AMENDED AND RESTATED AGREEMENT
CONCERNING ADDITIONAL FACILITIES
THIS AMENDED AND RESTATED AGREEMENT CONCERNING ADDITIONAL FACILITIES (the
"Agreement"), is made and entered into as of December 12, 1997 by and between
PacifiCorp Syn Fuel, L.L.C., an Oregon limited liability company ("PSF"), and
Covol Technologies, Inc., a Delaware corporation ("Covol").
WHEREAS, PSF entered into six (6) separate Standard Form of Agreements,
dated as of December 31, 1996 (individually referred to as a "Facility
Agreement" and collectively referred to as the "Facility Agreements"), between
Owner and Design/Builder with a qualified contractor ("Contractor"), for the
construction of six (6) coal fines agglomeration facilities within the United
States, each to have a production capacity of up to 50,000 tons per month
(individually referred to as a "Facility" and collectively referred to as the
"Facilities").
WHEREAS, in connection with entering into the Facility Agreements,
Covol granted to PSF a license for the coal extruding and briquetting technology
in connection with each Facility on the terms and conditions set forth in the
original Agreement Concerning Additional Facilities, dated as of December 31,
1996, which was amended and restated on July 7, 1997 (the "Original Agreement")
and Covol agreed to sell to PSF the proprietary binder material manufactured by
Covol for use in the operation of each Facility.
WHEREAS, PSF and Covol desire to amend and restate the Original
Agreement pursuant and in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, PSF
and Covol agree as follows:
Section 1 Definitions.
"Coal Briquetting Technology" means all intellectual property,
inventor's certificates and applications therefor, printed and unprinted
technical data, know-how, trade secrets, copyrights and other intellectual
property rights, inventions, discoveries, techniques, works, processes, methods,
plans, software, designs, drawings, schematics, specifications, communications
protocols, source and object code and
* Confidential material has been omitted from this Exhibit and filed separately
with the Securities and Exchange Commission (the "Commission).
modifications, test procedures, program cards, tapes, disks, algorithms and all
other scientific or technical information in whatever form relating to, embodied
in or used in the proprietary process to produce synthetic coal fuel extrusions
and briquettes from waste coal dust, coal fines and other similar coal
derivatives, and the proprietary binder material used in manufacturing synthetic
coal fuel extrusions and briquettes from waste coal dust, coal fines and other
similar coal derivatives, in each case owned or controlled by Covol, to include
such information in existence as of the date of this Agreement as well as
related information later developed by Covol; provided, however, that the
defined term "Coal Briquetting Technology" shall not include the proprietary
process developed by Covol to produce synthetic coke extrusions and briquettes
from coke breeze or any technology for other than the processing and production
of synthetic coal fuel extrusions and briquettes.
"Commencement Date" has the meaning set forth in the Section
3.1 hereof.
"Commercial Use" means any usage of the Coal Briquetting
Technology for commercial exploitation and any other usage to which Covol grants
prior written consent.
"Competing Project" has the meaning set forth in the Section
2.1 hereof.
"Covol" has the meaning set forth in the preamble.
"Contractor" has the meaning set forth in the preamble.
"Designation Notice" has the meaning set forth in the Section
2.1 hereof.
"Excepted Project" has the meaning set forth in the Section
2.1 hereof.
"Facility" and "Facilities" has the meaning set forth in the
preamble.
"Facility Agreement" and "Facility Agreements" has the meaning
set forth in the preamble.
"Facility Assignment" has the meaning set forth in the Section
13 hereof.
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"Improvements" has the meaning set forth in the Section 2.3
hereof.
"Notice of Competing Project" has the meaning set forth in the
Section 2.1 hereof.
"Prior Restricted Areas" has the meaning set forth in the
Section 2.1 hereof.
"PSF" has the meaning set forth in the preamble.
"Royalty" has the meaning set forth in the Section 3.2 hereof.
Section 2 License Grant.
