Exhibit 10.1


 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


TECHNOLOGY AND PATENT RIGHTS LICENSE
AGREEMENT


 


This Technology and Patent Rights License Agreement, (the “Agreement”),
is made and entered into effective the 25th day of October, 2005
(the “Effective Date”), by and between Broin and Associates, Inc., a South
Dakota corporation located at 2209 East 57th Street North, Sioux Falls, South Dakota 57104 (“Licensor”) and
Northern Lights Ethanol, LLC, a South Dakota limited liability company, located
in Grant County, South Dakota (“Licensee”).


 


RECITALS:


 


A.                                   Licensee
owns and operates a dry mill fuel ethanol plant near Big Stone City, South
Dakota, for the production and marketing of fuel ethanol and ethanol
co-products.


 


B.                                     Licensee entered
into with Manager the Management Agreement.


 


C.                                     Licensor is in the
business of designing and building dry mill fuel ethanol plants.


 


D.                                    Licensor licensed
to Licensee the Existing Technology pursuant to the terms set forth in the
Original License Agreement.


 


E.                                      Licensor
has developed certain new technologies described as the “Raw Starch Technology
and Patent Rights,” as set forth in the Raw Starch Technology and Patent Rights
Addendum dated the same date as this Agreement (the “Raw Starch Addendum”).


 


F.                                      Licensee
desires to license from Licensor, and Licensor is willing to license to
Licensee, the Raw Starch Technology and Patent Rights, pursuant to the terms
and conditions of this Agreement and the Raw Starch Addendum.


 


G.                                     Licensor owns, and
continues to research and develop certain New Technology.


 


H.                                    Licensee is willing
to pay to Licensor a fee for research and development of New Technology.


 





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


NOW, THEREFORE, in consideration of the mutual promises and conditions
set forth in this Agreement, Licenser and Licensee hereby agree as follows:


 


ARTICLE I


DEFINITIONS


 


1.1                                 “Affiliate”
or “Affiliates” of Licensor means Jeffrey S. Broin, Robert L. Broin, Todd R.
Broin, one or more members of their respective Immediate Families, Broin
Enterprises, Inc., Broin Management, LLC, Ethanol Products, LLC, or any
other present or future company of which ten percent (10%) or more of the
outstanding securities are owned or controlled by Licensor or one or more
Affiliates.


 


1.2                                 “Application”
means an application for the protection of an invention or an industrial
design; reference to an “Application” shall include applications for patents
for inventions (including utility and provisional applications), reissue
applications, inventors’ certificates, utility certificates, utility models,
patents or certificates of addition, inventors’ certificates of addition,
utility certifications of addition, design patents, and industrial design
registrations, foreign or domestic, including the Applications identified in Exhibit B,
if any.


 


1.3                                 “Confidentiality
Agreement” means the Confidentiality and Nondisclosure Agreement dated April 20,
2005, between Licensee and Licensor, and/or any amendment, modification or
replacement agreement between Licensee and Licensor with respect to the
protection and nondisclosure of Confidential Information.


 


1.4                                 “Confidential
Information” means the Confidential Information of Licensor and its Affiliates,
as defined in the Confidentiality Agreement, and any other information now or
later identified by Licensor and its Affiliates as being confidential and
subject to nondisclosure obligations. Confidential Information does not include
the Licensee’s financial information to the extent that it is required to be
disclosed pursuant to federal securities laws, rules, regulations and orders,
and membership information.


 


1.5                                 “Ethanol
Plant” means the ethanol production facility owned and operated by Licensee
near Big Stone City, South Dakota.


 


1 .5A                    “Existing
Technology” means all of “Licensor’s Technology” as defined in the Original
License Agreement and currently utilized in the production of the Licensed
Products at the Ethanol Plant using the cook/fermentation process described in
the Original License Agreement.


 


1.6                                 “Gross
Income” means gross income as determined under generally accepted accounting
principles, applied on a consistent basis.


 


2





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


1.7                                 “Immediate
Family” or “Immediate Families” means respectively and collectively the spouse,
children, grandchildren and parents of Jeffrey S. Broin, Robert L. Broin and
Todd R. Broin.


 


1.8                                 “Initial
New Technology Fee” means the initial fee to be paid to Licensor for New
Technology pursuant to any Addendum executed by the parties.


 


1.9                                 “Licensed
Products” means any and all products, machines, manufactures, or compositions
of matter which are covered by or are produced using a process or a method
covered by the Technology and Patent Rights, including but not limited to
ethanol, distillers grain, carbon dioxide and other ethanol co-products.


 


1.10                           “Licensed
Methods” means any and all methods or processes which are covered by the
Technology and Patent Rights, including but not limited to methods of producing
ethanol, distillers grain, carbon dioxide or other ethanol co-products.


 


1.11                           “License”
or “Licenses” means the Technology License and/or Patent Rights License
described in Section 2.1


 


1.12                           “Management
Agreement” means the Management Agreement dated April 20, 2005, and/or any
amendment, modification or replacement agreement between Manager and Licensee
for the management and operation of the Ethanol Plant.


 


1.13                           “Management
Bonus” means the management bonus to be paid to Manager under the terms of the
Management Agreement.


