CONFIDENTIAL
Volume License Agreement
Between
Syntroleum Corporation
and
Ivanhoe Energy Inc.
CONFIDENTIAL INFORMATION:
Use and distribution of this document is limited to the terms and conditions of
the confidentiality agreement dated February 7, 2000 between Syntroleum
Corporation and Ivanhoe Energy Inc.
THIS LICENSE AGREEMENT is made and entered into as of this ___ day of
April, 2000 by and between Syntroleum Corporation, a Delaware corporation
("Licensor"), and Ivanhoe Energy Inc. , a company duly incorporated in Canada
("Licensee").
RECITALS
--------
A. WHEREAS, Licensor has developed and owns certain patent rights and
technical information relating to the Conversion Process; and
B. WHEREAS, Licensee desires to enter into a non-exclusive limited
license with Licensor to use Licensor Patent Rights and Licensor Technical
Information in practicing the Conversion Process in Licensed Facilities in the
Licensed Territory.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Parties agree as follows:
1. DEFINITIONS
---------------
The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof).
1.01 "AFFILIATE" means, with respect to each Party, any Person in which the
Party or its parent company(ies) (one or more parent companies in an upward
series) shall at the time in question directly or indirectly own a fifty percent
(50%) or more interest in such Person. It is understood that: (i) a Party or
its parent company(ies) directly owns a fifty percent (50%) or more interest in
a Person if that Party or its parent company(ies) individually or collectively
hold(s) shares carrying fifty percent (50%) or more of the voting power to elect
directors or other managers of such Person and (ii) a Party or its parent
company(ies) indirectly owns a fifty percent (50%) or more interest in a Person
if a series of companies can be specified beginning with a Party or its parent
company(ies), individually or collectively, and ending with such Person so
related that each company of the series, except such Person, directly owns a
fifty percent (50%) or more interest in a later company in the series.
1.02 "AGREEMENT" means this Volume License Agreement.
1.03 "BARREL" means forty-two (42) gallons of two hundred thirty-one (231)
cubic inches each, measured at sixty degrees Fahrenheit (60 F) and one (1)
atmosphere pressure.
1.04 "CHAIN-LIMITING CATALYST" means a type of catalyst for use in a
▇▇▇▇▇▇▇-Tropsch Reaction the primary products of which are predominately
hydrocarbon molecules of twenty (20) or fewer carbon atoms which remain liquid
at ambient temperature and pressure.
1.05 "CONFIDENTIAL INFORMATION" means information of Licensor or Licensee
disclosed to the other Party under this Agreement, including any formula,
pattern, compilation, program, apparatus, device, drawing, schematic, method,
technique, know-how, process or pilot plant data, -and other non-public
information such as business plans or other technology that: (a) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (b) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy, which
information shall be disclosed in writing and labeled as "Confidential" or the
equivalent, or if disclosed verbally or in other non-written form, identified as
such at the time of disclosure and thereafter summarized in writing by the
disclosing Party within thirty (30) days of such initial disclosure.
Confidential Information includes, without limit, Licensor Catalyst Information,
Licensor Technical Information, and Licensee Technical Information.
1.06 "CONFIDENTIALITY AGREEMENT" means the agreement between Licensee and
Licensor dated February 7, 2000.
1.07 "CONVERSION PROCESS" means any process for the conversion of normally
gaseous hydrocarbons into a mixture of hydrocarbons which may be a combination
of normally gaseous, liquid, or solid hydrocarbons at ambient temperatures and
pressures and comprised of (a) autothermal reforming of a feed stream consisting
substantially of gaseous hydrocarbons in the presence of air, or oxygen-enriched
air to create an intermediate feed stream containing carbon monoxide and
molecular hydrogen, and (b) reacting the intermediate stream in the presence of
a ▇▇▇▇▇▇▇-Tropsch catalyst to produce a product stream consisting of any
combination of gaseous, liquid or solid hydrocarbons at ambient temperature and
pressure. The Conversion Process includes all associated internal processes and
technologies such as heat integration, separation, or the recycle, use, or
consumption of hydrocarbons or other products. The Conversion Process does not
include any technology related to (i) pre-treatment of the natural gas feedstock
or (ii) post-processing the ▇▇▇▇▇▇▇-Tropsch product stream for a purpose other
than that defined above.
1.08 "EFFECTIVE DATE" means the date set forth in the first paragraph of
this Agreement.
1.09 "▇▇▇▇▇▇▇-TROPSCH CATALYST" means any catalyst for use in a
▇▇▇▇▇▇▇-Tropsch Reaction including, but not limited to, Chain Limiting Catalyst
and High Alpha Catalyst.
1.10 "▇▇▇▇▇▇▇-TROPSCH REACTION" means the catalytic reaction of carbon
monoxide and hydrogen, the primary products of which are hydrocarbons.
1.11 "HIGH ALPHA CATALYST" means a type of ▇▇▇▇▇▇▇-Tropsch Catalyst,
whose alpha number, as calculated by the ▇▇▇▇▇▇-▇▇▇▇▇ distribution equation, is
0.85 or higher.
"INVENTIONS OR IMPROVEMENTS" means any process, formula, composition, device,
catalyst (including both autothermal reforming catalysts and ▇▇▇▇▇▇▇-Tropsch
Catalysts), apparatus, technology, know-how, operating technique, improvement,
modification, or enhancement relating to the use, operation, or
commercialization of the Conversion Process and the products (including
Synthetic Product) of the Conversion Process, which is discovered, made,
designed, developed or acquired by Licensee, solely or with others, since the
date of the Confidentiality Agreement, or used in a Licensed Plant, in each
instance whether patentable or not, including, without limitation, patents,
copyrights, and Confidential Information and further including the full scope
and content of the intellectual and tangible property included therein and
produced therefrom, e.g., drawings, prints, chemical formulae, prototypes, data,
computer programs and software, and the like. Inventions or Improvements shall
not include any information relating to methods of manufacturing catalysts for
use in the Conversion Process.
1.12 "LICENSE FEE" means the fee paid by Licensee to Licensor, as
consideration for granting a license pursuant to a Site License Agreement to use
Licensor Technology at a Licensed Plant, as calculated in accordance with
Attachment 3 of this Agreement, and does not include fees related to the
purchase of the associated Process Design Package for such Licensed Plant, any
catalyst or any catalyst markup.
1.13 "LICENSED FACILITIES" means one or more Licensed Plants.
1.14 "LICENSED PLANT" means a plant (including modification, expansion
or replacement thereof) licensed to operate pursuant to a Site License Agreement
issued under the terms of this Agreement, at a site within the Licensed
Territory with a design production capacity measured in Barrels of Synthetic
Product per day, using or designed to use Licensor Technology to practice the
Conversion Process to produce Marketable Products.
1.15 "LICENSED TERRITORY" means all the countries of the world and
their respective territorial waters, e-xcept for the United States of America,
Canada, Mexico, the People's Republic of China, India, and their respective
territorial waters and any country and its territorial waters (i) that, from
time to time, may be prohibited, or whose citizens (considered as a group) may
be prohibited, by the United States government from receiving Licensor
Technology or the products thereof or (ii) the inclusion of which in the
definition of Licensed Territory is, or could in good faith be argued to be,
prohibited by United States law, including, without limitation, United States
Executive Orders and administrative orders, rules and regulations. Licensed
Territory shall include territories or territorial waters which are the subject
of official dispute between or among countries only if all countries claiming
sovereignty, a sovereign right, or jurisdiction over such territories or
territorial waters are otherwise included within the definition of such term.
