Document:

10.83 - Technology License Agreement

Confidential Treatment Requested.  Confidential portions of this document have been redacted and have been separately filed with the Commission.

TECHNOLOGY LICENSE AGREEMENT 

THIS LICENSE AGREEMENT is effective the 26th day of September, 2013 between Butamax Advanced Biofuels LLC, a Delaware limited liability company located at Bldg 356, DuPont Experimental Station, Wilmington, DE ("BUTAMAX"), and Highwater Ethanol LLC, a Minnesota limited liability company located at 24500 U.S. 14, Lamberton, MN ("HIGHWATER"). 

     WHEREAS, the Parties have entered into a binding Term Sheet for Phase 1 Plant Retrofit (the “Term Sheet”) dated July 18, 2013, pursuant to which the Parties desire to enter into the instant Technology License Agreement (“License Agreement”) concurrent with execution of other agreements designated the Definitive Agreements in said Term Sheet;

WHEREAS, BUTAMAX has certain intellectual property and technology, including a developing patent portfolio, patents, know-how, trade secrets, products, processes, proprietary equipment and other Technical Information, relating to Project Nemo Facility and is willing to provide certain rights to certain of such intellectual property to HIGHWATER and HIGHWATER desires to obtain such rights as well as related obligations as described herein; 

THEREFORE, in consideration of the mutual understandings and obligations herein set forth, the Parties agree as follows: 

ARTICLE 1 - DEFINITIONS   For the purpose of this License Agreement, capitalized terms used herein (including in the preamble and recitals hereto) and not otherwise defined herein shall have the following meanings:

1.1    “Affiliate” shall mean, with respect to any person or entity, any person or entity that directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such person or entity provided that any such person or entity which is a Competitor or in which a Competitor has any ownership interest shall not be an Affiliate.  For the purposes of this definition, the term "control" or "controls" or "controlled" means either (a) the power, direct or indirect, to direct or cause the direction of the management and policies of a person or entity whether by contract or otherwise or (b) ownership of fifty percent or more of the stock or other equity interest in a person or entity.

1.2    “Butamax Agreements" and “Definitive Agreements” both shall mean (a) an Easement for Construction and Process Demonstration Agreement (the "Easement Agreement"), (b) an Equipment Lease (the "Lease"), (c) this License Agreement, (d) a Security Interest Agreement (“Security Agreement”), and (e) a Technology Demonstration Risk Reduction Agreement (“Risk Reduction Agreement”) executed concurrent with this License Agreement.
    
1.3    “BUTAMAX Confidential Information” means business and technical information, including Technical Information in any form (including samples), pertaining or related to the engineering design, implementation, use, testing, sampling, operation, demonstration and sale of product produced from the Butamax Unit or any information related to (i) any other BUTAMAX technology or business information, (ii) BUTAMAX contractors, negotiations and agreements, and (iii) BUTAMAX biobutanol strategy; disclosed prior to termination of this License Agreement that is identified by or on behalf of BUTAMAX as constituting ”Confidential Information” (or a similar legend).  The term includes information that is disclosed orally or visually and identified as constituting Confidential Information at the time of disclosure.  The term does not include information that (a) is or becomes known to the public through no fault of HIGHWATER; (b) is learned by HIGHWATER from a third party entitled to disclose it, provided that the third party does

*** Confidential material redacted and filed separately with the Commission.

not impose restrictions of confidentiality or non-use on HIGHWATER; (c) was already known to HIGHWATER at the time of disclosure by or on behalf of BUTAMAX, without third party restrictions of confidentiality or nonuse, or a direct or indirect obligation of such third party to BUTAMAX to maintain confidentiality,  as shown by HIGHWATER’s prior written records; or (d) is developed by or for HIGHWATER prior to the Effective Date of this License Agreement without use of the BUTAMAX Confidential Information as shown by HIGHWATER’s prior written records.  Information disclosed hereunder shall not be deemed to be within the foregoing exceptions merely because such information is embraced by more general knowledge in the public domain or in HIGHWATER’s possession.  In addition, no combination of features shall be deemed to be within the foregoing exceptions merely because individual features are in the public domain or in HIGHWATER’s possession, unless the combination itself and its principle of operations are in the public domain or in HIGHWATER’s possession. 

1.4    “BUTAMAX Intellectual Property” shall mean, to the extent Controlled by BUTAMAX, (a) all Technical Information, and any patents and patent applications related thereto set forth in Exhibit 1, including Technical Information incorporated in the Butamax Unit and the Butamax Process descriptions, as set forth in Exhibit 1, and (b) any know-how incorporated in, or patents that cover, the Inventions related thereto. 

1.5    “Butamax Process” shall mean that process for feedstock processing and recovery of corn oil *** described in Exhibit 1.

1.6     "Competitor" shall mean any entity other than BUTAMAX or an Affiliate of BUTAMAX *** a Competitor shall not include a corn oil derived biodiesel technology supply company so long as any implementation of such company’s biodiesel technology in the Plant that uses the Product does not adversely affect the value proposition for biobutanol or implementation of the biobutanol technology in any way.

1.7    “Controlled” shall mean, when used in reference to intellectual or other intangible property, or materials, that a Party owns or has a license or sublicense to such intellectual or other intangible property or materials, and has the ability to grant a license or sublicense or other right to use such intellectual or other intangible property or materials, as applicable, as provided for herein, without violating the terms of any agreement or other arrangement with any third party.

1.8    “Effective Date” means the date indicated above as being the effective date of this License Agreement, which shall be conditional upon full execution of the Butamax Agreements, and BUTAMAX execution of definitive terms with the Project Nemo Facility builder. 

1.9    “Field of Use” means implementation, demonstration, operation and use of the Project Nemo Facility at the Plant as defined in the LTP solely for production of saleable corn oil during ethanol production.  Such corn oil sales may be on a global basis.  The Field of Use also permits operation of the Project Nemo Facility at BUTAMAX’s direction for purposes of the easements granted by Highwater to BUTAMAX in the Easement Agreement.

1.10    “Improvements” has the meaning given in paragraph 2.4.

1.11    “Inventions” has the meaning given in paragraph 2.5.

1.12    “License Term” is the period of time in which BUTAMAX has granted a license to HIGHWATER.  As it pertains to BUTAMAX Intellectual Property, this period commences on the Effective 

*** Confidential material redacted and filed separately with the Commission.

Date and continues until expiration of the last to expire Patents, unless earlier terminated.  The License Term may be terminated prior to expiration of the last to expire Patent as provided herein.

1.13     “LTP” means the construction release Licensing Technology Package that contains Technical Information.  BUTAMAX will provide the Technical Information from the LTP to Highwater as needed and as reasonably practicable. 

1.14    “Party” means BUTAMAX or HIGHWATER depending on the context, and “Parties” means BUTAMAX and HIGHWATER.

1.15    “Patents” means any BUTAMAX Controlled patents/patent applications listed in attached Exhibit 1, including, but not limited to, provisional, utility, divisional, continuation, continuation-in-part, and design patent applications, any continuing or divisional application thereof, any patent granted on any aforesaid patent application, and any extension, revival, reissue, reexamination and foreign patents and patent applications that rely on aforesaid patents and patent applications in whole or in part for an effective priority date.

1.16    “Payment” has the meaning set forth in the Lease. 

1.17     “Plant” means only the HIGHWATER ethanol plant located at Lamberton Minnesota having a nameplate or nominal capacity of about fifty-five to sixty (55-60) million gallons of ethanol per year.  Plant shall not include the Butamax Unit unless specifically stated.

1.18    “Product” shall mean saleable corn oil made, used, or sold from use or operation of the Project Nemo Facility.  ***

1.19    “Project Nemo Facility” is also referred to herein as the “Butamax Unit” shall mean that technology and equipment (including the housing for the technology and equipment), but excluding any intellectual property, for feedstock processing and recovery of corn oil *** described in Exhibit 1.

1.20    “Samples” may be taken by or for BUTAMAX at BUTAMAX’s request in accordance with the Easement Agreement.  All samples and analysis will be owned by Butamax and are considered BUTAMAX Confidential Information hereunder. 

1.21    “Technical Information” means know-how, trade secrets, data, samples, software (including copyrights in said software), training material, engineering design, equipment specifications, and technology, including all technical information embodied in the LTP, the Butamax Unit and the Butamax Process, that is disclosed to HIGHWATER by or on behalf of BUTAMAX pursuant to this License Agreement.

Except as otherwise expressly provided, the following rules of interpretation shall apply to this License Agreement and the other Butamax Agreements: (a) the singular includes the plural and the plural includes the singular; (b) except where otherwise specified, the word “or” is not exclusive (thus, if a party “may do (i) or (ii),” then the party may do either or both, and the party is not limited to a mutually exclusive choice between the two alternatives); (c) a reference to a person includes their successors and permitted assigns; (d) accounting terms have the meanings given to them by GAAP, as applied by the accounting entity to which they refer; (e) the words “include,” “includes” and “including” are not limiting; (f) a reference in a document to an Article, Section, Exhibit, Schedule, Annex or Exhibit is to the Article, Section, Exhibit, Schedule, Annex or Exhibit of such document unless otherwise indicated; (g) Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by reference in such document; (h) references to any document, 

*** Confidential material redacted and filed separately with the Commission.

instrument or agreement (i) shall include all exhibits, schedules and other attachments thereto and (ii) means such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time to the extent permitted under the Butamax Agreements and in effect at any given time; (i) the words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document; and (j) references to “days” means calendar days, unless the term “business days” shall be used.

ARTICLE 2 - LICENSE GRANT 

2.1    Nonexclusive License   Subject to the terms hereof, as of the Effective Date and for the License Term, BUTAMAX hereby grants to HIGHWATER a limited, revocable, nonexclusive license under BUTAMAX Intellectual Property, to (i) use, demonstrate at BUTAMAX’s direction, and operate the Project Nemo Facility solely at the Plant, within the Field of Use; and (ii) make, use, offer or market for sale and sell Product only within the Field of Use. The BUTAMAX license granted herein is contingent upon the Parties’ execution of each of the Butamax Agreements.  

2.2    This license is non-sublicensable, non-transferable, and subject to the Security Agreement and shall apply (unless terminated prior to expiration and/or HIGHWATER is in breach of this or any Definitive Agreement) only while HIGHWATER is producing: 1) ethanol or ***

2.3    BUTAMAX is and shall remain the sole and absolute owner of the Technical Information, the LTP, all BUTAMAX Intellectual Property and BUTAMAX Confidential Information, including its technology and any improvements thereto, and including Improvements and Inventions as defined below.  