 


1.14                           “Management
Fee” means the management fee paid to Manager pursuant the terms of the
Management Agreement.


 


1.15                           “Management
Term” means from the date of this Agreement until such time as the Management
Agreement expires or is terminated by either Licensee and/or Manager, pursuant
to the terms and conditions of the Management Agreement.


 


1.16                           “Manager”
means Broin Management, LLC, its successors and assigns.


 


1.17                           (Reserved)


 


1.18                           “New
Technology” means: (i) replacements, improvements, enhancements or
modifications to the Technology and Patent Rights, (ii) new inventions and
discoveries for the construction and operation of the Ethanol Plant, the
manufacture of the Licensed Products and/or use of the Licensed Methods, (iii) technology
in research, development,


 


3





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


or testing stage, and technology to be researched, developed or tested
by Licensor subsequent to the date of this Agreement, and (iv) any
processes, systems, diagrams, information, balances, blueprints,
configurations, manuals, videotapes or any other proprietary rights, patents,
trademarks, copyrights, trade secrets, formulas, research data, know-how,
process control systems, software certifications and specifications and other
technology that is not part of the Technology and Patent Rights.


 


1.18A                 “Original
License Agreement” means that certain Licensing Agreement dated November 2,
2000, originally executed by Licensor and Northern Growers Cooperative, which
License Agreement has subsequently been assigned to Licensee.


 


1.19                           “Patents”
means patents, reissues, renewals, and extensions thereof for inventions,
inventors’ certificates, utility certificates, utility models, patents or certificates
of addition, inventors’ certificate of addition, utility certificates of
addition, design patents, and industrial design registrations.


 


1.20                           “Patent
Rights” means: (i) the Scheduled Patents, and (ii) such Patents and
Applications directed to the construction and operation of the Ethanol Plant,
the manufacture of the Licensed Products and/or use of the Licensed Methods
that Licensor may own or gain rights to license during the term of this
Agreement and which Licensor may agree to include in the Patent Rights.


 


1.21                           “Patent
Rights License” means a revocable, non-exclusive, indivisible and
non-transferable right and license to use the Patent Rights solely for the
Permitted Purpose, subject to the conditions set forth herein.


 


1.22                           “Permitted
Purpose” means the operation of the Ethanol Plant for the production of the
Licensed Products and/or use of the Licensed Methods at the Ethanol Plant.


 


1.23                           “Person”
means an individual, partnership, limited partnership, limited liability
company, foreign limited liability company, trust, estate, corporation, foreign
corporation, cooperative, custodian, trustee, executor, administrator, nominee,
representative or any other individual or entity, however designated.


 


1.24                           “Post-Management
term” means that period of time commencing upon (i) the expiration of the
Management Agreement at the conclusion of its natural term with no renewal
thereof or (ii) Licensee’s termination of the Management Agreement for
cause as defined in the Management Agreement, and in either event concluding
upon the earlier of (iii) the date that Licensee ceases to use all of the
Technology and/or Patent Rights, or (iv) the annual anniversary date of
the expiration or termination of the Management


 


4





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


Agreement occurring at least ninety (90) days following the giving of
notice of termination of the Licenses, by Licensee pursuant to Section 3.3.


 


1.25                           “Post-Management
Term Fees” means   **    to be paid by Licensee to Licensor during the
Post-Management Term as provided in any Addendum executed by the parties.


 


1.26                           “Scheduled
Patents” means the Applications and Patents listed in any Addendum executed by
the parties.


 


1.27                           “Technology”
means: (i) all processes, systems, diagrams, information, balances,
blueprints, configurations, manuals, videotapes, proprietary rights, patents,
trademarks, copyrights, trade secrets, formulas, research data, know-how,
process control systems, software configurations and specifications, and other
technology required to operate the Ethanol Plant, to manufacture the Licensed
Products, and/or use the Licensed Methods, all as identified in Exhibit A,
(ii) means all inventions and discoveries covered by the claims in the
Applications prior to the issuance of, during the life of, and following the
expiration of the Patents, and (iii) any of the foregoing directed to the
manufacture of the Licensed Products and/or use of the Licensed Methods that
Licensor may own or gain rights to license during the term of this Agreement,
but not including the New Technology until so specified in an Addendum.


 


1.28                           “Technology
and Patent Rights Fee” means   **   to be paid to Licensor by Licensee during the
Management Term for the right to use the Technology and Patent Rights to
produce the Licensed Products using the Licensed Methods, pursuant to Section 4.1.


 


1.29                           “Technology
License” means the revocable, non-exclusive, indivisible and non-transferable
right and license to use the Technology solely for the Permitted Purpose as
granted by Licensor to Licensee pursuant to Section 2.1, but subject to
the conditions set forth in this Agreement.


 


1.30                           “Third
Party” means any Person other than Licensee and its officers and employees
having a reason to know the Technology and Patent Rights.


 


1.31                           “Transfer”
means a sale, assignment, gift, exchange or other disposition of the Technology
and/or the Patent Rights. “Transfer” does not mean or include a mortgage,
pledge or grant of a security interest or other encumbrance of or in the item
in question.