1.16 "LICENSEE PATENT RIGHTS" means all rights with respect to patents
and patent applications of all relevant countries to the extent that the claims
cover features or aspects of Inventions or Improvements practiced in a Licensed
Plant, in each case to the extent that, and subject to the terms and conditions
under which, Licensee has the right to grant licenses, immunities or licensing
rights without having to make payment to others.
1.17 "LICENSEE TECHNICAL INFORMATION" means all unpatented Inventions
or Improvements practiced in a Licensed Plant, in each case to the extent that,
and subject to the terms and conditions under which, Licensee has the right to
grant licenses, immunities or licensing rights without having to make payment to
others.
1.18 "LICENSOR CATALYST INFORMATION" means, without limit, information
relating to any catalyst, catalyst formulation, conditioning procedure, start-up
procedure, regeneration procedure, or performance considered to be proprietary
by and to Licensor or acquired by Licensor which is useful in the practice of
the Conversion Process and which has been used commercially or is ready for
commercial use. Licensor Catalyst Information shall not include any information
relating to methods for manufacturing catalysts for use in the Conversion
Process.
1.19 "LICENSOR CATALYST PATENT RIGHTS" means all rights with respect to
patents and patent applications of all relevant countries to the extent that the
claims cover features or aspects of catalysts useable in the Conversion Process
(including, without limitation, autothermal reforming catalysts and
▇▇▇▇▇▇▇-Tropsch Catalysts) and expressly excluding any process operating
techniques or apparatus or methods for manufacturing such catalysts, which are
acquired by Licensor (with right to sublicense) or are based on inventions
conceived by Licensor prior to termination of this Agreement; in each case to
the extent that, and subject to the terms and conditions, including the
obligation to account to and/or make payments to others, under which Licensor
has the right to grant licenses, sublicenses, immunities or licensing rights.
1.20 "LICENSOR PATENT RIGHTS" means all rights with respect to patents
and patent applications of all relevant countries to the extent that the claims
cover features or aspects of the Conversion Process (including, without
limitation, any operating techniques and apparatus and expressly excluding
Licensor Catalyst Patent Rights) which are acquired by Licensor (with right to
sublicense) or are based on inventions conceived by Licensor prior to
termination of this Agreement; in each case to the extent that, and subject to
the terms and conditions, including the obligation to account to and/or make
payments to others, under which Licensor has the right to grant licenses,
sublicenses, immunities or licensing rights.
1.21 "LICENSOR TECHNICAL INFORMATION" means all unpatented information
relating to the Conversion Process (including, without limitation, operating
techniques and apparatus for carrying out the Conversion Process and expressly
excluding Licensor Catalyst Information and Reactor Information) which (a)
either (i) has been commercially used or (ii) is in a stage of development
suitable for commercial use, and (b) has been made or acquired by Licensor (with
right to sublicense) prior to the termination of this Agreement; in each case to
the extent that, and subject to, the terms and conditions, including the
obligation to account to and/or make payments to others, under which Licensor
has the right to disclose and grant rights to others.
1.22 "LICENSOR TECHNOLOGY" includes Licensor Technical Information and
Licensor Patent Rights related to the practice of the Conversion Process and
Licensor Catalyst Information and Licensor Catalyst Patent Rights related to the
use of Licensor catalysts in the practice of the Conversion Process but
expressly excluding the right to make, have made, or sell Licensor Catalysts.
1.23 "LUBRICANTS" means hydrocarbon base oils which can be made into,
or blended with other base oils to be made into, without limit (a) automotive
lubricating oils such as PCMO, HDD, transmission and hydraulic fluids, and gear
oils; (b) industrial lubricants such as metalworking lubricants, process oils,
white oils, agricultural spray oils, de-foamers, cutting and quenching oils, and
rubber processing oils; (c) greases; (d) drilling fluids; or (e) any other
specialty product agreed to by the Parties which is not a Marketable Product.
1.24 "MARKETABLE PRODUCTS" means finished hydrocarbon fuels,
hydrocarbons consumed as fuel, or fuel blending stocks including, but not
limited to, diesel, kerosene, gasoline, and naphtha processed from Synthetic
Product and expressly excluding waxes, chemicals, Lubricants, or any other
specialty hydrocarbon products and subject to the express condition that
Marketable Products shall be produced from Synthetic Product at the Licensed
Plant or produced from Synthetic Product at a separate facility operated by the
Licensee, its Affiliates, or third Persons who are contractually committed to
Licensee or its Affiliate to produce only Marketable Products from such
Synthetic Product. Notwithstanding the foregoing, Marketable Products shall be
deemed to include any products:
(a) produced at any location by any Person from a blended stream of
Synthetic Product and at least 15 % by volume of produced crude oil or
condensate, in which the Synthetic Product, before any blending,
(i) remains a liquid at sixty degrees Fahrenheit (60 F) and one (1) atmosphere
pressure or,
(ii) has a chemical composition consisting of molecules having at least 85 % by
volume of which contain no more than 20 carbon atoms each and no more than 1 %
by volume of which contains more than 40 carbon atoms each; or
(b) produced at any location by any Person from a blended stream of
Synthetic Product and at least 40 % by volume produced crude oil or condensate
such that after blending the mixture is a transportable liquid, expressly
excluding slurries; or
(c) produced by blending individual fractions distilled from Synthetic
Product with at least 50 % by volume of like distilled fractions from produced
crude oil or condensate, in which each distilled fraction from Synthetic
Product, before any blending, has a chemical composition consisting of molecules
having at least 85 % by volume of which contain no more than 20 carbon atoms
each and no more than 1 % by volume of which contains more than 40 carbon atoms
each, wherein the blending is performed at any location by the Licensee, its
Affiliates, or third Persons who are contractually committed to Licensee or its
Affiliate to produce only Marketable Products from such Synthetic Product.
1.25 Notwithstanding the above language in this Section 1.25 hydrocarbons
consumed as fuel by Licensee or its Affiliates at locations which satisfy the
conditions of this Section 1.25 are Marketable Products, regardless of whether
or not they happen to be waxes, chemicals, Lubricants, or any other specialty
hydrocarbon products.
1.26 "PARTICIPATING INTEREST" means a Person's working, net profits,
equity, or other economic interest (an economic interest shall include an
interest in a production sharing contract where the parties to such contract
construct the Licensed Plant), owned directly or indirectly through another
entity, in a Licensed Plant or Person owning or controlling a Licensed Plant,
but excluding a contract for operation of such Licensed Plant, which interest,
in the case of Licensee, shall at all times be no less than ten percent (10%).
1.27 "PARTIES" means Licensor and Licensee.
1.28 "PARTY" means Licensor or Licensee.
1.29 "PERSON" means any natural person, corporation, partnership,
limited liability company, firm, association, trust, government, governmental
agency or any other entity, other than the Parties.
1.30 "PROCESS DESIGN PACKAGE" means a compilation of text, figures,
drawings and documentation, relating to the design and construction of a
Licensed Plant, in the form set forth in Exhibit B to the Site License
Agreement, which may be modified from time to time by mutual consent of the
Parties, and expressly excluding Reactor Information.
1.31 "REACTOR INFORMATION" means all information, including but not limited
to data, processes, plans, specifications, flow sheets, designs, and drawings,
relating to the internal design or functions including, without limitation, tube
count, tube size and configuration and catalyst volume, relating to any Licensor
autothermal reformer or ▇▇▇▇▇▇▇-Tropsch reactors, which, at any time during the
term of this Agreement, Licensor discloses to Licensee.
