CONFIDENTIAL
License Agreement
Between
Syntroleum Australia
Licensing Corporation
and
Commonwealth of Australia
LICENSE AGREEMENT
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THIS LICENSE AGREEMENT is made and entered into as of this 3rd day of
August, 2000 by and between Syntroleum Australia Licensing Corporation, a
Delaware corporation ("Licensor"), and the Commonwealth of Australia
("Licensee").
RECITALS
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A. WHEREAS, Licensor has entered into the Syntroleum License Agreement
with Syntroleum pursuant to which Licensor has licensed from Syntroleum certain
patent rights and technical information relating to a Conversion Process; and
B. WHEREAS, under the provisions of the Syntroleum License Agreement,
Licensor has the right to grant a sublicense to Licensee to use Licensor Patent
Rights and Licensor Technical Information in practicing of a Conversion Process
in Licensed Facilities in the Licensed Territory; and
C. WHEREAS, Licensee desires to enter into a non-exclusive limited
license with Licensor to acquire the right to use Licensor Patent Rights and
Licensor Technical Information.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Parties agree as follows.
1. DEFINITIONS
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The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof).
1.01 "AFFILIATE" means, with respect to each Party, any Person in which the
Party or its parent company(ies) (one or more parent companies in an upward
series) shall at the time in question directly or indirectly own a fifty percent
(50%) or more interest in such Person. It is understood that: (i) a Party or
its parent company(ies) directly owns a fifty percent (50%) or more interest in
a Person if that Party or its parent company(ies) individually or collectively
hold(s) shares carrying fifty percent (50%) or more of the voting power to elect
directors or other managers of such Person and (ii) a Party or its parent
company(ies) indirectly owns a fifty percent (50%) or more interest in a Person
if a series of companies can be specified beginning with a Party or its parent
company(ies), individually or collectively, and ending with such Person so
related that each company of the series, except such Person, directly owns a
fifty percent (50%) or more interest in a later company in the series.
1.02 "AGREEMENT" means this License Agreement.
1.03 "BARREL" means forty-two (42) gallons of two hundred thirty-one (231)
cubic inches each, measured at sixty degrees Fahrenheit (60 F) and one (1)
atmosphere pressure.
1.04 "CHAIN-LIMITING CATALYST" means a type of catalyst for use in a
▇▇▇▇▇▇▇-Tropsch Reaction the primary products of which are predominately
hydrocarbon molecules of twenty (20) or fewer carbon atoms which remain liquid
at ambient temperature and pressure.
1.05 "CONFIDENTIAL INFORMATION" means information of Licensor or Licensee
disclosed to the other Party under this Agreement, including any formula,
pattern, compilation, program, apparatus, device, drawing, schematic, method,
technique, know-how, process or pilot plant data, and other non-public
information such as business plans or other technology that: (a) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (b) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy, which
information shall be disclosed in writing and labeled as "Confidential" or the
equivalent, or if disclosed verbally or in other non-written form, identified as
such at the time of disclosure and thereafter summarized in writing by the
disclosing Party within thirty (30) days of such initial disclosure.
Confidential Information includes, without limit, Licensor Catalyst Information,
Licensor Technical Information, and Licensee Technical Information.
1.06 "CONVERSION PROCESS" means any process for the conversion of normally
gaseous hydrocarbons into a mixture of hydrocarbons which may be a combination
of normally gaseous, liquid, or solid hydrocarbons at ambient temperatures and
pressures and comprised of (a) autothermal reforming of a feed stream consisting
substantially of gaseous hydrocarbons in the presence of air, or oxygen-enriched
air to create an intermediate feed stream containing carbon monoxide and
molecular hydrogen, and (b) reacting the intermediate stream in the presence of
a ▇▇▇▇▇▇▇-Tropsch catalyst to produce a product stream consisting of any
combination of gaseous, liquid or solid hydrocarbons at ambient temperature and
pressure. The Conversion Process includes all associated internal processes and
technologies such as heat integration, separation, or the recycle, use, or
consumption of hydrocarbons or other products. The Conversion Process does not
include any technology related to (i) pre-treatment of the natural gas feedstock
or (ii) post-processing the ▇▇▇▇▇▇▇-Tropsch product stream for a purpose other
than that defined above.
1.07 "EFFECTIVE DATE" means the date set forth in the first paragraph of
this Agreement.
1.08 "ESCROW AGENT" means Westpac Banking Corporation.
1.09 "ESCROW AMOUNT" means 50% of the Initial License Fee.
1.10 "ESCROW AGREEMENT" means the Deposit Agreement between Licensor,
Licensee and Westpac Banking Corporation.
1.11 "▇▇▇▇▇▇▇-TROPSCH CATALYST" means any catalyst for use in a
▇▇▇▇▇▇▇-Tropsch Reaction, including, but not limited to, Chain Limiting Catalyst
and High Alpha Catalyst.
1.12 "▇▇▇▇▇▇▇-TROPSCH REACTION" means the catalytic reaction of carbon
monoxide and hydrogen, the primary products of which are hydrocarbons.
1.13 "HIGH ALPHA CATALYST" means a type of ▇▇▇▇▇▇▇-Tropsch Catalyst, whose
alpha number, as calculated by the ▇▇▇▇▇▇-▇▇▇▇▇ distribution equation, is 0.85
or higher.
1.14 "INITIAL LICENSE FEE" means the initial license fee paid by Licensee to
Licensor pursuant to Section 5.01 of this Agreement.
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1.15 "INVENTIONS OR IMPROVEMENTS" means any process, formula, composition,
device, catalyst (including both autothermal reforming catalysts and
▇▇▇▇▇▇▇-Tropsch Catalysts), apparatus, technology, know-how, operating
technique, improvement, modification, or enhancement relating to the use,
operation, or commercialization of a Conversion Process and the products
(including Synthetic Product) of a Conversion Process, which is discovered,
made, designed, developed or acquired by Licensee, solely or with others, since
the date of this Agreement, or used in a Licensed Plant, in each instance
whether patentable or not, including, without limitation, patents, copyrights,
and Confidential Information and further including the full scope and content of
the intellectual and tangible property included therein and produced therefrom,
e.g., drawings, prints, chemical formulae, prototypes, data, computer programs
and software, and the like. Inventions or Improvements shall not include any
information relating to methods of manufacturing catalysts for use in a
Conversion Process.
1.16 "LICENSE FEE" means the fee paid by Licensee to Licensor, as
consideration for granting a license pursuant to a Site License Agreement to use
Licensor Technology at a Licensed Plant, as calculated in accordance with
Attachment 2 of this Agreement, and does not include fees related to the
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purchase of the associated Process Design Package for such Licensed Plant, any
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catalyst or any catalyst markup.
1.17 "LICENSED FACILITIES" means one or more Licensed Plants.
1.18 "LICENSED PLANT" means a plant (including modification, expansion or
replacement thereof) licensed to operate pursuant to a Site License Agreement
issued under the terms of this Agreement, at a site within the Licensed
Territory with a design production capacity measured in Barrels of Synthetic
Product per day, using or designed to use Licensor Technology to practice the
Conversion Process to produce Marketable Products.
1.19 "LICENSED TERRITORY" means the countries of Australia, Papua New
Guinea, East Timor, and Indonesia and their respective territorial waters except
(a) any such country that, from time to time, may be prohibited, or whose
citizens (considered as a group) may be prohibited, by the United States
government from receiving Licensor Technology or the products thereof or (b) any
such country the inclusion of which in the definition of Licensed Territory is,
or could in good faith be argued to be, prohibited by United States law,
including, without limitation, United States Executive Orders and administrative
orders, rules and regulations. Licensed Territory shall include territories or
territorial waters which are the subject of official dispute between or among
countries only if all countries claiming sovereignty, a sovereign right, or
jurisdiction over such territories or territorial waters are otherwise included
within the definition of such term.
1.20 "LICENSEE PATENT RIGHTS" means all rights with respect to patents and
patent applications of all relevant countries to the extent that the claims
cover features or aspects of Inventions or Improvements practiced in a Licensed
Plant, in each case to the extent that, and subject to the terms and conditions
under which, Licensee has the right to grant licenses, immunities or licensing
rights without having to make payment to others.
1.21 "LICENSEE TECHNICAL INFORMATION" means all unpatented Inventions or
Improvements practiced in a Licensed Plant, in each case to the extent that, and
subject to the terms and conditions under which, Licensee has the right to grant
licenses, immunities or licensing rights without having to make payment to
others.
1.22 "LICENSOR CATALYST INFORMATION" means, without limit, information
relating to any catalyst, catalyst formulation, conditioning procedure, start-up
procedure, regeneration procedure, or performance which are licensed by
Syntroleum to Licensor (with right to sublicensee) pursuant to the Syntroleum
License Agreement. Licensor Catalyst Information shall not include any
information relating to methods for manufacturing catalysts for use in a
Conversion Process.
1.23 "LICENSOR CATALYST PATENT RIGHTS" means all rights with respect to
patents and patent applications of all relevant countries to the extent that the
claims cover features or aspects of catalysts useable in a Conversion Process
(including, without limitation, autothermal reforming catalysts and
▇▇▇▇▇▇▇-Tropsch Catalysts) and expressly excluding any process operating
techniques or apparatus or methods for manufacturing such catalysts, which are
licensed by Syntroleum to Licensor (with right to sublicense) pursuant to the
Syntroleum license Agreement.
1.24 "LICENSOR PATENT RIGHTS" means all rights with respect to patents and
patent applications of all relevant countries to the extent that the claims
cover features or aspects of a Conversion Process (including, without
limitation, any operating techniques and apparatus and expressly excluding
Licensor Catalyst Patent Rights) which are licensed by Syntroleum to Licensor
(with right to sublicense) pursuant to the Syntroleum License Agreement.
1.25 "LICENSOR TECHNICAL INFORMATION" means all unpatented information
relating to a Conversion Process (including, without limitation, operating
techniques and apparatus for carrying out the Conversion Process and expressly
excluding Licensor Catalyst Information and Reactor Information) which are
licensed by Syntroleum to Licensor (with right to sublicense) prior to the
termination of this Agreement; in each case to the extent that, and subject to,
the terms and conditions, including the obligation to account to and/or make
payments to others, under which Licensor has the right to disclose and grant
rights to others.
1.26 "LICENSOR TECHNOLOGY" includes Licensor Technical Information and
Licensor Patent Rights related to the practice of a Conversion Process and
Licensor Catalyst Information and Licensor Catalyst Patent Rights related to the
use of Syntroleum catalysts in the practice of a Conversion Process but
expressly excluding the right to make, have made, or sell Syntroleum catalysts.
1.26A "LOAN AGREEMENT" means the A$ Loan Agreement between Licensee and
Syntroleum Australia Credit Corporation dated August 3, 2000.
1.27 "LUBRICANTS" means hydrocarbon base oils which can be made into, or
blended with other base oils to be made into, without limit (a) automotive
lubricating oils such as PCMO, HDD, transmission and hydraulic fluids, and gear
oils; (b) industrial lubricants such as metalworking lubricants, process oils,
white oils, agricultural spray oils, de-foamers, cutting and quenching oils, and
rubber processing oils; (c) greases; (d) drilling fluids; or (e) any other
specialty product agreed to by the Parties which is not a Marketable Product.
1.28 "MAJOR EVENT OF DEFAULT" has the meaning ascribed to that term in the
Loan Agreement.
1.29 "MARKETABLE PRODUCTS" means finished hydrocarbon fuels, hydrocarbons
consumed as fuel, or fuel blending stocks, including, but not limited to,
diesel, kerosene, gasoline, and naphtha processed from Synthetic Product and
expressly excluding waxes, chemicals, Lubricants, or any other specialty
hydrocarbon products and subject to the express condition that Marketable
Products shall be produced from Synthetic Product at the Licensed Plant or
produced from Synthetic Product at a separate facility operated by the Licensee,
or third Persons who are contractually committed to Licensee to produce only
Marketable Products from such Synthetic Product. Notwithstanding the foregoing,
Marketable Products shall be deemed to include any products:
(a) produced at any location by any Person from a blended stream of
Synthetic Product and at least 15% by volume of produced crude oil or
condensate, in which the Synthetic Product, before any blending,
(i) remains a liquid at sixty degrees Fahrenheit (60 F) and one (1)
atmosphere pressure or,
(ii) has a chemical composition consisting of molecules having at least 85%
by volume of which contain no more than 20 carbon atoms each and no more than 1%
by volume of which contains more than 40 carbon atoms each; or
(b) produced at any location by any Person from a blended stream of
Synthetic Product and at least 40% by volume produced crude oil or condensate
such that after blending the mixture is a transportable liquid, expressly
excluding slurries; or
(c) produced by blending individual fractions distilled from Synthetic
Product with at least 50 % by volume of like distilled fractions from produced
crude oil or condensate, in which each distilled fraction from Synthetic
Product, before any blending, has a chemical composition consisting of molecules
having at least 85% by volume of which contain no more than 20 carbon atoms each
and no more than 1 % by volume of which contains more than 40 carbon atoms each,
wherein the blending is performed at any location by the Licensee or third
Persons who are contractually committed to Licensee to produce only Marketable
Products from such Synthetic Product.
Notwithstanding the above language in this Section 1.27 hydrocarbons consumed
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as fuel by Licensee at locations which satisfy the conditions of this Section
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1.27 are Marketable Products, regardless of whether or not they happen to be
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waxes, chemicals, Lubricants, or any other specialty hydrocarbon products.
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1.30 "PARTIES" means Licensor and Licensee.
1.31 "PARTY" means Licensor or Licensee.
1.32 "PERSON" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, other than the Parties.
1.33 "PROCESS DESIGN PACKAGE" means a compilation of text, figures, drawings
and documentation, relating to the design and construction of a Licensed Plant
which may be modified from time to time by mutual consent of the Parties (and
expressly excluding Reactor Information) which is necessary and sufficient to
prepare the detailed design and engineering necessary to construct and operate a
Licensed Plant.
1.34 "REACTOR INFORMATION" means all information, including but not limited
to data, processes, plans, specifications, flow sheets, designs, and drawings,
relating to the internal design or functions, including, without limitation,
tube count, tube size and configuration and catalyst volume, relating to any
Syntroleum autothermal reformer or ▇▇▇▇▇▇▇-Tropsch reactors which, at any time
during the term of this Agreement, Licensor discloses to Licensee.
1.35 "REACTOR VENDOR" shall mean those fabricators approved by Licensor (or
Syntroleum) to perform the fabrication and/or maintenance and repair of
autothermal reformer or ▇▇▇▇▇▇▇-Tropsch reactors for installation and use in
Licensed Facilities. Licensor (or Syntroleum) may, from time to time, add or
remove any vendor from being a Reactor Vendor.
1.36 "SITE LICENSE AGREEMENT" means an agreement between the Parties, in the
form attached to this Agreement as Attachment 3 and which may be modified from
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time to time by mutual written consent of the Parties, granting the right to
build and operate a single Licensed Plant, specifying in each case the fixed
site and the nominal design capacity, in Barrels of Synthetic Product produced
per day.
1.37 "START-UP DATE" means the first full calendar day following a five day
period, after completion of catalyst pre-treatment and other preliminary
operations, during which the applicable Licensed Plant produces quantities of
Synthetic Product in an amount equal to at least 75% of the per-day design
production capacity of such Licensed Plant averaged over such five day period.
