Exhibit 10.18
FORM OF LICENSE
AGREEMENT
THIS FORM OF LICENSE
AGREEMENT (this
“License Agreement”) is entered into and made effective
as of the ___ day of ___________, 2006 (“Effective
Date”) by and between ________________, a Delaware limited
liability company (“OWNER”), and ICM, Inc., a Kansas
corporation (“ICM”).
WHEREAS, OWNER has entered into that
certain Lump Sum Design-Build Agreement dated the date hereof (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 _______________ (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 and operation 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. ICM grants to OWNER a limited
license to use the Proprietary Property (hereinafter defined)
solely in connection with the design, construction, operation,
maintenance and repair of the Plant, subject to the limitations
provided herein (the “Purpose”). The limited license
granted in this License Agreement shall remain in effect and shall
not terminate for so long as the Plant is operational, except as
otherwise provided in this paragraph 1 or paragraph 12.
(a) If the Contract is terminated
for any reason not expressly set forth in paragraph 1(b)
(including, without limitation, termination by OWNER for
OWNER’s convenience under Section 15.3 of the Contract
or termination by Fagen for cause pursuant to
Section 15.5.1(d) of the contract), the limited license
granted to OWNER herein shall terminate.
(b) If (i) the Contract is
terminated by OWNER due to Fagen’s default (pursuant to
Section 15.2 or 15.6 of the Contract), or (ii) the
Contract is terminated by Fagen for cause in accordance with
Section 15.5 of the Contract (other than a termination under
Section 15.5.1(d) of the Contract), then, in either case,
OWNER may cause the Plant to be completed and maintain the limited
license granted to it herein subject to the conditions set forth in
this paragraph 1(b). In this event, ICM shall have the option of
completing the Plant and the parties shall negotiate in good faith
the terms and conditions of a replacement contract which shall be
reasonable. If ICM chooses not to complete the Plant, or if the
parties are unable to reach mutual agreement on the terms and
conditions of
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a replacement contract within thirty
(30) days after the Contract is terminated despite their good
faith efforts to do so, then, in either case, this License
Agreement shall remain in effect and OWNER will be free to select
and utilize a qualified contractor to serve as a replacement
contractor to complete the Plant, provided , however
, (A) OWNER may not utilize a replacement contractor other
than Kiewit without ICM’s prior written approval, which will
not be unreasonably withheld or delayed (the parties agree that ICM
may withhold its approval, and such approval will not be considered
unreasonably withheld, if the replacement contractor is Delta-T
Corporation, Broin Companies, Lurgi, Vogelbusch or Katzen (each of
which is referred to hereinafter as a “Technology
Competitor”) or any successor or affiliate of a Technology
Competitor or any contractor who regularly performs work for a
Technology Competitor), (B) such replacement contractor must
execute and deliver to ICM an instrument, in form and substance
reasonably acceptable to ICM, under which such replacement
contractor agrees to be bound by the provisions of this License
Agreement to the same extent as OWNER, (C) if ICM has not been
paid all amounts that would have been payable by Fagen to ICM with
respect to the Plant had Fagen completed the Plant pursuant to the
Contract, OWNER shall pay such remaining amounts to ICM, and,
(D) such replacement contractor enters into an agreement with
ICM under which ICM provides those services (on a reasonable time
and materials basis) that ICM reasonably determines are needed for
the replacement contractor to complete the Plant and achieve the
performance standards contained in the Contract (OWNER understands
that Fagen and ICM possess certain knowledge and know-how
concerning the construction of ethanol plants that utilize the
Proprietary Property that is not known or available to other
contractors and therefore any replacement contractor will need some
assistance from ICM in order to complete the Plant), all of which
must occur prior to OWNER supplying any of the Proprietary Property
to such replacement contractor. The replacement contractor, OWNER
and ICM will negotiate in good faith and cooperate with each other
toward execution of a reasonable service agreement under clause
(D) above.
2. The “Proprietary
Property” means, without limitation, documents, Operating
Procedures (hereinafter defined), materials and other information
that are furnished by ICM to OWNER, whether orally, visually, in
writing, or by any other means, whether tangible or intangible,
directly or indirectly (including, without limitation, through
Fagen or any replacement contractor under paragraph 1(b)) and in
whatever form or medium, in connection with the Purpose 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
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system hardware connections) and all documents
supporting that system. Proprietary Property disclosed in written
format by ICM shall contain one or more words conspicuously
printed, typed or marked thereon indicating that such materials are
proprietary and/or confidential. 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 similar
information concerning the Purpose. Proprietary Property shall not
include any information or materials that OWNER can demonstrate by
clear and convincing evidence and written documentation:
(i) was lawfully in the possession of OWNER prior to
disclosure by ICM or Fagen (or any replacement contractor under
paragraph 1(b)); (ii) was in the public domain prior to
disclosure by ICM or Fagen (or any replacement contractor under
paragraph 1(b)); (iii) was disclosed to OWNER by a third party
other than Fagen (or any replacement contractor under paragraph
1(b)) having the legal right to possess and disclose such
information or materials; or (iv) after disclosure by ICM or
Fagen (or any replacement contractor under paragraph 1(b)) 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. Upon reasonable notice, 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 (provided that such inspection may not
unreasonably interfere with the operation of the Plant, and OWNER
may require ICM and its Representatives to execute reasonable
nondisclosure agreements and to comply with OWNER’s
reasonable safety and similar procedures).
4. In the event the replacement
contractor selected pursuant to paragraph 1(b) (including Kiewit)
fails to comply in all material respects with the terms and
conditions of the agreement entered into between such replacement
contractor and ICM in accordance with paragraph 1(b)(D),
including all construction guidelines and manuals incorporated
therein, or in the event OWNER fails to materially comply with any
part of the Operating Procedures, all guarantees, representations
and warranties, whether expressed or implied, if any, that were
given by ICM to OWNER, directly or indirectly through Fagen (or any
replacement contractor under paragraph 1(b)), concerning the
performance of the Plant or the Proprietary Property (collectively
the “Guarantees”) will be void to the extent that
I