1.32 "REACTOR VENDOR" shall mean those fabricators approved by Licensor
to perform the fabrication and/or maintenance and repair of autothermal reformer
or ▇▇▇▇▇▇▇-Tropsch reactors for installation and use in Licensed Facilities.
Licensor may, from time to time, add or remove any vendor from being a Reactor
Vendor.
1.33 "SITE LICENSE AGREEMENT" means an agreement between the Parties,
in the form attached to this Agreement as Attachment 4 and which may be modified
from time to time by mutual written consent of the Parties, granting the right
to build and operate a single Licensed Plant, specifying in each case the fixed
site and the nominal design capacity, in Barrels of Synthetic Product produced
per day.
1.34 "START-UP DATE" means the first full calendar day following a five
day period, after completion of catalyst pre-treatment and other preliminary
operations, during which the applicable Licensed Plant produces quantities of
Synthetic Product in an amount equal to at least 75% of the per-day design
production capacity of such Licensed Plant averaged over such five day period.
1.35 "SYNTHETIC PRODUCT" means those hydrocarbons, having a chemical
composition substantially consisting of molecules with five or more carbon atoms
each, produced using Licensor Technology in the practice of the Conversion
Process at a Licensed Plant.
2. LICENSOR GRANTS TO LICENSEE
-------------------------------
2.01 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee a limited, non-exclusive, non-transferable (except as provided in
Section 2.06 and Article 8) right and license to use Licensor Patent Rights and
Licensor Technical Information to design, construct, operate and maintain
(including modify, expand and replace) Licensed Facilities under a separate Site
License Agreement for each Licensed Plant, to practice the Conversion Process to
manufacture Synthetic Product solely for the purpose of producing, using, and
selling Marketable Products anywhere in the world, provided that the aggregate
maximum daily design capacity of the Licensed Facilities, as defined in the
Process Design Packages for all Licensed Plants which comprise the Licensed
Facilities, shall not exceed 50,000 barrels per day of Synthetic Product,
regardless of Licensee's specific Participating Interest in any particular
Licensed Plant.
2.02 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee a limited, non-exclusive, non-transferable (except as provided in
Section 2.06 and Article 8) right to purchase from Reactor Vendors the
appropriate ▇▇▇▇▇▇▇-Tropsch and autothermal reforming reactors for use in the
practice of the Conversion Process at a Licensed Plant. Licensee shall have no
right to make, have made, or sell any reactor based on Reactor Information
except as expressly provided in this Section 2.02.
2.03 Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee (a) the right to purchase from Licensor the appropriate
▇▇▇▇▇▇▇-Tropsch Catalyst and, from either Licensor or a catalyst vendor
designated by Licensor, the appropriate autothermal reforming catalyst for use
in the practice of the Conversion Process at a Licensed Plant to manufacture
Synthetic Product solely for the purpose of producing, using, and selling
Marketable Products anywhere in the world and (b) a limited non-exclusive,
non-transferable (except as provided in Section 2.06 and Article 8) right and
license under Licensor Catalyst Patent Rights and Licensor Catalyst Information
to use such catalysts in the practice of the Conversion Process at a Licensed
Plant to manufacture Synthetic Product solely for the purpose of producing,
using, and selling Marketable Products anywhere in the world. The purchase price
for any catalyst purchased by Licensee from Licensor shall be equal to the
lowest of (a) Licensor's cost to produce or have produced such catalysts, plus a
markup of twenty five percent (25%), or (b) if, during the twelve (12) month
period prior to a catalyst purchase by Licensee, the same catalyst (at
comparable quantities) was sold by Licensor to a third party at a markup less
than twenty five percent (25%), Licensee shall be entitled to the lower markup
for its current catalyst purchase. Licensor will, no more than once per year,
provide Licensee reasonable access to the relevant books of Licensor to verify
the lowest markup for such catalyst. Licensee shall have no rights to make,
have made, or sell any Licensor ▇▇▇▇▇▇▇-Tropsch Catalyst or autothermal
reforming catalyst, which is proprietary to Licensor. Beyond the initial
catalyst fill, for a Licensed Plant, Licensee will have the right to buy
replacement catalyst from other catalyst suppliers. If Licensor specifies in
the Process Design Package an autothermal reforming catalyst commercially
available from a third party, Licensee shall have the right to purchase such
catalyst directly from a third party.
2.04 In the event Licensor for any reason is unable to supply Licensee with
such amounts of ▇▇▇▇▇▇▇-Tropsch Catalyst as may be reasonably necessary for the
operation of a specific Licensed Plant, Licensor shall provide to one or more
catalyst vendors designated by Licensor the necessary catalyst recipe, together
with a non-exclusive limited license to make and sell such ▇▇▇▇▇▇▇-Tropsch
Catalyst to Licensee for use in such Licensed Plant, and Licensee shall have the
right to purchase such ▇▇▇▇▇▇▇-Tropsch Catalyst from such vendor for use in such
Licensed Plant on the same terms (including price) as set forth in Section 2.03.
2.05 Upon Licensee's written request, Licensor will execute a Site License
Agreement with respect to a specific proposed Licensed Plant if:
(a) Licensee has a Participating Interest of at least ten percent (10%) in the
proposed Licensed Plant as represented in a Request for Site License Agreement
(Attachment 1);
(b) Licensee is current on all payments due under prior Site License Agreements
for all Licensed Facilities under this Agreement in accordance with their
respective terms;
(c) there is not a material default under this Agreement for which Licensee is
responsible resulting from or affecting more than one Licensed Plant; and
(d) no Person having a Participating Interest in the proposed Licensed Plant is
in material default under any agreement relating to Licensor Technology.
Until such time as the above conditions are satisfied, Licensee shall have no
right or license to use Licensor Technology at the proposed Licensed Plant.
2.06 During the term of this Agreement, Licensee may extend this Agreement
to any Affiliate, provided that Licensee shall first notify Licensor in writing
of any such extension and the acceptance of such extension by such Affiliate
pursuant to this Section 2.06. The Affiliate to which this Agreement may be
extended by Licensee shall be subject to and shall accept in writing (in the
form set forth in Attachment 2) the same obligations to which Licensee is
subjected under this Agreement and all terms and conditions of this Agreement
shall apply to such Affiliate with respect to its obligations and its rights
(except the right of extension as set forth in this Section 2.06) as if such
Affiliate had entered into this Agreement with Licensor effective as of the date
of such extension. Licensee warrants to Licensor the full performance by such
Affiliate of the obligations which are imposed upon such Affiliate as a result
of such extension of this Agreement and, notwithstanding any such extension,
Licensee shall still be liable to Licensor for all sums which become due from
such Affiliate to Licensor and for any default by such Affiliate in the
performance of its obligations under this Agreement.
2.07 Each Licensed Plant shall remain at the initial plant site for a
minimum of seven (7) years from Start-Up Date. Thereafter, Licensee may
relocate a Licensed Plant to a new plant site within the Licensed Territory
without obtaining a new Site License Agreement provided (i) request is made by
Licensee to Licensor in the form of Exhibit G of the Site License Agreement in
which Licensee agrees that the Licensed Plant will remain at the new site for
minimum of seven (7) years and (ii) the Licensee is not in default under the
Site License Agreement for the Licensed Plant. Notwithstanding the foregoing,
Licensed Plants utilizing gas from leases, concessions, or similar production
sharing arrangements in which Licensee or its Affiliates own at least a ten
percent (10%) working, net profits, equity, or other economic interest
(excluding any interest owned by a governmental entity) may, at any time, be
relocated within the geographic boundaries of any such leases, concessions, or
similar production sharing arrangements. Nothing in this Agreement shall
prohibit Licensee or its Affiliates from purchasing gas from other parties to
manufacture Synthetic Product at any Licensed Plant pursuant to this Agreement.
