Exhibit 10.2
CONFIDENTIAL TREATMENT REQUESTED
***Certain portions of this exhibit have been omitted and marked with "***".
Copies of this exhibit containing the omitted information have been filed
separately with the SEC pursuant to the Company's Application for Confidential
Treatment under Rule 24b-2 under the Securities Exchange Act of 1934.
LICENSE AGREEMENT FOR ALTAIR TiO2 PIGMENT TECHNOLOGY
BETWEEN
ALTAIR NANOTECHNOLOGIES, INC., ALTAIR NANOMATERIALS, INC.
AND WESTERN OIL SANDS INC.
THIS LICENSE AGREEMENT (this "Agreement") is entered into effective as
of this 23 day of January, 2004 (the "Effective Date"), by and between Altair
Nanotechnologies, Inc., a Canadian corporation and Altair Nanomaterials, Inc., a
Nevada corporation (collectively, "Altair") and Western Oil Sands Inc., an
Alberta corporation ("Western").
WHEREAS Western would like to develop business opportunities by
capitalising on the concentrations of titanium and zirconium in certain heavy
mineral deposits;
WHEREAS Altair has a proprietary process that extracts Ti values from
ilmenite ore to produce pigment grade TiO2 and currently possesses certain
hydrometallurgical, mineral processing, mineralogical, and analytical
capabilities required to optimise heavy mineral recoveries from a variety of
mineral resources and to recover titanium and other metals from heavy mineral
concentrates;
WHEREAS Western is interested in evaluating and licensing the AHPP for
the purpose of applying it to heavy minerals contained in oil sands, tar sands
and other heavy oil and mineral deposits;
WHEREAS Altair would like to provide certain technical services to
Western for the evaluation, and possibly the development and commercialisation
of, the AHPP; and
WHEREAS Western would like to take licenses from Altair, and Altair
desires to grant Western licenses, of Altair's intellectual property to
evaluate, develop, and commercialise the AHPP, all in accordance with and
subject to the terms and conditions set forth herein.
NOW THEREFORE the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 In this Agreement, the following terms shall have respective meanings
ascribed thereto:
(a) "AHPP" or "Altair Hydrochloric Pigment Process" means the
proprietary process that extracts Ti values from ilmenite ore to
produce pigment grade and other high quality TiO2. Various
portions of the AHPP are disclosed in the Licensed Patent Rights.
The AHPP does not include any product or process disclosed in any
Altair patent or patent application not referenced on Exhibit B or
any proprietary process related thereto.
(b) "Alberta Licensed Products" has the meaning ascribed thereto in
Section 3.1 of this Agreement.
(c) "Canada and Minnesota Licensed Products" has the meaning ascribed
thereto in Subsection 3.2(a) of this Agreement.
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(d) "Commercial Production" means production at a level equal to or
greater than fifty percent of the name plate capacity of the
relevant production facility.
(e) "Conceive" means contributing to the conception of an invention
within the meaning of U.S. patent laws under 35 U.S.C. et seq.
(f) "Develop" means substantial participation in, or providing funding
to be utilised under this Agreement for, reducing conceived
subject matter to practice or advancing the state of development
of such subject matter toward commercialisation or beyond.
(g) "Effective Date" means the date of this Agreement.
(h) "Improvement," with respect to the AHPP, means any derivative,
modification, improvement, alteration, or enhancement of the AHPP.
(i) "Intellectual Property" means intellectual property, domestic and
foreign, including, without limitation, trade secrets, proprietary
confidential information, copyrights, trademark rights, patents,
patent applications, industrial designs, and utility models. In
the case of Altair's Intellectual Property, the terms patent and
patent applications include the Licensed Patent Rights.
(j) "Joint Intellectual Property" has the meaning ascribed thereto in
Subsection 6.1(a) of this Agreement.
(k) "License #1" means the license granted by Altair to Western
pursuant to Section 3.1 of this Agreement.
(l) "License #2" means the license granted by Altair to Western
pursuant to Subsection 3.2(a) of this Agreement.
(m) "License #3" means the license granted by Altair to Western
pursuant to Subsection 3.2(b) of this Agreement.
(n) "Licensed Patent Rights" shall mean the U.S. patents and patent
applications and the international patent applications identified
in Exhibit B, any Improvements thereto and any divisions,
continuations or continuations-in-part thereof, any international
or foreign patent applications corresponding thereto and any U.S.
or foreign patents or the equivalent thereof issuing thereon or
any reissue or extension thereof.
(o) "Licensed Products" means Pigment Products and Titanium Dioxide
Products. Notwithstanding any other provision of this Agreement,
in no event shall Nanomaterials be considered to be Licensed
Products.
(p) "Nanomaterials" means materials that can be produced purposely and
specifically, using the AHPP, by controlled precipitation or
crystallization of titanium dioxide using various additives from
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an aqueous titanium chloride solution with the explicit objective
of limiting the primary TiO2 product particle dimensions to less
than 100 nm.
(q) "Net Sales Revenue" means the price (plus the fair market value of
all non-cash consideration) paid to Western (or a sublicensee of
Western, as applicable) for any sale, transfer or other
disposition of Licensed Product less: (i) actual cost of shipping
the Licensed Product to or for the purchasers of the Licensed
Product; (ii) credit or cash discounts for returns of Licensed
Product; (iii) any tax, duty, imposts, or other government charge
on the sale, transportation, or delivery of Licensed Products; and
(iv) allowances for damaged or defective Licensed Product. In the
case of any sale, transfer or disposition of Licensed Product to a
subsidiary or affiliate of Western or its sublicensees, as
applicable, Net Sales Revenue shall be equal to the fair market
value of such Licensed Product. Net Sales Revenue shall also
include any revenue (plus the fair market value of all non-cash
consideration) Western (or a sublicensee of Western, as
applicable) receives for the performance of services involving the
use of the AHPP, or an Improvement of the AHPP Conceived or
Developed by Altair in the course of its performance under this
Agreement or under any other agreement to the extent that such
Improvement is owned by Altair, to produce Licensed Products for
or on behalf of a third party.
(r) "Oil Sands Resources" means the heavy mineral reserves that occur
in oil sands, tar sands and other heavy oil resources.
(s) "Other Licensed Products" has the meaning ascribed thereto in
Subsection 3.2(b) of this Agreement.
(t) "Phase "X"" means the portion of the Phased Development Plan
identified as "Phase "X"" (e.g., "Phase I") in attached Exhibit A.
(u) "Phase II Commencement Option" has the meaning ascribed thereto in
Section 2.1 of this Agreement.
(v) "Phase III Commencement Option" has the meaning ascribed thereto
in Section 2.1 of this Agreement.
(w) "Phased Development Plan" means the Phased Development Plan set
out in Exhibit A to this Agreement, as such plan may be amended
from time to time.
(x) "Pigment Products" means titanium dioxide pigment and related
products made using the AHPP or an Improvement of the AHPP
Conceived or Developed by Altair in the course of its performance
under this Agreement or under any other agreement to the extent
that such Improvement is owned by Altair; provided, however, that
in no event shall Altair be required to license or disclose any
Improvement to Western (i) that Altair is not allowed to license
or disclose because of an existing confidentiality agreement,
license agreement or other agreement between Altair and a third
party, the existence of which has been disclosed to Western and
which is listed in Exhibit D, or (ii) which relates to the use of
AHPP for non-pigment related applications.
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(y) "Primary Ore Resources" means resources derived from hard rock
massive ilmenite deposits; examples being the Minnesota resources
like Longnose and Water Hen.
(z) "Solely Owned Intellectual Property" has the meaning ascribed
thereto in Subsection 6.1(d) of this Agreement.
(aa) "Titanium Dioxide Products" means high grade titanium dioxide
(which can be used to make titanium metal) made using the AHPP or
an Improvement of the AHPP Conceived or Developed by Altair in the
course of its performance under this Agreement or under any other
agreement to the extent that such Improvement is owned by Altair;
provided, however, that in no event shall Altair be required to
license or disclose any Improvement to Western that Altair is not
allowed to license or disclose because of a confidentiality
agreement, license agreement or other agreement between Altair and
a third party with the intent of making titanium metal. The term
Titanium Dioxide Products does not include any titanium dioxide
product made using a process disclosed in any Altair patent or
patent application not referenced on Exhibit B or any proprietary
process related thereto.
bb) "Western's ERA director" means Western's Energy Research Alliance
director, being The Technology Store, Inc., subject to the
provisions of Section 2.2 of this Agreement.
1.2 The following Exhibits, as amended from time to time, are attached to
and form part of this Agreement:
Exhibit A -Phased Development Plan
Exhibit B - Altair Patents and Patent Applications
Exhibit C - Public Announcement
Exhibit D - List of Third Party Confidentiality Agreements, License
Agreements and Other Agreements
ARTICLE 2
DEVELOPMENT COLLABORATION
2.1 Project Phases: Altair and Western shall conduct research and development
according to the Phased Development Plan. Phase I shall commence on the
Effective Date. Phase II shall commence upon Western's providing Altair with
written notice of election to pursue Phase II ("Phase II Commencement Option").
Phase III shall commence upon Western's providing Altair with written notice of
election to pursue Phase III ("Phase III Commencement Option"); provided,
however, that Phase III shall not commence unless and until (i) the parties
successfully complete Phase II within the Phase II Time Period (as defined in
subsection 3.3(b) below), or (ii) Western spends at least US$25 million on goods
or services described in Phase II of the Phased Development Plan during the
Phase II Time Period. Altair shall devote its commercially reasonable efforts
toward successful evaluation, development, and utilisation of technology as
contemplated for each such Phase when commenced hereunder. In the event of any
inconsistency between the Phased Development Plan and the terms of this
Agreement, the terms of this Agreement shall prevail.
4
2.2 Western's ERA Director: From the Effective Date and until Altair is advised
otherwise in writing by Western, in its sole discretion, Western shall utilise
The Technology Store, Inc. as Western's ERA director. Western shall ensure that
Western's ERA director and any other agent or subcontractor used by Western or
Western's ERA director, and any sublicensee of Western, executes a binding
written agreement with Western that names Altair as an express third party
beneficiary and that requires Western's ERA director or such agent,
subcontractor or sublicensee, as applicable, to (a) protect the Confidential
Information of Altair to at least the same extent as Western is required to
protect such information pursuant to the terms of this Agreement, and (b) comply
with all other obligations, duties and responsibilities required of Western
hereunder. Western will enforce each such agreement with Western's ERA director
and such other agents, subcontractors and sublicensees with at least the same
degree of diligence that it uses to enforce similar agreements for its own
products and/or technologies, but in no event less than commercially reasonable
efforts. Western will notify Altair if Western becomes aware of any material
breach of any such agreement. Notwithstanding the foregoing, Western agrees that
it shall remain fully responsible for any breach of the provisions of this
Agreement by Western's ERA director or any of its (or Western's ERA director's)
agents, subcontractors or sublicensees to the same extent as if such breach were
caused by the action or inaction of Western or its employees. Western shall also
be responsible to pay any and all fees of Western's ERA director.
