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EXHIBIT 10.2
LICENSING AGREEMENT
FOR ETHANOL PRODUCTION PROCESS
THIS LICENSING AGREEMENT is made and entered into this 2nd day of November,
2000 by and between Broin and Associates, Inc., a South Dakota corporation
located at 2209 East 57th Street North, Sioux Falls, SD 57104, (hereinafter
referred to as "Licensor") and Northern Growers Cooperative, located at Post
Office Box 225, Milbank, South Dakota 57252, (hereinafter referred to as
"Licensee").
WHEREAS, the Licensor is in the business of designing and building dry mill
ethanol plants; and
WHEREAS, Licensor and Licensee have entered into a Construction Contract
dated as of even date herewith ("Construction Contract") to construct the dry
mill ethanol plant near Grant County, South Dakota ("Facility").
WHEREAS, Licensee has chosen Licensor as Design/Builder to construct the
Facility because that Licensor has expertise in the design and construction of
ethanol plants; and
WHEREAS, the Licensor possesses certain proprietary technology, design
information and operational information (hereinafter referred to as the
"Technology", as set forth in Exhibit A); and
WHEREAS, the Licensee wishes to license a plant design and its associated
proprietary design and operational information from the Licensor; and
WHEREAS, the parties hereto are entering into a Confidentiality and
Non-disclosure agreement which is attached hereto as Exhibit B.
NOW, THEREFORE, in consideration of the foregoing mutual covenants and
agreements set forth herein, the parties agree as follows:
AGREEMENT
1.0 THE TECHNOLOGY
The "Licensor's Technology" refers to all proprietary rights, including
patents, copyrights, trade secrets, formulas, research data, processes, know-how
and specifications related to the Licensor' s design and construction of the
Facility identified in Exhibit A.
2.0 THE GRANT
2.1 LICENSE
Licensor grants to Licensee a nonexclusive license to utilize Licensor's
Technology to make, use and sell Ethanol and related co-products produced using
the Licensor's Technology only at the facility located near Grant County, South
Dakota.
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2.2 RESTRICTIONS
The Licensee agrees that it will use the items listed in Exhibit A only in
relation to the operation and maintenance of the Facility.
3.0 COMPENSATION
For and in consideration of the Licensee's execution of the Construction
Contract and for the payment of $100,000, which is included in the Design/Build
Contract Price Licensor executed this License Agreement with Licensee.
4.0 TERM OF AGREEMENT
4.1 TERM
This Agreement shall commence on the date that the Facility operates for
seven days as provided in the Process Guarantee attached to the Construction
Contract and continue for so long as the plant shall exist to use the Licensor's
Technology.
4.2 BREACH
Any party shall be in default under this Agreement if said party otherwise
fails to perform any of its obligations under this Agreement. In the event a
party is in default under this Agreement, the nondefaulting party shall have
such rights and remedies as may be available at law or in equity, including the
right of specific performance and injunctive relief.
5.0 LIMITATION OF LIABILITY
In no event shall Licensor be liable to Licensee (or any other party) for
loss of profits or indirect, incidental, special, consequential, or other
similar damages arising out of any breach of this Agreement or obligations under
this Agreement.
6.0 INDEPENDENT CONTRACTOR
For the purpose of this Agreement and all services to be provided
hereunder, both parties shall be, and shall be deemed to be, independent
contractors and not agents or employees of the other. Neither party shall have
authority to make any statements, representations or commitments of any kind, or
to take any action, that will be binding on the other party.
7.0 SEVERABILITY
If any one or more of the provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, such provision shall be enforced to the
maximum extent possible consistent with applicable law and the remaining
provisions of this Agreement shall remain in full force and effect.
8.0 ASSIGNABILITY
This Agreement shall be assignable by either party upon mutual written
consent of the parties hereto. It is understood and agreed by Licensee that the
Licensing Agreement will need to be Assigned to a new owner prior to the
operation of the Facility by a new owner. Neither party shall unreasonably
withhold consent to said transfer.
9.0 ENTIRE AGREEMENT
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This instrument contains the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes any prior or
contemporaneous agreement.
10.0 MODIFICATIONS IN WRITING
No change, modification, extension, termination or waiver of this
Agreement, or any of the provisions herein contained, shall be valid unless made
in writing and signed by a duly authorized representative of each party.
11.0 GOVERNING LAW
The validity and interpretation of this Agreement and the legal relations
of the parties to it shall be governed by the laws of the State of South Dakota,
excepting that body of law related to conflict of laws.
