Exhibit 10.1
RESEARCH AGREEMENT
BETWEEN
PROFILE TECHNOLOGIES, INC.
AND
XXXXXXXX PETROLEUM COMPANY
RESEARCH AGREEMENT
This Research Agreement, effective January 6, 2003, ("Effective Date"), is
between Profile Technologies, Inc., a Delaware Corporation ("PTI"), and Xxxxxxxx
Petroleum Company, a Delaware corporation ("XXXXXXXX"). In consideration of the
mutual covenants set forth in this Agreement, PTI and XXXXXXXX agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 "Agreement" means this Research Agreement, as may be amended from time to
time according to Article 20, and any Schedules to this Agreement.
1.2 "Claim(s)" means any legal or equitable causes of action (including but
not limited to negligence; strict liability; other tort; express or
implied warranty, indemnity or contract; contribution; or subrogation)
related to or arising out of the performance or nonperformance of this
Agreement.
1.3 "Confidentiality Agreement" means the Confidentiality and Non-Disclosure
Agreement dated as of March 5, 2001, by and between Xxxxxxxx and PTI.
1.4 "Effective Date" means the date stated above.
1.5 "Force Majeure Event" means any event beyond the reasonable control of
the party affected which significantly interferes with the party's
performance hereunder. Force Majeure Events include any accident,
mechanical breakdown of facilities, fire, flood, strike, labor trouble,
riot, revolt, war, drought, action of governmental authority and laws,
rules, ordinances and regulations (including, but not limited to, those
dealing with pollution, health, ecology, or environmental matters), acts
of God, a credible claim by a third-party that activity pursuant to this
Agreement violates intellectual property rights of the third-party, or
other similar types of contingencies.
1.6 "Month(s)" means a calendar month commencing on the first day of a month.
1.7 "XXXXXXXX Background Technology" means technical information in XXXXXXXX'
possession, or which was conceived by an employee, agent or
representative of XXXXXXXX, before the effective date and is related to
the Technical Area.
1.8 "Proprietary Information" shall have the meaning set forth in the
Confidentiality Agreement.
1.9 "PTI Background Technology" means technical information in PTI's
possession, or which was conceived by an employee, agent or
representative of PTI before the effective date and is related to the
Technical Area.
1.10 "Representative" means a parties' representative who shall be such
parties' main contact for the research and development under this
Agreement. Xxxxxxxx' Representative shall be Xxxxxxx Xxxxx, (168 PL,
Xxxxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Telephone:
918/000-0000) or such other representative as it may designate from time
to time. PTI's Representative shall be Xxxxx Xxxxxx, 0000 X. Xxxxxx Xxxx,
Xxxxx, XX 00000, Phone:360/000-0000,Facsimile:360/366-3294, or such other
representative as it may designate from time to time.
1.11 "Research Technology" means technical information which is generated
during the parties' efforts under this Agreement.
1.12 "Technical Area" means electromagnetic methods and devices useful in
detecting, evaluating and interpreting pipe, vessel, structure and
equipment corrosion.
ARTICLE 2 - PURPOSE
2.1 The Parties agree to use reasonable efforts to improve the data
interpretation methods currently being used to evaluate pipe corrosion
data and/or develop new data interpretation methods. The goal of this
project is to evaluate the use of pattern recognition tools available in
chemometric software for improved analysis of PTI's corrosion data. Two
key objectives are a) to use pattern recognition to improve the
quantification of damage by this technique and b) improve the ability to
distinguish corrosion from non-corrosion anomalies in the data sets. Both
parties acknowledge that, as a result of this collaborative effort,
additional research opportunities may arise that could improve PTI's
proprietary EMW (Electro Magnetic Wave) testing services. The parties
agree to make reasonable efforts to pursue said opportunities, as
resources allow, if the anticipated results offer significant improvement
in the services currently offered by PTI to Xxxxxxxx.
2.2 PTI's primary responsibilities are:
1. Provide raw data sets for the project (in a format that can be
imported into pattern recognition software (e.g., ASCII format)).
2. Provide a complete description of the testing and data processing
procedures used to obtain the raw data sets.
3. Provide specifications and corrosion information on the pipes tested
to produce the raw data sets.
4. Assist in evaluation of performance of new interpretation tools
developed in this project.