2.3 Disclosure of Know-How and Information: Promptly following the execution of
this Agreement, Altair shall disclose in writing to Western's ERA director, all
information known to, or in the possession, custody or control of, Altair
regarding any Licensed Product or the AHPP as would be reasonably necessary for
a person skilled in the art to produce or manufacture the Licensed Products. In
addition, during each Phase commenced under the Phased Development Plan, Altair
shall promptly provide to Western's ERA director:
(a) any new information known to, or in the possession, custody or
control of, Altair regarding any Licensed Product or the AHPP as
would be reasonably necessary for a person skilled in the art to
produce or manufacture the Licensed Products that has not already
been disclosed pursuant to the preceding paragraph;
(b) all data and reports generated by or for Altair either in
connection with the Phased Development Plan or relating to the
AHPP or any Licensed Product; provided, however, that in no event
shall Altair be required to provide or disclose any information to
Western that Altair is not allowed to provide or disclose because
of a confidentiality agreement, license agreement or other
agreement between Altair and a third party; and
(c) written progress summaries and technology development reports as
reasonably requested by Western's ERA director to achieve the
purposes of the Phased Development Plan.
Notwithstanding the foregoing or any other provision of this Agreement, in no
event shall Altair be required to license or disclose any information to Western
(i) that Altair is not allowed to license or disclose because of an existing
confidentiality agreement, license agreement or other agreement between Altair
and a third party, the existence of which has been disclosed to Western and
which is listed in Exhibit D, or (ii) that Altair is not allowed to license or
disclose because of a confidentiality agreement, license agreement or other
agreement between Altair and a third party with the intent of making titanium
metal, or (iii) which relates to the use of AHPP for non-pigment related
applications.
2.4 Payment for Phase Development: Western shall pay Altair for work under each
Phase as set forth in the Phased Development Plan and, in addition, shall pay
Altair royalty payments for licenses as set forth in Article 4 below.
6
2.5 Independent Contractor: Altair's work under this Agreement shall be only as
an independent contractor and licensor to Western, and the parties hereby
disclaim any other relationship including as agent, representative, or
otherwise.
2.6 Changes to Scope of Work: The parties hereby acknowledge that Western may,
in its sole discretion, reasonably revise the scope and nature of the tasks and
deliverables to be completed under Phase I of the Phased Development Plan;
provided however that Western shall deliver to Altair a written description of
any substantial revisions. In the event that Altair believes that any such
revision will affect the timing of its performance of such tasks or delivery of
such deliverables, Altair may, in its sole discretion, reasonably revise any
applicable time schedule or deadline to accommodate such revisions, and the
Phase I Time Period (as defined in Subsection 3.3(a) below) shall be deemed to
be extended by a corresponding time period. In the event that Altair believes
that the requested revisions will result in any additional fees, costs or
expenses, (i) Altair shall submit a proposal to Western which shall include a
statement of such additional fees, costs and expenses, and (ii) Altair shall not
begin work under the revised Phase I unless and until Western consents in
writing to such additional fees, costs and expenses.
ARTICLE 3
LICENSE GRANTS
3.1 Initial License Grant: As of the Effective Date and subject to the terms and
conditions of this Agreement, Altair hereby grants to Western an exclusive
license, with a right to grant sublicenses to third parties (provided that no
such sublicense shall be further sublicensable), under Altair's Intellectual
Property rights, to make and have made Licensed Products derived from Oil Sands
Resources located in Alberta ("Alberta Licensed Products"), and to use, sell,
offer for sale, and distribute worldwide Alberta Licensed Products ("License
#1"). License #1 is exclusive with respect to Oil Sands Resources located in
Alberta only and Western shall have no right pursuant to License #1 to make, use
or sell Licensed Products derived from materials of any kind located outside of
Alberta. Moreover, License #1 shall not be deemed to restrict in any way
Altair's right to fully exploit or license its Intellectual Property rights with
respect to any products not considered to be Alberta Licensed Products, subject
however to the provisions of Section 3.2.
3.2 Additional Licenses: Subject to the terms and conditions of this Agreement
and provided that Western elects to commence Phase II within ninety days of the
completion of Phase I, Altair shall grant to Western, upon the commencement of
Phase II:
(a) an exclusive license, with a right to grant sublicenses to third
parties (provided that no such sublicense shall be further
sublicensable), under Altair's Intellectual Property rights, to
make and have made Licensed Products from Oil Sands Resources,
Primary Ore Resources or any other titanium resource located in
Canada and in Minnesota ("Canada and Minnesota Licensed
Products"), and to use, offer for sale, sell, or otherwise
distribute Canada and Minnesota Licensed Products worldwide
("License #2"). License #2 is exclusive with respect to Oil Sands
Resources, Primary Ore Resources and other titanium resources
located in Canada and Minnesota only and Western shall have no
right pursuant to License #2 to make, use or sell Licensed
Products derived from resources located outside of Canada and
Minnesota. Moreover, License #2 shall not be deemed to restrict in
any way Altair's right to fully exploit or license its
Intellectual Property rights with respect to any products not
considered to be Canada and Minnesota Licensed Products (subject
however to the provisions of Subsection 3.2(b) of this Agreement);
and
7
(b) an exclusive license, with a right to grant sublicenses to third
parties (provided that no such sublicense shall be further
sublicensable), under Altair's Intellectual Property rights, to
make and have made Licensed Products derived from any worldwide
Oil Sands Resources ("Other Licensed Products"), and to use, offer
for sale, sell, or otherwise distribute Other Licensed Products
worldwide ("License #3"). License #3 is exclusive with respect to
Oil Sands Resources only and Western shall have no right pursuant
to License #3 to make, use or sell Licensed Products derived from
any other materials. Moreover, License #3 shall not be deemed to
restrict in any way Altair's right to fully exploit or license its
Intellectual Property rights with respect to any products not
considered to be Other Licensed Products.
3.3 License Conversion/Termination:
(a) In the event that (i) the parties do not complete Phase I within
eighteen months of the Effective Date (the "Phase I Time Period",
provided that the Phase I Time Period may be extended pursuant to
the terms of Section 2.6 above); or (ii) Western does not elect to
commence Phase II within ninety days of the completion of Phase I,
then, notwithstanding any other provision of this Agreement, all
licenses granted by Altair to Western under this Agreement shall
terminate immediately.
(b) In the event that (i) the parties fail to complete Phase II within
the time period established by the parties in the Phased
Development Plan (the "Phase II Time Period"), and (ii) Western
fails to spend at least US$25 million on goods or services
described in Phase II of the Phased Development Plan during the
Phase II Time Period, then: (x) notwithstanding any other
provision of this Agreement, License #2 and License #3 shall
terminate immediately at the end of the Phase II Time Period; (y)
License #1 shall convert to a non-exclusive license immediately at
the end of the Phase II Time Period and shall continue, on a
non-exclusive basis, until this Agreement (or License #1) expires
or is terminated in accordance with its terms; and (z) all of the
other terms of this Agreement applicable to License #1 shall
remain unchanged, including, without limitation, Western's
obligation to pay royalties in accordance with the terms of
Article 4.
(c) In the event that (i) the parties successfully complete Phase II
within the Phase II Time Period, or (ii) Western spends at least
US$25 million on goods or services described in Phase II of the
Phased Development Plan during the Phase II Time Period, then
License #1 shall continue, on an exclusive basis, until this
Agreement (or License #1) expires or is terminated in accordance
with its terms.
(d) In the event that (i) Altair grants License #2 and License #3 to
Western in accordance with the provisions of Section 3.2 of this
Agreement; (ii) the parties fail to complete Phase III within the
time period established by the parties in the Phased Development
Plan (the "Phase III Time Period"), and (iii) Western fails to
spend at least US$5 million on goods or services described in
Phase III of the Phased Development Plan during the Phase III Time
Period, then, notwithstanding any other provision of this
Agreement, License #2 and License #3 shall be terminated
immediately at the end of the Phase III Time Period.
8
(e) In the event that (i) Altair grants License #2 and License #3 to
Western in accordance with the provisions of Section 3.2 of this
Agreement; (ii) the parties fail to complete Phase III within the
Phase III Time Period, and (iii) Western spends at least US$5
million, but less than US$50 million, on goods or services
described in Phase III of the Phased Development Plan during the
Phase III Time Period, then (x) License #2 and License #3 shall
convert to non-exclusive licenses immediately at the end of the
Phase III Time Period and shall continue, on a non-exclusive
basis, until this Agreement (or License #2 or License #3, as
applicable) expires or is terminated in accordance with its terms;
and (y) all of the other terms of this Agreement applicable to
License #2 and License #3 shall remain unchanged, including,
without limitation, Western's obligation to pay royalties in
accordance with the terms of Article 4.
(f) In the event that (i) Altair grants License #2 and License #3 to
Western in accordance with the provisions of Section 3.2 of this
Agreement, and (ii) Phase III is successfully completed or Western
spends at least US$50 million on goods or services described in
Phase III of the Phased Development Plan during the Phase III Time
Period, then License #2 and License #3 shall continue on an
exclusive basis until this Agreement is terminated in accordance
with its terms.
(g) For purposes of this Agreement, a Phase will be deemed complete
when (i) Altair and Western have completed all of the tasks as
mutually agreed by Western and Altair and all of the deliverables
required under the applicable section of the Phased Development
Plan (as mutually agreed by the parties) have been delivered; and
(ii) Western has made all payments required in connection with the
work performed by Altair pursuant to such Phase. The parties may
also at any time, by mutual agreement, declare a Phase to be
complete.
(h) The parties may at any time extend any of the time periods or
modify any of the dollar amounts referenced in this Section 3.3 by
mutual agreement.
ARTICLE 4
ROYALTIES
4.1 Initial Up-Front Fee: Upon execution of this Agreement, Western shall pay
Altair an up-front royalty of US$100.00, representing partial payment for
License #1.
4.2 Up-Front Fee For License #2 and License #3: In the event that Altair grants
License #2 and License #3 to Western in accordance with the terms of Section
3.2, Western shall pay Altair a second lump-sum royalty of US$100.00,
representing partial payment for License #2 and License #3.