2.4    Improvements   Should BUTAMAX further develop or improve the BUTAMAX Intellectual Property (licensed hereunder) during the Payment Term, BUTAMAX will offer to HIGHWATER pursuant to a separate license agreement or by amendment to this License Agreement, without additional requirement for Payment, a nonexclusive license to use, limited to the Field of Use and the restrictions set forth in Section 2.1 and 2.2, (i) such improvements that are the result of activities at the Plant demonstrating the use and operation of the Butamax Unit; or (ii) such improvements developed as a result of activities by BUTAMAX or BUTAMAX Affiliate utilizing the Butamax Unit; in each case, to the extent such improvements or developments (a) may provide an increase in corn oil production or quality, and/or (b) reduction in operating costs and/or improvements to the Plant or Butamax Unit efficiencies, (excluding any equipment to be provided by a third party, third party intellectual property, or any potential enzyme development activity by a third party or other party not under BUTAMAX’s control) (“Improvements”).  BUTAMAX’s obligation to offer Improvements for license as provided in this paragraph 2.4, is only in effect while HIGHWATER is in compliance with all the terms and conditions of the Definitive Agreements. Any costs or fees associated with implementing any Improvements are HIGHWATER’s sole obligation. Any Improvements that have or may have third party or Affiliate encumbrances, or that are not otherwise Controlled by BUTAMAX, are specifically excluded from this paragraph. No other right or license will be provided without further agreement and payment. 

2.5    Inventions   All improvements, inventions, plans, designs, writings, reports, processes, ideas, know-how (including operating know-how), engineering design and discoveries made, conceived, suggested or otherwise originated or acquired by or on behalf of HIGHWATER or any of its employees, representatives, contractors, agents, Affiliate collaborators and any HIGHWATER member of the Steering Team (as defined in the Easement Agreement)  (including any such individuals working for HIGHWATER and with BUTAMAX) in connection with the support, use and operation of the Project Nemo Facility, or its exercise of any other rights granted, or performance of any obligations, hereunder or in connection with the Definitive 

Agreements, (“Inventions”) shall be the sole and absolute property of BUTAMAX.  HIGHWATER shall, and shall cause all those working on behalf of HIGHWATER to, make full disclosure, by reports provided on at least a quarterly basis, to BUTAMAX of all such Inventions by its regular reporting of operation of the Project Nemo Facility. Such regular reporting will be pursuant to activities undertaken by the Steering Team established by the Parties in accordance with the Easement Agreement.  Without limiting the foregoing and for clarity, the Inventions shall include all intellectual property conceived of, developed and/or generated as a result of (i) any activities related to the easements granted in the Easement Agreement, including any improvements to any BUTAMAX technology or improvements to the Project Nemo Facility based on BUTAMAX technology or BUTAMAX information; and/or (ii) access to BUTAMAX Confidential Information, BUTAMAX Intellectual Property, the Butamax Unit, the Butamax Process, any Samples, testing, Trials (as defined in the Easement Agreement), any other BUTAMAX technology, and/or any improvements thereto.  

2.6    Assignment of Inventions   Further, HIGHWATER hereby grants, assigns and conveys to BUTAMAX, or its designee, HIGHWATER’s entire right, title and interest in and to each Invention (including any HIGHWATER invented improvements) and any intellectual property derived therefrom or otherwise related thereto, whether or not patentable, and shall, at all times during the term of this License Agreement and after the expiration or termination of this License Agreement cooperate and assist BUTAMAX in protecting and perfecting such rights as may be reasonably requested by BUTAMAX, at BUTAMAX’s expense. HIGHWATER shall require terms to be agreed by its employees and contractors to effectuate the requirements of this Section 2.  Such terms shall be agreed with BUTAMAX. HIGHWATER shall have the right to use all such Inventions as part of the license granted in this Section 2, so long as the license granted is in effect.

2.7    Patent Filing   HIGHWATER shall not file, without the prior express written consent of BUTAMAX, any patent applications directed to inventions resulting from activities covered by the licenses granted hereunder or its exercise of any rights or performance of any obligations hereunder. The remedy for breach of this paragraph shall be assignment to BUTAMAX of any patents that issue or grant from such unauthorized filings at HIGHWATER’s sole cost and expense and HIGHWATER hereby so assigns such patents to BUTAMAX.

2.8    Patent Prosecution   BUTAMAX shall control all patent prosecution and patent filing activities at its sole discretion and HIGHWATER shall cooperate in all respects with such intellectual property protection activities as reasonably requested by BUTAMAX, at BUTAMAX’s expense.  Notwithstanding the foregoing, BUTAMAX has no obligation to file or maintain any patents including Patents.  Any information in HIGHWATER’s possession which may support such patent filings will be provided to BUTAMAX by HIGHWATER with reasonable notice.  

2.9    Third Party Technology   BUTAMAX understands that HIGHWATER may wish to pursue implementing at the Plant, separate technology related to producing corn oil derived biodiesel.  The rights granted in this License Agreement may be modified by written agreement to facilitate HIGHWATER using corn oil produced from the Project Nemo Facility for biodiesel production so long as implementation of such technology would not, by BUTAMAX’s determination, adversely affect (i) any Payment owed to BUTAMAX under the Lease, (ii) potential implementation of BUTAMAX biobutanol technology, and/or (iii) BUTAMAX’s security interest in the Project Nemo Facility.  Should HIGHWATER implement such corn oil derived biodiesel technology, or any other technology in contravention of (i)-(iii) in this paragraph, BUTAMAX may terminate this License Agreement and remove the Project Nemo Facility at HIGHWATER’s expense.

Notwithstanding anything to the contrary in this License Agreement, any implementation by HIGHWATER of third party technology at its Plant, is specifically excluded from BUTAMAX’s representations and warranties with respect to the Project Nemo Facility, and BUTAMAX’s indemnification obligations set forth herein and in the other Definitive Agreements. Specifically, BUTAMAX makes no warranty nor has any indemnification obligations with respect to third party intellectual property OR TECHNOLOGY implemented AT THE PLANT and/or use of any corn oil produced at the Project Nemo Facility OR USING THE BUTAMAX PROCESS to make biodiesel. 

2.10    Rights by Implication   Neither Party has any rights or obligations under this License Agreement and nothing herein shall be construed to confer any rights upon a Party by implication, estoppel or otherwise with respect to the other Party’s technology or intellectual property, except as expressly stated herein or as expressly stated in Definitive Agreements. 

2.11    Patent Marking   Product information provided by HIGHWATER for any Products sold by HIGHWATER shall be labeled with an appropriate patent pending or other patent notice that pertains to BUTAMAX Intellectual Property, as provided and approved by BUTAMAX.  

ARTICLE 3 - TECHNICAL INFORMATION

3.1    Transmittal of Information   BUTAMAX or its designee shall transmit to HIGHWATER requisite written copies of information as reasonably practicable, including but not limited to Technical Information, including information provided in Exhibit 1 and information pertaining to the LTP, for operation and use of the Project Nemo Facility.  This Technical Information is considered BUTAMAX Confidential Information.  
    
3.2    Technical Services   Technical services for the Butamax Unit will be managed by the Steering Team in accordance with the Easement Agreement. Such services are to be provided exclusively by BUTAMAX or BUTAMAX designee except where BUTAMAX has given its express written consent to HIGHWATER to solicit technical services from a third party. These BUTAMAX resources will support optimization and problem-solving as needed for the Project Nemo Facility.  Terms pertaining to such technical services and the process for requesting services by HIGHWATER are provided in Exhibit 2. Where the services are provided post-Commercial Validation (as defined in the Easement Agreement) by an equipment manufacturer or by a BUTAMAX contractor, such services shall be at HIGHWATER’s expense.  HIGHWATER shall at all times remain responsible for all operations and maintenance of the Plant, including control of the Plant distributed control system (“DCS”) and including during BUTAMAX provision of technical services.  Such responsibility shall be consistent with any written equipment or materials warranties passed from BUTAMAX to HIGHWATER from time to time, otherwise HIGHWATER assumes risk of invalidating such warranties.  

3.3    Visits and Demonstration   From time to time, BUTAMAX employees and representatives shall be entitled to inspect the Plant, interview HIGHWATER employees operating the Project Nemo Facility, and review any HIGHWATER documents to ensure compliance with the terms herein. 

ARTICLE 4 - TRADEMARK RIGHTS 

No express or implied right is granted by this License Agreement to use any registered or unregistered trademark, trade name, service mark or commercial symbol of BUTAMAX on or in connection with the sale, distribution, marketing and promotion of any Product hereunder, unless required by BUTAMAX in writing.  At BUTAMAX’s request, HIGHWATER will support BUTAMAX licensing branding strategy.

ARTICLE 5 - CONFIDENTIALITY AND NON-USE

5.1    Confidentiality   HIGHWATER shall keep confidential all BUTAMAX Confidential Information disclosed pursuant to this License Agreement and shall disclose such Confidential Information only to those of its employees to whom it is necessary to so disclose for the purpose contemplated by this License Agreement.  Such disclosure shall be limited to such employees who have previously agreed in writing to be bound by terms no less strict than the terms of this License Agreement.  Except for disclosure by BUTAMAX (a) for purposes of protecting and defending its intellectual property rights or for other legal requirements, (b) enforcing its rights under this License Agreement, or (c) in connection with a potential or actual sale of the business or assets related to this License Agreement, neither Party shall publicly disclose any of the terms and conditions of this License Agreement without the prior written consent of the other Party.  

5.2    HIGHWATER Disclosure   Notwithstanding the foregoing Section 5.1, HIGHWATER may disclose the terms and conditions of this License Agreement to the extent reasonably necessary in connection with (a) the sale of HIGHWATER’s entire ownership interest in the Facility to a third party (to the extent permitted herein and/or in the other Definitive Agreements) which third party enters into an agreement with BUTAMAX assuming all of HIGHWATER’s obligations, including the license restrictions and protections of BUTAMAX Intellectual Property and BUTAMAX Confidential Information, under this License Agreement and under the BUTAMAX Agreements; provided that BUTAMAX grants prior written consent (not to be unreasonably withheld) and, in no event may such disclosure be to a Competitor, and (b) any legal reporting requirements to the United States Securities and Exchange Commission ("SEC") or any other relevant securities commission or exchange (including NASDAQ); provided that HIGHWATER shall request, and use commercially reasonable efforts to obtain, confidential treatment of the terms permitted to be redacted under applicable law and shall provide BUTAMAX with a reasonable opportunity to review any and all filings with the SEC (and other relevant securities commissions and exchanges) related hereto prior to submission thereof, and shall give due consideration to any reasonable and timely comments provided by BUTAMAX.  

5.3    Non-use   HIGHWATER shall not use BUTAMAX Confidential Information, including Confidential Information learned from BUTAMAX or from operation and use of the Project Nemo Facility, except for the purpose of exercising its rights and carrying out its obligations under this License Agreement.

5.4    Term of Confidentiality   The obligations imposed by this Article shall survive for ten (10) years after the Effective Date of this License Agreement, except for in the case of Technical Information, in such case, with respect to trade secrets the obligation remains until such information is publicly available through no fault of HIGHWATER.

5.5     Liability for Disclosure   Subject to Section 8.3, should HIGHWATER either directly or indirectly, disclose or use any BUTAMAX Confidential Information contrary to the provisions of this License Agreement, it shall be responsible for direct financial damage to Butamax and all other Liabilities that arise out of, or relate to, such disclosure or use (including any disclosure of Technical Information to a Competitor).  

