Exhibit 4.1.1

 

PATENT AND TRADEMARK SECURITY AGREEMENT

 

This Agreement, dated as of July 21, 2009, is made by and between MGP INGREDIENTS, INC., a Kansas corporation having a business location at the address set forth below next to its signature (the “Debtor”), and Wells Fargo Bank, National Association (the “Wells Fargo”), and having a business location at the address set forth below next to its signature.

 

Recitals

 

Company and Wells Fargo are parties to a Credit and Security Agreement of even date herewith (as the same may hereafter be amended, supplemented or restated from time to time, the “Credit Agreement”) setting forth the terms on which Wells Fargo may now or hereafter extend credit to or for the account of Company.

 

As a condition to extending credit to or for the account of Company, Wells Fargo has required the execution and delivery of this Agreement by Company.

 

ACCORDINGLY, in consideration of the mutual covenants contained in the Loan Documents and herein, the parties hereby agree as follows:

 

1.                                       Definitions. All terms defined in the Recitals hereto or in the Credit Agreement that are not otherwise defined herein shall have the meanings given to them therein. In addition, the following terms have the meanings set forth below:

 

Patents” means all of Company’s right, title and interest in and to patents or applications for patents, fees or royalties with respect to each, and including without limitation the right to sue for past infringement and damages therefor, and licenses thereunder, all as presently existing or hereafter arising or acquired, including without limitation the patents listed on Exhibit A.

 

Security Interest” has the meaning given in Section 2.

 

Trademarks” means all of Company’s right, title and interest in and to: (i) trademarks, service marks, collective membership marks, registrations and applications for registration for each, and the respective goodwill associated with each, (ii) licenses, fees or royalties with respect to each, (iii) the right to sue for past, present and future infringement, dilution and damages therefor, and (iv) licenses thereunder, all as presently existing or hereafter arising or acquired, including, without limitation, the marks listed on Exhibit B.

 

2.                                       Security Interest. Company hereby irrevocably pledges and assigns to, and grants Wells Fargo a security interest (the “Security Interest”) with power of sale to the extent permitted by law, in the Patents and in the Trademarks to secure payment of the Indebtedness. As set forth in the Credit Agreement, the Security Interest is coupled with a security interest in substantially all of the personal property of Company.  This Agreement grants only the Security

 



 

Interest herein described, is not intended to and does not affect any present transfer of title of any trademark registration or application and makes no assignment and grants no right to assign or perform any other action with respect to any intent to use trademark application, unless such action is permitted under 15 U.S.C. § 1060.

 

3.                                       Representations, Warranties and Agreements. Company represents, warrants and agrees as follows:

 

(a)                                  Existence; Authority. Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, and this Agreement has been duly and validly authorized by all necessary corporate action on the part of Company.

 

(b)                                 Patents. Exhibit A accurately lists all Patents owned or controlled by Company as of the date hereof, or to which Company has a right as of the date hereof to have assigned to it, and accurately reflects the existence and status of applications and letters patent pertaining to the Patents as of the date hereof. If after the date hereof, Company owns, controls or has a right to have assigned to it any Patents not listed on Exhibit A, or if Exhibit A ceases to accurately reflect the existence and status of applications and letters patent pertaining to the Patents, then Company shall within 60 days provide written notice to Wells Fargo with a replacement Exhibit A, which upon acceptance by Wells Fargo shall become part of this Agreement.

 

(c)                                  Trademarks. Exhibit B accurately lists all Trademarks owned or controlled by Company as of the date hereof and accurately reflects the existence and status of Trademarks and all applications and registrations pertaining thereto as of the date hereof; provided, however, that Exhibit B need not list common law marks (i.e., Trademarks for which there are no applications or registrations) which are not material to Company’s or any Affiliate’s business(es).  If after the date hereof, Company owns or controls any Trademarks not listed on Exhibit B (other than common law marks which are not material to Company’s or any Affiliate’s business(es)), or if Exhibit B ceases to accurately reflect the existence and status of applications and registrations pertaining to the Trademarks, then Company shall promptly provide written notice to Wells Fargo with a replacement Exhibit B, which upon acceptance by Wells Fargo shall become part of this Agreement.