4.3 Running Royalties: Western shall pay Altair running royalties for the
licenses granted hereunder as follows:
(a) General Royalty Rate
(i) Except as otherwise provided in Subsection 4.3(b), Western
shall pay Altair running royalties in the amount of two
percent (2%) of Western's Net Sales Revenue for Licensed
Products produced under License #1, License #2 or License #3.
9
(b) Resources Located In Minnesota
(i) Western shall pay Altair running royalties on Western's Net
Sales Revenue for Licensed Products produced under License #2
and derived from resources located in Minnesota in accordance
with the following schedule:
(A) During the period of time beginning with the
commencement of operations through the date that is
three years following the commencement of Commercial
Production for a given production facility, Western
shall pay Altair two percent (2%) of Western's Net Sales
Revenue from such production facility.
(B) During the second three years following commencement of
Commercial Production from a given production facility,
Western shall pay Altair three percent (3%) of Western's
Net Sales Revenue from such production facility.
(C) At any time following the sixth anniversary of the
commencement of Commercial Production from a given
production facility, Western shall pay Altair four
percent (4%) of Western's Net Sales Revenue from such
production facility.
(c) Sublicensees
(i) Western shall pay Altair running royalties on the Net Sales Revenue
of Western's sublicensees in accordance with the following
schedule:
(A) During the period of time beginning with the
commencement of operations through the date that is ***
following the commencement of Commercial Production for
a given production facility of a Western sublicensee,
Western shall pay Altair *** of the Net Sales Revenue
from such production facility, regardless of whether the
Licensed Products produced at such facility were derived
from Primary Ore Resources, Oil Sands Resources or any
other resource and regardless of where such resources
are located.
(B) During the *** following commencement of Commercial
Production from a given production facility of a Western
sublicensee, Western shall pay Altair *** of the Net
Sales Revenue from such production facility, regardless
of whether the Licensed Products produced at such
facility were derived from Primary Ore Resources, Oil
Sands Resources or any other resource and regardless of
where such resources are located.
(C) At any time following *** of the commencement of
Commercial Production from a given production facility
of a Western sublicensee, Western shall pay Altair ***
of the Net Sales Revenue from such production facility,
regardless of whether the Licensed Products produced at
such facility were derived from Primary Ore Resources,
Oil Sands Resources or any other resource and regardless
of where such resources are located.
***Portions of this page have been omitted pursuant to a request for
confidential treatment filed separately with the SEC.
10
4.4 First Production Facility: With respect to the first commercial TiO2
production facility that either Western or a Western sublicensee owns, operates
or otherwise participates in for the production of Alberta Licensed Product,
Canada and Minnesota Licensed Product or Other Licensed Product, Western shall
only pay 50% (fifty percent) of the running royalty otherwise due under Section
4.3 during the period of time beginning with the commencement of operations
through the date that is three years following the commencement of Commercial
Production for such production facility. For purposes of clarity, this Section
4.4 is only intended to apply to one production facility.
ARTICLE 5
RECORDS, PAYMENT AND AUDIT
5.1 Records: Each party hereunder shall keep full and accurate records of its
activities under this Agreement, including in the case of Western records of all
sales or disposition of any Licensed Product. Records shall be maintained for
five years from the time of each such activity.
5.2 Payment and Reporting: Within forty-five days of the conclusion of each
calendar quarter during which running royalties accrue to Altair under the terms
of Section 4.3 above, Western shall deliver to Altair:
(a) a written report of all royalties accrued to Altair during such
calendar quarter; and
(b) payment in full for such royalties.
5.3 Audit: Each party (the "Audited Party") shall permit auditors designated by
the other party (the "Auditing Party") to examine the Audited Party's books and
records at the Auditing Party's expense, during normal business hours after
three days notice (but no more than four times per year), for the sole purpose
of verifying compliance with the terms of this Agreement or enforcing this
Agreement. The auditors shall agree in writing in advance of any such audit to
be bound as a party to the terms of Article 10 (Confidentiality) and Article 13
(Miscellaneous), and the auditors shall deliver such written agreement to the
Audited Party in advance of conducting the audit. The auditors shall convey
information learned during any such audit to employees or attorneys of the
Auditing Party only on a need to know basis, solely for the purpose of reporting
the Audited Party's compliance with this Agreement or enforcing this Agreement.
Each party's auditor shall consist of personnel reasonably acceptable to the
Audited Party, provided that Western's Vice President of Business Development
(or an employee of Western appointed by Western's Vice President of Business
Development) is pre-approved herein as auditor on behalf of Western and Altair's
Chief Financial Officer (or an employee of Altair appointed by Altair's Chief
Financial Officer) is pre-approved herein as auditor on behalf of Altair.
ARTICLE 6
INTELLECTUAL PROPERTY DEVELOPMENT
6.1 Ownership of Intellectual Property: With regard to Intellectual Property
conceived or arising: (i) in conducting Phase I, Phase II, or Phase III; or (ii)
after the Effective Date and prior to the conclusion of the term of any such
Phase, by any party relating to Licensed Products or AHPP:
(a) Any Intellectual Property (including Improvements to the AHPP)
Conceived and Developed by both of the parties hereto shall be
owned jointly by Altair and Western ("Joint Intellectual
Property"). Except as otherwise provided below, each party shall
have the royalty free and unrestricted right to utilise and
license such Joint Intellectual Property and to make, have made,
use, sell, offer for sale, or distribute products or services
under such Joint Intellectual Property. Neither party shall,
however, have any right to otherwise license any Joint
Intellectual Property until it provides written notice to the
other party of its intent to do so.
11
(b) Notwithstanding the provisions of Subsection 6.1(a) or any other
provision of this Agreement, Altair shall not have the right to
license or disclose any Joint Intellectual Property to any third
party with whom Altair has a confidentiality agreement, license
agreement or other agreement (a "Third Party Agreement") if the
terms of such Third Party Agreement prevent Altair from licensing
any Intellectual Property or Improvements Conceived or Developed
under such Third Party Agreement to Western.
(c) In the event that one party (the "Filing Party") chooses to file
for a patent on any Joint Intellectual Property, such party shall
advise the other party (the "Non-Filing Party") in writing. The
Non-Filing Party then shall advise the Filing Party in writing
within thirty days if the Non-Filing Party agrees to share the
cost of the patent prosecution 50/50. In the event that the
Non-Filing Party does not provide the Filing Party with such
written notice of agreement to so share the cost of patent
prosecution, the Filing Party may proceed with the patent
prosecution at its own expense and shall thereafter be the sole
owner of any resulting patent(s). Any such resulting patent(s)
shall be Solely Owned Intellectual Property as set forth below and
in the event that any such resulting patent(s) are not deemed to
be solely and exclusively owned by the Filing Party for any
reason, the Non-Filing Party hereby assigns, transfers and conveys
to the Filing Party all of its right, title and interest in and to
such resulting patent(s). The Non-Filing Party further agrees to
assist the Filing Party, at the Filing Party's expense, to further
evidence, record and perfect such assignment, and to perfect,
obtain, maintain, enforce, and defend any rights so assigned. The
Non-Filing Party shall also cooperate with the Filing Party in
connection with the Filing Party's efforts to obtain patent
protection for such Joint Intellectual Property and the Non-Filing
Party and its employees and representatives shall, at the Filing
Party's request, execute and deliver any documents, including,
without limitation, any patent or other Intellectual Property
right assignments or applications, to permit the Filing Party to
exercise its rights under this Section 6.1. Subsequently, if the
Filing Party desires to cease prosecution and/or maintenance of
any such patent applications or patents, then the Filing Party
shall provide at least 60 days written notice to the Non-Filing
Party, whereupon the Filing Party may assign its rights in such
patent applications or patents to the Non-Filing Party and the
Non-Filing Party may take over the prosecution and/or maintenance
at its own expense. In the event that the Non-Filing Party does
provide the Filing Party with written notice of agreement to so
share the cost of patent prosecution, the parties shall file and
manage the patent prosecution jointly and any resulting patent(s)
will be jointly owned by the parties.
(d) Intellectual Property Conceived and Developed solely by one party
("Solely Owned Intellectual Property") shall be owned solely by
the one party.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Mutual Warranties: Each party represents and warrants to the other party
that:
(a) it is duly organized and subsisting under the laws of the
jurisdiction of its incorporation as stated above;
12
(b) it has full corporate power and authority to enter into and
perform its obligations under this Agreement;
(c) to its knowledge, no person has publicly disclosed the nature of
the research, evaluation, development, and possible
commercialisation contemplated by this Agreement;
(d) the individual executing this Agreement on its behalf has actual
authority to bind the party to this Agreement; and
(e) it has not, as of the date of this Agreement, entered into any
contracts, including any licenses, inconsistent with or that would
interfere with the performance of its obligations under this
Agreement.
7.2 Altair Warranties: Altair represents and warrants to Western that, to
Altair's knowledge:
(a) Altair owns all right, title, and interest in AHPP and all
technology provided by Altair or has the right to license the
Intellectual Property rights it is licensing to Western under this
Agreement, including without limitation in performing Phase I,
Phase II, and Phase III;
(b) as of the Effective Date of this Agreement, the patents and patent
applications identified in Exhibit B are the only patents issued
to Altair and the only patent applications filed by Altair
relating to AHPP or the use of AHPP to make, use, sell, offer for
sale, or distribute any Licensed Product;
(c) the patent claims presently set forth in the patents and patent
applications identified in Exhibit B, have not been held invalid
or unenforceable by any court or governmental authority, and are
not and have not been the subject of any lawsuit, reissue
petition, reexamination petition, or similar petition or
government action;
(d) Altair has the skill and staff necessary to perform the tasks and
provide the deliverables to Western in accordance with the Phased
Development Plan, within the time periods specified in this
Agreement and in the Phased Development Plan, and that such tasks
and deliverables shall be performed and delivered in a prompt,
economical, skilful and careful manner in accordance with
professional standards and practices;
(e) any deliverable provided to Western by Altair in connection with
the Phased Development Plan that contains third-party Intellectual
Property rights will be properly licensed to Western at no
additional cost or expense to Western;
(f) Altair does not know of any rule, law, or regulation that would
invalidate, or interfere with the intention of, any provision of
this Agreement or with Altair's ability to carry out its
obligations hereunder; and
(g) EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 7, ALTAIR MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE
AHPP, THE LICENSED PRODUCTS, OR ANY RESULTS THAT MAY BE OBTAINED
THROUGH THE WORK TO BE PERFORMED UNDER THE PHASED DEVELOPMENT PLAN
AND ALTAIR EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES ARISING OUT OF
COURSE OF PERFORMANCE OR COURSE OF DEALING.
