EXHIBIT 10.1
LICENCE AGREEMENT
This Licence Agreement ("Agreement"), effective as of 28 February 2002
("Effective Date") and dated 1 March 2002 ("the Execution Date") as amended
April 29, 2002 is made between SHELL TECHNOLOGY VENTURES INC. ("SHELL"),
XXXXXXXXXXX/XXXX, INC. ("the Company") and XXXXXXXXXXX INTERNATIONAL, INC.
("Weatherford") (individually a "Party" and together the "Parties").
WHEREAS, SHELL and its Affiliates have certain Intellectual Property Rights to
Expanded Tube Technology which may be utilized in various commercial
applications, including, without limitation, the Field of Use; and
WHEREAS SHELL and its Affiliates have certain information relating to Expanded
Tube Technology; and
WHEREAS the Company wishes to be granted a right and licence for the use of
certain of the aforementioned Intellectual Property Rights and information
related thereto and SHELL is willing to grant such right and licence on terms
and conditions set forth herein; and
WHEREAS Weatherford (who is, at the Effective Date, the parent of the Company)
is prepared to guarantee the obligations of the Company set forth herein,
the Parties agree as follows:
1. DEFINITIONS
The following terms, as used in this Agreement and the Recitals to it,
will have the following meanings:
"Affiliate" means:
(a) in respect of a Person other than SHELL;
any company or legal entity
(i) which Controls either directly or indirectly such
Person; or
(ii) which is Controlled directly or indirectly by such
Person; or
(iii) which is directly or indirectly Controlled by a
company or entity which directly or indirectly
Controls such Person;
for the purposes of this paragraph (a), "Control" and its
derivatives means either
(A) the right to exercise 50% (fifty percent) or more of
the voting rights exercisable at a general meeting of
the shareholders (or its equivalent) of such company
or entity; or
(B) where paragraph (A) cannot be satisfied due to legal
or governmental restrictions of the country in which
such company or entity is registered, and SHELL
agrees that such company or entity should be regarded
as an Affiliate (such agreement not to be
unreasonably withheld), the right to exercise a
number being less than 50% (fifty percent) of such
voting rights, provided that the Controlling party
exercises control of such company or entity with
respect to operations and management. For the
avoidance of doubt, it shall be reasonable for SHELL
to refuse to agree that such company be regarded as
an Affiliate if it is not reasonably satisfied that
such control of operations and management actually
exists; and
(b) in respect of SHELL:
(i) N.V. Koninklijke Nederlandsche Petroleum Maatschappij
(a Dutch company), The "Shell" Transport and Trading
Company, p.l.c. (an English company) and any company
other than SHELL that is for the time being directly
or indirectly affiliated with the two first mentioned
companies or either of them.
For the purpose of this paragraph (i), a particular company
is:
(A) directly affiliated with another company or companies
if the latter hold/holds shares carrying 50% (fifty
percent) or more of the votes exercisable at a
general meeting of shareholders (or its equivalent)
of the particular company; and
(B) indirectly affiliated with a company or companies (in
this definition referred to as "the parent company or
companies") if a series of
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companies can be specified, beginning with the parent
company or companies and ending with the particular
company, so related that each company of the series,
except the parent company or companies, is directly
affiliated with one or more companies earlier in the
series; and
(ii) any company which is managed or operated by SHELL or
a company as defined in (i) above and/or has a
service agreement with SHELL and/or a company as
defined in (i) above pursuant to which it pays on a
cost sharing basis a proportion of certain of the
costs of research and/or technical development
activities of SHELL or such other company pursuant to
a cost allocation arrangement, provided that any
company which from time to time holds a licence or
sub-licence in relation to the Other Commercial
Licence as referred to in Clause 3.1 hereof and
which, but for this proviso would be an Affiliate of
SHELL, shall for so long as the aforesaid licence
subsists be deemed for the purposes of this Agreement
not to be an Affiliate of SHELL.
"Affiliate Sub-Licensee" means Affiliate of the Company to whom a
sub-licence has been granted in accordance with the terms of this
Agreement.
