Document:

exv10w10

 

Exhibit 10.10

ICM License Agreement

THIS LICENSE AGREEMENT (this “License Agreement”) is entered into and made effective as of the
13th day of March, 2006 (“Effective Date”) by and between Advanced BioEnergy, LLC, a
Delaware Limited Liability Company (“OWNER”), and ICM, Inc., a Kansas corporation (“ICM”).

     WHEREAS, OWNER has entered into that certain Design-Build Lump Sum Contract dated March 13,
2006 (the “Contract”) with Fagen, Inc., a Minnesota corporation (“Fagen”), under which Fagen is to
design and construct a 100 million gallon per year ethanol plant for OWNER to be located in or near
Fairmont, Nebraska (the “Plant”);

     WHEREAS, ICM has granted Fagen the right to use certain proprietary technology and information
of ICM in the design and construction of the Plant; and

     WHEREAS, OWNER desires from ICM, and ICM desires to grant to OWNER, a license to use such
proprietary technology and information in connection with OWNER’s ownership, operation, maintenance
and repair of the Plant, all upon the terms and conditions set forth herein;

     NOW, THEREFORE, the parties, in consideration of the foregoing premises and the mutual
promises contained herein and for other good and valuable consideration, receipt of which is hereby
acknowledged, agree as follows:

1. Upon substantial completion of the Plant by Fagen pursuant to the terms of the Contract or,
if later, payment by OWNER of all amounts due and owing to Fagen under the Contract, ICM grants
to OWNER a perpetual limited license to use the Proprietary Property (hereinafter defined)
solely in connection with the ownership, operation, maintenance and repair of the Plant,
subject to the limitations provided herein (the “Purpose”).

2. The “Proprietary Property” means, without limitation, documents, Operating Procedures
(hereinafter defined), materials and other information that are furnished by ICM to OWNER in
connection with the Purpose, whether orally, visually, in writing, or by any other means,
whether tangible or intangible, directly or indirectly (including, without limitation, through
Fagen) and in whatever form or medium including, without limitation, the design, arrangement,
configuration, and specifications of (i) the combinations of distillation, evaporation, and
alcohol dehydration equipment (including, but not limited to, pumps, vessels, tanks, heat
exchangers, piping, valves and associated electronic control equipment) and all documents
supporting those combinations; (ii) the combination of the distillers grain drying (DGD), and
heat recovery steam generation (HRSG) equipment (including, but not limited to, pumps, vessels,
tanks, heat exchangers, piping and associated electronic control equipment) and all documents
supporting those combinations; and (iii) the computer system, known as the distributed control
system (DCS and/or PLC) (including, but not limited to, the software configuration,
programming, parameters, set points, alarm points, ranges, graphical interface, and system
hardware connections) and all documents supporting that system. The “Operating Procedures”
means, without limitation, the process equipment and specifications manuals, standards of
quality, service protocols, data collection methods, construction specifications, training
methods, engineering standards and any other information prescribed by ICM from time to time
concerning the Purpose. Proprietary Property shall not include any information or materials
that OWNER can demonstrate by clear and convincing written evidence: (i) was lawfully in the
possession of OWNER prior to disclosure by ICM or Fagen; (ii) was in the

 

 

public domain prior to disclosure by ICM or Fagen; (iii) was disclosed to OWNER by a third
party other than Fagen having the legal right to possess and disclose such information or
materials; or (iv) after disclosure by ICM or Fagen comes into the public domain through no
fault of OWNER or its members, directors, officers, employees, agents, contractors, consultants
or other representatives (hereinafter collectively referred to as “Representatives”).
Information and materials shall not be deemed to be in the public domain merely because such
information is embraced by more general disclosures in the public domain, and any combination
of features shall not be deemed to be within the foregoing exceptions merely because individual
features are in the public domain if the combination itself and its principles of operation are
not in the public domain.