1.38 "SYNTHETIC PRODUCT" means those hydrocarbons, having a chemical
composition substantially consisting of molecules with five or more carbon atoms
each, produced using Licensor Technology in the practice of a Conversion Process
at a Licensed Plant.
1.39 "SYNTROLEUM" means Syntroleum Corporation, a Delaware corporation.
1.40 "SYNTROLEUM AUSTRALIA CREDIT" means Syntroleum Australia Credit
Corporation, a Delaware corporation, and a wholly-owned subsidiary of
Syntroleum.
1.41 SYNTROLEUM LICENSE AGREEMENT" means the License Agreement between
Syntroleum and Licensor dated August 2, 2000.
2. LICENSOR GRANTS TO LICENSEE
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2.01 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee a limited, non-exclusive, non-transferable (except as provided
Article 8) right and license to use Licensor Patent Rights and Licensor
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Technical Information to design, construct, operate and maintain (including
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modify, expand and replace) Licensed Facilities under a separate Site License
Agreement for each Licensed Plant, to practice a Conversion Process to
manufacture Synthetic Product solely for the purpose of producing, using, and
selling Marketable Products anywhere in the world.
2.02 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee a limited, non-exclusive, non-transferable (except as provided in
Article 8) right to purchase from Reactor Vendors the appropriate
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▇▇▇▇▇▇▇-Tropsch and autothermal reforming reactors for use in the practice of a
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Conversion Process at a Licensed Plant. Licensee shall have no right to make,
have made, or sell any reactor based on Reactor Information except as expressly
provided in this Section 2.02.
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2.03 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee (a) the right to purchase from Licensor the appropriate
▇▇▇▇▇▇▇-Tropsch Catalyst and, from either Licensor or a catalyst vendor
designated by Licensor, the appropriate autothermal reforming catalyst for use
in the practice of a Conversion Process at a Licensed Plant to manufacture
Synthetic Product solely for the purpose of producing, using, and selling
Marketable Products anywhere in the world and (b) a limited non-exclusive,
non-transferable (except as provided in Article 8) right and license under
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Licensor Catalyst Patent Rights and Licensor Catalyst Information to use such
catalysts in the practice of a Conversion Process at a Licensed Plant to
manufacture Synthetic Product solely for the purpose of producing, using, and
selling Marketable Products anywhere in the world. The purchase price for any
catalyst purchased by Licensee from Licensor shall be equal to the lowest of
(a) Licensor's cost to produce or have produced such catalysts, plus a markup of
twenty five percent (25%), or (b) if, during the twelve (12) month period prior
to a catalyst purchase by Licensee, the same catalyst (at comparable quantities)
was sold by Licensor to a third party at a markup less than twenty five percent
(25%), Licensee shall be entitled to the lower markup for its current catalyst
purchase. Licensor will, no more than once per year, provide Licensee
reasonable access to the relevant books of Licensor to verify the lowest markup
for such catalyst. Licensee shall have no rights to make, have made, or sell
any Licensor ▇▇▇▇▇▇▇-Tropsch Catalyst or autothermal reforming catalyst, which
is proprietary to Licensor. Beyond the initial catalyst fill, for a Licensed
Plant, Licensee will have the right to buy replacement catalyst from other
catalyst suppliers. If Licensor specifies in the Process Design Package an
autothermal reforming catalyst commercially available from a third party,
Licensee shall have the right to purchase such catalyst directly from a third
party.
2.04 In the event Licensor for any reason is unable to supply Licensee with
such amounts of ▇▇▇▇▇▇▇-Tropsch Catalyst as may be reasonably necessary for the
operation of a specific Licensed Plant, Licensor shall provide to one or more
catalyst vendors designated by Licensor the necessary catalyst recipe, together
with a non-exclusive limited license to make and sell such ▇▇▇▇▇▇▇-Tropsch
Catalyst to Licensee for use in such Licensed Plant, and Licensee shall have the
right to purchase such ▇▇▇▇▇▇▇-Tropsch Catalyst from such vendor for use in such
Licensed Plant on the same terms (including price) as set forth in Section 2.03.
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2.05 Upon Licensee's written request, Licensor will execute a Site License
Agreement with respect to a specific proposed Licensed Plant if:
(a) Licensee has delivered to Licensor a Request for Site License Agreement
in the form of Attachment 1;
(b) Licensee is current on all payments due under prior Site License
Agreements for all Licensed Facilities under this Agreement in accordance with
their respective terms; and
(c) there is not a material default under this Agreement for which Licensee
is responsible resulting from or affecting a Licensed Plant.
Until such time as the above conditions are satisfied, Licensee shall have no
right or license to use Licensor Technology at the proposed Licensed Plant. At
the time a Request for Site License Agreement has been submitted by Licensee,
Licensor shall survey its Reactor Vendors (and cause Syntroleum to do the same)
to determine the lead time for reactor fabrication for the Licensed Plant. If
delivery time for reactors is greater than 18 months, Licensor shall use its
commercially reasonable efforts to approve (or have Syntroleum approve)
additional Reactor Vendors in order to reduce the delivery time.
2.06
(a) Each Licensed Plant shall remain at the initial plant site for a minimum
of (i) seven (7) years from Start-Up Date, or (ii) until the natural gas
reserves from which the Licensed Plant acquires its gas supply have been
depleted to the point that such reserves are not adequate for operation of the
Licensed Plant at its design capacity, whichever first occurs. Thereafter,
Licensee may relocate a Licensed Plant to a new plant site within the Licensed
Territory without obtaining a new Site License Agreement provided (i) request is
made by Licensee to Licensor in the form of Exhibit C of the Site License
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Agreement in which Licensee agrees that the Licensed Plant will remain at the
new site for minimum of seven (7) years and (ii) the Licensee is not in default
under the Site License Agreement for the Licensed Plant.
(b) Notwithstanding the provisions of Section 2.06(a), Licensed Plants
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utilizing gas from leases, concessions, or similar production sharing
arrangements in which Licensee owns at least a ten percent (10%) working, net
profits, equity, or other economic interest may, at any time, be relocated
within the geographic boundaries of any such leases, concessions, or similar
production sharing arrangements.
(c) Nothing in this Agreement shall prohibit Licensee from purchasing gas
from other parties to manufacture Synthetic Product at any Licensed Plant
pursuant to this Agreement.
(d) In the event that Licensee and Licensor or their respective Affiliates
enter into a program for the development of a floating facility using Licensor
Technology under the provisions of a written agreement between Licensee and
Licensor, or their respective Affiliates, the time period set forth in Section
2.06(a) and Section 2.05 of the Site License Agreement will be reduced from
seven (7) years to two (2) years.
3. TECHNICAL ASSISTANCE
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3.01 Licensee shall purchase and Licensor agrees to furnish to Licensee, or
to a contractor designated by Licensee (or procure the same is furnished by
Syntroleum), a Process Design Package for each Licensed Plant according to the
terms specified in Section 5.08 of this Agreement.
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3.02 Reactor Information necessary for each Licensed Plant shall be excluded
from the Process Design Package. However, those elements of Reactor Information
which are necessary to fabricate such reactors will be provided by Licensor (or
Licensor will procure Syntroleum provides such information) directly to the
Reactor Vendors selected by Licensee to manufacture the autothermal reformer and
▇▇▇▇▇▇▇-Tropsch reactors from Licensor's (or Syntroleum's) then current list of
Reactor Vendors. Licensor may, from time to time, add or remove any Reactor
Vendor.
3.03 Except as may be set forth in a Process Design Package, the obligations
of Licensor under this Agreement do not include the performing of any basic or
detailed design, engineering, training, consulting, start-up, operating or
maintenance services with respect to any Licensed Plant. Licensor's
responsibilities for any such services in the design, construction and operation
(including maintenance) of any Licensed Plant shall be as set forth in one or
more separate written engineering services agreement(s) (if any) between
Licensor (or Syntroleum as the case may be) and Licensee specifically applicable
to each Licensed Plant. Licensor will not refuse a request by Licensee to enter
into such an agreement with Licensee for such services as are reasonably
requested by Licensee and the Parties will each act reasonably in agreeing the
terms of such agreement. Where such services cannot be provided by Licensor
(but can be reasonably provided by Syntroleum), Licensor agrees to procure that
Syntroleum enters into such agreements with Licensee.
3.04 Licensor agrees to disclose to Licensee, upon reasonable request but at
least once a year, (a) additions to Licensor Technology and (b) improvements or
inventions developed by Licensor (or Syntroleum) relating to Licensor Technology
which have been commercially used or which Licensor determines are in a stage of
development suitable for commercial use. Licensor shall permit Licensee to
reasonably inspect, at mutually convenient times, the operating procedures,
process conditions, material balances, energy consumption, catalyst performance,
and analyses of internal streams and/or Synthetic Product at Syntroleum's pilot
plant which are applicable to such improvements or inventions.
3.05 Licensee shall provide Licensor 90 days advance written notice of the
anticipated Start-up Date for each Licensed Plant. Licensee agrees to permit
Licensor and/or its representatives access to Licensee's Licensed Plants at
reasonable and convenient times, for inspection and if requested by Licensee,
training, by representatives of Licensor. Licensor shall have the right to
charge Licensee a reasonable fee for any training as may be agreed with the
Licensee on a case-by-case basis.
4. LICENSEE GRANTS TO LICENSOR
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4.01 Licensor may, no more than one (1) time per year, request and Licensee
agrees to disclose to Licensor in writing any Inventions or Improvements related
to the Conversion Process.
4.02 Subject to the terms and conditions of this Agreement, Licensee grants
to Licensor a limited, non-exclusive, irrevocable, royalty free, worldwide (a)
right and license under Licensee Patent Rights and (b) right and license to use
Licensee Technical Information for the design, construction, operation and
maintenance (including modify, expand and replace) of facilities practicing a
Conversion Process, together with the right to grant corresponding sublicenses
of the Licensee Patent Rights and Licensee Technical Information to other
licensees of Licensor Technology for use at a licensed plant practicing a
Conversion Process, provided that any such licensee to whom a sublicense is to
be granted shall have granted reciprocal rights to Syntroleum to use and grant
sublicenses under such licensee's patent rights and technical information for
the benefit of Licensee. Licensee shall have the right to charge Licensor a
reasonable fee for any training with respect to Licensee Patent Rights and
Licensee Technical Information as may be agreed with the Licensor on a case by
case basis.
4.03 Should Licensee, during the term of this Agreement, make any patentable
Inventions or Improvements, Licensee may, at its sole discretion, file patent
applications with respect to such Inventions or Improvements in its own name and
at its own expense, and take such other steps as are necessary, in the sole
judgment of Licensee, to protect its rights in such Inventions or Improvements.
In the event Licensee declines to file any patent application with respect to
any Inventions or Improvements, it shall promptly notify Licensor in a timely
manner to allow Licensor, at its sole discretion, to file such patent
application at its sole expense, and to take such other steps as are necessary,
in its judgment, to protect the Parties' rights in such Inventions or
Improvements, subject to Licensee's obligation to account to third parties
therefore and provided that title to such Inventions or Improvements shall
remain in Licensee.
4.04 Licensor and Licensee each agree that they will take all actions and
execute all documents and shall cause their employees, agents and contractors to
take all actions and execute all documents as are necessary or appropriate to
carry out the provisions of this Article 4 or to assist each other in the
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preparation, filing and prosecution of patent applications or securing such
protection referenced in this Article 4 when so requested.
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4.05 Licensee shall permit Licensor and/or its representatives to reasonably
inspect, at mutually convenient times, the operating procedures, process
conditions, material balances, energy consumption, catalyst performance, and
analyses of internal streams and/or Synthetic Product which are applicable to
Licensee's Inventions or Improvements at any Licensed Plant incorporating such
Inventions or Improvements.
4.06 Licensee agrees to provide, from time to time and upon request by
Licensor, samples of Synthetic Product and Marketable Products as they are
produced by any of Licensee's Licensed Plants to verify compliance with this
Agreement. Licensor agrees to limit its analysis of samples of Synthetic
Product and Marketable Products to those analyses necessary to determine
compliance with the definition of Marketable Products.
5. LICENSE AND OTHER FEES
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5.01 Upon execution of this Agreement, but subject to Section 5.02, Licensee
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shall pay Licensor a non-refundable Initial License Fee in the amount of
AUD$30,000,000.
5.02 If, at the time of execution of this Agreement, the condition in
Schedule 3 to the Loan Agreement has not been satisfied (as determined according
to that Loan Agreement), the Escrow Amount shall be paid by Licensee to Escrow
Agent to be held in escrow on the terms set forth in the Escrow Agreement.
5.03 Where the condition in Schedule 3 to the Loan Agreement has been
satisfied (as determined according to the Loan Agreement) and, Licensor delivers
a certification that no event of default by Licensor has occurred and is
continuing under this Agreement as of the date of such delivery, Licensee will,
within three business days of receipt by Licensee of such certificate from
Licensor, instruct the Escrow Agent to disburse in immediately available funds
to an account identified by Licensor to the Escrow Amount together with the
accrued interest thereon.
5.04 In the event that Escrow Agent shall hold the Escrow Amount at 5:00
p.m. United States Central Standard Time on August 31, 2004, the Licensee shall
be entitled to instruct the Escrow Agent to disburse the Escrow Amount (less any
accrued interest thereon) to Licensee. Notwithstanding such payment to
Licensee, this Agreement continues in full force and effect. Any interest
accrued on the Escrow Amount is payable to the Licensor. If the Parties dispute
whether or not the condition in schedule 3 to the Loan Agreement has been
satisfied, or Licensee disputes the certification delivered under Section 5.03,
the dispute is to be referred to the Australian Commercial Disputes Centre
("ACDC"). The Licensor and Licensee must act promptly in good faith and in a
reasonable manner with the ACDC to agree on and implement a suitable dispute
resolution process for the dispute. The Licensee shall not be entitled to
instruct the Escrow Agent with respect to the Escrow Amount and the Escrow Agent
shall continue to retain the Escrow Amount until the dispute is resolved.
5.05 Provided that Licensor shall have received the Initial License Fee:
(a) Licensee shall be entitled to a credit, up to a total of AUD$20,000,000
of the Initial License Fee, at a rate of (i) the US$ equivalent (calculated
according to Section 5.05(c)) of AUD$.50 for every AUD$1.00 of future license
----------------
fees incurred by Licensee for any Site License Agreement for a Licensed Plant
with a design capacity of up to 20,000 barrels per day against those future
license fees, and (ii) the US$ equivalent (calculated according to Section
-------
5.05(c)) of AUD$1.00 for every AUD $1.00 of future license fees incurred by
--
Licensee for any Site License Agreement for a Licensed Plant with a design
capacity greater than 20,000 barrels per day against those future license fees.
(b) In the event that under the Loan Agreement the Commonwealth of Australia
("Commonwealth") makes an election under clause 8.5 or 13.5 of the Loan
Agreement, then and in either case Licensee shall be entitled to a credit in
respect of License fees outstanding when the election is made and future license
fees incurred by Licensee for any Site License Agreement for a Licensed Plant
under this Agreement, equal to the US$ equivalent (calculated according to
Section 5.05(c)) of the amount in respect of which the Commonwealth has made
-----------
that election. This Section 5.05(b) applies notwithstanding that the Licensee
---------------
may not be the Commonwealth.
(c) The exchange rate used to determine the credited amount in US$ shall be
the average exchange rate on the date of the Site License Agreement as quoted by
three reputable foreign exchange dealers, one nominated by the Licensor, one
nominated by the Licensee, and one jointly agreed between the Parties.
