Exhibit 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.
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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;
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(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).
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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.
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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.
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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.
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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 thi