 

(d)                                 Affiliates. As of the date hereof, no Affiliate (other than D.M. Ingredients GmbH, to the extent set forth in Schedule 5.11 to the Credit Agreement) owns, controls, or has a right to have assigned to it any items that would, if such item were owned by Company, constitute Patents or Trademarks. If after the date hereof any Affiliate owns, controls, or has a right to have assigned to it any such items, then Company shall promptly either: (i) cause such Affiliate (other than D.M. Ingredients GmbH) to assign all of its rights in such item(s) to Company; or (ii) notify Wells Fargo of such item(s) and cause such Affiliate to execute and deliver to Wells Fargo a patent and trademark security agreement substantially in the form of this Agreement.

 

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(e)                                  Title. Except as set forth in Schedule 5.11 to the Credit Agreement, Company has absolute title to each Patent and each Trademark listed on Exhibits A and B, free and clear of all Liens except Permitted Liens. Company (i) will have, at the time Company acquires any rights in Patents or Trademarks hereafter arising, absolute title to each such Patent or Trademark free and clear of all Liens except Permitted Liens, and (ii) will keep all Patents and Trademarks free and clear of all Liens except Permitted Liens.

 

(f)                                    No Sale. Except as permitted in the Credit Agreement, Company will not assign, transfer, encumber or otherwise dispose of the Patents or Trademarks, or any interest therein, without Wells Fargo’s prior written consent.

 

(g)                                 Defense. Company will at its own expense and using commercially reasonable efforts, protect and defend the Patents and Trademarks against all claims or demands of all Persons other than those holding Permitted Liens.

 

(h)                                 Maintenance. Company will at its own expense maintain the Patents and the Trademarks to the extent reasonably advisable in its business including, but not limited to, filing all applications to obtain letters patent or trademark registrations and all affidavits, maintenance fees, annuities, and renewals possible with respect to letters patent, trademark registrations and applications therefor.  Company covenants that it will not abandon nor fail to pay any maintenance fee or annuity due and payable on any Patent or Trademark, nor fail to file any required affidavit or renewal in support thereof, without first providing Wells Fargo:  (i) sufficient written notice, of at least 30 days, to allow Wells Fargo to timely pay any such maintenance fees or annuities which may become due on any Patents or Trademarks, or to file any affidavit or renewal with respect thereto, and (ii) a separate written power of attorney or other authorization to pay such maintenance fees or annuities, or to file such affidavit or renewal, should such be necessary or desirable.

 

(i)                                     Wells Fargo’s Right to Take Action. If Company fails to perform or observe any of its covenants or agreements set forth in this Section 3, and if such failure continues for a period of ten (10) calendar days after Wells Fargo gives Company written notice thereof (or, in the case of the agreements contained in subsection (h), immediately upon the occurrence of such failure, without notice or lapse of time), or if Company notifies Wells Fargo that it intends to abandon a Patent or Trademark, Wells Fargo may (but need not) perform or observe such covenant or agreement or take steps to prevent such intended abandonment on behalf and in the name, place and stead of Company (or, at Wells Fargo’s option, in Wells Fargo’s own name) and may (but need not) take any and all other actions which Wells Fargo may reasonably deem necessary to cure or correct such failure or prevent such intended abandonment.

 

(j)                                     Costs and Expenses. Except to the extent that the effect of such payment would be to render any loan or forbearance of money usurious or otherwise illegal under any applicable law, Company shall pay Wells Fargo on demand the amount of all moneys expended and all costs and expenses (including reasonable attorneys’ fees and

 

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disbursements) incurred by Wells Fargo in connection with or as a result of Wells Fargo’s taking action under subsection (i) or exercising its rights under Section 6, together with interest thereon from the date expended or incurred by Wells Fargo at the Default Rate.

 

(k)                                  Power of Attorney. To facilitate Wells Fargo’s taking action under subsection (i) and exercising its rights under Section 6, Company hereby irrevocably appoints (which appointment is coupled with an interest) Wells Fargo, or its delegate, as the attorney-in-fact of Company with the right (but not the duty) from time to time to create, prepare, complete, execute, deliver, endorse or file, in the name and on behalf of Company, any and all instruments, documents, applications, financing statements, and other agreements and writings required to be obtained, executed, delivered or endorsed by Company under this Section 3, or, necessary for Wells Fargo, after an Event of Default, to enforce or use the Patents or Trademarks or to grant or issue any exclusive or non-exclusive license under the Patents or Trademarks to any third party, or to sell, assign, transfer, pledge, encumber or otherwise transfer title in or dispose of the Patents or Trademarks to any third party. Company hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof. The power of attorney granted herein shall terminate upon the termination of the Credit Agreement as provided therein and the payment and performance of all Indebtedness.