 


5





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


ARTICLE II


GRANT OF LICENSE


 


2.1                                 Non-Exclusive
License. Licensor hereby grants to Licensee the Technology License and the
Patent Rights License (the “Licenses”). Notwithstanding anything herein to the
contrary, the parties acknowledge and agree that the Original License Agreement
is not being terminated and that Licensee holds a license to utilize the
Existing Technology pursuant to the Original License Agreement, which license
shall continue in full force and effect notwithstanding the termination of the
Management Agreement or this Agreement.


 


2.2                                 Restrictions.
Licensee is prohibited from using the Technology and/or Patent Rights for any
purpose other than the Permitted Purpose. Licensee is prohibited from
disclosing to any Person the Technology and Patent Rights. Licensee is
prohibited from sublicensing, renting, and/or leasing to any Person the
Technology and/or Patent Rights. Licensee is prohibited from reverse
engineering the Technology and/or Patent Rights. Licensee is not granted the
right to use the Technology and/or Patent Rights in connection with the design,
construction, operation or maintenance of another ethanol facility.


 


2.3                                 New
Technology. The Licenses do not extend to New Technology until an Addendum
is executed by the parties under which the New Technology becomes subject to
the Licenses. If during the term of this Agreement, Licensor, Licensee and/or
Licensee’s employees, consultants, and contractors develop any New Technology,
or if Licensor becomes the owner of any New Technology, such New Technology
shall be solely owned by Licensor. If Licensee, its employees, consultants
and/or contractors develop any New Technology, or if any of the foregoing
become the owners of any rights in New Technology, Licensee, its employees,
consultants and/or contractors shall assign to Licensor all right, title and
interest in and to the New Technology. New Technology, in the sole discretion
of Licensor, may be licensed to Licensee. If Licensor determines that Licensor
will make available and license to Licensee the New Technology, then the New
Technology shall become part of the Technology licensed hereunder upon the execution
of an Addendum identifying and licensing the New Technology. Any charges and
additional compensation to be paid to Licensor during the Post-Management Term
shall be set forth in an Addendum that shall be executed by the parties.


 


2.4                                 Assignments
to Licensee. Licensee shall require all of Licensee’s current and future
employees, consultants and contractors to assign to Licensee all New
Technology, so as to ensure and facilitate the assignment by Licensee to
Licensor of the same. Licensee’s current and fixture employees, consultants and
contractors shall execute and deliver to Licensee an Employee, Consultant or
Contractor Confidentiality and Nondisclosure Agreement in the form attached to
the Confidentiality Agreement.


 


6





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


Licensee shall enforce the terms and conditions of the Employee,
Consultant or Contractor Confidentiality and Nondisclosure Agreement, and
hereby authorizes Licensor, as a third party beneficiary, to enforce the same,
and agrees to cooperate and assist Licensor in the enforcement of the same.


 


2.5                                 Patent
Prosecution. Licensor shall have full control over prosecution and
maintenance of the Applications and Scheduled Patents. Licensor shall use, at
its sole discretion, reasonable efforts to establish patent protection for the
information, inventions and discoveries included in the Applications and shall
timely keep Licensee advised of the status of such prosecution and maintenance
thereof. In addition, with respect to the development of New Technology,
Licensee may offer, at its own expense, assistance to Licensor in the drafting
of claims and specifications for the development of New Technology and/or
filing of new Applications.


 


2.6                                 Research
and Development. Licensor represents to Licensee that it has been
conducting substantial research and engaging in substantial development
activities associated with the production of the Licensed Products. Licensor
agrees to continue such research and development activities for the purpose of
developing New Technology. As consideration for the research and development
activities, Licensee shall pay to Licensor the Technology and Patents Rights
Fee in accordance with the provisions of Section 4.1.


 


ARTICLE III


TERM


 


3.1                                 Initial
Technology License Term. The Technology License shall commence on the
Effective Date of this Agreement and shall terminate, unless otherwise
terminated as provided herein, upon the date that Licensee ceases to use all of
the Technology. If Licensor determines, in its reasonable discretion, that the
processes, know-how, and other proprietary information contained in the
Technology infringes or may infringe upon the proprietary information of any
Person, then the Technology License with respect to said infringing processes,
know-how, and other proprietary information shall terminate upon notice from
Licensor to Licensee.


 


3.2                                 Initial
Patent Rights License Term. The Patent Rights License shall commence on the
Effective Date of this Agreement and shall terminate, unless otherwise
terminated as provided herein, upon the earlier of (i) the date that
Licensee ceases to use all of the Patent Rights, (ii) the conclusion of
the Management Term, or (iii) expiration of the last to expire of any of
the Scheduled Patents issued.


 


3.3                                 Post-Management
Term. Upon the commencement of the Post-Management Term, Licensee shall
have the option to continue the Licenses in full force and effect on a
year-to-year basis, subject to Licensee’s fulfillment of Licensee’s


 


7





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


obligations hereunder, including but not limited to Licensee’s payment
of the Post-Management Term Fees, if required under the terms of any Addendums,
and Licensee’s obligations under any and all Addendums to this License
Agreement. To exercise the option to continue the Licenses, Licensee shall give
Licensor written notice of Licensee’s election to exercise the option at least
ninety (90) days prior to the expiration of the Management Agreement if it
expires at the conclusion of its natural term or no later than the date that
Licensee gives Manager notice of termination of the Management Agreement for
cause. Thereafter, the Licenses shall renew automatically on a year-to-year
basis, unless Licensee gives Licensor written notice of Licensee’s election to
terminate the Licenses, which notice shall be given at least ninety (90) days
prior to the anniversary date of the expiration of the Management Term. If Licensee
timely exercises the option to continue the Licenses, then the Licenses shall
continue in full force and effect during the Post-Management Term.