13
7.3 Western Warranties: Western represents and warrants to Altair that, to
Western's knowledge:
(a) Western does not presently contemplate filing any patent
applications relating to AHPP or use of AHPP to make, use, sell,
offer for sale, or distribute any Licensed Products based on any
subject matter Conceived prior to the Effective Date of this
Agreement;
(b) Western does not know of any Intellectual Property or license
required for Altair to perform its obligations or exercise its
rights under this Agreement other than Intellectual Property
licenses from Altair to which Western is expressly granted
licensing rights and options in Article 3 of this Agreement; and
(c) Western does not know of any rule, law, or regulation that would
invalidate, or interfere with the intention, of any provision of
this Agreement or Western's ability to make, have made, use, or
sell Licensed Product as contemplated by this Agreement.
ARTICLE 8
INDEMNIFICATION
8.1 Mutual Indemnification: Each party shall defend, indemnify, and hold
harmless the other party and its subsidiaries and affiliates, and their
respective directors, officers, employees, and agents, from and against all
claims, causes of action, demands, losses, damages, liabilities, settlement
amounts, and costs and expenses of any type whatsoever (including reasonable
attorneys' fees and costs) arising from or related to any breach of any
representation or warranty by the indemnifying party in Article 7 of this
Agreement.
8.2 Altair Indemnification: Altair shall defend, indemnify, and hold harmless
Western and its subsidiaries and affiliates, and their respective directors,
officers, employees, and agents (including without limitation Western's ERA
director), from and against all claims, causes of action, demands, losses,
damages, liabilities, settlement amounts, and costs and expenses of any type
whatsoever (including reasonable attorneys' fees and costs) arising from or
related to any claim, action, or proceeding brought by a third party alleging
that the AHPP or any Improvement, or any making, using, selling, offering for
sale or distribution of any Licensed Product, infringes any Intellectual
Property of any third party.
8.3 Western Indemnification: Western shall defend, indemnify, and hold harmless
Altair and its affiliates, and their respective directors, officers, employees,
and agents, from and against all claims, causes of action, demands, losses,
damages, liabilities, settlement amounts, and costs and expenses of any type
whatsoever (including reasonable attorneys' fees and costs) arising from or
related to any claim, action, or proceeding brought by a third party alleging
that Altair's use of technology or information provided by Western in order to,
and utilised by Altair solely in order to, perform Altair's obligations under
this Agreement infringes any Intellectual Property of any third party.
8.4 Notice & Defense: Promptly after an indemnified party (including its
indemnified affiliate, director, officer, employee, or agent as applicable) has
received notice of any claim or lawsuit for which the other party has provided
indemnification (the "Indemnifying Party") in this Article 8, the indemnified
party shall advise the Indemnifying Party of the claim or lawsuit in writing.
The Indemnifying Party shall promptly assume responsibility for handling of the
defense of such claim or suit on behalf of the indemnified party, provided that
the indemnified party may, at its option, select its own counsel for the defense
14
of any matter so long as such counsel and defense does not interfere with the
Indemnifying Party's defense of the matter and is at the expense of the
indemnified party. In such event, the parties shall promptly inform each other
of all settlement discussions and contemplated making of any settlement offers
(prior to making any such offer), and each party shall consider the other
party's suggestions or requests with regard to any settlement prior to entering
into the settlement. In no event, however, shall an indemnified party have the
power or right to determine, settle, adjust, or compromise any aspect of the
defense in such a fashion as to impose any obligation on the Indemnifying Party
without the written consent of the Indemnifying Party.
8.5 Modification at Indemnifying Party's Request: An indemnified party shall, at
the reasonable request of the Indemnifying Party made to avoid or mitigate any
claim of infringement for which the Indemnifying Party has indemnified the
indemnified party under Section 8.2 or 8.3, modify its practice to avoid or
mitigate any such claim in such manner in the Indemnifying Party's judgment as
may avoid or materially limit such claim, provided that such modification shall
not materially increase the expense, lower the efficacy, output, or sales, or
interfere with the activities of the indemnified party as contemplated by this
Agreement.
ARTICLE 9
INFRINGEMENT
9.1 Third Party Infringement: If Western becomes aware of any product or
activity of any third party that may involve an infringement or violation of any
Altair patent or other Intellectual Property right, then Western shall promptly
notify Altair in writing of such infringement or violation. Altair may in its
discretion take or not take whatever action it believes is appropriate; if
Altair elects to take action, and if the alleged infringement or violation
relates to any Intellectual Property which is the subject of this Agreement,
Western will fully cooperate therewith at Altair's expense, including joining as
a party, if necessary. If, ninety days after receipt of notice from Western of a
third party infringement of any Intellectual Property licensed on an exclusive
basis to Western hereunder, Altair has not instituted suit against the infringer
seeking to terminate the infringement, Western, so long as such exclusivity
remains in effect, may proceed in its own name (or, if required by law, in
Altair's name) and at Western's expense to ▇▇▇ the infringer, but only with
respect to infringements within the scope of any exclusive license granted to
Western. In such event, Altair shall cooperate with and assist Western in
connection with any such suit. Western will indemnify Altair for any third-party
damages, as well as Altair's expenses, costs and attorneys' fees, in connection
with Western's actions under this Section 9.1. Nothing in this Section 9.1
allows Western or requires Altair to disclose Confidential Information of
Altair.
9.2 Costs of Enforcement: If Altair initiates and prosecutes an action under
Section 9.1, all legal expenses (including court costs and attorneys' fees)
shall be borne by Altair and Altair shall be entitled to all amounts awarded by
way of judgment, settlement or compromise. Notwithstanding the foregoing, if the
action relates to any Intellectual Property licensed on an exclusive basis to
Western, all amounts awarded to Altair (excluding court costs and attorneys'
fees incurred by Altair) shall be for Western's account. Similarly, if Western
initiates and prosecutes such an action, all legal expenses (including court
costs and attorneys' fees) shall be borne by Western and Western shall be
entitled to all amounts awarded by way of judgment, settlement, or compromise.
9.3 Payment of Royalties on Amounts Recovered by Western: The parties agree that
any amounts collected by Western in connection with any action under Section 9.1
in excess of the parties' legal expenses shall be considered Net Sales Revenue
for which royalties shall be due under Article 4 hereof.
15
9.4 Survival: This Article 9 shall survive any termination or expiration of this
Agreement but only with respect to actions commenced prior to such termination
or expiration.
ARTICLE 10
CONFIDENTIALITY
10.1 Confidentiality: All confidential, secret or proprietary information, in
whatever form, provided by one party (the "Disclosing Party") to the other party
(the "Receiving Party") pertaining to the AHPP or to the Disclosing Party's
business, finances, technology, ideas, inventions (whether patentable or not),
marketing strategies and/or product offerings that is identified, or would
reasonably be understood by the Receiving Party, as being proprietary or
confidential (collectively, "Confidential Information") shall be held in strict
confidence by the Receiving Party and not disclosed to any third parties except
as expressly stated in this Agreement. Notwithstanding the foregoing, no
obligation of confidence shall extend to information to the extent that the
information:
(a) is or becomes generally known in the trade or to the public
through no fault of the Receiving Party;
(b) as shown by verifiable written records, was in the Receiving
Party's possession prior to disclosure by the Disclosing Party; or
(c) is disclosed to the Receiving Party by a third party without
violation of any obligation of confidence.
In addition, to the extent any Confidential Information is required by order of
court or regulatory body to be disclosed by a Receiving Party, the Receiving
Party shall advise the Disclosing Party prior to any such disclosure, and shall
cooperate with the Disclosing Party at the Disclosing Party's expense, so that
the Disclosing Party may have a reasonable opportunity to limit the scope of the
disclosure.
10.2 Injunction: Each party, as a Receiving Party, acknowledges that the other
party, as a Disclosing Party, will suffer irreparable injury in the event of a
breach by the Receiving Party of Section 10.1 above and that monetary damages
will be inadequate to compensate the Disclosing Party for the breach. The
Receiving Party agrees that, in the event of a breach or threatened breach of
Section 10.1 above, the Disclosing Party shall be entitled to a temporary,
preliminary, and permanent injunction to prevent or restrain any breach, in
addition to any other rights, remedies, or damages available at law or in
equity.
10.3 Public Announcement: Without the prior written consent of the other party,
neither party shall make any public announcement or press release or otherwise
disclose to any third party any terms or conditions of discussions between the
parties or any matter set forth herein, or the existence of discussions and
negotiations between the parties on the matters set forth herein, except:
(a) to the extent necessary to comply with, or as required by,
applicable law (including, without limitation, applicable
securities laws) or pursuant to legal process, proceeding or
order;
(b) to potential investors pursuant to written non-disclosure
agreements; or
(c) to accountants, attorneys, financial consultants, and other
professional advisors who are bound by a duty of confidentiality.
16
Upon execution of this Agreement, the parties shall issue a joint press release
in the form of Exhibit C. Notwithstanding the foregoing limitations, the parties
shall use reasonable efforts to promptly agree upon the text of any subsequent
public statements to be issued by the parties.
10.4 Tax Structure: Notwithstanding anything to the contrary in this Agreement,
each party (and each employee, representative, or other agent of the parties)
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to either party relating to such tax treatment and tax structure,
except to the extent confidentiality of such tax treatment or tax structure is
reasonably necessary to comply with securities laws.
10.5 Western Joint Venture Partners: Notwithstanding anything contained in this
Agreement, Altair recognizes that Shell Canada Limited and ChevronTexaco are
joint venture partners of Western and that the joint venture is currently mining
oil sands and producing crude in the Athabasca region of Alberta, Canada; that
the joint venture partners are also involved in many businesses worldwide
including conventional oil and gas and oil sands exploration, production,
development, refining, marketing, petrochemical and others; that the joint
venture partners conduct research, studies, analysis and carry on many varied
businesses and develop technologies, certain of which may be very similar to the
technology developed by Altair, and they may use similar or like technology,
know-how, methodologies, procedures, systems or processes (the "Technologies")
as those used or contemplated by Altair. In this regard, Western, Shell Canada
Limited, ChevronTexaco and their affiliates, share certain of their confidential
information relating to the foregoing with each other. Provided that Western is
in compliance in all material respects with its confidentiality obligations
hereunder, Altair agrees that nothing contained in this Agreement shall (i)
impair, restrict, preclude, inhibit, limit or otherwise prevent Shell Canada
Limited, ChevronTexaco or Western or any of their affiliates from conducting any
of their businesses or developing or using any of the Technologies in any manner
whatsoever, or (ii) create any liability or obligation of any nature as a result
of the conduct of their businesses or use of the Technologies.