ARTICLE 6 - PAYMENTS

6.1    License payments   In consideration for the grant of rights under the BUTAMAX Intellectual Property, HIGHWATER shall pay to BUTAMAX the Payments provided in Article 4 and Exhibit 2 of the Lease executed concurrently herewith.

6.2    Taxes   To the extent HIGHWATER is required by any applicable income tax law to withhold a portion of the payment owing to BUTAMAX hereunder, BUTAMAX shall accept the resulting net payment as due performance under this License Agreement.  HIGHWATER shall, however, take all necessary steps to secure the benefit of any reduction of withholding tax rate available under treaty and shall promptly provide BUTAMAX with receipt for any tax withheld. 

ARTICLE 7 - REPORTS, PAYMENT INSTRUCTIONS, AND RECORDS

7.1    Reports and Records   Reporting obligations are provided in the Lease and Easement Agreement and incorporated by reference herein.  Breach of such requirements is a breach of this License Agreement. 
    
ARTICLE 8 -- WARRANTIES AND LIABILITIES

8.1    BUTAMAX Warranty   SUBJECT TO THE TERMS HEREOF, BUTAMAX WARRANTS THAT IT HAS THE RIGHT TO GRANT THE LICENSE EXTENDED BY ARTICLE 2.  WHILE IT IS EXPECTED THAT THE INTELLECTUAL PROPERTY PROVIDED BY BUTAMAX UNDER THIS LICENSE AGREEMENT WILL BE USEFUL TO HIGHWATER TO MAKE PRODUCT ON A COMMERCIAL SCALE, BUTAMAX DOES NOT WARRANT OR GUARANTEE THAT SUCH RESULTS WILL BE OBTAINED, EXCEPT TO THE EXTENT PROVIDED IN THE LEASE WITH RESPECT TO THE BUTAMAX UNIT PERFORMANCE TEST.  BUTAMAX SHALL NOT BE LIABLE TO HIGHWATER BECAUSE OF ANY FAILURE IN OPERATIONS. THRE ARE NO OTHER WARRANTIES, EXPRESS OR IMPLIED OTHER THAN THOSE EXPRESSLY EXTENDED IN THIS ARTICLE 8 AND BUTAMAX HEREBY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF TITLE, FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, VALIDITY AND ENFORCEABILITY OF ANY OF THE BUTAMAX PATENTS LICENSED HEREUNDER AND NONINFRINGEMENT OF THE BUTAMAX PATENTS BY A THIRD PARTY.  BUTAMAX REPRESENTS THAT, AND SUBJECT TO SECTION 8.5, IT HAS PROVIDED AN INDEMNITY THAT TO ITS KNOWLEDGE AS OF THE EFFECTIVE DATE, (1) THE INSTALLATION AND USE OF THE PROJECT NEMO FACILITY FOR PRODUCTION OF SALEABLE CORN OIL WILL NOT INFRINGE ANY KNOWN, VALID, GRANTED U.S. PATENTS OF ANY THIRD PARTY (INCLUDING ANY VALID, U.S. GRANTED PATENTS ONED BY GREENSHIFT), AND (2) SUBJECT TO RECEIPT OF REQUIRED PERMITS AND CONSENTS, THAT THE INSTALLATION AND OPERATION OF THE PROJECT NEMO FACILITY FOR THE INTENDED PURPOSE WILL CONFORM WITH ALL APPLICALBE LAWS.  ANY TECHNICAL INFORMATION PROVIDED BY BUTAMAX OR ITS DESIGNEE IS MADE AVAILABLE ON AN "AS IS" BASIS, WITHOUT WARRANTY WITH RESPECT TO COMPLETENESS, COMPLIANCE WITH REGULATORY STANDARDS OR REGULATIONS OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER KIND OF WARRANTY WHETHER EXPRESS OR IMPLIED. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, HIGHWATER WILL NOT HAVE ANY CLAIM AGAINST BUTAMAX FOR LOST PROFITS.

8.2    HIGHWATER Warranty   HIGHWATER REPRESENTS AND WARRANTS TO BUTAMAX THAT HIGHWATER HAS THE NECESSARY AUTHORIZATION TO ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER THIS LICENSE AGREEMENT AND THE DEFINITIVE AGREEMENTS, AND THAT THE PERFORMANCE OF ITS OBLIGATIONS WILL NOT CONFLICT WITH ITS OBLIGATIONS TO ANY THIRD PARTY.  WITHOUT LIMITED BUTAMAX'S REMEDIES OR CUASES OF ACTION FOR THE SAME, HIGHWATER COVENATNS NOT TO INFRINGE 

BUTAMNAX'S INTELLECTUAL PROPERTY LICENSED HEREUNDER BY EXCEEDING OR OTHERWISE VIOLATING THE SCOPE OF LICENSE GRANTED HEREIN.  HIGHWATER REPRESENTS AND WARRANTS THAT IT IS NOT SUBJECT TO ANY TERMS AND CONDITIONS THAT WOULD PREVENT IMPLEMENTATION OF BUTAMAX'S BIOBUTANOL TECHNOLOGY AND THAT IT WILL NOT ENTER SUCH TERMS WITHOUT BUTAMAX'S EXPRESS WRITTEN CONSENT.  HIGHWATER FURTHER REPRESENTS THAT IT WILL USE BEST EFFORTS TO MODIFY ANY LOAN AGREEMENT OR OTHERWISE SECURE ANY NEEDED PERMISSIONS TO IMPLEMENT BUTAMAX BIOBUTANOL TECHNOLOGY ON A TIMELY BASIS (SUCH THAT ANY BIOBUTANOL PROJECT WILL NOT BE DELAYED FOR FAILURE TO ACQUIRE REQUISITE PERMISSIONS AND/OR APPROVALS).

8.3    Incidental/Consequential Damages   EXCEPT FOR (A) A BREACH OF ARTICLE 5  WITH RESPECT TO BUTAMAX TRADE SECRETS, (B) A BREACH WITH RESPECT TO ARTICLE 5 BASED ON ANY OTHER BUTAMAX CONFIDENTIAL INFORMATION (PROVIDED THAT SUCH BREACH WAS THE RESULT OF BAD FAITH, NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD) OR (C) ANY AMOUNTS PAYABLE TO A THIRD PARTY PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS ARISING UNDER ARTICLE 8.5, NEITHER PARTY SHALL BE RESPONSIBLE TO THE OTHER FOR SPECIAL, INCIDENTAL, EXEMPLARY, OR OTHER INDIRECT DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR LOSS OF USE DAMAGES) OR CONSEQUENTIAL DAMAGES THAT MAY BE INCURRED PURSUANT TO THIS LICENSE AGREEMENT OR PERFORMANCE HEREUNDER. 

8.4    Health and Safety Hazards   WHILE IT IS BELIEVED THAT HTE ORIDINARY AND ANTICIPATED USE OF HTE LICENSED INTELLECTUAL PROPERTY, AND PRODUCTS MADE THEREBY, WILL NOT RESULT IN SAFETY OR HEALTH HAZARDS TO WORKERS OR TO PURCHASERS OF SUCH PRODUCTS IF USED, OEPRATED, STORED, LOADED AND/OR TRANSPORTED CORRECTLY, BUTAMAX DOES NOT WARRANTE OR GUARANTEE AGAINST SUCH HEALTH OR SAFETY HAZARDS  (AND EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES AND GUARANTEES). FURTHER BUTAMAX DISCLAIMS ALL REPRESENTATIONS, WARRANTIES AND INDEMNITIES OWED FOR ANY ACTION BY HIGHWATER TO USE THE BUTAMAX UNIT FOR ANY PURPOSE OTHER THAN AS PROVIDED HEREIN OR IF HIGHWATER OPERATIONS THE BUTAMAX UNIT CONTRARY TO DIRECTION PROVIDED BY BUTAMAX.

8.5    Indemnities   HIGHWATER HAS SOLE RESPONSIBILITY FOR THE PLANT (INCLUDING OPERATION THEREOF) AND SALE OF ANY PRODUCTS PURSUANT TO THIS LICENSE AGREEMENT.  ACCORDINGLY, TO THE EXTENT PERMITTED BY THE LAW OF THE STATE OF DELAWARE, UNITED STATES OF AMERICA, HIGHWATER SHALL INDEMNIFY, DEFEND, AND HOLD BUTAMAX AND ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, CONTRACTORS, AND CONSULTANTS, (COLLECTIVELY, “BUTAMAX INDEMNITEES”) HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, SUITS, OBLIGATIONS, CAUSES OF ACTION, LIABILITY, LOSSES, FINES, COSTS AND DAMAGES (INCLUDING, WITHOUT LIMITATION, ATTORNEY FEES AND COURT COSTS), INJURIES TO PERSOMS (INCLUDING DEATH) OR PROPERTY (INCLUDING, WITHOUT LIMITATION, LOSS OF USE), PRODUCT LIABILITY CLAIMS (COLLECTIVELY, "LIABILITIES"), WHATEVER THE CAUSE MAY BE, BASED UPON, ARISING OUT OF, OR RELATED TO (A) THE ACTS OR OMISSIONS OF HIGHWATER AND ITS AFFILIATES AND/OR ANY OF THEIR EMPLOYEES, OFFICERS, EMPLOYEES, OFFICERS, AND CONSULTANTS OR OTHER PERSONS ACTION ON THEIR BEHALF OR UNDER THEIR CONTROL (“HIGHWATER PARTIES”), IN CONNECTION WITH HIGHWATER'S EXECUTION, DELIVERY AND PERFORMANCE OF, OR FAILURE TO PERFORM  UNDER, THIS LICENSE AGREEMENT, 

*** Confidential material redacted and filed separately with the Commission.

INCLUDING INFRINGEMENT, MISAPPROPRIATION OR OTHER VIOLATION OF ANY INTELLECTUAL PROPERTY (EXCEPT TO THE EXTENT THAT BUTAMAX IS RESPONSIBLE FOR INDEMNIFYING the HIGHWATER INDEMNITEES PURSUANT TO THIS SECTION FOR SUCH INFRINGEMENT), (B) FRAUD, NEGLIGENCE, RECKLESSNESS OR WILLFUL MISCONDUCT OF ANY OF THE HIGHWATER PARTIES IN PERFORMING ANY ACTIVITY OR MAKING ANY OMISSION, IN CONNECTION WITH THIS LICENSE AGREEMENT, (C) BREACH BY HIGHWATER OF ANY PROVISION OF THIS LICENSE AGREEMENT, AND (D) IMPLEMENTATION OF ANY THIRD PARTY TECHNOLOGY OR  INTELLECTUAL PROPERTY AT THE PLANT; EXCEPT TO THE EXTENT THAT SUCH LIABILITIES ARE ESTABLISHED IN A COURT OF LAW OR ARBITRATION TO HAVE BEEN CAUSED SOLELY AND DIRECTLY BY THE FRAUD, GROSS NEGLIGENCE OR WILLFUL MNISCONDUCT, OR BREACH OF THIS LICENSE AGREEMENT, ON THE PART OR ON BEHALF OF BUTAMAX OR ANY OF ITS AFFILIATES.