12.0 CAPTIONS
The captions are provided for convenience and are not to be used in
construing this Agreement.
13.0 CONSTRUCTION
The parties agree that they have participated equally in the formation of
this Agreement and that the language herein should not be presumptively
construed against either of them.
14.0 CONFIDENTIALITY
The parties acknowledge that Licensor will likely be providing confidential
information to Licensee during the term of this Agreement. In contemplation
thereof, the parties have signed Exhibit B--Confidentiality and Non-disclosure
Agreement--which is hereby incorporated by reference into this agreement.
15.0 DEFENSE OF THE TECHNOLOGY
The Licensor, in granting the Licensee a license to said Licensor's
Technology as noted in this Agreement, will defend the Licensee in matters
pertaining to infringement of Licensor' s Technology including patents,
trademarks, copyrights, trade secrets, or any other proprietary rights owned or
controlled by third parties by reason of Licensee's manufacture, use, or sale of
Ethanol or ethanol co-generated products through Licensor's Technology. Licensee
shall inform Licensor immediately upon receipt of notice of any suit, actions,
claim or claims relating to patents, trademarks, copyrights, trade secrets, or
other proprietary rights having any bearing on said Licensor's Technology.
Should it so elect, Licensee, may, at its own expense, assume the control of and
join the Licensor in the defense of any such suit, actions, claim, or claims. In
the event that Licensor's Technology is found to infringe in any of the
aforementioned instances, Licensor will pay any costs to change the Technology
or to bring the Licensee into compliance with the holders of any proprietary
rights.
16.0 NOTICES
All notices hereunder shall be effective if sent by first class mail,
postage prepaid, and shall be deemed given and received one business day after
deposit with the post office. Supplemental to the delivery methods described
above, the parties may also fax and E-mail said
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notices. Notice sent by recognized express courier, certified or registered mail
shall be considered the official and binding notice. Notice shall be to:
IF TO LICENSOR: By: JEFFREY S. BROIN
ITS: C.E.O.
ADDRESS: 2209 EAST 57TH STREET NORTH
SIOUX FALLS, SD 57104
PHONE: (605)965-2201
FAX: (605)965-2203
E-MAIL: jeffbroin@broin.com
IF TO LICENSEE: BY: JIM PETERSON
ITS: CHAIRMAN
ADDRESS: POST OFFICE Box 225
MILBANK, SD 57104
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT ON THE
DATE AND YEAR FIRST ABOVE WRITTEN.
LICENSOR: LICENSEE:
BROIN AND ASSOCIATES, INC. NORTHERN GROWERS COOPERATIVE
By: /s/ Jeffrey S. Broin By: /s/ Jim Peterson
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Its Chief Executive Officer Its Chairman - Jim Peterson
Jeffrey S. Broin
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EXHIBIT A
THE FOLLOWING ITEMS SHALL CONSTITUTE THE LICENSOR'S TECHNOLOGY THAT LICENSOR IS
TRANSFERRING TO LICENSEE UNDER THIS AGREEMENT:
1. ANY AND ALL PROCESS DIAGRAMS (A-1)
2. ANY AND ALL PROCESS INFORMATION (A-2)
3. ANY AND ALL MATERIAL AND ENERGY BALANCES (A-3)
4. ANY AND ALL BLUEPRINTS (A-4)
5. ANY AND ALL ISOMETRIC BLUEPRINTS (A-5)
6. ANY AND ALL TRAINING MANUALS (A-6)
7. ANY AND ALL OPERATIONS MANUALS (A-7)
8. ANY AND ALL OPERATIONS VIDEO TAPES (A-8)
9. ALL OTHER ITEMS AS MAY BE DISCLOSED FROM TIME TO TIME BY LICENSOR TO
LICENSEE. SUCH ADDITIONAL MATERIALS WHICH SHOULD ALSO BE CONSIDERED
TECHNOLOGY SHALL BE DETERMINED SOLELY BY LICENSOR.
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EXHIBIT B
CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT
This CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT (this "Agreement") is made
and entered into as of this 2nd day of November, 2000 by and between Broin and
Associates, Inc., a South Dakota corporation, having a business address at 2209
East 57th Street North, Sioux Falls, South Dakota 57104 ("Discloser") and
Northern Growers Cooperative, having a business address at Post Office Box 225,
Milbank, South Dakota 57252("Recipient"), with reference to the following:
RECITALS
The following provisions form the basis for, and are hereby made a part of,
this Agreement:
A. The parties to this Agreement are entering into discussions or
negotiations for the purpose of Financing, Design, Engineering, Construction,
Training and Startup and Operation of an ethanol production plant to be located
near Grant County, South Dakota.