2.1 General; Agreement Concerning Exclusivity. Subject to the
terms and conditions of this Agreement, Covol hereby grants to PSF and
guarantees to PSF a license to use the Coal Briquetting Technology for
Commercial Use with each Facility, including a license to make, have made, use
and sell or otherwise transfer products which embody, use or have been developed
or manufactured with the Coal Briquetting Technology. Set forth on attached
Schedule 2.1 is a list of those geographical areas in which Covol has limited
its ability to grant further licenses of the Coal Briquetting Technology (the
"Prior Restricted Areas"). Until the earlier of (i) December 31, 1997, or (ii)
the designation by PSF of the sites for all six of the Facilities, Covol shall
not agree to further material restrictions to its ability to grant licenses
(i.e., a restriction upon granting an exclusive site to any person or entity
within a radius of ten miles or more of any site) without retaining an exception
for projects to be developed by PSF pursuant to the terms hereof. Each time PSF
designates by written notice to Covol the specific site for a Facility (a
"Designation Notice"), Covol shall inform PSF in writing (the "Notice of
Competing Projects") within ten (10) days of the receipt of the Designation
Notice of any other coal agglomeration projects being developed, or related coal
fines acquisition programs, within a one hundred (100) mile radius of such
Facility (the "Competing Projects"). The Notice of Competing Projects shall set
forth the (i) site of the Competing Project, (ii) the operating capacity of the
Competing Project, (iii) the source of fines of the Competing Project, (iv) the
expected date of commencement of operations of the Competing Project and (v)
whether the Competing Project will be owned twenty-five percent (25%) or more by
the owner or supplier of the coal fines expected to be used in connection
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with such Competing Project (a "Source Sponsored Project"). If there are
Competing Projects being developed, PSF may, within twenty (20) days of the
receipt of notice from Covol, rescind such designation and designate a different
site on a later date. With respect to each Facility for which PSF has
irrevocably designated by written notice to Covol the specific site thereof, PSF
shall have a right of first refusal to develop any other coal agglomeration
projects proposed to be developed, or related coal fines acquisition programs,
within (i) a ten (10) mile radius of any Facility located east of the
Mississippi River, or (ii) a fifty (50) mile radius of any Facility located west
of the Mississippi River; provided however, that such right of first refusal
shall not apply to Source Sponsored Projects.
2.2 Know-How and Assistance. To enable PSF to benefit fully
from the license of the Coal Briquetting Technology, Covol shall provide access
to all relevant documentation, drawings, engineering specifications and other
know-how in its possession, reasonable access to its employees or agents who are
familiar with the Coal Briquetting Technology, and Improvements to the Coal
Briquetting Technology, as defined in Section 2.3, and shall provide such
technical advice with regard to the Coal Briquetting Technology as is reasonably
requested by PSF and relevant to the provisions of this Agreement.
2.3 Improvements. Covol shall notify PSF of any improvements,
variations or modifications ("Improvements") made on or to the Coal Briquetting
Technology promptly after such Improvements are made by it. The term
"Improvements" shall include changes that reduce production costs, improve
performance, broaden applicability or increase marketability. Covol hereby
grants to PSF a license (such license to become exclusive in accordance with
Section 2.1 hereof) to utilize the Improvements made by it for Commercial Use,
including to make, have made, use, and sell or otherwise transfer products that
utilize any such Improvements subject to the terms of this Agreement. It is
mutually understood and agreed that all Improvements provided to PSF by Covol
shall remain the sole and exclusive property of Covol. This Agreement does not
contemplate any jointly developed Improvements. All rights to any jointly
developed Improvements shall be subject to the terms and conditions of a
separate written agreement between PSF and Covol entered into prior to
undertaking any joint development.
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2.4 Confidentiality. PSF hereby agrees not to disclose the
Coal Briquetting Technology, except to its agents, employees, directors or
representatives who have a need to know about such technology in connection with
the operation and maintenance of the Facilities and the sale of coal
briquettes/extrusions produced by the Facilities; provided, however, information
which (i) becomes generally available to the public other than as a result of a
disclosure by PSF or its agents, employees, directors or representatives, (ii)
was available to PSF on a non-confidential basis prior to its disclosure
pursuant to the terms hereof, or (iii) becomes available to PSF on a
non-confidential basis from a source other than Covol, provided that such source
is not known by PSF or its agents, employees, directors or representatives to be
prohibited from transmitting the information to PSF by any confidentiality
agreement with Covol or by any other contractual, legal or fiduciary obligation
shall not be subject to the terms of this Section 2.4.
Section 3 License Fees and Royalty.
