UNIT PURCHASE AGREEMENT
by and among
INTERLINE HYDROCARBON INC.
and
TRANSPACIFIC INDUSTRIES PTY LTD ACN 010 745 383
Date of Agreement: August 24, 1996
UNIT PURCHASE AGREEMENT
This Unit Purchase Agreement (the "Agreement") is
dated August 24, 1996 and is by and between the following
Parties:
Interline: INTERLINE HYDROCARBON INC.
a Wyoming corporation
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Purchaser: TRANSPACIFIC INDUSTRIES PTY LTD
ACN 010 745 383
10TH Floor Toowong
Tower ▇ ▇▇▇▇▇▇▇▇ ▇▇.
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RECITALS
WHEREAS, Purchaser recognizes and acknowledges that
Interline possesses substantial and valuable technology,
expertise, know-how, information, trade secrets, patent rights
and intellectual property relating to the processing of Used
Oil and the manufacture and operation of equipment for the
processing of Used Oil;
WHEREAS, Purchaser desires to purchase from Interline a
Unit for processing Used Oil to produce Finished Products, as
defined below;
WHEREAS, Interline is willing to construct the Unit and
sell the Unit to Purchaser under the terms and conditions of
this Agreement; and
WHEREAS, Purchaser and Interline have entered into a
License Agreement dated August 24, 1996.
NOW, THEREFORE, the Parties agree as follows:
SECTION 1 - INTRODUCTION
1.1 The Unit. The "Unit" and "Battery Unit" shall mean
the unit (including equipment and instrumentation) constructed
and assembled by Interline for Purchaser and sold to Purchaser
under this Agreement. A description of the Unit and
Specifications for the Unit are set forth in Exhibits A and B
attached hereto. The Unit is for processing Used Oil.
Interline Technology is utilized in the construction and
operation of the Unit.
1.2 Oil. "Oil" shall mean any oil refined from crude
oil. Oil may contain additives to improve its lubrication,
wear, oxidation, corrosion, and/or other characteristics.
1.3 Used Oil. "Used Oil" shall mean any Oil that has
been used for its intended purpose and as a result of such use
has been contaminated by physical and/or chemical impurities.
1.4 First Phase Process Equipment. "First Phase Process
Equipment" shall mean the equipment and apparatus of the Unit
used to process Used Oil to the point that First Phase Material
is recovered from the Used Oil and is made ready for sale or
use as a Finished Product or is made ready for distillation (or
other separation means) for recovery of Base Oil, Diesel,
Gasoline and Other Finished Products. First Phase Process
Equipment includes MP-FP Vessels, oil/propane separator
equipment, propane recovery equipment, residuum/water separator
equipment and asphalt blending vessels, together with the
associated pumps, piping, and control instrumentation. First
Phase Process Equipment includes the equipment and apparatus
which prepares First Phase Material for further processing to
recover Base Oil, Diesel, Gasoline and Other Finished Products,
but does not include distillation columns or other separation
means for recovering Finished Products from the First Phase
Material.
1.5 MP-FP Vessels. "MP-FP Vessels" shall mean the
vessels used in the operation of the Unit for solvent
extraction. Used Oil is introduced into the MP-FP Vessels,
combined with a carrier, and subjected to solvent extraction
processing utilizing Disclosed Information.
1.6 Finished Products. "Finished Products" are described
below:
When Used Oil is processed by the Unit in accordance
with Interline's instructions, "Residuum" and "First Phase
Material" will result. This is accomplished in MP-FP Vessels.
The Residuum is a "Finished Product" that may be sold or used.
The First Phase Material may be sold or used as a Finished
Product or may be further processed by distillation or other
means to recover other Finished Products, such as Base Oil,
Gasoline and Diesel.
(a) "Residuum" shall mean the colloidal material
separated from lighter Used Oil fractions through the
processing of Used Oil by the Unit. The bottoms recovered from
the further processing of First Phase Material may be combined
with (and thus become part of) the Residuum.
(b) "First Phase Material" shall mean the
hydrocarbon material other than Residuum which results from the
solvent extraction processing of Used Oil through the use of the Unit.
(c) "Base Oil" shall mean the base oil recovered by
the Unit from Used Oil. Base Oil is derived from the
distillation of First Phase Material. Such distillation
process can segregate the Base Oil from the Gasoline and Diesel
fractions and the bottoms.
(d) "Diesel" shall mean the fraction commonly
referred to as diesel that is recovered by the Unit from Used
Oil. Diesel can be derived from the distillation of First
Phase Material.
(e) "Gasoline" shall mean the fraction commonly
referred to as gasoline that is recovered by the Unit from Used
Oil. Gasoline can be derived from the flashing of First Phase
Material.
(f) "Finished Products" shall mean all commercially
marketable products produced as a result of processing Used Oil
by any process, equipment or apparatus of the Unit. Finished
Products include, but are not necessarily limited to, First
Phase Material, Diesel, Gasoline, Base Oil, and Residuum.
Finished Products other than First Phase Material, Diesel,
Gasoline, Base Oil, and Residuum, are sometimes referred to in
this Agreement as "other Finished Products."
1.7 Disclosed Information. "Disclosed Information" is
defined in the License Agreement.
1.8 Proprietary Information. "Proprietary Information"
is defined in the License Agreement.
1.9 Proprietary Materials. "Proprietary Materials" is
defined in the License Agreement.
1.10 Licensed Patents. "Licensed Patents" is defined in
the License Agreement.
1.11 Licensed Technology and Interline Technology.
"Licensed Technology" and "Interline Technology" are defined in
the License Agreement.
1.12 Interline's facilities. Any reference in this
Agreement to Interline's facilities or offices shall also mean
and include the facilities and offices of Interline's
affiliated corporations, including ▇▇▇▇▇ Brothers Mechanical
Contractors, Inc.
1.13 Licensed Field. "Licensed Field" is defined in the
License Agreement.
1.14 Territory. The "Territory" is defined in the License
Agreement.
1.15 Litres. Any reference in this Agreement to "litre"
or "litres" shall mean the basic unit of capacity in the metric
system, equal to 1 cubic decimeter or 61.025 cubic inches
(3.784 litres per U.S. Gallon).
1.16 Specifications. The "Specifications" shall mean the
descriptions of the Unit set forth in Exhibit A and the
specifications set forth in Exhibit B.
1.17 Unit Site. "Unit Site" shall mean the site in the
Territory selected by Purchaser for the location and operation
of the Unit. The Unit Site must be in the Territory.
1.19 License Agreement. The "License Agreement" shall
mean the License Agreement dated August 24, 1996 by and between
Interline Hydrocarbon, Inc. and Industries Pty Ltd ACN 010 745
383.
SECTION 2 - MANUFACTURE AND PURCHASE OF UNIT
2.1 Manufacture of Unit. Interline shall manufacture a
single Unit for Purchaser. A summary description of the Unit
to be manufactured is set forth in Exhibit A. Interline's
manufacturing duties include the following:
1. Process engineering and design for battery
limits.
2. Procurement and fabrication within battery
limits.
3. Battery limit control instrumentation.
4. Supervision of battery unit assembly and
installation (six weeks only).
5. Battery equipment layout, and bolt arrangement
details.
6. Supervision of battery unit start-up (three weeks
only).
7. Training and schooling of owner operators for two
weeks at Interline. Travel and accommodations not
included (Purchaser must pay).
8. Supply material only of Motor Control Center (MCC)
and Uninterrupted Power Supply (UPS). This does not
include power wiring from MCC to motors.
9. Cooling tower and related pump skid.
10. Heater (furnace), Vessel V-200 and related pump
skid.
11. Flare with control panel and related pump skid.
12. Exchanger and pump skids within battery.
13. ASME Section VIII Pressure Vessels within
battery.
14. Connecting pipe spools between skids, vessels
and pipe rack within battery. Does not include connecting pipe
between heater, V-200 and pump skid; between cooling tower and
pump skid; between flare and pump skid.
15. Electrical and Instrumentation wiring from
equipment to panel or skid connection points on skid.
16. Pipe insulation for skids, not including
connection spools.
17. Heat tracing of skid piping when climate
dictates, not including connection spools.
18. Painting of exposed metal surfaces, not
including skid connection spools.
19. Ladders and Platforms for all related vessels.
20. Vessel packing and internals. Materials only.
21. Structural pipe rack within battery limit.
22. Computer/Program Logic Controls and Man Machine
Interface system.
23. Supervision of connections to battery of
Purchaser furnished pipe and electrical lines.
24. Operating and Maintenance Manuals for Battery
Equipment (2 sets).
25. One-time visit by Heater Technician (5 days
maximum).
26. Tower T-505 and related systems.
27. Clay treatment and related system to treat one
cut of oil from the distillation column.
Purchaser shall promptly provide all information and guidance
needed by Interline in order to design and manufacture the Unit
to meet all applicable laws, ordinances, codes, regulations and
other requirements in the Territory.
2.2 Design Capacity. The "Design Capacity" of the Unit
shall be 91,000 litres of Used Oil (and any other materials
included in the charge to the Unit) processed per 24 hours of
continuous operation.
2.3 Purchase. Purchaser agrees to purchase the Unit from
Interline and agrees to pay for the Unit in accordance with the
terms, conditions and provisions of this Agreement.
2.4 Title. Title to each component of the Unit will pass
to Purchaser after Interline has received payment from
Purchaser for such component. Purchaser shall have no right or
power to sell, lease or encumber any component of the Unit
until after title to the component passes to Purchaser (and
even after passage of title, Section 9 shall continue to
govern). The occurrence before title passes to Purchaser of
any event which creates in any other person any rights with
respect to the Unit component, shall entitle Interline to
immediate and summary possession of the Unit.
2.5 Risk of Loss. Risk of loss, with respect to the
Unit, shall shift to Purchaser when the Unit is delivered to
Purchaser under Paragraph 4.2, or otherwise comes into the
possession or control of Purchaser or their designee, or a
carrier for transit to Purchaser, whichever occurs first.
2.6 Timetable. The Parties shall cooperate with each
other and exercise their best reasonable efforts to meet the
Timetable set forth in Exhibit C.
2.7 Engineering and Instrumentation. In addition to
supplying the Unit, Interline will supply the following:
a. Process engineering and design for the process
described in Exhibit A.
b. Design, installation and testing of Unit control
instrumentation.
2.8 Weights, Measurements, Etc. All references to
weights, measurements, volumes, capacity and amounts, shall be
definitions applied pursuant to the laws and standards of the
United States of America. To the extent the Parties agree in
writing and for a mutually agreeable fee, Interline may convert
weights, measurements, volumes, capacity and amounts to the
laws and standards of Australia.
SECTION 3 - TRAINING AND CONSULTATION
3.1 Initial Training. Purchaser shall receive five days
of "Initial Training" at Interline's facilities in Sandy, Utah,
U.S.A. Initial Training shall be conducted on a Monday through
Friday week reasonably designated by Interline. Initial
Training shall provide instruction with respect to the
operation and use of the Unit. Interline's pilot plant, or
some other appropriate Interline facility, will be used for
Initial Training. Initial Training will be attended by not
more than ten trainees designated by Purchaser. Each day of
training shall be approximately 6 to 8 hours. The Initial
Training shall address operation, maintenance and service of
the Unit. Interline shall provide to the Purchaser staffing
details and the qualifications and experience required for
trainees suitable to undergo Initial Training. Such trainees
must have education and experience in oil refining operations
and maintenance. It is Purchaser's
responsibility to employ trainees meeting these requirements
for the Initial Training. Interline shall provide the
Purchaser with written training guidelines and manuals to back
up the Initial Training.
3.2 Consultation. For one year beginning after
successful completion of the Acceptance Test, Purchaser shall
be entitled to and Interline shall provide consultation, for
Battery Unit issues only, at no additional fee for up to 20
hours per month. Said hours are not cumulative and unused
hours will not be carried forward or credited to other months.
Consultation consists primarily of answers to questions or
problems, and the research, study and other time relating to
such questions or problems. Consultation is not to be used for
training purposes. Consultation is subject to Interline's then-
current consultation policies, limitations and procedures (a
copy of which shall be provided to Purchaser on request).
Consultation may be provided by telephone, fax, e-mail and
other forms of communication. This Paragraph does not obligate
Interline to provide any consultation requiring travel. All
telephone tolls and other expenses will be paid by Purchaser.
Consultation after said year or in excess of the hourly limit
is governed by Paragraph 3.3.
3.3 Additional Consultation and Additional Training. If
Purchaser desires additional consultation or additional
training, such consultation and training will be available to
Purchaser subject to the following:
(a) Additional consultation and additional training
will be available to Purchaser at such times and places as
mutually agreed by Interline and Purchaser. Interline shall
make its personnel available for such consultation and
training.
(b) Interline is entitled to receive its then-
current fees, as established by Interline, for the consultation
and training (details of which shall be provided to Purchaser
on request, but are subject to change). The payments set forth
in this Agreement only entitle Purchaser to the Initial
Training and Consultation described in Paragraphs 3.1 and 3.2
above.
(c) Consultation and training shall only be used by
Purchaser for the purpose of operating the Unit in the
Territory.
(d) All information learned from consultation and
training shall be subject to the provisions and restrictions of
this Agreement and the License Agreement, including
confidentiality and nonuse provisions.
(e) Purchaser shall pay all expenses reasonably
incurred by Interline and its personnel in connection with the
consultation or training.
(f) Interline may decline to provide consultation
and training at any time after five years from the date of this
Agreement or if Purchaser commits an unremedied breach of this
Agreement.