DURING THE LICENSE TERM BUTAMAX AGREES TO IDEMNIFY AND HOLD HIGHWATER AND ITS AFFILITES, OFFICERS, DIRECTORS, EMPLOYEES, CONTRACTORS, AND CONSULTANTS, (COLLECTIVELY, "HIGHWATER INDEMNITEES") HARMLESS FROM ANY AND ALL LIABILITIES PERTAINING TO *** (B), SUBJECT TO THE RECEIPT OF REQUIRED PERMITS AND CONSENTS, THAT THE INSTALLATION AND OPERATION OF THE PROJECT NEMO FACILITY FOR THE INTENDED PURPOSES WILL CONFORM WITH ALL APPLICABLE LAWS, OR (2) BREACH BY BUTAMAX OF ANY PROVISION OF THIS LICENSE AGREEMENT, EXCEPT TO THE EXTENT THAT SUCH LIABILITIES ARE ESTABLISHED IN A COURT OF LAW OR ARBITRATION TO HAVE BEEN CAUSED SOLELY AND DIRECTLY BY THE FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR BREACH OF THIS LICENSE AGREEMENT, ON THE PART OR BEHALF OF HIGHWATER OR ANY OF ITS AFFILIATES.

FURTHER, IN THE EVENT THAT BUTAMAX HAS AN OBLIGATION TO INDEMNIFY AND/OR HOLD HARMLESS HIGHWATER IN ACCORDANCE WITH 1(A) OF THE FOREGOING PARAGRAPH, UPON RECEIVING WRITTEN NOTICE FROM BUTAMAX, THE PARTIES SHALL MEET TO DISCUSS THE ACTIVITIES GIVING RISE TO SUCH INDEMNIFICATION AND SHALL REASONABLY COOPERATE TO MITIGATE ANY RELATED DAMAGES.  FOLLOWING SUCH MEETING, BUTAMAX MAY REQUIRED AT ITS SOLE DISCRETION, HIGHWATER TO (A) MAKE MODIFICATIONS TO THE EXTENT THAT SUCH MODIFICATIONS DO NOT MATERIALLY ADVERSELY AFFECT THE APPLICABLE PROCESS AND/OR (B) CEASE USE AND OPERATIONG OF THE PROJECT NEMO FACILITY, AND IN THE EVENT OF THE FOREGOING (B), ANY AND ALL HIGHWATER PAYMENT OBLIGATION AS PROVIDED IN THE DEFINITIVE AGREEMENTS SHALL IMMEDIATELY BE SUSPENDED, UNTIL NOTIFIED BY BUATMAX ***
    
If a BUTAMAX Indemnitee or HIGHWATER Indemnitee (each, an “Indemnitee”) shall receive notice or otherwise learn of the assertion by a third party of any claim or of the commencement by any such third party of any action with respect to which HIGHWATER or BUTAMAX (each, an “Indemnifying Party”) may be obligated to provide indemnification to such Indemnitee pursuant to this License Agreement (collectively, a "Third Party Claim"), such Indemnitee shall give such Indemnifying Party written notice thereof as promptly as practicable (and in any event within forty-five (45) days) after becoming aware of such Third Party Claim, describing the Third Party Claim in reasonable detail.  Notwithstanding the foregoing, failure to give such notice shall not relieve the Indemnifying Party of its obligations under this Section 8.5, except and only to the extent that such Indemnifying Party is materially prejudiced by such failure.   An Indemnifying Party may elect (but shall not be required) to defend, at such Indemnifying Party's own expense and by such Indemnifying Party's own counsel (which counsel shall be reasonably satisfactory to the Indemnitee), any Third Party Claim.  Within forty-five (45) days after the receipt of notice from an Indemnitee

in accordance with this Section, the Indemnifying Party shall notify the Indemnitee of such election, which election shall specify any reservations or exceptions to its defense. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnitee; provided, however, in the event that (a) the Indemnifying Party has elected to assume the defense of the Third Party Claim but has specified, and continues to assert, any reservations or exceptions in such notice or (b) the Third Party Claim involves injunctive or equitable relief, then, in any such case, the reasonable fees and expenses of one separate counsel for all Indemnitees shall be borne by the Indemnifying Party.  If an Indemnifying Party elects not to assume responsibility for defending a Third Party Claim, or fails to notify an Indemnitee of its election as provided in this Section, such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party.  The indemnified Party shall reasonably cooperate with the Indemnifying Party in connection with a Third Party Claim.
    
Notwithstanding the foregoing, during the License Term, if any Third Party Claim involves an allegation of infringement of any patent held by said third party in connection with the Project Nemo Facility, HIGHWATER will promptly give notice to BUTAMAX of said claim or litigation and BUTAMAX, at the sole cost and expense of BUTAMAX, and under BUTAMAX’s sole authority and control, will have the sole right to defend such Third Party Claim (subject to HIGHWATER'S indemnification obligations set forth in this Section 8.5).

ARTICLE 9 - PATENT MAINTENANCE AND INFRINGEMENT

9.1     Patent Maintenance   Nothing herein shall be construed as obligating BUTAMAX to file or prosecute any patent application or to maintain any Patent.

9.2    Third Party Infringement   Should HIGHWATER become aware of any third party infringement, misappropriation or other violation of BUTAMAX Intellectual Property as it pertains to the license granted herein, HIGHWATER shall timely notify BUTAMAX and BUTAMAX may take any action, or take no action at all, at its sole discretion.  For clarity, BUTAMAX shall retain all amounts recovered in any such action or settlement thereof.

ARTICLE 10 - GOVERNMENTAL CONTROL

10.1    Governmental Prohibition   Neither Party shall be required to furnish information over governmental prohibition or objection and BUTAMAX may supply any information that upon advice of counsel is necessary or helpful for prosecution of any court or patent office proceeding.

10.2    Governmental Regulation   All activities of BUTAMAX and HIGHWATER pursuant to this License Agreement shall comply with all applicable laws, rules and regulations including, without limitation, the export control regulations of the United States. HIGHWATER shall use its reasonable best efforts to obtain necessary licenses, permits and approvals with respect to its obligations under this License Agreement.    HIGHWATER will comply with all legal requirements, including but not limited to, all applicable laws, statutes, regulations, and treaties relating to the marketing, sale, storage, shipment, and distribution of Products. 

ARTICLE 11 - FORCE MAJEURE 

Neither Party shall be responsible to the other Party for damages or breach of this License Agreement, or shall be subject to termination of this License Agreement by the other Party, for delay or failure in performance of any of the obligations imposed by this License Agreement (other than to make payment of any money due pursuant to this License Agreement or any of the other Definitive Agreements), if the delay or failure is occasioned by a cause beyond the reasonable control of (and without the fault or negligence of), that Party, such as fire, flood, explosion, lightning, windstorm, earthquake, subsidence of soil, failure of machinery or equipment or supply of materials, court order or governmental interference, riot or war.  The Party seeking such relief shall (a) take all reasonable steps to overcome or minimize such delay or failure in performance as promptly as is practical (b) promptly notify the other Party of the nature and particulars thereof and expected duration of the delay or failure of performance, and (c) promptly notify the other Party when the cause beyond its reasonable control is no longer causing delay or failure in performance.  Notwithstanding the aforesaid, if either Party fails to fulfill any of its material obligations under this License Agreement in accordance with the foregoing sentence for a period of at least three (3) months, the other Party may terminate the License Agreement upon thirty (30) days advance written notice of termination, subject to the dispute resolution terms provided in Article 13.  For clarity, the terminating Party shall have all rights and remedies available at law or in equity or otherwise arising from such breach.

ARTICLE 12 - APPLICABLE LAW

This License Agreement is acknowledged to have been made in and shall be governed, interpreted and construed in accordance with the laws of the State of Delaware, United States of America, excluding its conflicts of laws provisions; provided that all questions concerning patent applications and patents shall be decided in accordance with the federal laws of United States of America, in each instance without regard to conflict of laws principles.

ARTICLE 13 - DISPUTE RESOLUTION

(a)     If any dispute arising out of or relating to this License Agreement is not settled promptly in the ordinary course of business, the Parties shall seek to resolve such dispute, first, by negotiating promptly with each other in good faith in face-to-face negotiations. These face-to-face negotiations shall be conducted by a designated senior management representative of each Party. If the Parties are unable to resolve the dispute between them within twenty (20) business days (or such period as the Parties shall otherwise agree in writing) through these face-to-face negotiations, then any such disputes shall be resolved in the manner set forth in subsection (b) below.

(b)    Any dispute, controversy or claim arising out of or relating to this License Agreement, including the breach, termination or validity thereof shall be finally resolved by arbitration in accordance with the Commercial Rules of the American Arbitration Association (the “AAA”) then in effect by three arbitrators of whom each Party shall appoint one arbitrator which arbitrators shall jointly appoint the third arbitrator. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof.  The place of arbitration shall be Minneapolis, Minnesota. Recognizing the importance to the Parties of a quick resolution of any dispute, the Parties shall provide such information as will permit the arbitration to proceed expeditiously and shall join in asking the arbitrators to schedule the arbitration for a date no later than three months after appointment of the arbitrators. The Parties shall join in requesting that such arbitration be conducted in a hearing not to exceed five (5) consecutive business days. Further, the arbitrators are expressly authorized to award such interim measures, including, but not limited to injunctive relief, that they deem necessary upon the application of either Party supported by affidavits.

(c)    In the event the arbitrators have determined that a breach of this License Agreement or that the dispute otherwise justifies the award of relief or damages, the arbitrators shall be expressly authorized to grant such legal, equitable and/or other relief as they deem appropriate, including specific performance, injunctive relief and monetary damages.  Notwithstanding the foregoing, within 30 days of receipt of any award, any Party may notify the AAA of an intention to appeal to a second arbitral tribunal, constituted in the same manner as the initial tribunal, and the appeal tribunal shall be entitled to adopt the initial award as its own, modify the initial award or substitute its own award for the initial award, provided that the appeal tribunal shall not modify or replace the initial award except for clear errors of law or because of clear and convincing factual errors. The decision of the arbitral panel, or if an appeal is made, the appeal tribunal shall be final and binding, and judgment may be entered by a court having jurisdiction thereof.

(d)    Prior to the appointment of the arbitral tribunal, either Party may seek injunctive relief from any court of competent jurisdiction in order to enforce compliance with the provisions of this Article 13 or otherwise in aid of arbitration or to maintain the status quo or prevent irreparable harm in aid of arbitration.  The arbitrators shall have full authority to order the Parties to request that a court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any Party to respect the arbitrators' orders to that effect.  The Parties hereby submit to the non-exclusive jurisdiction of the federal and state courts located in Minnesota and Delaware for the purposes set forth in this Section and to enforce any arbitration award rendered by the arbitrators.