2.3 XXXXXXXX' primary responsibilities are:
1. Provide pattern recognition tools (software).
2. Provide functional understanding of pattern recognition tools.
3. Apply pattern recognition algorithms to raw data and attempt to
identify location of corrosion from this approach.
4. Assist in evaluation of performance of new interpretation tools
developed in this project.
ARTICLE 3 - TERM
This Agreement shall terminate one year from the Effective Date unless extended
by the parties or terminated early in accordance with the terms of Article 9
below. The parties agree to attempt to meet the preliminary schedule attached
hereto as Exhibit A. The parties may alter the preliminary schedule by mutual
agreement of the Representative and will mutually agree to a forward plan for
additional research and development, if any, at the end of the preliminary
schedule.
ARTICLE 4 - INFORMATION EXCHANGE
The parties recognize that detailed and continuing exchanges of information may
be necessary in order to optimize the administration of this Agreement and to
perform the research provided hereunder. To that end, each party shall notify
the other of the individual representative or representatives responsible for
exchanging information and for resolving issues which arise affecting the
research. The designated representatives of XXXXXXXX and PTI shall conduct
planning meetings as mutually agreed in order to address issues which shall
arise under this Agreement. The meetings need not take any particular form and
may include in person meetings (as mutually agreed upon), video conferences or
any combination thereof. The parties also agree to write a memorandum outlining
such targets, and other points of mutual agreement prior to concluding each of
said periodic meetings.
ARTICLE 5 - COSTS
5.1 Each party will be responsible for its own cost incurred in the
performance under this Agreement without reimbursement from the other
party. The Representatives of the parties will mutually agree in advance
on the division of any cost determined to be joint cost.
ARTICLE 6 - WARRANTIES
6.1 Neither party makes any representations, extends any warranties of any
kind (including freedom from alleged infringement of third party patents
or trade secrets), either express or implied, and assumes no
responsibility whatsoever with respect to the practice by the other
party, its assignees or licensees of any Background Technology or
Research Technology and each party agrees to indemnify and to hold the
other party harmless from and assume all risk, liability, or lawsuits
arising out of, or in the course of practice by such indemnifying party,
its assignees or licensees of the Background Technology or Research
Technology.
6.2 Each party hereto shall indemnify and hold harmless the other party and
its officers, employees, agents, consultants, and subcontractors from and
against any and all claims, demands, actions, liabilities, judgements,
costs and expenses of whatever kind including, without limitations,
attorney's fees and costs of defense, on account of damage to property of
the indemnifying party or damage to personal property of or injury to our
death of any officer, employee, agent, consultant or subcontractor of the
indemnifying party arising out of, or related in any way to, this
Agreement except to the extent that such damage, injury or death was
caused by the sole negligence or wrongful act of the party indemnified or
of its officers, employees, agents, consultants or subcontractors.
ARTICLE 7 - INTELLECTUAL PROPERTY
7.1 PTI Proprietary Information and PTI Background Technology are owned by
PTI.
7.2 XXXXXXXX Proprietary Information and XXXXXXXX Background Technology are
owned by XXXXXXXX.
7.3 PTI shall have first option to obtain any patent covering Research
Technology. If PTI so elects, then all expenses related to obtaining and
maintaining such patents shall be born solely by PTI and PTI will be sole
owner of any such patents. PTI will notify XXXXXXXX of its decision to
obtain patent protection for any Research Technology within thirty (30)
days from making its decision. Notwithstanding the foregoing, if XXXXXXXX
desires for patent protection to be obtained on an invention included in
the Research Technology, it will notify PTI of such and PTI shall have
sixty (60) days to evaluate whether it will file any patent applications
relating to such invention and to notify XXXXXXXX of its decision. For
any patent applications filed by PTI under this Paragraph 7.3, PTI and
XXXXXXXX will consult on countries in which to file counterpart
applications. If XXXXXXXX desires to file such counterpart applications
in countries other than those PTI desires to file counterpart
applications, XXXXXXXX will have the right to file and maintain such
counterpart applications in PTI's name. In exchange for the first option
to obtain and maintain patent(s), if any, covering Research Technology,
PTI agrees to provide testing services to XXXXXXXX at the lowest service
price provided to any of PTI's customers This price protection excludes
pipe testing demonstrations provided by PTI to potential customers or
organizations free of charge or at cost.
