DESULFURIZATION TECHNOLOGY AGREEMENT
This Agreement is made by and between:
SulphCo, Inc., a Nevada corporation with offices at 0000 Xxxx Xxxx, Xxxx,
Xxxxxx, 00000 ("SulphCo");
And
Xxxxxxxx Oil Corporation, a Wyoming corporation, with offices at 000 Xxxx Xxxxx
Xxxxxx Xx., Xxxx Xxxx Xxxx, Xxxx 00000-0000 ("Sinclair").
Whereas:
A. SulphCo represents that it is the owner of certain
intellectual property rights in relation to a unique process
for the removal of organic sulfur compounds from fossil or
(petroleum-derived fuel) that combines oxidative
desulfurization with the use of sonic waves ("this process is
hereinafter referred to as the Proprietary Technology").
X. Xxxxxxxx operates as an independent refiner and distributor of
petroleum products with refineries in Oklahoma and Wyoming.
C. EPA regulations recently signed into effect will impose new
limits on sulfur levels in diesel fuel and gasoline. Sinclair
wishes to introduce and utilize technologies and processes
that will achieve the new limits in its petroleum products.
X. Xxxxxxxx and SulphCo have mutually expressed interest in
forming a business relationship with each other that will
allow Xxxxxxxx an opportunity to beta test SulphCo's
Proprietary Technology and processes and acquire ownership
interest in SulphCo.
Therefore:
1. Xxxxxxxx will undertake a due diligence evaluation of the Propriety
Technology. Such due diligence is to be completed within 30 - 60 days
of the date of execution of this Agreement. SulphCo shall fully
cooperate with and assist Xxxxxxxx in performing this evaluation,
including providing all necessary documents and information requested
by Xxxxxxxx in a timely manner.
2. Xxxxxxxx'x due diligence evaluation of the Proprietary Technology will
involve a study of the practicality, safety and the economic viability
of its commercial implementation, including a performance review of the
Proprietary Technology in a laboratory setting either in the SulphCo
facility in Reno, Nevada and or at the University of Southern
California.
3. At the conclusion of the evaluation period, Sinclair shall determine,
in its sole discretion, whether it wishes to install and operate a
4,000 to 10,000 BPD industrial model of SulphCo's desulfurization unit
(the "Beta Test Unit" or the "Unit") and shall give notice of its
determination to SulphCo.
4. If Xxxxxxxx determines that it will not proceed with such installation
and operation of the Beta Test Unit, it will (a) promptly return all
proprietary documents and other property to SulphCo; (b) not make any
use of information concerning the Proprietary Technology obtained
during the evaluation period; and (c) not seek to acquire any ownership
interest in SulphCo.
5. If Xxxxxxxx determines that it wishes to proceed with the installation
and operation of the Beta Test Unit, the parties shall, within two
weeks, negotiate and execute a mutually agreeable contract (the
"Definitive Agreement") governing their relationship, at a minimum to
include the following:
5.1. The Beta Test Unit will be installed in an expeditious manner
at a location to be chosen by Xxxxxxxx, contemplated to be
Tulsa, Oklahoma;
5.2. All Engineering required for the installation and operation
shall be provided by SulphCo at no cost to Xxxxxxxx;
5.3. Xxxxxxxx will operate the Unit in accordance with the
operating instructions prescribed by SulphCo for a period not
to exceed 90 days (the "Beta Test Period");
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5.4. Xxxxxxxx will allow SulphCo, and/or the manufacturer of the
Unit, access to the Unit with reasonable notice during normal
working hours (8:00 am to 4:00 pm Monday through Friday) for
the purpose of monitoring the operation of the Unit during the
Beta Test Period;
5.5. Xxxxxxxx shall keep and maintain adequate records of the
Unit's operation, and SulphCo shall have access to, and the
right to use, such records on a reasonable basis;
5.6. Xxxxxxxx shall pay for all processing costs, and shall provide
at its own cost all equipment utilized during the Beta Test
Period;
5.7. Following the Beta Test Period, Sinclair shall receive a
license, at no cost to Sinclair, to use the Proprietary
Technology at all of its refineries for a period of four (4)
years, and Sinclair shall pay a royalty of fifty per cent
(50%) of the market royalty thereafter;
5.8. Xxxxxxxx will have the option to purchase fifteen per cent
(15%) of the outstanding shares of SulphCo at three dollars
($3.00) per share, to be exercised as follows: five per cent
(5%) within 30 days following the execution of the Definitive
Agreement, the other ten per cent (10%) within six (6) months
of the execution of the Definitive Agreement. Following the
initial exercise of this option, Xxxxxxxx will be entitled to
fill one seat on the Board of Directors of SulphCo.
6. Under no circumstances shall either party to this Agreement be liable
to the other party for any consequential, incidental or indirect
damages arising from any aspect of the performance or non- performance
of this Agreement, whether arising in tort, contract, strict liability,
breach of contract, or otherwise, except for damages for patent
infringement. The parties hereby release each other and their
affiliates, subsidiaries, officers, employees and agents from all such
loss or damages.
7. SulphCo hereby represents that it owns and is entitled to all
intellectual property rights associated with the Proprietary Technology
and agrees to fully and completely indemnify Xxxxxxxx for any loss,
damage or costs associated with any contrary intellectual property
claims which may be brought by third parties.
8. The governing law of this Agreement shall be the law of the state of
Nevada and the parties hereby submit to the jurisdiction of the courts
of the state of Nevada, country of Washoe for purposes of the
interpretation or enforcement of the terms of this Agreement.
9. Neither this Agreement nor performance of any of its terms shall be
subcontracted or assigned by either party without the prior written
approval of the other.
10. This Agreement may not be modified except by a writing duly signed by
both the parties hereto.
11. All notices required or permitted to be given under this Agreement
shall be sent to the other party by certified mail to the addressee and
at the address shown below:
Dated this 3rd day of January, 2001.
For Xxxxxxxx Oil Corporation: For SulphCo, Inc.:
By:/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxx
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Xxxxx X. Xxxxxxx Xxxx Xxxxxx, President & CEO
President, Oil Division SulphCo, Inc.
Xxxxxxxx Oil Corporation 0000 Xxxx Xxxx
000 Xxxx Xxxxx Xxxxxx Xxxx, Xxxxxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000
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