 

4.                                       Debtor’s Use of the Patents and Trademarks. Company shall be permitted to control and manage the Patents and Trademarks, including the right to exclude others from making, using or selling items covered by the Patents and Trademarks and any licenses thereunder, in the same manner and with the same effect as if this Agreement had not been entered into, so long as no Event of Default occurs and remains uncured.

 

5.                                       Events of Default. Each of the following occurrences shall constitute an event of default under this Agreement (herein called “Event of Default”):  (a) an Event of Default, as defined in the Credit Agreement, shall occur; or (b) Company shall fail promptly to observe or perform any covenant or agreement herein binding on it; or (c) any of the representations or warranties contained in Section 3 shall prove to have been incorrect in any material respect when made.

 

6.                                       Remedies. Upon the occurrence of an Event of Default and at any time thereafter, Wells Fargo may, at its option, take any or all of the following actions:

 

(a)                                  Wells Fargo may exercise any or all remedies available under the Credit Agreement.

 

(b)                                 Wells Fargo may sell, assign, transfer, pledge, encumber or otherwise dispose of the Patents and Trademarks.

 

(c)                                  Wells Fargo may enforce the Patents and Trademarks and any licenses thereunder, and if Wells Fargo shall commence any suit for such enforcement, Company shall, at the request of Wells Fargo, do any and all lawful acts and execute any and all proper documents required by Wells Fargo in aid of such enforcement.

 

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7.                                       Miscellaneous. This Agreement can be waived, modified, amended, terminated or discharged, and the Security Interest can be released, only explicitly in a writing signed by Wells Fargo. A waiver signed by Wells Fargo shall be effective only in the specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of Wells Fargo’s rights or remedies. All rights and remedies of Wells Fargo shall be cumulative and may be exercised singularly or concurrently, at Wells Fargo’s option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. All notices to be given to Debtor under this Agreement shall be given in the manner and with the effect provided in the Credit Agreement. Wells Fargo shall not be obligated to preserve any rights Company may have against prior parties, to realize on the Patents and Trademarks at all or in any particular manner or order, or to apply any cash proceeds of Patents and Trademarks in any particular order of application. This Agreement shall be binding upon and inure to the benefit of Company and Wells Fargo and their respective participants, successors and assigns and shall take effect when signed by Company and delivered to Wells Fargo, and Company waives notice of Wells Fargo’s acceptance hereof. Wells Fargo may execute this Agreement if appropriate for the purpose of filing, but the failure of Wells Fargo to execute this Agreement shall not affect or impair the validity or effectiveness of this Agreement. A carbon, photographic or other reproduction of this Agreement or of any financing statement signed by Company shall have the same force and effect as the original for all purposes of a financing statement. This Agreement shall be governed by the internal law of Minnesota without regard to conflicts of law provisions. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Agreement shall survive the execution, delivery and performance of this Agreement and the creation and payment of the Indebtedness.

 

[Signatures follow]

 

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THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT.

 

IN WITNESS WHEREOF, the parties have executed this Patent and Trademark Security Agreement as of the date written above.

 

100 Commercial Street

MGP INGREDIENTS, INC.

Atchison, KS 66002

a Kansas corporation

Telecopier: (913) 360-5661

 

 

 

Attention: Dick Larson

By:

/s/ Timothy W. Newkirk

e-mail: dick.larson@mgpingredients.com

Name: Timothy W. Newkirk

 

Its President

 

STATE OF MISSOURI

)

 

)

COUNTY OF JACKSON

)

 

The foregoing instrument was acknowledged before me this 21 day of July, 2009, by Timothy W. Newkirk, the President of MGP Ingredients, Inc., a Kansas corporation, on behalf of the corporation.

 

 

/s/ Martisua Ann Lager

 

 

 

Notary Public

 

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Wells Fargo Bank, National Association

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

Wells Fargo Business Credit

 

 

MAC N9312-040

 

 

109 South 7th Street, 4th Floor

 

 

Minneapolis, MN 55402

 

By:

/s/ Becky A. Koehler

Telecopier: (612) 341-2472

 

 

Becky A. Koehler, Vice President

Attention: Becky A. Koehler

 

 

e-mail: becky.a.koehler@wellsfargo.com

 

 

 

 

STATE OF MINNESOTA

)

 

 

)

COUNTY OF HENNEPIN

)

 

The foregoing instrument was acknowledged before me this 21 day of July, 2009, by Becky A. Koehler, a Vice President of Wells Fargo Bank, National Association, on behalf of the national association.