7.4 If PTI elects not to attempt to obtain any patent coverage for an
invention included in the Research Technology, then XXXXXXXX shall have
the option to obtain such patent. If XXXXXXXX so elects, then all
expenses shall be born solely by XXXXXXXX and XXXXXXXX will be sole owner
of any such patents. XXXXXXXX hereby grants to PTI a non-exclusive,
perpetual, royalty-free license, with the right to grant sublicenses,
under any such patents to make, use and sell any inventions covered by
such patents.
7.5 Each party agrees to assist the other party in obtaining and protecting
patents covering Research Technology including having its employees sign
patent applications and assignment papers and otherwise cooperate in
actions necessary for the prosecution and defense of patents resulting
therefrom in all countries designated by such other party.
7.6 All non-patented Research Technology shall be owned by PTI and licensed
to Xxxxxxxx pursuant to Section 7.9.
7.7 XXXXXXXX grants to PTI a non-exclusive, non-transferable, perpetual,
royalty-free license to use XXXXXXXX Background Technology for the
purpose of performing PTI's obligations under this Agreement and as
necessary for PTI to use the Research Technology.
7.8 PTI grants to XXXXXXXX a non-exclusive, perpetual, royalty-free license
to use PTI Background Technology for the purpose of performing XXXXXXXX'
obligations under this Agreement and as necessary for XXXXXXXX to use the
Research Technology in accordance with the licenses set forth in
Paragraph 7.9.
7.9 (a) PTI grants to XXXXXXXX and its subsidiaries a non-exclusive,
perpetual, royalty-free license to make, use and sell any inventions
covered by the patented Research Technology and/or the non-patented
Research Technology within the Technology Area for the limited purpose of
interpreting XXXXXXXX' or its affiliates data sets whether provided by
PTI or by a PTI affiliate or licensee.
(b) PTI grants to XXXXXXXX a non-exclusive, perpetual, royalty-free
license with the right to grant sublicenses to make, use and sell any
inventions covered by the patented Research Technology and/or the
non-patented Research Technology outside the Technology Area. This
license shall survive termination of this Research Agreement.
7.10 The licenses granted under this Article 7 shall not be assigned or
transferred by a party without the prior written consent of the other
party, except that such licenses may be assigned or transferred by a
party to its successor of its entire business to which this Agreement
relates, or to a new business entity resulting from a merger, or to a
person, firm or corporation acquiring all or substantially all of the
business and assets of a party to which this Agreement relates.
ARTICLE 8 - FORCE MAJEURE
8.1 If the performance of the party impacted by a Force Majeure Event under
this Agreement is delayed, such delay shall be without liability to such
delayed party, for the duration of a Force Majeure Event.
8.2 The party whose performance is affected by a Force Majeure Event shall
give prompt notice to the other party stating the details and expected
duration of the vent. Once notice is given of a Force Majeure Event, the
parties shall keep each other apprised of the situation until the Force
Majeure Event terminates or this Agreement is terminated, whichever
occurs first. Each party has full management discretion in dealing with
its own labor issues, and in determining how and when to perform
obligations (other than payment for work already performed) under this
Agreement when the other party is involved in a strike, work stoppage or
slowdown conditions.
ARTICLE 9 - EARLY TERMINATION
Either party is entitled (without prejudice to its other rights and remedies
under this Agreement) to terminate this Agreement upon (a) written notice at any
time upon thirty (30) days notice to the other party (b) written notice by the
party not affected by a Force Majeure Event to the party affected by the Force
Majeure Event if a Force Majeure Event lasts for more than thirty (30) days.
ARTICLE 10 - ASSIGNMENT
This Agreement is not transferable or assignable by either party, except that it
may be assigned by a party to a successor of its entire business to which this
Agreement relates or to a new business entity resulting from a merger, or to a
person, firm, or corporation acquiring all or substantially all of the relevant
business and assets of a party to which this Agreement relates.
ARTICLE 11 - NOTICE
Any notice to be given under this Agreement shall be in writing and shall be
deemed given when received and may be sent by mail, express courier or facsimile
to:
If to XXXXXXXX: If the PTI:
Xxxxxxxx Petroleum Company Profile Technologies, Inc.
