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.
2
(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
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