EXHIBIT 10.44
DECEMBER 6, 2002
TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT is made this sixth day of December 2002, by
and between:
PROBEX CORP., a corporation organized under the laws of the State of Delaware,
having its principal place of business at 15510 Wright Bros. Drive, Xxxxxxx,
Xxxxx 00000, XXX ("Licensor"),
AND
OSILUB, a French societe anonyme registered with the Registry of Commerce and
Companies of Elbeuf under the number 441 563 764 having its registered office at
00 xxx xx xx Xxxx, 00000 Saint Xxxxx xxx Elbeuf ("Licensee").
PREAMBLE
WHEREAS, Licensor owns the intellectual and industrial property rights including
patents, know-how and confidential technical information to certain cost
efficient refining technology employing an unique set of operating parameters in
conjunction with certain chemical additives, known as the ProTerra Process(R)
and used for the purification, recycling and upgrading of used lubricating oil
in a plant constructed and operated using conventional process equipment;
WHEREAS, Licensor, SARP INDUSTRIES, S.A. and SARP, S.A., have entered into a
Shareholders Agreement on the date hereof (the "Shareholders Agreement") for the
purpose of defining their relationship within OSILUB; and
WHEREAS, Licensor is willing to grant, and Licensee desires a license to use
Licensor's patents, technology, methods and know-how to design, build and
operate facilities using the Technology and to distribute and sell the
re-refined oil and other salable products produced by such facility, on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the
parties hereby agree as follows:
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1. CERTAIN DEFINITIONS
1.1 "Affiliate" means any person, corporation or entity controlling,
controlled by or under common control with another person, corporation
or entity. For purposes of this definition "control" shall mean
ownership directly or indirectly, of 50% or more of the outstanding
equity securities of a Person, or the ability to direct or cause the
direction of the management and policies of another Person whether
through a management agreement or otherwise. Provided that as concerns
SARPI, no Persons above SARP Industries S.A. and SARP, S.A. in the
chain of control shall be deemed an Affiliate nor taken into account
for purposes of determining control.
1.2 "Base Salary Hourly Rate" means for each PROBEX employee level the
hourly rate derived by dividing by 2080 the gross annual salary prior
to standard income tax deductions (Federal withholdings, Social
Security, Medicare) but including regular bonuses, insurance,
commissions, retirement contributions or other compensation package
allowances. For the third quarter of the year 2002, the Base Salary
Hourly Rate will be : Senior Project Engineer US$ 62.77 - Junior
Project Engineer US$ 43.63.
1.3 "Commissioning" means the successful completion of a two stage process
consisting of:
- a start-up phase during which the Facility (or the Line as the case
may be) shall operate without interruption over a 72 hour period at
an average output of no less than its Nominal Capacity, and 24
continuous hours of such 72 hours at an average output equal to 110%
of its Nominal Capacity and:
- an acceptance phase during which the Facility (or the Line, as the
case may be) shall operate without interruption for a period of
thirty (30) days at an average output equal to its Nominal Capacity,
and for a continuous period of 48 hours during such thirty days at
an average output equal to 110% of its Nominal Capacity. At no time
during the thirty day period shall output fall below 90% of Nominal
Capacity. Down time for repairs or parts changes not exceeding
twelve (12) hours in any one instance shall not be taken into
account for this purpose if they do not result from a defect in the
Technical Information.
1.4 "Confidential Information" means any and all information, including but
not limited to, documents, business plans, customer lists, data,
software, computer programs, concepts, and ideas, disclosed by Licensor
to Licensee that is identified as confidential or proprietary or that,
due to the nature of the information or the circumstances surrounding
disclosure, should be treated as confidential or proprietary.
"Confidential Information" shall not include, however, information (i)
previously known to Licensee before receipt
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from Licensor; (ii) independently developed by Licensee without access
to Licensor's information; (iii) acquired by Licensee from a third
party which is not under an obligation to Licensor not to disclose such
information; or (iv) which is or becomes publicly available through no
breach by Licensee of this Agreement. This definition shall apply
mutatis mutandis to Licensee Confidential Information.
1.5 "Effective Date" means the date in the first paragraph of this
Agreement.
1.6 "Europe" means all European Union countries as of the date of this
Agreement and Czechie, Slovakia, Poland, Hungry, Romania, Switzerland
and Norway.
1.7 "Facility" means a used-oil re-refining plant, which may be composed of
one or more operating lines (each a "Line"), built to operate using the
Technology in whole or in part.
1.8 "First Facility" means a Facility 100% owned by OSILUB and constructed
in France with a minimum capacity to process 120,000 tons per year (its
Nominal Capacity) of wet feed stock meeting agreed specifications when
operated on a 7,500 hours per year basis; used oil supplied to the
facility to contain no more than 7% dissolved water. The First Facility
will be constructed in two operating Lines of approximately equal
capacity, Line 2 to be built after Commissioning of Line 1, if and when
decided by the Board.
1.9 "Improvement" means any invention, discovery, modification or
enhancement, whether patentable or not, which can be employed to
improve the performance of the ProTerra Process or reduce the cost of
building any equipment or structure used to operate the ProTerra
Process.
1.10 "Net Sales" means the total invoiced sales price of all base oil
products ("Base Oil") sold by Licensee or its direct or indirect
sub-licensees to customers, less any sales or value added taxes,
packing, insurance and transportation costs which are identified as
such on the corresponding invoices.