(e)     All offers, promises, communications, statements and actions during the course of any informal dispute resolution process, and any non-binding mediation or arbitration, by any Party or individual:  (1) are confidential, privileged and may not be disclosed (including by any mediator); and (2) are inadmissible, are not discoverable and may not be used (or referred to) for any purpose, including impeachment of any other testimony in an arbitration, judicial, administrative or regulatory proceeding; (3) stays all statutory or contractual limitations that limit a Party’s right to litigate.

(f)     All mediation or arbitration proceedings pursuant to this Article 13, and awards made pursuant to such proceedings, shall be kept confidential by the Parties, except as may be necessary for a Party to exercise its rights to appeal a decision of an arbitral panel to an appeal tribunal or to have a court enter judgment based on the arbitration.

(g)      The Parties may agree to private arbitration and all terms in this Section shall apply to such private arbitration.  

ARTICLE 14 - TERMINATION

14.1    Normal Termination Date   This License Agreement, unless earlier terminated as provided hereinafter, shall automatically terminate on the tenth (10th) anniversary of its Effective Date or upon the expiration of the last to expire of the Patents licensed hereunder, whichever date shall last occur.  All licenses and rights granted hereunder pursuant to Section 2 shall be fully paid-up and vest upon termination pursuant to Article 14.1, assuming compliance with all Payment terms provided in the Lease.

14.2    Termination as a Result of Material Breach   In the event of material breach of this License Agreement or any Definitive Agreement, the Party not in breach may provide notice thereof to the Party in breach.  The Party in breach shall have a sixty (60) day period, after receiving said notice, to correct the breach.  If not corrected during said sixty (60) day period, the Party not in breach may terminate this License Agreement, and any Definitive Agreement by sending written termination notice to the Party in breach.  Failure to make any Payment when due and violation of either Article 6 or Article 3 by HIGHWATER shall 

be deemed to constitute a material breach of this License Agreement. Termination shall be effective upon receipt of said notice and is cumulative to other rights and remedies available at law or in equity or otherwise that the terminating Party may have arising from the breach. BUTAMAX may terminate this License Agreement and any Definitive Agreement automatically as provided below.  
14.3    Potential Termination for Events of Default   Should HIGHWATER undergo any Event of Default, or should HIGHWATER (1) become insolvent or unable to pay its debts as they mature, or (2) make an assignment for the benefit of creditors, or (3) permit or procure the appointment of a receiver, trustee, or similar party for all or substantially all of its assets related to this License Agreement or that are provided to HIGHWATER pursuant to the terms hereof, or (4) become the subject of, or be authorized to commence (whether by its board of directors or such other person or entity having authority to direct HIGHWATER), any bankruptcy, insolvency receivership, reorganization or similar proceeding by or against HIGHWATER, or (5) experience an Event of Default as defined in the Technology Demonstration Risk Reduction Agreement, or (6) the institution of any reorganization, restructuring, arrangement, or other readjustment of debt plan of HIGHWATER not involving the Bankruptcy Code, or (7) any corporate action taken by the board of directors of HIGHWATER or such other Person having authority to direct HIGHWATER in furtherance of any of the foregoing (1) through (6); then BUTAMAX may terminate this License Agreement (including the licenses granted to HIGHWATER herein) immediately upon being informed of such events.  Should HIGHWATER cure within thirty (30) days, subject to the terms of the Security and Technology Risk Reduction Agreements, BUTAMAX will reinstate the licenses granted herein. All of BUTAMAX's rights and remedies for such breaches or other actions are cumulative to all other rights and remedies available at law, in equity or otherwise, and may be exercised concurrently or separately.

14.4     Termination for Patent Challenge 
(a)    BUTAMAX may terminate this License Agreement and the licenses granted hereunder upon thirty (30) days prior written notice in the event that HIGHWATER or any of its Affiliates initiates a challenge regarding or otherwise challenges the enforceability or validity of any BUTAMAX Intellectual Property in any judicial or administrative proceeding, or assists in any way in any such challenge (including by providing funding) of the enforceability or validity of any BUTAMAX Intellectual Property, and does not terminate, or cause the applicable third party to terminate, such challenge within such thirty (30) day period.

(b)    If HIGHWATER decides to challenge the validity or enforceability of any BUTAMAX Intellectual Property, HIGHWATER covenants that it will give BUTAMAX at least ninety (90) days’ notice thereof prior to commencement of a proceeding that it initiates, controls, or funds in whole or in part or in which HIGHWATER assists. Such notice shall identify all prior art that HIGHWATER intends to rely upon in such challenge.  Notwithstanding anything to the contrary herein, failure to comply with any part of this subsection 14.4(b) shall result in automatic termination of this License Agreement.  Without limiting the foregoing, HIGHWATER shall not be entitled to recover fees payable, if any, under the Definitive Agreement during the course of a legal challenge or contest to the validity, enforceability or priority of any BUTAMAX Intellectual Property, even if such challenge or contest should be successful. 

14.5    Termination in accordance with other Definitive Agreements   
This License Agreement shall terminate in accordance with the terms of the other Definitive Agreements to the extent, and subject to the terms, set forth therein.  

14.7    Effect of Early Termination on Confidential Information
Following termination of the License Agreement pursuant to Article 14.2, 14.3, 14.4, or 14.5, HIGHWATER shall thereafter cease to use BUTAMAX Confidential Information disclosed to HIGHWATER and information derived there from.   All BUTAMAX Confidential Information and derivative information shall be returned to BUTAMAX, or be destroyed if BUTAMAX provides written authorization, within thirty 

(30) days following termination. Following termination of the License Agreement pursuant to Article 14.2, 14.3, 14.4, or 14.5, HIGHWATER shall thereafter cease to use BUTAMAX Intellectual Property, Improvements (as applicable) and/or Inventions.   Further immediately upon termination:
(a)    HIGHWATER shall immediately stop operating the Project Nemo Facility and stop selling Products;
(b)     HIGHWATER shall confirm steps taken to assure (a) in writing within sixty (60) days of the effective date of termination of this License Agreement; and 
(c)     HIGHWATER shall provide a detailed final report to BUTAMAX describing the previous years’ operating performance up to date immediately preceding action in (a) of the Project Nemo Facility and any other details requested by BUTAMAX, including the confirmation provided in (b).

14.8    Continuing Obligations Following Termination of this License Agreement by either Party shall not affect any rights accrued or obligations incurred pursuant to this License Agreement prior to the effective date of such termination to (a) abide by the obligations of non-use and confidentiality as provided in Article 5; (b) make payment of any sum due to BUTAMAX pursuant to Article 6, including for payment for the sale or transfer of any quantity of Product manufactured prior to termination of this License Agreement but sold or transferred thereafter; and, (c) furnish written reports and keep adequate records as provided in Article 7.   In addition, the following provisions, together with any other provisions that expressly specify that they survive, shall survive expiration or termination of this License Agreement: Articles and Sections 1, 2.2, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 4, 5 (in accordance with such Section), 8, 10.1, 12, 13, 14.7, 15 and 16. 

ARTICLE 15 - ASSIGNABILITY  

For clarity, the rights, benefits, and obligations of HIGHWATER under (or relating to) this License Agreement (including any licenses or sublicenses granted pursuant to this License Agreement) are personal to HIGHWATER. HIGHWATER shall not assign (including in a bankruptcy or similar proceeding) or assume in a bankruptcy or similar proceeding this License Agreement or any rights, benefits, or obligations under or relating to this License Agreement, in each case whether by operation of law or otherwise, this License Agreement without the prior written consent of BUTAMAX, which BUTAMAX may withhold in its sole discretion.  Any attempted assignment or assumption without the prior written consent of BUTAMAX or that otherwise contravenes the terms of this License Agreement shall be void ab initio and of no force or effect; provided that, without limiting any provision of this License Agreement, in the event of an attempted assignment or assumption in contravention of this Section 15, this License Agreement (and any licenses or sublicenses granted hereunder) shall be subject to automatic termination.

ARTICLE 16 - MISCELLANEOUS   

16.1    Entire Understanding   This License Agreement and the Definitive Agreements constitute the entire agreement between the Parties on the subject matter hereof and this License Agreement shall not be amended, altered or changed except by a further writing signed by the Parties hereto.  Any prior representations, warranties or agreements between the Parties, whether written or oral, pertaining to license of the Project Nemo Facility that are not contained in this License Agreement are superseded by this License Agreement.

16.2     Intentionally Left Blank 

16.3    Relationship of the Parties   Nothing herein contained shall be deemed to create a joint venture, agency or partnership relationship between the Parties hereto.  Neither Party shall have any power 

to enter into any contracts or commitments in the name of, or on behalf of, the other Party, or to bind the other Party in any respect.

16.4     Bankruptcy Code 365(n)   The Parties acknowledge and agree that this License Agreement is for the purposes of Section 365(n) of the United States Bankruptcy Code a license of rights to “intellectual property” as defined under Section 101(56) of the U.S. Bankruptcy Code. Except as expressly permitted by this License Agreement, this License Agreement cannot be assumed or assumed and assigned by a trustee or debtor-in-possession in bankruptcy of HIGHWATER as set forth in Section 365(c)(1) of the United States Bankruptcy Code or any similar provisions of state or federal law, provided the party assuming or the party to whom such is assigned is not a Competitor as defined in the Agreements and executes an Agreement confirming that it is bound to all the terms and provisions of the Agreements by and between Highwater and Butamax.

16.5    Reservation of Rights   Except as is specifically provided herein, nothing in this License Agreement or any Definitive Agreement shall be construed to limit the rights of BUTAMAX or its Affiliates in any way. It is specifically understood by the Parties that BUTAMAX reserves the right itself or through its Affiliates to practice any BUTAMAX Intellectual Property and to license, assign or otherwise transfer such rights to other parties for any purpose whatsoever. Nothing in this License Agreement or any Definitive Agreement shall be construed as obligating BUTAMAX to grant any additional rights to any existing or future BUTAMAX Intellectual Property to HIGHWATER beyond the scope of the license grant provided herein.

16.6    Severability   In case any one or more of the provisions contained in this License Agreement shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.  The Parties shall consult and use their best efforts to agree upon a valid and enforceable provision that shall be a reasonable substitute for such invalid or unenforceable provision in light of the intent of the License Agreement.

16.7    Amendment; Waiver   Any provision of this License Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Parties hereto, or in the case of a waiver, by the Party against whom the waiver is to be effective.  A waiver of any breach of any provision of this License Agreement shall not be construed as a continuing waiver of other breaches of the same or other provisions of this License Agreement.

16.8    Headings and Subheadings   The headings and subheadings in this License Agreement are included herein for ease of reference only and have no legal effect and shall not be used in interpreting this License Agreement.

16.9    Interpretation   For clarity, the rules of interpretation set forth in Section 1 of the Lease are incorporated herein by reference and shall apply as if fully set forth herein mutatis mutandis.  