3.4 Expenses. Purchaser shall be responsible for any and
all costs and expenses of its trainees and personnel incurred
in connection with Initial Training, additional training,
consultation under Paragraph 3.2, and/or additional
consultation, including (without limitation) transportation,
meals, accommodations, entertainment, compensation, etc.
Purchaser shall also pay all expenses reasonably incurred by
Interline and its personnel in connection with Initial
Training, additional training, telephone consultation, and/or
additional consultation.
3.5 Purchaser's Personnel. Purchaser shall ensure that
all of its trainees and other personnel and representatives who
visit any of Interline's facilities shall comply with all
safety and other policies, procedures and guidelines of
Interline. Interline shall not be liable for, and Purchaser
shall indemnify Interline and its directors, officers,
employees, shareholders, agents and representative against, and
hold them harmless from, any and all injuries, deaths, damages,
liabilities, losses and claims incurred, caused or asserted by
any of the trainees or any other personnel or representatives
of Purchaser who visit Interline's facilities.
SECTION 4 - ACCEPTANCE, DELIVERY AND INSTALLATION
4.1 Initial Acceptance. Before the Unit is delivered to
Purchaser (see Paragraph 4.2), the Unit shall be inspected by a
representative of Purchaser. It is understood that the Unit
will be in an unassembled condition. It is the responsibility
of Purchaser to report in writing to Interline the basis for
any cause or reason for rejecting the Unit. The unassembled
condition of the Unit shall not be a cause or reason for
rejection. Notwithstanding the Delivery Date indicated in
Exhibit C, Interline shall have no obligation to deliver the
Unit until after the Certificate of Initial Acceptance has been
executed. Purchaser shall promptly make its representative
available for this inspection and purpose when Interline gives
reasonable notice that the Unit is ready for inspection. In
the event that the Unit is rejected by the Purchaser, Interline
shall remedy any default (i.e., a nonconformance with the
Specifications) to the reasonable satisfaction of the
Purchaser, within a reasonable time of receiving the reasons
for rejection.
4.2 Delivery. Following Initial Acceptance, Interline
shall deliver the Unit in a reasonably suitable condition for
transportation to Purchaser at Interline's facilities in Sandy,
Utah, U.S.A. and shall advise the Purchaser in writing of such
delivery. Purchaser shall receive and accept the Unit at such
location. Purchaser shall be responsible for transporting the
Unit from Interline's facilities to the Unit Site in the
Territory. Purchaser's responsibility includes packing and
preparing the Unit for transportation and making all necessary
arrangements for transportation, including the selection of a
carrier. Purchaser shall be responsible for the costs and
expenses (including insurance) of transporting the Unit from
Interline's facilities to Purchaser and the Unit Site in the
Territory. Purchaser is required to insure the shipments for
their full value. It is understood that the Delivery Date (see
Exhibit ture or by the need to remedy any problem that may
cause a rejection of the Unit under Paragraph 4.1. If any
problem is to be remedied, such remedy shall not be
unreasonably delayed. Interline shall assist the Purchaser in
arranging for suitable contractors to pack and transport the
Unit.
4.3 Installation and Start-Up of Unit. Interline shall
supervise (for a six week period) the installation, erection,
assembly, and start-up of the Unit at the Unit site in the
Territory. Purchaser shall provide Interline and its personnel
with access to and use of such facilities, power supplies,
offices and other resources as are reasonably requested by
Interline to facilitate installation, erection, assembly, and
start-up. Purchaser shall also provide: (a) qualified and
skilled personnel and labor to install, erect, assemble, and
start-up the Unit in accordance with Interline's instructions,
and (b) all lifting equipment and other equipment and machinery
reasonably requested by Interline. If installation, erection,
assembly, and/or start-up are delayed due to Purchaser's
failure to promptly comply with Paragraph 5.1 or any other
provision of this Agreement or due to any other fault or delay
of Purchaser, Purchaser shall pay for the time of Interline's
personnel during such delay at Interline's then-current fees
for such personnel and for their expenses.
4.4 Acceptance Test. After installation of the Unit at
Purchaser's Site, Interline shall, with the assistance and
participation of Purchaser's personnel, conduct an Acceptance
Test in accordance with Exhibit D. The Acceptance Test will be
deemed successful if the Specifications in Exhibit B are met.
If any such Specifications are not met, Interline shall take,
at its own cost such remedial action and/or provide such work-
around solutions as it deems appropriate and Purchaser shall
cooperate in the implementation of such remedial action and
work-around solutions. This may include, without limitation,
adjustments and corrections to the Unit, the addition or
replacement of Unit equipment, and/or changes to the operation
of the Unit or its operating parameters. Interline may repeat
the Acceptance Test until it has been successfully completed.
If after six months from the date of the first Acceptance Test,
the Acceptance Test has still not been successfully completed,
then Interline shall pay liquidated damages in accordance with
Paragraph 8.2 and Exhibit E. The six month period will be
extended as reasonably necessary if any malfunctions, problems
or delays are caused by Unit equipment manufactured by third
parties.
4.5 Certificate of Final Acceptance. When the Acceptance
Test has been successfully completed, Purchaser shall execute
and deliver to Interline a Certificate of Final Acceptance
accepting the Unit as installed at the Unit site in the
Territory. It is the responsibility of Purchaser to report in
writing to Interline any nonconformity of the Unit with the
Specifications before executing the Certificate of Final
Acceptance. If any such nonconformity is not reported in
writing by Purchaser to Interline, then the Warranty of
Paragraph 8.2 shall not apply to the nonconformity and
Interline shall have no obligation or liability with respect
thereto and shall pay no liquidated damages with respect
thereto. Any and all warranties, representations and
guarantees of Interline relating to the Unit and its
obligations to manufacture, install, erect, assembly, and start-
up the Unit shall be deemed to have been fully satisfied and
met as soon as the Certificate of Final Acceptance is signed.
4.6 Repeat of Acceptance Test. Purchaser may, at its
option and expense, have the Acceptance Test repeated once at
any time within six months after successful completion of the
Acceptance Test under Paragraph 4.4. Such repeated Acceptance
Test shall be governed by Paragraphs 4.4 and 4.5 (including a
second Certificate of Acceptance) subject to this Paragraph 4.6
which shall govern in the event of a conflict with Paragraph
4.4 or 4.5. Purchaser shall pay for all Interline personnel at
their then-current rates plus expenses involved in the repeated
Acceptance Test (including the inspection referred to below).
Purchaser must perform all reasonable repairs, maintenance and
replacements as may be needed to place the Unit into a
condition at least as good as the condition of the Unit at the
time of the first Acceptance Test. Interline personnel may
inspect the Unit and designate needed repairs, maintenance and
replacements prior to the repeated Acceptance Test. Liquidated
damages are payable by Interline in accordance with Paragraphs
4.4 and 8.2 and Exhibit E. Under no circumstances shall the
total of all liquidated damages under this Agreement exceed the
limits specified in this Agreement (including Exhibit E). If
the Unit has been changed or modified by any person other than Interline
or Interline's personnel, then there shall be no repeated
Acceptance Test and this Paragraph 4.6 shall be of no effect.
SECTION 5 - RESPONSIBILITIES OF PURCHASER
5.1 Site Preparation and other Responsibilities. At its
sole cost and expense, Purchaser shall be responsible for the
selection of the site for the Unit in the Territory (the "Unit
Site") and for the preparation of the Unit Site for the
installation of the Unit and for maintenance of said site and
its environment. At its sole cost and expense, Purchaser shall
be responsible for all tasks and items (including the
procurement thereof) identified in the Infrastructure and Site
Preparation Package which shall be provided by Interline to
Purchaser after the site for the Unit has been selected by
Purchaser and inspected by Interline, and for:
(a) Site Improvements and Requirements
1. The procurement, installation & start-up of
all equipment & resources needed to support the unit.
2. Finished product, chargeoil, water, slop,
asphalt and chemical storage.
3. All civil work, engineering, layout,
excavation for site.
4. Building and facilities for control room,
MCC, Office, Change, Maintenance Storage and Laboratory.
5. All required Concrete and Containment req.
tank farm, heater, cooling tower, chemical storage.
6. Product, heat, transfer fluid, water and
drain supply and return pipe lines.
7. Plant site selection, preparation and
topography survey.
8. Any and all licenses, permits, fees, taxes
or import duties.
9. All site improvements to include support
buildings.
10. Fencing (Temporary Construction and
permanent).
11. Bolt and Anchor embedments (accuracy to
design plus/minus 1/16").
12. All electrical and instrumentation wiring
from MCC to the battery skid connection points, storage
facilities, cooling tower, flare, heater and any other
electrical users.
13. Loading and unloading facility.
14. All needed utilities (e.g., electricity,
water, fuel, waste water disposal, etc.) and other
infrastructure to the Site and Unit.
(b) Required materials and labor to complete battery
installation (not provided by Interline):
1. Wiring from Motor Control Center skid
connection points.
2. Skid to skid; skid to vessel; skid to rack;
electrical and instrumentation wiring.
3. Heat tracing connections between skids,
vessels and rack.
4. Engineering and design of foundation &
containment for battery limit area.
5. Construction of foundation & containment area
to indicate supports, bolts & anchor embedments (accuracy +/- 1/16").
6. Piping, electrical and related items among
and between the battery and the following:
a. heater and heater pumps
b. cooling tower and cooling tower pumps
c. flare and flare pumps
d. storage
e. control room
7. Insulation of vessels and battery limit
skid connecting spools.
8. Insulation maintenance blankets at owners
discretion.
9. Installation of vessel ladders and
platforms provided by Interline.
10. Instrumentation Air Compressor and dryer
(minimum requirements to be specified by Interline).
11. Battery sump pump and drainage system.
12. Fire protection or deluge system as
required. 13. Emergency shower and eye wash
stations as required.
14. Caustic and acid treat systems.
15. Installation of vessel packing and
internals which are provided by Interline.
16. Painting of connecting spools and repairs
(touch-up).
17. Dowtherm A. (require quantity provided by
Interline once site layout is completed).
18. Propane (Approx. 13000 US Gal.).
19. All consumables including but not limited
to: Caustic, Acid, Nitrogen and Diesel.
20. Spare parts required for start-up &
continued operation. (Recommendation provided by Interline).
21. Material Handling equipment (see estimated
material handling & labor list provided under (c) below).
22. Construction and start-up office for
Interline personnel.
23. Operation manual which is to include
Interline's Operating guidelines.
24. Flood lighting at battery limit corners.
25. 3500 KVA Electrical power supplied at
appropriate requirement e.g. 460/415/380 Volt 50/60 Hz.
26. Main amp breaker and transformer to supply
Motor Control center.
27. Alarm printer and color printer (one each).
28. Audible Alarm System.
29. Hazardous Operations Analysis Review
(Interline will participate at applicable daily rates plus
expenses).
30. Cooling tower water treatment.
31. Cooling tower support structure.
32. Water hose station required for
housekeeping, etc.
33. Waste water treatment.
34. Housing for Clay Treat System if required.
(c) Estimated labor & material handling equipment
required to assemble Battery Unit.
Material handling equipment:
a. 125 ton crane for a 1 day period with
operator.
b. 60 ton crane for a 7 day period with
operator.
c. 30 ton crane for a 6 week period with
operator.
d. 10 ton forklift with extension boom for a 6
week period with operator.
e. 2 ton flatbed truck, with driver, for a 6
week period.
f. 1 each 300 AMP welding machine for a 6
week period for each welder.
g. 2 each 60 foot manlift for a 6 week
period.
h. 1 air compressor for 2 weeks (100 CFM).
Trained, professional construction people with
hand tools for 6 week Battery Set-Up:
a. 8 each Certified Welders.
b. 8 each Pipe Fitters.
c. 4 each
Labor/Helper.
d. 6 each
Electricians.
e. 1 each Millwright for 1 week.
f. 1 each Instrument Technician for 4
weeks.
g. 1 each Instrument Technician for 2
weeks.
h. 4 each Insulators for 5 weeks.
i. 3 each Painters for 2 weeks.
Interline has no obligation to provide the following items
unless and only to the extent they are specifically added and
specified by Addendum (in writing and signed by both Parties)
to this Agreement:
1. Insulation maintenance blankets.
2. Site Design and Engineering.
3. Engineering support for permitting and site
development.
4. Complete project management.
5. Total turn key project.
6. End section on the MCC to supply the site
electrical loads.
All personnel supplied by Purchaser must meet normal industry
standards.
5.2 Local Experts and Compliance with Laws. At its sole
cost and expense, Purchaser shall obtain and procure the
services of a local professional engineer and other experts and
professionals as necessary who will ascertain and ensure that
the design, installation, erection, assembly, start-up and
operation of the Unit and the Unit Site comply with local,
national, and all other applicable laws, codes, ordinances and
regulations and will assist Purchaser in obtaining any and all
required permits, licenses and approvals. The responsibility
of complying with all applicable laws, ordinances, codes,
regulations and the like and of obtaining all necessary
permits, licenses and approvals shall rest solely with
Purchaser.
5.3 Raw Materials. At its sole cost and expense,
Purchaser will supply all water, feedstock, chemicals,
utilities and raw materials, in such quantity and quality and
at such specifications provided by Interline as are required to
operate the Unit and process Used Oil.
5.4 Security and Safety. Purchaser shall be responsible
for the security of the Unit and all Unit-related equipment,
engineered items, materials and supplies delivered to the Unit
Site. Purchaser shall take all reasonable steps to ensure the
safety, health, and reasonable comfort of Interline personnel
at the Unit Site. Interline personnel shall comply with all
reasonable instructions of the Purchaser relating to security
or safety.