3. TECHNICAL ASSISTANCE
------------------------
3.01 Licensee shall purchase and Licensor agrees to furnish to Licensee, or
to a contractor designated by Licensee, a Process Design Package for each
Licensed Plant according to the terms specified in Section 5.03 of this
Agreement.
3.02 Reactor Information necessary for each Licensed Plant shall be excluded
from the Process Design Package. However, those elements of Reactor Information
which are necessary to fabricate such reactors will be provided by Licensor
directly to the Reactor Vendors selected by Licensee to manufacture the
autothermal reformer and ▇▇▇▇▇▇▇-Tropsch reactors from Licensor's then current
list of Reactor Vendors. Licensor may, from time to time, add or remove any
Reactor Vendor.
3.03 Except as may be set forth in a Process Design Package, the obligations
of Licensor under this Agreement do not include the performing of any basic or
detailed design, engineering, training, consulting, start-up, operating or
maintenance services with respect to any Licensed Plant. Licensor's
responsibilities for any such services in the design, construction and operation
(including maintenance) of any Licensed Plant shall be as set forth in one or
more separate written engineering services agreement(s) (if any) between
Licensor and Licensee specifically applicable to each Licensed Plant.
3.04 Licensor agrees to disclose to Licensee, upon reasonable request but at
least once a year, (a) additions to Licensor Technology and (b) improvements or
inventions developed by Licensor or its Affiliates relating to Licensor
Technology which have been commercially used or which Licensor determines are in
a stage of development suitable for commercial use. Licensor shall permit
Licensee to reasonably inspect, at mutually convenient times, the operating
procedures, process conditions, material balances, energy consumption, catalyst
performance, and analyses of internal streams and/or Synthetic Product at
Licensor's pilot plant which are applicable to such improvements or inventions.
3.05 Licensee shall provide Licensor 90 days advance written notice of the
anticipated Start-up Date for each Licensed Plant. Licensee agrees to permit
Licensor and/or its representatives access to Licensee's Licensed Plants at
reasonable and convenient times, for inspection and if requested by Licensee,
training, by representatives of Licensor. Licensor shall have the right to
charge Licensee a reasonable fee for any training as may be agreed with the
Licensee on a case by case basis.
4. LICENSEE GRANTS TO LICENSOR
------------------------------
4.01 Licensor may, no more than one (1) time per year, request and Licensee
agrees to disclose to Licensor in writing any Inventions or Improvements related
to the Conversion Process.
4.02 Subject to the terms and conditions of this Agreement, Licensee grants
to Licensor a limited, non-exclusive, irrevocable, royalty free, worldwide (i)
right and license under Licensee Patent Rights and (ii) right and license to use
Licensee Technical Information for the design, construction, operation and
maintenance (including modify, expand and replace) of facilities practicing the
Conversion Process, together with the right to grant corresponding sublicenses
of the Licensee Patent Rights and Licensee Technical Information to other
licensees of Licensor Technology for use at a licensed plant practicing the
Conversion Process, provided that any such licensee to whom a sublicense is to
be granted shall have granted reciprocal rights to Licensor to use and grant
sublicenses under such licensee's patent rights and technical information for
the benefit of Licensee. Licensee shall have the right to charge Licensor a
reasonable fee for any training with respect to Licensee Patent Rights and
Licensee Technical Information as may be agreed with the Licensor on a case by
case basis.
4.03 Should Licensee, during the term of this Agreement, make any patentable
Inventions or Improvements, Licensee may, at its sole discretion, file patent
applications with respect to such Inventions or Improvements in its own name and
at its own expense, and take such other steps as are necessary, in the sole
judgment of Licensee, to protect its rights in such Inventions or Improvements.
In the event Licensee declines to file any patent application with respect to
any Inventions or Improvements, it shall promptly notify Licensor in a timely
manner to allow Licensor, at its sole discretion, to file such patent
application at its sole expense, and to take such other steps as are necessary,
in its judgment, to protect the Parties' rights in such Inventions or
Improvements, subject to Licensee's obligation to account to third parties
therefore and provided that title to such Inventions or Improvements shall
remain in Licensee.
4.04 Licensor and Licensee each agree that they will take all actions and
execute all documents and shall cause their employees, agents and contractors to
take all actions and execute all documents as are necessary or appropriate to
carry out the provisions of this Article 4 or to assist each other in the
preparation, filing and prosecution of patent applications or securing such
protection referenced in this Article 4 when so requested.
4.05 Licensee shall permit Licensor and/or its representatives to reasonably
inspect, at mutually convenient times, the operating procedures, process
conditions, material balances, energy consumption, catalyst performance, and
analyses of internal streams and/or Synthetic Product which are applicable to
Licensee's Inventions or Improvements at any Licensed Plant incorporating such
Inventions or Improvements.
4.06 Licensee agrees to provide, from time to time and upon request by
Licensor, samples of Marketable Products as they are produced by any of
Licensee's Licensed Plants to verify compliance with this Agreement. Licensor
agrees to limit its analysis of samples of Marketable Products to those analyses
necessary to determine compliance with the definition of Marketable Products.
5. LICENSE AND OTHER FEES
--------------------------
5.01 In consideration for the rights granted to Licensee by Licensor under
this Agreement, Licensee shall pay Licensor a non-refundable amount of $________
U.S. dollars upon execution of this Agreement. This amount shall be fully
credited against the first $_________ U.S. dollars in License Fees payable by
Licensee to Licensor as provided in Attachment 3.
5.02 Licensee agrees to pay fees to Licensor in accordance with Attachment 3
for each Licensed Plant.
5.03 In addition to the amounts to be paid by Licensee to Licensor under
Sections 5.01 and 5.02, Licensee agrees to pay Licensor for each Process Design
Package, a fee equal to the costs actually incurred by Licensor in preparing the
Process Design Package, plus 10% of the total of such actual cost. Such fee
shall be invoiced by Licensor to Licensee after delivery of a Process Design
Package and payment shall be due within 30 days from receipt of invoice by
Licensee.
5.04 All amounts payable under this Agreement shall be paid by Licensee to
Licensor at Licensor's address specified in Section 10.07, or to an account at a
bank specified by Licensor, in dollars of the United States of America.
5.05 In the event Licensee is required to withhold any taxes from amounts
payable to Licensor under this Agreement, Licensee agrees to provide Licensor at
the time of such withholding with a receipt or other evidence reflecting the
deposit of such taxes with the appropriate governmental agency.
6. WARRANTIES AND INDEMNITIES
------------------------------
6.01 Licensor represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, United States of America, and has full power and authority to enter
into and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement and all documents relating hereto by Licensor
have been duly and validly authorized by all requisite corporation action and
constitute valid and binding obligations of Licensor enforceable in accordance
with their respective terms.
6.02 Licensee represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the province
of Yukon, Canada, and has full power and authority to enter into and perform its
obligations under this Agreement including the right to grant the rights and
licenses as set forth in Article 4. The execution, delivery and performance of
this Agreement and all documents relating hereto by Licensee have been duly and
validly authorized by all requisite corporate action and constitute valid and
binding obligations of Licensee enforceable in accordance with their respective
terms.