16.10    Security Agreement   Notwithstanding anything to the contrary herein, all rights and remedies available to BUTAMAX under the Security Agreement shall be available to BUTAMAX herein.

16.11    Notices   Service of all notices under this License Agreement shall be sufficient and deemed given if delivered personally or sent by facsimile (with confirmation of receipt), by registered or certified mail, return receipt requested, postage prepaid, by nationally recognized overnight courier service, at the address hereinafter set forth, or to such address as such party may provide in writing from time to time.

If to BUTAMAX:

Chief Operating Officer
Butamax Advanced Biofuels, LLC
Building 356, DuPont Experimental Station
Wilmington, DE  19880
 
If to HIGHWATER:

Chief Executive Officer
Highwater Ethanol LLC
24500 U.S. 14
Lamberton, MN

16.12    No Third Party Beneficiaries   This License Agreement is solely for the benefit of the Parties hereto and is not intended to confer upon any other person or entity except the Parties hereto any rights or remedies hereunder.

16.13    Successors and Assigns   This License Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

16.14    Counterparts   This License Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that both Parties need not sign the same counterpart.

16.15    Expenses   Except as otherwise expressly provided in this License Agreement, all costs and expenses incurred in connection with this License Agreement and the actions contemplated hereby shall be borne by the Party incurring such expenses.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties have executed this License Agreement by their duly authorized representatives and have entered the Effective Date on the first page hereof. 

	
		
	Highwater Ethanol LLC
	Butamax Advanced Biofuels LLC

	By: /s/ Brian Kletscher
	By: /s/ Brenda Head

	Name: Brian Kletscher
	Name: Brenda Head

	Title: CEO
	Title: VP-Us Commercialization

	Date: 9/27/2013
	Date: 25 Sept 2013

*** Confidential material redacted and filed separately with the Commission.

TECHNOLOGY LICENSE AGREEMENT

EXHIBIT 1 - Description of BUTAMAX INTELLECTUAL PROPERTY and Technical Information

***

*** Confidential material redacted and filed separately with the Commission.

TECHNOLOGY LICENSE AGREEMENT

EXHIBIT 2 - Technical Services details and transmittal of information between BUTAMAX and HIGHWATER 

***10.84 - Distillers Crude Corn Oil Marketing Agmt

October 2, 2012 CHS Inc. Confidential Draft
Confidential Treatment Requested.  Confidential portions of this document have been redacted and have been separately filed with the Commission.

DISTILLERS CRUDE CORN OIL
MARKETING AGREEMENT

This Distillers Crude Corn Oil Marketing Agreement is made as of November 4, 2013 (the "Effective Date") by and between CHS Inc., a Minnesota cooperative corporation ("Marketer"), and Highwater Ethanol LLC, a Minnesota Limited Liability Corperation ("Producer").

WHEREAS, Producer own and operators an ethanol production facility in Lamberton, Minnesota (the "Facility"); and

WHEREAS, subject to the terms and conditions set forth in this Agreement, Producer desires to engage Marketer as its exclusive marketer of Oil produced at the Facility.

NOW, THEREFORE, in view of the foregoing, Marketer and Producer agree as follows:

ARTICLE I 
Definitions

1.1    Definitions. The definitions set forth in this Section 1.1 apply to this Agreement.  Any word, phrase or expression that is not defined in this Agreement that has a generally accepted meaning in the feed trade industry in the United States shall have such meaning in this Agreement.

(a)"Buyer" means an entity to which Marketer sells Oil.

(b)"Commencement Date" means the date on which Marketer commences marketing Producer's Oil pursuant to the mutual agreement of Producer and Marketer.

(c)"Execution Costs" means: (i) the actual costs charged by a third party, or otherwise incurred, for freight and/or transportation of the Oil from the Facility to a Buyer including, without limitation, charges and fees for any and all railcar leases, transloading costs, brokerage costs, shrink incurred as a result of the loading and unloading of the Oil during transportation process, interim storage and/or terminaling incurred prior to delivery; (ii) sales taxes, VAT and such other taxes, duties, import or export fees or costs, tariffs, fees or charges as may be applicable to the purchase, delivery or sale of the Oil as contemplated under this Agreement; and (iii) all other costs, expenses, fees or charges charged by a third party in connection with such transportation and delivery to a Buyer, without mark-up by Marketer, and without charge for Marketer's administrative costs.

(d)"FOB" has the definition set forth in Incoterms 2010, as published by the International Chamber of Commerce.

(e)"Initial Term" means the 6 month term following the Commencement
Date.

(f)    "short Ton" means one short ton of Oil, (2000 pounds) measured in accordance with customary industry weights and measures.

(g)    "Oil" means distillers' crude corn oil.

(h)    "Oil Specifications" means the specifications mutually agreed to by Marketer and Producer from time to time, including, without limitation, those specifications set forth in Section 2.5 of this Agreement.

(i)    "Renewal Term" means a one-year term following the Initial Term or then-current Renewal Term.

(j)    "Transportation" means truck, railroad, pipe, vessel or other means of transportation agreed to by Marketer and Producer.

ARTICLE II
Marketing of Oil

2.1    Exclusive Marketer. Marketer shall be the exclusive marketer of Oil produced at the Facility.

2.2    Sale and Purchase. Subject to the terms and conditions set forth in this Agreement, Producer shall sell to Marketer and Marketer shall purchase from Producer all Oil produced at the Facility in accordance with the terms set forth in Section 2.3 of this Agreement. Producer estimates that on an annual basis it will make available for delivery to Marketer approximately 2 million gallons of Oil. Marketer and Producer agree that Producer has no obligation to produce such amount of Oil and shall incur no liability for failing to produce such amount of Oil; provided, however, that Producer shall be obligated to produce all Oil that is subject to an Accepted Contract and shall be liable for failing to make such amount of Oil available for delivery to Marketer.

2.3    Accepted Contracts. Pursuant to the terms and conditions set forth in this Section 2.3, Marketer shall execute contracts with Buyers for the sale of Oil to such Buyers. Prior to executing such contracts, Marketer shall promptly communicate to Producer the terms and conditions of such contracts, including the price, volume and term of such commitments (a "Contract Offer"). Marketer shall give notice of all Contract Offers to the Producer employee set forth at the end of this Section 2.3 or such other Producer employee designated by Producer in writing (such Producer employee, the "Producer Contact") via telephone, e-mail or any other form of communication agreed to by Marketer and Producer. Upon receipt of a Contract Offer, the Producer Contact shall immediately direct Marketer to either reject or accept such Contract Offer. Any Contract Offer shall be deemed rejected if not accepted by the Producer Contact: (a) during the same telephone call on which the Contract Offer was provided; or (b) within two hours after delivery of the e-mail or other written or electronic communication pursuant to which the Contract Offer was provided. Marketer shall provide to Producer a written sales confirmation following receipt of Producer's acceptance of a Contract Offer ("Accepted Contract"). Once Producer has authorized an Accepted Contract, and notwithstanding whether Marketer actually receives a returned signed sales confirmation from Producer, Producer shall be obligated to make the Oil that is subject to such Accepted Contract available for delivery to Marketer. If any Contract Offer is rejected, for whatever reason, Marketer shall have no obligation to, and shall have no liability for its failure to, purchase the quantity of Oil that is subject to such rejected Contract Offer.

Until Producer notifies Marketer in writing otherwise, the Producer Contact shall be:

*** Confidential material redacted and filed separately with the Commission.

Name: Tom Streifel, HWE Commodity Manager or Brian Kletscher, CEO
Telephone Number: 507-752-6160
Facsimile Number: 507-752-6162
e-mail: tom.streifel@highwaterethanol.com or brian.kletscher@highwaterethanol.com

2.4    Price and Payment.

(a)FOB Facility Price. For all Oil sold by Producer to Marketer pursuant to this Agreement, Marketer shall pay to Producer the FOB Facility Price. "FOB Facility Price" means the actual price that Marketer invoices to and receives from its Buyers pursuant to Accepted Contracts (the "Marketer Actual Price") less a marketing fee equal to *** of Oil (the "Marketing Fee") less the Execution Costs. Marketer may, at any time upon notice to Producer, purchase Oil for its own account, in which case the Marketer Actual Price shall equal a price mutually agreed to by Marketer and Producer.

(b)Payment. Marketer shall pay Producer the FOB Facility Price within 10 calendar days after receipt by Marketer of a certified weight certificate for Oil shipped to a Buyer prepared in accordance with Section 2.12 of this Agreement.

(c)Set-Off. Marketer may exercise a right of offset with respect to any payment or obligation that is due to Marketer from Producer pursuant to this Agreement or any agreement between Marketer and Producer against any payment, delivery or other obligation owed by Marketer to Producer pursuant to this Agreement or any other agreement between Marketer and Producer.

(d)Arbitrage. Marketer and Producer agree that market conditions from time to time may allow Marketer to achieve additional value from Accepted Contracts through location arbitrage or other commercial means. In such instances, Marketer shall notify Producer of the potential arbitrage transaction and its potential benefits. Producer shall immediately respond in writing if Producer desires to proceed with the arbitrage transaction, and any financial benefit realized pursuant to such arbitrage transaction shall be for the Producer.

2.5    Quality. Producer hereby represents, warrants and covenants to Marketer that:

(a)    except for any Oil purchased by Marketer during the two-month period following the Commencement Date, all Oil shall be manufactured in a feed facility that does not handle or store products containing animal proteins prohibited in ruminant feed;

(b)    except for any Oil purchased by Marketer during the two-month period following the Commencement Date, at the time of completion of Delivery pursuant to Section 2.7 of this Agreement, all Oil shall meet the Oil Specifications;

(c)    except for any Oil purchased by Marketer during the two-month period following the Commencement Date, at the time of completion of Delivery pursuant to Section 2.7 of this Agreement, all Oil shall meet the following minimum standards:

	
										
	Total Fatty Acid
	Unsaponifiable Matter
	Insoluble Matter
	Moisture
	Free Fatty Acids

	Min
	Max
	Min
	Max
	Min
	Max
	Min
	Max
	Min
	Max

	80%
	 
	 
	3%
	 
	0.5%
	 
	1%
	 
	15%

(d)    at the time of completion of Delivery pursuant to Section 2.7 of this Agreement, all Oil shall comply with all applicable federal, state and local laws, ordinances, penilits, orders, rules and regulations, including, without limitation, those governing the production, quality, naming, labeling and sale of Oil and all industry standards then in effect;

(e)    all Oil shall be merchantable, have not been adulterated or misbranded and may be lawfully introduced into commerce; and

(f)    Producer has, and shall transfer to Marketer, good title to all Oil, free and clear of all security interests, liens and encumbrances.

2.6    Marketer's Damages. Producer must give Marketer no less than 10 calendar days' prior written notice if Producer cannot supply to Marketer any Oil that Producer has agreed to provide to Marketer pursuant to this Agreement. If Producer fails to provide any Oil that Producer has agreed to provide to Marketer pursuant to this Agreement, Marketer may purchase the quantity of such undelivered Oil from other sources to the extent necessary to perform Marketer's obligations under Accepted Contracts after providing Producer with not less than three calendar days' advance notice of its intention to do so. In such event, Marketer shall be entitled to recover from Producer any and all reasonable out-of-pocket costs and expenses Marketer incurs in excess of the FOB Facility Price in connection with such purchase.

