Exhibit 4.7
INTERCREDITOR
AGREEMENT
THIS INTERCREDITOR AGREEMENT (the
“ Intercreditor Agreement ” or “
Agreement ”) dated effective as of July 21, 2009,
is by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, acting
through its Wells Fargo Business Credit operating division
(together with its successors and/or assigns, “ WFBC
”), and UNION STATE BANK OF EVEREST, d/b/a Bank of Atchison
(“ Bank of Atchison ”) with respect to certain
financing arrangements with MGP INGREDIENTS, INC., a Kansas
corporation (the “ Borrower ”).
BACKGROUND
A.
Pursuant to a certain Credit and Security Agreement dated on or
about the date hereof, by and between WFBC and Borrower and certain
instruments, documents and other agreements related thereto,
defined therein or contemplated thereby (the foregoing, together
with all amendments, modifications and restatements thereof now and
from time to time hereafter entered into between WFBC and Borrower
are individually or collectively referred to as the “ WFBC
Agreements ”), WFBC proposes to extend credit to the
Borrower in an original principal amount of up to
$25,000,000.00.
B.
Pursuant to a certain (i) Promissory Note dated as of
March 31, 2009 and (ii) promissory note dated as of
July 17 ,2009, each by Borrower in favor of Bank of Atchison
and certain agreements, instruments, documents and other agreements
related thereto, defined therein or contemplated thereby (the
foregoing, together with all amendments and modifications thereof
now and from time to time hereafter entered into between Bank of
Atchison and Borrower are individually or collectively referred to
as the “ Bank of Atchison Agreements ”), Bank of
Atchison agreed to extend credit to the Borrower in the aggregate
original principal amount of $3,500,000.
C.
WFBC and Bank of Atchison desire to agree to the relative priority
of their respective security interests in and liens on the
Collateral (defined below) and certain other rights, priorities and
interests.
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants herein contained, and for
other good and valuable consideration, it is hereby agreed as
follows:
1.
DEFINITIONS
1.1
Account , Chattel Paper , Commercial Tort
Claims , Deposit Accounts , Documents ,
Electronic Chattel Paper , Equipment ,
Fixtures , General Intangibles , Goods ,
Instruments , Inventory , Investment Property
, Letter-of-Credit Right , Proceeds , Supporting
Obligations and Tangible Chattel Paper have the
respective meanings assigned to such terms, as of the date of this
Agreement, in the Minnesota Uniform Commercial Code.
1.2
WFBC Claim shall mean all obligations or indebtedness of the
Borrower, now or in the future owing to WFBC, as set forth in the
WFBC Agreements, including but not
limited to, all sums loaned and
advanced to or for the benefit of Borrower at any time under the
terms of the WFBC Agreements, any interest thereon, any future
advances, any costs of collection or enforcement, including
reasonable attorneys’ and paralegal costs, costs, fees, and
any prepayment penalties.
1.3
Bank of Atchison Claim shall mean all obligations or
indebtedness of the Borrower now or in the future owing, to Bank of
Atchison as set forth in the Bank of Atchison Agreements, including
but not limited to, all sums loaned and advanced to or for the
benefit of Borrower at any time under the terms of the Bank of
Atchison Agreements, any interest thereon, any future advances, any
costs of collection or enforcement, including reasonable
attorneys’ fees and paralegals’ costs, fees and any
prepayment penalties.
1.4
Collateral shall mean all of the Borrower’s now owned
or hereafter acquired interest in all assets of every kind or
nature, whether now owned or hereafter acquired, including without
limitation, all of Borrower’s real and personal property and
specifically including without limitation, the property or
interests in all and any of the property defined in
paragraph 1.1 above, whether now owned or hereafter
acquired, and the proceeds and products thereof, and where
applicable, the proceeds of insurance or escrow accounts covering
any such property.
1.5
WFBC Senior Collateral shall mean the Collateral in which
WFBC has a senior lien or security interest as described in and
provided by paragraph 2.1(a) .
1.6
Bank of Atchison Senior Collateral shall mean the Collateral
in which Bank of Atchison has a senior lien or security interest as
described in and provided by paragraph 2.1(b) .
Bank of Atchison acknowledges and agrees that except for the Bank
of Atchison Senior Collateral, Bank of Atchison does not claim or
hold a security interest or lien of any kind on any of the assets
of Borrower.
1.7
Enforcement shall mean, collectively or individually for one
or both of WFBC and Bank of Atchison to make demand for payment or
accelerate the indebtedness of the Borrower, repossess any material
amount of Collateral or commence the judicial or non-judicial
enforcement of any of the rights and remedies under the WFBC
Agreements, the Bank of Atchison Agreements, any related agreements
or applicable law.