ARTICLE 11
TERMINATION
11.1 Termination of Agreement: Unless sooner terminated in accordance with the
terms of this Article 11, this Agreement shall remain in full force and effect
until the last claim of any patent covering the Licensed Products expires.
11.2 Termination of License: Altair may terminate this Agreement or one or more
of License #1, License #2 and License #3 by written notice of termination of
this Agreement or such license(s) to Western in the event that Western:
(a) materially breaches any term of this Agreement, and such breach
remains uncured for a period of ninety days (or five business days
notice in the case of a failure to pay any monies owed hereunder)
after receipt of written notice from Altair of such breach;
(b) commences dissolution proceedings or liquidation, or ceases
conducting operations;
(c) is the subject of an involuntary petition in bankruptcy, or an
insolvency proceeding, that is not dismissed within ninety days
after filing of the petition;
(d) voluntarily files a petition in bankruptcy; or
(e) makes an assignment for the benefit of creditors or is subject to
appointment of a receiver.
17
This Agreement shall also terminate upon the termination of all licenses granted
by Altair to Western hereunder.
11.3 Return of Confidential Information: Upon any termination of this Agreement,
each Receiving Party shall immediately return to the Disclosing Party or destroy
all Confidential Information of the Disclosing Party in its possession or
control except for one archival copy and copies reasonably required to perform
post-termination obligations or exercise post-termination rights under this
Agreement. In the latter event, all copies other than one strictly archival copy
shall be immediately returned to the Disclosing Party or destroyed when no
longer needed to so perform or exercise rights. Any Receiving Party electing to
destroy rather than return information hereunder shall have an officer of the
Receiving Party immediately certify the destruction, including the full scope of
the destruction, in writing to the Disclosing Party.
11.4 Not Sole Remedy: Termination is not the sole remedy under this Agreement
and, whether or not termination is effected, all other remedies will remain
available.
11.5 Survival: Articles 1, 5, 6, 7, 8, 9, 10, 11, 12 and 13 shall survive any
termination or expiration of this Agreement in accordance with their terms.
ARTICLE 12
LIMITATION OF LIABILITY
EXCEPT FOR ANY OBLIGATIONS ARISING UNDER SECTION 10 (CONFIDENTIALITY), OR
ACTIONS OF WESTERN OR WESTERN'S ERA DIRECTOR BEYOND THE SCOPE OF THE LICENSES
GRANTED HEREUNDER, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY, THEIR OFFICERS,
DIRECTORS OR AFFILIATES BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
EXCEPT FOR ANY OBLIGATIONS ARISING UNDER SECTION 8 (INDEMNIFICATION) OR SECTION
10 (CONFIDENTIALITY) OR ACTIONS OF WESTERN OR WESTERN'S ERA DIRECTOR BEYOND THE
SCOPE OF THE LICENSES GRANTED HEREUNDER, IN NO EVENT SHALL EITHER PARTY'S
AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE LESSER OF (I) AN AMOUNT
EQUAL TO THE TOTAL AMOUNT OF MONEY SPENT BY WESTERN UNDER THE PHASED DEVELOPMENT
PLAN BEFORE THE APPLICABLE CAUSE OF ACTION AROSE, AND (II) $50 MILLION,
REGARDLESS OF THE FORM OF CLAIM OR ACTION.
THIS ARTICLE 12 SHALL NOT LIMIT EITHER PARTY'S LIABILITY FOR THE DEATH OR BODILY
INJURY OF A PERSON.
ARTICLE 13
MISCELLANEOUS
13.1 Headings: Headings in this Agreement are for convenience and shall not
affect construction or interpretation of this Agreement.
13.2 Neutral Construction: This Agreement shall be construed and interpreted
neutrally and without regard to the party that produced it or any part of it.
13.3 Notices: Any written notice to a party under this Agreement shall be made
by (i) facsimile, and (ii) by mail, postage prepaid or reputable commercial
express delivery service, to the party's address and facsimile number set forth
below or as amended by notice pursuant to this Section 13.3:
If to Altair: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President Altair Nanomaterials, Inc
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Phone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
18
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Western: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President Business Development
Western Oil Sands Inc.
2400, ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Corporate Secretary
Western Oil Sands Inc.
2400, ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
13.4 Amendments: This Agreement shall not be amended except by a written
instrument executed by the parties hereto or their respective permitted
successors or assigns.
13.5 Non-waiver: No waiver of any provision or obligation under this Agreement
shall constitute or provide a waiver of any other provision or subsequent
obligation under this Agreement.
13.6 Force Majeure: No party shall be deemed to be in breach for non-performance
under this Agreement (except for non-performance of obligations to pay money or
obligations under Section 10 hereof (Confidentiality)), so long as its
non-performance is due to labour unrest, natural disaster or Act of God, act of
war or terrorism, or other cause beyond the reasonable control of the party,
provided however that lack of financing shall in no event be deemed such a cause
and provided further that, in the event any force majeure is not removed within
ninety days after its first interference with the party's performance, the other
party shall have the right to terminate this Agreement upon thirty days written
notice in advance to the non-performing party.
13.7 Governing Law: The provisions of this Agreement shall be governed and
construed in accordance with the laws of the province of Alberta, Canada,
without regard to rules regarding conflicts of laws. Any dispute under or
relating to this Agreement shall be settled by arbitration.
13.8 Arbitration: Except that either party may seek injunctive or other similar
relief from a court of competent jurisdiction, any dispute, controversy or claim
arising out of or relating to this Agreement, or the negotiation or breach,
termination or validity thereof (a "Dispute"), shall be settled by arbitration
pursuant to the rules of the Arbitration Act (Alberta) and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitration shall be held in Calgary, Alberta, shall apply the
19
substantive law of the Province of Alberta and shall be conducted before a
single arbitrator mutually agreeable to the parties hereto, or if no agreement
can be reached on the selection of such arbitrator, then any party may apply to
the courts of the Province of Alberta to appoint an arbitrator. The cost of the
arbitration, including the fees and expenses of the arbitrator, shall be shared
as to 50% by Western and 50% by Altair. Each party shall bear its own cost of
preparing and presenting its case. The arbitration award (the "Award") shall be
presented to the parties in writing, and upon request of any party hereto, shall
specify the factual and legal bases for the Award. The Award may be confirmed
and enforced in any court of competent jurisdiction. Any party to the
arbitration may, before the Award is rendered and/or complied with, apply to any
court having jurisdiction to enforce any interim award of the arbitrator
granting provisional, injunctive or other interim equitable relief ("Interim
Award"). Except as required by law or as necessary in court proceedings to
enforce this arbitration provision or any Award or Interim Award, none of the
parties to the arbitration nor an arbitrator may disclose the existence, content
or results of any arbitration hereunder without the prior written consent of the
other parties hereto. There shall be no appeal to the court from any Award or
Interim Award.
13.9 Further Assurances: Each party shall promptly execute all documents, and
perform such other acts, as may be reasonably necessary or expedient to further
the purposes of this Agreement and the transactions contemplated hereby.
13.10 Time of Essence: Time shall be of the essence of this Agreement.
13.11 Entire Agreement: This Agreement (together with the Exhibits attached
hereto) constitutes the entire Agreement of the parties, and supersedes all
prior agreements, promises, or understandings relating to the subject matter of
this Agreement.
13.12 Assignment: Neither party may assign its rights or obligations under this
Agreement without the other party's prior written consent, except that:
(a) Western may assign this Agreement to any subsidiary or affiliate
of Western or any party that acquires substantially the entire
business of Western involved in developing and selling Licensed
Products; and
(b) Altair may assign this Agreement to any party that acquires
substantially the entire business of Altair involved in developing
the technology or Intellectual Property rights licensed to Western
under this Agreement.
Any assignment in violation of this Section 13.12 is void.
13.13 Counterparts: This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
13.14 Severability: If any provision of this Agreement is held illegal, invalid
or unenforceable by a court of competent jurisdiction, that provision will be
limited or eliminated to the minimum extent necessary so that this Agreement
shall otherwise remain in full force and effect and enforceable.
13.15 Export Control. Subject to Canadian law, each party shall comply with all
applicable export laws, restrictions, and regulations of any United States or
foreign agency or authority and will not export or re-export, or authorize the
export or re-export of any product, technology or information it obtains or
learns pursuant to this Agreement (or any direct product thereof) in violation
of any such laws, restrictions or regulations.
20
13.16 Currency: Unless otherwise expressly provided herein, all money and other
financial references used in this Agreement, including its exhibits and
appendices, shall be to U.S. dollars.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
date and year first written above by their authorized agents as set forth below.
Altair Nanotechnologies, Inc. Western Oil Sands Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Office: Chief Executive Officer Office: President & CEO
Altair Nanomaterials, Inc.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Office: President
21
Exhibit A
Phased Development Plan
--------------------------------------------------------------------------------
Exhibit A
Phased Development Plan
This Phased Development Plan, as from time to time may be amended, modified,
supplemented or updated (the "Phased Development Plan") is incorporated into and
made a part of that certain License Agreement for Altair TiO2 Pigment Technology
between Altair Nanotechnologies, Inc. and Altair Nanomaterials, Inc.
(collectively, "ALTAIR") and Western Oil Sands Inc. ("WESTERN") entered into
effective as of January ______, 2004 (the "Agreement"). Any capitalized terms
used in this Phased Development Plan which are not otherwise defined shall have
the meanings ascribed to such terms in the Agreement.
Western's Heavy Minerals Upgrade Project - Zircon, Rutile, Ilmenite and
Leucoxene Mineral Resource
WESTERN would like to develop business opportunities by capitalising on the
concentrations of titanium and zirconium in certain heavy mineral deposits.
ALTAIR has a proprietary process that extracts Ti values from ilmenite ore to
produce pigment grade TiO2 (which is referred to herein as the AHPP (as defined
in the Agreement)). In addition, ALTAIR possesses certain hydrometallurgical,
mineral processing, mineralogical and analytical capabilities required to
optimize heavy mineral recoveries from a variety of mineral resources. WESTERN
is interested in evaluating and licensing the AHPP for the purpose of applying
it to various heavy mineral concentrates. Western's ERA director has been
retained by WESTERN to direct WESTERN's Energy Research Alliance group that will
oversee this project.
A phased approach is proposed that will enable WESTERN to evaluate the AHPP,
make informed decisions and, subject to the terms and conditions of the
Agreement, earn technology licenses. The first phase of development will take
approximately 12-18 months and will culminate in a preliminary engineering
feasibility study.