B. During discussions, negotiations, design, engineering, construction
oversight, DCS system configuration and installation, employee training, plant
startup, and on-going consulting, Discloser may disclose to Recipient certain
information Discloser deems confidential and proprietary.
AGREEMENT
NOW THEREFORE, in consideration of the promises and mutual covenants set
forth herein, the parties agree as follows:
1.0 DEFINITION OF CONFIDENTIAL INFORMATION.
"CONFIDENTIAL INFORMATION" shall mean any and all information disclosed by
Discloser to Recipient relating to its business or technology that Discloser
designates as being confidential or which, under the circumstances surrounding
disclosure, should be treated as confidential, regardless of whether Discloser
provides such information to Recipient in tangible form or it is retained in the
intangible memory of Recipient. Confidential Information includes, for example
and without limitation, Discloser's confidential business or technical
information, such as financial information or data, marketing techniques and
material, business plans and strategies, business operation and systems, pricing
policies, information concerning employees, customers, and/or vendors, trade
secrets, discoveries, inventions, improvements, research, development, know-how,
designs, products, compositions, prototypes, biological or physical materials
and manufacturing processes.
2.0 DISCLOSURE AND USE RESTRICTIONS
2.1 PERMITTED USE AND DISCLOSURE.
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(i) Recipient may only disseminate Confidential Information to those
employees of Recipient who have:
(a) a demonstrable need to know;
(b) been informed of Recipient's obligations hereunder; and
(c) are bound by an obligation of confidentiality to Recipient
at least as broad in scope as Recipient's obligations
hereunder.
(ii) Recipient may disseminate necessary portions of the Confidential
Information to consultants, engineers or associates of Recipient for
the sole purpose of making major modifications to or expanding the
facility, but only after said consultants, engineers or associates
have executed a Confidentiality and Nondisclosure Agreement with
Discloser and Recipient has received a copy of this signed
Agreement.
A breach of such agreement shall be considered a material breach hereunder.
2.2 RESTRICTIONS.
Except as expressly provided in Section 2.1, Recipient shall not:
(i) Publish, disseminate or otherwise disclose or make available
Confidential Information received hereunder to any person, firm or
corporation without prior written consent of Discloser; or
(ii) Use Confidential Information for any purpose including, without
limitation, selling, leasing, renting, licensing, marketing or
otherwise distributing any Confidential Information or products,
services, or processes embodying or derived from same. Recipient
agrees to use the same degree of care that it uses to protect its
confidential information of similar importance, to prevent any
unauthorized disclosure of Confidential Information, but in no event
less than a reasonable degree of care.
(iii) Modify or disseminate the Confidential Information or any part
thereof without the express written consent of the Discloser.
2.3 NO REVERSE ENGINEERING.
Recipient shall not alter, modify, break-down, disassemble, or reverse
engineer materials or compositions containing or constituting Confidential
Information without the express prior written consent of Discloser.
2.4 DISCUSSIONS.
Recipient shall not publicize or disclose beyond those persons to whom
Confidential Information may be disclosed hereunder the existence and the terms
of this Agreement or the discussions that give rise to this Agreement and all
such information shall be deemed Confidential Information for all purposes
herein.
2.5 NOTIFICATION OF UNAUTHORIZED USE OR DISCLOSURE.
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Recipient shall notify Discloser in writing immediately upon discovery of
any unauthorized use or disclosure of Confidential Information by Recipient or
its employees, consultants or associates, and will reasonably cooperate with
Discloser to regain possession of the Confidential Information and prevent its
further unauthorized use.
3.0 NO EXPORT.
Recipient shall not export, directly or indirectly, including but not
limited to export on the Internet or other network service, any Confidential
Information or technical data acquired by Recipient from Discloser under this
Agreement or any products utilizing any such data to any country for which the
U.S. Government or any agency thereof at the time of export requires an export
license or other Government approval without first obtaining such license or
approval.
4.0 EXCEPTIONS.
Recipient shall have no obligation under this Agreement to maintain in
confidence any information which it can demonstrate:
(i) is in the public domain at the time of disclosure;
(ii) is in the possession of Recipient free of any obligation of
confidence prior to the time of disclosure;
(iii) though originally, Confidential Information, subsequently becomes
part of the public knowledge through no fault of Recipient, as of
the date of its becoming part of the public knowledge;
(iv) though originally, Confidential Information, subsequently is
rightfully received by Recipient without obligations of confidence
from a third party who is free to disclose the information, as of
the date of such third-party disclosure; or is independently
developed by Recipient without the use of any Confidential
Information, as of the date of such independent development.