 


ARTICLE IV


COMPENSATION


 


4.1                                 License
Fees During the Management Term. During the Management Term, Licensee shall
pay to Licensor the Technology and Patent Rights Fee, as defined in Section 1.28.
The Technology and Patent Rights Fee shall be paid   **   .


 


4.2                                 Post-Management
Term Fees. During the Post-Management Term, Licensee shall pay Licensor
only the licensing fees specified in any Addendum executed by Licensor and
Licensee for New Technology. The Technology and Patent Rights Fee to be paid by
Licensee to Licensor during the Management Term, as identified in Section 4.1,
shall not be paid by Licensee to Licensor during the Post-Management Term.


 


4.3                                 Initial
New Technology Fee. In the event that New Technology is made available to
Licensee by Licensor, and Licensee agrees to License from Licensor the New
Technology, the parties agree to execute an Addendum for the New Technology.
Licensee agrees to pay to Licensor the Initial New Technology Fee set forth in
any Addendum upon its execution. Licensor agrees that the Initial New
Technology Fee applicable to each New Technology, as set forth in a new
Addendum, will be negotiated by and between Licensor and Licensee at a future
date, but shall not, in any event, exceed the sum of   **   for each New Technology licensed.


 


ARTICLE V


REPRESENTATIONS AND WARRANTIES


 


5.1                                 List
of Technology and Patent Rights. Licensor represents and warrants that Exhibit A
contains a complete and accurate listing of all licensed Technology.


 


8





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


5.2                                 No
Claims of Infringement. Licensor represents and warrants that there are no
claims of infringement filed against Licensor with respect to the Technology
and/or Patent Rights anywhere in the world.


 


5.3                                 No
Further Infringement Warranties. Except as set forth herein above, Licensor
makes no representations or warranties, express or implied, with regard to the
infringement of proprietary rights of any Person.


 


5.4                                 No
Other Warranties or Representations. Except as set forth in this Agreement,
neither Licensor nor persons acting on Licensor’s behalf make any warranty,
express or implied.


 


ARTICLE VI


DISCLAIMER OF WARRANTIES AND
CLAIMS/INDEMNIFICATION


 


6.1                                 Disclaimer
of Infringement Claims. Licensor has provided Licensee in good faith the
rights and privileges contained in this Agreement. However, nothing contained
in this Agreement shall be construed as (i) a warranty or representation
by Licensor as to the validity or scope of any of the Technology or Patent
Rights; or (ii) a warranty or representation that the Technology, Patent
Rights, Licensed Products and Licensed Methods, or part thereof embodying any
of them, will be free from infringement of patents, trademarks, copyrights,
service marks, or other proprietary rights of any Person.


 


6.2                                 Disclaimers
of Other Claims. Licensor disclaims all liability and responsibility for
property damage, death, and personal injury, whether or not foreseeable, that
may result from the manufacture, use, or sale of the License products.


 


6.3                                 Licensee’s
Obligation to Indemnify and Defend. Licensee agrees to indemnify, defend,
and hold harmless Licensor from and against all claims (including, without
limitation, product liability claims), suits, losses and damages, including
reasonable attorneys’ fees and any other expenses incurred in the investigation
and defense of any claim arising out of Licensee’s manufacture, use or sale of
the Licensed Products and/or use of the Licensed Methods, and/or out of any
allegedly unauthorized use of any trademark, service mark, patent, copyright,
process, idea, method, or device (excepting the Technology and/or Patent
Rights) by Licensee or those acting under its apparent or actual authority,
except for claims that the Technology, the Patent Rights and/or the
manufacture, use, or sale of the Licensed Products and/or use of the Licensed Methods,
solely to the extent the same incorporate or conform to the Technology and/or
Patent Rights, infringe any patent, copyright, trademark, service mark or other
proprietary rights of any Person.


 


9





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


6.4                                 Licensor’s
Obligation to Indemnify and Defend. Licensor agrees to indemnify, defend,
and hold harmless Licensee from and against all claims that Licensor’s
Technology and/or Patent Rights infringe upon patents, trademarks, copyrights,
trade secrets or any other proprietary rights owned or controlled by any Person
by reason of Licensee’s manufacture, use or sale of the Licensed Products
and/or use of the Licensed Methods, or for the use of Licensors’ Technology
and/or Patent Rights. Licensee shall inform Licensor immediately upon receipt
of notice of any suit, action or claim relating to patents, trademarks,
copyrights, trade secrets or other proprietary rights of any Person having any
bearing on Licensor’s Technology and/or Patent Rights. Should it so elect,
Licensee may, at its own expense, join Licensor in the defense of any such
suit, action or claim. In the event that Licensor’s Technology and/or Patent
Rights are found to infringe in any of the aforementioned instances, Licensor
shall indemnify Licensee for any and all damages, except as excluded under Section 10.5, arising out of the infringement, and
shall (i) obtain the right to use patents, trademarks, copyrights, trade
secrets and/or other proprietary rights of said Person, (ii) modify
Licensor’s Technology and/or Patent Rights so as not to infringe upon the
rights of said Person, and/or (iii) achieve some other resolution of the
infringement claims so as to allow Licensee to use the Technology and Patent
Rights to operate Licensee’s Ethanol Plant, to manufacture the Licensed
Products and use the Licensed Methods.