5.06 Licensee agrees to pay License fees to Licensor in accordance with
Attachment 2 for each Licensed Plant.
---------
5.07 In addition to the amount to be paid by Licensee to Licensor under
Sections 5.01 and 5.06, Licensee agrees to pay Licensor for each Process Design
---------- ----
Package, a fee equal to the costs actually incurred by Licensor in preparing the
Process Design Package, plus 10% of the total of such actual cost. Such fee
shall be invoiced by Licensor to Licensee after delivery of a Process Design
Package and payment shall be due within 30 days from receipt of invoice by
Licensee.
5.08 Unless otherwise provided in this Agreement, all amounts payable under
this Agreement shall be paid by Licensee to Licensor at Licensor's address
specified in Section 11.08, or to an account at a bank specified by Licensor, in
-------------
Australian dollars.
5.09 In the event Licensee is required to withhold any taxes from amounts
payable to Licensor under this Agreement, Licensee agrees to provide Licensor at
the time of such withholding with a receipt or other evidence reflecting the
deposit of such taxes with the appropriate governmental agency.
6. WARRANTIES AND INDEMNITIES
------------------------------
6.01 Licensor represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, USA, and has full power and authority to enter into and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement and all documents relating hereto by Licensor have been duly and
validly authorized by all requisite corporation action and constitute valid and
binding obligations of Licensor enforceable in accordance with their respective
terms.
6.02 Licensee represents and warrants that it has full power and authority
to enter into and perform its obligations under this Agreement including the
right to grant the rights and licenses as set forth in Article 4. The
---------
execution, delivery and performance of this Agreement and all documents relating
hereto by Licensee have been duly and validly authorized by all requisite
corporate action and constitute valid and binding obligations of Licensee
enforceable in accordance with their respective terms.
6.03 Except as otherwise expressly set forth in this Agreement or other
written agreement between the Parties, LICENSOR MAKES NO AND HEREBY DISCLAIMS
ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER
WARRANTIES OR REPRESENTATIONS OF ANY KIND TO LICENSEE, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OR REPRESENTATION WITH RESPECT TO USE OF LICENSOR
TECHNOLOGY AS AUTHORIZED HEREUNDER.
6.04 EXCEPT FOR UNAUTHORIZED DISCLOSURE OR USE OF CONFIDENTIAL INFORMATION
OR UNAUTHORIZED USE OF PATENT RIGHTS UNDER THIS AGREEMENT, IN NO EVENT SHALL A
PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR
EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS OR SAVINGS,
REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH A CLAIM FOR SUCH DAMAGES,
WHETHER IN CONTRACT OR TORT INCLUDING NEGLIGENCE, EVEN IF LICENSOR OR LICENSEE
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. BUT IF A PARTY IS FOUND
LIABLE, DESPITE THE ABOVE LANGUAGE, TO THE OTHER PARTY FOR SPECIAL, INDIRECT,
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR EXEMPLARY DAMAGES THEN THE MAXIMUM LIMIT
OF SUCH DAMAGES IS AGREED TO BE $5,000.
6.05 A Party will promptly advise the other Party in writing of any claim
made or lawsuit alleging infringement of any patent or copyright or
misappropriation of Confidential Information based on the design, construction
and/or operation of Licensed Facilities (including Synthetic Product or
Marketable Products produced from Licensed Facilities).
(a) If Licensee has made a modification to the Process Design Package,
with respect to a Licensed Plant, and infringement or misappropriation by such
Licensed Plant would not exist in the absence of Licensee's modification,
Licensee will be solely responsible for any claim or lawsuit. Licensee will (i)
promptly undertake at its own expense the defense of the claim or lawsuit, and
(ii) hold Licensor and its officers and employees harmless from any liability,
damages and other sums that may be assessed in or become payable under any
decree or judgment by any court or other tribunal which results from such claim
or lawsuit and from any attorneys fees, costs of litigation and other reasonable
out of pocket expenses incurred in the defense of such claim or lawsuit.
(b) If the design, construction and/or operation of a Licensed Plant
which is the basis for alleged infringement or misappropriation, is in
accordance with the designs, specifications and operating conditions (including,
but not limited to, catalysts) embodied in the Process Design Package for such
Licensed Plant, Licensor will (i) promptly undertake at its own expense the
defense of the claim or lawsuit, and (ii) hold Licensee, its affiliates, and
their officers, directors, and employees harmless from any liability, damages
and other sums that may be assessed in or become payable under any decree or
judgment by any court or other tribunal which results from such claim or lawsuit
and from any attorneys fees, costs of litigation and other reasonable out of
pocket expenses incurred in the defense of such claim or lawsuit.
(c) A Party will render all reasonable assistance that may be required
by the other Party in the defense of claim or lawsuit alleging infringement or
misappropriation and such Party shall have the right to be represented therein
by advisory counsel of its selection and at its expense.
(d) In the event a court or other tribunal finds that infringement
and/or misappropriation has occurred not as a result of Licensee's
modifications, Licensor shall have the option, at its sole expense, to either
(i) provide designs, specifications and/or operating conditions (including, but
not limited to, catalysts) and make modifications to the Licensed Plant which
avoid such infringement and/or misappropriation without degrading the economics
or performance of the Licensed Facilities, or (ii) acquire the right to continue
using the design, construction and operating conditions (including, but not
limited to, catalysts), which were the subject of such infringement and/or
misappropriation.
(e) Except as provided in (d) above, a Party shall not settle or
compromise any claim or lawsuit alleging infringement or misappropriation
without the written consent of the other Party if such settlement or compromise
obligates the other Party to make any payment or part with any property, to
assume any obligation or grant any licenses or other rights, or to be subject to
any injunction by reason of such settlement or compromise.
6.06 Licensor agrees to indemnify and hold harmless Licensee and its
officers and employees from and against the full amount of any and all claims,
demands, actions, damages, losses, costs, expenses, or liability whatsoever
(including without limitation the costs of litigation, including reasonable
attorneys' fees), for patent infringement, property (real and personal) damage,
personal injury or death, fines, or penalties arising in whole or in part out of
the use of Licensee Patent Rights and Licensee Technical Information in a plant
operated by Licensor or Person under license from Licensor.
6.07 Licensor agrees to indemnify and hold harmless Licensee and its
officers and employees from and against the full amount of any and all claims,
demands, actions, damages, losses, costs, expenses, or liability whatsoever
(including without limitation the costs of litigation, including reasonable
attorneys' fees), for property (real and personal) damage, personal injury or
death, fines, or penalties arising in whole or in part out of acts or omissions
in the preparation and content (including design, engineering, and
specifications) of the Process Design Package for the Licensed Facilities.
6.08 Licensee agrees to indemnify and hold harmless Licensor, its
Affiliates, their officers, directors, and employees from and against the full
amount of any and all claims, demands, actions, damages, losses, costs,
expenses, or liability whatsoever (including without limitation the costs of
litigation, including reasonable attorneys' fees), for property (real and
personal) damage, personal injury or death, fines, or penalties arising in whole
or in part out of acts or omissions outside the scope of or any modification to
the content (including design, engineering, and specifications) of the Process
Design Package for the Licensed Facilities.
6.09 Licensor's total obligation and liability to indemnify and hold
Licensee harmless for any and all claims (a) under this Article 6, including but
---------
not limited to all expenses incurred by Licensor in assuming Licensee's defense,
making modifications to the Licensed Plant and for paying any judgments or
settlements on Licensee's behalf, or for any other reason contemplated by this
Article 6, (b) for failure to meet any process guarantees that may have been
---------
provided under a separate agreement, or (c) for any other indemnification made
--
by Licensor pursuant to this Agreement, shall in no event exceed 50% of the
total License Fees received from the Licensee for any Licensed Plant that is
subject to the above claims.
6.10 Licensee's total obligation and liability to indemnify and hold
Licensor harmless for any and all claims (a) under this Article 6 including but
---------
not limited to all expenses incurred by Licensee in assuming Licensor's defense
and for paying any judgments or settlements on Licensor's behalf, or for any
other reason contemplated by this Article 6, or (b) for any other
----------
indemnification made by Licensee pursuant to this Agreement, shall in no event
exceed 50% of the total License Fees received by Licensor from Licensee for any
Licensed Plant that is subject to the above claims.
7. CONFIDENTIALITY AND LIMITATIONS
-----------------------------------
7.01 Licensee agrees that any Confidential Information disclosed by Licensor
or an Affiliate (including Syntroleum) directly or indirectly to Licensee during
the period from the date of Licensee's execution of this Agreement through the
term of this Agreement, will be kept confidential by Licensee for a period of
fifteen (15) years after the date of each disclosure, but not to exceed five (5)
years after the termination of this Agreement or fifteen (15) years from the
Effective Date, whichever last occurs, with the same standard of care Licensee
uses to protect its own similar confidential information and, except as
otherwise provided in this Agreement, will not be disclosed to others or copied
or duplicated (except for internal use), and will be used by Licensee solely as
it relates to this Agreement. Licensee may disclose such Confidential
Information to third parties who have executed a secrecy agreement with Licensor
or Syntroleum with confidentiality terms no less restrictive than those set
forth in this Section 7.01.
-------------
7.02 Licensor agrees that any Confidential Information disclosed by Licensee
directly or indirectly to Licensor during the term of this Agreement will be
kept confidential by Licensor for a period of fifteen (15) years after the date
of each disclosure, but not to exceed five (5) years after the termination of
this Agreement or fifteen (15) years from the Effective Date, whichever last
occurs, with the same standard of care Licensor uses to protect its own similar
confidential information, and except as otherwise provided in this Agreement
will not be disclosed to others or copied or duplicated, and will be used by
Licensor solely in the development, marketing and licensing of a Conversion
Process, and for no other purpose. Licensor may disclose such Confidential
Information to third parties who have executed a secrecy agreement with
confidentiality terms similar to the confidentiality provisions of this
Agreement. To the extent reasonably necessary to carry out the purposes of this
Agreement, Licensor may disclose any of the foregoing information to an
Affiliate, provided that the Affiliate has agreed in writing to be bound by the
relevant provisions of this Agreement.
7.03 A Party shall not be subject to the restrictions set forth in Sections
--------
7.01 and 7.02 as to the disclosure, duplication or use of disclosed Confidential
---- ----
Information, which the receiving Party can prove by competent evidence (a) was
already known to the receiving Party or an Affiliate prior to the disclosure
thereof by the disclosing Party; (b) is or becomes part of the public knowledge
or literature without breach of this Agreement by the receiving Party but only
after it becomes part of the public knowledge or literature; (c) shall otherwise
lawfully become available to the receiving Party or an Affiliate from a third
party but only after it becomes so available and provided the third party is not
under obligation of confidentiality to disclosing Party; or (d) is developed by
the receiving Party or an Affiliate independently of any disclosure by the
disclosing Party to the receiving Party or an Affiliate under this Agreement or
independently of any joint research and development activities of Licensee and
Licensor which may occur under a separate agreement. Any Confidential
Information disclosed shall not be deemed to fall within the confidentiality
exceptions of this Section 7.03 merely because it is embraced by more general
------------
information. In any such case set forth in Section 7.03(a), (b), (c), and (d),
--------------- --- --- ---
the receiving Party shall keep confidential and not disclose to any third party
that any such information was also made available to or acquired by the
receiving Party or an Affiliate from the disclosing Party, and such release from
the secrecy obligation shall not be considered as a license to make, sell, use
or operate under any of the disclosing Party's proprietary rights.
7.04 The receiving Party shall limit access to the Confidential Information
disclosed to it to those employees of the receiving Party or an Affiliate who
reasonably require the same and who are under a legal obligation of
confidentiality on the terms set forth in Section 7.01 and Section 7.03. The
------------ ------------
receiving Party shall be responsible to the disclosing Party for the performance
by its employees of their confidentiality obligations. The receiving Party
shall keep a record of any Confidential Information marked "Limited Access" and
the identity of each employee who has access to Confidential Information so
marked. The receiving Party shall inform the other Party of the identity of
each such employee within 30 days of disclosure.
7.05 In the event that a Party which is recipient of Confidential
Information from the other Party is requested or required by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process to disclose any such Confidential Information, the receiving
Party shall provide the disclosing Party with prompt written notice of such
request or requirement prior to making the requested disclosure, and shall
cooperate with the disclosing Party so that the disclosing Party may seek a
protective order or other appropriate remedy or, if the disclosing Party so
elects, waive compliance with the terms of this Agreement. In the event that
such protective order or other remedy is not obtained, the receiving Party may
disclose only that portion of the Confidential Information which the disclosing
Party is advised by counsel is legally required to be disclosed.
7.06 The Parties agree that they will each take all actions and execute all
documents, and shall cause their employees, agents and contractors to take all
actions and execute all documents as are necessary or appropriate to carry out
the provisions of this Article 7 or to assist each other in securing protection
---------
of intellectual property and Confidential Information referenced in this Article
-------
7.
7.07 With respect to any catalyst furnished by Licensor to Licensee or
Syntroleum for use by Licensee at the Licensed Facilities, Licensee will not,
and Licensee will not allow any other person to, analyze, break down, reverse
engineer or otherwise seek to determine the chemical composition, except for
loss on ignition and bulk density, of any such catalyst, except that Licensee
shall be entitled to (a) perform analyses that Licensor may from time to time
specifically authorize in writing, to the extent required for monitoring the
performance of the Licensed Facilities and for regeneration, reclamation or
disposal of spent catalysts, such authorization not to be unreasonably withheld,
and (b) provide results of the aforementioned analyses to other parties to the
extent required for regeneration, reclamation or disposal of spent catalysts,
but only after such other parties have entered into an agreement with Licensor
in a form attached hereto as Exhibit B of the attached Site License Agreement.
---------
Licensor will be provided with a copy of all such analyses which has been
approved in writing prior to release to other parties.
8. ASSIGNMENT
--------------
8.01 Subject to Section 8.02, this Agreement shall not be assigned by
-------------
Licensee without the prior written consent of the Licensor, which consent will
not be unreasonably withheld, except that Licensee may, upon written notice to
Licensor, assign this Agreement to a department, bureau, division, agency or
similar governmental entity that is under the control of Licensee. Under no
circumstances shall this Agreement be assigned to Exxon Corporation, Royal Dutch
Shell or Sasol Limited.
8.02 Licensee may assign this Agreement to any corporation or authority
which is wholly-owned by Licensee.
9. TERM AND TERMINATION
------------------------
9.01 This Agreement shall extend to the later of (a) fifteen (15) years
from the Effective Date, (b) five years from the nominal facility maturity date
of the last tranche offered under the Loan Agreement, or (c) five (5) years
following the effective date of the last Site License Agreement issued under
this Agreement.
9.02 Upon the written notice from Licensor to Licensee of any material
default under this Agreement (including any material default under a Site
License Agreement), other than as noted in Section 2.05(c), all rights of
---------------
Licensee under Section 2.05 of this Agreement, shall be suspended until such
-------------
default is cured by Licensee. Licensee's right to operate any Licensed Plant
which is in compliance with its Site License Agreement shall not be affected by
either a default under this Agreement or a default under another Site License
Agreement for another Licensed Plant. If a material default under this Agreement
shall continue for a period of one year following written notice of such default
to Licensee from Licensor without being cured by Licensee, then Licensor shall
have the right to (a) suspend all rights of Licensee under this Agreement, or
(b) terminate this Agreement upon written notice to Licensee. The actions by
Licensor under this Section 9.02 shall not prejudice Licensor from enforcing any
------------
claim which it may have for damages or otherwise on account of the default.