5.5 Costs and Expenses. In addition to any fees or
charges under this Agreement, Purchaser shall pay for (or
reimburse Interline for) any and all reasonable costs and
expenses incurred by Interline and Interline personnel (other
than the salaries and wages of Interline personnel) in
connection with the installation, erection, assembly, and/or
start-up of the Unit or any other services rendered at
Purchaser's request. Transportation, meals, lodging and other
accommodations for Interline personnel shall be consistent with
reasonable business practice, and the safety, health and
reasonable comfort of Interline personnel shall not be
compromised.
5.6 Interline Personnel. With respect to Interline
personnel, the Parties agree as follows:
(a) Travel. All travel shall be by commercial
airline service via economy class and the most expeditious
route available. All travel and lodging arrangements shall be
made by Interline, but must be reasonable. Purchaser shall
assist Interline at its request in making such arrangements.
(b) Indemnification and Insurance. Interline shall
have the right, but not the obligation, to obtain insurance (or
extend the coverage of currently existing insurance) against
all claims, costs, damages, injuries and expenses, of or to
Interline personnel which may arise in connection with the
performance of duties and obligations under this Agreement of
Interline personnel whilst outside the United States of America
and to charge Purchaser the reasonable costs or additional cost
of such insurance.
(c) Office, Secretarial and Communication Facilities
and Services. Purchaser shall provide each of Interline's
personnel at the Site with suitably furnished, lighted, heated
and air conditioned office space, with suitable secretarial
services, with suitable communication facilities (including
facsimile and telephone) and with suitable space for storing
tools and equipment. The cost of all communications
(telephone, facsimile, telex, cable, etc.) made by Interline
personnel within the scope of their duties while on assignment
to Purchaser shall be paid by Purchaser.
(d) Assistance to Interline personnel. Purchaser
shall give reasonable assistance which Interline personnel may
reasonably require for their health, safety, comfort, or well
being or in order to perform Interline's obligations and duties
under this Agreement.
5.7 No Supervision or Management Services. Except for
the supervision to be given under Paragraph 4.3 above,
Interline and its personnel shall function merely as advisors
and consultants, and Purchaser shall not (i) require or request
that Interline or Interline personnel perform any supervisory
or managerial duties, or (ii) rely upon Interline or Interline
personnel for any supervisory or managerial services.
SECTION 6 - PAYMENTS
6.1 Unit Purchase Price. Purchaser shall pay to
Interline a Unit Purchase Price of Three Million Four Hundred
Thousand Dollars (US$ 3,400,000) as follows:
Each amount specified in Exhibit F shall become due
and payable by Purchaser to Interline at the times specified in
Exhibit F. Each such payment shall be made by Purchaser to
Interline within five days of invoice and shall be made by wire
transfer to Interline's account in accordance with Interline's
wire transfer instructions. Purchaser shall have the right to
inspect and verify as reasonably necessary to confirm that each
payment is due and payable, but this right shall not delay any
payment to Interline, i.e., Purchaser may not delay payment
because an inspection or verification has not been conducted or
completed. Unless the inspection or verification reveals that
the payment in question is not yet due and payable, it must be
paid within five days of invoice.
6.2 No Letter of Credit. Purchaser is not obligated
under this Agreement to provide Interline with a Letter of
Credit.
6.3 Other Payments. For any other payments under this
Agreement (for example, payments for additional consultation or
additional training under Paragraph 3.3 and reimbursable
expenses), Purchaser shall make payment to Interline within 30
days of receipt of Interline's invoice or written request for
reimbursement. Each request for reimbursement will be
accompanied by supporting documentation of the expenses for
which reimbursement is requested.
6.4 Interest. Any payments under this Agreement
(including, without limitation, payments under Paragraphs 6.1
and 6.3 hereof) not made by Purchaser in full when due shall
thereafter bear interest on the unpaid balance (including
accrued but unpaid interest) at the rate of one and one-half
percent (1.5%) per month or the highest rate allowed by
applicable law, whichever is lower. Any interest payable to
Interline may be subject to Australian Withholding Tax.
6.5 United States Dollars. All references to "Dollars"
or $ in this Agreement mean dollars of the United States of
America. All payments to Interline by Purchaser under this
Agreement shall be in lawful money of the United States of
America.
6.6 Taxes. All payments to Interline under this
Agreement are in addition to and exclusive of all sales taxes,
use taxes, other taxes, duties, imports, assessments and
charges of any kind or description levied by any governmental
authorities or agencies and payment for the same shall be the
sole responsibility of Purchaser. Purchaser shall indemnify
Interline and its directors, officers, employees, shareholders,
agents and representatives against, and hold them harmless
from, any and all liability which may be imposed on any of them
arising out of Purchaser's failure to make such payments timely
and in full. This Paragraph 6.6 shall not apply to any income
tax imposed by the United States or the state of Wyoming on
Interline.
6.7 Termination and Repurchase. In the event that the
License Agreement or the "License" thereunder is terminated,
the Purchaser shall offer to sell the Unit back to Interline at
the Repurchase Price and the following shall apply:
(a) Exercise of Option to Repurchase. Interline may
elect to purchase the entire Unit or only the First Phase
Process
Equipment of the Unit. If Interline desires to exercise this
repurchase option, Interline must give written notice to
Purchaser not later than 60 days after the date of the
termination of the License Agreement or the License. The
notice will indicate if Interline is repurchasing the entire
Unit or just the First Phase Process Equipment. Upon payment
of the Repurchase Price to Purchaser, title to the Unit or the
First Phase Process Equipment (whichever is applicable) will
pass to Interline and Purchaser shall deliver the Unit or the
First Phase
Process Equipment (whichever is applicable) to Interline.
(b) Repurchase Price. The Repurchase Price shall be as
follows:
For the entire Unit:
The Unit Purchase Price paid by Purchaser to Interline
for the entire Unit minus 10% for each year after the date that
the Unit is delivered to Purchaser. Partial years shall be pro
rated. For example, if the Unit Purchase is $3,400,000 and the
Unit is repurchased two and one-half years after delivery, then
the Repurchase Price shall equal $3,400,000 minus $850,000 =
$2,550,000.
For the First Phase Process Equipment only:
That portion of the Unit Purchase Price applicable to
the First Phase Process Equipment paid by Purchaser to
Interline minus 10% for each year after the date that the Unit
is delivered to Purchaser. Partial years shall be pro-rated.
If at the time of repurchase, Purchaser owes any money
to Interline, the amount owed may be applied by Interline to the
Repurchase Price.
(c) Option not Exercised. If Interline declines to
exercise its option to repurchase the Unit, then Purchaser must
discontinue all use and operation of the Unit. Purchaser may,
however, dismantle and disassemble the Unit and sell its
components provided that no Disclosed Information or
Proprietary Information is transferred or disclosed. Purchaser
shall first consult with Interline and shall take such steps as
are requested by Interline to protect Disclosed Information and
Proprietary Information. Interline may identify certain key
components of Unit equipment and instrumentation that must not
be sold or transferred by Purchaser.
(d) Sale of Finished Products. Purchaser shall be free
to sell at any time all Finished Products produced by Purchaser
at the Unit prior to termination of the License Agreement or
License.
6.8 Delivery of Unit and Delivery Credit. The Unit will
not be delivered to Purchaser (see Paragraph 4.2) until
Interline's Utah Plant can process Used Oil feedstock at a rate
of at least 77,000 litres per day on average over a period of
28 days or Purchaser becomes entitled to the "Delivery Credit"
as provided below in this Paragraph 6.8. The "Utah Plant"
means Interline's plant in Utah for processing Used Oil. The
Utah Plant utilizes technology sublicensed to Purchaser under
the License Agreement. The 28 day period shall be selected by
Interline and Interline shall provide a production report for
such period to Purchaser. If during the 28 day run, the
operation of the Utah Plant is interrupted or adversely
affected due to mechanical interruption or failure or due to
any cause not the fault of Interline or its technology, then
the run will be discontinued until the interruption, failure or
cause has been cured or eliminated and the Utah Plant is
restored to steady operation to Interline's reasonable
satisfaction. At such time of restoration, the 28 day run
shall resume and shall be extended in duration by the time of
this delay to ensure a full 28 days of acceptable operation for
the purpose of calculating the Used Oil feedstock rate. The
time period during which operation of the Plant is interrupted
or adversely affected as described above shall not be included
in the 28 day period used to calculate the average rate at
which Used Oil feedstock is processed. At any
time after three months from the date that the Unit is ready
for delivery to Purchaser under Paragraph 4.2 and if the Utah
Plant has not satisfied the 77,000 litre per day average rate
as described above, then Interline may credit Purchaser with
the Delivery Credit and may deliver thllows:
The total number of litres of Used Oil processed over the
28 day period shall be calculated and will be referred to
herein as the "Total Number of Litres". [Note that if 77,000
litres of User Oil per day are processed over the 28 day
period, then this Total Number of Litres will be 2,156,000
litres.] The Delivery Credit will be $15,000 for each full
increment of 10,000 litres by which the actual Total Number of
Litres is less than 2,156,000 litres. The amount of the
Delivery Credit may be used by Purchaser as a credit against
any payment to Interline under this Agreement or against any
royalty or other payment under the License Agreement.
SECTION 7 - MAINTENANCE
7.1 Manuals and Schedules. After Purchaser delivers to
Interline the Certificate of Final Acceptance referred to in
Paragraph 4.5, Interline shall provide to Purchaser Maintenance
Manuals for the Unit in sufficient detail to allow qualified
personnel to maintain the Unit in accordance with Interline's
recommendations. These Manuals will be updated from time to
time by Interline to the extent that any further maintenance
requirements or recommendations are developed by Interline for
the Unit following their issue. As Interline becomes aware of
preventative maintenance procedures for the Unit, Interline
will add them to these Manuals or will otherwise disclose them
to Purchaser. Interline has no obligation under this Paragraph
or any other provision of this Agreement with respect to
improvements or changes made to the Unit by Purchaser or any
person other than Interline.
7.2 Interline Maintenance Agreement. This Agreement does
not entitle Purchaser to any maintenance services other than as
set out in Paragraph 7.1. Maintenance services from Interline
are available through an Interline Maintenance Agreement, but
only if such agreement is executed by Interline and Purchaser
and the applicable fees for maintenance services are paid to
Interline.
7.3 Continuing Assistance. Interline shall also ensure
the provision of the following to Purchaser:
(a) Training and Consultation for Purchaser's
personnel as required in Section 3.
(b) Written training guidelines as required in
Paragraph 3.1.
(c) Spare parts list for the Unit for start-up and
normal operation.
SECTION 8 - WARRANTIES, INDEMNIFICATION, DISCLAIMER AND
LIMITATION ON LIABILITY
8.1 Warranty - No Conflict. Each Party represents and
warrants that it has the right and power to enter into this
Agreement and that this Agreement is not contrary to any other
agreement or obligation of the Party.
8.2 Warranty - Unit. Interline warrants that if the Unit
does not successfully complete at least one Acceptance Test
under Section 4 over a seven day period at an average rate of 77,000
litres of Used Oil per 24 hour day, then Interline will pay
liquidated damages in accordance with Exhibit E. This
Agreement defines the entire and only warranties,
representations and guarantees of Interline with respect to the
quality, properties, safety, characteristics, functionality,
usefulness, merchantability, adequacy and suitability of the
Unit and Disclosed Information. The warranties,
representations and guarantees of Interline and Interline's
obligations under Section 4, including any obligation to pay
liquidated damages are subject to the following conditions:
(a) that Purchaser has complied with its obligations under this
Agreement, (b) that Purchaser's operators of the Unit have
completed training to the reasonable satisfaction of Interline
and the Purchaser, (c) that a reasonable number (as determined
by Interline) of preliminary runs have been conducted prior to
Acceptance Testing, (d) that Acceptance Testing is conducted in
a timely manner unless delayed due to the fault or delay of
Interline, and (e) that the Unit has not been damaged or
misused by anyone other than Interline after delivery to
Purchaser. THE SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF ANY
SUCH WARRANTIES, REPRESENTATIONS OR GUARANTEES IS SET FORTH IN
THIS AGREEMENT.
8.3 Warranty - Manufacturers. In addition to any other
warranty provided under this Agreement, Interline agrees to
assign to Purchaser, and hereby does assign to Purchaser, all
manufacturers' and contractors' warranties relative to the Unit
or Unit construction to the extent that they are assignable by
Interline to Purchaser.
8.4 Warranty - Infringement. Interline warrants that as
of the date of this Agreement Interline has no actual knowledge
that the Unit or any Disclosed Information to be used by
Purchaser with the Unit infringes any patent, trade secret or
copyright of a third party. There is no express or implied
warranty of noninfringement except as expressly stated above in
this Paragraph 8.4. It is the responsibility of Purchaser to
conduct such patent searches and intellectual property
investigations in Australia and elsewhere that Purchaser deems
appropriate. The risk of patent and intellectual property
infringement is borne by Purchaser.
8.5 Disclaimer. INTERLINE MAKES NO REPRESENTATION,
WARRANTY OR GUARANTEE, EXPRESS, IMPLIED OR BY OPERATION OF LAW,
RELATING IN ANY WAY TO THE UNIT, DISCLOSED INFORMATION,
LICENSED PATENTS, FINISHED PRODUCTS PRODUCED AT THE UNIT,
TRAINING, CONSULTATION OR ANY OTHER MATTER RELATING TO THIS
AGREEMENT OR THE LICENSE AGREEMENT, NOT EXPRESSLY SET FORTH IN
THIS AGREEMENT OR THE LICENSE AGREEMENT. ANY AND ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NONINFRINGEMENT ARE DISCLAIMED AND EXCLUDED BY
INTERLINE.