 

 

/s/ Constance Nesbitt

 

 

 

Notary Public

 

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EXHIBIT A

 

UNITED STATES ISSUED PATENTS

 

Title

 

Patent Number

 

Issue Date

 

 

 

 

 

 

 

1.

Alcohol-Free Wet Extraction of Gluten Dough Into Gliadin and Glutenin

 

5610277

 

03/11/1997

 

 

 

 

 

 

 

 

2.

Modified Wheat Glutens and Use Thereof In Fabrication of Films

 

5747648

 

05/05/1998

 

 

 

 

 

 

 

 

3.

Modified Wheat Glutens and Use Thereof in Fabrication of Films

 

5965708

 

10/12/1999

 

 

 

 

 

 

 

 

4.

Modified Wheat Glutens and Use Thereof in Fabrication of Films

 

5977312

 

11/02/1999

 

 

 

 

 

 

 

 

5.

Gliadin-Containing Hairspray

 

5780013

 

07/14/1998

 

 

 

 

 

 

 

 

6.

Gliadin-Containing Cosmetic Formulations

 

5945086

 

08/31/1999

 

 

 

 

 

 

 

 

7.

Protein/Starch Paper Coating Compositions and Method of Use Thereof

 

6517625

 

02/11/2003

 

 

 

 

 

 

 

 

8.

Protein/Starch Paper Coating Compositions and Method of Use Thereof

 

6605367

 

08/12/2003

 

 

 

 

 

 

 

 

9.

Microwaveable Bread Products

 

6482454

 

11/19/2002

 

 

 

 

 

 

 

 

10.

Hydrolyzed Jojoba Protein

 

6552171

 

04/22/2003

 

 

 

 

 

 

 

 

11.

Method of Preparing Hydrolyzed Jojoba Protein

 

6716599

 

04/06/2004

 

 

 

 

 

 

 

 

12.

Hydrolyzed Jojoba Protein

 

6800736

 

10/05/2004

 

 

 

 

 

 

 

 

13.

Method of Preparing Hydrolyzed Jojoba Protein

 

6821525

 

11/23/2004

 

 

 

 

 

 

 

 

14.

Formulations Including Hydrolyzed Jojoba Protein

 

6649177

 

11/18/2003

 

 

 

 

 

 

 

 

15.

Liquid Foam Builder Containing Hydrolyzed Grain Protein

 

6749842

 

06/15/2004

 

 



 

16.

Unhydrolyzed Jojoba Protein Products Having High Simmondsin Concentration

 

6982164

 

01/03/2006

 

 

 

 

 

 

 

 

17.

Unhydrolyzed Jojoba Protein Products Having High Simmondsin Concentration and Methods of Producing the Same

 

6955913

 

10/18/2005

 

 

 

 

 

 

 

 

18.

Method of Hydrolyzing Jojoba Protein

 

7238516

 

07/03/2007

 

 

 

 

 

 

 

 

19.

Cosmetic Formulation Containing Unhydrolyzed Jojoba Protein

 

7070794

 

07/04/2006

 

 

 

 

 

 

 

 

20.

Process for Preparing Hybrid Proteins

 

7534459

 

05/19/2009

 

 

 

 

 

 

 

 

21.

Emulsion Stabilizing Starch Products

 

6809197

 

10/26/2004

 

 

 

 

 

 

 

 

22.

Polyvalent Metal-Substituted Starch Products

 

7166305

 

01/23/2007

 

 

UNITED STATES PATENT APPLICATIONS

 

Title

 

Serial Number

 

Filing Date

 

 

 

 

 

 

 

1.

High-Protein, Low-Carbohydrate Bakery Products

 

11/830,507

 

6/30/2007

 

 

 

 

 

 

 

 

2.

Process for Preparing Hybrid Proteins

 

11/459,198

 

6/21/2006

 

 

 

 

 

 

 

 

3.

Process for Preparing Hybrid Proteins

 

11/777,176

 

6/12/2007

 

 

 

 

 

 

 

 

4.