9.03 Termination of this Agreement shall not:
(a) relieve Licensee of its obligations to account for and pay all amounts
due Licensor under this Agreement and all Site License Agreements executed by
Licensee under this Agreement;
(b) affect any rights granted Licensee under Site License Agreements in
effect on the date of termination;
(c) affect any rights granted under Article 4 with respect to Licensee
----------
Patent Rights and Licensee Technical Information, which shall survive
termination in accordance with its terms; or
(d) affect the obligations of Licensor and Licensee under Articles 6 and 7
---------- -
and Sections 8.01 and 11.02, which shall survive termination in accordance with
------------- -----
their terms.
9.04 No Party to this Agreement shall be in default in performing its
obligations under this Agreement to the extent that performing such obligations,
or any of them, is delayed or prevented by revolution, civil unrest, strike,
labor disturbances, epidemic, accident, fire, lightening, flood, storm,
earthquake, explosion, blockage or embargo, or any law, proclamation, regulation
or ordinance, or any other cause that is beyond the control and without the
fault or negligence of the Party asserting the benefit of this Section 9.04.
------------
Each Party shall do all things reasonably possible to remove the cause of such
default.
9.05 Licensee shall have the right to terminate this Agreement in its sole
discretion, with or without cause, upon the delivery of written notice of
termination to Licensor no less than 90 days prior to the date of such
termination.
10. JOINT DEVELOPMENT ACTIVITIES
---------------------------------
10.01 Licensee shall have the right during the term of this Agreement
to propose to Licensor one or more joint development projects of interest to
Licensee and relating to development and/or commercialization of a Conversion
Process, which shall be governed by a separate written agreement between the
parties which shall not be inconsistent with the terms and conditions of this
Agreement. Such projects shall be open to all other Persons as mutually agreed
by the Parties and who agree to pay project costs in a manner agreed upon by the
parties; provided, however, Licensee shall have the right to proceed alone with
funding any such project.
10.02 A project team will be established for each project. Each team
will be made up of members from the Parties who will be appointed by the Party
they represent. Each Party has full discretion over the selection of their
respective team members and reserves the right to modify, change, condition or
terminate any such person's membership on the team.
10.03 Each project team will (a) agree upon a budget for the project
and the respective obligations of the Parties for project expenses, (b) define
the schedule and management controls for each project, (c) identify and assemble
the necessary resources, both internal and external to the Parties, for each
project, (d) allocate funds and authorize expenditures on a periodic basis
related to each project, (e) communicate to Licensor and Licensee the status of
the work on a monthly basis, and (f) submit final reports to Licensor and
Licensee. The team shall hold meetings on an "as needed" basis at mutually
acceptable times and locations to review and discuss the status and results of
all projects.
11. MISCELLANEOUS
------------------
11.01 This Agreement embodies the entire intent of the Parties and merges
all prior oral and written agreements between the Parties hereto with respect to
subject matter hereof. No stipulation, agreement, representation or
understanding of the Parties hereto shall be valid or enforceable unless
contained in this Agreement or in a subsequent written agreement signed by the
Parties hereto. In the event of a conflict between this Agreement and a Site
License Agreement executed pursuant to this Agreement, this Agreement will
govern.
11.02 This agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to conflict of law provisions
thereof. Any dispute claim or controversy arising out of or relating to this
Agreement on the breach, termination, scope or invalidity (including any dispute
relating to patent invalidity or infringement) of this Agreement shall be
finally settled by arbitration conducted in accordance with the Rules
Conciliation and Arbitration of the International Chamber of Commerce.
(a) The arbitration panel shall consist of one arbitrator who shall be
nominated with the concurrence of both parties; failing their agreement, the
arbitrator shall be appointed by the Court of Arbitration of the International
Chamber of Commerce.
(b) The arbitration shall be held in New York City, New York, USA.
(c) The arbitration shall be conducted in the English language.
(d) The applicable procedural rules shall be the Rules of Conciliation and
Arbitration of the International Chamber of Commerce. In any case not
specifically covered by those Rules, the arbitrator shall himself formulate the
rules of procedure to be followed.
(e) Arbitration awards rendered shall not be subject to any form of appeal,
but judgment upon awards rendered may be entered in any court having
jurisdiction, or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case by may be.
11.03 This Agreement does not grant and shall not be construed as granting
any license, authorization or consent, to either Party by the other Party
hereto, to use any name, trademark, service ▇▇▇▇ or slogan of the other Party.
A Party shall not use the other Party's name without written consent, except for
the identification of the other Party as a Licensee or Licensor of Licensor
Technology. The terms of this Agreement will be maintained in confidence by
each Party subject to the same standard of care each Party uses to protect its
confidential information, except as required by law. A press release which
includes the name of the other Party must have prior written approval of the
other Party, except as required by law.
11.04 Failure of either Licensor or Licensee at any time or from time to
time to exercise any of its rights under this Agreement or to insist upon strict
performance of the other Party's obligations hereunder shall not be deemed a
waiver of or to limit any of such rights or obligations with respect to such
rights or obligations or any subsequent occurrence.
11.05 Licensee may publish the existence of this Agreement but agrees not to
disclose, without the written consent of the Licensor, any of the terms of this
Agreement or any portion thereof, or any amendment concerning the same, except
to Persons directly involved with design, financing, construction, or operation
of a Licensed Plant on a need-to-know basis or as required by law.
11.06 Licensee agrees that all Licensor information, technology, patents,
and the product produced directly by the use thereof, when used outside the
United States of America, shall be used by Licensee subject to and in accordance
with regulations of any department or agency of the United States of America and
Licensee shall not re-export or transship or agree to re-export or transship any
such Licensor information, technology, patents, and the product produced
directly by the use thereof to any destination prohibited by United States law,
including, without limitation, United States executive orders and administrative
orders, rules, and regulations or to any destination requiring the approval of
the United States government for such re-exportation or transshipment until a
request to do so has been submitted to and approved by the United States
government and notice of such approval has been provided to Licensor. Licensee
shall not (i) enter into a transaction or dealing, including, without
limitation, re-exporting the Licensed Technology, or causing, financing,
guaranteeing, authorizing or facilitating an action to enter into a transaction
or dealing, that might reasonably be considered a violation of United States law
by either Licensor or Licensee, or (ii) disclose information in a way that might
reasonably be considered a violation of United States law by either Licensor or
Licensee.
11.07 Should any part or provision of this Agreement be held unenforceable
or in conflict with the law of any state or of the United States of America or
of any foreign country, the validity of the remaining parts or provisions shall
not be affected by such holding.
11.08 All notices hereunder shall be addressed to the Parties as follows:
(a) If to Licensor:
Syntroleum Australia Licensing Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: Office of the President
with copy to:
Syntroleum Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: Office of the General Counsel
(b) If to Licensee:
Invest Australia
Department of Industry Science and Resources
Commonwealth of Australia
GPO Box 9839
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
ATTN: General Manager
Any notice required or permitted to be given under this Agreement by one of the
Parties to the other shall be deemed to have been sufficiently given for all
purposes hereof if mailed by registered or certified mail, postage prepaid,
addressed to such Party at its address indicated above, electronically
transmitted and acknowledged by the other Party or by actual delivery of written
notice to the other Party.
12. GOODS AND SERVICES TAX
---------------------------
12.01 The payments specified in this Agreement have been calculated without
taking GST into account.
12.02 If any GST is payable on a taxable supply by the Licensor under or in
connection with this Agreement:
(a) the Licensor warrants that, at the time of entry into this agreement and
unless and until otherwise notified in writing to the Licensee:
(i) it is a non-resident; and
(ii) it does not make the supply through an enterprise that it carries on in
Australia or through a resident agent;
(b) the Licensee warrants that, at the time of entry into this Agreement and
unless and until otherwise notified in writing to the Licensor, it is registered
for GST purposes; and
(c) the Parties hereby agree that the GST on the taxable supply by the
Licensor will be payable by the Licensee in accordance with Section 83-5(1) of
the GST Law.
12.03 If the requirements of Section 83-5(1) of the GST Law are not
satisfied, either because:
(a) the Licensor provides notice to the Licensee in accordance with Section
12.02(a); or
(b) for any other reason,
the provisions of Section 12.04 will apply to the taxable supply.
--------------
12.04 If GST is imposed on any supply by a party (the "Supplier") to the
other party (the "Recipient") under or in connection with this Agreement, the
Recipient must pay to the Supplier, subject to the receipt of a valid tax
invoice, the amount of GST imposed at the same time as and in addition to the
amount the Recipient is required to pay the Supplier for the supply in question
(and without setoff), or on demand.
12.05 In Article 12:
-----------
"GST Law" means the A New Tax System (Goods and Services Tax) ▇▇▇ ▇▇▇▇ together
with all associated regulations and legislation.
"GST," "enterprise," "taxable supply," "tax invoice," "non-resident," "carried
on in Australia" and "resident agent" have the meaning given to them in the GST
Law.
12.06 The Licensee and the Licensor acknowledge and agree that the
warranties contained in Section 12.02 are intended solely for the purposes of
-------------
Article 12, and that, accordingly, any breach of such warranty shall not
---------
constitute a default or an event of default under this Agreement or any of the
-----
documents related to the transaction contemplated by this Agreement and shall
not otherwise have any consequences for the purposes of this Agreement and any
of the documents related to the transaction contemplated by this Agreement,
except as expressly provided in Sections 12.03 and 12.04.
--------------- -----
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
set forth above.
LICENSOR
SYNTROLEUM AUSTRALIA LICENSING CORPORATION
By: /s/
---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and
Chief Financial Officer
Date: 8/3/00
-------
LICENSEE
COMMONWEALTH OF AUSTRALIA
By: /s/
------------ ---
Name: ▇▇▇▇ Holthuyzen
----------------
Title: Deputy CEO
----------------
Date: 8/3/00
----------------
ATTACHMENT 1
-------------
REQUEST FOR SITE LICENSE AGREEMENT
--------------------------------------
Syntroleum Australia Licensing Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Office of the President
Gentlemen:
Please issue, for immediate execution, a Site License Agreement of the form
identical to Attachment 3 of our License Agreement dated August 3, 2000 (License
------------
Agreement), covering the construction and operation of a Licensed Plant at the
location set forth below. The following information is provided for inclusion
in the execution copies of the Site License Agreement:
Licensed Plant Location:
City: _____________________________ State/Province: _________________
Country: __________________________ Onshore/Offshore: ______________
Latitude: __________________________ Longitude: ____________________
Maximum daily design capacity, as defined by the Process Design Package is
__________ barrels of Synthetic Product per day. To the extent that more than
one licensee of the Licensor Technology (as defined in the License Agreement) is
a participant in the Licensed Plant, the design capacity of such Licensed Plant
should be applied against such licensees' remaining aggregate maximum daily
design capacities for licensed facilities under their respective license
agreements as follows:
Aggregate Design
Entity Capacity Deduction
------ -------------------
______________________________________ ________________
______________________________________ ________________
______________________________________ ________________
We agree to pay (subject to Section 5.05 of License Agreement) License Fees in
accordance with the applicable provisions of Attachment 2 of the License
-------------
Agreement.
Please forward the appropriate materials to initiate the Process Design Package
and acknowledge your receipt of this request.
Very truly yours,
COMMONWEALTH OF AUSTRALIA
By____________________________
______________________________
Name
______________________________
Title
ATTACHMENT 2
------------
LICENSE FEE CALCULATION
-----------------------
I. For purposes of this Attachment 2, the following terms shall have the
------------
meanings ascribed thereto:
A. "LICENSED PLANT" means the Licensed Plant in which a Site License
Agreement for such plant is issued to and remains (subject to assignment in
accordance with Section 8 of the Site License Agreement) in the name of the
Licensee who has executed this Agreement with Licensor.
B. "ROYALTY RATE" shall mean (i) the lowest royalty rate per Barrel of
Synthetic Product accepted by Licensor for a Site License Agreement with a
non-affiliate for a facility of comparable size, in the Licensed Territory,
which is not under a master preferred license agreement, during the twelve (12)
months immediately preceding the execution date of the applicable Site License
Agreement under this Agreement, or (ii) if no such Site License Agreement has
been executed during the twelve (12) months immediately preceding, then the
royalty rate per Barrel of Synthetic Product in the last Site License Agreement
with a non-affiliate, in the Licensed Territory, executed by Licensor, which is
not under a master preferred license agreement, or (iii) if none of the
foregoing applies, then US$0.495 per Barrel of Synthetic Product. Market
Royalty Rate does not include the catalyst price as provided for under Section
-------
2.03 of this Agreement.
---
II. For each Site License Agreement executed for Licensed Plants under this
Agreement, Licensee agrees to pay (subject to Section 5.05 of the License
Agreement) License Fees to Licensor on a prepaid license basis as follows:
A. Licensee agrees to pay Licensor a one-time, prepaid License Fee
calculated in accordance with the following formula:
License Fee = "C" x 350 x 7.5 x "R"
wherein:
"C" = the maximum daily design capacity, as defined by the Process
Design Package, of such Licensed Plant to produce Marketable Products measured
in Barrels of Synthetic Product per day for which such Licensed Plant is
originally designed and constructed, and
"R" = the Royalty Rate.
and payable in installments as follows:
(i) 20% within thirty (30) days after the execution of the Site License
Agreement for such Licensed Plant;
(ii) 30% within thirty (30) days after delivery of the Process Design
Package or within one hundred twenty (120) days after the execution of the Site
License Agreement for such Licensed Plant, whichever first occurs;
(iii) 20% within thirty (30) days after the commencement of field
construction move-in;
(iv) 30% within one-hundred and twenty (120) days after the Start-Up Date of
the Licensed Plant or a successful Performance Test as specified in any Process
Guarantee and Performance Test Agreement, whichever first occurs.
B. Capacity Adjustments: In the event the actual production capacity of any
--------------------
Licensed Plant, under II.A. above, is determined to have either exceeded the
original maximum daily design capacity established in its Site License Agreement
or is increased through major equipment modification, by more than five percent
(5%) or by more than 500 barrels per day, at any time after the Start-up Date,
Licensee shall pay (subject to Section 5.05 of the License Agreement) Licensor
an additional License Fee, on a prepaid basis, equal to the difference between
(a) the prepaid License Fee as would have been calculated with the higher
production capacity for such Licensed Plant substituted for "C" in the
calculation method set forth in II.A. above, and (b) the License Fee as would
have been calculated for such Licensed Plant by the method set forth in II.A.
above using the original maximum daily design capacity established in each Site
License Agreement. The incremental License Fee due will be reduced by any
previous incremental adjustments. Such additional License Fee shall be payable
within thirty (30) days after the end of the calendar year in which such
increase in production capacity of such Licensed Plant occurs. Incremental
License Fees for increased production capacity in any Licensed Plant shall not
be due if the increased production capacity is the result of the initial use of
Licensee Patent Rights or Licensee Technical information. The total cumulative
incremental capacity adjustments under each Site License Agreement will be
limited to 50 percent of the initial maximum daily capacity under such
Agreement.
III. Subject to Section 5.05 of the License Agreement, upon payment of all
fees due under the Site License Agreement for each Licensed Plant, Licensee
shall be deemed to have acquired a fully paid license for such Licensed Plant up
to the original maximum daily design capacity or any adjusted daily design
capacity made under the provisions of II.B. above. Any additional incremental
increases in the Licensed Plant capacity will be subject to additional License
Fees as calculated under Incremental Adjustments defined under II. above.