8.6 Limitation on Liability. IN NO EVENT SHALL INTERLINE
BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN REASONABLY FORESEEABLE
GENERAL DAMAGES. IN NO EVENT SHALL THE AGGREGATE LIABILITY OF
INTERLINE UNDER THIS AGREEMENT OR RELATING TO ITS SUBJECT
MATTER EXCEED THE UNIT PURCHASE PRICE ACTUALLY RECEIVED BY
INTERLINE UNDER THIS AGREEMENT. IN NO EVENT SHALL INTERLINE'S
AGGREGATE LIABILITY FOR THE ACCEPTANCE TEST OR ANY FAILURE TO
MEET SPECIFICATIONS EXCEED THE $500,000 LIQUIDATED DAMAGES AS
SPECIFIED IN EXHIBIT E.
8.7 Indemnification - By Purchaser. Purchaser shall
indemnify Interline and its directors, officers, shareholders,
employees and representatives against, and hold them harmless
from, any and all claims, liabilities, demands, damages,
expenses and losses arising out of any use, sale or other disposition of
any Finished Products or other products produced at the Unit or
arising out of operation of the Unit.
8.8 Allocation of Risk. This Agreement defines and
represents a mutually agreed upon allocation of risk between
the Parties and the consideration given and received under this
Agreement has been adjusted to reflect such allocation of risk.
SECTION 9 - CONFIDENTIALITY
9.1 Acknowledgment. Purchaser acknowledges that it is
obligated under Section 8 of the License Agreement.
9.2 Protection of Unit. Purchaser acknowledges that the
Unit and Software embody or include Proprietary Information and
that to protect Proprietary Information the following
restrictions are reasonable and necessary. Except as expressly
authorized in writing by Interline, Purchaser shall not (a)
reverse engineer the Unit, (b) create any drawings, diagrams,
flow charts or other documents containing technical information
about the Unit, (c) construct or assemble any facility, plant
or processing equipment based on the Unit or any part thereof,
or (d) allow any person or entity to inspect, reverse engineer
or access the Unit. The Unit shall not be sold or transferred
by Purchaser without the advance written consent of Interline.
It is also understood and agreed that any sale or transfer by
Purchaser of the Unit would require a transfer of the
Purchaser's sublicense under the License Agreement and the
agreement of the purchaser or transferee to the terms and
conditions of this Agreement, the License Agreement, and the
sublicense.
SECTION 10 - GOVERNMENTS AND COUNTRIES
10.1 Purchaser's Responsibility. Purchaser shall obtain
for the Parties all approvals, permits, licenses, etc.
necessary for this Agreement and for the performance of
obligations under this Agreement (including payments to
Interline) required by the Government of Australia or any of
its agencies or ministries or under any law, regulation,
ordinance or requirement of Australia or any of its
subdivisions.
10.2 Export Act. Purchaser hereby warrants and certifies
that no part of Disclosed Information or Interline Technology
or the Unit shall be made available or exported by Purchaser to
any country in contravention of any law or regulation of the
United States, including the Export Administration Act of 1979
and regulations relating thereto. This Agreement and
Interline's obligations hereunder are subject to such laws and
regulations.
10.3 Impairment by Government Regulation. In the event
that the government of Australia or the United States, or any
agency, ministry or subdivision thereof, adopts or interprets
any measure, regulation or law, which is in conflict with the
terms of this Agreement or which has the effect of impairing
the object of this Agreement, either Party may propose
negotiations for an appropriate modification of this Agreement.
The Parties shall in good faith attempt to agree upon an
appropriate modification giving effect as closely as possible
to the original intent.
10.4 Different Customs, Laws and Languages. Purchaser
acknowledges that Australia is at a great distance from
Interline, and has customs and laws which are foreign to and
unknown by Interline. Accordingly, in an effort to help
Interline in its performance of its obligations, Purchaser
shall assist Interline in dealing with any problems arising
from such distance and differences.
SECTION 11 - GENERAL PROVISIONS
11.1 Attorneys' Fees. In the event of any litigation or
arbitration between the Parties, the prevailing Party shall be
entitled to recover from the nonprevailing Party any and all
costs, including reasonable attorneys' fees, incurred by the
prevailing Party. Such relief shall be in addition to any
other relief, award or damages to which the prevailing Party
may be entitled.
11.2 Severability. In case any one or more of the
provisions contained herein shall, for any reason, be held to
be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provision(s) had never been contained herein; provided that
such invalid, illegal or unenforceable provision(s) shall first
be curtailed, limited or eliminated to the extent necessary to
remove such invalidity, illegality or unenforceability with
respect to the applicable law as it shall then be applied.
11.3 Governing Law. This Agreement shall be governed,
construed and enforced in accordance with the laws of
Australia. Licensee warrants to Interline that this Agreement
does not include any provision which is contrary to, or invalid
or unenforceable under, the laws of Australia. Any litigation
or arbitration between the Parties involving Interline shall be
conducted exclusively in Australia. The Parties hereby submit
to such jurisdiction and venue. Such jurisdiction and venue
shall be exclusive.
11.4 Final Agreement. This Agreement constitutes the
final and complete agreement between the Parties concerning the
subject matter of this Agreement and supersedes all prior
agreements, understandings, negotiations, letters of intent and
discussions, written or oral, between the Parties with respect
thereto. Any modification, revision or amendment of this Agree
Any waiver of, or promise not to enforce, any right under this
Agreement shall not be enforceable unless evidenced by a
writing signed by the Party making said waiver or promise.
11.5 Waiver. Any Waiver of, or promise not to enforce, any
right under this Agreement shall not be enforceable unless evidenced by a
writing signed by the Party making said waiver or promise.
11.6 Headings. The headings in this Agreement are for the
purpose of convenience only and shall not limit, enlarge or
affect any of the covenants, terms, conditions or provisions of
this Agreement.
11.7 Language. The language used in this Agreement shall
be deemed to be the language chosen by the Parties to express
their mutual intent, and no rule of strict construction shall
be applied against any Party.
11.8 Notices. All notices, requests, consents, demands
and other communications under this Agreement must be in writing
and shall be sent to the Parties at the addresses set forth
below, or to such other person and place as any Party may
designate for itself by notice to the other Parties:
Interline: Interline Hydrocarbon Inc.
▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: President
With a copy to:"Interline Legal
Department" ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Purchaser: Transpacific Industries Pty Ltd
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
11.9 Force Majeure. Except for obligations to make payment,
no Party shall be liable to the other Party for any failure of (or delay
in performance of) its obligations hereunder due to any cause or
circumstance which is beyond its reasonable control including, but
without limiting thAssignments. Purchaser has neither the right nor the
power to assign this Agreement or any rights hereunder without first
obtaining the written consent of Interline. Interline shall not
withhold consent if the assignment is to a person or entity who
purchases or acquires the Unit and who first delivers to Interline a
written acceptance of this Agreement and Purchaser's obligations
thereunder. Purchaser may assign this Agreement to a Sublicensee (see
License Agreement) approved by Interline.
11.10 English Language. All communications between the
Parties concerning anything within the scope of this Agreement
(including disclosures, training, consultation, and the Acceptance Test)
shall be in the English language.
11.11 Assignments. Purchaser has neither the right nor the
power to assign this Agreement or any rights hereunder without first
obtaining the written consent of Interline. Interline shall not withhold
consent if the assignment is to a person or entity who purchases or
acquires the Unit and who first delivers to Interline a written
acceptance of this Agreement and Purchaser's obligations thereunder.
Purchaser may assign this Agreement to a Sublicensee (see License
Agreement)
approved by Interline.
11.12 Delegation of Duties. Interline may delegate
duties and otherwise render its performance under this
Agreement through independent contractors selected by
Interline.
11.13 Relationships. Purchaser is not a partner,
joint venturer, agent or representative of Interline.
11.14 Termination Option. If government approval of
this Agreement is required (see Paragraph 10.1), but not
obtained, either Party may terminate this Agreement. In the
event of such termination, Section 9 shall survive.
11.15 Insolvency, Bankruptcy. If Purchaser becomes
insolvent, makes any assignment of its assets or business for
the benefit of creditors, or if a trustee or receiver is
appointed to administer or conduct its business or affairs, or
if it is adjudged in any legal proceeding to be either a
voluntary or involuntary bankrupt, or if anything similar to
the foregoing occurs under the laws and practices of Australia,
then Interline may terminate this Agreement. If Interline
becomes insolvent,
makes any assignment of its assets or business for the benefit
of creditors, or if a trustee or receiver is appointed to
administer or conduct its business or affairs, or if it is
adjudged in any legal proceeding to be either a voluntary or
involuntary bankrupt, or if anything similar to the foregoing
occurs under the laws and practices of the United States, then:
(1) Purchaser's sublicense rights under the ormation needed to
complete the Unit if the Unit has not already been completed,
and (3) Interline expressly authorizes the Purchaser pursuant
to Paragraph 9.2(c) to use the technical information provided
to it under this Agreement to complete the construction and
assembly of the Unit.
11.16 Construction and Interpretation. This Agreement is
written in the English language and shall be construed and
interpreted in accordance with such language, regardless of any
translations that may be prepared or executed. All references
to weights, measurements, volumes, capacity and amounts, shall
be definitions applied pursuant to the laws and standards of
the United States of America. All references to "Dollars",
"$", money or funds in this Agreement mean dollars of the
United States of America. All payments to Interline by
Purchaser under this Agreement shall be in lawful money of the
United States of America.
11.17 Non-Frustration, Other Instruments, Further
Assurances. No Party to this Agreement shall commit any act or
take any action which frustrates or hampers the rights of the
other Party under this Agreement. Each Party shall act in good
faith and engage in fair dealings when taking any action under
or related to this Agreement. The Parties agree to execute any
other documents, instruments, or writings as may be reasonably
required in connection with the performance of this Agreement
and the realization of the benefits and protections hereof.
11.18 Execution. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one
and the same instrument. The individuals signing below
represent that they are duly authorized to do so by and on
behalf of the Party for whom they are signing.
AGREED TO AND ACCEPTED BY:
THE COMMON SEAL of )
TRANSPACIFIC INDUSTRIES PTY. LTD. )
LTD ACN 010 745 383 )
is affixed in accordance with )
its articles of association )
in the presence of: )
________________________________ ______________________________
Signature of Authorized Person Signature of Authorized Person
________________________________ ______________________________
Name of Authorized Person Name of Authorized Person
________________________________ ______________________________
Office Held Office Held
INTERLINE HYDROCARBON, INC.
________________________________ ______________________________
Signature of Authorized Person Signature of Authorized Person
___________________________
EXHIBIT A
THE UNIT
1 SUMMARY
1.1 Process Description
The Interline Process relies on propane extraction followed by
vacuum distillation to clean and re-refine Used Oil. The
recovered Base Oil may require clay or an equivalent finishing
step to produce the required colors mentioned in Exhibit B,
entitled "Specifications".
The first step of the process dissolves the Used Oil with
propane and rejects most of the Used Oil additives and any water
present in the feedstock to the Unit. The water is sent to an
industrial sewer (supplied by Purchaser) while the additive
package is blended with the heaviest Oil from the vacuum
distillation section to produce an asphalt extender. Other
alternatives for disposal of water (supplied by Purchaser)
include use of evaporative cooler, use of a fired heater and
removal from site for disposal at another facility.
The propane is recovered from the Oil-propane mix and reused to
dissolve additional Used Oil feedstock. The Oil is then further
refined by boiling the lighter gasoline and diesel material out
of the Base Oil. The Base Oil is then distilled to improve
color and remove metals or other impurities that may be present.
A clay treatment or equivalent finishing step will be used to
meet the color specification as detailed in Schedule B.
1.2 Equipment
A more detailed description of the equipment involved is
included below in the form of several P&ID's (Process and
Instrument Diagrams) identified in Exhibit A-2.1. A general
description of the equipment is provided below.
The equipment will be skid mounted to the extent feasible. The
Oil charge section will consist of Oil and propane charge pumps,
a feed preheat exchanger, and a propane surge vessel.
The Propane Extraction section consists of a mixing vessel
together with a settling vessel. The Propane Recovery section
has a solution feed tank, a solvent flash drum for propane
removal, heat exchangers and propane condensers.
Following the extraction/recovery section is the gasoline
removal section. This section consists of an atmospheric tower,
heat exchangers and a compressor which removes any propane or
gasolinetype material which may still be present in the Oil.
The vacuum distillation section consists of a single tower,
pumps, heat exchangers, coolers and vacuum producing equipment
necessary to boil the Base Oil thus removing metals and other
contaminants remaining after the extraction process. An asphalt
mixing vessel is provided to mix the Residuum recovered from the
propane extraction together with the heaviest material from the
vacuum distillation section.
2 DETAILED DESCRIPTION OF EQUIPMENT
2.1 Process and Instrument Drawings. See Exhibit A-2.1
2.2 Plans and Drawings. See Exhibit A-2.2
2.3 Detailed Equipment List. See Exhibit A-2.3
EXHIBIT A-2.1
PROCESS AND INSTRUMENT DRAWINGS
[This Exhibit will be prepared and provided by Interline after
this Unit Purchase Agreement is signed by both Parties. It
will then be added to this Agreement as Exhibit A-2.1.]
EXHIBIT A-2.2
PLANS AND DRAWINGS
[This Exhibit will be prepared and provided by Interline after
this Unit Purchase Agreement is signed by both Parties. It
will then be added to this Agreement as Exhibit A-2.2.]
EXHIBIT A-2.3
DETAILED EQUIPMENT LIST
[This Exhibit will be prepared and provided by Interline after
this Unit Purchase Agreement is signed by both Parties. It
will then be added to this Agreement as Exhibit A-2.3.]
