Exhibit 4.3
COMMODITY ACCOUNT CONTROL
AGREEMENT
This Commodity Account Control
Agreement (the “ Agreement ”), dated as of
November 19, 2008, is made by and among MGP INGREDIENTS, INC,
a Kansas corporation (together with its successors and assigns,
“ Debtor ”), COMMERCE BANK, N.A. as Agent for
the Banks, as such terms are defined in the Credit Agreement
referred to below (together with its successors and assigns, and in
such capacity, “ Secured Party ”), and ADM
INVESTOR SERVICES, INC. (together with its successors and assigns,
“ Commodity Intermediary ”).
WHEREAS, Debtor, Secured Party and
the Banks party thereto are parties to a Credit Agreement dated as
of May 5, 2008, as amended, and Debtor and Secured Party are
parties to a Security Agreement dated as of May 5, 2008, as
amended, which provide for Debtor’s grant of a security
interest in certain of its assets to Secured Party (such Credit
Agreement and Security Agreement, as each may be amended, renewed,
restated, replaced or otherwise modified from time to time, being
collectively referred to herein as the “ Financing
Agreement ”); and
WHEREAS, the assets pledged to
Secured Party pursuant to the Financing Agreement include
Debtor’s interests in the Trading Account at Commodity
Intermediary and the Trading Account Property contained therein or
credited thereto (each as defined below); and
WHEREAS, it is a requirement under
the Financing Agreement that Debtor cause Commodity Intermediary to
enter into a commodity account control agreement with Debtor and
Secured Party;
NOW THEREFORE, the parties agree as
follows:
1.
Definitions
. As used herein, the
following terms have the following meanings:
“ Commodity Intermediary
Indebtedness ” has the meaning provided in Section 6
of this Agreement.
“ Distributions ”
means interest, dividends and other distributions of any nature on
any Investment Property or other property that is credited to the
Trading Account at any time.
“ Entitlement Order
” has the meaning provided in Section 4 of this
Agreement.
“ Investment Property
” means “investment property,” as defined in UCC
Section 9-102.
“ Lien ” means,
with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating
a security interest in such asset.
“ Person ” means
an individual, a corporation, a partnership, a limited liability
company, an association, a trust or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
“ Proceeds ”
means all cash and other proceeds and all other profits, products,
rents or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition
of, other realization upon any Investment Property or other
property that is credited to the Trading Account.
“ Trading Account
” has the meaning provided in Section 2(a)(i) of
this Agreement.
“ Trading Account
Property ” means each item of property (whether
Investment Property, a security, a security entitlement, a
commodity contract, a commodity, an instrument or cash), including
Proceeds and Distributions (i) that is or may in the future be
standing to the credit of the Trading Account, (ii) that has
been received and accepted, or may in the future be received and
accepted, by Commodity Intermediary for credit to the Trading
Account, or (iii) as to which Commodity Intermediary is or may
in the future become obligated by law, regulation, rule or
agreement to credit to the Trading Account.
“ UCC ” means the
Uniform Commercial Code as in effect in the State of
Missouri.
2.
Establishment of Trading Account;
Debtor’s Right to Excess Funds .
(a)
Commodity Intermediary confirms and
agrees that:
(i)
At the request of, and for the
account of Debtor, as owner of the assets therein, Commodity
Intermediary has established account number(s) 234-34802,
234-34803, 234-34804, 234-34805, 234-34806, 234-34807 and 234-34808
in the name of Debtor (such account(s) and any successor or
replacement account(s), whether one or more and however titled,
being herein called the “ Trading Account
”).
(ii)
Commodity Intermediary will not
change the name(s) or account number(s) of the Trading
Account without obtaining Secured Party’s prior written
consent.
(iii)
The Trading Account is an account to
which Investment Property and commodity contracts are or may be
credited.
(b)
Except for initial and variation
margin payments, commission and fee payments required to be made in
respect of the Trading Account, no withdrawal of cash from or
similar debit of cash with respect to the Trading Account shall be
made except pursuant to written instructions from Secured Party,
and Commodity Intermediary shall forthwith honor all debit
instructions from Secured Party without consent of Debtor by
transmitting each disbursement in immediately available funds as
instructed by Secured Party. Notwithstanding the above,
Commodity Intermediary shall be entitled to withdraw funds from the
Trading Account to meet any and all Trading Account related
obligations of Debtor to Commodity Intermediary and additionally
shall be allowed to send excess funds from the Trading Account to
Debtor in the ordinary course of business unless Secured Party
gives Commodity Intermediary written notice to the contrary in
accordance with its rights under this Agreement.