IV. All payments required hereunder shall include a statement showing the
details supporting the calculation of the License Fees being paid. Licensee
shall keep accurate and complete records of all natural gas feedstock processed
(volume and composition) and all Synthetic Product produced at and either used
internally within or removed from each Licensed Plant to enable verification of
statements and payments rendered to Licensor hereunder. Licensee agrees to
permit Licensor, at Licensor's expense, to inspect such records on reasonable
notice and at reasonable intervals during normal business hours to verify the
fees paid and payable under this Agreement.
ATTACHMENT 3
------------
SAMPLE - NOT FOR SIGNATURE
--------------------------
Site License Agreement
Between
Syntroleum Australia Licensing Corporation
and
Commonwealth of Australia
CONFIDENTIAL
SITE LICENSE AGREEMENT
----------------------
THIS SITE LICENSE AGREEMENT is made and entered into as of this ___ day of
____________, ______ by and between Syntroleum Australia Licensing Corporation,
a Delaware corporation ("Licensor"), and the Commonwealth of Australia
("Licensee").
RECITALS
--------
A. WHEREAS, Licensor has entered into the Syntroleum License Agreement
with Syntroleum pursuant to which Licensor has licensed from Syntroleum certain
patent rights and technical information relating to a Conversion Process; and
B. WHEREAS, under the provisions of the Syntroleum License Agreement,
Licensor has the right to grant a sublicense to Licensee to use Licensor Patent
Rights and Licensor Technical Information in practicing of a Conversion Process
in Licensed Facilities in the Licensed Territory; and
C. WHEREAS, Licensor and Licensee have entered into the License
Agreement pursuant to which Licensor has sublicensed to Licensee the right to
use Licensor Patent Rights and Licensor Technical Information in producing a
Conversion Process in Licensed facilities in the Licensed Territory pursuant to
one or more site license agreements; and
D. WHEREAS, Licensee desires to enter into this non-exclusive limited
license with Licensor to use Licensor Patent Rights and Licensor Technical
Information in practicing a Conversion Process at the Licensed Plant to make and
sell Marketable Products.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Parties agree as follows.
1. DEFINITIONS
---------------
The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof).
1.01 "AFFILIATE" means, with respect to each Party, any Person in which the
Party or its parent company(ies) (one or more parent companies in an upward
series) shall at the time in question directly or indirectly own a fifty percent
(50%) or more interest in such Person. It is understood that: (a) a Party or
its parent company(ies) directly owns a fifty percent (50%) or more interest in
a Person if that Party or its parent company(ies) individually or collectively
hold(s) shares carrying fifty percent (50%) or more of the voting power to elect
directors or other managers of such Person and (b) a Party or its parent
company(ies) indirectly owns a fifty percent (50%) or more interest in a Person
if a series of companies can be specified beginning with a Party or its parent
company(ies), individually or collectively, and ending with such Person so
related that each company of the series, except such Person, directly owns a
fifty percent (50%) or more interest in a later company in the series.
1.02 "AGREEMENT" means this Site License Agreement.
1.03 "BARREL" means forty-two (42) gallons of two hundred thirty-one (231)
cubic inches each, measured at sixty degrees Fahrenheit (60 F) and one (1)
atmosphere pressure.
1.04 "CHAIN-LIMITING CATALYST" means a type of catalyst for use in a
▇▇▇▇▇▇▇-Tropsch Reaction the primary products of which are predominately
hydrocarbon molecules of twenty (20) or fewer carbon atoms which remain liquid
at ambient temperature and pressure.
1.05 "CONFIDENTIAL INFORMATION" means information of Licensor or Licensee
disclosed to the other Party under this Agreement, including any formula,
pattern, compilation, program, apparatus, device, drawing, schematic, method,
technique, know-how, process or pilot plant data, -and other non-public
information such as business plans or other technology that: (a) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (b) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy, which
information shall be disclosed in writing and labeled as "Confidential" or the
equivalent, or if disclosed verbally or in other non-written form, identified as
such at the time of disclosure and thereafter summarized in writing by the
disclosing Party within thirty (30) days of such initial disclosure.
Confidential Information includes, without limit, Licensor Catalyst Information,
Licensor Technical Information, and Licensee Technical Information.
1.06 "CONTRACTOR" shall mean any engineering company approved by Licensor
(or Syntroleum), to perform the detailed engineering, construction or
construction management in connection with the Licensed Plant from a list of
approved companies. Licensor may, from time to time, modify the list of
companies.
1.07 "CONVERSION PROCESS" means any process for the conversion of normally
gaseous hydrocarbons into a mixture of hydrocarbons which may be a combination
of normally gaseous, liquid, or solid hydrocarbons at ambient temperatures and
pressures and comprised of (a) autothermal reforming of a feed stream consisting
substantially of gaseous hydrocarbons in the presence of air, or oxygen-enriched
air to create an intermediate feed stream containing carbon monoxide and
molecular hydrogen, and (b) reacting the intermediate stream in the presence of
a ▇▇▇▇▇▇▇-Tropsch catalyst to produce a product stream consisting of any
combination of gaseous, liquid or solid hydrocarbons at ambient temperature and
pressure. The Conversion Process includes all associated internal processes and
technologies such as heat integration, separation, or the recycle, use, or
consumption of hydrocarbons or other products. The Conversion Process does not
include any technology related to (i) pre-treatment of the natural gas feedstock
or (ii) post-processing the ▇▇▇▇▇▇▇-Tropsch product stream for a purpose other
than that defined above.
1.08 "EFFECTIVE DATE" means the date set forth in the first paragraph of
this Agreement.
1.09 "▇▇▇▇▇▇▇-TROPSCH CATALYST" means any catalyst for use in a
▇▇▇▇▇▇▇-Tropsch Reaction including, but not limited to, Chain Limiting Catalyst
and High Alpha Catalyst.
1.10 "▇▇▇▇▇▇▇-TROPSCH REACTION" means the catalytic reaction of carbon
monoxide and hydrogen, the primary products of which are hydrocarbons.
1.11 "HIGH ALPHA CATALYST" means a type of ▇▇▇▇▇▇▇-Tropsch Catalyst, whose
alpha number, as calculated by the ▇▇▇▇▇▇-▇▇▇▇▇ distribution equation, is 0.85
or higher.
1.12 "INVENTIONS OR IMPROVEMENTS" means any process, formula, composition,
device, catalyst (including both autothermal reforming catalysts and
▇▇▇▇▇▇▇-Tropsch Catalysts), apparatus, technology, know-how, operating
technique, improvement, modification, or enhancement relating to the use,
operation, or commercialization of a Conversion Process and the products
(including Synthetic Product) of a Conversion Process, which is discovered,
made, designed, developed or acquired by Licensee, solely or with others, since
the date the License Agreement, or used in a Licensed Plant, in each instance
whether patentable or not, including, without limitation, patents, copyrights,
and Confidential Information and further including the full scope and content of
the intellectual and tangible property included therein and produced therefrom,
e.g., drawings, prints, chemical formulae, prototypes, data, computer programs
and software, and the like. Inventions or Improvements shall not include any
information relating to methods of manufacturing catalysts for use in the
Conversion Process.
1.13 "LICENSE AGREEMENT" means the License Agreement between Licensor and
Licensee dated August 3, 2000.
1.14 "LICENSE FEE" means the fees paid by Licensee to Licensor under this
Agreement, as consideration for granting this Site License Agreement to use
Licensor Technology at a Licensed Plant, as calculated in accordance with
Exhibit A of this Agreement, and does not include fees related to the purchase
-----
of the associated Process Design Package for such Licensed Plant, any catalyst
or any catalyst markup.
1.15 "LICENSED PLANT" means the plant initially located at:
City: ________________________ State/Province: ______________________
Country: _____________________ Onshore/Offshore: ___________________
Latitude: _____________________ Longitude: _________________________
with an initial maximum daily design capacity of ______________ Barrels of
Synthetic Product per day licensed under this Agreement to use Licensor
Technology to practice a Conversion Process to produce Marketable Products.
1.16 "LICENSED TERRITORY" means the countries of Australia, Papua New
Guinea, East Timor and Indonesia and their respective territorial waters except
(a) any such country that, from time to time, may be prohibited, or whose
citizens (considered as a group) may be prohibited, by the United States
government from receiving Licensor Technology or the products thereof or (b) any
such country the inclusion of which in the definition of Licensed Territory is,
or could in good faith be argued to be, prohibited by United States law,
including, without limitation, United States Executive Orders and administrative
orders, rules and regulations. Licensed Territory shall include territories or
territorial waters which are the subject of official dispute between or among
countries only if all countries claiming sovereignty, a sovereign right, or
jurisdiction over such territories or territorial waters are otherwise included
within the definition of such term.
1.17 "LICENSEE PATENT RIGHTS" means all rights with respect to patents and
patent applications of all relevant countries to the extent that the claims
cover features or aspects of Inventions or Improvements practiced in a Licensed
Plant, in each case to the extent that, and subject to the terms and conditions
under which, Licensee has the right to grant licenses, immunities or licensing
rights without having to make payment to others.
1.18 "LICENSEE TECHNICAL INFORMATION" means all unpatented Inventions or
Improvements practiced in a Licensed Plant, in each case to the extent that, and
subject to the terms and conditions under which, Licensee has the right to grant
licenses, immunities or licensing rights without having to make payment to
others.
1.19 "LICENSOR CATALYST INFORMATION" means, without limit, information
relating to any catalyst, catalyst formulation, conditioning procedure, start-up
procedure, regeneration procedure, or performance which are licensed by
Syntroleum to Licensor (with right to sublicensee) pursuant to the Syntroleum
License Agreement. Licensor Catalyst Information shall not include any
information relating to methods for manufacturing catalysts for use in a
Conversion Process.
1.20 "LICENSOR CATALYST PATENT RIGHTS" means all rights with respect to
patents and patent applications of all relevant countries to the extent that the
claims cover features or aspects of catalysts useable in a Conversion Process
(including, without limitation, autothermal reforming catalysts and
▇▇▇▇▇▇▇-Tropsch Catalysts) and expressly excluding any process operating
techniques or apparatus or methods for manufacturing such catalysts, which are
licensed by Syntroleum to Licensor (with right to sublicense) pursuant to the
Syntroleum license Agreement.
1.21 "LICENSOR PATENT RIGHTS" means all rights with respect to patents and
patent applications of all relevant countries to the extent that the claims
cover features or aspects of a Conversion Process (including, without
limitation, any operating techniques and apparatus and expressly excluding
Licensor Catalyst Patent Rights) which are licensed by Syntroleum to Licensor
(with right to sublicense) pursuant to the Syntroleum License Agreement.
1.22 "LICENSOR TECHNICAL INFORMATION" means all unpatented information
relating to a Conversion Process (including, without limitation, operating
techniques and apparatus for carrying out a Conversion Process and expressly
excluding Licensor Catalyst Information and Reactor Information) which are
licensed by Syntroleum to Licensor (with right to sublicense) prior to the
termination of this Agreement; in each case to the extent that, and subject to,
the terms and conditions, including the obligation to account to and/or make
payments to others, under which Licensor has the right to disclose and grant
rights to others.
1.23 "LICENSOR TECHNOLOGY" includes Licensor Technical Information and
Licensor Patent Rights related to the practice of a Conversion Process and
Licensor Catalyst Information and Licensor Catalyst Patent Rights related to the
use of Syntroleum catalysts in the practice of a Conversion Process but
expressly excluding the right to make, have made, or sell Syntroleum catalysts.
1.24 "LUBRICANTS" means hydrocarbon base oils which can be made into, or
blended with other base oils to be made into, without limit (a) automotive
lubricating oils such as PCMO, HDD, transmission and hydraulic fluids, and gear
oils; (b) industrial lubricants such as metalworking lubricants, process oils,
white oils, agricultural spray oils, de-foamers, cutting and quenching oils, and
rubber processing oils; (c) greases; (d) drilling fluids; or (e) any other
specialty product agreed to by the Parties which is not a Marketable Product.
1.25 "MARKETABLE PRODUCTS" means finished hydrocarbon fuels, hydrocarbons
consumed as fuel, or fuel blending stocks including, but not limited to, diesel,
kerosene, gasoline, and naphtha processed from Synthetic Product and expressly
excluding waxes, chemicals, Lubricants, or any other specialty hydrocarbon
products and subject to the express condition that Marketable Products shall be
produced from Synthetic Product at the Licensed Plant or produced from Synthetic
Product at a separate facility operated by the Licensee, or third Persons who
are contractually committed to Licensee to produce only Marketable Products from
such Synthetic Product. Notwithstanding the foregoing, Marketable Products
shall be deemed to include any products:
(a) produced at any location by any Person from a blended stream of
Synthetic Product and at least 15 % by volume of produced crude oil or
condensate, in which the Synthetic Product, before any blending,
(i) remains a liquid at sixty degrees Fahrenheit (60 F) and one (1)
atmosphere pressure or,
(ii) has a chemical composition consisting of molecules having at least 85 %
by volume of which contain no more than 20 carbon atoms each and no more than 1
% by volume of which contains more than 40 carbon atoms each; or
(b) produced at any location by any Person from a blended stream of
Synthetic Product and at least 40 % by volume produced crude oil or condensate
such that after blending the mixture is a transportable liquid, expressly
excluding slurries; or
(c) produced by blending individual fractions distilled from Synthetic
Product with at least 50% by volume of like distilled fractions from produced
crude oil or condensate, in which each distilled fraction from Synthetic
Product, before any blending, has a chemical composition consisting of molecules
having at least 85% by volume of which contain no more than 20 carbon atoms each
and no more than 1% by volume of which contains more than 40 carbon atoms each,
wherein the blending is performed at any location by the Licensee or third
Persons who are contractually committed to Licensee to produce only Marketable
Products from such Synthetic Product.
Notwithstanding the above language in this Section 1.24 hydrocarbons consumed as
------------
fuel by Licensee at locations which satisfy the conditions of this Section 1.25
------------
are Marketable Products, regardless of whether or not they happen to be waxes,
chemicals, Lubricants, or any other specialty hydrocarbon products.
1.26 "PARTIES" means Licensor and Licensee.
1.27 "PARTY" means Licensor or Licensee.
1.28 "PERSON" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, other than the Parties.
1.29 "PROCESS DESIGN PACKAGE" means a compilation of text, figures, drawings
and documentation, relating to the design and construction of a Licensed Plant,
which may be modified from time to time by mutual consent of the Parties, and
expressly excluding Reactor Information which is necessary and sufficient to
prepare the detailed design and engineering necessary to construct and operate a
Licensed Plant.
1.30 "REACTOR INFORMATION" means all information, including, but not limited
to, data, processes, plans, specifications, flow sheets, designs, and drawings,
relating to the internal design or functions including, without limitation, tube
count, tube size and configuration and catalyst volume, relating to any
Syntroleum autothermal reformer or ▇▇▇▇▇▇▇-Tropsch reactors which, at any time
during the term of this Agreement, Licensor discloses to Licensee.
1.31 "REACTOR VENDOR" shall mean those fabricators approved by Licensor (or
Syntroleum) to perform the fabrication and/or maintenance and repair of
autothermal reformer or ▇▇▇▇▇▇▇-Tropsch reactors for installation and use in the
Licensed Plant. Licensor (or Syntroleum) may, from time to time, add or remove
any vendor from being a Reactor Vendor.