6.03 Except as otherwise expressly set forth in this Agreement or other
written agreement between the Parties, LICENSOR MAKES NO AND HEREBY DISCLAIMS
ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND, INCLUDING ANY
WARRENTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER
WARRANTIES OR REPRESENTATIONS OF ANY KIND TO LICENSEE, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OR REPRESENTATION WITH RESPECT TO USE OF LICENSOR
TECHNOLOGY AS AUTHORIZED HEREUNDER.
6.04 EXCEPT FOR UNAUTHORIZED DISCLOSURE OR USE OF CONFIDENTIAL INFORMATION
OR UNAUTHORIZED USE OF PATENT RIGHTS UNDER THIS AGREEMENT, IN NO EVENT SHALL A
PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR
EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS OR SAVINGS,
REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH A CLAIM FOR SUCH DAMAGES,
WHETHER IN CONTRACT OR TORT INCLUDING NEGLIGENCE, EVEN IF LICENSOR OR LICENSEE
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. BUT IF A PARTY IS FOUND
LIABLE, DESPITE THE ABOVE LANGUAGE, TO THE OTHER PARTY FOR SPECIAL, INDIRECT,
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR EXEMPLARY DAMAGES THEN THE MAXIMUM LIMIT
OF SUCH DAMAGES IS AGREED TO BE $5,000.
6.05 A Party will promptly advise the other Party in writing of any claim
made or lawsuit alleging infringement of any patent or copyright or
misappropriation of Confidential Information based on the design, construction
and/or operation of Licensed Facilities (including Synthetic Product or
Marketable Products produced from Licensed Facilities).
(a) If Licensee has made a modification to the Process Design Package,
with respect to a Licensed Plant, and infringement or misappropriation by such
Licensed Plant would not exist in the absence of Licensee's modification,
Licensee will be solely responsible for any claim or lawsuit. Licensee will (i)
promptly undertake at its own expense the defense of the claim or lawsuit, and
(ii) hold Licensor, its Affiliates, and their officers, directors, and employees
harmless from any liability, damages and other sums that may be assessed in or
become payable under any decree or judgment by any court or other tribunal which
results from such claim or lawsuit and from any attorneys fees, costs of
litigation and other reasonable out of pocket expenses incurred in the defense
of such claim or lawsuit.
(b) If the design, construction and/or operation of a Licensed Plant which
is the basis for alleged infringement or misappropriation, is in accordance with
the designs, specifications and operating conditions (including, but not limited
to, catalysts) embodied in the Process Design Package for such Licensed Plant,
Licensor will (i) promptly undertake at its own expense the defense of the claim
or lawsuit, and (ii) hold Licensee, its Affiliates, and their officers,
directors, and employees harmless from any liability, damages and other sums
that may be assessed in or become payable under any decree or judgment by any
court or other tribunal which results from such claim or lawsuit and from any
attorneys fees, costs of litigation and other reasonable out of pocket expenses
incurred in the defense of such claim or lawsuit.
(c) A Party will render all reasonable assistance that may be required by
the other Party in the defense of claim or lawsuit alleging infringement or
misappropriation and such Party shall have the right to be represented therein
by advisory counsel of its selection and at its expense.
(d) In the event a court or other tribunal finds that infringement and/or
misappropriation has occurred not as a result of Licensee's modifications,
Licensor shall have the option, at its sole expense, to either (i) provide
designs, specifications and/or operating conditions (including, but not limited
to, catalysts) and make modifications to the Licensed Plant which avoid such
infringement and/or misappropriation without degrading the economics or
performance of the Licensed Facilities, or (ii) acquire the right to continue
using the design, construction and operating conditions (including, but not
limited to, catalysts), which were the subject of such infringement and/or
misappropriation.
(e) Except as provided in (d) above, a Party shall not settle or compromise
any claim or lawsuit alleging infringement or misappropriation without the
written consent of the other Party if such settlement or compromise obligates
the other Party to make any payment or part with any property, to assume any
obligation or grant any licenses or other rights, or to be subject to any
injunction by reason of such settlement or compromise.
6.06 Licensor agrees to indemnify and hold harmless Licensee, its
Affiliates, and their officers, directors, and employees from and against the
full amount of any and all claims, demands, actions, damages, losses, costs,
expenses, or liability whatsoever (including without limitation the costs of
litigation, including reasonable attorneys' fees), for patent infringement,
property (real and personal) damage, personal injury or death, fines, or
penalties arising in whole or in part out of the use of Licensee Patent Rights
and Licensee Technical Information in a plant operated by Licensor or Person
under license from Licensor.
6.07 Licensor agrees to indemnify and hold harmless Licensee, its
Affiliates, their officers, directors, and employees from and against the full
amount of any and all claims, demands, actions, damages, losses, costs,
expenses, or liability whatsoever (including without limitation the costs of
litigation, including reasonable attorneys' fees), for property (real and
personal) damage, personal injury or death, fines, or penalties arising in whole
or in part out of acts or omissions in the preparation and content (including
design, engineering, and specifications) of the Process Design Package for the
Licensed Facilities.
6.08 Licensee agrees to indemnify and hold harmless Licensor, its
Affiliates, their officers, directors, and employees from and against the full
amount of any and all claims, demands, actions, damages, losses, costs,
expenses, or liability whatsoever (including without limitation the costs of
litigation, including reasonable attorneys' fees), for property (real and
personal) damage, personal injury or death, fines, or penalties arising in whole
or in part out of acts or omissions outside the scope of or any modification to
the content (including design, engineering, and specifications) of the Process
Design Package for the Licensed Facilities.
6.09 Licensor's total obligation and liability to indemnify and hold
Licensee harmless for any and all claims (i) under this Article 6, including but
not limited to all expenses incurred by Licensor in assuming Licensee's defense,
making modifications to the Licensed Plant and for paying any judgments or
settlements on Licensee's behalf, or for any other reason contemplated by this
Article 6, (ii) for failure to meet any process guarantees that may have been
provided under a separate agreement, or (iii) for any other indemnification made
by Licensor pursuant to this Agreement, shall in no event exceed 50% of the
total License Fees received from the Licensee for any Licensed Plant that is
subject to the above claims.
6.10 Licensee's total obligation and liability to indemnify and hold
Licensor harmless for any and all claims (i) under this Article 6 including but
not limited to all expenses incurred by Licensee in assuming Licensor's defense
and for paying any judgments or settlements on Licensor's behalf, or for any
other reason contemplated by this Article 6, or (ii) for any other
indemnification made by Licensee pursuant to this Agreement, shall in no event
exceed 50% of the total License Fees received by Licensor from Licensee for any
Licensed Plant that is subject to the above claims.
7. CONFIDENTIALITY AND LIMITATIONS
-----------------------------------
7.01 Licensee agrees that any Confidential Information disclosed by Licensor
or an Affiliate directly or indirectly to Licensee during the period from the
date of Licensee's execution of the Confidentiality Agreement through the term
of this Agreement, will be kept confidential by Licensee for a period of fifteen
(15) years after the date of each disclosure, but not to exceed five (5) years
after the termination of this Agreement or fifteen (15) years from the Effective
Date, whichever last occurs, with the same standard of care Licensee uses to
protect its own similar confidential information and, except as otherwise
provided in this Agreement, will not be disclosed to others or copied or
duplicated (except for internal use), and will be used by Licensee solely as it
relates to this Agreement, and for no other purpose, including Licensee's
research, development or commercial activities related to the Conversion Process
for its own account. Licensee may disclose such Confidential Information to
third parties who have executed a secrecy agreement with Licensor with
confidentiality terms no less restrictive than those set forth in this Section
7.01. To the extent reasonably necessary to carry out the purposes of this
Agreement, Licensee may disclose any of the foregoing information to an
Affiliate, provided that the Affiliate has agreed in writing to be bound by this
Agreement.