1.11 "New Project" means a proposed Facility for which Licensor or Licensee
has demonstrable evidence that it has secured fifty percent (50%) of
the feedstock and has certified that it intends to initiate
construction of the Facility.
1.11 "Output" means the number of metric tons of Products and other
lubricants, fuels, or salable products produced using the ProTerra(tm)
Process in the Facility.
1.12 "Patents" means all of the patents and patent applications set forth in
Schedule 1.12, and any and all continuations, divisions, reissues,
extensions of life and other filings that Licensor may file with
respect to such patents and patent applications.
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1.13 "Person" means any individual, corporation, partnership, association,
trust or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
1.14 "Products" mean the base oil and other salable products produced by the
Facility, including , fuel and asphalt flux or modifier.
1.15 "ProTerra Process(R)" shall mean the PROBEX propriety process for the
production of high quality base oil, fuel oil and asphalt flux from
used oil that sequentially embodies pretreatment and distillation and
finishing stages as more fully defined in Schedule 1.15.
1.16 "Technical Information" means all Confidential Information, trade
secrets, know-how, technology, methods, processes, designs, drawings,
specifications, and other valuable information of whatever nature,
whether confidential or not, and whether proprietary or not, which is
now or in the future in the possession of Licensor and which is
relevant to the design, construction or operation of a Facility using
the Probex ProTerra Process and the Patents for the production of
Products or other high quality lubricants, fuels or salable products
from used oils or other lesser quality products, or for the sale,
distribution, use, or testing of any Product.
1.17 "Technology" means the Patents, Technical Information, and Improvements
as set forth in Section 2.2.
1.18 "Territory" means the world excluding the United States of America.
1.19 Other capitalized terms used and not otherwise defined herein shall
have the meanings assigned thereto in the Shareholders Agreement.
2. GRANT OF RIGHTS AND LICENSES
2.1 License Grant for Technology.
(a) License to Use Technology. Subject to Section 9 below,
Licensor hereby grants to Licensee a license to use the
Technology, in order to design, build, and operate Facilities
in the Territory, and to produce, distribute and sell the
Products.
(b) Exclusivity.
(i) Subject to Section 9 below, the license granted in
sub-section (a) above is exclusive for Europe.
Accordingly, within Europe and during the term of
this
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Technology License Agreement, PROBEX shall not
directly or indirectly itself, invest in, manage,
operate, control, assist, counsel, or provide
services, technology, or intellectual property to any
Person that has activities related to the Technology
or , grant any license to any Person other than
Licensee, to use the Technology in any manner,
including to design, build and operate any Facility
or any site in Europe. The license granted in
subsection (a) above is non-exclusive in the
remainder of the Territory. However, it is agreed
that as, concerns Japan, this country shall not be
included in the Territory provided that PROBEX
successfully concludes its current negotiations with
a large national company based in Japan, and
commences basic engineering on a Facility in Japan
with that Company, prior to December 31, 2005. If
this provision is not satisfied on or before December
31, 0000, Xxxxx will thereafter become a
non-exclusive Territory for the purposes of the
Agreement. PROBEX will deposit with OSILUB a sealed
envelop containing the name of the large
international company based in Japan, which OSILUB
agrees to open only after December 31, 2005.
(ii) Subject to sub-section (iv) below, the exclusive
license granted in sub-section (i) above shall under
the following circumstances become a non-exclusive
license with respect to a country, other than France,
defined below:
If on a date commencing five years from the
Commissioning of Line 2 of the First Facility(or Line
1 if construction of Line 2 is not commenced within
one year after the Commissioning of Line 1), Licensor
has a New Project for a Facility in a particular
country subject to the exclusive license in which
Licensee does not have a New Project, it shall so
notify Licensee, in which case this License shall
become non-exclusive as to said country only, unless
with thirty days of receiving said notice, Licensee
shall notify Licensor that Licensee has a New Project
for a Facility in said country.
(iii) Subject to sub-section (iv) below, for any part of
the Territory in which this license is non-exclusive
neither Licensee nor Licensor, subsequent to having
received a notice of a New Project from the other
party, shall in any manner participate in a Facility
which is within 200 kilometers of a New Project of
the other party. This obligation shall terminate as
provided in (iv) below.
(iv) For purposes of each of sub-sections (ii) and (iii)
above a New Project shall cease to exist if
construction is not commenced with thirty months
after notification of the New Project by one party to
the other.
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(v) For any New Project subject to Sub-section (ii) and
(iii) above Licensor and Licensee agree to negotiate
on a good faith basis the terms of an exclusive
license in favor of the Party initiating the New
Project, to use the Technology within the country in
which the New Project is located.
(c) Restrictions On Technology. Licensee shall not use the
Technology for any purpose other than those specified herein
without the prior written approval of Licensor. Subject to
applicable law, during the term of this Agreement neither
Licensee nor its Affiliates shall challenge or assist in the
challenge of the validity or enforceability of any claim of
any patent or application therefor included in the Technology.
(d) Right to Sub-License. Licensee shall have the right to grant
sublicenses for Facilities, other than for Facilities inside
France, provided that Licensee is either (i) owner of a
majority of the capital of the entity that owns the Facility
or (ii) has an operating/management contract under which
Licensee is responsible for the operations of the Facility.
(e) Facilities outside of France. For all Facilities outside of
France for which Licensee has the right to grant a sub-license
pursuant to Section 2.1(d) above, Licensee shall at the time
of organization of the sub-Licensee provide Licensor with the
right to acquire a direct equity position of 20%, or a lesser
percentage as PROBEX in its sole discretion shall elect on
terms no less favorable than those obtained by Licensee. This
obligation shall terminate at such time as Licensor ceases to
be an owner of Shares of Licensee.