3.1 License Fees. PSF shall pay a base license fee to Covol
equal to $500,000 for each Facility as each such Facility is constructed and
commences normal production operations (after any applicable testing period
under the applicable Facility Agreement, such commencement date, the
"Commencement Date"); provided, however, that with respect to any Facility
located within a one-half mile radius of the location of either (i) the Alabama
Project (to be owned by Birmingham Syn Fuel, L.L.C.) or (ii) any other Facility
hereunder, only one base license fee shall be paid (in the case of the Alabama
Project, by Birmingham Syn Fuel, L.L.C.). PSF shall pay Covol the base license
fee for each Facility for which a base license fee is due within five (5)
Business Days after the Commencement Date of the applicable Facility. If, by
reason of the proviso in the second preceding sentence, a base license fee is
not paid for a Facility and, within five (5) years of the Commencement Date of
the most recently completed Facility at such site, one or more of the Facilities
is removed to a location outside of the original one-half mile radius for
operations under this Agreement, then PSF shall be obligated to pay the base
license fee for each Facility at such original site with respect to which it had
not previously paid a base license fee, such base license fee to be payable on
the date of such removed plant commences normal production operations at the new
site.
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3.2 Royalty Amount. As to each Facility, on or before each
January 31, April 30, July 31, and October 31 from and after the Commencement
Date applicable to such Facility, PSF shall pay to Covol quarterly royalty
payments ("Royalty") in an amount equal to the product of (i) *, multiplied by
(ii) the MM Btu of the extrusions and briquettes produced by such Facility and
sold by PSF during the immediately preceding calender quarter; provided,
however, that for all extrusions and briquettes produced by such Facility and
sold by PSF in excess of the initial 250,000 tons of extrusions and briquettes
produced and sold in any calender year, the amount set forth in clause (i) above
shall be *; provided, further, that the aggregate maximum reduction in the
Royalty payable with respect to all the Facilities pursuant to the immediately
preceding proviso shall be limited to *; provided, further, that for each
calender quarter or portion thereof from and after the occurrence of a Facility
Sublicense or a Facility Assignment (as such terms are defined in Section 13
hereof) with respect to such Facility, the Royalty payable shall be an amount
equal to the sum of (A) the product of NCF (as defined below) for the
immediately preceding calender quarter, multiplied by *, and (B) the product of
(I) *, multiplied by (II) the MM Btu of the extrusions and briquettes produced
by such Facility and sold by the operator of the Facility during the immediately
preceding quarter, multiplied by (III) the PSF Percentage Interest (as defined
below); provided, further, that on each anniversary date, commencing January 1,
1997, the amount set forth in clause (i) and (B)(I) above shall be adjusted by
an amount equal to the relative change between (y) the "inflation adjustment
factor" (as set forth in Section 29(d)(2) of the 1986 Code) calculated for the
immediately preceding year and (z) the "inflation adjustment factor" calculated
for the penultimate year. "NCF" means the cash received by PSF (which term
includes, for purposes of this paragraph, any entity included in the same
consolidated federal income tax return as PacifiCorp) with respect to a
Facility, exclusive of amounts received by PSF, either directly or indirectly,
as payment of principal, interest and penalties in connection with any deficit
loan or funding arrangement pursuant to which PSF, either directly or
indirectly, funds an operating deficit of such Facility; provided, however, to
the extent that cash used to fund any such operating deficit is generated by the
Facility and a Royalty has not previously been paid with respect thereto, the
immediately foregoing exclusion shall not apply. "PSF Percentage Interest" means
the percentage, expressed as a decimal, of PSF's equity interest, either direct
or indirect, in the Facility.
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* Confidential material omitted and filed separately with the Commission.
3.3 No Fees or Royalties Prior to Commencement Date.
Notwithstanding anything contained herein to the contrary, PSF shall have no
liability for a base license fee or Royalties as to any Facility for which a
site is not designated or, in the event a site is designated, as to any Facility
for which the Commencement Date does not occur.
Section 4 Binder.
4.1 Sales of Binder.
4.1.1 Sale and Purchase. Upon the request of PSF, from
time-to-time, Covol shall sell to PSF a sufficient quantity of proprietary
binder ingredients as is required to operate each Facility up to full capacity.
Covol shall deliver or cause to be delivered the proprietary binder ingredients
to each Facility, at such times and in such amounts as requested by PSF.
Payments for proprietary binder ingredients delivered by Covol during each three
month period ended January 31, April 30, July 31 and October 31 shall be due and
payable to Covol on the last Business Day of the immediately succeeding month.
