend the term of the Lease, or to
purchase any right, title or interest in or to all or any portion of the
Project or the Mortgaged Property, upon the occurrence of an Event of Default
under the Leasehold Mortgage the Mortgagor shall exercise any or all of such
rights or options only in accordance with such directions as the Mortgagee may,
from time to time, give to the Mortgagor; and the Mortgagor hereby constitutes
and appoints the Mortgagee the true and lawful attorney, coupled with an
interest, of the Mortgagor and in the name, place and stead of the Mortgagor,
to exercise any and all such rights and options of the Mortgagor, and to
perform such other or further acts, to execute such documents and instruments,
and to pay or advance such sums as the Mortgagee may deem appropriate in
connection therewith in the event that the Mortgagor at any time, or from time
to time, fails or refuses to exercise any such rights or options in accordance
with any directions given by the Mortgagee hereunder; provided, however, the
foregoing rights are deemed to be permissive and the Mortgagee shall not be
obligated.  The foregoing appointment is
irrevocable and continuing, and such rights, powers and privileges shall be
exclusive in the Mortgagee, its successors and assigns so long as an Event of 

 

15

 

Default
exists under this Leasehold Mortgage remains in force or any sum due in respect
of the Secured Obligations remains outstanding, and the Mortgagor warrants that
it has not and will not take any action which would in any way impair its
rights, or the Mortgagee’s rights and powers hereunder, to exercise any such
rights or options.

 

Section 40.  Waiver of Statutory Rights.  To the extent permitted by law, Mortgagor
shall not, and will not, apply for or avail itself of any appraisement,
valuation, stay, extension or exemption laws, or any so-called “Moratorium
Laws,” now existing or hereafter enacted, in order to prevent or hinder the
enforcement or foreclosure of this Leasehold Mortgage, but hereby waives the
benefit of such laws.  Mortgagor, for
itself and all who may claim through or under it, waives any and all right to
have the property and estates comprising the Mortgaged Property marshaled upon
any foreclosure of the lien hereof and agree that any court having jurisdiction
to foreclose such lien may order the Mortgaged Property sold as an entirety.

 

Section 41.  Waiver of Redemption.  Mortgagor agrees that upon an Event of
Default, neither Mortgagor nor anyone claiming through or under it shall or
will set up, claim or seek to take advantage of any redemption laws or
redemption periods or grace periods now or hereafter in force and affecting the
Mortgaged Property in order to prevent or hinder enforcement, foreclosure,
sale, confirmation of sale or conveyance of the Mortgaged Property upon
foreclosure or the final and absolute putting in possession thereof immediately
after any such sale of the purchaser or purchasers at such sale, and Mortgagor,
for itself and its successors in title, to the full extent that it may lawfully
do so for itself and its successors in title, hereby waives the benefit of all
such laws.

 

Section 42.  Conflicts with the Lease.  If any obligation or
covenant of the Mortgagor under this Leasehold Mortgage conflicts with any
obligation or covenant of the Mortgagor under the Lease, the Mortgagor shall be
required to perform the obligation or covenant that imposes the higher standard
or duty.

 

[Next Page is Signature Page]

 

16

 

IN WITNESS WHEREOF,
Mortgagor has caused this Leasehold Mortgage to be signed by its authorized
officer as of the date first above written.

 

 

	
   

  	
  MORTGAGOR:

  
	
   

  	
   

  
	
   

  	
  MGP
  INGREDIENTS, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
   

  	
  Timothy
  W. Newkirk, President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE
  OF Kansas

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
   

  	
   

  
	
  COUNTY
  OFAtchison

  	
   

  	
  )

  	
   

  	
   

  

 

This instrument was acknowledged before me on the 15th day of April , 2009, by Timothy W. Newkirk, the President and Chief Executive
Officer of MGP Ingredients, Inc., a Kansas corporation.

 

	
   

  	
   

  	
  /s/
  Sandra L. Becker

  
	
   

  	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
  My
  Commission expires:

  	
   

  

 

17

 

EXHIBIT A

 

Legal Description Of Land

 

Tract 1: Beginning at the
Northeast corner of Lot Fourteen (14), Block Twenty (20); Thence North 90o00’00”
East 90.16 feet along the South line of Commercial Street to a point 24.84 feet
West of the Northeast corner of Lot One (1), in Block Twenty (20); Thence South
00o11’50” West 135.0 feet to a point 25.19 feet West of the Southeast corner of
Lot Three (3) in Block Twenty (20); Thence South 90o00’00” West 189.81
feet to the Southwest corner of Lot Twelve (12) in said Block; Thence North
00o03’00” East 67.50 feet along the East line of Second Street to the North
one-half of Lot Thirteen (13) in said Block; Thence North 90o00’00” East 100.0
feet along the North one-half of Lot Thirteen (13) to the East line of Lot
Thirteen (13); Thence North 00o03’00” East 67.50 feet along the East line of
the North one-half of Lot Thirteen (13) and all of Lot Fourteen (14) to the
point of beginning, all lying in Block Twenty (20) in that part of the City of
Atchison known and designated as “Old Atchison.”

 

Tract 2: The North One-half
(N 1/2) of Lot Thirteen (13), and all of Lot Fourteen (14), in Block Twenty
(20), in that part of the City of Atchison usually known and designated as “Old
Atchison.”

 

Tract 3: Lots One (1), Two (2) and
Three (3), in Block Nineteen (19), in that part of the City of Atchison usually
known and designated as “Old Atchison.”

 

Atchison County, Kansas

 

18

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"}]]