Each phase will be used to improve the cost estimates and operating parameters
before moving on to the next stage of capital investment risk. As each phase is
completed, WESTERN will evaluate the success and determine whether or not it
will continue the program.
The development phases include: 1) resource evaluation, piloting, TiO2 pigment
demonstration and engineering feasibility study; 2) semi-commercial
demonstration plant operating at 5,000-10,000 tons per year for market testing;
3) single-line plant producing about 25,000 tons per year of finished TiO2
pigment that could be expanded to three lines as soon as the first line of
production proves feasible.
22
Exhibit A
Phased Development Plan
--------------------------------------------------------------------------------
In order to reduce the risk to WESTERN, a staged development plan for the
initial phase is proposed to enable WESTERN to make informed decisions on
whether it can successfully enter the TiO2 pigment and/or titanium containing
product business. This phase consists of four development stages including: 1)
resource evaluation and mineral beneficiation to produce a product for leaching;
2) large batch preparation and digestion efficiencies and evaluation; 3) large
batch purification, spray hydrolysis, calcination and milling; and 4) an
engineering feasibility study.
The estimated budgets listed in this Phased Development Plan are all-inclusive
with overhead, reagents, expenses and equipment all built into the prices. The
parties acknowledge and agree that the estimated budgets provided herein are
merely estimates, that neither party shall be bound to or limited by such
estimates, and that the actual invoice amounts to WESTERN will be based on
actual hours worked, expenses incurred and contractor's direct invoices;
notwithstanding the foregoing, to the extent that ALTAIR determines that its
actual costs will exceed those set out in the estimated budgets, ALTAIR shall
obtain prior written consent from WESTERN prior to incurring such costs, such
consent not to be unreasonably withheld.
WESTERN shall pay ALTAIR for all work performed under this Phased Development
Plan in accordance with ALTAIR's then-current billing rates, as such rates may
be modified by ALTAIR from time to time. ALTAIR's current billing rates are
listed in Appendix I. These rates will remain in force during Phase I of the
program. In addition, WESTERN shall reimburse ALTAIR for any costs and expenses
incurred by ALTAIR in connection with the work to be performed hereunder,
including, without limitation, the costs of any contractors retained by the
parties. All compensation, fees, expense reimbursements and other amounts owing
to ALTAIR from WESTERN shall be due and payable within thirty (30) days after
the date of ALTAIR's invoice therefor. ALTAIR shall have the right to invoice
WESTERN on a monthly basis.
ALTAIR shall not purchase any equipment with a value of more than $250 without
the prior written consent of WESTERN.
Characterization work will be conducted as required to determine the feasibility
of extracting commercial values from WESTERN process tailings. Characterization
procedures and outcomes are outlined in Appendix II.
Every three months ALTAIR and WESTERN shall review budgets and recommend changes
wherever needed. Notwithstanding the foregoing, WESTERN may from time to time,
in its sole discretion, revise the scope and the nature of the tasks and
deliverables to be completed by ALTAIR under each Phase of the Phased
Development Plan.
23
Exhibit A
Phased Development Plan
--------------------------------------------------------------------------------
Phase I:
Resource evaluation, piloting, demonstration and engineering feasibility study ~
12-18 months
Objective: Prove processing technology for upgrading Western Oil Sands thickener
underflow tailings directly to produce zircon, rutile and TiO2 pigment and/or
pigment helper. An intermediate centrifuge tailings material, provided by
others, that is already upgraded to approximately 10% TiO2 will be supplied to
accelerate our understanding of WESTERN's resource. The outcome of Phase I will
be a preliminary engineering feasibility study.
Stage I: Resource Evaluation
Samples of both WESTERN thickener underflow and centrifuge tailings from another
source have been shipped or are being prepared for shipment. Centrifuge tailings
are the intermediate concentrate desired for the final beneficiation and upgrade
and will be compared to the WESTERN tailings. The following tasks are required
to support the economic evaluation of the mineral resources.
Tasks:
1. Characterize materials as-received - SEM, XRD, OM, ICP suite, moisture,
loss on ignition, carbon and sulfur.
2. Roast to burn off residual organic bitumens and asphaltenes.
Alternatively WESTERN could use third party technology to
remove/recover the asphaltene fraction.
3. Characterize roasted residue - SEM, XRD, OM, ICP suite, moisture, loss
on ignition, carbon and sulfur. 4. Perform Sieve Fraction analysis;
determine weight percent of each fraction, mineral content, chemical
analysis, XRD and SEM. Determine fraction having highest heavy mineral
concentrate and perform heavy liquid sink/ float analysis of that
fraction, weight percent of each sink/float fraction, mineral content
of each sink/float fraction using OM, XRD and SEM, chemical analysis of
each sink/float fraction.
5. Perform preliminary density and/or flotation tests to determine Ti and
Zr minerals upgrade feasibility, chemically and mineralogically
characterize density and flotation concentrates and tailings.
6. Prepare report and assess viability to process WESTERN material using
the ALTAIR hydrochloride process. Compare and contrast Suncor to
WESTERN materials.
Duration: Approximately 4 months to complete from date of signing.
Estimated Cost: See Appendix III: US$104,600.
24
Exhibit A
Phased Development Plan
--------------------------------------------------------------------------------
Stage 2: Centrifuge Tailings Resource preparation and Digestion
Evaluate the feasibility of beneficiating valuable heavy minerals and extracting
Ti from mineral concentrates derived from third party centrifuge tailings. If
Stage 1 results are positive and a titanium concentrate can be produced, samples
from WESTERN resources shall follow after a large sample is produced in mini
circuit the same path below.
Tasks:
1. Produce approximately 100 kgs of WESTERN resource sample for concurrent
testing with the Centrifuge Tailings sample
2. Perform crucible tests to determine minimum temperature required to
remove organic phase. Characterize inorganic residue after roasting.
3. Prepare approximately 100 kilograms of centrifuge tailing material by
roasting in a 6" rotary calciner using criteria determined in #1.
4. Beneficiate and recover heavy mineral concentrates including ilmenite,
leucoxene, rutile and zircon.
5. Determine quantities of each fraction.
6. Determine quality of each fraction by using XRD, SEM, OM and chemical
analysis.
7. Digest approximately 30 kg of the ilmenite/leucoxene concentrates.
Perform 6 tests in different leaching conditions, cleanup and
interpretation. Consider alternative filtration methods.
8. Perform chemical analysis of the resulting digestates.
9. Perform chemical and mineralogical analysis of the residue.
10. Perform a material balance of the chemical components.
11. Prepare report and assess the viability of using the ALTAIR digestion
process on centrifuge tailings titanium mineral concentrates.
Duration: Approximately 4 months
Estimated Budget: See Appendix IV: US$192,600
Stage 3: Large batch SX purification, spray hydrolysis, calcination and milling
Prove and refine purification/pigment formation using digestion liquors derived
from Stage 2 testing.
Tasks:
1. Reduce, crystallize and filter iron chloride from the ▇▇▇▇▇ solution.
2. Chemically characterize filtrate. 3. Run continuous solvent
extraction using SX1 standard conditions to separate Ti.
4. Run continuous solvent extraction using SX2 standard conditions to
remove traces of iron from Ti aqueous solution.
5. Spray hydrolyze using standard pigment conditions.
25
Exhibit A
Phased Development Plan
--------------------------------------------------------------------------------
6. Calcine using standard pigment conditions.
7. Mill to primary pigmentary particles.
8. Characterize pigment base.
9. Prepare report and assess the viability of the purification process to
the Suncor titanium concentrates.
Duration: approximately 4 months
Estimated Budget: See Appendix V - US$195,000
Stage 4: Preliminary Engineering Feasibility Study
BHP Minerals contracted Davy International in 1995 to perform a pre-feasibility
study on a technology that ultimately lead to the Ilmenite Upgrade Technology as
it is today and much of the information derived from that study is still valid.
A 2003 feasibility study is required to update the information. ALTAIR has been
presented with proposals from two international engineering companies that
provide an estimate of cost between $50,000 and $75,000. ALTAIR and WESTERN will
agree on a suitable engineering contractor to perform the work and ALTAIR will
provide all the engineering details and part time engineering assistance.
Duration: approximately 4 months
Feasibility Study Cost: approximately US$100,000
Estimated Budget: See Appendix VI, US$138,200
Total Phase I Estimated Budget: US$630,400.
Phase II:
Semi-commercial demonstration plant operating at mutually agreed upon tons per
year for market testing ~ 2 years
To be constructed at any site of WESTERN's choosing, but preferably at an Albian
site near Fort ▇▇▇▇▇▇▇▇. Examine the feasibility of purchasing and using the old
▇▇▇▇ ▇▇▇▇▇ Mobile Alabama plant equipment. Equipment is standard, "off-the
shelf" chemical industry equipment. The parties shall agree upon the Phase II
Time Period and such other details of Phase II as they deem necessary prior to
commencing Phase II.
Approximate Cost: ~$25 million, or whatever lower amount is required to complete
the construction of a demonstration plant.
Duration: approximately 2 years
26
Exhibit A
Phased Development Plan
--------------------------------------------------------------------------------
Phase III:
Single-line plant producing mutually agreed upon tons per year of finished TiO2
pigment that could be expanded to three lines as soon as the first line of
production proves feasible ~ 2 years
Cost: to be determined in the engineering feasibility study.
Duration: approximately 2 years
The parties shall agree upon the Phase III Time Period and such other details of
Phase III as they deem necessary prior to commencing Phase III.