4.1.2 Price. The price which PSF shall pay to Covol for the
proprietary binder ingredients delivered by or on behalf of Covol with respect
to each Facility during any calender year shall be an amount equal to (i)
Covol's direct and actual costs (direct material, shipping and labor costs,
third party manufacturing and transportation costs and a percentage of the total
overhead costs of Covol reasonably reflecting the ratio of the administrative
costs incurred in connection with the delivery and sale of the proprietary
binder ingredients to the total overhead costs of Covol) reasonably incurred to
deliver the proprietary binder ingredients during the immediately preceding
calender year, plus (ii) * of the amount determined pursuant to clause (i);
provided, however, that with respect to the first calender year hereunder, the
price which PSF shall pay to Covol for the proprietary binder ingredients
delivered by or on behalf of Covol shall be * per pound; provided, further, that
in the event Covol's direct and actual costs reasonably incurred to deliver the
proprietary binder ingredients delivered during the first calender year
hereunder is less than or greater than * per pound, Covol or PSF, respectively,
shall pay to the other party on or before January 31 of the next calender year
the difference between (A) such direct and actual costs, plus * of such direct
and actual costs, and (B) the amount actually paid by PSF for proprietary binder
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* Confidential material omitted and filed separately with the Commission.
ingredients delivered during the first calender year; provided, further, that in
the event that in any three month period ended January 31, April 30, July 31 and
October 31, after the payment of all other operating costs of the Facility
(excluding any license fees payable pursuant to a Facility Sublicense or
Facility Assignment), the payment of the binder purchase price would cause the
Facility to incur a net operating cash deficit during such three month period,
the amount calculated by clause (ii) above will be reduced to such amount as
would not cause the Facility to incur a net operating cash deficit for such
three month period, but not less than zero; provided, further, that on the last
day of February of each year, PSF shall pay to Covol the difference between (x)
the aggregate total quarterly binder purchase price reductions during the twelve
month period ended on the immediately preceding January 31, which reductions
result from the application of the immediately preceding proviso, minus (y) an
amount equal to reduction in the binder purchase price that would result from
the application of the calculation required by the immediately preceding proviso
for the twelve month period ended on the immediately preceding January 31, if
any.
4.1.3 Specifications and Warranties. Covol
represents and warrants that all proprietary binder ingredients shall be
merchantable, free from defects, and shall conform to any other agreed to
specifications. At PSF's option, Covol shall replace, or refund the purchase
price and cost of shipment of, all non-conforming proprietary binder
ingredients. Covol will bear the risk of loss of the proprietary binder
ingredients while it is in transit.
4.1.4 Acceptance and Rejection. All proprietary
binder ingredients are subject to PSF's inspection and test before final
acceptance. Acceptance and/or inspection by PSF shall not constitute a waiver of
any latent defect or nonconformity.
4.2 Binder Formula. Covol represents and warrants that,
simultaneous with the execution and delivery of the Original Agreement, Covol
delivered to a safety deposit box owned by PSF a written copy of the formula
used by it to manufacture the proprietary binder material in sufficient
quantities to operate each Facility up to full capacity, and Covol covenants to
notify PSF of any improvements, variations or modifications made on or to the
formula used by it to manufacture the proprietary binder material promptly after
such improvements, variations or modifications are made by it and to
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provide a copy of any such improved, varied or modified formula for placement in
the safety deposit box.
Section 5 Records; Inspection; Confidentiality. Each party hereto shall
keep accurate records containing all data reasonably required for the
computation and verification of the amounts to be paid by the respective parties
under this Agreement, and shall permit each other party or an independent
accounting firm designated by such other party to inspect and/or audit such
records during normal business hours upon reasonable advance notice. All costs
and expenses incurred by a party in connection with such inspection shall be
borne by it. Each party agrees to hold confidential from all third parties all
information contained in records examined by or on behalf of it pursuant to this
Section 5.
Section 6 Infringement. If during the term of this Agreement a third
party has infringed any intellectual property rights associated with the Coal
Briquetting Technology or otherwise misappropriated any Coal Briquetting
Technology, Covol shall, at Covol's expense, institute and conduct legal actions
against such third party or to enter into such agreements or accord in
settlement as are deemed appropriate by Covol. PSF shall have the right to join
Covol as a plaintiff in the prosecution of any infringement or misappropriation
action affecting any Facility, provided that PSF shall bear up to fifty percent
(50%) of all the costs and expenses of the action. If PSF and Covol have jointly
conducted an infringement or misappropriation action, any sums recovered from
the third party shall be distributed to PSF and Covol in accordance with the
percentage of the costs and expenses borne by each, after each party has been
reimbursed for costs and expenses incurred by it in prosecuting the action. PSF
shall always have the right to be represented by counsel of its own selection in
any action. In no event shall Covol enter into any agreement or settlement
inconsistent with the terms of this Agreement.