3. OWNER shall not use the Proprietary Property for any purpose other than the Purpose. OWNER
shall not use the Proprietary Property in connection with any expansion or enlargement of the
Plant. ICM and its Representatives shall have the express right at any time to enter upon the
premises of the Plant to inspect the Plant and its operation to ensure that OWNER is complying
with the terms of this License Agreement.

4. OWNER’s failure to materially comply with the Operating Procedures shall void all
guarantees, representations and warranties, whether expressed or implied, if any, that were
given by ICM to OWNER, directly or indirectly through Fagen, concerning the performance of the
Plant that ICM reasonably determines are materially affected by OWNER’s failure to materially
comply with such Operating Procedures. OWNER agrees to indemnify, defend and hold harmless
ICM, Fagen and their respective Representatives from any and all losses, damages and expenses
including, without limitation, reasonable attorneys’ fees resulting from, relating to or
arising out of Owner’s or its Representatives’ (a) failure to materially comply with the
Operating Procedures or (b) negligent use of the Proprietary Property.

5. Any and all modifications to the Proprietary Property by OWNER or its Representatives shall
be the property of ICM. OWNER shall promptly notify ICM of any such modification and OWNER
agrees to assign all right, title and interest in such modification to ICM; provided, however,
OWNER shall retain the right, at no cost, to use such modification in connection with the
Purpose.

6. ICM has the exclusive right and interest in and to the Proprietary Property and the
goodwill associated therewith. OWNER will not, directly or indirectly, contest ICM’s ownership
of the Proprietary Property. OWNER’s use of the Proprietary Property does not give OWNER any
ownership interest or other interest in or to the Proprietary Property except for the limited
license granted to OWNER herein. Goodwill created by the operation of the plant and all
financial benefits therefrom shall be the property of the Owner.

7. OWNER shall pay no license fee or royalty to ICM for OWNER’s use of the Proprietary Property
pursuant to this License Agreement, the consideration for the perpetual limited license granted
herein is included in the amounts payable by OWNER to Fagen for the construction of the Plant
under the Contract.

8. OWNER may not assign the perpetual limited license granted herein, in whole or in
part, without the prior written consent of ICM, which will not be unreasonably withheld or
delayed. Prior to any assignment, OWNER shall obtain from such assignee a written instrument,
in form and substance reasonably acceptable to ICM, agreeing to be bound by all the terms and
provisions of this License Agreement. Any assignment of this License Agreement shall not
release OWNER from (i) its duties and obligations hereunder concerning the disclosure and

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use of the Proprietary Property by OWNER or its Representatives, or (ii) damages to ICM
resulting from, or arising out of, a breach of such duties or obligations by OWNER or its
Representatives. ICM may assign its right, title and interest in the Proprietary Property, in
whole or part, subject to the limited license granted herein.

9. The Proprietary Property is confidential and proprietary. OWNER shall keep the Proprietary
Property confidential and shall use all reasonable efforts to maintain the Proprietary Property
as secret and confidential for the sole use of OWNER and its Representatives for the Purpose.
OWNER shall retain all Proprietary Property at its principal place of business and/or the
Plant. OWNER shall not at any time without ICM’s prior written consent, copy, duplicate,
record, or otherwise reproduce the Proprietary Property, in whole or in part, or otherwise make
the same available to any unauthorized person provided, OWNER shall be permitted to copy,
duplicate or otherwise reproduce the Proprietary Property in whole or in part in connection
with, and to the extent it is necessary and essential for, the Purpose so long as all such
copies, duplicates or reproductions are kept at its principal place of business and/or the
Plant and are treated the same as any other Proprietary Property. OWNER shall not disclose the
Proprietary Property except to its Representatives who are directly involved with the Purpose,
and even then only to such extent as is necessary and essential for such Representative’s
involvement. OWNER shall inform such Representatives of the confidential and proprietary
nature of such information and, if requested by ICM, OWNER shall obtain from such
Representative a written instrument, in form and substance reasonably acceptable to ICM,
agreeing to be bound by all of the terms and provisions of this License Agreement to the same
extent as OWNER. OWNER shall make all reasonable efforts to safeguard the Proprietary Property
from disclosure by its Representatives to anyone other than permitted hereby. OWNER shall
notify ICM immediately upon discovery of any unauthorized use or disclosure of the Proprietary
Property, or any other breach of this License Agreement by OWNER or its Representatives, and
shall cooperate with ICM in every reasonable way to help ICM regain possession of the
Proprietary Property and prevent its further unauthorized use or disclosure. In the
event that OWNER or its Representatives are required by law to disclose the Proprietary
Property, OWNER shall provide ICM with prompt written notice of same so that ICM may seek a
protective order or other appropriate remedy. In the event that such protective order or other
appropriate remedy is not obtained, OWNER or its Representatives will furnish only that portion
of the Proprietary Property which in the reasonable opinion of its or their legal counsel is
legally required and will exercise its reasonable efforts to obtain reliable assurance that the
Proprietary Property so disclosed will be accorded confidential treatment.