1.32 "START-UP DATE" means the first full calendar day following a five day
period, after completion of catalyst pre-treatment and other preliminary
operations, during which the applicable Licensed Plant produces quantities of
Synthetic Product in an amount equal to at least 75% of the per-day design
production capacity of such Licensed Plant averaged over such five day period.
1.33 "SYNTHETIC PRODUCT" means those hydrocarbons, having a chemical
composition substantially consisting of molecules with five or more carbon atoms
each, produced using Licensor Technology in the practice of a Conversion Process
at the Licensed Plant.
1.34 "SYNTROLEUM" means Syntroleum Corporation, a Delaware corporation.
1.35 "SYNTROLEUM LICENSE AGREEMENT" means the License Agreement between
Syntroleum and Licensor dated August 2, 2000.
2. LICENSOR GRANTS TO LICENSEE
-------------------------------
2.01 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee a limited, non-exclusive, non-transferable (except as provided in
Article 8) right and license to use Licensor Patent Rights and Licensor
--------
Technical Information to design, construct, operate and maintain (including
------
modify, replace, or expand within the limits defined in Exhibit A, Section IIB)
-- --------- -----------
the Licensed Plant to practice a Conversion Process to manufacture Synthetic
Product solely for the purpose of producing, using, and selling Marketable
Products anywhere in the world. This grant by Licensor includes improvements in
a Conversion Process developed or acquired by Licensor for fifteen (15) years
from the Effective Date, for which Licensor has the right to grant licenses,
immunities or licensing rights without having to make payment to others and
which Licensor is offering for license to others.
2.02 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee a limited, non-exclusive, non-transferable (except as provided in
Article 8) right to purchase from Reactor Vendors the appropriate
--------
▇▇▇▇▇▇▇-Tropsch and autothermal reforming reactors for use in the practice of a
-------
Conversion Process at the Licensed Plant. Licensee shall have no right to make,
have made, or sell any reactor based on Reactor Information except as expressly
provided in this Section 2.02.
-------------
2.03 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee (a) the right to purchase from Licensor the appropriate
▇▇▇▇▇▇▇-Tropsch Catalyst and, from either Licensor or a catalyst vendor
designated by Licensor, the appropriate autothermal reforming catalyst for use
in the practice of a Conversion Process at the Licensed Plant to manufacture
Synthetic Product solely for the purpose of producing, using, and selling
Marketable Products anywhere in the world and (b) a limited non-exclusive,
non-transferable (except as provided in Article 8) right and license under
----------
Licensor Catalyst Patent Rights and Licensor Catalyst Information to use such
catalysts in the practice of a Conversion Process at the Licensed Plant to
manufacture Synthetic Product solely for the purpose of producing, using, and
selling Marketable Products anywhere in the world. The purchase price for any
catalyst purchased by Licensee from Licensor shall be equal to the lowest of
(a) Licensor's cost to produce or have produced such catalysts, plus a markup of
twenty five percent (25%), or (b) if, during the twelve (12) month period prior
to a catalyst purchase by Licensee, the same catalyst (at comparable quantities)
was sold by Licensor to a third party at a markup less than twenty five percent
(25%), Licensee shall be entitled to the lower markup for its current catalyst
purchase. Licensor will, no more than once per year, provide Licensee
reasonable access to the relevant books of Licensor to verify the lowest markup
for such catalyst. Licensee shall have no rights to make, have made, or sell
any Licensor ▇▇▇▇▇▇▇-Tropsch Catalyst or autothermal reforming catalyst, which
is proprietary to Licensor. Beyond the initial catalyst fill for the Licensed
Plant, Licensee will have the right to buy replacement catalyst from other
catalyst suppliers. If Licensor specifies in the Process Design Package an
autothermal reforming catalyst commercially available from a third party,
Licensee shall have the right to purchase such catalyst directly from a third
party.
2.04 In the event Licensor for any reason is unable to supply Licensee with
such amounts of ▇▇▇▇▇▇▇-Tropsch Catalyst as may be reasonably necessary for the
operation of the Licensed Plant, Licensor shall provide to one or more catalyst
vendors designated by Licensor the necessary catalyst recipe, together with a
non-exclusive limited license to make and sell such ▇▇▇▇▇▇▇-Tropsch Catalyst to
Licensee for use in such Licensed Plant, and Licensee shall have the right to
purchase such ▇▇▇▇▇▇▇-Tropsch Catalyst from such vendor for use in such Licensed
Plant on the same terms (including price) as set forth in Section 2.03.
------------
2.05
(a) The Licensed Plant shall remain at the initial plant site for a
minimum of (i) seven (7) years from Start-Up Date, or (ii) until the natural gas
reserves from which the Licensed Plant acquires its gas supply have been
depleted to the point that such reserves are not adequate for operation of the
Licensed Plant at its design capacity, whichever first occurs. Thereafter,
Licensee may relocate the Licensed Plant to a new plant site within the Licensed
Territory without obtaining a new Site License Agreement provided (i) request is
made by Licensee to Licensor in the form of Exhibit C in which Licensee agrees
---------
that the Licensed Plant will remain at the new site for minimum of seven (7)
years and (ii) the Licensee is not in default under this Agreement.
(b) Notwithstanding the foregoing, the Licensed Plant utilizing gas
from leases, concessions, or similar production sharing arrangements in which
Licensee owns at least a ten percent (10%) working, net profits, equity, or
other economic interest may, at any time, be relocated within the geographic
boundaries of any such leases, concessions, or similar production sharing
arrangements.
(c) Nothing in this Agreement shall prohibit Licensee from purchasing
gas from other parties to manufacture Synthetic Product at the Licensed Plant
pursuant to this Agreement.
(d) In the event that Licensee and Licensor or their respective
Affiliates enter into a program for the development of a floating facility using
Licensor Technology under the provisions of a written agreement between Licensee
and Licensor, or their respective Affiliates, the time period set forth in
Section 2.06(a) of the License Agreement and Section 2.05 of the Site License
Agreement will be reduced from seven (7) to two (2) years.
3. TECHNICAL ASSISTANCE
------------------------
3.01 Licensee shall enter into a process design package agreement to
purchase a Process Design Package for the Licensed Plant according to the terms
specified in Section 5.02 of this Agreement. At the request of Licensee,
-------------
Licensor agrees to enter (or at the request of Licensee procure that Syntroleum
enters) into a technical services agreement to provide technical support to
Licensee related to transfer of Licensor Technology.
3.02 Reactor Information necessary for the Licensed Plant shall be excluded
from the Process Design Package. However, those elements of Reactor Information
which are necessary to fabricate such reactors will be provided by Licensor (or
Licensor will procure Syntroleum provides such information) directly to the
Reactor Vendors selected by Licensee to manufacture the autothermal reformer and
▇▇▇▇▇▇▇-Tropsch reactors from Licensor's (or Syntroleum's) then current list of
Reactor Vendors. Licensor may, from time to time, add or remove any Reactor
Vendor.
3.03 Except as may be set forth in a Process Design Package, the obligations
of Licensor under this Agreement do not include the performing of any basic or
detailed design, engineering, training, consulting, start-up, operating or
maintenance services with respect to the Licensed Plant. Licensor's
responsibilities for any such services in the design, construction and operation
(including maintenance) of the Licensed Plant shall be as set forth in one or
more separate written engineering services agreement(s) (if any) between
Licensor and Licensee specifically applicable to such Licensed Plant. Licensor
will not refuse a request by Licensee to enter into such an agreement with
Licensee for such services as are reasonably requested by Licensee and the
Parties will each act reasonably in agreeing the terms of such agreement. Where
such services cannot be provided by Licensor (but can be reasonably provided by
Syntroleum), Licensor agrees to procure that Syntroleum enters into such
agreements with Licensee.
3.04 Licensor agrees to disclose to Licensee, upon reasonable request but at
least once a year, (a) additions to Licensor Technology and (b) improvements or
inventions developed by Licensor or its Affiliates (including Syntroleum)
relating to Licensor Technology which have been commercially used or which
Licensor determines are in a stage of development suitable for commercial use.
Licensor shall permit Licensee to reasonably inspect, at mutually convenient
times, the operating procedures, process conditions, material balances, energy
consumption, catalyst performance, and analyses of internal streams and/or
Synthetic Product at Syntroleum's pilot plant which are applicable to such
improvements or inventions.
3.05 Licensee shall provide Licensor 90 days advance written notice of the
anticipated Start-up Date . Licensee agrees to permit Licensor and/or its
representatives access to the Licensed Plant at reasonable and convenient times,
for inspection and if requested by Licensee, training, by representatives of
Licensor. Licensor shall have the right to charge Licensee a reasonable fee for
any training as may be agreed with the Licensee on a case by case basis.
4. LICENSEE GRANTS TO LICENSOR
------------------------------
4.01 Licensor may, no more than one (1) time per year, request and Licensee
agrees to disclose to Licensor in writing any Inventions or Improvements related
to the Conversion Process.
4.02 Subject to the terms and conditions of this Agreement, Licensee grants
to Licensor a limited, non-exclusive, irrevocable, royalty free, worldwide (a)
right and license under Licensee Patent Rights and (b) right and license to use
Licensee Technical Information for the design, construction, operation and
maintenance (including modify, expand and replace) of facilities practicing a
Conversion Process, together with the right to grant corresponding sublicenses
of the Licensee Patent Rights and the use of Licensee Technical Information to
other licensees of Licensor Technology for use at a licensed plant practicing a
Conversion Process, provided that any such licensee to whom a sublicense is to
be granted shall have granted reciprocal rights to Syntroleum to use and grant
sublicenses under such licensee's patent rights and technical information for
the benefit of Licensee. Licensee shall have the right to charge Licensor a
reasonable fee for any training with respect to Licensee Patent Rights and
Licensee Technical Information as may be agreed with the Licensor on a case by
case basis.
4.03 Should Licensee, during the term of this Agreement, make any patentable
Inventions or Improvements, Licensee may, at its sole discretion, file patent
applications with respect to such Inventions or Improvements in its own name and
at its own expense, and take such other steps as are necessary, in the sole
judgment of Licensee, to protect its rights in such Inventions or Improvements.
In the event Licensee declines to file any patent application with respect to
any Inventions or Improvements, it shall promptly notify Licensor in a timely
manner to allow Licensor, at its sole discretion, to file such patent
application at its sole expense, and to take such other steps as are necessary,
in its judgment, to protect the Parties' rights in such Inventions or
Improvements, subject to Licensee's obligation to account to third parties
therefore and provided that title to such Inventions or Improvements shall
remain in Licensee.
4.04 Licensor and Licensee each agree that they will take all actions and
execute all documents and shall cause their employees, agents and contractors to
take all actions and execute all documents as are necessary or appropriate to
carry out the provisions of this Article 4 or to assist each other in the
----------
preparation, filing and prosecution of patent applications or securing such
protection referenced in this Article 4 when so requested.
----------
4.05 Licensee shall permit Licensor and/or its representatives to reasonably
inspect, at mutually convenient times, the operating procedures, process
conditions, material balances, energy consumption, catalyst performance, and
analyses of internal streams and/or Synthetic Product which are applicable to
Licensee's Inventions or Improvements used at the Licensed Plant.
4.06 Licensee agrees to provide, from time to time and upon request by
Licensor, samples of Synthetic Product and Marketable Products as they are
produced by any of Licensee's Licensed Plants to verify compliance with this
Agreement. Licensor agrees to limit its analysis of samples of Synthetic
Product and Marketable Products to those analyses necessary to determine
compliance with the definition of Marketable Products.
5. LICENSE AND OTHER FEES
--------------------------
5.01 In consideration for the rights granted to Licensee by Licensor under
this Agreement, the Licensee shall pay (subject to Section 5.05 of the License
Agreement) License Fees for the Licensed Plant calculated and paid according to
Exhibit A.
----------
5.02 In addition to the amounts to be paid by Licensee to Licensor (or
Syntroleum as the case may be) under Section 5.01, Licensee agrees to pay
------------
Licensor a fee for the Process Design Package according to the terms in the
process design package agreement. Licensee also agrees to pay Licensor (or
Syntroleum as the case may be) for technical services according to the terms in
the technical services agreement, if any.
5.03 Unless otherwise provided in this Agreement, all amounts payable under
this Agreement shall be paid by Licensee to Licensor at Licensor's address
specified in Section 10.08, or to an account at a bank specified by Licensor, in
-------------
Australian dollars.
5.04 In the event Licensee is required to withhold any taxes from amounts
payable to Licensor under this Agreement, Licensee agrees to provide Licensor at
the time of such withholding with a receipt or other evidence reflecting the
deposit of such taxes with the appropriate governmental agency.
6. WARRANTIES AND INDEMNITIES
------------------------------
6.01 Licensor represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, USA, and has full power and authority to enter into and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement and all documents relating hereto by Licensor have been duly and
validly authorized by all requisite corporation action and constitute valid and
binding obligations of Licensor enforceable in accordance with their respective
terms.
6.02 Licensee represents and warrants that it has full power and authority
to enter into and perform its obligations under this Agreement including the
right to grant the rights and licenses as set forth in Article 4. The
---------
execution, delivery and performance of this Agreement and all documents relating
hereto by Licensee have been duly and validly authorized by all requisite
corporate action and constitute valid and binding obligations of Licensee
enforceable in accordance with their respective terms. Licensee represents and
warrants that the statements made in the Request for Site License Agreement are
true and accurate as of the Effective Date.
6.03 Except as otherwise expressly set forth in this Agreement or other
written agreement between the Parties, LICENSOR MAKES NO AND HEREBY DISCLAIMS
ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER
WARRANTIES OR REPRESENTATIONS OF ANY KIND TO LICENSEE, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OR REPRESENTATION WITH RESPECT TO USE OF LICENSOR
TECHNOLOGY AS AUTHORIZED HEREUNDER.
6.04 EXCEPT FOR UNAUTHORIZED DISCLOSURE OR USE OF CONFIDENTIAL INFORMATION
OR UNAUTHORIZED USE OF PATENT RIGHTS UNDER THIS AGREEMENT, IN NO EVENT SHALL A
PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR
EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS OR SAVINGS,
REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH A CLAIM FOR SUCH DAMAGES,
WHETHER IN CONTRACT OR TORT INCLUDING NEGLIGENCE, EVEN IF LICENSOR OR LICENSEE
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. BUT IF A PARTY IS FOUND
LIABLE, DESPITE THE ABOVE LANGUAGE, TO THE OTHER PARTY FOR SPECIAL, INDIRECT,
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR EXEMPLARY DAMAGES THEN THE MAXIMUM LIMIT
OF SUCH DAMAGES IS AGREED TO BE $5,000.
6.05 A Party will promptly advise the other Party in writing of any claim
made or lawsuit alleging infringement of any patent or copyright or
misappropriation of Confidential Information based on the design, construction
and/or operation of the Licensed Plant (including Synthetic Product or
Marketable Products produced from the Licensed Plant).
6.06 If Licensee has made a modification to the Process Design Package, with
respect to a Licensed Plant, and infringement or misappropriation by such
Licensed Plant would not exist in the absence of Licensee's modification,
Licensee will be solely responsible for any claim or lawsuit. Licensee will (a)
promptly undertake at its own expense the defense of the claim or lawsuit, and
(b) hold Licensor, its affiliates, and their officers, directors, and employees
harmless from any liability, damages and other sums that may be assessed in or
become payable under any decree or judgment by any court or other tribunal which
results from such claim or lawsuit and from any attorneys fees, costs of
litigation and other reasonable out of pocket expenses incurred in the defense
of such claim or lawsuit.