Resistant Starch-Hydrocolloid Blends and Uses Thereof

 

11/689,620

 

3/22/2007

 

 

 

 

 

 

 

 

5.

Thermotolerant Starch-Polyester Composites and Methods of Making Same

 

11/585,369

 

10/24/2006

 

 

 

 

 

 

 

 

6.

Starch-Plastic Composite Resins and Profiles Made by Extrusion

 

11/339,367

 

1/25/2006

 

 

 

 

 

 

 

 

7.

Pregelatinized Chemically Modified Resistant Starch Products and Uses Thereof

 

11/294,314

 

12/5/2005

 

 

 

 

 

 

 

 

8.

Mineral-Bound Starch Compositions and Methods of Making the Same

 

11/146,623

 

6/7/2005

 

 

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9.

Expanded Products with High Protein Content

 

11/115,441

 

4/27/2005

 

 

 

 

 

 

 

 

10.

Reversibly Swellable Granular Starch-Lipid Composites and Methods of Making the Same

 

11/146,671

 

6/7/2005

 

 

 

 

 

 

 

 

11.

Wheat Protein Isolates and their Modified Forms and Methods of Making

 

11/059,166

 

2/16/2005

 

 

 

 

 

 

 

 

12.

High-Protein, Reduced Carbohydrate Dessert and Other Food Products

 

10/851,896

 

5/21/2004

 

 

 

 

 

 

 

 

13.

High-Protein, Reduced Carbohydrate Bread and Other Food Products

 

10/851/899

 

5/21/2004

 

 

 

 

 

 

 

 

14.

High-protein, reduced-carbohydrated flat bakery and other food products

 

10/851,887

 

5/21/2004

 

 

 

 

 

 

 

 

15.

High-Protein, Reduced-Carbohydrate Bakery and Other Food Products

 

10/851,847

 

5/21/2004

 

 

 

 

 

 

 

 

16.

Composition and Method for Making High-Protein and Low-Carbohydrate Food Products

 

10/983,506

 

11/5/2004

 

 

3



 

EXHIBIT B

 

UNITED STATES ISSUED TRADEMARKS, SERVICE MARKS

 

AND COLLECTIVE MEMBERSHIP MARKS

 

REGISTRATIONS

 

Mark

 

Registration Number

 

Registration Date

 

 

 

 

 

 

 

1.

ARISE

 

2681958

 

01/28/2003

 

 

 

 

 

 

 

 

2.

COSMOGEL

 

2795149

 

12/16/2003

 

 

 

 

 

 

 

 

3.

FIBERRITE

 

3259490

 

07/03/2007

 

 

 

 

 

 

 

 

4.

FIBERSYM

 

3143069

 

09/12/2006

 

 

 

 

 

 

 

 

5.

FIBERSYM and Design (highly stylized S)

 

3086500

 

04/25/2006

 

 

 

 

 

 

 

 

6.

FOAM PRO

 

2083385

 

07/29/1997

 

 

 

 

 

 

 

 

7.

MGP INGREDIENTS

 

3032619

 

12/20/2005

 

 

 

 

 

 

 

 

8.

MGP INGREDIENTS, INC. and Design

 

3020190

 

11/29/2005

 

 

 

 

 

 

 

 

9.

MIDWEST GRAIN PRODUCTS

 

2926087

 

02/08/2005

 

 

 

 

 

 

 

 

10.

OMNI-SMOOTH

 

2891247

 

10/05/2004

 

 

 

 

 

 

 

 

11.

PASTA POWER

 

2243169

 

05/04/1999

 

 

 

 

 

 

 

 

12.

POLYTRITICUM

 

2355989

 

06/06/2000

 

 

 

 

 

 

 

 

13.

TERRATEK

 

3265875

 

07/17/2007

 

 

 

 

 

 

 

 

14.

WHEATEX

 

2076023

 

07/01/1997

 

 

 

 

 

 

 

 

15.

WHEATEX

 

3450542

 

06/17/2008

 

 

 

 

 

 

 

 

16.

GELBIND

 

2135094

 

07/15/1997

 

 

 

 

 

 

 

 

17.

CURE PRO

 

2143582

 

03/10/1998

 

 



 

APPLICATIONS

 

COLLECTIVE MEMBERSHIP MARKS

 

UNREGISTERED MARKS

 

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