10. OWNER agrees to indemnify ICM for any and all damages (including, without limitation,
reasonable attorneys’ fees) arising out of or resulting from any unauthorized disclosure or use
of the Proprietary Property by OWNER or its Representatives. OWNER agrees that ICM would be
irreparably damaged by reason of a violation of the provisions contained herein and that any
remedy at law for a breach of such provisions would be inadequate. OWNER agrees that ICM shall
be entitled to seek injunctive or other equitable relief in a court of competent jurisdiction
against OWNER or its Representatives for any unauthorized disclosure or use of the Proprietary
Property without the necessity of proving actual monetary loss or posting any bond. It is
expressly understood that the remedy described herein shall not be the exclusive remedy of ICM
for any breach of such covenants, and ICM shall be entitled to seek such other relief or
remedy, at law or in equity, to which it may be entitled as a consequence of any breach of such
duties or obligations.

11. The duties and obligations of OWNER under this License Agreement, and all provisions
relating to the enforcement of such duties and obligations shall survive and remain in full
force

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and effect notwithstanding any termination or expiration of the Contract or this License
Agreement.

12. ICM may terminate this License Agreement upon written notice to OWNER if OWNER willfully
or wantonly (a) uses the Proprietary Property for any purpose, or (b) discloses the Proprietary
Property to anyone, in each case other than permitted herein. Upon termination of this License
Agreement, OWNER shall cease using the Proprietary Property for any purpose (including the
Purpose) and, upon request by ICM, shall promptly return to ICM all documents or other
materials in OWNER’s or its Representatives’ possession that contain Proprietary Property in
whatever format, whether written or electronic, including any and all copies or reproductions
of the Proprietary Property. OWNER shall permanently delete all such Proprietary Property from
its computer hard drives and any other electronic storage medium (including any backup or
archive system). OWNER shall deliver to ICM a written certificate which certifies that all
electronic copies or reproductions of the Proprietary Property have been permanently deleted.

13. The laws of the State of Kansas, United States of America (or US), shall govern the
validity of the provisions contained herein, the construction of such provisions, and the
interpretation of the rights and duties of the parties. Any legal action brought to enforce or
construe the provisions of this License Agreement shall be brought in the federal or state
courts located in Wichita, Kansas, and the parties agree to and hereby submit to the exclusive
jurisdiction of such courts and agree that they will not invoke the doctrine of forum non
conveniens or other similar defenses in any such action brought in such courts.
Notwithstanding the foregoing, nothing in this License Agreement will affect any right ICM may
otherwise have to bring any action or proceeding relating to this License Agreement against
OWNER or its properties in the courts of any jurisdiction.