Section 7 Development and Construction of Facilities.
7.1 Assistance from Covol. As it is in Covol's interest that
each of the Facilities are completed, upon the reasonable request of PSF, Covol
agrees to provide assistance from time to time in the development and
construction of each of the Facilities. In addition to and not in limitation of
the foregoing, Covol shall provide from time to time upon the reasonable request
of PSF, on a priority basis, the services of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President of
Covol (or his successor),
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in connection with the construction and development of the Facilities and of
▇▇▇▇▇▇ ▇▇▇▇, Vice President of Covol (or his successor) in connection with the
analysis and formulation of the optimal binder with respect to each identified
coal fine source.
7.2 Reimbursement of Expenses. PSF shall reimburse, on demand,
the travel and other similar out-of-pocket expenses of Covol in performing
services requested under Section 7.1; provided, however, that Covol shall obtain
the prior written approval of PSF for any expenditures in excess of $5,000.
7.3 Excess Costs for the Development of Facilities. Covol has
represented to PSF that, so long as PSF uses ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Engineers, Inc.,
any of its affiliates, or any other contractor approved in writing by Covol, the
cost of development and construction of each Facility should not exceed *. In
the event that the cost of development and construction of any Facility exceeds
* (excluding special improvements, if any, not included in the basic design of
the coal agglomeration facilities which have been requested by PSF), then Covol
shall be responsible for (and shall pay directly or reimburse PSF on demand) *.
Section 8 Representations and Warranties.
8.1 Authority. Each of Covol and PSF represents and warrants
that (i) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
on its behalf by all requisite action, corporate or otherwise, (ii) it has the
full right, power and authority to enter into this Agreement and to carry out
the terms of this Agreement, (iii) it has duly executed and delivered this
Agreement, and (iv) this Agreement is a valid and binding obligation of it
enforceable in accordance with its terms.
8.2 No Consent. Each of Covol and PSF represents and warrants
that no approval, consent, authorization, order, designation or declaration of
any court or regulatory authority or governmental body or any third-party is
required to be obtained by it, nor is any filing or registration required to be
made therewith by it for the consummation by it of the transactions contemplated
under this Agreement.
8.3 Intellectual Property Matters. Covol warrants that it (i)
owns, free and clear of all liens and encumbrances, all intellectual property,
inventor's
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* Confidential material omitted and filed separately with the Commission.
certificates and applications therefor, printed and unprinted technical data,
know-how, trade secrets, copyrights and other intellectual property rights,
inventions, discoveries, techniques, works, processes, methods, plans, software,
designs, drawings, schematics, specifications, communications protocols, source
and object code and modifications, test procedures, program cards, tapes, disks,
algorithms and all other scientific or technical information in whatever form
relating to, embodied in or used in the proprietary process to produce synthetic
coal fuel extrusions and briquettes from waste coal dust, coal fines and other
similar coal derivatives, and, the proprietary binder material used in
manufacturing synthetic coal fuel extrusions and briquettes from waste coal
dust, coal fines and other similar coal derivatives, (ii) has the right and
power to grant to PSF the licenses granted herein, (iii) has not made any
agreement with another in conflict with the rights granted herein, and (iv) has
no knowledge that the sale or use of the licenses granted herein as contemplated
by this Agreement would infringe any third-party's intellectual property rights.
8.4 Physical Properties. Covol represents and warrants that
(i) as of the date hereof, based upon the current information available to
Covol, the cost per ton of producing coal extrusions and briquettes at a
facility like the proposed Facilities, using the Coal Briquetting Technology and
the proprietary binder ingredients provided hereunder, but not including the
cost of the waste coal dust, coal fines and other coal derivatives utilized, is
approximately *; (ii) no waste, noxious fumes or other byproducts result from
the manufacture of the coal briquettes and extrusions using the Coal Briquetting
Technology, other than waste water, packaging materials, stack house emissions
and similar items, none of which is noxious or designated as a "hazardous waste"
under any Federal, state or local law and all of which will be disposed of in
accordance with applicable Federal, state and local law; and (iii) application
of the Coal Briquetting Technology in each Facility will result in a chemical
change similar in all material respects to the chemical change described in the
IRS letter ruling received by Covol, dated September 8, 1995.
Section 9 Term. This Agreement and the license granted hereunder shall
be for the period from the Closing Date to and including January 1, 2008, or the
corresponding date under Section 29 of the 1986 Code in the event of an
extension of the tax credits available under Section 29 of the 1986 Code.