"Change of Control" means:
(a) the acquisition by a non-Affiliate of Weatherford of 50% or
more of the combined voting power of the outstanding voting
securities of the Company (or its permitted assignee);
(b) the merger or consolidation of the Company with and into
another corporation or other entity (whether or not the
Company is the surviving corporation), where Weatherford or an
Affiliate of Weatherford does not continue to own 50% or more
of the combined voting power of the outstanding voting
securities of the surviving corporation; or
(c) the Company transfers all or substantially all of its assets
(including this licence) to a Person which is a non-Affiliate
of Weatherford or the Company transfers all or substantially
all of its assets not including this licence to a Person who
is a non-Affiliate of Weatherford or the Company where the
Company is unable to demonstrate to the reasonable
satisfaction of SHELL that
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it retains appropriate financial and commercial resources to
continue to meet its obligations under, and to operate, the
licence;
provided that, a change of control of Weatherford shall not be deemed
to be a "Change of Control" of the Company. For the avoidance of doubt,
a change of control of Weatherford includes, without limitation, the
following events:
(i) any "person", including a "group", as those terms are used in
Section 13(d)(3) of the Securities Exchange Act of 1934
acquires or otherwise becomes the owner of 50% or more of the
combined voting power of Xxxxxxxxxxx'x then outstanding voting
securities;
(ii) Weatherford is merged or consolidated with and into another
corporation or other entity, whether or not:
(A) Weatherford is the surviving or parent corporation,
(B) the stockholders of Weatherford prior to such merger
or consolidation continue to own 50% or more of the
combined voting power of the outstanding voting
securities of the surviving corporation,
(C) the directors of the surviving corporation are
"continuing directors" (within the customary meaning
of such term), or
(D) the surviving corporation is publicly traded; and
(iii) Weatherford transfers all or substantially all of its assets
as contemplated by Delaware corporate law on a consolidated
basis to another corporation or entity which is a less than a
50% owned subsidiary of Weatherford.
"Confidential Information" means:
(a) any information referred to in paragraphs (a), (b) and (d) of
the definition of Technical Information, whether in written,
electronic or other physical form provided that where the same
is orally or visually disclosed by SHELL or any Affiliate of
SHELL it shall be confirmed in writing as confidential within
thirty (30) days of such oral or visual disclosure;
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(b) any information referred to in paragraphs (c) and (e) of the
definition of Technical Information; and
(c) any other technical information provided to the Company or its
Affiliates that should reasonably, by the nature of such
information or under the circumstances of its disclosure, be
considered of a confidential nature.
"Documentation" means any and all written materials or electronic media
relating to a product (whether hardware or software) or service
including, without limitation, (i) all manuals, drawings, patterns,
plans, specifications, tolerances, algorithms, formulas, source code,
object code and other data whatsoever and all supplements, revisions
and updates thereto and (ii) all programmer's notes and manuals,
flowcharts, user manuals and all other information which assists in
compiling, interpreting, linking, interfacing, porting, loading,
maintaining, supporting, debugging, upgrading, updating, enhancing or
programming software applications programs, or which otherwise describe
and/or explain the components, structures, sequencing, organisation,
function, performance, communications and/or operation of such software
application programs.
"Enventure" means Enventure Global Technology LLC.
"EST" means expandable perforated (including slotted) tube
applications, including, without limitation, applications utilized for
wellbore drilling, completion and/or repair.
"Expanded Tube Technology" means all technology related to or necessary
for the expansion of tubulars as covered by any of the SHELL
Intellectual Property.
"Field of Use" means any application of Expanded Tube Technology in
oil, gas and water xxxxx (including subsea applications).
"Framework Agreement" means the framework agreement between Shell
Technology Ventures Limited and Weatherford dated 1 March 2002 and
effective as of 28 February 2002.
"Intellectual Property Rights" means all Patent Rights and any other
intellectual property rights existing under the laws of any
jurisdiction, including, without limitation, copyrights (whether
registrable or not), rights under copyright applications for
registration, rights under copyright registrations, unregistered design
rights, rights under design rights registrations, rights under design
rights applications, database rights, trade secrets or other similar
property rights.