(g) Government Approvals. Licensee shall be responsible for
obtaining, at its sole expense, all approvals, if any, of
governmental agencies and departments which are required in
connection with the execution, performance, validity or
enforceability of this Agreement.
(h) Non-Compete. During the term of this Agreement, and for one
year thereafter, neither Licensee nor any of its Affiliates
shall engage in any negotiations with any third party with a
view towards, or engage in, directly or indirectly, the
production, in the Territory of base oil made by re-refining
used lubricating oil.
(i) Right to change the Technology. Notwithstanding the preceding
sub-section and any other disposition of this Agreement,
Licensee shall be free to change, develop, modify, improve and
add to the Technology (collectively the "Changes"). The
ownership of such Changes shall be in accordance with Section
2.2.
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(j) Infringement by Licensee Technology. Licensee represents that
any technology provided by Licensee and used in conjunction
with the ProTerra Process to operate a Facility will not
infringe any third party rights in such technology.
(k) Feedstock. Licensor represents that used base lubricating oil
feedstock generally available in France and consistent with
the used oil provided by the Vivendi group to Probex to
process in its pilot plant during 2000, when processed in the
First Facility using the ProTerra Process will produce high
quality group II base oil (except with regard to sulfur
content).
2.2 Improvements. Each party shall promptly advise the other party of all
Improvements created, discovered or developed, in whole or in part, by
such first party, and at the latest upon commencement of commercial
testing of such Improvement. Any Improvement made by Licensor, or made
by a third party and to which Licensor has acquired rights therein by
grant back or otherwise, shall remain the property of the Licensor and
be included in the Technology. Any improvements made in whole or in
part by Licensee, in accordance with section 2.2(iii) shall remain the
property of the Licensee which shall have the sole and exclusive right
to file and prosecute any patent applications and maintain any patents
on such Improvements, worldwide, at its own expense. Licensee agrees to
negotiate an appropriate royalty in consideration for which Licensor
may obtain the non-exclusive right to license the improvements of
Section 2.2 (iii) outside of the Exclusive Territory.
For purposes of interpreting this Section 2.2, it is agreed that:
(i) Any Improvements in the ProTerra Process other than those
described in (ii) and (iii) below for purposes of optimizing
performance, whether made by Licensee or Licensor shall be
owned by the Licensor and shall be included in the Technology.
(ii) Any Improvements, made jointly by Licensor and Licensee
pursuant to a written agreement to collaborate on such
Improvement shall be jointly owned by Licensor and Licensee,
and shall be included in the Technology.
(iii) Any Improvement in the ProTerra Process ( as is more fully
described by the Black Book) which does not violate PROBEX
patents or patent applications and is developed by Licensee,
will be described in appropriate written detail by Licensee
when the Black Book is delivered and shall be the property of
the Licensee.
(iv) Any improvement unrelated to the ProTerra Process, shall be
the property of the party that develops such improvement.
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2.3 Line 2. Licensor acknowledges and agrees that the decision to construct
Line 2 of the First Facility will be made by Licensee in its sole
discretion.
3. OBLIGATIONS OF LICENSOR
3.1 Delivery of the Technology. Within three months of signature of this
Agreement, PROBEX will provide OSILUB in written form with all Technical
Information and all relevant Confidential Information as well as
non-confidential information concerning the construction and operation of
the First Facility in the form of a "Black Book" as that term is used in
the engineering profession, having the contents indicated in Schedule
3.1. PROBEX will in a timely fashion provide any follow up information,
coordination, comments and explanations required by the engineering
contractor or OSILUB and necessary to accomplish the objectives of this
Agreement and the Shareholders Agreement. Licensor will provide Licensee
and its engineering contractor or other contractors access to all
documentation, test units and other information that it possesses that is
required for the performance of and related to this Agreement for the
construction and operation of the First Facility. All such information
may be in English, and shall be in metric units and will be complete. The
Technical Information other than the "Black Book" will be delivered at
Licensor's facilities in United States unless otherwise agreed. In this
connection when reasonably needed, Licensor will dispatch to the First
Facility and to the offices of the general contractor or sub-contractors
in France all necessary (as determined by mutual agreement of the
Parties) qualified engineering and technical personnel to collaborate in
implementing and expediting the First Facility. Prior to the commencement
of Commissioning Licensor shall provide Licensee with complete written
documentation for the proper operation of the First Facility including,
an instruction and operating manual for the operation and maintenance of
the First Facility and the ProTerra Process.
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3.2 Initial Training and Technical Assistance. During the period commencing
on the Effective Date and ending on the date of Commissioning of the
First Facility, Licensor shall provide initial technical assistance to
Licensee of qualified technicians and/or engineers of Licensor at
Licensor's facilities in the United States or at the First Facility if
Licensee so requests, in order to assist Licensee in designing, building
and operating the First Facility and in producing and selling the
Products.
3.3 Commissioning. Prior to and during the Commissioning procedures for the
First Facility, Licensor will provide Licensee's personnel with all
necessary training to enable them to properly operate the First Facility
and the ProTerra Process.
