EXHIBIT 10.3
 
AMENDED AND RESTATED PATENT SECURITY AGREEMENT
 

This AMENDED AND RESTATED PATENT SECURITY AGREEMENT (this "Patent Security
Agreement") is made this 2nd day of November, 2012 by and among the Grantors
listed on the signature pages hereof (collectively, jointly and severally,
"Grantors" and each individually "Grantor"), and WELLS FARGO BANK, NATIONAL
ASSOCIATION ("WF"), in its capacity as agent for the Lender Group and the Bank
Product Providers (in such capacity, together with its successors and assigns in
such capacity,  "Agent").
 
W I T N E S S E T H:
 
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement dated as
of November 2, 2012 (as amended, restated, supplemented, or otherwise modified
from time to time, the "Credit Agreement") by and among MGP Ingredients, Inc.,
as parent ("Parent"), MGPI Processing, Inc., MGPI Pipeline, Inc. and MGPI of
Indiana, LLC, as Borrowers ("Borrowers"), the lenders party thereto as "Lenders"
(such Lenders, together with their respective successors and assigns in such
capacity, each, individually, a "Lender" and, collectively, the "Lenders"), and
Agent, the Lender Group has agreed to make certain financial accommodations
available to Borrowers from time to time pursuant to the terms and conditions
thereof; and
 
WHEREAS, the members of Lender Group and the Bank Product Providers are willing
to make the financial accommodations to Borrowers as provided for in the Credit
Agreement, the other Loan Documents, and the Bank Product Agreements, but only
upon the condition, among others, that the Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Amended and Restated Guaranty and Security Agreement,
dated as of November 2, 2012 (including all annexes, exhibits or schedules
thereto, as from time to time amended, restated, supplemented or otherwise
modified, the "Guaranty and Security Agreement"); and
 
WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Agent, for the benefit of the Lender Group and the
Bank Product Providers, this Patent Security Agreement;
 
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:
 
1.           DEFINED TERMS.  All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Guaranty and
Security Agreement or, if not defined therein, in the Credit Agreement, and this
Patent Security Agreement shall be subject to the rules of construction set
forth in Section 1(b) of the Guaranty and Security Agreement, which rules of
construction are incorporated herein by this reference, mutatis mutandis.
 
2.           GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor
hereby unconditionally grants, assigns, and pledges to Agent, for the benefit
each member of the Lender Group and each of the Bank Product Providers, to
secure the Secured Obligations, a continuing security interest (referred to in
this Patent Security Agreement as the
 
 
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"Security Interest") in all of such Grantor's right, title and interest in and
to the following, whether now owned or hereafter acquired or arising
(collectively, the "Patent Collateral"):
 
(a)           all of its Patents and Patent Intellectual Property Licenses to
which it is a party including those referred to on Schedule I;
 
(b)           all divisionals, continuations, continuations-in-part, reissues,
reexaminations, or extensions of the foregoing; and
 
(c)           all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Patent or any Patent exclusively licensed under any Intellectual Property
License, including the right to receive damages, or right to receive license
fees, royalties, and other compensation under any Patent Intellectual Property
License.
 
3.           SECURITY FOR SECURED OBLIGATIONS.  This Patent Security Agreement
and the Security Interest created hereby secures the payment and performance of
the Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Patent Security Agreement secures
the payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Agent, the other members of the
Lender Group, the Bank Product Providers or any of them, whether or not they are
unenforceable or not allowable due to the existence of an Insolvency Proceeding
involving any Grantor.
 
4.           SECURITY AGREEMENT.  The Security Interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interests
granted to Agent, for the benefit of the Lender Group and the Bank Product
Providers, pursuant to the Guaranty and Security Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the Security Interest in the Patent Collateral made and granted hereby are more
fully set forth in the Guaranty and Security Agreement, the terms and provisions
of which are incorporated by reference herein as if fully set forth herein.  To
the extent there is any inconsistency between this Patent Security Agreement and
the Guaranty and Security Agreement, the Guaranty and Security Agreement shall
control.
 
5.           AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to
any new patent application or issued patent or become entitled to the benefit of
any patent application or patent for any divisional, continuation,
continuation-in-part, reissue, or reexamination of any existing patent or patent
application, the provisions of this Patent Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new patent rights.  Without limiting Grantors'
obligations under this Section, Grantors hereby authorize Agent unilaterally to
modify this Patent Security Agreement by amending Schedule I to include any such
new patent rights of each Grantor.  Notwithstanding the foregoing, no failure to
so modify this Patent Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Agent's continuing security interest in all
Collateral, whether or not listed on Schedule I.
 