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"Licensed Patents" means the patent applications and patents listed in
Schedule 1, any patents claiming priority from or granted on any of the
patent applications listed in Schedule 1, any patents and patent
applications corresponding with any of the patent applications and
patents listed in Schedule 1, any other patents or patent applications
that SHELL may from time to time agree in writing in accordance with
Clause 16 are to be added to Schedule 1; and including any divisions,
reissues, reexaminations, continuations, continuations-in-part,
extensions and renewals thereof.
"Net Invoice Price" means the gross invoice price, incorporating all
revenues accrued or received by the Company or any Affiliate
Sub-Licensee or other Affiliate of the Company from a third Person who
is not an Affiliate of the Company or from an Affiliate who is the end
user thereof from the sale, lease, supply, or other disposal of
Products and the provision of Services after deduction of any crating,
freight, packing, transportation, insurance, prompt payment, trade or
quantity discounts, taxes (not computed on income), duties, storage,
Value Added Tax or any other sales tax or duty from time to time in
force and credits for returned or defective goods, relating exclusively
to the sale, lease, supply, other disposal or provision of the Products
or the Services save as may be modified in accordance with Clause 5.6.
"Patent Rights" means the rights conveyed by patents and patent
applications including any patents which issue from such applications,
as well as divisions, reissues, continuations and renewals thereof.
"Payment Period" means the period of 17 years commencing on the
Effective Date.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an unincorporated association, a joint stock
company, a trust, a joint venture, an unincorporated organisation, a
governmental agency, department or instrumentality or any political
subdivisions thereof and any other legal entity.
"Products" means EST and STT products that (a) were directly created
with and/or incorporate and/or otherwise are/were developed using
Technical Information and/or (b) come within one (1) or more claims of
or otherwise use any of the inventions coming within any of the claims
of the Licensed Patents.
"Promissory Note" means the promissory note in the agreed form in the
sum of US$ 20 million due and payable on 31 December 2002 to be issued
by Weatherford.
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"Services" means services (a) relating to the installation of Products,
and/or (b) using and/or otherwise developed using Technical Information
and/or using a product or method coming within one (1) or more claims
of or otherwise use any of the inventions coming within any of the
claims of any of the Licensed Patents.
"SHELL Intellectual Property" means the Licensed Patents and the
Technical Information.
"STT" means expandable solid tube applications, including without
limitation, applications utilized for wellbore drilling, completion
and/or repair
"Technical Information" means:
(a) the know-how, manufacturing processes, data, test results,
engineering and manufacturing drawings and specifications,
lists of materials, sources of materials and Documentation and
instructions and any other information (i) contained in any of
the documents listed in Schedule 2 and/or (ii) accepted by the
Company pursuant to Clause 6.2;
(b) any information directly related to any inventions covered by
any of the Licensed Patents set out in Schedule 1 that SHELL
or any Affiliate of SHELL discloses to the Company or any
Affiliate of the Company, to the extent that the same are
directly related to any inventions covered by any of the
Licensed Patents set out in Schedule 1;
(c) any information received or obtained by Petroline Wireline
Services Limited directly or indirectly from SHELL and/or any
Affiliate of SHELL under the Development Agreement between
Shell Internationale Research Maatschappij B.V. and Petroline
Wireline Services Limited dated 22 February 1993;
(d) any information provided by SHELL or any Affiliate of SHELL in
connection with or as a result of the provision of technical
support and assistance as referred to in Clause 6.1; and
(e) any information disclosed by SHELL or any of its Affiliates
pursuant to the Memorandum of Understanding dated 31 October
2001 and/or the Confidentiality Agreement dated 15 November
2001 between Shell Technology Ventures Limited and
Weatherford.
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"Warrants" means the warrants in agreed form to be issued by
Weatherford in favour of SHELL.
"Xxxxxxxxxxx" means Xxxxxxxxxxx International Inc.
"Year" means each consecutive period of 12 months during the currency
of this Agreement beginning on the Effective Date and each anniversary
thereof.
