EXHIBIT 10.3
[********] Material has been omitted
pursuant to request for confidential treatment and such material
has been filed separately with the securities and exchange
commission.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (hereinafter
referred to as this “LICENSE”), effective as of the 23
rd day of June, 2005 by and between CVP, LLC a limited
liability company, organized and existing under the laws of the
State of Wisconsin, with its principal place of business at 9586 58
th Place, Kenosha, Wisconsin 53144 (hereinafter referred
to as “LICENSOR”) and BADGER STATE ETHANOL, LLC, a
limited liability company duly organized and existing under the
laws of the State of Wisconsin and having its principal place of
business at 820 W. 17 th Street, Monroe, WI 53566-0317
(hereinafter referred to as “LICENSEE”).
WITNESSETH:
WHEREAS, LICENSOR has developed and
acquired the irrevocable right to use, modify, license, sublicense,
transfer and assign the Licensed Process (as defined below);
and
WHEREAS, LICENSEE wishes to license
from LICENSOR the Licensed Process and LICENSOR desires to provide
such license on the terms set forth herein;
WHEREAS, simultaneously with the
execution of this License LICENSEE is entering into (i) a
Services and Process Guarantee Agreement dated the date hereof (the
“Process Guarantee Agreement”) with LICENSOR,
(ii) an AIA Document A141-2004 construction agreement dated
the date hereof (the “AIA Agreement”) with AMG/GCI,
LLC, an Iowa limited liability company (“AMG/GCI”);
(iii) a Corn Germ Marketing Agreement dated the date hereof
(the “Corn Germ Marketing Agreement”) with Quality
Technology International, Inc., (“QTI”); and
(iv) a Corn Protein Concentrate Marketing Agreement dated the
date hereof (the “Corn Protein Concentrate Marketing
Agreement”) with QTI (collectively, including this License,
the “Transaction Documents”);
NOW, THEREFORE, in consideration of
the mutual promises herein contained, it is agreed as
follows:
ARTICLE 1
Definitions
For the purposes of this License,
the following terms shall have the following meanings:
(1.1)
“Licensed Process” means
and refers to the Process Design and Technical Information Package
as described in Schedule A attached hereto (the
“Process Design and Technical Information Package”),
operating methods, data, operating and specification manuals,
training methods, engineering standards, techniques, protocols,
procedures, plans and processes, and other information relating to
design, construction and operation of the Plant (as defined below)
as upgraded and modified pursuant to the Transaction Documents,
including the design, arrangement, configuration and specifications
of the combinations of equipment (including,
1
without limitation, computer
hardware and software equipment) described in the Transaction
Documents related thereto and/or supporting those
combinations. Notwithstanding the above, the definition of
Licensed Process shall specifically exclude any procedures,
techniques, processes and other information or intellectual
property relating to Plant and its operation developed, owned,
licensed, sublicensed by LICENSEE or otherwise in the possession of
the LICENSEE (except pursuant to this License).
(1.2)
“Confidential
Information” shall mean the Licensed Process; provided that
Confidential Information shall not include any such information and
operating data which: (i) is in the possession of the LICENSEE
prior to LICENSOR’S disclosure; (ii) is in the public
domain prior to LICENSEE’S receipt of said information from
LICENSOR or which subsequently becomes a part of the public domain
by publication or otherwise, except by LICENSEE’S wrongful
act; (iii) LICENSEE developed independently, or
(iv) LICENSEE received such information from a third party
without obligation of confidentiality.
(1.3)
“Plant” means the
LICENSEE’s facility located in Monroe, Wisconsin.
(1.4)
“Person” means an
individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or governmental
authority.
ARTICLE 2
Grant of License;
Representations and Warranties
(2.l)
LICENSOR hereby grants to LICENSEE a
non-exclusive (subject to Section 2.5), fully paid,
irrevocable, perpetual and transferable (subject to Article 6)
license to use and modify the Licensed Process. All
information of LICENSOR relating to the Licensed Process, including
without limitation, the Process Design and Technical Information
Package, any and all documents, data, manuals and processes shall
be delivered by the LICENSOR to the LICENSEE upon the payment of
the first component of the fee as set forth in Section 3.1 and
Schedule B . Notwithstanding any other term of
this License, the grant of the License shall be deemed irrevocable
upon tender of payment of the initial 50% of the License Fee (as
stated in Section A of Schedule B ) pursuant to
Section 3.1 and Schedule B .
(2.2)
LICENSOR represents that a U.S.
patent is currently being sought by LICENSOR that may cover some,
or all, of the Licensed Process. LICENSEE acknowledges that
the United States Patent and Trademark Office may not issue a
patent for some, or all, of the Licensed Process.