1.8
Enforcement Notice shall mean a written notice delivered, at
a time when a “Default” or an “Event of
Default” (as defined in the WFBC Agreements or the Bank of
Atchison Agreements, respectively and if not so defined, the
occurrence of any event or material default under any of such
agreements, giving rise to the exercise of any Enforcement right or
action by WFBC and Bank of Atchison, respectively) has occurred and
is continuing, by WFBC or Bank of Atchison, to another Party
hereto, specifying the relevant Default or Event of Default,
stating the current balance of the WFBC Claim or Bank of Atchison
Claim, as appropriate, and requesting the current balance of the
other parties’ claims.
1.9
Insolvency Proceeding means any receivership,
conservatorship, general meeting of creditors, insolvency or
bankruptcy proceeding, assignment for the benefit of
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creditors, or any proceeding or
action by or against the Borrower for any relief under any
bankruptcy or insolvency law or other laws relating to the relief
of debtors, readjustment of indebtedness, reorganizations,
dissolution, liquidation, compositions or extensions, or the
appointment of any receiver, intervenor or conservator of, or
trustee, or similar officer for, the Borrower or any substantial
part of its properties or assets, including, without limitation,
proceedings under the Bankruptcy Code, or under other federal,
state or local statute, laws, rules and regulations, all
whether now or hereafter in effect.
1.10
Parties shall mean WFBC and Bank of Atchison, and
Party shall mean either WFBC or Bank of Atchison as the
context indicates.
1.11
The word “ senior ”, when used in conjunction
with the words “Collateral”, “collateral”,
“priority”, and/or “lien” shall mean and
refer to the relative perfection and priority of liens and security
interests among the Parties established by the agreement of the
Parties in Section 2.1 of this Agreement.
2.
INTERCREDITOR AGREEMENT
2.1
Lien Priorities . Notwithstanding the date, manner or
order of attachment or perfection of the security interests and
liens granted to WFBC or Bank of Atchison by Borrower and
notwithstanding any provisions of the Uniform Commercial Code, the
United States Bankruptcy Code (the “ Bankruptcy Code
”) or any applicable law or decision or the WFBC Agreements
or the Bank of Atchison Agreements, or whether WFBC or Bank of
Atchison holds possession of all or any part of the Collateral, the
following, as between WFBC and Bank of Atchison, shall be the
relative priority of the security interests and liens of WFBC and
Bank of Atchison in the Collateral:
(a)
WFBC shall have a first and prior security interest and lien in all
property and collateral described on Schedule 2.1(a)
hereto (the “ WFBC Senior Collateral ”);
and
(b)
Bank of Atchison shall have a first and prior security interest in
all property and collateral described on Schedule 2.1(b)
hereto (the “ Bank of Atchison Senior Collateral
”).
(c)
WFBC shall have a second and junior security interest in all
property and collateral described on Schedule 2.1(c)
hereto (“ WFBC Junior Collateral
”).
(d)
The priorities established hereunder are only as between WFBC and
Bank of Atchison and to the extent that the operation of the
foregoing provisions would otherwise entitle any other person
(including a trustee in bankruptcy) to either a priority over the
parties herein or a right to avoid the lien of the other Party,
then (and only to such extent) this paragraph shall be null and
void and WFBC and Bank of Atchison shall, from the proceeds
received from the other Party’s senior Collateral, sell
and/or purchase participation interests in the WFBC Claim or the
Bank of Atchison
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Claim to effectuate, to the maximum
extent possible, the allocative purposes of this
Section 2.1 and to maximize the recovery for WFBC with
respect to WFBC Senior Collateral and Bank of Atchison with respect
to the Bank of Atchison Senior Collateral in accordance with and
pursuant to the other terms and provisions of this
Agreement.
(e)
Each Party agrees it will execute any and all agreements and
documents which the other Party may reasonably request to evidence
the subordination and priority of liens and security interests as
established by this Section 2.1 in this
Agreement.
(f)
(g)Subject only to the relative priorities set forth in this
Section 2.1 (including without limitation, the
provisions of subsection 2.1(d) ), each of the Parties
agrees that it will not contest or challenge the validity,
legality, enforceability, perfection or avoidability of the
respective security interest in, rights or lien of the other Party
as set forth in Sections 2.1(a) , (b) , and
(c) above on the Collateral (or any other collateral)
of the other Party in any proceeding for any reason. Each
Party acknowledges that a breach of this covenant is likely to
cause irreparable harm to the other and shall be specifically
enforceable.
(g)
The lien and security interest priorities (collectively, the
“ lien priorities ”) provided in this Agreement
shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, restatement or
refinancing of either the WFBC Agreements or the Bank of Atchison
Agreements, nor by any action or inaction which the WFBC, Bank of
Atchison or the Borrower may take or fail to take in respect of the
Collateral, nor by the institution or pendency of any Insolvency
Proceeding.
(h)
The undertakings and agreements set forth in this Agreement are
solely for the benefit of the Parties and there are no other
parties (including, without limitation, the Borrower and affiliates
of Borrower) who are intended to be benefited in any way by this
Agreement. Except as otherwise expressly set forth in this
Agreement, nothing contained in this Agreement is intended to limit
in any way the rights and remedies of the WFBC or Bank of Atchison
under the WFBC Agreements or Bank of Atchison Agreements,
respectively.