2. COMMENCEMENT, DURATION AND SURVIVAL
2.1 This Agreement shall commence on the Effective Date.
2.2 Termination or cancellation of this Agreement will not terminate any
obligation with respect to any amounts due and owing to the other Party
but unpaid or unsatisfied, including, without limitation amounts due
and owing under the obligation to pay royalties. Notwithstanding
termination or cancellation of this Agreement, the Parties may assert
their accrued rights to indemnification pursuant to Clause 10. The
provisions in Clause 6: Confidential Information/Publicity, Clause 7:
Limitation of Liability/Indemnity/Warranties, Clause 10:
Indemnification, Clause 13: Law and Jurisdiction, in addition to the
provisions of this Clause 2, will survive any termination of this
Agreement.
2.3 The Parties hereby agree to arrange for their respective Affiliates,
Shell Research Limited and Petroline Wireline Services Limited to
terminate the licence agreement between the latter two companies with
effective date 15 April 1996 with effect from the Effective Date.
3. INTELLECTUAL PROPERTY
3.1 SHELL hereby grants to the Company a world-wide, perpetual,
royalty-bearing, non-exclusive, non-sub-licensable and non-transferable
(except as permitted in Clause 14) licence to use the SHELL
Intellectual Property, to manufacture, and have manufactured, use and
have used, lease and have leased, sell and have sold, dispose of and
have disposed of on behalf of the Company Products made by or for the
Company for use only in the Field of Use and provide and have provided
Services to third parties only in the Field of Use and to further
develop such Products and Services for use only in the Field of Use. It
is understood and agreed that the licence granted under patent
application WO 00/26,501, any patents granted thereon, any
corresponding patent
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applications and patents granted on such corresponding patent
applications shall be restricted to applications whereby the device
including the shape memory metal is arranged around a portion of the
conduit which is expanded, and the licence granted under patent
application WO 01/36,782, any patents granted thereon, any
corresponding patent applications and patents granted on such
corresponding patent applications shall not include the right to
manufacture, sell, lease, supply or otherwise dispose of or provide the
drill bit as covered by such patent rights. The licence shall be
sub-licensable to Affiliates of the Company except to the extent that
SHELL or its Affiliates are restricted from permitting any
sub-licensing pursuant to any of the agreements listed in Schedule 3.
The Company shall ensure that in any and all sub-licences there are
included like obligations on the Affiliate Sub-Licensees as those on
the Company contained in this Agreement and that all Affiliate
Sub-Licensees duly observe and perform the same. Notwithstanding the
fact that the licence contemplated by Clause 3.1 is described as a
non-exclusive licence, SHELL agrees that it and its Affiliates will not
whether acting together or separately authorise or permit, in addition
to the Company and Affiliate Sub-Licensees, more than one third Person
and its Affiliates to hold a licence or sub-licences in respect of the
SHELL Intellectual Property in the Field of Use at any one (1) time
(which Person and its Affiliates are at the Effective Date Enventure,
Halliburton Company and their respective Affiliates) ("Other Commercial
Licence") provided, however, that such licence or sub-licence shall not
be sub-licenseable by such other Person and its Affiliates other than
to other Affiliates of such Person and its Affiliates. Notwithstanding
the foregoing provisions of this Clause 3.1, SHELL and Affiliates of
SHELL shall remain free to (i) use and have used SHELL Intellectual
Property within the Field of Use for their own operations only,
consistent with their customary practice at the Effective Date provided
that in no case shall SHELL or its Affiliates make or have made any
Products for commercial sale, lease or other commercial disposal to a
third Person and (ii) to provide Services to Affiliates consistent with
this customary practice at the Effective Date.
3.2 The Company agrees that it will not obscure, deface or remove any
legend or notice placed by SHELL or an Affiliate of SHELL on any
tangible manifestation of SHELL Intellectual Property provided to the
Company (including all the documents listed in Schedule 2) for the
purpose of protecting the Intellectual Property Rights of SHELL or such
Affiliate of SHELL in, under or to such SHELL Intellectual Property.
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3.3. SHELL hereby undertakes for so long as the licence granted hereunder
subsists and save as provided in Clause 3.4 not to, and to procure that
none of its Affiliates bring proceedings against the Company or any of
its Affiliates, permitted assigns or customers anywhere in the world
alleging infringement of any claims or any claim of any patent directed
to Expanded Tube Technology, and which are owned by Shell Oil Company
or Shell Internationale Research Maatschappij B.V. and existing at or
granted on applications published and pending at the Effective Date by
the use of the licence in Clause 3.1 to manufacture and have
manufactured, use and have used, lease and have leased, sell and have
sold, dispose of and have disposed of on behalf of the Company products
or the use of methods in each case falling within the claims of any of
the Licensed Patents within the Field of Use.