EXHIBIT B
SPECIFICATIONS
The Unit supplied by Interline has been supplied to process
Australian Used Oil feedstock that meets the following
specifications (samples from Australia lab test July 11,
1996):
Used Oil Feed Specifications
Maximum Contaminants
Water 10%
Fuel(1) 8%
Solid Residuum(2) 7%
First Phase Oil Specification(3)
Specific Gravity at 60F 0.865 - 0.887
Maximum material boiling over 1000F 5%
Typical D-1160 distillation curve as follows:
Distillation Result
(AET,DEGREES F) IBP
439
5% 520
10% 612
20% 728
30% 757
40% 782
50% 793
60% 826
70% 852
80% 884
90% 937
95% 999
END POINT 1000
MIN. RECOVERY 95%
Notes:
(1) Fuel is any hydrocarbon material not meeting
lube base-oil specifications. This material must all boil at a
lower temperature than the base oil. Contamination with heavy
fuel oil (i.e., 380 CST. material) will cause the product base
oil to have an undesirable viscosity index.
(2) This is the solid material recovered from the
propane extraction step.
(3) This is the material which was soluble in the
propane and separated from the solids described in 2 above.
The properties are to be measured after the propane solvent has
been removed.
It is Purchaser's responsibility to provide Used Oil feedstock
meeting these specifications and descriptions for the
Acceptance Tests. Based on a Used Oil feedstock quality set
out above, the Unit supplied by Interline will meet the
following operational specifications:
1. The Unit will have a design capacity to process up to
91,000 litres of Used Oil per 24-hour day and will consistently
process an average of 77,000 litres of Used Oil per 24-hour
day, based on 330 days of operation per year. The 77,000
litres per 24-hour day rate shall be used for purposes of the
seven day Acceptance Test.
2. Since the Finished Products produced are directly related
to the quality of the Used Oil feed to the Unit, the Unit design
will be based on the sample of Used Oil received from
Purchaser.
3. Based on the Used Oil feedstock specifications stated
above, it is anticipated the Finished Products produced will be
approximately as follows:
(a) Water: Less than 10% by volume will be water, as
determined by a laboratory distillation.
(b) Fuel: The fuel (Diesel and Gasoline) composition
will be less than 10% by volume, as determined by a laboratory
distillation.
(c) Asphalt Extender: The asphalt extender should not
constitute more than 15% by volume.
(d) Base Oil: The Base Oil (including light and heavy
neutrals) will not be less than 65% by volume.
(e) Color: The ASTM Color Rating (ASTM test number D-
15924-63T or D-1500-64) for one selected heavy neutral cut of Base
Oil, after clay treatment, will be 3.5 or less.
EXHIBIT C
TIMETABLE
1. Completion of Unit fabrication and preparation for
shipping: within eight (8) months of signing of this Agreement
provided that Purchaser does not fail to make payments when
due.
2. Delivery of the Unit to the Unit Site shall be the
responsibility of the Purchaser.
3. Completion of Unit installation: within two (2)
months
after arrival of the Unit at the Unit Site.
4. Completion of the Acceptance Test: within six (6)
months after installation of the Unit at the Unit Site, but the
Acceptance Test shall not be delayed by Purchaser.
Interline may accelerate the time table.
EXHIBIT D
ACCEPTANCE TEST
Test Requirements:
The Unit will meet the Specifications detailed in Exhibit
B provided that the conditions and Used Oil feedstock quality
during the Acceptance Test are equal to the design conditions.
Acceptance Test Run:
1. Interline will select a time convenient for Purchaser
and Interline and appropriate for the Acceptance Test run to be
carried out.
2. Interline will specify all Unit process conditions,
feedstocks, catalysts, additives, flow rates and compositions,
and other appropriate operating parameters and conditions for
the Acceptance Test run. Test conditions will be set when the
detailed process design and engineering for the Unit are
submitted to Purchaser for its approval. The duration of the
Acceptance Test run shall be one week, i.e., seven days at 24
hours per day (except for color as indicated in Paragraph 6
below).
3. Purchaser shall provide all raw materials and
manpower specified by Interline, and shall cause the Unit to operate, at
Purchaser's expense, according to the conditions set by
Interline.
4. The volume of Used Oil processed shall be metered or
measured for volume through means or instrumentation designated
by Interline and approved by the Purchaser, such approval shall
not be unreasonably withheld.
5. If, during the Acceptance Test run, interruptions,
operating mishaps, mistakes or other situations occur which are
deemed by Interline to be detrimental to the performance of the
Unit or to the Finished Products, Interline may cause the
Acceptance Test run to be repeated, or Purchaser may, at its
option, certify that the Acceptance Test run has been
successfully completed.
6. With respect to color only, the Acceptance Test run
shall apply to only one cut and will require the taking of one
base oil sample after every hour period has elapsed, i.e., 24
samples in 24 hours. The ASTM color rating data will then be
averaged to determine if the Acceptance Test has been satisfied
for color. The Acceptance Test period for color shall only be
this 24 hour period and shall not be for an entire week.
EXHIBIT E
LIQUIDATED DAMAGES
In the event that liquidated damages are payable under
Paragraph 8.2 of the Unit Purchase Agreement, then the
following shall apply. The liquidated damages shall be in the
form of a credit against Royalties payable to Interline under
the License Agreement. The amount of such credit, if any,
shall be as follows:
(a) If the Unit processes Used Oil at an average rate
below the 77,000 litres per 24-hour period rate, then for every
1,000 litres it is below the 77,000 litre rate, the credit
shall be $42,000, up to a maximum total credit under this
subsection (a) of $250,000. The average rate over the entire
seven day Acceptance Test period shall be used.
(b) In addition to the amount, if any, provided in (a)
above, if the average of Base Oil duly produced, sampled and
tested from the Unit during the seven day Acceptance Test
period fails to exhibit a color of 3.5 or less following clay
treatment as determined by ASTM test number D-15924-63T or D-
1500-64, then for each 1/2 point increment that the color is
worse than 3.5, there shall be an additional credit of $125,000
per 1/2 point increment, up to a maximum total credit of $250,000
under this subsection (b).
(c) If the Base Oil is less than 65% by volume as
provided in Paragraph 3 (d) of Exhibit B, then for each full 1%
under 65% the credit shall be $12,500, up to a maximum total
credit of $125,000 under this subsection (c).
Acceptance Test run results must be used to calculate the
liquidated damages under (a), (b) and (c) above. If more than
one Acceptance Test is conducted, Interline shall select the
Acceptance Test to be used for the calculation of liquidated
damages payable hereunder. In no event (except for the
"Exception" stated below) shall Interline be required to give
any credit to Purchaser other than against Royalties otherwise
payable under the License Agreement, and the total of all
credits (i.e., total liquidated damages under the Agreement and
this Exhibit B) shall not exceed $500,000.
Exception: If the Unit never produces Finished Products
because of Interline's fault and the Unit's failure to meet the
Specifications in the Acceptance Test, then Purchaser may
require Interline to pay to Purchaser an amount equal to the
credit. Interline acknowledges that this is reasonable, because
under such circumstances there will be no royalty against which
the credit can be taken. This payment is subject to the above
$500,000 limit.
EXHIBIT F
PAYMENT SCHEDULE - UNIT PURCHASE
PRICE
TERMS
Item Description Signing of Purchase Vendor Rec'd Delivery to Assembly Assembly Assembly Assembly Accept- Total
No. Agreement Order (1) Material Interline 25% (4) 50% (4) 75% (4) 100% (4) ance (5)
1 Down Payment 200,000 $200,000
2 Process 74,125 222,374 $296,499
Pumps
3 Compressor 13,914 41,741 $55,655
4 Heat 52,191 104,383 52,191 $208,765
Exchanger
5 Fired Heater 39,873 53,164 39,873 $132,910
6 Cooling 5,469 16,408 $21,877
Tower
7 Flare 4,178 13,477 708 708 708 708 $20,487
8 Clay Press 26,677 80,032 $106,709
9 Piping & 101,453 382,622 58,698 58,698 58,698 58,698 $718,867
Valves
10 Structure 10,047 41,471 8,498 8,498 8,498 8,498 $85,510
11 Ladders and 2,499 10,517 2,265 2,265 2,265 2,265 $22,076
Platforms
12 Process 8,169 25,530 767 767 767 767 $36,767
Internals
13 Fab Support 24,516 24,516 24,516 24,516 $98,064
&
Consumables
14 Insulation 9,704 40,756 8,733 8,733 8,733 8,733 $85,392
15 Paint 12,589 12,589 $25,178
16 Controls 20,495 73,327 8,881 8,881 8,881 8,881 $129,346
17 Instrument- 39,387 123,025 3,647 3,647 3,647 3,647 $177,000
ation
18 Electrical 14,003 60,973 14,223 14,223 14,223 14,223 $131,868
19 Motor 26,324 82,002 2,274 2,274 2,274 2,274 $117,422
Control
Center (MCC)
20 Heat Trace 3,286 10,748 669 669 669 669 $16,710
21 Engineering 47,623 35,717 35,717 $119,057
& Quality
Control
22 Vessels 31,864 169,657 55,548 55,548 55,548 55,548 $423,713
23 Acceptance 170,128 $170,128
Test
Complete
TOTAL 200,000 483,658 157,547 1,518,990 225,144 237,733 202,017 204,784 170,128 $3,400,000
(1) Means date that Interline submits purchase order to vendor.
(2) Means date that Interline's vendor receives the designated item.
(3) Means the date that the designated item is delivered to Interline.
(4) Assembly percentage applies to designated item and will be reported by
Interline to Purchaser. Purchaser has right to
inspect and verify as provided in Paragraph 6.1
of this Unit Purchase Agreement.
(5) Acceptance means acceptance under Paragraph
4.4 (but not Paragraph 4.6) of this Unit
Purchase Agreement.
LICENSE AGREEMENT
by and among
INTERLINE HYDROCARBON INC.
and
SINPATIC ENTERPRISES LTD.
Date of Agreement: August 24, 1996
LICENSE AGREEMENT
This License Agreement (the "Agreement") is dated August
24, 1996 and is by and between the following Parties:
Interline: INTERLINE HYDROCARBON INC.
a Wyoming corporation
▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Licensee: Sinpatic Enterprises Ltd.
▇▇/▇, ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
RECITALS
WHEREAS, Licensee recognizes and acknowledges that
Interline possesses substantial and valuable technology,
expertise, knowhow, information, trade secrets, patent rights
and intellectual property relating to the processing of Used
Oil and the manufacture and operation of equipment for the
processing of Used Oil;
WHEREAS, Licensee desires to obtain an exclusive license
from Interline for the use of Licensed Technology in the
Territory; and
WHEREAS, Interline is willing to grant the license to
Licensee in the Territory, but only under the terms and
conditions of this Agreement.
NOW, THEREFORE, the Parties agree as follows:
SECTION 1 - INTRODUCTION
1.1 Units.
(a) Initial Unit. The "Initial Unit" and the
"Initial Battery Unit" shall mean the "Unit" (including its
equipment and instrumentation) to be constructed and assembled
by Interline for Licensee or its Sublicensee in accordance with
the Unit Purchase Agreement. The Initial Unit is for
processing Used Oil. Interline Technology is utilized in the
construction and operation of the Initial Unit.
(b) Other Units. "Other Units" shall mean plants,
equipment and facilities for processing Used Oil in which
Interline Technology is utilized in the construction and/or
operation thereof. "Other Units" do not include the Initial
Unit.
(c) Units. "Units" shall mean any of the Initial
Unit and Other Units. A "Unit" may be either the Initial Unit
or one of the Other Units.
1.2 Oil. "Oil" shall mean any oil refined from crude
oil. Oil may contain additives to improve its lubrication,
wear, oxidation, corrosion, and/or other characteristics.
1.3 Used Oil. "Used Oil" shall mean any Oil that has
been used for its intended purpose and as a result of such use
has been contaminated by physical and/or chemical impurities.
1.4 First Phase Process Equipment. "First Phase Process
Equipment" shall mean the equipment and apparatus of a Unit
used to process Used Oil to the point that First Phase Material
is recovered from the Used Oil and is made ready for sale or
use as a Finished Product or is made ready for distillation (or
other separation means) for recovery of Base Oil, Diesel,
Gasoline and Other Finished Products. First Phase Process
Equipment includes MP-FP Vessels, oil/propane separator
equipment, propane recovery equipment, residuum/water separator
equipment and asphalt blending vessels, together with the
associated pumps, piping, and control instrumentation. First
Phase Process Equipment includes the equipment and apparatus
which prepares First Phase Material for further processing to
recover Base Oil, Diesel, Gasoline and Other Finished Products,
but does not include distillation columns or other separation
means for recovering Finished Products from the First Phase
Material.
1.5 MP-FP Vessels. "MP-FP Vessels" shall mean the
vessels used in the operation of a Unit for solvent extraction.
Used Oil is introduced into the MP-FP Vessels, combined with a
carrier, and subjected to solvent extraction processing
utilizing Disclosed Information.
1.6 Finished Products. "Finished Products" are described
below:
When Used Oil is processed by a Unit in accordance
with Interline's instructions, "Residuum" and "First Phase
Material" will result. This is accomplished in MP-FP Vessels.
The Residuum is a "Finished Product" that may be sold or used.
The First Phase Material may be sold or used as a Finished
Product or may be further processed by distillation or other
means to recover other Finished Products, such as Base Oil,
Gasoline and Diesel.
(a) "Residuum" shall mean the colloidal material
separated from lighter Used Oil fractions through the
processing of Used Oil by a Unit. The bottoms recovered from
the further processing of First Phase Material may be combined
with (and thus become part of) the Residuum.