 


ARTICLE VII


DEFENSE OF TECHNOLOGY


 


7.1                                 Licensor’s
Right to Prosecute and/or Defend. Licensor shall have the right, at its
election and expense, but not the obligation, to prosecute any and all claims
against any Person for infringement or misappropriation of the Technology
and/or Patent Rights.


 


7.2                                 Licensee’s
Right to Defend. If Licensor fails or refuses to prosecute any and all
claims against any Person for infringement or misappropriation of the
Technology and/or Patent Rights, or fails or refuses to defend any such claim,
Licensee may initiate the prosecution or assume control of the defense.
However, Licensor shall not be responsible for any settlement made without its
prior written consent, or for any costs, expenses or fees incurred by Licensee
without Licensor’s prior written consent.


 


ARTICLE VIII


COINFIDENTIAL INFORMATION


 


8.1                                 Confidential
Information. Licensor and Licensee hereby acknowledge and


 


10





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


agree that the Technology and the Patent Rights are a part of the
Confidential Information, are subject to the terms and conditions of the
Confidentiality Agreement, and are provided to Licensee solely for the
Permitted Purpose. Upon the termination of this Agreement and/or the Licenses,
the Technology, Patent Rights and the other Confidential Information in the
possession of Licensee shall be removed from Licensee’s Ethanol Plant and
possession and shall be returned to Licensor, and Licensee shall retain no
written, electronic or other forms of documentation with respect to the
Technology, Patent Rights and other Confidential Information. Notwithstanding
the foregoing, however, Licensee shall be entitled to retain such information
as is required to operate the Ethanol Plant utilizing Existing Technology
provided Licensee continues to treat such information as Confidential
Information under the Confidentiality Agreement.


 


8.2                                 Protection
of Technology and Patent Rights. Licensee agrees to protect the Technology,
Patent Rights and other Confidential Information, or any part thereof, from
disclosure pursuant to the terms and conditions of the Confidentiality
Agreement. Licensee shall require all of Licensee’s current and future
employees, consultants and contractors to keep confidential the Confidential
Information. Licensee’s current and future employees, consultants and
contractors shall execute and deliver to Licensee an Employee, Consultant or
Contractor Confidentiality and Nondisclosure Agreement in the form attached to
the Confidentiality Agreement. Licensee shall enforce the terms and conditions
of the Employee, Consultant or Contractor Confidentiality and Nondisclosure Agreement,
and hereby authorizes Licensor, as a third party beneficiary, to enforce the
same, and agrees to cooperate and assist Licensor in the enforcement of the
same.


 


8.3                                 Ownership
of Technology and Patent Rights. Licensee agrees and acknowledges that the
Technology and Patent Rights are proprietary to and are the sole, exclusive and
confidential property of Licensor, and that Licensor expressly maintains all
rights to the Technology and Patent Rights including, but not limited to,
copyright, patent, trademark and trade secret protections as provided by
federal and state law. Nothing contained in this Agreement shall be construed
as granting or employing any Transfer to Licensee of any rights in or to the
Technology and Patent Rights beyond the specific Licenses granted herein.


 


ARTICLE IX


ASSIGNMENT


 


This Agreement shall not be assignable by either party without the
prior written consent of the non-assigning party, which consent shall not be
unreasonably withheld.


 


11





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


ARTICLE X


DEFAULT AND REMEDIES


 


10.1                           Licensee’s
Events of Default. Each of the following events shall be a default by
Licensee and a breach of this Agreement:


 


A.                                   If
Licensee fails to pay Licensor any amounts required under this Agreement as and
when they become due and payable, or fails to pay Licensor or any Affiliate any
amount required under any other agreement between Licensor or an Affiliate and
Licensee, as and when they become due and payable.


 


B.                                     If
Licensee fails to keep, observe or perform any of the other terms and
conditions of this Agreement or of any other agreement between Licensee and
Licensor or an Affiliate.


 


C.                                     If Licensee
vacates or abandons the Ethanol Plant.


 


D.                                    If Licensee
Transfers or attempts to Transfer this Agreement or the Licenses, voluntarily
or by operation of law, without the prior written consent of Licensor.


 


E.                                      If Licensee
breaches the confidentiality provisions set forth in Article VIII.


 


F.                                      If Licensee files
a petition in bankruptcy or insolvency or for reorganization or arrangement
under the bankruptcy laws of the United States or any insolvency act of any
state or shall voluntarily take advantage of any such law or act by answer or
otherwise or shall be dissolved or shall make an assignment for the benefit of
creditors.