7.02 Licensor agrees that any Confidential Information disclosed by Licensee
or an Affiliate directly or indirectly to Licensor during the term of this
Agreement will be kept confidential by Licensor for a period of fifteen (15)
years after the date of each disclosure, but not to exceed five (5) years after
the termination of this Agreement or fifteen (15) years from the Effective Date,
whichever last occurs, with the same standard of care Licensor uses to protect
its own similar confidential information, and except as otherwise provided in
this Agreement will not be disclosed to others or copied or duplicated, and will
be used by Licensor solely in the development, marketing and licensing of the
Conversion Process, and for no other purpose. Licensor may disclose such
Confidential Information to third parties who have executed a secrecy agreement
with confidentiality terms similar to the confidentiality provisions of this
Agreement. To the extent reasonably necessary to carry out the purposes of this
Agreement, Licensor may disclose any of the foregoing information to an
Affiliate, provided that the Affiliate has agreed in writing to be bound by the
relevant provisions of this Agreement.
7.03 A Party shall not be subject to the restrictions set forth in Sections
7.01 and 7.02 as to the disclosure, duplication or use of disclosed Confidential
Information, which the receiving Party can prove by competent evidence (a) was
already known to the receiving Party or an Affiliate prior to the disclosure
thereof by the disclosing Party; (b) is or becomes part of the public knowledge
or literature without breach of this Agreement by the receiving Party but only
after it becomes part of the public knowledge or literature; (c) shall otherwise
lawfully become available to the receiving Party or an Affiliate from a third
party but only after it becomes so available and provided the third party is not
under obligation of confidentiality to disclosing Party; or (d) is developed by
the receiving Party or an Affiliate independently of any disclosure by the
disclosing Party to the receiving Party or an Affiliate under this Agreement or
independently of any joint research and development activities of Licensee and
Licensor which may occur under a separate agreement. Any Confidential
Information disclosed shall not be deemed to fall within the confidentiality
exceptions of this Section 7.03 merely because it is embraced by more general
information. In any such case set forth in Section 7.03(a), (b), (c), and (d),
the receiving Party shall keep confidential and not disclose to any third party
that any such information was also made available to or acquired by the
receiving Party or an Affiliate from the disclosing Party, and such release from
the secrecy obligation shall not be considered as a license to make, sell, use
or operate under any of the disclosing Party's proprietary rights.
7.04 The receiving Party shall limit access to the Confidential Information
disclosed to it to those employees of the receiving Party or an Affiliate who
reasonably require the same and who are under a legal obligation of
confidentiality on the terms set forth in Section 7.01 and Section 7.03. The
receiving Party shall be responsible to the disclosing Party for the performance
by its employees of their confidentiality obligations. The receiving Party
shall keep a record of any Confidential Information marked "Limited Access" and
the identity of each employee who has access to Confidential Information so
marked. The receiving Party shall inform the other Party of the identity of
each such employee within 30 days of disclosure.
7.05 In the event that a Party which is recipient of Confidential
Information from the other Party is requested or required by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process to disclose any such Confidential Information, the receiving
Party shall provide the disclosing Party with prompt written notice of such
request or requirement prior to making the requested disclosure, and shall
cooperate with the disclosing Party so that the disclosing Party may seek a
protective order or other appropriate remedy or, if the disclosing Party so
elects, waive compliance with the terms of this Agreement. In the event that
such protective order or other remedy is not obtained, the receiving Party may
disclose only that portion of the Confidential Information which the disclosing
Party is advised by counsel is legally required to be disclosed.
7.06 The Parties agree that they will each take all actions and execute all
documents, and shall cause their employees, agents and contractors to take all
actions and execute all documents as are necessary or appropriate to carry out
the provisions of this Article 7 or to assist each other in securing protection
of intellectual property and Confidential Information referenced in this Article
7.
7.07 With respect to any catalyst furnished by Licensor to Licensee for use
by Licensee at the Licensed Facilities, Licensee will not, and Licensee will not
allow any other person to, analyze, break down, reverse engineer or otherwise
seek to determine the chemical composition, except for loss on ignition and bulk
density, of any such catalyst, except that Licensee shall be entitled to (a)
perform analyses that Licensor may from time to time specifically authorize in
writing, to the extent required for monitoring the performance of the Licensed
Facilities and for regeneration, reclamation or disposal of spent catalysts,
such authorization not to be unreasonably withheld, and (b) provide results of
the aforementioned analyses to other parties to the extent required for
regeneration, reclamation or disposal of spent catalysts, but only after such
other parties have entered into an agreement with Licensor in a form attached
hereto as Exhibit E of the attached Site License Agreement. Licensor will be
provided with a copy of all such analyses which has been approved in writing
prior to release to other parties.
8. ASSIGNMENT AND TRANSFERS
----------------------------
8.01 Except for assignment to an Affiliate or the successor in interest, by
purchase or otherwise, of Licensee (but specifically excluding Exxon
Corporation, Royal Dutch Shell, Sasol Limited or any entity in which they have
an equity interest), which may be made without written consent of Licensor, this
Agreement shall not be assignable by Licensee without the prior written consent
of the Licensor, which consent will not be unreasonably withheld. Licensee will
promptly notify Licensor in writing of any assignment to an Affiliate, or such
successor in interest. Except for assignment to an Affiliate, or such successor
in interest, any attempted assignment of this Agreement by Licensee without
consent of Licensor shall be void.
8.02 In the event of the transfer of all or a portion of Licensee's
Participating Interest in any Licensed Plant to another Person other than an
Affiliate, Licensee shall obtain such Person's unconditional execution of the
Site License Transfer Letter set forth in Exhibit F of the Site License
Agreement, and submit such Letter to Licensor, whereupon if Licensor gives its
written consent, such consent not to be unreasonably withheld, then such Person
to whom such Site License Agreement shall have been transferred shall be
substituted for Licensee for all purposes in connection with such Licensed
Plant. Licensor's refusal to consent may be justified by Licensor's reasonable
concern that assignee will not comply with the terms of this Agreement. A
transfer of Licensee's Participating Interest does not relieve Licensee of its
confidentiality obligations under this Agreement with respect to Confidential
Information associated with such transferred Participating Interest.
9. TERM AND TERMINATION
------------------------
9.01 This Agreement shall extend for a period of fifteen (15) years
following the Effective Date, or five (5) years following the effective date of
the last Site License Agreement issued under this Agreement, whichever last
occurs.
9.02 Upon the written notice from Licensor to Licensee of any material
default under this Agreement (including any material default under a Site
License Agreement), other than as noted in Section 2.05 (c), all rights of
Licensee under Section 2.05 of this Agreement, shall be suspended until such
default is cured by Licensee. Licensee's or an Affiliate's right to operate any
Licensed Plant which is in compliance with its Site License Agreement shall not
be affected by either a default under this Agreement or a default under another
Site License Agreement for another Licensed Plant. If a material default under
this Agreement shall continue for a period of one year following written notice
of such default to Licensee from Licensor without being cured by Licensee, then
Licensor shall have the right to (a) suspend all rights of Licensee under this
Agreement, or (b) terminate this Agreement upon written notice to Licensee. The
actions by Licensor under this Section 9.02 shall not prejudice Licensor from
enforcing any claim which it may have for damages or otherwise on account of the
default.