3.4 Additional Training and Technical Assistance.
(a) In addition to the initial technical assistance described in
Section 3.2 and 3.3 above, Licensor shall make available to
Licensee, during the term of this Agreement and upon written
request by Licensee, at Licensor's facilities in the United States
or at a Licensee Facility if Licensee so requests, the services of
qualified technicians and/or engineers of Licensor, in order to
advise, instruct and train with respect to the use of the
Technology and the production and sale of the Products, the
operation of the First Facility and the design, construction and
operation of other Facilities.
(b) Licensor shall also provide consultation and advice by telephone
or facsimile, pursuant to reasonable inquiries made by Licensee in
respect of the Technology.
3.5 Availability. The number of such personnel made available by Licensor
under Sections 3.2, 3.3 and 3.4, as well as the dates of their
availability, shall be decided by mutual agreement between Licensor and
Licensee, arrived at in good faith.
3.6 Information and Literature. Licensor shall provide Licensee with
operating instructions, maintenance manuals, catalogues, market
information existing at the time of signature of this Agreement, and
other descriptive literature with respect to the Technology and Products
which Licensor has previously generated, as well as which Licensor
otherwise generates during the term of this Agreement.
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4. PAYMENTS AND ROYALTIES
4.1 Lump Sum Royalty. In consideration for the rights granted hereunder to
Licensee to use the Technology, during the term of this Agreement
including renewal period, Licensee agrees to pay Licensor a lump sum
royalty which, for the First Facility only, shall include the performance
of Licensors' services under Section 3.1 in an amount equal to Two
Hundred Thousand US Dollars ($200,000) before VAT for the First Facility
payable:
o 50% on delivery of the Black Book (as defined in Section 3.1
above), and
o 50% on completion of Commissioning of Line 1.
Provided that if Licensor hires an engineering firm acceptable to
Licensee on terms acceptable to Licensee, for the preparation of the
Black Book, the lump sum royalty shall be payable :
o 75% on delivery of the Black Book (as defined in Section 3.1
above), and
o 25% on completion of Commissioning of Line 1.
And a lump sum royalty in an amount equal to one hundred thousand dollars
(US$100,000) before V.A.T. for any other Facility payable :
o 50% on the signature of the sub-license agreement or the
commencement of basic engineering if there is no sublicense
agreement, and
o 50% on completion of Commissioning.
4.2 Additional Royalty.
(i) In the event of the transfer of all of PROBEX Shares in OSILUB, as
a result of either Section 5.4 Co-sale, or section 5.5 Change of
control of PROBEX, of the Shareholders Agreement, PROBEX shall be
entitled to, and Licensee shall pay a royalty equal to 2% of Net
Sales of all Base Oil sold by each Facility, and
(ii) In the event of the transfer of all of PROBEX Shares in OSILUB as
a result of Section 3.8 Fulfillment of Conditions of the
Shareholders Agreement , PROBEX shall be entitled to, and Licensee
shall pay a royalty equal to 1% of the Net Sales of Base Oil sold
by the First Facility, and 2% of the Net Sales of Base Oil sold by
all other Facilities, provided that if PROBEX transfers its Shares
pursuant to Section 3.8 of the Shareholders Agreement due to its
disagreement concerning the Budget for Phase 2, the royalty shall
be 1% on the First Facility and on all other Facilities.
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(iii) In the event of the transfer of all of PROBEX Shares in OSILUB as
a result of Section 5.6 (PROBEX Put) of the Shareholders
Agreement, PROBEX shall be entitled to, and Licensee shall pay a
royalty equal to 1% of the Net Sales of Base Oil sold by each
Facility.
(iv) For any Facilities subject to the Additional Royalty, and which
produce less than 65% yield of Base Oil, the Additional Royalty
shall be calculated on 100% of the Net Sales of all Product
whether or not Base Oil.
(v) The Additional Royalty shall cease to be due and payable for
periods subsequent to January 1, 2023.
4.3 Technical Assistance Fee. In consideration of the training and technical
assistance supplied by Licensor pursuant to Sections 3.2, 3.3 and 3.4
above (collectively, "Technical Assistance"), Licensee shall pay to
Licensor on an actual cost basis calculated by multiplying the actual
Base Salary Hourly Rate cost of Licensee personnel, assigned to perform
the Technical Assistance for each hour, or part thereof, that such
personnel are directly engage in such services, which amount shall be
payable quarterly within 30 days of receiving the corresponding invoice
from Licensor. For Technical Assistance supplied by Licensor under
Section 3.4 for Facilities other than the First Facility, Licensee or its
sub-Licensee, as the case may be, shall pay reasonable rates to be
mutually agreed between the parties. Licensee shall also bear all
reasonable costs and expenses incurred in connection with such technical
assistance whether for its own employees or those of Licensor, including
international and local transportation, lodging, meals and living
expenses. All transportation, lodging and meals furnished to Licensor's
technical experts shall be of a class and quality consistent with their
positions.
4.4 Payment of Royalties and Fees.
(a) All amounts payable by Licensee hereunder shall be paid in U.S.
Dollars by wire transfer to Licensor at the bank account
designated by Licensor in writing.
(b) If Licensee fails to make timely payment of any amount due
hereunder, Licensee shall pay Licensor interest on such overdue
amount until paid, at the rate for US three (3) month treasury
notes, increased by two (2) percentage points.
(c) When the Additional Royalty is applicable, Licensee will, within
thirty (30) days of the end of each calendar quarter, send to
Licensor a statement signed by an officer of Licensee, indicating
the Products produced and sold by Licensee in such quarter, the
Net Sales and the calculation and payment of any royalty due.