 


G.                                     If involuntary
proceedings under any such bankruptcy law or insolvency act shall be instituted
against Licensee or if a receiver or trustee shall be appointed for all or
substantially all of the property of Licensee and such proceeding shall not be
dismissed or such receivership or trustee vacated within sixty (60) days after
institution or appointment.


 


H.                                    If Licensee merges
with another entity, completes the sale of substantially all of its assets to
any Person, or any Person that is a competitor of Licensor acquires more than
ten percent (10%) of the outstanding capital or voting rights of Licensee.


 


12





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


10.2                           Licensor’s
Remedies. Upon the occurrence and continuance of an event of default,
Licensor shall give Licensee ninety (90) days written notice of default,
specifying the event of default and the action required to cure the default. If
the default is of such a nature that it cannot be cured by Licensee making a
reasonable effort to cure the default within ninety (90) days, then Licensee
shall within the ninety (90) day period make a reasonable effort to cure the
default and continue making such efforts until the default is cured. If
Licensee fails to timely fulfill its obligations as set forth in this Section 10.2,
Licensor may resort to any and all legal remedies or combination of legal
remedies allowed by law and/or this Agreement, including, without limitation,
the termination of this Agreement and the Licenses, and the removal of the
Technology and Patent Rights from Licensee’s Ethanol Plant and possession and
the recovery of all damages, reasonable attorneys’ fees and costs.
Notwithstanding that Licensee timely cures any default as specified herein,
Licensor may recover damages, attorneys’ fees and costs occasioned by or as a
result of Licensee’s default. Licensor, in addition to all of the other
remedies allowed by law, shall be entitled to specific performance and/or
injunctive relief.


 


10.3                           Licensor’s
Default. Licensor’s failure to keep, observe or perform any of the terms
and conditions of this Agreement, shall be a default by Licensor and a breach
of this Agreement.


 


10.4                           Licensee’s
Remedies. Upon the occurrence and continuance of an event of default,
Licensee shall give Licensor ninety (90) days written notice of default,
specifying the event of default and the action required to cure the
default.  If the default is of such a
nature as it can not be cured by Licensor making a reasonable effort to cure
the default within ninety (90) days, then Licensor shall within the ninety (90)
day period make a reasonable effort to cure the default and continue making
such efforts until the default is cured. If Licensor fails to timely fulfill
its obligations as set forth in this Section 10.4, Licensee may resort to any
and all legal remedies or combination of legal remedies allowed by law and/or
this Agreement, including, without limitation, the termination of this
Agreement and the Licenses, and the recovery of all damages, reasonable
attorneys’ fees and costs. Notwithstanding that Licensor timely cures any
default as specified herein, Licensee may recover damages, attorneys fees and
costs occasioned by or as a result of Licensor’s default. Licensee, in addition
to all of the other remedies allowed by law, shall be entitled to specific
performance and/or injunctive relief.


 


10.5                           Remedies
Cumulative. No remedy conferred upon or reserved to Licensor or Licensee
shall be considered to exclude or suspend any other remedy, but the same shall
be cumulative and shall be in addition to every other remedy now or hereafter
existing at law or by statute and every power and remedy given by this
Agreement to Licensor or Licensee may be exercised from time to time and as
often as occasion may arise. No delay or omission of Licensor or Licensee to
exercise any right or power arising


 


13





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


from any event of default shall impair any such right or power, nor
shall it be construed to be a waiver of any such event of default or
acquiescence therein. Notwithstanding the provisions of Sections 10.2 and 10.4,
in no event shall either party be liable for any lost profits, lost data, or
any form of incidental, consequential, or punitive damages of any kind whether
or not foreseeable.


 


10.6                           Rights
of Parties After Termination. Neither party shall be relieved of any
obligation or liability under this Agreement arising from any act or omission
committed prior to the effective date of such termination. In the event of
expiration of this Agreement or termination of this Agreement for any reason
whatsoever, the rights and obligations of the parties under Articles VIII, IX,
X, XI and XII shall survive any expiration or termination of this Agreement.
From and after any expiration or termination of this Agreement, Licensee may no
longer use the Technology and Patent Rights specifically described under any
Addendum entered into under this Agreement but, shall continue to have the
right to manufacture the Licensed Products, it being acknowledged by Licensor
that, in all events, Licensee’s Ethanol Plant may continue in operation
utilizing either Existing Technology and/or other technology that is, at that
time, available from third parties. Licensor specifically waives any right to
shut down Licensee’s Ethanol Plant provided, however, Licensee’s continued
operation of the Ethanol Plant must be based on either the Existing Technology
and/or other technology available from third parties.


 


ARTICLE XI


TRADE SECRETS


 


Licensee agrees and acknowledges that the Technology and Patent Rights
licensed to Licensee by Licensor meet the definition of a trade secret as
defined by the South Dakota Codified Law 37-29-1(4), and Licensor is entitled
to any and all rights and remedies granted by the South Dakota Uniform Trade
Secrets Act for any breach by Licensee of this Agreement.


 


ARTICLE XII


MISCELLANEOUS PROVISIONS


 


12.1                           Taxes.
Licensee shall be responsible to pay all taxes of any type, nature or
description (including, but not limited to, sale, use, gross receipts, excise,
import, export, income and employment taxes); provided, however, Licensee shall
not be responsible for any income taxes imposed upon Licensor by any taxing
jurisdiction, arising by virtue of the performance of this Agreement.