Appendix I -- Project Team Members and Rates (rates fixed during Phase I)
--------------------------------- ------------------------------------------------------------------- ----------------
Position Project Duties Rates/Hour
--------------------------------- ------------------------------------------------------------------- ----------------
Director R&D and Eng. Project Director $106
--------------------------------- ------------------------------------------------------------------- ----------------
Manager Engineering Oversee Pilot Plant Activities $ 77
--------------------------------- ------------------------------------------------------------------- ----------------
Manager R&D Oversee Development Activities $ 82
--------------------------------- ------------------------------------------------------------------- ----------------
Metallurgical Engineer Pilot Plant Operator and bench scale Engineering $ 63
--------------------------------- ------------------------------------------------------------------- ----------------
Metallurgical Engineer Pilot Plant Operator and bench scale engineering $ 75
--------------------------------- ------------------------------------------------------------------- ----------------
Metallurgical Engineer Pilot Plant Operator and bench scale engineering $ 53
--------------------------------- ------------------------------------------------------------------- ----------------
Chief Chemist Chemical Characterization $ 53
--------------------------------- ------------------------------------------------------------------- ----------------
SEM/XRD Spectroscopist SEM and XRD characterization $ 68
--------------------------------- ------------------------------------------------------------------- ----------------
Analytical Technician Chemical Characterization $ 30
--------------------------------- ------------------------------------------------------------------- ----------------
Metallurgical Technician Pilot Plant Operator and bench technician $ 34
--------------------------------- ------------------------------------------------------------------- ----------------
Design Engineer Fabrication, Plant Commissioning, Maintenance, and Repair $ 60
--------------------------------- ------------------------------------------------------------------- ----------------
Mechanic Helper Pilot Plant Operation $ 31
--------------------------------- ------------------------------------------------------------------- ----------------
Metallurgical Technician Mineralogist, pilot plan operator, bench scale engineering $ 53
--------------------------------- ------------------------------------------------------------------- ----------------
27
Appendix II -- Characterization Instrumentation and Techniques
SEM -- Hitachi S4700 Field Emission Scanning Electron Microscope - examine the
mineral interactions, clay minerals, and associations of all economic minerals.
EDS -- Oxford Instruments Energy dispersive X-ray micro analysis spectrometer
mounted on the Hitachi S4700 Scanning Electron Microscope to determine minor and
major elements in micron size structures.
XRD -- Scintag X-1 X-ray diffractometer - scans using an instrument to determine
the most predominate crystalline mineral phases.
ICP -- ▇▇▇▇▇▇ ▇▇▇▇▇ Optima 3000 Dual View Inductively coupled argon plasma
spectrometry - multi-element analysis for trace, minor and major constituents.
DCP -- ▇▇▇▇▇▇▇ Spectraspan VI Direct Current plasma spectrometry - multi-element
analysis for trace, minor and major constituents.
OM -- Optical Microscopy - perform mineral point counts using optical microscopy
to determine approximate percentages of valuable minerals and association of
gangue to economic minerals.
PSA -- ▇▇▇▇▇▇▇ ▇▇-230 laser scattering particle size analyzer.
SA -- ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ Surface area analysis using nitrogen.
SG -- Micromerities Helium pyonometer determines specific gravity.
TGA -- Perkin Elemer Thermo - gravimetric analysis.
DTA -- ▇▇▇▇▇▇ ▇▇▇▇▇ Differential thermal analysis.
28
Appendix III
Phase I Stage I -- Resource Characterization [split table]
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Employee BS DV TS SC JP KC ES BF
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Rate per hour $ 106 $ 77 $ 82 $ 63 $ 75 $ 53 $ 53 $ 68
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
1 Characterize materials as received - 24 24 24 16 16 16 40 16
SEM, XRD, OM, ICP suite, moisture,
loss on ignition, carbon, and sulfur.
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
2 Roast to burn off residual organic 24 24 24 24 8 8 40 16
bitumens and asphaltenes,
characterize residue
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
3 Perform sieve fraction analysis, 8 48 40 32
determine weight percent of each
fraction, chemical analysis and
mineralogical analysis, XRD and SEM
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
4 Determine fraction having highest 40 40 32
heavy mineral concentrate and perform
heavy liquid sink/float analysis of that
fraction, characterize each fraction.
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
5 Develop and perform floatation tests 16 16 16 48 40 32
to upgrade Western Oil sands tailings,
determine weight percent of each
fraction, determine mineral content
of each fraction via OM, XRD, and SEM,
and chemical analysis.
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
6 Prepare report and assess viability 24 24 24 24 8 8
to process WESTERN material using the
ALTAIR hydrochloride process.
Compare and contract centrifuge tails
materials from other sources to
WESTERN materials.
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Phase I Stage I subtotals $ 9,308 $7,385 $7,192 $12,500 $2,400 $1,692 $10,577 $8,738
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Total ALTAIR Labor and Overhead $ 84,631
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Outside contractor (mineralogist) $ 10,000
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Outside contractor (location $ 20,000
consultant)
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Minor Equipment $ 20,000
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
Approximate Budget $104,631
----- --------------------------------------- ---------- --------- -------- ---------- -------- -------- ---------- -------
29
Appendix III
Phase I Stage I -- Resource Characterization [cont'd]
----- --------------------------------------- --------- -------- -------- --------- --------
Employee EO RT GE JM GF
----- --------------------------------------- --------- -------- -------- --------- --------
Rate per hour $ 60 $ 34 $ 53 $ 30 $ 31
----- --------------------------------------- --------- -------- -------- --------- --------
1 Characterize materials as received - 40
SEM, XRD, OM, ICP suite, moisture,
loss on ignition, carbon, and sulfur.
----- --------------------------------------- --------- -------- -------- --------- --------
2 Roast to burn off residual organic 24 24 24 40 24
bitumens and asphaltenes,
characterize residue
----- --------------------------------------- --------- -------- -------- --------- --------
3 Perform sieve fraction analysis, 48 48 40
determine weight percent of each
fraction, chemical analysis and
mineralogical analysis, XRD and SEM
----- --------------------------------------- --------- -------- -------- --------- --------
4 Determine fraction having highest 48 48 40
heavy mineral concentrate and perform
heavy liquid sink/float analysis of that
fraction, characterize each fraction.
----- --------------------------------------- --------- -------- -------- --------- --------
5 Develop and perform floatation tests 24 48 48 40 24
to upgrade Western Oil sands tailings,
determine weight percent of each
fraction, determine mineral content
of each fraction via OM, XRD, and SEM,
and chemical analysis.
----- --------------------------------------- --------- -------- -------- --------- --------
6 Prepare report and assess viability
to process WESTERN material using the
ALTAIR hydrochloride process.
Compare and contract centrifuge tails
materials from other sources to
WESTERN materials.
----- --------------------------------------- --------- -------- -------- --------- --------
Phase I Stage I subtotals $2,862 $5,654 $8,885 $5,962 $1,477
----- --------------------------------------- --------- -------- -------- --------- --------
Total ALTAIR Labor and Overhead
----- --------------------------------------- --------- -------- -------- --------- --------
Outside contractor (mineralogist)
----- --------------------------------------- --------- -------- -------- --------- --------
Outside contractor (location
consultant)
----- --------------------------------------- --------- -------- -------- --------- --------
Minor Equipment
----- --------------------------------------- --------- -------- -------- --------- --------
Approximate Budget
----- --------------------------------------- --------- -------- -------- --------- --------
30
Appendix IV
Phase I Stage II -- Resource Preparation and Digestion [split table]
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Employee BS DV TS SC JP KC ES BF
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Rate per hour $ 106 $ 77 $ 82 $ 63 $ 75 $ 53 $ 53 $ 68
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
1 Perform crucible tests to 40 40 24 24 24 40
determine minimum temperature
required to remove organic phase.
Characterize inorganic residue
after roasting.
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
2 Prepare approximately 100 32 40 24 80 40
kilograms of Suncor centrifuge
tailing material by roasting in a
6" rotary calciner using criteria
determined in #1.
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
3 Beneficiate and recover heavy 32 40 24 80 160 160
mineral concentrates including
ilmenite, leucoxene, rutile, and
zircon.
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
4 Determine quantities, XRD, SEM, 32 40 40
OM, and chemical analysis of each
fraction..
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
5 Digest approximately 30kg of the 32 80 24 80
ilmenite/leucoxene concentrates.
Perform 6 tests in different
leaching conditions, cleanup, and
interpretation. Consider
alternative filtration methods.
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
6 Perform chemical analysis of the 32 40 24
resulting digestates and residues.
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
7 Perform a material balance of the 8 8 8 8
chemical components.
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
8 Prepare report and assess the 40 40 40 24 24 24
viability of the digestion
process to the oil sand heavy
mineral concentrates.
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Subtotal Phase I Stage II $ 26,231 $19,077 $11,769 $18,500 $15,600 $9,731 $8,462 $4,369
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Total ALTAIR Labor and Overhead $152,631
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Outside contractor (mineralogist) $ 10,000
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Outside contractor (mineral $ 20,000
beneficiation consultant)
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Minor Equipment $ 10,000
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
Approximate Budget $192,631
----- ----------------------------------- ----------- --------- ---------- --------- ---------- -------- --------- --------
31
Appendix IV
Phase I Stage II -- Resource Preparation and Digestion [cont'd]
----- ----------------------------------- -------- --------- --------- --------- --------
Employee EO RT GE JM GF
----- ----------------------------------- -------- --------- --------- --------- --------
Rate per hour $ 60 $ 34 $ 53 $ 30 $ 31
----- ----------------------------------- -------- --------- --------- --------- --------
1 Perform crucible tests to 40 40 24
determine minimum temperature
required to remove organic phase.
Characterize inorganic residue
after roasting.
----- ----------------------------------- -------- --------- --------- --------- --------
2 Prepare approximately 100 40 80 80 24 40
kilograms of Suncor centrifuge
tailing material by roasting in a
6" rotary calciner using criteria
determined in #1.
----- ----------------------------------- -------- --------- --------- --------- --------
3 Beneficiate and recover heavy 40 80 80 40
mineral concentrates including
ilmenite, leucoxene, rutile, and
zircon.
----- ----------------------------------- -------- --------- --------- --------- --------
4 Determine quantities, XRD, SEM, 40
OM, and chemical analysis of each
fraction..
----- ----------------------------------- -------- --------- --------- --------- --------
5 Digest approximately 30kg of the 40 80 80 40
ilmenite/leucoxene concentrates.
Perform 6 tests in different
leaching conditions, cleanup, and
interpretation. Consider
alternative filtration methods.
----- ----------------------------------- -------- --------- --------- --------- --------
6 Perform chemical analysis of the 40
resulting digestates and residues.
----- ----------------------------------- -------- --------- --------- --------- --------
7 Perform a material balance of the
chemical components.
----- ----------------------------------- -------- --------- --------- --------- --------
8 Prepare report and assess the
viability of the digestion
process to the oil sand heavy
mineral concentrates.
----- ----------------------------------- -------- --------- --------- --------- --------
Subtotal Phase I Stage II $7,154 $9,423 $14,808 $3,815 $3,692
----- ----------------------------------- -------- --------- --------- --------- --------
Total ALTAIR Labor and Overhead
----- ----------------------------------- -------- --------- --------- --------- --------
Outside contractor (mineralogist)
----- ----------------------------------- -------- --------- --------- --------- --------
Outside contractor (mineral
beneficiation consultant)
----- ----------------------------------- -------- --------- --------- --------- --------
Minor Equipment
----- ----------------------------------- -------- --------- --------- --------- --------
Approximate Budget
----- ----------------------------------- -------- --------- --------- --------- --------
32
Appendix V
Phase I Stage III -- Large Batch SX Purification, Spray Hydrolysis, Calcination, and Milling [split table]
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Employee BS DV TS SC JP KC ES BF
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Rate per hour $ 106 $ 77 $ 82 $ 63 $ 75 $ 53 $ 53 $ 68
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
1 Reduce crystallize and filter 80 80 80 80
iron chloride from the ▇▇▇▇▇
solution.