3.
Control .
(a)
Debtor hereby directs Commodity
Intermediary, and Commodity Intermediary hereby agrees subject to
its rights under Section 6 of this Agreement, to comply with
all instructions it receives from Secured Party from time to time
regarding the Trading Account, including, without limitation, any
instructions to liquidate or redeem any commodity contracts and/or
any other Trading Account Property in the Trading Account and any
instructions to remit all or any portion of the Proceeds thereof
and/or any or all other property in the Trading Account to Secured
Party or to such other Person as Secured Party may designate, in
each case without further consent by Debtor. Debtor agrees
not to withdraw or attempt to withdraw any funds or
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other property from the Trading
Account except as permitted in writing by Secured Party or except
as otherwise permitted under this Agreement.
(b)
Any Trading Account Property or
Proceeds thereof remitted by Commodity Intermediary to Secured
Party or its designee pursuant to Secured Party’s
instructions shall act to discharge Commodity Intermediary’s
obligations to Debtor to the extent of such Trading Account
Property or Proceeds, all as if such Trading Account Property or
Proceeds had been remitted to and received by Debtor.
(c)
Without limiting any other
provisions of this Agreement, this Agreement is intended and shall
act to provide Secured Party “control” of all commodity
contracts carried at any time in the Trading Account and
“control” of the Trading Account itself, for purposes
of UCC Section 9-106(b) and (c), respectively; and
Secured Party is hereby granted all rights and powers as are
legally necessary to obtain and exercise such control and all
rights and powers as may be reasonably incidental thereto, in each
case subject only to Commodity Intermediary’s express rights
under this Agreement.
4.
Entitlement Orders
.
(a)
Debtor grants its continuing consent
to Commodity Intermediary complying with any and all notifications,
whether written or oral, communicated to Commodity Intermediary
directing transfer, liquidation, or redemption of any of the
Trading Account Property (each such notification being referred to
herein as an “ Entitlement Order ”) originated
by Secured Party, without any further consent by Debtor or any
other Person.
(b)
Nothing herein contained shall be
construed so as to prevent Debtor from remaining the owner of the
Trading Account, subject to Secured Party’s security interest
therein and its rights and remedies under this Agreement and the
Financing Agreement. Until Secured Party elects to the
contrary and delivers notice of such election in writing to
Commodity Intermediary, Debtor may make such additional
transactions in the Trading Account as Commodity Intermediary shall
be willing to accept for execution and/or clearance. In the
event Secured Party makes such election and delivers such notice in
writing to Commodity Intermediary, Debtor shall not thereafter
execute any transactions in the Trading Account. After
receipt of any such notice from Secured Party, Commodity
Intermediary shall cease complying with orders or other directions
concerning the Trading Account originated by Debtor. Upon
receipt by Commodity Intermediary of notice of such election and if
directed by Secured Party, Commodity Intermediary will use
commercially reasonable efforts to cancel open orders that have
been authorized by Debtor through Commodity Intermediary but which
have not yet been executed. If Commodity Intermediary is
unable to cancel such orders before they are executed, the
transactions will be considered valid and binding on Debtor and
Secured Party. In the event that orders are executed for
Debtor’s account by a third party pursuant to the terms of a
“give-up” or similar agreement among Debtor, Commodity
Intermediary and such third party, Commodity Intermediary will use
commercially reasonable efforts, subject to the terms of such
agreement, to notify such third party that Commodity Intermediary
will not thereafter accept trades executed by such third party for
clearance into Debtor’s account.
(c)
Commodity Intermediary confirms that
it has not entered into any agreement with Debtor or any other
Person purporting to limit or condition the obligation of Commodity
Intermediary to comply with Entitlement Orders originated by
Secured Party.
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(d)
If at any time Commodity
Intermediary shall receive any Entitlement Order from Secured
Party, Commodity Intermediary shall comply with such Entitlement
Order without further consent by Debtor or any other Person,
notwithstanding that such Entitlement Order may conflict with any
instruction or notification by Debtor or any other
Person.
(e)
Commodity Intermediary need not
investigate whether Secured Party is entitled under Secured
Party’s agreements with Debtor to give an Entitlement Order
or a notice of exclusive control. Commodity Intermediary may
rely on notices and communications it reasonably believes are given
by the appropriate party.
(f)
Commodity Intermediary will not be
liable to Secured Party for complying with orders or other
instructions from Debtor that are received by Commodity
Intermediary before Commodity Intermediary has received and has had
reasonable opportunity to act on Sec