9.03 Termination of this Agreement shall not:
(a) relieve Licensee of its obligations to account for and pay all amounts
due Licensor under this Agreement and all Site License Agreements executed by
Licensee under this Agreement;
(b) affect any rights granted Licensee under Site License Agreements in
effect on the date of termination;
(c) affect any rights granted under Article 4 with respect to Licensee
Patent Rights and Licensee Technical Information, which shall survive
termination in accordance with its terms; or
(d) affect the obligations of Licensor and Licensee under Articles 6 and 7
and Sections 8.02 and 10.02, which shall survive termination in accordance with
their terms.
9.04 No Party to this Agreement shall be in default in performing its
obligations under this Agreement to the extent that performing such obligations,
or any of them, is delayed or prevented by revolution, civil unrest, strike,
labor disturbances, epidemic, accident, fire, lightening, flood, storm,
earthquake, explosion, blockage or embargo, or any law, proclamation, regulation
or ordinance, or any other cause that is beyond the control and without the
fault or negligence of the Party asserting the benefit of this Section 9.04.
Each Party shall do all things reasonably possible to remove the cause of such
default.
9.05 Licensee shall have the right to terminate this Agreement in its sole
discretion, with or without cause, upon the delivery of written notice of
termination to Licensor no less than 90 days prior to the date of such
termination.
10. MISCELLANEOUS
------------------
10.01 This Agreement embodies the entire intent of the Parties and merges
all prior oral and written agreements between the Parties hereto with respect to
subject matter hereof. No stipulation, agreement, representation or
understanding of the Parties hereto shall be valid or enforceable unless
contained in this Agreement or in a subsequent written agreement signed by the
Parties hereto. In the event of a conflict between this Agreement and a Site
License Agreement executed pursuant to this Agreement, this Agreement will
govern.
10.02 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF. The Parties expressly and irrevocably
consent and submit to the jurisdiction of any federal court sitting in the state
of Oklahoma and agree that, to the fullest extent allowed by law, only such
Oklahoma federal courts, to the exclusion of all others, shall have jurisdiction
over any action, suit or proceeding arising out of or relating to this
Agreement. Provided, however, that in the event that no federal court in the
State of Oklahoma has jurisdiction over the Parties and the subject matter of
any action, suit, or proceeding, the Parties expressly and irrevocably consent
and submit to the jurisdiction of any state court sitting in the state of
Oklahoma and agree that, to the fullest extent allowed by law, only such
Oklahoma state courts, to the exclusion of all others, shall have jurisdiction
over any such action, suit or proceeding arising out of or relating to this
Agreement. The Parties each irrevocably waive, to the fullest extent allowed by
law, any objection either of them may have to the laying of venue of any such
suit, action or proceeding brought in any state or federal court sitting in, the
state of Oklahoma based upon a claim that such court is inconvenient or
otherwise an objectionable forum. Any process in any action, suit or proceeding
arising out of or relating to this Agreement may, among other methods, be served
upon any Party by delivering it or mailing it to their respective addresses set
forth herein. Any such delivery or mail service shall be deemed to have the
same force and effect as personal service in the State of Oklahoma.
10.03 This Agreement does not grant and shall not be construed as granting
any license, authorization or consent, to either Party by the other Party
hereto, to use any name, trademark, service ▇▇▇▇ or slogan of the other Party.
A Party shall not use the other Party's name without written consent, except for
the identification of the other Party as a Licensee or Licensor of Licensor
Technology. The terms of this Agreement will be maintained in confidence by
each Party subject to the same standard of care each Party uses to protect its
confidential information, except as required by law. A press release which
includes the name of the other Party must have prior written approval of the
other Party, except as required by law.
10.04 Failure of either Licensor or Licensee at any time or from time to
time to exercise any of its rights under this Agreement or to insist upon strict
performance of the other Party's obligations hereunder shall not be deemed a
waiver of or to limit any of such rights or obligations with respect to such
rights or obligations or any subsequent occurrence.
10.05 Licensee may publish the existence of this Agreement but agrees not to
disclose, without the written consent of the Licensor, any of the terms of this
Agreement or any portion thereof, or any amendment concerning the same, except
to Persons directly involved with design, financing, construction, or operation
of a Licensed Plant on a need-to-know basis or as required by law.
10.06 Licensee agrees that all Licensor information, technology, patents,
and the product produced directly by the use thereof, when used outside the
United States of America, shall be used by Licensee subject to and in accordance
with regulations of any department or agency of the United States of America and
Licensee shall not re-export or transship or agree to re-export or transship any
such Licensor information, technology, patents, and the product produced
directly by the use thereof to any destination prohibited by United States law
including, without limitation, United States executive orders and administrative
orders, rules, and regulations or to any destination requiring the approval of
the United States government for such re-exportation or transshipment until a
request to do so has been submitted to and approved by the United States
government and notice of such approval has been provided to Licensor. Licensee
shall not (i) enter into a transaction or dealing, including, without
limitation, re-exporting the Licensed Technology, or causing, financing,
guaranteeing, authorizing or facilitating an action to enter into a transaction
or dealing, that might reasonably be considered a violation of United States law
by either Licensor or Licensee, or (ii) disclose information in a way that might
reasonably be considered a violation of United States law by either Licensor or
Licensee.
10.07 Should any part or provision of this Agreement be held unenforceable
or in conflict with the law of any state or of the United States of America or
of any foreign country, the validity of the remaining parts or provisions shall
not be affected by such holding.
10.08 All notices hereunder shall be addressed to the Parties as follows:
(a) If to Licensor:
Syntroleum Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: Office of the President
with copy to:
Syntroleum Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: Office of the General Counsel
(b) If to Licensee:
Ivanhoe Energy Inc.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attn: E. ▇▇▇▇ ▇▇▇▇▇▇
with copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Any notice required or permitted to be given under this Agreement by one of the
Parties to the other shall be deemed to have been sufficiently given for all
purposes hereof if mailed by registered or certified mail, postage prepaid,
addressed to such Party at its address indicated above, electronically
transmitted and acknowledged by the other Party or by actual delivery of written
notice to the other Party.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
set forth above.
Licensor
SYNTROLEUM CORPORATION
By:_________________________________
▇▇▇▇ ▇. ▇▇▇▇, President/COO
Date:_______________________________
Licensee
IVANHOE ENERGY INC.
By:_________________________________
E. ▇▇▇▇ ▇▇▇▇▇▇, President & CEO
Date:_______________________________
ATTACHMENT 1
------------
Request for Site License Agreement
--------------------------------------
Syntroleum Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Office of the President
Gentlemen:
Please issue, for immediate execution, a Site License Agreement of the form
identical to Attachment 4 of our Volume License Agreement dated _____________,
20__, covering the construction and operation of a Licensed Plant, in which we
have, or intend to have, a Participating Interest upon completion of other
related agreements. Issue the Site License Agreement in the name of
_____________________________ as the Licensee pursuant to the Volume License
Agreement. The following information is provided for inclusion in the execution
copies:
Licensed Plant Location:
City: _____________________________ State/Province: ______________________
Country: __________________________ Onshore/Offshore: ___________________
Latitude: __________________________ Longitude: _________________________
Maximum daily design capacity, as defined by the Process Design Package is
__________ Barrels of Synthetic Product per day. To the extent that more than
one Syntroleum licensee is a participant in the Licensed Plant, the design
capacity of such Licensed Plant should be applied against such licensees'
remaining aggregate maximum daily design capacities for licensed facilities
under their respective license agreements as follows:
Aggregate Design
Entity Capacity Deduction
------ -------------------
______________________________________ ________________
______________________________________ ________________
______________________________________ ________________
Our Participating Interest in the Licensed Plant currently represents _______
percent (%) of the entire ownership interest not held by a government authority
and we (are/are not) ______ the operator of the proposed Licensed Plant.