6.07 If the design, construction and/or operation of a Licensed Plant which
is the basis for alleged infringement or misappropriation, is in accordance with
the designs, specifications and operating conditions (including, but not limited
to, catalysts) embodied in the Process Design Package for such Licensed Plant,
Licensor will (a) promptly undertake at its own expense the defense of the claim
or lawsuit, and (b) hold Licensee, its affiliates, and their officers,
directors, and employees harmless from any liability, damages and other sums
that may be assessed in or become payable under any decree or judgment by any
court or other tribunal which results from such claim or lawsuit and from any
attorneys fees, costs of litigation and other reasonable out of pocket expenses
incurred in the defense of such claim or lawsuit.
6.08 A Party will render all reasonable assistance that may be required by
the other Party in the defense of claim or lawsuit alleging infringement or
misappropriation and such Party shall have the right to be represented therein
by advisory counsel of its selection and at its expense.
6.09 In the event a court or other tribunal finds that infringement and/or
misappropriation has occurred not as a result of Licensee's modifications,
Licensor shall have the option, at its sole expense, to either (a) provide
designs, specifications and/or operating conditions (including, but not limited
to, catalysts) and make modifications to the Licensed Plant which avoid such
infringement and/or misappropriation without degrading the economics or
performance of the Licensed Facilities, or (b) acquire the right to continue
using the design, construction and operating conditions (including, but not
limited to, catalysts), which were the subject of such infringement and/or
misappropriation.
6.10 Except as provided in (d) above, a Party shall not settle or compromise
any claim or lawsuit alleging infringement or misappropriation without the
written consent of the other Party if such settlement or compromise obligates
the other Party to make any payment or part with any property, to assume any
obligation or grant any licenses or other rights, or to be subject to any
injunction by reason of such settlement or compromise.
6.11 Licensor agrees to indemnify and hold harmless Licensee and its
officers and employees from and against the full amount of any and all claims,
demands, actions, damages, losses, costs, expenses, or liability whatsoever
(including without limitation the costs of litigation, including reasonable
attorneys' fees), for patent infringement, property (real and personal) damage,
personal injury or death, fines, or penalties arising in whole or in part out of
the use of Licensee Patent Rights and Licensee Technical Information in a plant
operated by Licensor or Person under license from Licensor.
6.12 Licensor agrees to indemnify and hold harmless Licensee and its
officers and employees from and against the full amount of any and all claims,
demands, actions, damages, losses, costs, expenses, or liability whatsoever
(including without limitation the costs of litigation, including reasonable
attorneys' fees), for property (real and personal) damage, personal injury or
death, fines, or penalties arising in whole or in part out of acts or omissions
in the preparation and content (including design, engineering, and
specifications) of the Process Design Package for the Licensed Facilities.
6.13 Licensee agrees to indemnify and hold harmless Licensor, its
affiliates, their officers, directors, and employees from and against the full
amount of any and all claims, demands, actions, damages, losses, costs,
expenses, or liability whatsoever (including without limitation the costs of
litigation, including reasonable attorneys' fees), for property (real and
personal) damage, personal injury or death, fines, or penalties arising in whole
or in part out of acts or omissions outside the scope of or any modification to
the content (including design, engineering, and specifications) of the Process
Design Package for the Licensed Facilities.
6.14 Licensor's total obligation and liability to indemnify and hold
Licensee harmless for any and all claims (a) under this Article 6, including but
---------
not limited to all expenses incurred by Licensor in assuming Licensee's defense,
making modifications to the Licensed Plant and for paying any judgments or
settlements on Licensee's behalf, or for any other reason contemplated by this
Article 6, (b) for failure to meet any process guarantees that may have been
---------
provided under a separate agreement, or (c) for any other indemnification made
--
by Licensor pursuant to this Agreement, shall in no event exceed 50% of the
total License Fees received from the Licensee for any Licensed Plant that is
subject to the above claims.
6.15 Licensee's total obligation and liability to indemnify and hold
Licensor harmless for any and all claims (a) under this Article 6 including but
---------
not limited to all expenses incurred by Licensee in assuming Licensor's defense
and for paying any judgments or settlements on Licensor's behalf, or for any
other reason contemplated by this Article 6, or (b) for any other
----------
indemnification made by Licensee pursuant to this Agreement, shall in no event
exceed 50% of the total License Fees received by Licensor from Licensee for the
Licensed Plant that is subject to the above claims.
7. CONFIDENTIALITY AND LIMITATIONS
-----------------------------------
7.01 Licensee agrees that any Confidential Information disclosed by Licensor
or an Affiliate (including Syntroleum) directly or indirectly to Licensee during
the period from the date of Licensee's execution of the License Agreement
through the term of this Agreement, will be kept confidential by Licensee for a
period of fifteen (15) years after the date of each disclosure, but not to
exceed five (5) years after the termination of this Agreement or fifteen (15)
years from the Effective Date, whichever last occurs, with the same standard of
care Licensee uses to protect its own similar confidential information and,
except as otherwise provided in this Agreement, will not be disclosed to others
or copied or duplicated (except for internal use), and will be used by Licensee
solely as it relates to this Agreement, and for no other purpose, including
Licensee's research, development or commercial activities related to the
Conversion Process for its own account. Licensee may disclose such Confidential
Information to third parties who have executed a secrecy agreement with Licensor
or Syntroleum with confidentiality terms no less restrictive than those set
forth in this Section 7.01.
-------------
7.02 Licensor agrees that any Confidential Information disclosed by Licensee
directly or indirectly to Licensor during the term of this Agreement will be
kept confidential by Licensor for a period of fifteen (15) years after the date
of each disclosure, but not to exceed five (5) years after the termination of
this Agreement or fifteen (15) years from the Effective Date, whichever last
occurs, with the same standard of care Licensor uses to protect its own similar
confidential information, and except as otherwise provided in this Agreement
will not be disclosed to others or copied or duplicated, and will be used by
Licensor solely in the development, marketing and licensing of a Conversion
Process, and for no other purpose. Licensor may disclose such Confidential
Information to third parties who have executed a secrecy agreement with
confidentiality terms similar to the confidentiality provisions of this
Agreement. To the extent reasonably necessary to carry out the purposes of this
Agreement, Licensor may disclose any of the foregoing information to an
Affiliate, provided that the Affiliate has agreed in writing to be bound by the
relevant provisions of this Agreement.
7.03 A Party shall not be subject to the restrictions set forth in Sections
--------
7.01 and 7.02 as to the disclosure, duplication or use of disclosed Confidential
---- ----
Information, which the receiving Party can prove by competent evidence (a) was
already known to the receiving Party or an Affiliate prior to the disclosure
thereof by the disclosing Party; (b) is or becomes part of the public knowledge
or literature without breach of this Agreement by the receiving Party but only
after it becomes part of the public knowledge or literature; (c) shall otherwise
lawfully become available to the receiving Party or an Affiliate from a third
party but only after it becomes so available and provided the third party is not
under obligation of confidentiality to disclosing Party; or (d) is developed by
the receiving Party or an Affiliate independently of any disclosure by the
disclosing Party to the receiving Party or an Affiliate under this Agreement or
independently of any joint research and development activities of Licensee and
Licensor which may occur under a separate agreement. Any Confidential
Information disclosed shall not be deemed to fall within the confidentiality
exceptions of this Section 7.03 merely because it is embraced by more general
------------
information. In any such case set forth in Section 7.03(a), (b), (c), and (d),
--------------- --- --- ---
the receiving Party shall keep confidential and not disclose to any third party
that any such information was also made available to or acquired by the
receiving Party or an Affiliate from the disclosing Party, and such release from
the secrecy obligation shall not be considered as a license to make, sell, use
or operate under any of the disclosing Party's proprietary rights.
7.04 The receiving Party shall limit access to the Confidential Information
disclosed to it to those employees of the receiving Party or an Affiliate who
reasonably require the same and who are under a legal obligation of
confidentiality on the terms set forth in Section 7.01 and Section 7.03. The
------------ ------------
receiving Party shall be responsible to the disclosing Party for the performance
by its employees of their confidentiality obligations. The receiving Party
shall keep a record of any Confidential Information marked "Limited Access" and
the identity of each employee who has access to Confidential Information so
marked. The receiving Party shall inform the other Party of the identity of
each such employee within 30 days of disclosure.
7.05 In the event that a Party which is recipient of Confidential
Information from the other Party is requested or required by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process to disclose any such Confidential Information, the receiving
Party shall provide the disclosing Party with prompt written notice of such
request or requirement prior to making the requested disclosure, and shall
cooperate with the disclosing Party so that the disclosing Party may seek a
protective order or other appropriate remedy or, if the disclosing Party so
elects, waive compliance with the terms of this Agreement. In the event that
such protective order or other remedy is not obtained, the receiving Party may
disclose only that portion of the Confidential Information which the disclosing
Party is advised by counsel is legally required to be disclosed.
7.06 The Parties agree that they will each take all actions and execute all
documents, and shall cause their employees, agents and contractors to take all
actions and execute all documents as are necessary or appropriate to carry out
the provisions of this Article 7 or to assist each other in securing protection
---------
of intellectual property and Confidential Information referenced in this Article
-------
7.
7.07 With respect to any catalyst furnished by Licensor to Licensee or
Syntroleum for use by Licensee at the Licensed Plant, Licensee will not, and
Licensee will not allow any other person to, analyze, break down, reverse
engineer or otherwise seek to determine the chemical composition, except for
loss on ignition and bulk density, of any such catalyst, except that Licensee
shall be entitled to (a) perform analyses that Licensor may from time to time
specifically authorize in writing, to the extent required for monitoring the
performance of the Licensed Plant and for regeneration, reclamation or disposal
of spent catalysts, such authorization not to be unreasonably withheld, and (b)
provide results of the aforementioned analyses to other parties to the extent
required for regeneration, reclamation or disposal of spent catalysts, but only
after such other parties have entered into an agreement with Licensor in a form
attached hereto as Exhibit B. Licensor will be provided with a copy of all such
---------
analyses which has been approved in writing prior to release to other parties.
8. ASSIGNMENT
--------------
8.01 Subject to Section 8.02, this Agreement shall not be assigned by
-------------
Licensee without the prior written consent of the Licensor, which consent will
not be unreasonably withheld, except that Licensee may, upon written notice to
Licensor, assign this Agreement to a department, bureau, division, agency or
similar governmental entity that is a part and under the control of Licensee.
Under no circumstances shall this Agreement be assigned to Exxon Corporation,
Royal Dutch Shell or Sasol Limited.
8.02 Licensee may assign this Agreement to any corporation or authority
which is wholly-owned by Licensee.
9. TERM AND TERMINATION
------------------------
9.01 This Agreement shall extend for the life of the plant. Upon payment of
all license fees due under this Agreement, no further license fees will be due
except for those associated with increases in capacity under Exhibit A.
---------
9.02 If a material default shall occur in connection with the Licensed
Plant, Licensor shall provide written notice to Licensee. If a material default
under this Agreement shall continue for a period of one year following written
notice of such default to Licensee from Licensor without being cured by
Licensee, then Licensor shall have the right to (a) suspend all rights of
Licensee under this Agreement, or (b) terminate this Agreement upon written
notice to Licensee. The actions by Licensor under this Article shall not
-------
prejudice Licensor from enforcing any claim which it may have for damages or
otherwise on account of the default.
9.03 Termination of this Agreement shall not:
(a) relieve Licensee of its obligations to account for and pay all amounts
due Licensor under this Agreement;
(b) affect any rights granted under Article 4 with respect to Licensee
----------
Patent Rights and Licensee Technical Information, which shall survive
termination in accordance with its terms; or
(c) affect the obligations of Licensor and Licensee under Articles 6 and 7
---------- -
and Section 10.02 which shall survive termination in accordance with their
--------------
terms.
-
9.04 No Party to this Agreement shall be in default in performing its
obligations under this Agreement to the extent that performing such obligations,
or any of them, is delayed or prevented by revolution, civil unrest, strike,
labor disturbances, epidemic, accident, fire, lightening, flood, storm,
earthquake, explosion, blockage or embargo, or any law, proclamation, regulation
or ordinance, or any other cause that is beyond the control and without the
fault or negligence of the Party asserting the benefit of this Section 9.04.
------------
Each Party shall do all things reasonably possible to remove the cause of such
default.
9.05 Licensee shall have the right to terminate this Agreement in its sole
discretion, with or without cause, upon the delivery of written notice of
termination to Licensor no less than 90 days prior to the date of such
termination.
10.MISCELLANEOUS
----------------
10.01 This Agreement embodies the entire intent of the Parties and
merges all prior oral and written agreements between the Parties hereto with
respect to the Licensed Plant. No stipulation, agreement, representation or
understanding of the Parties heretowith respect to the Licensed Plant shall be
valid or enforceable unless contained in this Agreement or in a subsequent
written agreement signed by the Parties hereto.
10.02 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, UNITED STATES OF AMERICA, INCLUDING
ARBITRATION LAW, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF. Any
dispute claim or controversy arising out of or relating to this Agreement on the
breach, termination, scope or invalidity (including any dispute relating to
patent invalidity or infringement) of this Agreement shall be finally settled by
arbitration conducted in accordance with the Rules Conciliation and Arbitration
of the International Chamber of Commerce.
(a) The arbitration panel shall consist of one arbitrator who shall be
nominated with the concurrence of both parties; failing their agreement, the
arbitrator shall be appointed by the Court of Arbitration of the International
Chamber of Commerce.
(b) The arbitration shall be held in New York City, New York, USA.
(c) The arbitration shall be conducted in the English language.
(d) The applicable procedural rules shall be the Rules of Conciliation and
Arbitration of the International Chamber of Commerce. In any case not
specifically covered by those Rules, the arbitrator shall himself formulate the
rules of procedure to be followed.
(e) Arbitration awards rendered shall not be subject to any form of appeal,
but judgment upon awards rendered may be entered in any court having
jurisdiction, or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case by may be.
10.03 This Agreement does not grant and shall not be construed as
granting any license, authorization or consent, to either Party by the other
Party hereto, to use any name, trademark, service ▇▇▇▇ or slogan of the other
Party. A Party shall not use the other Party's name without written consent,
except for the identification of the other Party as a Licensee or Licensor of
Licensor Technology. The terms of this Agreement will be maintained in
confidence by each Party subject to the same standard of care each Party uses to
protect its confidential information, except as required by law. A press
release which includes the name of the other Party must have prior written
approval of the other Party, except as required by law.
10.04 Failure of either Licensor or Licensee at any time or from time
to time to exercise any of its rights under this Agreement or to insist upon
strict performance of the other Party's obligations hereunder shall not be
deemed a waiver of or to limit any of such rights or obligations with respect to
such rights or obligations or any subsequent occurrence.
10.05 Licensee may publish the existence of this Agreement but agrees
not to disclose, without the written consent of the Licensor, any of the terms
of this Agreement or any portion thereof, or any amendment concerning the same,
except to Persons directly involved with design, financing, construction, or
operation of the Licensed Plant on a need-to-know basis or as required by law.