3.4. The undertaking in Clause 3.3 shall not in any event apply in relation
to the patents and patent applications listed in Schedule 5, any
patents claiming priority from or granted on any of the patent
applications listed in Schedule 5, any patents and patent applications
corresponding with any of the patent applications and patents listed in
Schedule 5, and including any divisions, reissues, reexaminations,
continuations, continuations-in-part, extensions and renewals thereof.
4. MAINTENANCE AND PROSECUTION
4.1 SHELL agrees to treat the SHELL Intellectual Property in the same
manner as it treats its other Intellectual Property Rights of a similar
nature, and agrees not to abandon any patent applications and patents
forming part of the Licensed Patents without the prior written consent
of the Company, such consent not to be unreasonably withheld. In the
event that SHELL wishes to abandon any such patent application or
patent SHELL will give 30 days notice of the intended date of
abandonment, discuss within such 30 day period with the relevant
licensees of such patent application or patent (who at the relevant
time are actively exploiting a licence in respect of such patent
application or patent), the terms and conditions of an assignment for
no additional monetary consideration, with immunity from suit in
respect thereof being granted to SHELL and its Affiliates and assigns
to one or more of such licensees of any such patent application or
patent and the granting of the right, either singularly or jointly, to
continue prosecution of and the maintenance of any such patent
application or patent (with the licensee in question bearing the cost
of preparation and recordal of any assignment).
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4.2 SHELL agrees to provide to the Company on an annual basis a report on
the status of the Licensed Patents. SHELL further agrees upon the
reasonable request of the Company to provide copies of the novelty
search reports carried out by patent offices in the course of the
prosecution of the Licensed Patents that have been received by SHELL or
an Affiliate of SHELL.
4.3 The Company shall notify SHELL in writing of any suspected infringement
by any third party of any Licensed Patent. If the Company supplies to
SHELL evidence that reasonably demonstrates infringement by a third
party in the Field of Use of one or more of the Licensed Patents to an
extent so as to cause actual loss of business (including loss of
contract) of the Company or any Affiliate of the Company ("a Third
Party Infringement") in a particular Product or Service and SHELL has
failed to take commercially reasonable steps either to cause the Third
Party Infringement to cease (whether pursuant to a Court order,
undertaking or otherwise) or, provided SHELL is entitled hereunder to
do so, license such third party, in either case, within six (6) months
of a written notification from the Company of such Third Party
Infringement (such notice to contain reasonable evidence to demonstrate
Third Party Infringement including the actual loss of business
(including loss of contract)), then the Company will pay all royalties
payable on sales of those Products and Services in the country in which
the Third Party Infringement was occurring into an escrow account which
will be established by the parties at a mutually acceptable bank on the
terms of an escrow agreement to be agreed by the parties within 90 days
of this Agreement. The escrow agreement shall, inter alia, provide that
upon SHELL taking commercially reasonable steps to cause cessation of
the Third Party Infringement SHELL will forthwith receive the royalties
paid into the escrow account together with all interest accrued thereon
provided that if subsequently Shell fails to take any further steps as
may be or become commercially reasonable in respect of that Third Party
Infringement then the Company shall be entitled to pay subsequent
royalties into the escrow account which shall remain in such account
until SHELL takes such further commercially reasonable steps whereupon
SHELL will forthwith receive the royalties paid into the escrow account
together with all interest accrued thereon (provided further that this
proviso shall apply mutatis mutandis in relation to any and all further
failures to take further commercially reasonable steps as aforesaid).
For the avoidance of doubt in the event that some royalties in respect
of sales of a particular Product or Service in a particular country are
paid into an escrow account pursuant to this Clause, the Company is
required to continue to pay to SHELL all other royalties due under and
in accordance with the
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terms of this Agreement. SHELL shall keep the Company reasonably
updated with respect to any steps taken by SHELL to cause the cessation
of the Third Party Infringment or licence the third party so infringing
the Licensed Patents as provided for in Clause 4.3.