The other ownership interests, including that held by a government authority, if
any, is as follows:
Entity Ownership Interest
------ -------------------
______________________________________ ________________
______________________________________ ________________
______________________________________ ________________
______________________________________ ________________
______________________________________ ________________
______________________________________ ________________
We agree to pay License Fees in accordance with the applicable provisions of
Attachment 3 of the Volume License Agreement.
Please forward the appropriate materials to initiate the Process Design Package
and acknowledge your receipt of this request.
Very truly yours,
____________________________,
Licensee
ATTACHMENT 2
-------------
AFFILIATE EXTENSION AGREEMENT
-------------------------------
THIS AGREEMENT, effective as of the _______ day of _______________, _____, by
and between ___________________________________________, a ______________
corporation (hereinafter "Affiliate-Licensee") and
_________________________________________, a _____________________ corporation
(hereinafter "Licensee").
WHEREAS, Licensee and Syntroleum Corporation (hereinafter "Licensor") have
previously entered into a certain Volume License Agreement, dated
_____________________, relating to the use of Licensor Technology in practicing
the Conversion Process at Licensed Facilities in the Licensed Territory to
produce Marketable Products, such capitalized terms being defined in the Volume
License Agreement;
WHEREAS, pursuant to the terms of the Volume License Agreement, Licensee has the
right to extend the benefits of the Volume License Agreement to its Affiliates;
and
WHEREAS, Affiliate-Licensee desires to acquire the right to use Licensor
Technology in practicing the Conversion Process at Licensed Facilities in the
Licensed Territory to produce Marketable Products by extension to it by Licensee
of the benefits of the Volume License Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the parties agree as follows:
1. Pursuant to the provisions of Section 2.06 of the Volume License
Agreement, Licensee hereby extends the Volume License Agreement to
Affiliate-Licensee for use of Licensor Technology in practicing the Conversion
Process in Licensed Facilities in the Licensed Territory to produce Marketable
Products.
2. Affiliate-Licensee hereby accepts the extension to it of the Volume
License Agreement as set forth in Paragraph 1 above and agrees that it shall be
subject to the same obligations to which Licensee is subject under the Volume
License Agreement, and that all of the terms and conditions of the Volume
License Agreement shall apply to it with respect to both its obligations and
rights (except for the right of extension as set forth in Section 2.06 of the
Volume License Agreement) as if Affiliate-Licensee had entered into the Volume
License Agreement effective as of the date of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
LICENSEE AFFILIATE-LICENSEE
______________________________ _______________________________
(COMPANY) (COMPANY)
By:___________________________ By:_____________________________
Title:________________________ Title:__________________________
Acknowledged and
Agreed to this ___ day
of _______, ________.
Syntroleum Corporation
By:_______________
ATTACHMENT 3
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LICENSE FEE CALCULATION
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I. For purposes of this Attachment 3, the following terms shall have the
meanings ascribed thereto:
A. "LICENSED PLANT" means the Licensed Plant in which a Site License
Agreement for such plant is issued to and remains in the name of the Licensee
who has executed this Agreement with Licensor and, in which the Participating
Interest held by Licensee, or collectively by Licensee and any other Person who
has executed a license agreement (which is applicable to the Licensed Plant)
with Licensor, represents at least 10% of the entire Participating Interest not
held by a governmental authority regardless of operatorship of the Licensed
Plant.
B. "ROYALTY RATE" shall mean (i) the lowest royalty rate per Barrel of
Synthetic Product accepted by Licensor for a Site License Agreement with a
non-Affiliate for a facility of comparable size, in the Licensed Territory,
which is not under a master preferred license agreement, during the twelve (12)
months immediately preceding the execution date of the applicable Site License
Agreement under this Agreement, or (ii) if no such Site License Agreement has
been executed during the twelve (12) months immediately preceding, then the
royalty rate per Barrel of Synthetic Product in the last Site License Agreement
with a non-Affiliate, in the Licensed Territory, executed by Licensor, which is
not under a master preferred license agreement, or (iii) if none of the
foregoing applies, then US$______ per Barrel of Synthetic Product. Market
Royalty Rate does not include the catalyst price as provided for under Section
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2.03 of this Agreement.
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II. For each Site License Agreement executed for Licensed Plants under this
Agreement, Licensee agrees to pay License Fees to Licensor on a prepaid license
basis as follows:
A. Licensee agrees to pay Licensor a one-time, prepaid License Fee
calculated in accordance with the following formula:
License Fee = "C" x 350 x 7.5 x "R"
wherein:
"C" = the maximum daily design capacity, as defined by the Process Design
Package, of such Licensed Plant to produce Marketable Products measured in
Barrels of Synthetic Product per day for which such Licensed Plant is originally
designed and constructed, and
"R" = the Royalty Rate.
and payable in installments as follows:
(i) 20% within thirty (30) days after the execution of the Site License
Agreement for such Licensed Plant;
(ii) 30% within thirty (30) days after delivery of the Process Design
Package or within one hundred twenty (120) days after the execution of the Site
License Agreement for such Licensed Plant, whichever first occurs;
(iii) 20% within thirty (30) days after the commencement of field
construction move-in;
(iv) 30% within one-hundred and twenty (120) days after the Start-Up Date of
the Licensed Plant or a successful Performance Test as specified in the Process
Guarantee and Performance Test Agreement, whichever first occurs.
B. Capacity Adjustments: In the event the actual production capacity of any
Licensed Plant, under II.A. above, is determined to have either exceeded the
original maximum daily design capacity established in its Site License Agreement
or is increased through major equipment modification, by more than five percent
(5%) or by more than 500 barrels per day, at any time after the Start-up Date,
Licensee shall pay Licensor an additional License Fee, on a prepaid basis, equal
to the difference between (a) the prepaid License Fee as would have been
calculated with the higher production capacity for such Licensed Plant
substituted for "C" in the calculation method set forth in II.A. above, and (b)
the License Fee as would have been calculated for such Licensed Plant by the
method set forth in II.A. above using the original maximum daily design capacity
established in each Site License Agreement. The incremental License Fee due
will be reduced by any previous incremental adjustments. Such additional
License Fee shall be payable within thirty (30) days after the end of the
calendar year in which such increase in production capacity of such Licensed
Plant occurs. Incremental License Fees for increased production capacity in any
Licensed Plant shall not be due if the increased production capacity is the
result of the initial use of Licensee Patent Rights or Licensee Technical
information. The total cumulative incremental capacity adjustments under each
Site License Agreement will be limited to 50 percent of the initial maximum
daily capacity under such Agreement.
III. Upon payment of all fees due under the Site License Agreement for each
Licensed Plant, Licensee shall be deemed to have acquired a fully paid license
for such Licensed Plant up to the original maximum daily design capacity or any
adjusted daily design capacity made under the provisions of II.B. above. Any
additional incremental increases in the Licensed Plant capacity will be subject
to additional License Fees as calculated under Incremental Adjustments defined
under II. above.
IV. All payments required hereunder shall include a statement showing the
details supporting the calculation of the License Fees being paid. Licensee
shall keep accurate and complete records of all natural gas feedstock processed
(volume and composition) and all Synthetic Product produced at and either used
internally within or removed from each Licensed Plant to enable verification of
statements and payments rendered to Licensor hereunder. Licensee agrees to
permit Licensor, at Licensor's expense, to inspect such records on reasonable
notice and at reasonable intervals during normal business hours to verify the
fees paid and payable under this Agreement.