(b) "First Phase Material" shall mean the
hydrocarbon material other than Residuum which results from the
solvent extraction processing of Used Oil through the use of a
Unit.
(c) "Base Oil" shall mean the base oil recovered by
a Unit from Used Oil. Base Oil is derived from the
distillation of First Phase Material. Such distillation
process can segregate the Base Oil from the Gasoline and Diesel
fractions and the bottoms.
(d) "Diesel" shall mean the fraction commonly
referred to as diesel that is recovered by a Unit from Used
Oil. Diesel can be derived from the distillation of First
Phase Material.
(e) "Gasoline" shall mean the fraction commonly
referred to as gasoline that is recovered by a Unit from Used
Oil. Gasoline can be derived from the flashing of First Phase
Material.
(f) "Finished Products" shall mean all commercially
marketable products produced as a result of processing Used Oil
by any process, equipment or apparatus of a Unit. Finished
Products include, but are not necessarily limited to, First
Phase Material, Diesel, Gasoline, Base Oil, and Residuum.
Finished Products other than First Phase Material, Diesel,
Gasoline, Base Oil, and Residuum, may be referred to as "other
Finished Products."
1.7 Disclosed Information. "Disclosed Information" shall
mean any and all information, technology, data, expertise, know
how, trade secrets, intellectual property, inventions,
processes, ideas, product formulations, compositions, operating
procedures, operating conditions (including temperatures,
pressures, flow rates, etc.), specifications, Unit designs,
equipment configurations, and the like, which are disclosed or
transferred by Interline (and/or any of its independent
contractors) to Licensee or a Sublicensee. All information
learned by Licensee or a Sublicensee from any Unit manufactured
by Interline or any of its affiliates shall be deemed part of
the Disclosed Information. Information disclosed to Licensee
or its Sublicensee under the Unit Purchase Agreement (and
Information disclosed to a Sublicensee under any other
agreement between a Sublicensee and Interline (or its
affiliate) for the manufacture or sale of a Unit), including
information disclosed through training and consultation, is
Disclosed Information. Disclosed Information does not include
any new information or technology created by Licensee or a
Sublicensee as part of Licensee Improvements.
1.8 Proprietary Information. "Proprietary Information"
shall mean any and all Disclosed Information (whether or not
reduced to writing and in any stage of development) except for
Disclosed Information that is in the public domain at the time
of disclosure by Interline to Licensee or a Sublicensee.
Proprietary Information, which subsequent to disclosure by
Interline to Licensee or a Sublicensee, becomes part of the
public domain through no fault of Licensee shall thereafter
cease to be Proprietary Information. Public domain status must
be established through printed publications and/or other
credible, tangible evidence. Furthermore, anything which becomes
lawfully and legitimately available to Licensee or a
Sublicensee from a third party (who did not directly or
indirectly acquire the same from Interline or Interline's
licensors or assignors) shall be released from the provisions
of Section 8 (entitled "Confidentiality"), butsuch use and
disclosure as are permitted by such third party. Specific
items of Disclosed Information shall not be excluded from the
scope of Proprietary Information merely because they can be
assembled by selection and combination of subject matter within
the scope of the above exceptions, or merely because they are
encompassed within more general subject matter within the scope
of the above exceptions.
1.9 Proprietary Materials. "Proprietary Materials" shall
mean any and all writings, records, documents and other
tangible media in which Proprietary Information is embodied,
stored or recorded or from which Proprietary Information can be
transferred, retrieved, reproduced, read or utilized. Software
and Documentation under Section 2 shall be presumed to be
Proprietary Materials.
1.10 Licensed Patents. "Licensed Patents" shall mean any
and all patents and patent applications owned by Interline or
licensed to Interline with a right to grant sublicenses, but
only to the extent that such patents or patent applications are
relevant to a Unit or its operation or the processing of Used
Oil by a Unit to produce Finished Products. Any of the
Licensed Patents which terminates or expires or which is held
to be invalid or unenforceable by a court or tribunal of
competent jurisdiction (after resolution of any appeals) shall
at such time cease to be included within the scope of the
Licensed Patents. There is no representation as to the number,
if any, of Licensed Patents applicable to this Agreement or to
the scope of such Patents or the countries of issuance. A list
of the patents and patent applications presently owned by
Interline and/or licensed to Interline with a right to grant
sublicenses is attached hereto as Exhibit A. It is understood
that Exhibit A may be expanded to include other patents and
patent applications as relevant patents issue and/or as
additional relevant applications are filed. For example,
patents and/or patent applicaure may be added to Exhibit A if
and as such patents issue and such patent applications are
filed. It is expressly agreed that Licensed Patents do not
include any patents obtained by the Licensee which claim
Licensee's Improvements.
1.11 Licensed Technology or Interline Technology.
"Licensed Technology" or "Interline Technology" means the
Disclosed Information, Proprietary Information, and Proprietary
Materials provided by Interline to Licensee or a Sublicensee
under this Agreement or the Unit Purchase Agreement or another
agreement for the manufacture or purchase of a Unit.
1.12 Interline's facilities. Any reference in this
Agreement to Interline's facilities or offices shall also mean
and include the facilities and offices of Interline's
affiliated corporations, including ▇▇▇▇▇ Brothers Mechanical
Contractors, Inc.
1.13 "Licensed Field" shall mean the processing of Used
Oil to recover Finished Products. Expressly excluded from
Licensed Field and this License Agreement are any hydrocarbon
products which are extracted from tar sands or oil shales, or
which are extracted from crude oil from which wax is extracted
as a primary marketable product, or which are extracted from
soil or other similar media artificially contaminated with
hydrocarbons. Licensee shall not use the Disclosed Information
for any purpose or use outside of the Licensed Field.
1.14 Territory. The "Territory" shall mean the country of
Australia. The Territory does not include any geographic area
outside of Australia.
1.15 Litres. Any reference in this Agreement to "litre"
or "litres" shall mean the basic unit of capacity in the metric
system, equal to 1 cubic decimeter or 61.025 cubic inches
(3.784 litres per U.S. Gallon).
1.16 Software and Documentation. "Software" and
"Documentation" mean the software and documentation identified
in Exhibit B and any other software and documentation under
Paragraph 2.1.
1.17 Unit Purchase Agreement. The "Unit Purchase
Agreement"
shall mean the Unit Purchase Agreement dated August 24, 1996 by
and between Interline Hydrocarbon Inc. and Transpacific
Industries Pty Ltd ("Transpacific") for the Initial Unit.
Transpacific may assign the Unit Purchase Agreement to a
company who is a Sublicensee under this License Agreement.
Other purchase agreements for the purchase of other Units from
Interline may be entered into by Licensee, Transpacific or
other Sublicensees.
1.18 Sublicensees. "Sublicensees" shall mean any
sublicensees under Paragraph 4.2.
SECTION 2 - SOFTWARE AND DOCUMENTATION
2.1 Provided Directly to Licensee. Pursuant to this
Agreement, Interline shall provide Licensee (or Transpacific or
its assignee of the Unit Purchase Agreement) with copies of the
Software and Documentation for use only in connection with the
Initial Unit. The Software will be provided to Licensee in
object code form only. Licensee (and Transpacific and its
assignee of the Unit Purchase Agreement) are not entitled to
any of the source code or proprietary programming documentation
relating to the Software. Other Sublicensees may receive other
software and documentation from Interline if they purchase
Units from Interline. Such other software and documentation
may be different from the Software and Documentation of Exhibit
B, but shall be governed by this Agreement as "Software" and
"Documentation."
2.2 Ownership. Notwithstanding anything in this
Agreement to the contrary, Licensee and Sublicensees do not obtain, nor
will they receive, any ownership of the Software or
Documentation received from Interline or copies thereof or the
copyrights, trade secrets or other intellectual property
therein. Interline is the owner thereof.
SECTION 3 - THE LICENSE
3.1 Grant of License. Subject to the terms and
conditions of this Agreement, Interline hereby grants to Licensee, and
Licensee hereby accepts, an exclusive, nontransferable license
to utilize Licensed Technology: (a) to operate Units in the
Territory to process Used Oil in the Licensed Field and (b) to
sell throughout the world the Finished Products resulting
therefrom. This license is referred to in this Agreement as
the "License." Except for the license to sell under (b)
above, the License is strictly limited to the Units, the
Territory and the Licensed Field, and is subject to Licensee's (and
Sublicensees') compliance with this Agreement. Licensee shall
not use Interline Technology outside of the scope of the
License. Rights not expressly granted in this Agreement are
reserved by Interline.
3.2 License of Licensed Patent(s). The License includes
a license under Licensed Patent(s) subject to all restrictions
and limitations applicable to the License, including the
Territory and the Licensed Field. Licensed Patent(s) to
Interline Improvements are included in the License only if the
Interline Improvements are disclosed and licensed to Licensee
in accordance with Paragraph 5.2.
3.3 Term. The License shall become effective on the date
of this Agreement and shall continue in force for a term of
ninety-nine (99) years, unless terminated earlier by the mutual
consent of the Parties or as otherwise provided in this
Agreement. It is understood that as each Licensed Patent or
other form of intellectual property expires or terminates or is
abandoned or cancelled, it shall cease to be part of the
License.
3.4 Termination. The License may be terminated at any
time by Interline if Licensee or a Sublicensee breaches any material
provision of this Agreement and fails to cure said breach
within 60 days of receiving notice in writing from Interline of
the breach. Termination of the License shall not limit or
affect the other legal and equitable remedies available to
Interline for any breach by Licensee or a Sublicensee of this
Agreement.
3.5 Effect of Termination. Following termination of the
License, Interline shall have no further obligation or
liability under this Agreement, and Licensee and Sublicensees:
(a) shall cease all use of Disclosed Information and
Proprietary Information, (b) shall not thereafter produce any
product, or process any Used Oil, utilizing any part of the
Disclosed Information or Proprietary Information, (c) shall
immediately deliver to Interline (or dispose of in accordance
with Interline's instructions) all Software and Documentation
(and copies thereof) in the possession or control of Licensee
or a Sublicensee, and (d) shall offer to sell the Initial Unit
back to Interline at the Repurchase Price in accordance with
the applicable provisions of the Unit Purchase Agreement (and
make similar offers with respect to Other Units). The
requirements of (d) above apply only to the Sublicensee or
Licensee who owns or controls the Unit. Licensee shall use its
best endeavours to procure that any Sublicensee offers to sell
its Unit(s) in accordance with the foregoing. Licensee and
Sublicensees shall be free to sell at any time all Finished
Products produced by Licensee or Sublicensees under the license
before termination of thy granted to Licensee or Sublicensees
under this Agreement are reserved by Interline.
3.6 Reservation of Rights. Rights not expressly granted
to Licensee or Sublicensees under this Agreement are reserved by
Interline.
3.7 Patent Markings. Any products sold, marketed or
distributed by Licensee or a Sublicensee which are made from or
embody any invention within, or which otherwise are within, the
scope of any Licensed Patents, shall bear (or their containers
shall bear) such marking or notice of patent or patent pending
as may be appropriate under applicable law as Interline shall
reasonably request.
3.8 Right to Inspect. Interline and its representatives
shall have the right, from time to time, to inspect any Unit
and its operation and Finished Products produced by any Unit,
at any reasonable time. Licensee and Sublicensees shall cooperate
therewith and shall make full disclosure thereof to Interline.
Interline shall have the right to take samples of Finished
Products produced by any Unit.
3.9 Trademarks. Nothing in this Agreement authorizes
Licensee or any Sublicensee to use any trademark, service ▇▇▇▇,
name, logo or commercial symbol of Interline. Licensee and
Sublicensees shall make no use of any trademark, service ▇▇▇▇,
name, logo or commercial symbol of Interline.
3.10 Ownership. Licensee and Sublicensees acknowledge
that Interline is the owner of the Proprietary Information and
Licensed Patents licensed to Licensee under this Agreement. To
the extent permitted by applicable law: (a) Licensee and
Sublicensees shall not challenge or contest the validity or
enforceability of any Proprietary Information or Licensed
Patent(s), and (b) if Licensee or any Sublicensee does so,
Interline may terminate the License or this Agreement.
3.11 Meaning of Exclusivity. The License is exclusive as
described in this Paragraph 3.11. "Exclusivity" or "exclusive"
as used in this Agreement shall mean that Interline shall not
use, nor license another licensee to use, any Licensed Tecitory
will not be processed outside of Licensee's exclusive Territory
by Interline or other licensees to recover Finished Products.
There is no assurance that Finished Products recovered by
Interline or its other licensees will not be purchased by
customers who are located in Licensee's exclusive Territory.
There is no assurance by Licensee that Finished Products
recovered by Licensee or its Sublicensee from the processing of
Used Oil at a Unit within the Territory will not be purchased
by customers who are located outside of the Territory. It is
also agreed that Licensee's exclusivity of any kind is limited
to the Licensed Field.
3.12 Retaining Exclusivity. Licensee will forfeit all
rights of exclusivity and the License and this Agreement will
be nonexclusive, if the following goals are not met by Licensee
within the time period stated below:
(a) Not later than two years after acceptance of the
Initial Unit under Paragraphs 4.4 and 4.5 (but not Paragraph
4.6) of the Unit Purchase Agreement, Licensee or its
Sublicensee shall order a second Unit from Interline for
operation in the Territory. Within two months of acceptance of
the second Unit (similar to acceptance under Paragraphs 4.4 and
4.5 of the Unit Purchase Agreement but with respect to the
specifications for the second Unit), the Units (i.e., Initial
Unit and second Unit) operated by Licensee and/or Sublicensees
in the Territory must be processing at least 154,000 litres of
Used Oil per day to produce Finished Products and must
thereafter maintain or exceed this level on average over each
six month period. Licensee and its Sublicensees must not
unreasonably delay the purchase, delivery, installation or
acceptance of the second Unit.