Licensor shall have the right at Licensor's expense and under
reasonable conditions, to audit Licensee's
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records relating to the Products produced and sold, the Net Sales
and the calculation of royalty.
(d) During the term of any sub-license and for two (2) years
thereafter, Sub-Licensees, subject to Additional Royalties under
section 4.2 shall keep accurate books, records and data concerning
the Products manufactured and sold by them and shall permit
representatives of Licensor during normal business hours, upon
reasonable notice, to examine Sub-Licensee's books, records and
data for the purposes of verifying compliance with the terms and
conditions of this Article 4, particularly the calculation of the
amount of the royalty. The sub-license agreements must provide to
Licensor the rights and benefits provided to Licensor under this
Agreement.
(e) No part of any amount payable to Licensor hereunder may be reduced
due to any counterclaim, set-off, adjustment or right which
Licensee might have against Licensor, any other party or
otherwise.
4.5 Payment of Taxes.
(a) Any value added taxes in the Territory now or hereafter imposed
with respect to the transactions contemplated hereunder shall be
paid by Licensee, and if paid or required to be paid by Licensor,
the amount thereof shall be added to and become a part of the
amounts payable by Licensee hereunder.
(b) If Licensee is required to withhold taxes from any amount payable
by Licensee to Licensor hereunder, Licensee shall promptly provide
Licensor (at no cost to Licensor) with such documents and
assistance as Licensor may reasonably require in order to obtain a
corresponding tax credit in the United States.
5. CONFIDENTIALITY
5.1 Confidentiality Maintained. Licensee agrees that Licensor has a
proprietary interest in its respective Confidential Information. During
and after the term of this Agreement, all disclosures of Confidential
Information to Licensee, its agents and employees shall be held in strict
confidence by Licensee, its agents and employees and such disclosures
shall not be used for any purpose not specifically authorized in this
Agreement. Licensee shall disclose the Confidential Information only to
those of its agents and employees to whom it is necessary in order
properly to carry out their duties as limited by the terms and conditions
hereof. During and after the term of this Agreement, Licensee shall not
use the Confidential Information except for the purposes of exercising
its rights and carrying out its duties hereunder. The provisions of this
Section 5.1 shall also apply to any sub-licensees,
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consultants or subcontractors that Licensee may engage in connection with
its obligations under this Agreement.
5.2 Disclosure of Confidential Information by Licensee. Licensee shall ensure
that any agent, employee, sub-licensee, consultant or subcontractor or
any other Person to whom it may disclose the Confidential Information in
accordance with Section 5.1 above shall undertake in writing not to use
such Confidential Information in any manner or to disclose such
Confidential Information to any person, except as permitted under the
terms of this Agreement. At Licensor's written request, Licensee shall
promptly deliver to Licensor a signed copy of such undertaking. In the
event Licensee receives a subpoena or other validly issued administrative
or judicial process requesting any portion of the Confidential
Information of Licensor, Licensee shall promptly notify Licensor and
tender to it defense of such demand, at Licensor's expense. Unless the
demand shall have been timely limited, quashed or extended, Licensee
shall thereafter be entitled to comply with such subpoena or other
process to the extent permitted by law. If requested by Licensor to whom
the defense has been tendered, Licensee shall cooperate (at the expense
of Licensor) in the defense of a demand. Licensee agrees that the
unauthorized disclosure or use of Licensor's Confidential Information may
cause irreparable harm and significant and immeasurable injury.
Accordingly, Licensee agrees that Licensor shall have the right to seek
and obtain an injunction against any breach of this section without
payment of a bond prior to entry of an order enjoining the disclosure or
unauthorized use of Confidential Information.
5.3 Return of Confidential Information. Upon expiration or termination of
this Agreement for any reason, Licensee shall, at Licensor's option,
either (i) return to Licensor all copies of Licensor's Confidential
Information in tangible (including electronic) form; or (ii) destroy all
copies of Licensor's Confidential Information in tangible (including
electronic) form which are not returned, and certify to Licensor that all
such copies of such Confidential Information have been destroyed.
5.4 This Article 5 shall apply mutatis mutandis to all Licensee Confidential
Information disclosed to Licensor.
6. REPRESENTATIONS AND WARRANTIES OF LICENSEE
Licensee hereby represents and warrants to Licensor as follows:
6.1 Corporate Organization and Authority. Licensee is a societe anonyme, duly
organized and validly existing under the laws of France. This Agreement
has been duly executed and
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delivered by Licensee and constitutes a valid and binding obligation of
Licensee, enforceable against it in accordance with its terms.
7. REPRESENTATIONS AND WARRANTIES OF LICENSOR
Licensor hereby represents and warrants to Licensee as follows:
7.1 Corporate Organization and Authority. Licensor is a corporation, duly
organized, validly existing and in good standing under the laws of the
State of Delaware. This Agreement has been duly executed and delivered by
Licensor and constitutes a valid and binding obligation of Licensor,
enforceable against it in accordance with its terms.
7.2 Patents and Technical Information.
(a) Licensor owns or controls and has a proprietary interest in the
Issued Patents and to its knowledge in the remainder of the
Technology, and has the right and authority to license the
Technology to Licensee in accordance with the terms of this
Agreement.
(b) The Issued Patents listed in Schedule 1.12 are valid and in full
force and effect.