Recipient shall be entitled to disclose Confidential Information in
response to a Court Order or as otherwise required by law; PROVIDED,
HOWEVER; that Recipient notifies Discloser prior to such disclosure,
and in no case more than ten (10) days after receiving such order to
give Discloser time to contest such order.
5.0 OWNERSHIP OF CONFIDENTIAL INFORMATION
5.1 OWNERSHIP OF MATERIALS.
Subject to the Construction Agreement and the License Agreement, all
materials furnished to Recipient by Discloser, including without limitation,
documents, drawings, apparatus, sketches, designs, biological or physical
materials, Confidential Information and Licensor's Technology as defined in the
License Agreement, and media upon which Confidential Information is stored or
recorded shall remain the property of Discloser, subject to the terms and
conditions of the License Agreement and Construction Agreement, Recipient will
return all such material, and all Copies thereof, to Discloser within a
reasonable time following Discloser's written request; PROVIDED, HOWEVER; that
Recipient may retain a single copy of the assignment data and any other
materials for
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archival purposes. This Agreement does not give Recipient a license, implied or
express, or other rights to the Confidential Information.
5.2 OWNERSHIP OF DERIVATIVE WORKS.
Except as provided in the License Agreement and the Construction Contract,
any and all Derivatives of Confidential Information shall be the property of
Discloser. For purpose of this Agreement, "Derivatives" shall mean:
(i) for copyrightable or copyrighted material, any translation,
abridgement, revision, or other form in which an existing work may
be recast, transformed or adapted;
(ii) for patentable or patented material any improvement thereon; and for
other material whether or not protected by trade secret, any new
material derived from such existing trade secret material, including
new material which may be protectable by copyright, patent and/or
trade secret.
6.0 TERMINATION.
6.1 TERMINATION PRIOR TO CONCLUSION OF AGREEMENT.
Upon written notice from one party to the other, this Agreement and the
parties' rights and obligations with respect hereto may be terminated solely as
to yet undisclosed Confidential Information; PROVIDED, HOWEVER; that this
Agreement and the parties' rights and obligations hereunder shall survive and
remain in full force and effect with respect to all information, Confidential
Information or otherwise, disclosed prior to the receipt of such written notice.
7.0 MISCELLANEOUS
7.1 ENTIRE AGREEMENT.
This Agreement constitutes the entire Agreement between the parties hereto
regarding the Confidential Information disclosed thereunder and supersedes all
oral or written agreements, either entered prior to or contemporaneously with
this Agreement, concerning the Confidential Information. This Agreement may not
be modified except by written agreement dated subsequent to the date of this
Agreement and signed by both parties.
7.2 ASSIGNMENT.
Recipient shall not assign or transfer any rights or obligations under this
Agreement without the prior written consent of Discloser. Subject to the
limitations set forth in this Agreement, this Agreement will inure to the
benefit of and be binding upon the parties, their successors and assigns.
7.3 PRESUMPTIONS.
In construing the terms of this Agreement, no presumption shall operate in
either party's favor as a result of its counsel's role in drafting the terms or
provisions hereof.
7.4 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of South Dakota, excluding that body of law relating to choice
of law.
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7.5 SEVERABILITY; WAIVER.
If any provision of this Agreement shall be held by a Court of Competent
Jurisdiction to be unenforceable, the remaining provisions shall remain in full
force and effect. A waiver by either of the parties hereto of any of the
covenants to be performed by the other party or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof or of any covenant
hereof contained.
7.6 HOLD HARMLESS.
The Recipient shall indemnify and save harmless the Discloser, its
officers, directors, consultants, employees, agents and assigns from and against
any liability, loss or damage arising out of Recipient's violation of any of the
Terms and Conditions of this Agreement.
7.7 REMEDIES.
In the event the Recipient breaches or threatens to breach any of the
covenants expressed herein, the damage to the Discloser will be great and
irreparable and difficult to quantify; therefore, the Discloser may apply to a
Court of Competent Jurisdiction for injunctive or other equitable relief to
restrain such breach or threat of breach, without the necessity of filing any
bond, and without disentitling the Discloser from any other relief in either law
or equity.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Broin And Associates, Inc. Northern Growers Cooperative
(Discloser) (Recipient)
By: /s/ Jeffrey S. Broin By: /s/ Jim Peterson
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Its Chief Executive Officer - Its Chairman - Jim Peterson
Jeffrey S. Broin
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