(b) Not later than four years after acceptance of the
Initial Unit under Paragraphs 4.4 and 4.5 (but not Paragraph
4.6) of the Unit Purchase Agreement, Licensee or its
Sublicensee shall order a third Unit from Interline for
operation in the Territory. Within two months of acceptance of
the third Unit (similar to acceptance under Paragraphs 4.4 and
4.5 of the Unit Purchase Agreement but with respect to the
specifications for the third Unit), the Units (i.e., Initial
Unit, second Unit, and third Unit) operated by Licensee and/or
Sublicensees in the Territory must be processing at least
231,000 litres of Used Oil per day to
produce Finished Products and must thereafter maintain or
exceed this level on average over each six month period.
Licensee and its Sublicensees must not unreasonably delay the
purchase, delivery, installation or acceptance of the third
Unit.
EXCEPTIONS: (1) If the second Unit is sufficiently large
to enable Licensee and its Sublicensees to meet the 231,000
litres per day goal and if they actually meet such goal as
stated above, then the mere absence of a third Unit shall not
cause Licensee to forfeit its exclusivity. (2) If the 231,000
litres per day rate of (b) above is not viable under then-
current market conditions in Australia, then the 231,000 litres
per day rate shall be reduced to such rate as is economically
viable and such reduced rate shall be used for the purposes of
(b) above, but in no event shall such rate be reduced below
154,000 litres per day. (3) The above time periods will be
extended by the duration of any delay caused by the failure of
Interline to meet its obligations under this Agreement or the
Unit Purchase Agreement.
For the purposes of this Paragraph 3.12 the terms "current
market conditions in Australia" and "economically viable" will
take into account the following:
(a) The locations of Used Oil in Australia.
(b) The transport costs of transporting the Used Oil to
the Unit.
(c) The volume of the Used Oil located in any particular
place.
(d) The quality of the Used Oil available in the
Australian market.
(e) The economic viability limits of a Unit established
in a particular place.
(f) The expanse of Australia and the economics of
processing Used Oil profitably.
3.13 Best Efforts. Licensee will use its best efforts to
find Sublicensees, establish Units in the Territory, and to
maximize the potential return (e.g., Royalty) to Interline.
SECTION 4 - SUBLICENSING AND ASSIGNMENTS
4.1 Sublicenses and Assignment. The License is personal
to Licensee. Except for the sublicenses under Paragraph 4.2
below, Licensee shall have neither the right nor the power to
grant any sublicense under the License or this Agreement or to
otherwise license or transfer any Disclosed Information,
Proprietary Information, Proprietary Materials or Licensed
Patents without the prior written consent of Interline. Such
consent shall not be unreasonably withheld. Licensee has
neither the right nor the power to encumber, pledge or
hypothecate the License or to assign, convey or transfer the
License without Interline's advance written consent.
4.2 Sublicense. If Transpacific assigns the Unit
Purchase Agreement to a Sublicensee, then Licensee shall grant
to the Sublicensee a sublicense under the License and this
Agreement. Licensee shall first obtain the Sublicensee's
agreement to and execution of Exhibit C, a copy of which will
be delivered to Interline. Licensee may grant other
sublicenses to other sublicensees approved by Interline. Each
such sublicensee must first agree to and execute a document in
the form of Exhibit C, but with the correct name of the
sublicensee. Copies thereof will be delivered to Interline.
Each Unit shall require a sublicense.
4.3 Sale of Unit. It is also understood and agreed that
any sale or transfer by the Licensee or a Sublicensee of a Unit
will require a transfer of the License or sublicense.
Therefore, Licensee or the Sublicensee must first procure from
any acquirer of a Unit and transferee of the License or
sublicense a written agreement to accept and comply with the
terms and conditions of this Agreement, and shall deliver a
copy thereof to Interline. The acquirer or transferee must
first be approved by Interline. Interline shall not
unreasonably withhold such approval.
SECTION 5 - TECHNOLOGY EXCHANGE
5.1 Technology Exchange. For so long as Licensee or a
Sublicensee is obligated to pay the Royalty to Interline,
Licensee and Sublicensees shall keep Interline informed of
"Licensee Improvements", and Interline shall inform Licensee or
Sublicensees of "Interline Improvements."
5.2 Interline Improvements. An "Interline Improvement"
shall be any improvement or invention created or acquired by
Interline that Interline believes may be an advantageous
addition or change to a Unit sold by Interline (or its
affiliate) for Licensee or a Sublicense or to the process for
processing Used Oil that is practiced by such Unit or otherwise
useful to Licensee or a Sublicensee in connection with its use
of such Unit. Interline has no obligation to disclose or
license any Interline Improvement to Licensee or any
Sublicensee if such disclosure or license would be in violation
of any obligation of Interline to any third party or would
obligate Interline to pay any fee or other consideration to a
third party or to otherwise account to a third party, or if for
any other reason Interline cannot make disclosure thereof to
Licensee or a Sublicensee. If is or Interline becomes
restricted from disclosing Interline Improvements to Licensee
because of restrictions in an agreement with a third party,
then Interline shall inform Licensee that Interline may not
disclose such Improvements to Licensee. Interline shall advise
the Purchaser of the name and contact details of any such third
party to whom Interline Improvements have been disclosed but of
which Interline has an obligation not to disclose.
5.3 Licensee Improvements. A "Licensee Improvement" is
any improvement, addition or change to a Unit or the process
practiced by a Unit, other than an Interline Improvement.
Licensee Improvements include any other ideas, inventions,
information and technology which Licensee or a Sublicensee
discloses to Interline.
5.4 Licenses. Interline Improvements disclosed by Interline to
Licensee or a Sublicensee shall be licensed to Licensee as Disclosed
Information and Proprietary Information under and as part of the
License and shall be governed by this Agreement and its restrictions.
Licensee and Sublicensees hereby license Interline to use and
implement for any purpose, and to sublicense to third parties, any
and all Licensee Improvements disclosed by Licensee or a Sublicensee
to Interline. This license includes a license under any and all
patents and other intellectual property held or controlled at
any time by Licensee or any Sublicensee applicable to the
Licensee Improvements.
SECTION 6 - PAYMENTS
6.1 Royalty to Interline. Licensee shall pay to Interline
a Royalty of U.S. $0.0159 per litre based on all Finished
Products (excluding Residuum) produced by any Unit and sold. Licensee
shall also pay to Interline a Royalty, based on all Residuum
produced by any Unit and sold, equal to the lesser of: (i) U.S.
$0.0159 per litre or (ii) the actual sales price of the
Residuum. Sublicensees must ensure that this Royalty is paid to
Interline.
6.2 Interest. Any payments under this Agreement
(including, without limitation, payments under Paragraphs 6.1
and 6.2 hereof) not made by Licensee in full when due shall
thereafter bear interest on the unpaid balance (including
accrued but unpaid interest) at the rate of one and one-half
percent (1.5%) per month or the highest rate allowed by
applicable law, whichever is lower.
6.3 United States Dollars. All references to "Dollars"
or $ in this Agreement mean dollars of the United States of
America. All payments to Interline under this Agreement shall
be in lawful money of the United States of America.
6.4 Taxes. Each Party shall be responsible for its own
taxes. Notwithstanding the foregoing or anything in this
Agreement to the contrary, Interline shall not be responsible
for any Hong Kong taxes, duties or assessments relating to this
Agreement, and Licensee shall make full and timely payment of
all such Hong Kong taxes, duties and assessments in addition
to, and without reduction of, the Royalties and other payments
to Interline under this Agreement.
6.5 Measurement. The amount of Finished Products
produced by Units and sold, which is the basis upon which the Royalty
set forth above shall be due and payable to Interline, shall be
determined by sales, accounting and other records as detailed
in Paragraph 6.9. If any Finished Products are not sold, but
are used by Licensee or a Sublicensee or any company affiliated
with any of them, then such Finished Products shall be deemed
sold at fair market value for the purpose of the Royalty
payable to Interline.
6.6 Quarterly Production Reports. Within 30 days of the
end of each quarter, Licensee and each Sublicensee shall
deliver to Interline a Production Report accurately setting
forth the number of litres of Used Oil (and other materials, if
any) processed by each Unit each day during the quarter. The
Production Report shall also state the kinds and quantities of
Finished Products produced by each Unit during the quarter.
This report shall be provided to Interline with the Royalty
Settlement Statement of Paragraph 6.7.
6.7 Royalty Payments. Royalties shall be pair of each
year. Within 30 days of the end of each quarter, Licensee and
each Sublicensee shall pay the Royalty for the quarter and
shall deliver to Interline a Royalty Settlement Statement
showing the number of litres of Finished Products sold during
the quarter and the Royalty amount payable to Interline for
that quarter. Each Royalty Settlement Statement and each
Production Report shall be signed by an officer of Licensee and
an officer of each Sublicensee who shall certify in writing in
the Statement and the Report that they are complete and
accurate. Royalty payments shall be made after deduction of
applicable withholding taxes required by Australian taxing
authorities based on Royalties paid to Interline under this
Agreement.
6.8 Efforts to Process Used Oil. Licensee shall use its
best reasonable efforts to ensure that it or its Sublicensees
use Units to process Used Oil in commercial quantities to
produce and sell Finished Products.
6.9 Records. Licensee and Sublicensees shall keep true
and accurate records, files and books of account containing all
the data reasonably required for the full computation and
verification of the amounts to be paid hereunder, the
information to be given in the reports and statements provided
for herein, and any other normal and reasonable records
necessary to verify and substantiate performance of Licensee's
and Sublicensees' obligations hereunder. Interline, or its
designated representative, shall have access to the books and
records of Licensee and Sublicensees during normal business
hours for the purpose of determining or confirming all ▇▇▇▇▇▇▇▇
and payments made hereunder, and verifying and substantiating
the performance of Licensee's and Sublicensees' obligations
hereunder. Licensee and Sublicensees shall retain all such
records, files and books of account for a period of at least
five years after their preparation or such other period, if
longer, as required under law.
6.10 Requirements. Licensee has requested that Interline be
available upon such advance written notice as Interline may
reasonably require, to manufacture Units for Licensee and Sublicensees in
the Territory. In consideration of Interline's willingness to
be available for such purpose, Licensee on behalf of itself and
its Sublicensees agrees and warrants that Licensee and
Sublicensees will purchase all of their requirements for Units
from Interline (or affiliates designated by Interline).
Interline agrees that Interline (and/or such affiliates) will
manufacture such Units for Licensee and its Sublicensees. The
schedule for the manufacture, delivery and installation of such
Units will be as mutually agreed. The purchase agreements to
be used for this purpose will be similar in form and substance
to the Unit Purchase Agreement for the Initial Unit. The
pricing shall be at Interline's then-current reasonable pricing
for the Units requested and may be further adjusted to reflect
services and other requests of Licensee or Sublicensees. The
Parties acknowledge that the terms of this Agreement have been
negotiated on a commercial basis and that Interline has not
tied or conditioned the grant of the License or rights under
this Agreement on Licensee's acceptance of this Paragraph 6.10
or any commitment to purchase Units.
SECTION 7 - WARRANTIES, INDEMNIFICATION, DISCLAIMER
AND LIMITATION ON LIABILITY
7.1 Warranty - No Conflict. Each Party represents and
warrants that it has the right and power to enter into this
Agreement and that this Agreement is not contrary to any other
agreement or obligation of the Party.
7.2 Warranty - Infringement. Interline warrants that as
of the date of this Agreement Interline has no actual knowledge
that any Disclosed Information to be used by Licensee or a
Sublicensee in accordance with this Agreement infringes any
patent, trade secret or copyright of a third party. There is
no express or implied warranty of noninfringement except as
expressly stated above in this Paragraph 7.2. It is the
responsibility of Licensee and Sublicensees to conduct such
patent searches and intellectual property investigations in
Australia and elsewhere that they deem appropriate. The risk
of patent and intellectual property infringement is borne by
Licensee and Sublicensees.
7.3 Disclaimer. INTERLINE MAKES NO REPRESENTATION,
WARRANTY OR GUARANTEE, EXPRESS, IMPLIED OR BY OPERATION OF LAW,
RELATING IN ANY WAY TO ANY UNIT, DISCLOSED INFORMATION,
PROPRIETARY INFORMATION, LICENSED PATENTS, FINISHED PRODUCTS
PRODUCED AT ANY UNIT, TRAINING, CONSULTATION OR ANY OTHER
MATTER RELATING TO THIS AGREEMENT OR THE UNIT PURCHASE
AGREEMENT, NOT EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE
UNIT PURCHASE AGREEMENT. ANY AND ALL IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NONINFRINGEMENT ARE DISCLAIMED AND EXCLUDED BY INTERLINE.
7.4 Limitation on Liability. IN NO EVENT SHALL INTERLINE
BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN REASONABLY FORESEEABLE
GENERAL DAMAGES. IN NO EVENT SHALL THE AGGREGATE LIABILITY OF
INTERLINE UNDER THIS AGREEMENT OR RELATING TO ITS SUBJECT
MATTER EXCEED THE ROYALTY ACTUALLY RECEIVED BY INTERLINE UNDER
THIS AGREEMENT.
7.5 Indemnification - By Licensee. Licensee shall
indemnify Interline and its directors, officers, shareholders,
employees and representatives against, and hold them harmless
from, any and all claims, liabilities, demands, damages,
expenses and losses arising out of any use, sale or other
disposition of any Finished Products or other products produced
at a Unit or arising out of Licensee's or a Sublicensee's
operation of a Unit.