(c) The Technology, if correctly applied by Licensee and where
necessary adapted in accordance with the technical assistance
rendered by Licensor under this Agreement, when utilized on used
base lubricating oil feedstock generally available in France and
consistent with the used oil provided by the Vivendi group to
Probex to process in its pilot plant during 2000, will enable
Licensee to design, build and Commission the First Facility
utilizing the services of an engineering construction company and
enable the Licensee to operate the First Facility and to produce
the Products in accordance with the typical performance
specifications as set forth in Schedule 7.2. Licensor shall not be
responsible for any failure to fulfill the terms of this
sub-section to the extent caused by Licensee changes,
modifications, developments, and improvements to the Technology
which have not been approved by Licensor.
(d) No third party has commenced or threatened proceedings against
Licensor alleging that Licensor's use of any of the Technology or
Licensor's sale of any products made or sold with the use of any
of the Technology infringes that third party's intellectual or
industrial property rights and Licensor has no knowledge of any
patents or other intellectual property rights of a third party
that may infringe the Technical Information. Licensor further
represents and warrants that the Technology Information will not
infringe any patent or intellectual property right of another
Person.
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8. COVENANTS OF THE PARTIES.
8.1 Patent Validity. Licensor undertakes to pay all renewal and maintenance
fees of the Patents. Should the validity of the Patents be contested
Licensor shall defend such action at its expense, to the extent it is
commercially reasonable. Licensor will be under no obligation to file for
patents other than those listed in Schedule 1.12. Licensor at its cost
will use its best efforts to prosecute to successful completion its
patent applications listed in Schedule 1.12.
8.2 Infringements. Each party shall promptly notify the other party of any
and all infringements, imitations, illegal uses or other misuses of the
Technology, or threats thereof, of which it is aware. Licensee shall
cooperate diligently in the prosecution of any action relating to the
protection of the Technology in the Territory. If Licensor fails, after
having been notified by Licensee for a period of one month to institute
any proceedings or actions necessary to prevent any infringement as
aforesaid which will interfere with or prejudice Licensee's operations
hereunder, Licensee will be at liberty at its own cost to institute and
prosecute actions or proceedings, if necessary, in the name of Licensor,
and Licensee shall be entitled to retain any amounts recovered.
8.3 Indemnification.
(a) Licensor will indemnify Licensee against any loss, damage, or
expense incurred by Licensee arising from any claims, actions, or
proceedings brought by any Person alleging infringement by the
Technology or other proprietary rights.
(b) Each party (the "Indemnifying Party") shall indemnify, hold
harmless and defend the other party and their respective present
and future directors, officers, employees and agents (each an
"Indemnitee") from and against any and all claims, demands,
losses, damages, liabilities, causes of action and expenses
(including but not limited to costs of defense, mediation,
settlement, and reasonable attorneys' fees), and including but not
limited to, claims for death of or bodily injury to any person, or
injury to or destruction of any property ("Losses"), if and to the
extent such Losses directly or indirectly relate to or
arise out of or in connection with (i) any negligent or willful
act or omission of the Indemnifying Party, or their respective
subcontractors, agents or employees relating to this Agreement or
the transactions contemplated hereby, (ii) the breach of any
warranty or other provision of this Agreement by the Indemnifying
Party or their respective subcontractors, agents or employees, or
(iii) the violation of governmental laws, regulations, guidelines,
permits or orders by the Indemnifying Party, its Affiliates or
their respective subcontractors, agents or employees relating to
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this Agreement or the transactions contemplated hereby, or (iv)
any indemnification undertaking provided for in this Agreement.
(c) Any party seeking indemnification hereunder (the "Indemnitee")
shall promptly notify the other party hereto obligated to provide
indemnification hereunder (the "Indemnifying Party") of any
action, suit, proceeding, or demand, (a "Third Party Claim") with
respect to which the Indemnitee claims indemnification hereunder,
provided that failure of the Indemnitee to give such notice shall
not relieve any Indemnifying Party of its obligations under this
Article 8 except to the extent, that the Indemnifying Party
demonstrates that the defense of the Third Party Claim is
materially damaged as a result of such failure to give notice.
Except for criminal proceedings, upon receipt of such notice from
the Indemnitee, the Indemnifying Party may appoint lead counsel of
such defense with a recognized reputable counsel reasonably
acceptable to the Indemnified Party provided that prior to
assuming control of such defense it shall first verify to the
Indemnified Party in writing, that Indemnifying Party shall be
fully responsible, without reservation for all liabilities and
obligations relating to such claim for indemnification.
(d) The Indemnitee shall retain the right to employ its own counsel
and to participate in the defense of any Third Party Claim, the
defense of which has been assumed by the Indemnifying Party
pursuant hereto, but the Indemnitee shall bear and shall be solely
responsible for its own costs and expenses in connection with such
participation incurred subsequent to the date the Indemnifying
Party effectively assumes control of such defense.
(e) In the event the Indemnifying Party does not accept the defense of
any Third Party Claim as provided above, the Indemnitee shall have
the full right to defend such Third Party Claim and shall be
entitled to negotiate, compromise and settle such Third Party
Claim, provided, however, that no Indemnitee shall be entitled to
settle any Third Party Claim without the Indemnifying Party's
prior written consent unless as part of such settlement (i) the
Indemnifying Party is released in writing from all liability with
respect to such Third Party Claim, (ii) there is no finding or
admission of violation of any law, rule, or regulation or any
violation of the rights of any person, and (iii) the sole relief
provided is monetary damages that are paid in full by the
Indemnifying Party.
(f) In any event, the Indemnitee and the Indemnified Party shall
reasonably cooperate with each other in the defense of any matter
arising under this section.