 


14





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


12.2                           Compliance.
With respect to its rights and obligations pursuant to this Agreement, each
party shall comply with all applicable federal and local laws, rules and
regulations.


 


12.3                           Successors
and  Assigns. Subject to Article IX, this Agreement shall be
binding upon and inure to the benefit of the successors, and to the extent
permitted herein, the assigns of the parties.


 


12.4                           Governing
Law. This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of South Dakota.


 


12.5                           Entire
Agreement. This Agreement, the Confidentiality Agreement, the Management
Agreement, any Exhibits hereto, and any Addendums executed by the parties as
described herein, constitute the entire agreement and understanding of the
parties and supersedes all prior agreements and understandings, whether oral or
written. No modifications or claimed waiver of any of the provisions of the
foregoing shall be valid unless in writing and signed by the duly authorized
representative against whom such modification or waiver is sought to be
enforced.


 


12.6                           No
Other Rights. Nothing contained in this Agreement shall be construed as
conferring by implication, estoppel, or otherwise upon either party any rights,
obligations or restrictions, except those expressly granted by this Agreement.


 


12.7                           No
Partnership or Joint Venture. Nothing contained in this Agreement shall
constitute or be construed to create a partnership or joint venture between
Licensor and Licensee. 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.


 


12.8                           Notice.
All notices required under this Agreement shall be effective if sent by first
class mail, postage prepaid or by recognized express courier to the address of
the parties set forth above. Licensor and the Licensee may provide supplemental
notice by means of fax or e-mail.


 


12.9                           Acceptance.
This Agreement shall be effective only after acceptance of its terms by
Licensor at its home office in Sioux Falls, South Dakota. No duties,
liabilities, or detriment shall be incurred by either party until the time of
acceptance. Notwithstanding any negotiations, representations, or agreements
made or entered into prior or contemporaneously with this Agreement, any
variance with the terms of this Agreement, or any variance with the terms of
any subsequent agreement entered into by and between the parties, whether oral
or written, shall be effective only after acceptance of said terms as provided
for in this Section 12.10.


 


15





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


12.10                     Severability.
In the event that any term, condition, or provision of this Agreement is held
to be invalid by any court of competent jurisdiction, such holding shall not
invalidate or make unenforceable any other term, condition, or provision of
this Agreement. The remaining terms, conditions, and provisions shall be fully
severable, and shall be construed and enforced as if such invalid term, condition,
or provision had never been inserted in this Agreement initially.


 


12.11                     Counterparts.
This Agreement may be executed in any number of counterparts with the same
effect as if all signing parties had signed the same document. All counterparts
shall be construed together and constitute the same instrument.


 


[Signature Page Follows]


 


16





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


IN WITNESS WHEREOF, the authorized agents of the parties have executed
this Agreement as of the date listed above.


 


	
   

  	
  LICENSOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BROIN AND ASSOCIATES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Broin

  	
   

  
	
   

  	
  Its:

  	
  CTO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LICENSEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTHERN LIGHTS ETHANOL, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Delton Strasser

  	
   

  
	
   

  	
  Its:

  	
  Chairman

  	
   

  



 


17





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


EXHIBIT A


 


Listing of Technology


 


	
  1.

  	
   

  	
  Process Diagrams

  
	
  2.

  	
   

  	
  Process information

  
	
  3.

  	
   

  	
  Material and energy balances

  
	
  4.

  	
   

  	
  Drawings

  
	
  5.

  	
   

  	
  Material and equipment specifications

  
	
  6.

  	
   

  	
  Process control system software configuration

  
	
  7.

  	
   

  	
  Isometric drawings

  
	
  8.

  	
   

  	
  Training manuals

  
	
  9.

  	
   

  	
  Operations manuals

  
	
  10.

  	
   

  	
  Operations video tapes

  
	
  11.

  	
   

  	
  Other items as maybe disclosed from time to time by Licensor to
  Licensee. Such additional materials which should also be considered
  technology shall be determined solely by Licensor.

  



 


18





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


EXHIBIT B


 


Listing of Applications and Scheduled Patents


 


None


 


19





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


NORTHERN LIGHTS ETHANOL, LLC


RAW STARCH TECHNOLOGY AND PATENT RIGHTS


ADDENDUM TO TECHNOLOGY AND


PATENT RIGHTS LICENSE AGREEMENT


 


This Addendum to Technology and Patent Rights License Agreement (“Addendum”)
is made and entered into effective the 25th day of October, 2005, by
and between Broin and Associates, Inc., a South Dakota corporation located
at 2209 East 57th Street North, Sioux Falls, South Dakota 57104 (“Licensor”)
and Northern Lights Ethanol, LLC, a South Dakota limited liability company,
located in Grant County, South Dakota (“Licensee”).


 


RECITALS:


 


A.                                   Licensee
owns and operates a dry mill fuel ethanol plant near Big Stone City, South
Dakota, for the production and marketing of fuel ethanol and ethanol
co-products.


 


B.                                     Licensor
licenses to Licensee certain Technology and Patent Rights, pursuant to the
terms and conditions of a Technology and Patent Rights License Agreement dated
the same date as this Addendum (the “License Agreement”).