132 PL, Xxxxxxxx Research Center 0 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxx Attn: Xx. Xxxxx Xxxxxx
918/000-0000 (FAX) 516/000-0000 (FAX)
With a copy to: With a copy to:
Xxxxxxxx Petroleum Company Profile Technologies, Inc.
214 PLB, Xxxxxxxx Research Center 0000 X, Xxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000 Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxx Attn: Xx. Xxxxx Xxxxxx
918/000-0000(FAX) 360/000-0000 (FAX)
Either party may change its location or facsimile number to receive notices upon
ten (10) days prior written notice.
ARTICLE 12 - CONFIDENTIALITY OF INFORMATION
12.1 The parties agree that the terms of the Confidentiality Agreement are
hereby incorporated into this Agreement by reference. Notwithstanding any
provision therein or herein to the contrary, the parties' confidentiality
obligations shall survive the termination of this Agreement and the
stated term of the Confidentiality Agreement and shall remain in full
force and effect as long as either party hereto uses or retains access to
(including, without limitation, by virtue of one or more licenses granted
hereunder) the Proprietary Information of the other party or any Research
Technology.
12.2 Each party may disclose the other party's Proprietary Information to
subcontractors as long as such subcontractors agree in writing to be
bound by obligations of confidence no less stringent than those contained
herein. . Further, Xxxxxxxx will not use PTI's Proprietary Information or
any Research Technology to compete directly with PTI in its use of
electromagnetic waves to detect and assess corrosion in or on pipelines,
vessels and other structures and equipment and will likewise obligate all
agents, assignees, sub-contractors and licencees to observe this
prohibition; provided, however, that nothing herein shall be construed as
preventing Xxxxxxxx from applying its Proprietary Information and
Research Technology to other inspection technologies that do not use
electromagnetic waves..
ARTICLE 13 - EXPORT CONTROL OF TECHNICAL DATA
The parties acknowledge their obligations to adhere to the United States export
laws and regulations, such as Export Administration Regulations, International
Traffic in Arms Regulations and regulations promulgated by the Office of Foreign
Assets Control and the parties agree to adhere to such laws and regulations. No
law of conflicts or choice of law shall supersede this provision.
ARTICLE 14 - INDEPENDENT CONTRACTOR
It is the parties intent that they be independent contractors, with all the
attendant rights and liabilities, and not an agent or employee of the other
party. Any provision in this Agreement, or any action by a party, which may
appear to give such party the right to direct or control the other party in
performing under this Agreement means such other party shall use reasonable
efforts to follow the desires of the first party in results only.
ARTICLE 15 - SEVERABILITY
If any provision of this Agreement or the application thereof to any person or
circumstance shall, for any reason, and to the extent, be held to be invalid or
unenforceable under applicable law, such provision shall be deemed limited or
modified to the extent necessary to make the same valid and enforceable under
applicable law. Any invalid or unenforceable provision shall be replaced with
such new provision which shall allow the parties to achieve the intended
economic result in a legally valid and effective manner.
ARTICLE 16 - NON-WAIVER OF DEFAULTS
Any failure by either party at any time to enforce or require strict keeping and
performance of any of the terms and conditions of this Agreement shall not
constitute a waiver of such terms and conditions and shall not affect or impair
such terms or conditions in any way, or the right of either party at any time to
avail itself of such remedies as it may have for any breach or breaches of such
terms and conditions.
ARTICLE 17 - GOVERNING LAW AND DISPUTE RESOLUTION
17.1 The interpretation, validity and performance of this Agreement shall be
governed by Delaware law, without regard to Delaware's conflict-of-law
provisions, both as to interpretation and performance.
17.2 PTI and XXXXXXXX shall attempt to resolve amicably any disputes that
arise concerning the interpretation or operation of this Agreement
according to the following principals.
(a) A representative of each party shall meet in an attempt to resolve
any dispute.
(b) If the dispute is not resolved, then the commercial development
manager of PTI responsible for the XXXXXXXX relationship shall
meet with the commercial manager for XXXXXXXX responsible for the
PTI relationship under this Agreement in an attempt to resolve any
dispute. The persons nominated shall have 30 days to resolve the
dispute.
(c) If the dispute is not resolved, then the PTI business director
shall meet with the XXXXXXXX business director responsible in an
attempt to resolve any dispute. The person nominated shall have 30
days to resolve the dispute.