(g) If the Indemnifying Party has assumed control of the defense of a
Third Party claim, it may negotiate, settle and compromise such
claims provided that notwithstanding
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the foregoing, no Indemnifying Party shall be entitled to settle
any Third Party Claim without the Indemnitee Party's prior written
consent unless as part of such settlement (i) the Indemnitee is
released in writing from all liability with respect to such Third
Party Claim, (ii) there is no finding or admission of violation of
any law, rule, or regulation or any violation of the rights of any
person, and (iii) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Party
(h) In the event one party hereunder should have a claim for
indemnification that does not involve a Third Party Claim, the
party seeking indemnification shall promptly send notice of such
Claim to the other party; provided that failure to give such
notice shall not relieve any Indemnifying Party of its obligations
under this Article 8 except to the extent, if at all, that such
Indemnifying Party shall have been prejudiced thereby.
8.4 Communications. Neither party nor any of their respective Affiliates
shall make or issue any public statement or announcement with respect to
the transactions contemplated herein without the prior approval of the
other party. In the event, however, that legal counsel for any party is
of the opinion that a public statement or announcement is required by law
or by the rules of any stock exchange, then such party may issue a public
statement or announcement limited solely to that which such legal counsel
reasonably considers to be required by law or such rules; provided,
however, that to the extent feasible, such party will notify the other
party and attempt to obtain the prior approval of the other party.
8.5 Registration: Licensor shall at its own cost be responsible for filing,
prosecuting and defending all proceedings for the registration,
cancellation or revocation of all patents, and shall pay all filing and
renewal fees.
8.6 Limitation of Indemnification
(a) Licensor's obligation of indemnification shall be subject to the
following limitations:
(i) in the event that any Patent is declared invalid, or if the
validity is contested, the total amount of Losses subject
to indemnification shall be limit to US$100,000.
(ii) in the event that Representation and Warranty contained in
Section 7.2 (c) and 2.1(k)is breached, inexact or not
respected, Licensor's liability shall be limited to
providing Licensee up to 2080 man hours of the services of
Licensors' engineers and technicians for the purpose of
making appropriate modifications of the First Facility in
order that such Facility meet specifications.
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(iii) in the event of a breach of Sections 7.2(d), 8.2 and for
Losses indemnified under Section 8.3(a), or in the event
any Patent is determined to infringe the patent of any
third party, Licensor's liability for Losses shall be
limited to (50%) fifty percent of any dividends or
Additional Royalties that Licensor is entitled to receive
from Licensee or any sub-licensee during the period ending
five years from the Commissioning of Line 2(or Line 1 if
construction of Line 2 is not commenced within one year
after the Commissioning of Line 1), of the First Facility.
(b) Licensee's obligation of indemnification of breach of its
Representations and Warranties contained in Section 6 hereunder
shall be limited to a total amount of US$10,000.
(c) With respect to any breach for which indemnification is provided
pursuant to this section 8.6, such indemnities shall not be
cumulative and shall constitute the sole remedy available to the
injured Party under this Agreement or at law.
8.7 EXPORT REGULATIONS
It is agreed that the exportation of Licensor's Technical Information
will be subject to the applicable Export Control Regulations of the
United States Government and that distribution of that information must
be in accordance with such Regulations. Notwithstanding anything to the
contrary in this Agreement, Licensee will not directly or indirectly
export (or re-export) any of the Technology, or permit the export of
same: (a) into (or to a national or resident of) any country to which the
United States has embargoed such goods; (b) to anyone on the U.S.
Treasury Department's list of Specially Designated Nationals, List of
Specially Designated Terrorists or List of Specially Designated Narcotics
Traffickers, or the U.S. Commerce Department's Denied Parties List; or
(c) to any country or destination for which the United States government
or a United Stares governmental agency requires an export license or
other approval for export without first having obtained such license or
other approval.
9. MISCELLANEOUS
9.1 Term and Termination
(a) This Agreement shall come into effect on the Effective Date, and
it shall remain in effect for an initial period of twenty (20)
years following the Effective Date unless otherwise terminated
pursuant to the terms of this agreement. It will automatically be
renewed for an unlimited number of additional periods of ten (10)
years each
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unless the Licensee gives notice to the Licensor if its intention
not to renew, at least three months prior to the date of
expiration. Notwithstanding the foregoing, this Agreement shall
cease to have any effect with respect to any Patent, if such
Patent expires, is abandoned, is dedicated to the public or is
held invalid by any court of competent jurisdiction.
(b) In the event of a breach of this Agreement, by Licensee, Licensor
shall be entitled to exercise the rights and remedies provided for
herein or otherwise available under French law. In the event of
expiration, termination, or extinguishment of this Agreement for
any reason, the Licensee and its sub-licensees shall have the
absolute right to continue to use the Technology in any Facility
already Commissioned and in any Facility for which basic
engineering has commenced (collectively the "Continuing
Facilities"), and Licensee shall continue to pay Additional
Royalties as provided herein.
(c) Upon expiration or termination of this Agreement for any reason,
Licensee shall promptly: (i) other than for Continuing Facilities,
cease to produce and sell the Products and, more generally, cease
to use any part of the Technology; (ii) return to Licensor all
written or printed materials containing any Technical Information
disclosed by Licensor other than as needed to operate Continuing
Facilities; and (iii) pay to Licensor all sums due by Licensee
hereunder. Notwithstanding the above, Licensee shall be entitled
to sell any of the Products produced but not sold on the date of
termination or expiration.