2.7    Delivery and Title. "Delivery" means the physical transfer of Oil to the possession of Marketer at the Facility on an FOB basis. Title, risk of loss and/or damage and shipping responsibility shall pass from Producer to Marketer upon completion of the Delivery. Until such time, Producer shall be deemed to be in control and possession of, and shall have title to and bear the risk of loss of and/or damage to, all Oil. Marketer and/or Marketer's agents shall be given access to the Facility as reasonably necessary for Marketer and/or Marketer's agents to arrange for Delivery of the Oil to Marketer. Marketer shall schedule the loading and shipping of all outbound Oil purchased pursuant to this Agreement pursuant to Section 2.11 of this Agreement, but all labor and equipment required to load the Transportation shall be supplied by Producer without charge to Marketer.

2.8    Production Estimates. Five calendar days before the end of each calendar month during the term of this Agreement, Producer shall provide to Marketer a forecast of the volume of Oil expected to be produced by Producer during the following calendar month. Producer shall immediately notify Marketer of any changes to any such Oil production forecast as soon as Producer has knowledge of any such change.

2.9    Handling. Producer shall handle all Oil in a good and workmanlike manner, in accordance with Marketer's reasonable written requirements and consistent with normal industry practice and standards. Producer shall maintain the Facility's truck and railroad loading facilities in safe operating condition consistent with normal industry practice and standards. Producer shall visually inspect all trucks and railroad cars to ensure cleanliness so as to avoid contamination from contaminants apparent to the naked eye.

2.10    Storage at the Facility. At all times during the term of this Agreement, Producer shall maintain, at Producer's sole cost, storage space at the Facility for the minimum storage of an average of five calendar days' production of Oil. Producer shall be responsible at all times for the quality and condition of the Oil in storage at the Facility and shall be responsible for all maintenance of such storage

 at the Facility.

2.11    Transportation. At least five calendar days prior to the beginning of the week during which Oil produced by Producer will be removed from the Facility, Marketer shall schedule for removal by approved Transportation the actual quantity of Oil produced by Producer in the relevant week less that amount of Oil that Marketer and Producer agree shall be stored at the Facility. If Producer fails to provide the labor, equipment or facilities necessary to meet Marketer's loading schedule, Producer shall be responsible for any and all actual demurrage and wait-time costs and expenses incurred by Marketer resulting from such failure. Marketer shall use commercially reasonable efforts to order and supply approved Transportation as scheduled for approved Transportation shipments to transport the Oil. On a daily basis, Producer shall inform Marketer of the inventory and production status for the Facility by 8:30 a.m. CST/CDST. Producer shall utilize all commercially reasonable efforts to purchase and install equipment for the electronic transfer of loading and inventory data to Marketer on a continuous basis. Marketer and Producer shall cooperate in coordinating production schedules, loading schedules and transportation arrangements, including, without limitation, promptly notifying the other party of any changes, and by using commercially reasonable efforts to mitigate damages in all cases.

2.12    Quantity. The quantity of Oil delivered to Marketer from the Facility into Transportation shall be established by weight certificates prepared by Producer, at no cost to Marketer, from the scale at the Facility, which scale shall be certified at the time of weighing and shall comply with all applicable federal, state and local laws, ordinances, orders, rules and regulations. Marketer and/or Marketer's agents shall be given access to the Facility to observe any such measurements.

2.13    Non-Conforming Oil. Notwithstanding anything to the contrary set forth in this Agreement, Marketer shall have no obligation to purchase any Oil from Producer that does not meet the Oil Specifications.

2.14     Rejection of Oil. Payment of invoice and acceptance of delivery do not waive Marketer's rights if any Oil does not comply with the Oil Specifications at the time of completion of Delivery pursuant to Section 2.7 of this Agreement. Unless otherwise agreed between Marketer and Producer, and in addition to any other available remedies at law or in equity to which Marketer may be entitled, Marketer may, without obligation to pay, reject any Oil that fails to conform in any material respect to the requirements set forth in this Agreement, including, without limitation, meeting the Oil Specifications, at the time of completion of Delivery pursuant to Section 2.7 of this Agreement. Should any Oil be seized or condemned by any governmental department or agency for any reason, such seizure or condemnation shall operate as a rejection by Marketer of the Oil seized or condemned and Marketer shall not be obligated to offer any defense in connection with the seizure or condemnation. When a rejection occurs, Marketer may, at its option:

(a)dispose of the rejected Oil after first offering Producer a reasonable opportunity of examining and taking possession of such rejected Oil provided that the condition of the Oil reasonably appears to Marketer to permit a delay in disposition to allow for such opportunity to examine and take possession;

(b)dispose of the rejected Oil in any manner directed by Producer that Marketer can accomplish without violating any applicable federal, state or municipal law, ordinance, permit, order, rule or regulation or any property rights; or

(c)    return the rejected Oil to Producer.

Title and risk of loss of any rejected Oil shall pass to Producer at the time of rejection by Marketer. Marketer's obligations with respect to any rejected Oil shall be fulfilled upon rejection. Producer shall reimburse Marketer for all costs incurred by Marketer in storing, transporting, returning and disposing of any rejected Oil. Marketer shall have no obligation to pay Producer for any rejected Oil and may deduct costs and expenses to be reimbursed by Producer from amounts otherwise owed by Marketer to Producer pursuant to Section 2.4(c) of this Agreement. Any rejection of Oil shall not relieve Producer of its obligations to deliver Oil conforming to the Oil Specifications as and when and in the amounts required under this Agreement.

2.15 Retention of Samples. Producer shall take a minimum of one representative sample from each load of Oil before it leaves the Facility, using standard sampling methodology. Producer shall label these samples to indicate the date of shipment, and the applicable for of Transportation used to transport such Oil. Producer shall retain the samples and labeling information for no less than one year after the date taken and shall make such samples available to Marketer upon Marketer's request.

2.16 Determination of Credit. Notwithstanding anything in this Agreement to the contrary, all determinations regarding extension of credit to, or the credit worthiness of, Buyers or potential Buyers resides exclusively with Marketer. Producer acknowledges and agrees that Marketer may reject contracts based on its determination of creditworthiness of certain Buyers and that any such rejection shall not be deemed a breach of Marketer's obligations under this Agreement.

2.17    Trade Rules. All purchases and sales of Oil made pursuant to this Agreement shall be governed by the National Oil Processors Association Trade Rules.

ARTICLE III
Term and Termination; Change in Control of Producer

3.1    Term. This Agreement shall take effect as of the Effective Date and shall continue in full force and effect through the Initial term of 6 months. Thereafter, this Agreement shall automatically renew for successive Renewal Terms until either Marketer or Producer terminates this Agreement as by giving the other party at least 120 calendar days' advance written notice of such termination.

3.2    Termination. Notwithstanding anything to the contrary set forth in this Agreement, this Agreement may be terminated in accordance with the following provisions:

(a)Marketer and Producer may immediately terminate this Agreement at any time by mutual written agreement;

(b)Marketer or Producer may terminate this Agreement by giving notice in writing to the other party in the event the other party is in material breach of this Agreement and has failed to cure such breach within 30 calendar days of receipt of written notice of such breach from the other party;

(c)Marketer or Producer may immediately terminate this Agreement at any time by giving notice in writing to the other party should the other party file a petition of any type as to its bankruptcy, be declared bankrupt, become insolvent, make an assignment for the benefit of creditors, go into liquidation or receivership or otherwise lose legal control of its business, or should the other party or a substantial part of its business come under the control of a third party;

(d)    Marketer may immediately terminate this Agreement at any time by giving notice in writing to Producer if Marketer determines, in its reasonable discretion, that significant changes or events within the U.S. government or regulatory structure of the U.S. government have caused, or are likely to cause, conditions under which Marketer will not be able to perform its obligations in the manner contemplated by this Agreement;

(e)    Marketer may immediately terminate this Agreement at any time by giving notice in writing to Producer if Marketer determines, in its reasonable discretion, that Marketer is unable to secure such number of potential Buyers having acceptable credit risk to perform Marketer's obligations under this Agreement; or

(f)    Marketer or Producer may terminate this Agreement in the event the performance of the other party is prevented by reason of the occurrence of an event of force majeure in accordance with Section 5.2 of this Agreement.

3.3    Effects of Termination. Upon the termination of this Agreement:

(a)Producer shall deliver all Oil to Marketer that is subject to an Accepted Contract pursuant to the terms and conditions set forth in such Accepted Contract;

(b)Marketer and Producer shall immediately satisfy all outstanding payment obligations to the other party;

(c)Sections 1.1, 2.4, 2.5, 2.7, 2.13, 2.14, 2.17, 4.1 and 4.2 and Article V of this Agreement shall survive the termination of this Agreement; and

(d)all obligations, promises and agreements of Marketer and Producer that expressly, or by their nature, survive the termination of this Agreement shall continue in full force and effect subsequent to, and notwithstanding, the termination of this Agreement until such obligation, promise or agreements is satisfied or by its nature expires.

3.4    Change in Control of Producer. If Producer, in any way, sells, assigns, grants, hypothecates, disposes of or otherwise transfers to any party (a "Change in Control Buyer") the Facility and/or substantially all of Producer's assets such that Producer cannot produce and deliver Oil to Marketer pursuant to the terms of this Agreement (an "Asset Sale") or engages in any change in control transaction with a Change in Control Buyer such that Producer cannot produce and deliver Oil to Marketer pursuant to the terms of this Agreement (a "Change in Control Transaction"), Producer shall, at Producer's option: (a) make the Change in Control Buyer's express acceptance of the assignment or purchase of this Agreement from Producer an express condition to the consummation of such Asset Sale or such Change in Control Transaction; or (b) terminate this Agreement and, within 5 calendar days following the date of such termination, pay Marketer by wire transfer of immediately available funds to an account designated by Marketer an amount equal to the Marketing Fees Marketer expected to collect from Producer during the lesser of the 12-month period following the date of termination and the balance of the Initial Term or then-current Renewal Term, as applicable, based on the Marketing Fees Marketer collected from Producer and the Metric Tons of Oil Marketer purchased from Producer during the preceding three-month period.

ARTICLE IV
Indemnification; Insurance

4.1    Indemnification.

(a)    Mutual Indemnification Obligation. Each party (as such, an "Indemnitor") agrees to indemnify, defend and hold harmless the other party and its affiliates and their officers, directors, employees and agents (as such, an "Indemnitee") from and against any and all claims, demands, causes of action, damages, liabilities, fines, penalties and expenses, including, without limitation, expenses of investigation, settlement, litigation and attorney's fees and costs incurred in connection therewith arising out of or resulting from: (i) any breach of this Agreement by Indemnitor or its employees, agents, contractors or representatives; (ii) the negligence or willful misconduct of Indemnitor or its employees, agents, contractors or representatives; or (iii) the Indemnitor's failure to comply with any applicable federal, state or local law, ordinance, permit, order, rule or regulation. If the event giving rise to the indemnification obligation of Marketer and Producer under this Section 4.1(a) arises from the concurrent negligence or fault of both Marketer and Producer (or their respective employees, agents, contractors or representatives), each party's indemnification obligations under this Section 4.1(a) shall be in proportion to the percentage of that party's negligence or fault.