14. OWNER hereby agrees to waive all claims against ICM and ICM’s Representatives for any
consequential damages that may arise out of or relate to this License Agreement, the Contract
or the Proprietary Property whether arising in contract, warranty, tort (including negligence),
strict liability or otherwise, including but not limited to losses of use, profits, business,
reputation or financing. OWNER further agrees that the aggregate recovery of OWNER and Fagen
(and everyone claiming by or through OWNER and Fagen), as a whole, against ICM and ICM’s
Representatives, collectively, for any and all claims that arise out of, relate to or result
from this License Agreement, the Proprietary Property or the Contract, whether arising in
contract, warranty, tort (including negligence), strict liability or otherwise, shall
not exceed One Million US Dollars ($1,000,000).

15. The terms and conditions of this License Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede any prior understandings,
agreements or representations by or between the parties, written or oral. Any rule of
construction to the effect that any ambiguity is to be resolved against the drafting party
shall not be applicable in the interpretation of this License Agreement. This License
Agreement may not be modified or amended at any time without the written consent of the
parties.

16. All notices, requests, demands, reports, statements or other communications (herein
referred to collectively as “Notices”) required to be given hereunder or relating to this
License Agreement shall be in writing and shall be deemed to have been duly given if
transmitted by personal delivery or mailed by certified mail, return receipt requested, postage
prepaid, to the address of the party as set forth below. Any such Notice shall be deemed to be
delivered and

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received as of the date so delivered, if delivered personally, or as of the third business day
following the day sent, if sent by certified mail. Any party may, at any time, designate a
different address to which Notices shall be directed by providing written notice in the manner
set forth in this paragraph.

17. In the event that any of the terms, conditions, covenants or agreements contained in this
License Agreement, or the application of any thereof, shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, such term, condition, covenant or
agreement shall be deemed void ab initio and shall be deemed severed from this License
Agreement. In such event, and except if such determination by a court of competent
jurisdiction materially changes the rights, benefits and obligations of the parties under this
License Agreement, the remaining provisions of this License Agreement shall remain unchanged
unaffected and unimpaired thereby and, to the extent possible, such remaining provisions shall
be construed such that the purpose of this License Agreement and the intent of the parties can
be achieved in a lawful manner.

18. The duties and obligations herein contained shall bind, and the benefits and advantages
shall inure to, the respective successors and permitted assigns of the parties hereto.

19. The waiver by any party hereto of the breach of any term, covenant, agreement or condition
herein contained shall not be deemed a waiver of any subsequent breach of the same or any other
term, covenant, agreement or condition herein, nor shall any custom, practice or course of
dealings arising among the parties hereto in the administration hereof be construed as a waiver
or diminution of the right of any party hereto to insist upon the strict performance by any
other party of the terms, covenants, agreement and conditions herein contained.

20. In this License Agreement, where applicable, (i) references to the singular shall include
the plural and references to the plural shall include the singular, and (ii) references to the
male, female, or neuter gender shall include references to all other such genders where the
context so requires.

IN WITNESS WHEREOF, the parties hereto have executed this License Agreement, the Effective Date of
which is indicated on page 1 of this License Agreement.

	 	 	 
	OWNER:

	 	ICM:
	 
	 	 
	Advanced BioEnergy, LLC

	 	ICM, Inc.
	 
	 	 
	By: /s/ Revis L. Stephenson III

	 	By: /s/ Dave Vander Griend
	 
	 	 
	Title: Chairman

	 	Title: CEO
	 
	 	 
	Date Signed: 3/16/06

	 	Date Signed: 3/24/06
	 
	 	 
	Address for giving notices:

	 	Address for giving notices:
	 
	 	 
	137 N. 8th St

	 	301 N First Street
	Geneva, NE 68361

	 	Colwich, KS 67030

5exv10w11

 

Exhibit 10.11

CONTRACT FOR ELECTRIC SERVICE

Between

PERENNIAL PUBLIC POWER DISTRICT

And

ADVANCED BIOENERGY, LLC

 

 

CONTRACT FOR ELECTRIC SERVICE

This CONTRACT is entered into this 25th day of April, 2006, between Perennial Public Power
District, a public corporation and political subdivision of the State of Nebraska (Perennial), and
Advanced BioEnergy, LLC, a Delaware limited liability company (ABE), each sometimes hereinafter
referred to singularly as “Party” and collectively as the “Parties”. Perennial hereby agrees to
sell and deliver to ABE and ABE agrees to purchase and receive from Perennial all of the electric
power and energy needed at the ABE ethanol production facility located in Section 36, Township 8
North, Range 3 West in Fillmore County, Nebraska.