(d) This Agreement shall terminate in the event of the dissolution,
insolvency or bankruptcy of the Licensee under the laws of the
Republic of France; provided, however, that the termination shall
not apply to any Facility already commissioned or a New Project
which has been notified to Licensor prior to the date of
termination, provided construction for that New Project occurs
within 2 years of the date of termination.
(e) Provided that the Facility is constructed and that failure to
achieve Commissioning is not primarily due to the fault of
Licensor or the Technology, in the event that no Facility or Line
of a Facility has been Commissioned by June 30, 2006, then
Licensor, in its sole discretion, shall have the option to
terminate this Agreement upon delivery of written notice to such
effect to the Licensee; provided, however, that the termination
shall not apply to any New Project which has begun by such date,
provided that construction for that New Project occurs within 2
years of the date of termination. Notwithstanding anything to the
contrary in this section 9.1(e), if a Facility has not been
constructed by June 30, 2008, then Licensor shall have the right
19
in its sole discretion to terminate this Agreement upon delivery
of written notice to such effect to the Licensee.
(f) This Agreement shall terminate in the event that the Licensee is
put into dissolution due to the failure to fulfill the
Commencement Conditions set forth in section 3.8 of the
Shareholders Agreement.
9.2 Force Majeure.
(a) The obligations of a party shall be suspended pro tanto upon the
occurrence of any event of force majeure as defined in this
Section;.
(b) The party asserting suspension based on force majeure shall
promptly notify the other party in writing. Thereafter, the
parties shall cooperate as necessary to mitigate the effects of
force majeure.
(c) Force majeure shall mean any act beyond the control of a party
that has the effect of preventing the performance by that party of
one or more of its obligations under this Agreement, including,
but not limited to, fires, floods, earthquakes, other natural
disasters, war, riots, strikes, power interruptions, lockouts,
civil unrest, civil commotion, insurrection, revolution or
governmental action or inaction.
9.3 Entire Agreement. This Agreement and the Shareholders Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes and annuls all previous
communications, agreements or understandings between them with respect to
the subject matter hereof. The entire agreement includes the Shareholders
Agreement and any previously executed Confidentiality Agreements,
provided that PROBEX hereby agrees that all such Confidentiality
Agreements shall be governed by French law so long as all third parties
to such Agreements likewise consent in writing to be bound by French law,
and, in such case, shall be subject to the exclusive jurisdiction of the
competent courts of Paris, France. In the event that any third party to
the Confidentiality Agreements refuses to consent in writing to be so
bound, then the Confidentiality Agreements as applicable to said non
consenting third party shall continue to be governed by the Laws of the
State of Texas and shall be subject to the jurisdiction of the courts
provided for therein.
9.4 Amendments. This Agreement may be modified or amended only by a written
instrument duly signed by the parties hereto.
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9.5 Severability. If any provision contained in this Agreement is determined
to be void, illegal, or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect
as if the provision which was determined to be void, illegal, or
unenforceable had not been contained herein.
9.6 Relationship of the Parties. Nothing contained in this Agreement shall
create or be deemed to create a partnership or relationship of
principle/agent, employer/employee or joint venturers between the
parties.
9.7 Assignment. Licensee shall not assign this Agreement in whole or in part,
without the prior written consent of Licensor.
9.8 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or upon receipt
if by facsimile transmission or mailed by registered or certified mail
(return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice; provided, that notices of a change of address
shall be effective only upon receipt thereof):
(a) To Licensor, as follows:
Probex Corp.
00000 Xxxxxx Xxxx. Xxxxx
Xxxxxxx, Xxxxx 00000
X.X.X.
Attn: 00 1 97 27 88 47 72
Facsimile: 00 1 97 29 80 85 45
and
(b) To Licensee, as follows:
Osilub
00 xxx xx xx Xxxx
00000 Saint Xxxxx xxx Elbeuf
France
Attn: 33 1 34 97 25 33
Facsimile: 33 1 34 97 25 32
9.9 Language. All written material, correspondence, Technical Information,
notices and oral assistance supplied by Licensor hereunder shall be in
the English language,and when
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supplied by Licensee shall be in the French language unless Licensee in
its sole discretion determines to use the English language.
9.10 Applicable Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the substantive laws of France applicable to
contracts executed and to be performed within France and without regard
to the conflicts-of-laws rules of France. Any dispute, claim, controversy
or litigation which may arise from the present agreement will be
submitted to the exclusive jurisdiction of the Tribunal de Grande
Instance or other competent court of Paris, France, including matters of
guaranty or warranty and claim made by interpleader or third party
complaint.
9.11 No Corrupt Practices. Each party agrees that it will not transfer money
or anything of value, or offer or promise any such transfer, or authorize
any of the foregoing to (i) any official political party, party official,
or candidate for political office, or (ii) any third party knowing or
believing that such third party will pass through such value, in whole or
in part, to any official political party, party official, or candidate
for political office, in order to secure any improper advantage in
connection with this Agreement or the transactions contemplated hereby.
9.12 Execution in Counterparts
Each text of this Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this Agreement
by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in two (2) originals on the date first written above.
PROBEX OSILUB
By: By:
------------------------------ ---------------------------
Its: Its:
----------------------------- ---------------------------
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LIST OF SCHEDULES
Schedule 1.12 List of the Patents
Schedule 1.15 ProTerra Process
Schedule 3.1 Table of Contents of "Black Book"
Schedule 7.2 Typical Performance Specifications
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