7.6 Allocation of Risk. This Agreement defines and
represents a mutually agreed upon allocation of risk between
the Parties and the consideration given and received under this
Agreement has been adjusted to reflect such allocation of risk.
SECTION 8 - CONFIDENTIALITY
8.1 Acknowledgment. Licensee and Sublicensees
acknowledge that Proprietary Information is of great value to Interline and
that such value depends in significant part upon the
preservation of the confidentiality of the same. Licensee and
Sublicensees shall take all reasonable precautions to prevent
any use or disclosure of Proprietary Information not expressly
authorized in writing by Interline.
8.2 Restrictions. Except as expressly authorized in
writing by Interline, Licensee and Sublicensees shall not (a)
disclose Proprietary Information to any person or entity, (b)
transfer Proprietary Materials to any person or entity, (c)
allow any person or entity to gain access to Proprietary
Information or Proprietary Materials, (d) aid or encourage any
unauthorized use or commercial exploitation of Proprietary
Information or Proprietary Materials, (e) file any patent
applications disclosing or claiming any Proprietary
Information, or (f) fail to report to Interline any
infringement or misappropriation of Proprietary Information or
Proprietary Materials known to Licensee or a Sublicensee.
Licensee and Sublicensees shall not disclose to any third party
any of the terms, provisions or conditions of this Agreement or
the Unit Purchase Agreement except as required by law or
government regulation.
8.3 Employees. Licensee and Sublicensees may disclose
Proprietary Information to their employees and allow them
access to Proprietary Materials on a need to know basis for
purposes related to this Agreement and/or for operation of the
Units within the Territory; provided, however, that Licensee or
the Sublicensee first obtains from each such employee a written
agreement to abide by and respect the restrictions and
obligations of this Section 8. Said written agreement shall be
in a form reasonably acceptable to Interline.
8.4 Disclosure to Independent Contractors. Interline
shall not unreasonablent contractors, to the extent that such
disclosure is necessary for the installation, erection,
assembly, start-up, operation and/or maintenance of a Unit.
Licensee or the Sublicensee must first obtain the written
agreement of the independent contractor to abide by and respect
the restrictions and obligations of this Section 8. Said
written agreement shall be in a form reasonably acceptable to
Interline.
8.5 Return of Proprietary Materials. Upon termination of
the License for any reason, Licensee and Sublicensees shall
immediately deliver to Interline (or otherwise dispose of in
accordance with Interline's reasonable instructions) any and
all Proprietary Materials in the possession or control of
Licensee or any Sublicensee or any of their employees or
independent contractors. Licensee and Sublicensees shall then
certify in writing delivered to Interline that the foregoing
has been fully accomplished.
8.6 Licensee Improvements. Licensee and Sublicensees
shall not disclose any Licensee Improvement containing
Proprietary Information to any other person or entity if the
disclosure of the License Improvement would result in the
disclosure of any Proprietary Information.
8.7 Injunctive Relief. Licensee and Sublicensees
acknowledge that any breach of any of the covenants or
provisions contained in this Section 8 will give rise to
irreparable injury to Interline inadequately compensable in
damages or other legal remedies alone. Accordingly, Interline
may seek and obtain preliminary and permanent injunctive relief
and other equitable remedies against the breach or threatened
breach of said covenants or provisions. Such relief shall be
in addition to any other legal or equitable remedies which may
be available to Interline.
SECTION 9 - GOVERNMENTS AND COUNTRIES
9.1 Licensee's Responsibility. Licensee shall obtain for
the Parties all approvals, permits, licenses, etc. necessary
for this Agreement and for the performance of obligations under
this Agreement (including payments to Interline) required by
the Governments of Australia or Hong Kong or any of their
agencies or ministries or under any law, regulation, ordinance
or requirement of Australia or Hong Kong or any of their
subdivisions.
9.2 Export Act. Licensee hereby warrants and certifies
that no part of Disclosed Information or Licensed Technology
shall be made available or exported by Licensee or any
Sublicensee to any country in contravention of any law or
regulation of the United States, including the Export
Administration Act of 1979 and regulations relating thereto.
This Agreement and Interline's obligations hereunder are
subject to such laws and regulations.
9.3 Impairment by Government Regulation. In the event
that the government of Australia or Hong Kong or the United
States, or any agency, ministry or subdivision thereof, has,
adopts or interprets any measure, regulation or law which is in
conflict with the terms of this Agreement or which has the
effect of impairing the object of this Agreement, either Party
may propose negotiations for an appropriate modification of
this Agreement. The Parties shall in good faith attempt to
agree upon an appropriate modification giving effect as closely
as possible to the original intent.
9.4 Different Customs, Laws and Languages. Licensee
acknowledges that Australia and Hong Kong are at a great
distance from Interline, and have customs and laws which are
foreign to and unknown by Interline. Accordingly, in an effort
to help Interline in its performance of its obligations,
Licensee shall assist Interline in dealing with any problems
arising from such distance and differences.
SECTION 10 - GENERAL PROVISIONS
10.1 Attorneys' Fees. In the event of any litigation or
arbitration between the Parties, the prevailing Party shall be
entitled to recover from the nonprevailing Party any and all
costs, including reasonable attorneys' fees, incurred by the
prevailing Party. Such relief shall be in addition to any
other relief, award or damages to which the prevailing Party
may be entitled.
10.2 Severability. In case any one or more of the
provisions contained herein shall, for any reason, be held to
be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provision(s) had never been contained herein; provided that
such invalid, illegal or unenforceable provision(s) shall first
be curtailed, limited or eliminated to the extent necessary to
remove such invalidity, illegality or unenforceability with
respect to the applicable law as it shall then be applied.
10.3 Governing Law. This Agreement shall be governed,
construed and enforced in accordance with the laws of
Australia. Licensee warrants to Interline that this Agreement
does not include any provision which is contrary to, or invalid
or unenforceable under, the laws of Australia. Any litigation
or arbitration between the Parties involving Interline shall be
conducted exclusively in Australia. The Parties hereby submit
to such jurisdiction and venue. Such jurisdiction and venue
shall be exclusive.
10.4 Final Agreement. This Agreement constitutes the
final and complete agreement between the Parties concerning the
subject matter of this Agreement and supersedes all prior
agreements, understandings, negotiations, letters of intent and
discussions, written or oral, between the Parties with respect
thereto. Any modification, revision or amendment of this Agre
Any waiver of, or promise not to enforce, any right under this
Agreement shall not be enforceable unless evidenced by a
writing signed by the Party making said waiver or promise.
10.5 Waiver. Any waiver of, or promise not to enforce, any
right under this Agreement shall not be enforceable unless envidenced by a
writing signed by the Party making said waiver or promise.
10.6 Headings. The headings in this Agreement are for the
purpose of convenience only and shall not limit, enlarge or
affect any of the covenants, terms, conditions or provisions of
this Agreement.
10.7 Language. The language used in this Agreement shall
be deemed to be the language chosen by the Parties to express
their mutual intent, and no rule of strict construction shall
be applied against any Party.
10.8 Notices. All notices, requests, consents, demands
and other communications under this Agreement must be in writing
and shall be sent to the Parties at the addresses set forth
below, or to such other person and place as any Party may
designate for itself by notice to the other Parties:
Interline: Interline Hydrocarbon Inc.
▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: President
With a copy to:"Interline Legal Department"
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Licensee: Sinpatic Enterprises Ltd.
▇▇/▇, ▇▇▇▇▇ ▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇-▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
10.9 Force Majeure. Except for obligations to make
payment, no Party shall be liable to the other Party for any
failure of (or delay in performance of) its obligations
hereunder due to any cause or circumstance which is beyond its
reasonable control including, but without limiting the
generality of the foregoing, any such failure or delay that is
caused by strike, lockout, labor shortage, unavailability of
personnel, equipment or parts, fire, explosion, shipwreck, act
of God or the public enemy, war, riot, interference by the
military or governmental authorities, or compliance with the
laws of the United States or with the laws or orders of any
applicable government authority.
10.10 English Language. All communications between
the Parties concerning anything within the scope of this
Agreement (including disclosures and the exchange of Licensee
Improvements and Interline Improvements and any litigation or
arbitration) shall be in the English language. This Agreement
is written in the English language and no translation of this
Agreement into any other language shall supersede this English
language version of the Agreement.
10.11 Assignments. Licensee has neither the right nor
the power to assign this Agreement or any rights hereunder
without first obtaining the written consent of Interline.
Interline shall not withhold consent if the assignment is to a
person or entity who: (a) acquires the Units, (b) delivers to
Interline a written acceptance of this Agreement and Licensee's
obligations thereunder, and (c) demonstrates to Interline's
reasonable satisfaction is financially stable and able to meet
such obligations. Interline may assign this Agreement to a
successor who acquires substantially all of Interline's
ownership interests in the Interline Technology.
10.12 Delegation of Duties. Interline may delegate
duties and otherwise render its performance under this Agreement
through independent contractors selected by Interline.
10.13 Relationships. Licensee is not a partner, joint
venturer, agent or representative of Interline.
10.14 Termination Option. If government approval of
this Agreement is required (see Paragraph 9.1), but not obtained,
either Party may terminate this Agreement by written notice to
the other Party. In the event of such termination, Section 8
shall survive and Paragraph 3.5 shall apply.
10.15 Insolvency, Bankruptcy. If Licensee becomes
insolvent, makes any assignment of its assets or business for
the benefit of creditors, or if a trustee or receiver is
appointed to administer or conduct its business or affairs, or
if it is adjudged in any legal proceeding to be either a
voluntary or involuntary bankrupt, or if anything substantially
similar to the foregoing occurs under the laws and practices of
Australia, then all the rights granted to Licensee herein
(including the License) shall forthwith cease and terminate
without prior notice or legal action by the other Party. If
Interline becomes insolvent, makes any assignment of its assets
or business for the benefit of creditors, or if a trustee or
receiver is appointed to administer or conduct its business or
affairs, or if it is adjudged in any legal proceeding to be
either a voluntary or involuntary bankrupt, or if anything
similar to the foregoing occurs under the laws and practices of
the United States, then Licensee's license and rights under the
License Agreement may not be terminated as a result thereof.
10.16 Construction and Interpretation. This Agreement is
written in the English language and shall be construed and
interpreted in accordance with such language, regardless of any
translations that may be prepared or executed. All references
to weights, measurements, volumes, capacity and amounts, shall
be definitions applied pursuant to the laws and standards of
the United States of America. All references to "Dollars",
"$", money or funds in this Agreement mean dollars of the
United States of America. All payments to Interline by
Licensee under this Agreement shall be in lawful money of the
United States of America.
10.17 Non-Frustration, Other Instruments, Further
Assurances. No Party to this Agreement shall commit any act or
take any action which frustrates or hampers the rights of the
other Party under this Agreement. Each Party shall act in good
faith and engage in fair dealing when taking any action under
or related to this Agreement. The Parties agree to execute any
other documents, instruments, or writings as may be reasonably
required in connection with the performance of this Agreement
and the realization of the benefits and protections hereof.
10.18 Execution. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one
and the same instrument. The individuals signing below
represent that they are duly authorized to do so by and on
behalf of the Party for whom they are signing.
AGREED TO AND ACCEPTED BY:
THE COMMON SEAL of )
SINPATIC ENTERPRISES LTD. )
is affixed in accordance with )
its articles of association )
in the presence of: )
________________________________ ______________________________
Signature of Authorized Person Signature of Authorized Person
________________________________ ______________________________
Name of Authorized Person Name of Authorized Person
________________________________ ______________________________
Office Held Office Held
INTERLINE HYDROCARBON, INC.
________________________________ ______________________________
Signature of Authorized Person Signature of Authorized Person
________________________________ ______________________________
Name of Authorized Person Name of Authorized Person
________________________________ ______________________________
Office Held Office Held
EXHIBIT A
PATENTS
U.S. Patent
U.S. Patent No. 5,286,380
"Apparatus for Contaminated Oil Reclamation"
Issued: February 15, 1994
Inventor: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
U. S. Patent Application
Serial No. 08/197,473
"Process for Contaminated Oil
Reclamation" Filed: February 15,
1994 Inventor: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Serial No. 08/532,707
"Removal of Contaminants From Oil"
Filed: October 13, 1995
Inventors: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇
International Patent Application
No. PCT/US95/01861
"Removal of Contaminants From Oil"
Priority Date: February 15, 1994
Inventors: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT B
SOFTWARE AND DOCUMENTATION
EXHIBIT C
SUBLICENSE
("Sublicensee") shall be, and is hereby made, a "Sublicensee"
under the "License" and License Agreement dated August 24,
1996 to which this Exhibit C is attached. As a precondition
to such sublicense, Sublicensee agrees to respect and abide by
the License Agreement and to comply with all obligations of
Sinpatic Enterprises Ltd. ("Licensee") under the License
Agreement.
AGREED TO AND ACCEPTED BY:
THE COMMON SEAL of )
)
)
("Sublicensee") )
is affixed in accordance with )
its articles of association )
in the presence of: )
________________________________ ______________________________
Signature of Authorized Person Signature of Authorized Person
________________________________ ______________________________
Name of Authorized Person Name of Authorized Person
________________________________ ______________________________
Office Held Office Held
THE COMMON SEAL of )
SINPATIC ENTERPRISES LTD. )
is affixed in accordance with )
its articles of association )
in the presence of: )
________________________________ ______________________________
Signature of Authorized Person Signature of Authorized Person
________________________________ ______________________________
Name of Authorized Person Name of Authorized Person
________________________________ ______________________________
Office Held Office Held
INTERLINE HYDROCARBON, INC.
________________________________ ______________________________
Signature of Authorized Person Signature of Authorized Person
________________________________ ______________________________