Notwithstanding the above, the failure of the United States Patent
and Trademark Office to issue such patent, or the issuance of such
patent for only a part of the Licensed Process, shall not revoke or
otherwise limit this License.
(2.3)
LICENSOR represents that it has a
substantial investment in the development of corn germ, corn fiber
and corn protein concentrate (collectively, the
“Co-products”), which are produced from the Licensed
Process, and that LICENSOR has appointed QTI, to market the
Co-products produced from the Licensed Process.
Simultaneously with the execution of this License, the LICENSEE
shall enter into the Corn Germ Marketing Agreement and the Corn
Protein Concentrate Marketing Agreement, provided that LICENSOR
will use its reasonable best efforts to cause QTI to offer LICENSEE
terms in such agreements that are no less favorable than those
offered to other clients of QTI. No breach of either the Corn
Germ Marketing Agreement
2
or the Corn Protein Concentrate
Marketing Agreement by any party shall be deemed to be a default
under this License, nor in any manner limit or revoke this
License.
(2.4)
LICENSOR warrants that (i) it
has the right to grant this License and disclose the Confidential
Information and all other information relating to the Licensed
Process, (ii) the grant of this License conveys to LICENSEE
all intellectual property necessary for the operation of the Plant
as contemplated herein and by the AIA Agreement and the Process
Guarantee, and (iii) there has not been and there is not now
any unauthorized use, infringement or misappropriation of the
Licensed Process by any person or claim or allegation
thereof.
(2.5)
LICENSOR shall not (and no party on
behalf of the LICENSOR shall), for a period of two years from the
effective date of this License, license the Licensed Process to any
third party located at a driving distance of less than 150 miles
from the Plant.
(2.6)
LICENSEE’s use of the Licensed
Process does not grant LICENSEE any ownership interest or other
interest in or to the Licensed Process other than as stated in this
License.
(2.7)
LICENSOR represents and warrants
that (i) it has the right, title and interest to sublicense
the Licensed Process free and clear of all liens, claims or other
restrictions, (ii) no person is infringing on the Licensed
Process, (iii) the Licensed Process does not infringe any
intellectual property or other rights of any other person,
(iv) the use of the Licensed Process does not (and this
License will not) result in a conflict with, misappropriation or
infringement of any rights of others and LICENSOR is not aware of
any allegation of conflict or infringement or any basis therefore,
and (v) all material fees and action reasonably required to be
taken for the maintenance, operation or use of the Licensed Process
have been paid and taken.
ARTICLE 3
License Fee; Technical
Information Fee
(3.l)
In consideration of the execution of
this License and the performance of its terms, LICENSEE shall pay
to LICENSOR a License Fee of [********] payable as specified in
Schedule B attached hereto.
(3.2)
In further consideration of the
execution of this License and the performance if its terms,
LICENSEE shall pay to LICENSOR a Technical Information Fee of
[********] payable as specified in Schedule C attached
hereto.
(3.3)
For additional services, LICENSEE
shall pay LICENSOR in accordance with Schedule C
attached hereto, as mutually agreed between LICENSEE and LICENSOR
following the completion of the Performance Test to the
satisfaction of LICENSEE, as described in Article 6 of the
Process Guarantee Agreement.
[********] Material has been omitted
pursuant to request for confidential treatment and such material
has been filed separately with the Securities and Exchange
Commission.
3
ARTICLE 4
Improvements or
Modifications
(4.l)
LICENSEE may improve or modify the
Licensed Process in any manner in its sole discretion, provided
that the improvements and/or modifications do not invalidate or
infringe upon the Licensed Process or LICENSOR’S ownership
thereof.
(4.2)
Improvements and/or modifications
made to the Licensed Process by LICENSEE, without the assistance of
LICENSOR, shall be the property of LICENSEE, provided, however,
that LICENSEE shall notify LICENSOR of any such improvements and/or
modifications (provided such action is not in violation of law or
LICENSEE’s obligations to third parties) and upon written
request, LICENSEE shall license (provided such action is not in
violation of law or LICENSEE’s obligations to third parties)
such improvements and/or modifications to LICENSOR (but only to the
extent of LICENSEE’s rights therein) on such reasonable terms
and conditions to be mutually agreed upon by LICENSEE and LICENSOR
by means of a license addendum describing the additional products,
improvements and/or modifications to the Licensed Process made by
LICENSEE.
(4.3)
Improvements and/or modifications
made to the Licensed Process by LICENSOR without the assistance of
LICENSEE shall be the property of LICENSOR, and shall be deemed to
be a part of the Licensed Process and subject to this
License. Reasonably promptly after any such improvement or
modification is discovered, LICENSOR shall notify LICENSEE of any
such improvements and/or modifications and, upon request, LICENSOR
shall license such improvements and/or modifications to LICENSEE
for a reasonable fee paid