10.06 Licensee agrees that all Licensor information, technology,
patents, and the product produced directly by the use thereof, when used outside
the United States of America, shall be used by Licensee subject to and in
accordance with regulations of any department or agency of the United States of
America and Licensee shall not re-export or transship or agree to re-export or
transship any such Licensor information, technology, patents, and the product
produced directly by the use thereof to any destination prohibited by United
States law including, without limitation, United States executive orders and
administrative orders, rules, and regulations or to any destination requiring
the approval of the United States government for such re-exportation or
transshipment until a request to do so has been submitted to and approved by the
United States government and notice of such approval has been provided to
Licensor. Licensee shall not (i) enter into a transaction or dealing,
including, without limitation, re-exporting the Licensed Technology, or causing,
financing, guaranteeing, authorizing or facilitating an action to enter into a
transaction or dealing, that might reasonably be considered a violation of
United States law by either Licensor or Licensee, or (ii) disclose information
in a way that might reasonably be considered a violation of United States law by
either Licensor or Licensee.
10.07 Should any part or provision of this Agreement be held
unenforceable or in conflict with the law of any state or of the United States
of America or of any foreign country, the validity of the remaining parts or
provisions shall not be affected by such holding.
10.08 All notices hereunder shall be addressed to the Parties as
follows:
(a) If to Licensor:
Syntroleum Australia Licensing Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: Office of the President
with copy to:
Syntroleum Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: Office of the General Counsel
(b) If to Licensee:
Invest Australia
Department of Industry Science and Resources
Commonwealth of Australia
GPO Box 9839
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ATTN: General Manager
Any notice required or permitted to be given under this Agreement by one of the
Parties to the other shall be deemed to have been sufficiently given for all
purposes hereof if mailed by registered or certified mail, postage prepaid,
addressed to such Party at its address indicated above, electronically
transmitted and acknowledged by the other Party or by actual delivery of written
notice to the other Party.
11. GOODS AND SERVICES TAX
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11.01 The payments specified in this Agreement have been calculated without
taking GST into account.
11.02 If any GST is payable on a taxable supply by the Licensor under or in
connection with this Agreement:
(a) the Licensor warrants that, at the time of entry into this agreement and
unless and until otherwise notified in writing to the Licensee:
(i) it is a non-resident; and
(ii) it does not make the supply through an enterprise that it carries on in
Australia or through a resident agent;
(b) the Licensee warrants that, at the time of entry into this Agreement and
unless and until otherwise notified in writing to the Licensor, it is registered
for GST purposes; and
(c) the Parties hereby agree that the GST on the taxable supply by the
Licensor will be payable by the Licensee in accordance with Section 83-5(1) of
the GST Law.
11.03 If the requirements of Section 83-5(1) of the GST Law are not
satisfied, either because:
(a) the Licensor provides notice to the Licensee in accordance with Section
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11.02(a); or
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(b) for any other reason,
the provisions of Section 11.04 will apply to the taxable supply.
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11.04 If GST is imposed on any supply by a party (the "Supplier") to the
other party (the "Recipient") under or in connection with this Agreement, the
Recipient must pay to the Supplier, subject to the receipt of a valid tax
invoice, the amount of GST imposed at the same time as and in addition to the
amount the Recipient is required to pay the Supplier for the supply in question
(and without setoff), or on demand.
11.05 In this Article 11:
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"GST Law" means the A New Tax System (Goods and Services Tax) ▇▇▇ ▇▇▇▇ together
with all associated regulations and legislation.
"GST," "enterprise," "taxable supply," "tax invoice," "non-resident," "carried
on in Australia" and "resident agent" have the meaning given to them in the GST
Law.
11.06 The Licensee and the Licensor acknowledge and agree that the
warranties contained in Section 11.02 are intended solely for the purposes of
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Article 11, and that, accordingly, any breach of such warranty shall not
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constitute a default or an event of default under this Agreement or any of the
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documents related to the transaction contemplated by this Agreement and shall
not otherwise have any consequences for the purposes of this Agreement and any
of the documents related to the transaction contemplated by this Agreement,
except as expressly provided in Sections 11.03 and 11.04.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
set forth above.
LICENSOR
SYNTROLEUM AUSTRALIA
LICENSING CORPORATION
By:______________________________
Date:____________________________
LICENSEE
COMMONWEALTH OF AUSTRALIA
By:______________________________
Name:___________________________
Title:____________________________
Date:____________________________
EXHIBIT A
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LICENSE FEE CALCULATION
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I. For purposes of this Exhibit A, the following terms shall have the
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meanings ascribed thereto:
A. "LICENSED PLANT" means the Licensed Plant in which this Site License
Agreement for such plant is issued to and remains (subject to assignment
pursuant to Section 8 of the Site License Agreement) in the name of the Licensee
who has executed this Agreement with Licensor.
B. "ROYALTY RATE" shall mean (i) the lowest royalty rate per Barrel of
Synthetic Product accepted by Licensor for a Site License Agreement with a
non-affiliate for a facility of comparable size, in the Licensed Territory,
which is not under a master preferred license agreement, during the twelve (12)
months immediately preceding the execution date of the applicable Site License
Agreement under this Agreement, or (ii) if no such Site License Agreement has
been executed during the twelve (12) months immediately preceding, then the
royalty rate per Barrel of Synthetic Product in the last Site License Agreement
with a non-affiliate, in the Licensed Territory, executed by Licensor, which is
not under a master preferred license agreement, or (iii) if none of the
foregoing applies, then US$0.495 per Barrel of Synthetic Product. Market
Royalty Rate does not include the catalyst price as provided for under Section
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2.03.
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II. For each Site License Agreement executed for the Licensed Plant under
this Agreement, Licensee agrees to pay (subject to Section 5.05 of the License
Agreement dated August 2, 2000 between Syntroleum Australia Licensing
Corporation (as Licensor) and Commonwealth of Australia as Licensee (LICENSE
AGREEMENT) License Fees to Licensor on a prepaid license basis as follows:
A. Licensee agrees to pay Licensor a one-time, prepaid License Fee
calculated in accordance with the following formula:
License Fee = "C" x 350 x 7.5 x "R"
wherein:
"C" = the maximum daily design capacity, as defined by the Process
Design Package, of such Licensed Plant to produce Marketable Products measured
in Barrels of Synthetic Product per day for which such Licensed Plant is
originally designed and constructed, and
"R" = the Royalty Rate.
and payable in installments as follows:
(i) 20% within thirty (30) days after the execution of this Site License
Agreement for such Licensed Plant;
(ii) 30% within thirty (30) days after delivery of the Process Design
Package or within one hundred twenty (120) days after the execution of this Site
License Agreement for the Licensed Plant, whichever first occurs;
(iii) 20% within thirty (30) days after the commencement of field
construction move-in;
(iv) 30% within one-hundred and twenty (120) days after the Start-Up Date of
the Licensed Plant or a successful Performance Test as specified in any process
guarantee and performance test agreement, whichever first occurs.
B. Capacity Adjustments: In the event the actual production capacity of the
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Licensed Plant, under II.A above, is determined to have either exceeded the
original maximum daily design capacity established in this Site License
Agreement or is increased through major equipment modification, by more than
five percent (5%) or by more than 500 barrels per day, at any time after the
Start-up Date, Licensee shall pay (subject to Section 5.05 of the License
Agreement) Licensor an additional License Fee, on a prepaid basis, equal to the
difference between (a) the prepaid License Fee as would have been calculated
with the higher production capacity for such Licensed Plant substituted for "C"
in the calculation method set forth in II.A. above, and (b) the License Fee as
would have been calculated for such Licensed Plant by the method set forth in
II.A. above using the original maximum daily design capacity established in this
Site License Agreement. The incremental License Fee due will be reduced by any
previous incremental adjustments. Such additional License Fee shall be payable
within thirty (30) days after the end of the calendar year in which such
increase in production capacity of such Licensed Plant occurs. Incremental
License Fees for increased production capacity in any Licensed Plant shall not
be due if the increased production capacity is the result of the initial use of
Licensee Patent Rights or Licensee Technical information. The total cumulative
incremental capacity adjustments under this Agreement will be limited to 50
percent of the initial maximum daily capacity under this Agreement.
III. Subject to Section 5.05 of the License Agreement, upon payment of all
fees due under the Agreement, Licensee shall be deemed to have acquired a fully
paid license for the Licensed Plant up to the original maximum daily design
capacity or any adjusted daily design capacity made under the provisions of II.B
above. Any additional incremental increases in the Licensed Plant capacity will
be subject to additional License Fees as calculated under Incremental
Adjustments defined under II. above.
IV. All payments required hereunder shall include a statement showing the
details supporting the calculation of the License Fees being paid. Licensee
shall keep accurate and complete records of all natural gas feedstock processed
(volume and composition) and all Synthetic Product produced at and either used
internally within or removed from the Licensed Plant to enable verification of
statements and payments rendered to Licensor hereunder. Licensee agrees to
permit Licensor, at Licensor's expense, to inspect such records on reasonable
notice and at reasonable intervals during normal business hours to verify the
fees paid and payable under this Agreement.
EXHIBIT B
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CONTRACTOR SECRECY AGREEMENT
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DATE
name
company
street address
city, state/province postal code
country
CONFIDENTIALITY AGREEMENT
In connection with your technical and commercial evaluation of Syntroleum
natural gas conversion technology, you may be given access to certain
proprietary information related to the conversion of natural gas into liquid
hydrocarbons, including license contract documents (collectively, the "License
Agreement"), which Syntroleum considers to be a trade secret of Syntroleum
(hereinafter referred to as the "Confidential Information"). For the purposes
of this Agreement, "You", as used in this Agreement, shall include those of your
Affiliates, including your directors, officers, employees, agents, advisors or
other representatives (including, without limitation, lawyers, accountants,
consultants, prospective financing sources and financial advisors)
(collectively, "Representatives"). "Affiliates" shall mean your parent
company(ies) (one or more parent companies in an upward series), if any, and all
present and future companies whose outstanding stock carrying the right to vote
for or appoint directors is fifty percent (50%) or more, and is owned or
controlled directly or indirectly at the time in question by you or your parent
company(ies).
As security for maintaining the confidentiality of our information and
protecting our competitive position, we ask that you agree to the terms and
conditions set out below before we disclose any Confidential Information to you.
1. All Confidential Information disclosed by Syntroleum, or on behalf of
Syntroleum by an authorized third party, to you in writing or other tangible
form is disclosed in confidence and shall not be disclosed by you to any third
party without our express prior written consent for a period of fifteen (15)
years from the date of disclosure. Syntroleum shall, at the time of disclosure,
identify information as Confidential Information. If written documents contain
Confidential Information, the documents shall be marked "Confidential". All
orally disclosed confidential information shall be confirmed in writing and
clearly marked "Confidential" within a period of 30 days after the disclosure by
Syntroleum. In the event that Syntroleum provides you only a License Agreement,
Syntroleum will not include, as part of the License Agreement, any of
Syntroleum's technical information that it deems confidential.
2. You shall not use the Confidential Information disclosed to you for any
purpose other than in connection with your evaluation of Syntroleum natural gas
conversion technology except by expressed prior written authorization of
Syntroleum. If you are required by law (pursuant to legal proceedings,
subpoena, civil investigative demand, or other similar process) to disclose any
Confidential Information, you shall notify Syntroleum promptly in writing so
that Syntroleum may seek a protective order or other appropriate remedy.
3. In recognition that your evaluation may require discussions with
Affiliate(s) who may be the potential end user(s) of the Confidential
Information under a license agreement(s) with Syntroleum, you may disclose
Confidential Information to such Affiliate(s).
4. You shall exercise reasonable care in overseeing those with access to the
Confidential Information, and shall limit such access to those of your
employees, Affiliate(s), employees of Affiliate(s), and Representatives who have
a need to know to achieve the limited purpose for which such information was
disclosed to you by Syntroleum and who are obligated to hold such Confidential
Information in confidence by secrecy obligations no less restrictive than those
contained in this Agreement. Should you desire to have a Representative assist
you in the evaluation of the Confidential information, you will ensure that such
third party is bound by a separate confidentiality agreement with Syntroleum
prior to any disclosure by you of Confidential Information to such
Representatives. The list of the initial employees, Affiliate(s), and employees
of Affiliate(s) to whom you intend to provide such access is included in Exhibit
A to this Agreement. You will maintain a separate list of all employees,
Affiliate(s), employees of Affiliate(s), and Representatives to whom you provide
such access, which list will be available to Syntroleum upon request.
5. You agree that the standard of care which you shall use in preventing
disclosure of the Confidential Information to third parties shall be the same
care you would take in preserving the confidentiality of your own trade secrets.
6. You understand that any Confidential Information submitted to you by
Syntroleum, or on behalf of Syntroleum by an third party authorized by
Syntroleum, pursuant to this Agreement is the property of Syntroleum and that,
upon request, you will return to Syntroleum all such Confidential Information,
including any copies, whether exact or approximate, you have made, except that
you may retain one archival copy of all such information in your legal
department files. You shall destroy all notes, compilations, analyses, or other
documents prepared by you or for your internal use which reflect any of the
Confidential Information, except that you may retain one archival copy of all
such information in your legal department files.
7. It is understood that nothing in this Agreement obligates either party to
enter into any other contract or agreement. Both parties understand and agree
that nothing in this Agreement grants or shall be construed as granting you a
license to the Confidential Information or to any other intellectual property of
Syntroleum.
8. You will be released from the restrictions set forth above on any
Syntroleum information marked Confidential that you can show by written record
to be:
(a) information previously known by you,
(b) information which becomes publicly available by other than
unauthorized disclosure,
(c) information which is received by you from a third party whose
disclosure does not violate any confidentiality obligation or,
(d) information which is independently developed by you.
However, such release from the confidentiality obligation shall not be
considered as a license to make, sell, use or operate under any of Syntroleum's
proprietary rights, except to the extent provided for in this Agreement. In
addition, in any such cases set forth in this Item 8 above, you shall continue
to keep confidential and shall not disclose to any third party that any such
information was made available to you, or acquired by you, from Syntroleum or
that Syntroleum uses such information in conjunction with, or as a part of, its
technology.
Should you agree to the foregoing terms and conditions, please indicate by
executing duplicate originals of this letter in the space provided below and
returning one fully executed original to the undersigned.
Very truly yours,
SYNTROLEUM CORPORATION
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President/COO
Accepted and Agreed to this _____day of ____________, 1997.
By: ___________________________________
Title: ___________________________________
EXHIBIT A
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Employees, Affiliate(s) and employees of Affiliates who will receive
Confidential Information under this Agreement.
________________________________ ___________________________
Name Name
________________________________ ___________________________
Company Company
________________________________ ___________________________
Date Included Date Included
________________________________ ___________________________
Name Name
________________________________ ___________________________
Company Company
________________________________ ___________________________
Date Included Date Included
________________________________ ___________________________
Name Name
________________________________ ___________________________
Company Company
________________________________ ___________________________
Date Included Date Included
EXHIBIT C
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REQUEST FOR LICENSED PLANT RELOCATION
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Syntroleum Corporation
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Attn: Office of the President
Gentlemen:
Please authorize the relocation of the existing Site License Agreement for the
Licensed Plant currently located at the following location:
City: ________________________ State/Province: ______________________
Country: _____________________ Onshore/Offshore: ___________________
Latitude: _____________________ Longitude: _________________________
to the following new location:
City: ________________________ State/Province: ______________________
Country: _____________________ Onshore/Offshore: ___________________
Latitude: _____________________ Longitude: _________________________
The new location is within the Licensed Territory and will remain at the new
plant site for a minimum of (subject to Section 2.05 of the Site License
Agreement) seven (7) years.
Very truly yours,
____________________________,
Licensee