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
2 Perform chemical analysis on 40 24
filtrate.
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
3 Run continuous solvent extraction 160 160 160 160 40 40 40
using SX1 standard conditions to
separate Ti.
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
4 Run continuous solvent extraction 20 80 16 80 16 40
using SX2 standard conditions to
remove traces of iron from Ti
aqueous solution...
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
5 Spray hydrolyze, calcine, and ▇▇▇ 16 16 16 16 16 40
using standard pigment conditions.
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
6 Characterize pigment base. 40 40
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
7 Prepare report and assess the 40 40 40 24 24 24
viability of the purification
process to the Suncore litanium
concentrates.
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Subtotal Phase I Stage III $ 33,423 $28,923 $25,500 $22,500 $7,200 $5,500 $8,462 $4,369
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Total ALTAIR Labor and Overhead $179,031
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Outside contractor (mineralogist) $ 4,000
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Outside contractor (mineral $ 12,000
beneficiation consultant)
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Minor Equipment $ 10,000
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
Approximate Budget $195,031
----- ----------------------------------- ----------- --------- ---------- --------- --------- -------- -------- ---------
33
Appendix V
Phase I Stage III -- Large Batch SX Purification, Spray Hydrolysis, Calcination, and Milling [cont'd]
----- ----------------------------------- -------- ---------- --------- --------- --------
Employee EO RT GE JM GF
----- ----------------------------------- -------- ---------- --------- --------- --------
Rate per hour $ 60 $ 34 $ 53 $ 30 $ 31
----- ----------------------------------- -------- ---------- --------- --------- --------
1 Reduce crystallize and filter 80 80
iron chloride from the ▇▇▇▇▇
solution.
----- ----------------------------------- -------- ---------- --------- --------- --------
2 Perform chemical analysis on 40
filtrate.
----- ----------------------------------- -------- ---------- --------- --------- --------
3 Run continuous solvent extraction 40 160 160 40 40
using SX1 standard conditions to
separate Ti.
----- ----------------------------------- -------- ---------- --------- --------- --------
4 Run continuous solvent extraction 40 80 80 40 40
using SX2 standard conditions to
remove traces of iron from Ti
aqueous solution...
----- ----------------------------------- -------- ---------- --------- --------- --------
5 Spray hydrolyze, calcine, and ▇▇▇ 40 40
using standard pigment conditions.
----- ----------------------------------- -------- ---------- --------- --------- --------
6 Characterize pigment base. 40
----- ----------------------------------- -------- ---------- --------- --------- --------
7 Prepare report and assess the
viability of the purification
process to the Suncore litanium
concentrates.
----- ----------------------------------- -------- ---------- --------- --------- --------
Subtotal Phase I Stage III $4,769 $12,115 $19,038 $4,769 $2,462
----- ----------------------------------- -------- ---------- --------- --------- --------
Total ALTAIR Labor and Overhead
----- ----------------------------------- -------- ---------- --------- --------- --------
Outside contractor (mineralogist)
----- ----------------------------------- -------- ---------- --------- --------- --------
Outside contractor (mineral
beneficiation consultant)
----- ----------------------------------- -------- ---------- --------- --------- --------
Minor Equipment
----- ----------------------------------- -------- ---------- --------- --------- --------
Approximate Budget
----- ----------------------------------- -------- ---------- --------- --------- --------
34
Appendix VI
Phase I Stage IV --Engineering Feasibility Study [split table]
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Employee BS DV TS SC JP KC ES
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Rate per hour $ 106 $ 77 $ 82 $ 63 $ 75 $ 53 $53
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
1 Support for Engineering Contractor 80 80 80 80 16 16
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Subtotal Phase I Stage IV $ 8,462 $6,154 $6,538 $5,000 $1,200 $846 $0
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Total ALTAIR Labor and Overhead $ 28,200
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Outside contractor (Engineering) $100,000
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Outside contractor (mineral beneficiation consultant) $ 10,000
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Minor Equipment
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Approximate Budget $138,200
----- ------------------------------------------------------ ---------- --------- -------- --------- -------- ------ ------
Appendix VI
Phase I Stage IV --Engineering Feasibility Study [cont'd]
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Employee BF EO RT GE JM GF
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Rate per hour $68 $68 $34 $53 $30 $31
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
1 Support for Engineering Contractor
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Subtotal Phase I Stage IV $0 $0 $0 $0 $0 $0
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Total ALTAIR Labor and Overhead
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Outside contractor (Engineering)
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Outside contractor (mineral beneficiation consultant)
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Minor Equipment
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
Approximate Budget
----- ------------------------------------------------------ ----- ----- ------ ----- ----- -----
35
EXHIBIT B
Altair Patents and Patent Applications
Issued Patents:
US Patent 6,375,923, titled "Processing Titaniferous Ore to Titanium Dioxide
Pigment," which was filed on February 7, 2000.
International publication number WO 01/00531, "Processing Titaniferous Ore to
Titanium Dioxide Pigment."
PCT application filing date: June 14, 2000.
PCT application publication date: Jan 4, 2001.
U.S. Patent 6,548,039, titled "Processing Aqueous Titanium Solutions to Titanium
Dioxide Pigment," which was filed on February 14, 2000.
International publication number WO 01/00530 "Processing Aqueous Titanium
Solutions to Titanium Dioxide Pigment". PCT application filing date: June 14,
2000. PCT application publication date: Jan 4, 2001.
Patent Applications:
***
Contemplated Applications:
***
***Portions of this page have been omitted pursuant to a request for
confidential treatment filed separately with the SEC.
36
EXHIBIT C
Public Announcement
ALTAIR NANOTECHNOLOGIES AND WESTERN OIL SANDS SIGN TECHNOLOGY LICENSING
AGREEMENT FOR ALTAIR HYDROCHLORIC PIGMENT PROCESS
RENO, NV - January 23, 2004 - Altair Nanotechnologies, Inc. (Nasdaq:ALTI), a
developer and manufacturer of innovative nanomaterial products, has signed an
exclusive technology licensing agreement with Western Oil Sands Inc., pertaining
to the use of the Altair Hydrochloride Pigment Process (AHPP) to extract heavy
minerals from oil sands in Alberta, Canada and produce titanium dioxide pigment.
Under the terms of the agreement, Western Oil Sands will initially evaluate the
AHPP to recover titanium and zirconium in heavy mineral by-products from oil
sands tailings taken from various oil sands operations in the Athabasca region
in Alberta, Canada.
The license is predicated on Western Oil Sands meeting set development
milestones and investment levels to enable further development and
commercialization in a three-phased, five-year program. Western has the option
upon successful completion of the first phase of the Agreement to expand the
geographic region and type of resources to which the license applies, based on
its level of investment in a demonstration plant and commercial facility
utilizing AHPP technology.
"Alberta's oil sands tailings will be an excellent demonstration of the AHPP,"
said Altair Vice President ▇▇▇▇ ▇▇▇▇▇▇▇▇▇. "These tailings contain an estimated
10 percent heavy minerals, as compared to 2-4 percent typical in heavy mineral
sand deposits worldwide. In addition to producing titanium dioxide pigment, the
joint venture will evaluate the economics to extract and sell zircon, and to
monetize other valuable byproducts such as asphaltenes."
Altair's proprietary AHHP technology is a comprehensive process for producing
white titanium dioxide pigment from a variety of feedstock including hard rock
ilmenite ore. It includes a novel combination of processes that extract, purify
and form high quality white titanium dioxide pigment. Distinctive features of
the process include projected lower operating costs, minimized environmental and
health risks and the recycling of all the chemical additives used in the
process. The patented technology has also provided Altair the unique ability to
produce a wide variety of nanomaterials with narrow particle size control,
chemical purity and particle morphology, at reasonably priced tonnage qualities.
- MORE-
36
ALTAIR NANOTECHNOLOGIES AND WESTERN OIL SANDS SIGN TECHNOLOGY LICENSING
AGREEMENT FOR ALTAIR HYDROCHLORIC PIGMENT PROCESS
WESTERN OIL SANDS INC.
Western Oil Sands is a Canadian oil sands corporation which holds a 20 percent
undivided interest in the Athabasca Oil Sands Project (AOSP). Western and its
partners has completed construction of the $5.7 billion (Canadian) first phase
of the AOSP. Operations commenced in April 2003 and production at the Project
continues to progress towards design production rates of 155,000 barrels per
day. At these rates, this initial stage of the project will supply the
equivalent of 10 percent of Canada's oil needs. For additional information on
Western Oil Sands, visit ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
ALTAIR NANOTECHNOLOGIES, INC.
Nanotechnology is rapidly emerging as a unique industry sector. Altair
Nanotechnologies is positioning itself through product innovation within this
emerging industry to become a leading supplier of nanomaterial technology and
nanomaterials worldwide. Altair owns a proprietary technology for making
nanocrystalline materials of unique quality both economically and in large
quantities. The company is currently developing special materials with potential
applications in pharmaceuticals, titanium pigment and metal, batteries, fuel
cells, solar cells, advanced energy storage devices, thermal spray coatings,
catalysts, cosmetics and environmental remediation. For additional information
on Altair and its nanoparticle materials, visit ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇.
Forward-Looking Statements
This release may contain forward-looking statements as well as historical
information. Forward-looking statements, which are included in accordance with
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, may involve risks, uncertainties and other factors that may cause the
company's actual results and performance in future periods to be materially
different from any future results or performance suggested by the
forward-looking statements in this release. These risks include the risks that
the results of the initial testing of the use of the AHPP may yield negative
results, that Western Oil Sands will determine for any of various reasons not to
proceed to commercialization of the project or that even if commercialization
occurs, production does reach projected levels or that costs exceed projections.
All forward-looking statements speak only as of the date of this release. The
company expressly disclaims any obligation to update or revise any
forward-looking statements found herein to reflect any changes in company
expectations or results or any change in events.
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EXHIBIT D
List of Third Party Confidentiality Agreements, License Agreements and Other
Agreements
o Technology Investment Agreement between Titanium Metals
Corporation and Altair Nanomaterials, Inc. dated January 8, 2004.
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