(i)
Until the payment or satisfaction in full of the WFBC Claims and
Bank of Atchison Claims, respectively, each Party further agrees
that it shall not make any election, give any consent, commence any
action or file any motion or take any other action in any case by
or against the Borrower under the Bankruptcy Code which would
result in the payment or distribution of the Collateral or other
assets of the Borrower contrary to the express provisions of this
Agreement, without the prior written consent of the other Party,
which consent may be withheld in each others Party’s sole and
absolute discretion, provided, however, that the notifying Party
shall have the right, at any time and in its sole discretion, to
file a proof of claim and defend or refute any objection to such
claim in any Insolvency Proceeding.
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(j)
Notwithstanding anything to the contrary contained herein, Bank of
Atchison represents and warrants that if does not have any UCC
filings against Borrower which cover, in whole or in part, the WFBC
Senior Collateral, other than those filings listed on Schedule
2.1(j) hereof (the “ Bank of Atchison
Filings ”).
2.2
Distribution of Proceeds of Collateral . At any time
(whether or not following an Enforcement Notice), all proceeds of
Collateral shall be distributed in accordance with the following
procedure:
(a)
The WFBC Senior Collateral and all proceeds of the WFBC Senior
Collateral shall be applied to the WFBC Claim.
(b)
The Bank of Atchison Senior Collateral and all proceeds of the Bank
of Atchison Senior Collateral shall be applied to the Bank of
Atchison Claim. After the Bank of Atchison Claim is
indefeasibly paid in full and the Bank of Atchison Agreements are
terminated and indefeasibly fully paid or otherwise satisfied in
Bank of Atchison’s sole discretion, any remaining proceeds of
the Bank of Atchison Senior Collateral shall be applied to the WFBC
Claim in accordance with their lien priorities set out in
2.1(a) and 2.1(b), as appropriate.
After the WFBC Claim and the Bank of
Atchison Claim have been paid or satisfied in full, the balance of
proceeds of Collateral, if any, shall be paid to Borrower or as
otherwise required by applicable law.
2.3
Enforcement Actions . Bank of Atchison agrees not to
commence Enforcement until one hundred eighty (180) days after an
Enforcement Notice has been given to WFBC (“ Bank of
Atchison Standstill Period ”). WFBC agrees not to
commence Enforcement against the Bank of Atchison Senior Collateral
until an Enforcement Notice has been given to Bank of
Atchison. Subject to the foregoing, WFBC and Bank of Atchison
agree that from and after the receipt of an Enforcement Notice, and
until such time as Borrower has cured such Default or an Event of
Default (if permitted to do so by the relevant document), or Bank
of Atchison or WFBC, as applicable, has waived such Default or
Event of Default, and any and all conditions to such waiver have
been satisfied:
(a)
WFBC may, at its option, take any action to accelerate payment of
the WFBC Claim and to foreclose or realize upon or enforce any of
its rights with respect to the WFBC Senior Collateral, without the
prior written notice to or consent of Bank of Atchison, and with
Bank of Atchison hereby waiving any rights (to the extent it has
such rights) to a “commercially reasonable sale” under
the Uniform Commercial Code; and further provided, that Bank of
Atchison shall not take any action to foreclose or realize upon or
to enforce any of their rights with respect to any of the
Collateral in which they have a lien or security interest junior to
WFBC or without WFBC’s prior written consent.
(b)
Bank of Atchison may, following the Bank of Atchison Standstill
Period, at its option, take any action to accelerate payment of the
Bank of Atchison Claim and to foreclose or realize upon or enforce
any of its rights with respect to the Bank of
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Atchison Senior Collateral, without
the prior written consent of WFBC, and with WFBC hereby waiving any
rights (to the extent it has such rights) to a “commercially
reasonable sale” under the Uniform Commercial Code; and
further provided, that WFBC shall not take any action to foreclose
or realize upon or to enforce any of its rights with respect to any
of the Collateral in which it has a lien or security interest
junior to Bank of Atchison without Bank of Atchison’s prior
written consent.
(c)
If WFBC and Bank of Atchison elect to proceed with Enforcement
under the WFBC Agreements and the Bank of Atchison Agreements,
respectively, in each case, in accordance with the terms of this
Agreement, then each shall proceed with the Enforcement of any
security interests in or liens on any Collateral in which it has a
senior lien or security interest, but, except as otherwise provided
in Section 2.4 below, not against that portion in which
it has only a junior and inferior lien and security
interest.
(d)
Bank of Atchison agrees to execute (as applicable) and deliver to
WFBC, promptly upon WFBC’s request, appropriate UCC
termination statements or partial releases, or satisfactions or
discharges of liens, with respect to any of the WFBC Senior
Collateral being sold or otherwise disposed of in the ordinary
course