6.           COUNTERPARTS.  This Patent Security Agreement is a Loan
Document.  This Patent Security Agreement may be executed in any number of
counterparts and by different
 
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parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Patent Security Agreement.  Delivery of an
executed counterpart of this Patent Security Agreement by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Patent Security Agreement.  Any party
delivering an executed counterpart of this Patent Security Agreement by
telefacsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Patent Security Agreement but the failure
to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Patent Security Agreement.
 
7.           CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE
PROVISION.  THIS PATENT SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS
REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET
FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE
INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.
 
8.                      Amendment and Restatement.  This Patent Security
Agreement, together with the Trademark Security Agreement dated as of the date
hereof, amends and restates in its entirety that certain Patent and Trademark
Security Agreement dated as of July 21, 2009 by MGP Ingredients, Inc. in favor
of the Agent (the "Original IP Security Agreement"), and shall not act as a
termination, release or novation of the Original IP Security Agreement.
 

[signature page follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Patent Security
Agreement to be executed and delivered as of the day and year first above
written.
 
GRANTORS:
      MGPI PROCESSING, INC.         By:
/s/ Don Tracy
  Name:
Don Tracy
  Title:
Chief Financial Officer
             
ACCEPTED AND ACKNOWLEDGED BY:
     
AGENT:
           
WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, as
Agent, as Sole Lead Arranger, as Sole Book
Runner, and as a Lender
      By:
/s/ Chris Heckman 
  Name:
Chris Heckman 
   
Its Authorized Signatory

 

 
[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

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SCHEDULE I
to
PATENT SECURITY AGREEMENT
 
Patents
 
PATENT
PATENT or
APPLICATION
NUMBER
FILE DATE
RESISTANT STARCH-HYDROCOLLOID BLENDS AND USES THEREOF
12/580755
10/16/2009
High-Protein, Reduced-Carbohydrate Bakery And Other Food Products
 
12/785169
 
05/21/2010
 
HIGH-PROTEIN, LOW-CARGOHYDRATE BAKERY PRODUCTS
11/830507
07/30/2007
RESITTANT STARCH-HYDROCOLLOID BLENDS AND USES THEREOF
11/689620
03/22/2007
Thermotolerant starch-polyester composites and methods of making same
 
11/585369
 
10/24/2006
Starch-plastic composite resins and profiles made by extrusion
 
11/339367
 
01/25/2006
Pregelatinized chemically modified resistant starch products and uses thereof
 
11/294314
 
12/05/2005
Reversibly swellable granular starch-lipid composites and methods of making the
same
 
11/146671
 
06/07/2005
Mineral-bound starch compositions and methods of making the same
 
11/146623
 
06/07/2005
Expanded products with high protein content
 
11/115441
 
04/27/2005
PROCESSES FOR PRODUCING WHEAT PROTEIN ISOLATES
 
11/059166
 
02/16/2005
PROCESS FOR PREPARING HYBRID PROTEINS
 
7989592
07/12/2007
METHOD OF PREPARING HYDROLYZED JOJOBA PROTEIN
6821525
11/14/2003
EMULSION STABILIZING STARCH PRODUCTS
6809197
06/11/2003
POLYVALENT METAL-SUBSTITUTED STARCH PRODUCTS
7166305
06/11/2003
HYDROLYZED JOJOBA PROTEIN
6800736
05/07/2003
PROTEIN/STARCH PAPER COATING COMPOSITIONS AND METHOD OF USE THEREOF
6605367
12/18/2002
PROCESS FOR PREPARING HYBRID PROTEINS
7534459
10/30/2002
METHOD OF PREPARING HYDROLYZED JOJOBA PROTEIN
6716599
01/24/2002
HYDROLYZED JOJOBA PROTEIN
6552171
04/23/2001
FORMULATIONS INCLUDING HYDROLYZED JOJOBA PROTEIN
6649177
04/23/2001

 
 
 

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PATENT
PATENT or
APPLICATION
NUMBER
FILE DATE
PROTEIN/STARCH PAPER COATING COMPOSITIONS AND METHOD OF USE THEREOF
6517625
01/03/2001
MODIFIED WHEAT GLUTENS AND USE THEREOF IN FABRICATION OF FILMS
5977312
10/31/1997
MODIFIED WHEAT GLUTENS AND USE THEREOF IN FABRICATION OF FILMS
5965708
03/11/1997
NODIFIED WHEAT GLUTENS AND USE THEREOF IN FABRICATION OF FILMS
5747648
03/12/1996
ALCOHOL-FREE WET EXTRACTION OF GLUTEN DOUGH INTO GLIADIN AND GLUTENIN
5610277
09/11/1995
BIODEGRADABLE GRAIN PROTEIN-BASED SOLID ARTICLES
5665152