IN CONSIDERATION of the terms hereinafter contained, IT IS AGREED:

	1.	 	SERVICE TO PREMISES

	 	A.	 	Perennial shall install, own and maintain the subtransmission line and
substation facilities needed for permanent electric service. Service hereunder shall
be considered to be firm and shall be three-phase, alternating current, at sixty hertz
and 12,470 volts. The Point of Delivery shall be at the point of attachments of the
ABE owned distribution circuits coming out of the substation.
	 
	 	 	 	According to the foregoing description of the characteristics of service, it is hereby
understood that two transformers will be installed by Perennial in the substation, and
each shall have a base rating of 7.5 MVA. The Parties also agree that the maximum
capacity to be reserved and furnished to ABE is 7,500 kW per transformer, for a total
capacity of 15,000 kW.
	 
	 	B.	 	ABE shall not use the electric power and energy furnished hereunder as an
auxiliary or supplement to any other sources of purchased power and shall not sell,
transfer or assign electric power and energy purchased hereunder. However, nothing
contained in this contract prevents ABE from participating in Perennial’s Energy
Curtailment Program, or purchasing other power products from Perennial that become
available from time to time. Monetary credits and/or charges for such products shall
be made

1

 

	 	 	 	in accordance with the rate schedules established for the programs in which ABE chooses
to participate.
	 
	 	C.	 	Perennial is willing to install the required electric service facilities to ABE
with a Contribution-in-Aid-of-Construction from ABE, in an amount in which the
actual cost of construction exceeds Perennial’s Allowable Investment Limit
(AIL) of $812,394. The cost of construction shall include, but is not limited to the
cost of labor, materials, transportation, overheads and right-of-way clearing. The
Contribution-in-Aid-of-Construction shall be paid by ABE as follows:

	 	•	 	$650,000 prior to placing the order for the substation transformers.
	 
	 	•	 	The balance of the costs (estimated at $598,000) upon the completion of the
construction of all facilities.

	 	D.	 	Duly authorized representatives of Perennial shall be permitted to enter ABE’s
premises at all reasonable times in order to maintain the facilities used to provide
service to ABE. In exercising its rights hereunder, Perennial shall follow ABE’s
requirement for notifying ABE of such entry, and Perennial shall not unreasonably
interfere with ABE’s operations. ABE agrees to grant Perennial all easement(s)
reasonably necessary for Perennial to perform under the Contract if Perennial’s
facilities are on property owned by ABE.

	2.	 	SECURITY REQUIREMENT
	 
	 	 	For security of monthly power and energy bills, ABE shall provide a prepayment equal to two
month’s estimated revenue. The prepayment will not accrue interest and is only refundable
in the event that ABE discontinues operations, at which time the prepayment would be applied
to the final bill.
	 
	 	 	In lieu of a prepayment, ABE may provide one of the following:

	 	•	 	A Surety Bond approved by Perennial’s legal counsel.

 

 

	 	•	 	An Irrevocable Letter of Credit from ABE’s bank equal to two month’s
estimated revenue. ABE is required to maintain such Letter of Credit for a
period of three (3) years from the date of the initial billing of power and
energy. However, if ABE’s account becomes delinquent during the three year
period, ABE shall extend such Letter of Credit for a period of three (3) years
from the date of the last delinquency.
	 
	 	•	 	Any other type of security arrangement approved by Perennial.