(b)    Notice of Claim.  In the event Marketer seeks indemnification on behalf of a Marketer Indemnitee, or Producer seeks indemnification on behalf of a Producer Indemnitee, such party seeking indemnification shall give written notice to the Indemnitor specifying the facts constituting the basis for such claim and the amount, to the extent known, of the claim asserted (a "Claim").

(c)    Third Party Claims. If an Indemnitee is entitled to indemnification pursuant to Section 4.1(a) because of a claim asserted by any claimant who is not an Indemnitee under this Agreement (a "Third Person"), the Indemnitee shall give the Indemnitor reasonably prompt notice thereof after such assertion is actually known to the Indemnitee. The Indemnitor shall have the right, upon written notice to the Indemnitee, and using counsel reasonably satisfactory to the Indemnitee, to investigate, secure, contest or settle the Claim alleged by such Third Person (a "Third Person Claim") with its own counsel at its own expense, provided that the Indemnitor has unconditionally acknowledged to the Indemnitee in writing its obligation to indemnify the persons to be indemnified pursuant to Section 4.1(a) with respect to such Third Person Claim. The Indemnitee may thereafter participate in (but not control) the defense of any such Third Person Claim with its own counsel at its own expense, unless separate representation is necessary to avoid a conflict of interest, in which case such representation shall be at the expense of the Indemnitor. Unless and until the Indemnitor so acknowledges its obligation to indemnify, the Indemnitee shall have the right, at its option, to assume and control the defense of the Claim and to look to the Indemnitor for the full amount of the costs of defense. The failure of the Indemnitor to respond in writing to the aforesaid notice of the Indemnitee with respect to such Third Person Claim within 30 calendar days after receipt thereof shall be deemed an election not to defend such Third Person Claim. If the Indemnitor does not so acknowledge its obligation to indemnify and assume the defense of any such Third Person Claim: (i) the Indemnitee may defend against such claim, in such manner as it may deem reasonably appropriate, including, without limitation, settling such claim, after giving notice of the same to the Indemnitor, on such terms as the Indemnitee may deem reasonably appropriate; and (ii) the Indemnitor may participate in (but not control) the defense of such action, with its own counsel at its own expense. Marketer and Producer shall make available to each other all relevant information in their possession relating to any such Third Person Claim and shall cooperate in the defense thereof.

4.2    Disclaimer. OTHER THAN FOR LIABILITY ARISING FROM A PARTY'S BREACH OF SECTION 5.1 OF THIS AGREEMENT OR FROM A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER MARKETER NOR PRODUCER SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

4.3    Producer's Insurance Obligation. Producer shall maintain at all times during the term of this Agreement: (a) workers' compensation insurance as prescribed by applicable federal, state or local law, ordinance, permit, order, rule or regulation; and (b) commercial general liability insurance with a per-occurrence limit of not less than $2,000,000 (or higher limits as may be required by applicable law), which coverage can be provided through a combination of primary and umbrella policies and which policy(ies) shall identify Marketer as an additional insured party with respect to the operation of the Facility. As to all policies described in this Section 4.3, Producer shall provide Marketer with at least 30 calendar days' written notice prior to the effective date of cancellation or any material change of any such policy(ies) and, upon any request from Marketer, immediately instruct its insurer(s) to provide Marketer with certificates of insurance evidencing coverage that is required by this Section 4.3. Producer agrees that the policy limits set forth in this Section 4.3 are minimum limits and shall not be construed to limit Producer's liability.

ARTICLE V
General Terms and Conditions

5.1    Confidentiality and Nondisclosure Obligations. Marketer and Producer agree that all information obtained by one party from the other party in the course of negotiating or performing this Agreement, whether furnished in written or oral form, as well as any information that is generated from such information or derived from tours of a party's facilities or review of a party's products, technology and any drawing, schematic diagrams or other technical information relating thereto, is "confidential" and shall be held strictly confidential by the receiving party and not revealed to any third party during the term of this Agreement and during the five-year period following the expiration or termination of this Agreement without the disclosing party's prior written approval. Marketer and Producer shall use the other party's confidential information solely and exclusively for carrying out and performing under this Agreement.

5.2    Force Majeure. For purposes of this Agreement, "force majeure" means any event or condition, not existing as of the Effective Date, not reasonably foreseeable as of such date and not reasonably within the control of any party, that prevents, in whole or in material part, the performance by a party of its obligations under this Agreement, except an obligation on the part of such party to make any payment pursuant to this Agreement. Without limiting the generality of the foregoing, the following shall constitute events or conditions of force majeure: acts of state or governmental action, riots, war, acts of terrorism, sabotage, strikes, lockouts, prolonged shortage of energy supplies, fire, flood, hurricanes, earthquakes, lightning and explosion. Any party affected by an event or condition of force majeure shall, upon providing prompt written notice to the other party, be excused, subject to the following sentence, from performance under this Agreement to the extent and for so long as such event or condition so prevents its performance, provided that the party so affected shall use reasonable efforts to avoid or remove the cause of non-performance and shall continue performance under this Agreement immediately upon the removal of such causes. If the event or condition of force majeure causing non-performance shall continue for more than 60 consecutive calendar days and such event shall have a material adverse effect upon the operations, financial condition, property rights or business prospects of the party whose 

performance is not prevented by the event of force majeure, the party whose performance is not prevented by the event of force majeure, upon the expiration of the above period and so long as the event or condition of force majeure is continuing, may terminate this Agreement by giving notice of such termination to the other party.

5.3    Governing Law, Venue and Attorneys' Fees. Any claim, controversy or dispute arising out of or in connection with this Agreement shall be governed by the laws of the State of Minnesota without regard to its principles of conflicts of law. Marketer and Producer irrevocably agree to the exclusive jurisdiction of the federal and state courts resident in St. Paul, Minnesota, unless Marketer and Producer otherwise agree in writing to an alternative venue or dispute resolution mechanism. If any legal action is brought by either Marketer or Producer arising out of or in connection with this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees and related costs.

5.4    Independent Contractors. Marketer and Producer are independent contractors, and nothing set forth in this Agreement shall be construed to constitute Marketer and Producer as partners, joint venturers, co-owners or otherwise as participants in a joint or common undertaking.

5.5    Entire Agreement. This Agreement constitutes the entire agreement and understanding between Marketer and Producer with regard to the subject matter of this Agreement and no other written or oral agreements, undertakings, promises, warranties or covenants respecting such subject matter, whether prior to or after the Effective Date, shall constitute an amendment to this Agreement unless such written or oral agreement, undertaking, promise, warranty or covenant complies with Section 5.6 of this Agreement.

5.6    Amendments. This Agreement may be amended only by a written agreement executed by Marketer and Producer.

5.7    Waivers. No waiver of any provision or condition of this Agreement by Marketer or Producer shall be valid unless set forth in a writing signed by such party. No such waiver shall be deemed to be a waiver of any other or similar provision or condition, or of any future event, act, breach or default.

5.8    Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given: (a) when delivered if personally delivered by hand, with written confirmation of receipt; (b) when received if sent by a recognized overnight courier service, receipt requested; (c) five business days after being mailed, if sent by first class mail, return receipt requested; or (d) when receipt is acknowledged by an affiunative act of the party receiving notice, if sent by facsimile, telecopy or other electronic transmission device provided that such acknowledgement does not include an acknowledgment generated automatically by a facsimile or telecopy machine or other electronic transmission device. Until a party receives written notice in the manner prescribed by this Section 5.8 to the contrary from the other party, Marketer and Producer can assume that the following are the proper addresses of Marketer and Producer:

As to Marketer:

CHS Inc.
5500 Cenex Drive
Inver Grove Heights, Minnesota 55077 Attention: Steve Markham

Facsimile No.: [NUMBER]
e-mail: steve.markham@chsinc.com

As to Producer:

Highwater Ethanol, LLC 
24500 US highway 14 
Lamberton, MN 56152

Attention: Tom Streifel or Brian Kletscher

e-mail: tom.streifel@highwaterethanol.com or brian.kletscher@highwaterethanol.com

5.9    Partial Invalidity. In the event that any provision of this Agreement is found invalid or unenforceable, in whole or in part, by a court of competent jurisdiction or an arbitration tribunal, such provision shall be limited to the minimum extent necessary to render the same valid and enforceable, or shall be excised from this Agreement, as circumstances may require, and this Agreement shall be construed as if the provision had been incorporated into this Agreement as so limited, or as if the provision had not been included in this Agreement, as the case may be, and enforced to the maximum extent permitted by applicable law.

 5.10     Headings. Headings of sections and subsections in this Agreement are for convenience of reference only and shall not be construed as a part of this Agreement or as limiting or defining the scope of any term or provision of this Agreement.

5.11    Assignment. This Agreement shall be binding upon and shall inure to the benefit of Marketer and Producer and their respective successors and assigns; provided, however, that Producer shall not assign its right or delegate its duties under this Agreement without the express prior written consent of Marketer, which consent may be granted or withheld in the sole and absolute discretion of Marketer. Any change in control of Producer, whether by operation of law or otherwise, including, without limitation, pursuant to any bankruptcy, liquidation or similar proceeding, shall constitute an assignment for purposes of this Section 5.11.

5.12    Counterparts. This Agreement may be executed in multiple identical counterparts, any of which may contain the signatures of less than all of the parties, and all of which together shall constitute a single agreement.

5.13 Construction. This Agreement, including the Exhibit to this Agreement, has been negotiated by Marketer and Producer and no general rule of contract construction requiring an agreement to be more stringently construed against the drafter or proponent of any particular provision may be applied in the construction or interpretation of this Agreement. Unless otherwise expressly provided in this Agreement, the word "including" does not limit the preceding words or terms.

5.14 Remedies Cumulative. Except as otherwise set forth in this Agreement, all remedies set forth in this Agreement are cumulative and concurrent and are in addition to all other available remedies at law or in equity to which Marketer or Producer may be entitled.

(Remainder of page intentionally left blank; signature page follows)

IN WITNESS WHEREOF, Marketer and Producer have executed this Distillers Crude Corn Oil Marketing Agreement as of the Effective Date.

	
		
	 
	CHS Inc.

	 
	 

	 
	By: /s/ Steve Markham

	 
	Name: Steve Markham

	 
	Its: Merchant

	 
	 

	 
	Highwater Ethanol, LLC

	 
	 

	 
	By: /s/ Brian Kletscher

	 
	Name: Brian Kletscher

	 
	Its: CEO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}]]