17.3 Any dispute between PTI and XXXXXXXX concerning the scope or
interpretation of this Agreement that is not resolved pursuant to section
17.2, including any dispute regarding the applicability of enforceability
of this section 17.3, shall be submitted to binding arbitration according
to the rules of Commercial Arbitration of the American Arbitration
Association in effect on the date that a dispute is submitted to
arbitration (the `Rules') except as the Rules are modified by this
Agreement. Arbitration shall be in English before a panel of three
arbitrators: one arbitrator will be selected by each party; the third
arbitrator shall be selected by the arbitrators selected by the parties.
17.4 Not less than 60 days prior to the arbitration hearing, PTI and XXXXXXXX
shall submit to the other party the documents and a list of witnesses it
intends to use in the arbitration. The arbitrators shall issue a written
opinion stating the findings of fact and the conclusions of law upon
which the decision is based. The decision of the arbitrators shall be
final and binding, absent manifest error in the findings of fact or the
conclusions of law. The decision of the arbitrators may be enforced in
any court or competent jurisdiction. The arbitrators shall be instructed
that the arbitration award shall not include punitive, special or
consequential damages. Each party shall bear equally the administrative
costs of the arbitration. Each party shall bear its own costs for
preparation and presentation of the dispute to the arbitrators.
ARTICLE 18 - HEADINGS
The headings used in this Agreement are for the convenience of the reader and
are not intended to have any substantive meaning.
ARTICLE 19 - ENTIRE AGREEMENT
This Agreement constitutes the full understanding of the parties, and is a
final, complete and exclusive statement of the terms and conditions of their
agreement regarding the subject of this Agreement. All representations, offers,
and undertakings, of the parties made prior to the effective date of this
Agreement are merged in this Agreement. All amendments or modifications to this
Agreement must be in writing, identified as an Amendment to this Agreement and
signed by an authorized representative of each party.
ARTICLE 20 - GRATUITIES
PTI will not itself, nor will PTI encourage or facilitate others, to pay any
commissions, fees, or grant any rebates to; favor with gifts or entertainment of
significant cost or value to; nor enter into any business arrangement with;
persons known to be employees, officers, or agents of XXXXXXXX without the prior
written consent of XXXXXXXX.
ARTICLE 21 - RECORDS
Both parties agree to keep true and correct records pertaining to this contract
and all transactions related thereto and to maintain such records for a period
of at least two (2) years after termination of this contract. On written request
by either party and at such party's expense, each party may have a firm of
independent certified public accountants audit any and all such records of the
other party at any time or from time to time for the purpose of confirming the
accuracy of such records and the manner in which such records have been used in
the administration of this contract; provided however, that such accountants
shall not disclose to the party requesting the audit any information obtained
during such audit and shall only report to such party the results of the audit
and whether same shows compliance with the terms of this contract, or as the
case may be, the respects in detail in which the terms of this contract have not
been complied with. The right to audit such records shall expire two (2) years
after termination of this contract.
ARTICLE 22 - SURVIVAL
The rights, obligations, and terms set forth in Articles 7, 12, and 13 shall
survive the termination or expiration of this Agreement.
The parties have caused this Agreement to be executed by their duly authorized
representatives. This Agreement shall be void if it is not executed by all
parties within thirty (30) days of the date on which the first party executes
this Agreement.
XXXXXXXX PETROLEUM COMPANY PROFILE TECHNOLOGIES, INC.
By /S/ Jan R. Knud By Xxxxx X. Xxxxxx
----------------------------- -----------------------------------
Title: Vice President, Upstream Technology Title: Chief Executive Officer
Date: December 3, 2002 Date: January 6, 2003
EXHIBIT A
---------
Preliminary Schedule
1. Xxxxxxxx and PTI schedule an extended session for detailed discussion and
planning of project. Within two (2) weeks of the Agreement Date.
2. PTI provides initial data set for screening existing pattern recognition
tools.
3. Xxxxxxxx processes initial data set with existing tools. Within four (4)
weeks of step 2.
4. PTI and Xxxxxxxx meet to review first set of results and develop a forward
plan. Within 3 weeks of step 3.
5. Agreement on forward plan after completion of Paragraph 4.