	3.	 	TERM
	 
	 	 	This Contract shall become effective on the date first above written and shall remain in
effect for a term of five (5) years from the initial billing period and will be renewed
automatically thereafter on an annual basis unless terminated by either party giving to the
other 12 months written notice.
	 
	4.	 	PAYMENT
	 
	 	 	ABE shall pay monthly charges to Perennial for service hereunder at the rates and upon the
terms and conditions set forth in the rate schedule attached hereto and made a part of this
Contract. The Parties expressly understand that Perennial’s rate schedule may change upon
approval of Perennial’s governing board.
	 
	 	 	Perennial shall pass through and ABE shall pay any applicable taxes levied on transactions
thereunder, except to the extent ABE provides Perennial with documentation acceptable to
Perennial in its sole judgment establishing that ABE is exempt from the obligation to pay
all or any portion of taxes that Perennial is required to collect pursuant to law.
	 
	5.	 	LIMITATION OF LIABILITY
	 
	 	 	Perennial shall use reasonable diligence to provide a constant and uninterrupted supply of
electric power and energy hereunder. Perennial does not guarantee that service will be free
from, and Perennial shall not be liable for, interruptions, surges, voltage fluctuations or
disturbances.

 

 

	 	 	In no event shall Perennial be liable under any provision of this Contract for special,
incidental, or consequential damages, including but not limited to, loss of profits, loss of
revenue, loss of use of any property, cost of capital, cost of purchased power, cost of
substitute equipment, facilities or services, downtime costs, or claims of ABE for such
damages, even if Perennial is expressly informed of the same.
	 
	6.	 	INDEMNIFICATION
	 
	 	 	Each party agrees to and shall defend, indemnify and hold harmless the other party, or its
representatives, agents, or employees from and against all claims, demands, suits, actions,
payments and judgments which arise out of or relate to this Contract and caused solely by
the negligent act or omission, willful misconduct, or other fault of any nature of the
indemnifying party, its representatives, agents, or employees.
	 
	7.	 	UNCONTROLLABLE FORCES
	 
	 	 	Perennial shall not be liable for loss or damage from any failure to perform any of its
contractual obligations specified under this Contract because of Uncontrollable Forces,
which are circumstances beyond Perennial’s control, or because an emergency situation arises
which affects Perennial’s ability to provide services to ABE under this Contract, and
Perennial shall be temporarily relieved of its obligations under this Contract, and shall
have a reasonable period of time after termination of the Uncontrollable Force or emergency
situation to resume performance.
	 
	8.	 	ASSIGNMENT OF CONTRACT
	 
	 	 	This Contract shall be binding upon and inure to the benefit of the successors, legal
representatives and assigns of the respective Parties hereto, but no voluntary assignment of
the Contract by ABE shall be made without the prior written consent of Perennial.

 

 

	9.	 	SEVERABILITY
	 
	 	 	If any provision of this Contract is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full
force without being impaired or invalidated in any way.
	 
	10.	 	GOVERNING LAW
	 
	 	 	This Contract is deemed to have been effectively entered into in the State of Nebraska and
it shall be interpreted and controlled by the laws of said State. The Parties agree that
any action arising out of or related to this Contract brought by ABE against Perennial shall
be brought only in the federal or state courts in the State of Nebraska.
	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their
duly authorized representatives, as of the effective date hereof.

	 	 	 	 	 	 	 
	 	 	 	 	PERENNIAL PUBLIC POWER DISTRICT
	 
	 	 	 	 	 	 
	ATTEST:

	 	 	 	By:
	 	/s/ Dean L. Due
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	   /s/ Herman P. Hirshfield
 

	 	 	 	Title: 
	 	 President 
	 
	 	 	 	 	 	 
	 	 	 	 	ADVANCED BIOENERGY, LLC
	 
	 	 	 	 	 	 
	ATTEST:

	 	 	 	By:
	 	/s/ Revis L. Stephenson III
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	    /s/ Donald Gales
 

	 	 	 	Title 
	 	: Chairman, CEO

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