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* Confidential material has been omitted from this Exhibit and filed separately
with the Commission.
Section 10 Waiver. The failure of any party to enforce at any time any
provision of this Agreement shall not be construed as a waiver of such provision
or the right thereafter to enforce each and every provision. No waiver by any
party, either express or implied, of any breach of any of the provisions of this
Agreement shall be construed as a waiver of any other breach of such term or
condition.
Section 11 Severability. If any provision of this Agreement shall be
held by a court of competent jurisdiction to be invalid or unenforceable in any
respect for any reason, the validity and enforceability of any such provision in
any other respect and of the remaining provisions of this Agreement shall not be
in any way impaired.
Section 12 Notices. All notices required or permitted to be given under
this Agreement shall be in writing. Notices may be served by certified or
registered mail, postage paid with return receipt requested; by private courier,
prepaid; by telex, facsimile, or other telecommunication device capable of
transmitting or creating a written record; or personally. Mailed notices shall
be deemed delivered five days after mailing, property addressed. Couriered
notices shall be deemed delivered when delivered as addressed, or if the
addressee refuses delivery, when presented for delivery notwithstanding such
refusal. Telex or telecommunicated notices shall be deemed delivered when
receipt is either confirmed by confirming transmission equipment or acknowledged
by the addressee or its office. Personal delivery shall be effective when
accomplished. Unless a party changes its address by giving notice to the other
party as provided herein, notices shall be delivered to the parties at the
following addresses:
Covol: Covol Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
Attn.: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
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With a copy
to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Buyer: PacifiCorp Syn Fuel, LLC
c/o PacifiCorp Financial Services, Inc.
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
Attn.: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy
to: Stoel Rives LLP
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Section 13 Assignment; Sublicenses. This Agreement may be assigned by
Covol to any of its wholly-owned subsidiaries; provided, however, that such
assignment will not release Covol from any of its obligations hereunder. Subject
to the foregoing, this Agreement shall not be assigned in whole or in part by
Covol without the prior written consent of PSF. Prior to the earlier of (i)
December 31, 1997, or (ii) the designation by PSF of the sites for all six of
the Facilities, PSF shall not assign this Agreement in whole without the prior
written consent of Covol. As to any Facility after the applicable site has been
designated, PSF may grant sublicenses with respect to this Agreement (a
"Facility Sublicense") and, as to any Facility after the payment of the base
license fee contemplated under Section 3.1 for such Facility, PSF may assign its
rights and obligations under this Agreement to any person or entity to the
extent they relate to such Facility (a "Facility Assignment"); provided,
however, that its rights under Section 4.2 hereof, including, without
limitation, the access to the binder formula, which may only be exercised by
PSF, PacifiCorp Financial Services, Inc. or any affiliate of either of them, and
such rights may not be assigned
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or sublicensed. In the event of a Facility Assignment, subject to the proviso in
the immediately preceding sentence, (i) Covol shall look solely to such assignee
for the performance of future obligations and, (ii) upon the request of PSF,
Covol shall enter into a separate agreement with the assignee with respect to
such Facility which shall be similar in all material respects to this Agreement
(except limited to such Facility).
Section 14 Further Assurances. Each party agrees, at the request of the
other party, at any time and from time to time, to execute and deliver all such
further documents, and to take and forbear from all such action, as may be
reasonably necessary or appropriate in order more effectively to carry out the
provisions of this Agreement.
Section 15 Set off. Any amounts owing to PSF from Covol hereunder may
be offset and applied toward the payment of any amounts, or any part thereof,
owing to Covol pursuant to Section 3.2 hereof, whether or not such amounts shall
be due and payable.
Section 16 Entire Agreement. This Agreement constitutes the entire
agreement of the parties relating to the subject matter hereof. There are no
promises, terms, conditions, obligations, or warranties other than those
contained herein. This Agreement supersedes all prior communications,
representations, or agreements, verbal or written, among the parties relating to
the subject matter hereof. This Agreement may not be amended except in writing
signed by the parties hereto.
Section 17 Governing Law. This Agreement shall be governed in
accordance with the laws of the State of Utah.
Section 18 Counterparts. This Agreement may be executed in two or more
counterparts, each which shall be deemed an original, but all of which together
shall constitute one and the same agreement.
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives the day and year first above written.
COVOL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title:President
PACIFICORP SYN FUEL, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:President
15
SCHEDULE 2.1
* Prior Restricted Areas
* Confidential material omitted and filed separately with the Commission.