 


C.                                     Licensor
has developed certain new technology, described by Licensor as the “Raw Starch
Technology and Patent Rights.”


 


D.                                    Licensor’s
Raw Starch Technology and Patent Rights are the subject of certain Patent
Rights described as follows:


 


Patent Application 2004 023 4649 Al, filed March 10,
2004


 


E.                                      Licensor
desires to license to Licensee, and Licensee desires to license from Licensor,
the Raw Starch Technology and Patent Rights (Exhibits A and B), pursuant to the
terms and conditions of this Addendum.


 


NOW, THEREFORE, in consideration of the mutual promises and conditions
set forth in this Addendum, Licensor and Licensee hereby agree as follows:


 


1.                                        Non-Exclusive
License. Licensor hereby grants to Licensee a revocable, non-exclusive,
indivisible and non-transferable right and license to use the Raw Starch
Technology and Patent Rights solely for the Permitted Purpose, subject to the
conditions set forth in the Agreement. The Raw Starch Technology and Patent
Rights are hereby


 


20





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


made a part of the Technology and Patent Rights, as defined in the
License Agreement, and which Raw Starch Technology and Patent Rights become
subject to the Licenses.


 


2.                                        Initial
New Technology Fee. Licensee shall pay to Licensor, immediately upon
execution of this Agreement, the sum of  
** 
 for the Raw Starch
Technology and Patent Rights (the “Initial License Fee”), as the Initial New
Technology Fee defined in Section 1.8 of the Agreement.


 


3.                                        Technology
and Patent Rights Fees. During the Management Term, Licensee shall continue
to pay to Licensor the Technology and Patent Rights Fee identified in the
License Agreement.


 


4.                                        Post-Management
Term License Fees. Upon the commencement of the Post-Management Term,
Licensee shall have the option to continue the Licenses with or without the Raw
Starch Technology and Patent Rights. In the event that Licensee elects to
continue the Licenses without the Raw Starch Technology and Patent Rights, then
Licensee shall discontinue the use of the Raw Starch Technology and Patent
Rights, in which event no Post-Management Term License Fees shall be owed by
Licensee to Licensor.


 


In the event that Licensee elects to continue to license the Raw Starch
Technology and Patent Rights, then immediately upon the commencement of the
Post-Management Term, Licensee shall pay Licensor a licensing fee of   **   . The licensing fees described
herein are collectively known as the “Post-Management Term Fees,” as identified
in Section 1.25 of the Agreement. The  
**  
.


 


The Post-Management Term License Fees shall only be paid by Licensee
while Licensee is utilizing the Licensor’s Raw Starch Technology and Patent
Rights. Licensee shall not be required to pay the Post-Management Term License
Fees even though Licensee continues to produce the Licensed Products utilizing
Existing Technology, or otherwise utilizing other technology which is available
to the Ethanol Plant from third parties. In the event that Licensee utilizes
the Existing Technology without utilizing the Raw Starch Technology and Patent
Rights, and without utilizing the other Technology and Patent Rights set forth
in any other Addendum, then Licensee may continue to utilize the Existing
Technology under the terms and conditions of the Original Licensing Agreement,
in which event the License Agreement shall expire and no longer be in effect.


 


5.                                        Capitalized
Terms. All capitalized terms contained in this Addendum shall have the
meanings set forth in this Addendum and/or in the License Agreement.


 


6.                                        License
Agreement. All of the terms, conditions, provisions and covenants contained
in the License Agreement shall continue in full force and effect, and shall be


 


21





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


binding upon and inure to the benefit of the parties and their
respective heirs, legal representatives, successors, and to the extent
permitted in the License Agreement, the assigns of the parties.


 


	
  [Signature Page Follows]

  



 


22





















 


**Certain information in this exhibit has
been omitted and will be filed separately with the


Securities and Exchange Commission pursuant
to a confidential treatment request.


 


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
listed above.


 


	
   

  	
  LICENSOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BROIN AND ASSOCIATES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Broin

  	
   

  
	
   

  	
  Its:

  	
  CTO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LICENSEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTHERN LIGHTS ETHANOL, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Delton Strasser

  	
   

  
	
   

  	
  Its:

  	
  Chairman

  	
   

  



 


23





















 


EXHIBIT A


 


Listing of Raw Starch Technology


 


	
  1.

  	
   

  	
  Process Diagrams

  
	
  2.

  	
   

  	
  Process information

  
	
  3.

  	
   

  	
  Material and energy balances

  
	
  4.

  	
   

  	
  Drawings

  
	
  5.

  	
   

  	
  Material and equipment specifications

  
	
  6.

  	
   

  	
  Process control system software configuration

  
	
  7.

  	
   

  	
  Isometric drawings

  
	
  8.

  	
   

  	
  Training manuals

  
	
  9.

  	
   

  	
  Operations manuals

  
	
  10.

  	
   

  	
  Operations video tapes

  
	
  11.

  	
   

  	
  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.

  



 


24





















 


EXHIBIT B


 


Listing of Raw Starch Applications


 


	
  Patent Application

  	
   

  	
  Filed March 10, 2004

  
	
  2004 023 4649,Al

  	
   

  	
   

  



 


25