5. CONSIDERATION
5.1 In consideration of the licence granted hereunder the Company agrees to
pay to SHELL the sum of One hundred and forty five million US Dollars
(US$ 145 million).
5.2 Consideration shall be satisfied as follows:
(a) as to US$65 million on the Execution Date by transfer for
value on the Effective Date to SHELL's account at XX Xxxxxx
Chase Bank, New York, ABA number 000000000, account number
323055907; and
(b) as to US$20 million by the issue of the Promissory Note on the
Effective Date and its delivery to SHELL on the Execution
Date; and
(c) as to US$60 million by the issue of the Warrants on the
Effective Date and their delivery to SHELL on the Execution
Date.
5.3 Subject always to Clause 5.9, the Company shall further pay to SHELL a
royalty of 6% (six percent) of the Net Invoice Price of every sale,
lease, supply or other disposal of Products during the Payment Period
and/or provision of Services during the Payment Period (whether by or
on behalf of the Company or an Affiliate Sub-Licensee or any other
Affiliate of the Company) to a Person other than an Affiliate of the
Company or to an Affiliate of the Company (where such Affiliate is the
end user) whether or not there is a subsisting patent or pending patent
application in the country in which the sale, lease, supply or other
disposal of Products or provision of Services occurred.
5.4 The Company shall within thirty (30) days after 31 March, 30 June, 30
September and 31 December in each Year and three (3) months after the
end of the Payment Period send to SHELL a statement showing the
quantity, description and value of the Products sold, leased, supplied
or disposed of or Services provided by the Company and by its Affiliate
Sub-Licensees and other Affiliates of the Company during the preceding
three (3) months (or such shorter period as may be applicable) ending
on such day and showing the amount of royalty due hereunder in respect
of each such period. With each such statement the Company shall send a
remittance to SHELL for the total aggregate amount of royalty shown by
such statement to be due. The Company shall
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remain responsible for the payment of royalties due for Products and
Services sold leased, supplied, otherwise disposed of or provided by
its Affiliate Sub-Licensees.
5.5 The Company shall and shall procure that Affiliate Sub-Licensees shall
keep proper records and books of account showing the quantity,
description and Net Invoice Price of the Products sold, leased,
supplied, disposed of and Services provided hereunder for a period of
five (5) years after the date any such statement is due hereunder. Such
records may be inspected by duly authorised in-house or independent
representatives or agents of SHELL during normal business hours, with
at least two (2) weeks prior written notice, and such inspections may
occur not more frequently than once per calendar year. The Company and
its Affiliates shall have the right to exclude from any such inspection
any and all confidential information that is not directly related to
the payment of royalties under this Agreement.
5.6 The gross invoice price as used in the definition of Net Invoice Price
for the purpose of determining any royalty payable to SHELL hereunder
in respect of any sale, lease or other disposal of Products or
provision of Services shall be based on a fair arm's length value of
the Products and Services such that the effect of the sale, lease or
other disposal of Products or provision of Services and any related
transactions has not been to avoid the liability to pay royalties.
5.7 All sums payable hereunder to SHELL shall be paid in US Dollars. Any
Net Invoice Price not expressed in such currency shall be converted to
such currency at the open middle market spot rate of exchange in London
as published in the Financial Times (or failing that, such other
published source as SHELL may reasonably select) on the last day of the
relevant period specified in Clause 5.4 hereof during which the
Products and Services were sold leased, supplied, otherwise disposed of
or provided.
5.8 If any amount specified for payment by the Company under this Agreement
shall be subject to taxes or governmental charges other than income tax
in SHELL's country of residence which are to be paid by SHELL or to be
withheld by the Company, the Company shall pay such increased amount as
yields to SHELL, after payment or withholding of the taxes or charges,
the full amount specified in this Agreement provided that (save where
the amount specified is paid by a company resident for tax purposes
outside the United States of America) the Company or other payer
resident for tax purposes in the United States of America shall not be
obliged to pay any greater sum on account of any withholding made by
the Company or such other payer than it would have been required to pay
had the payment been made to SHELL or another
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recipient resident for tax purposes in the United States of America.
The Company and SHELL agree to take such actions prescribed by
applicable law or regulation, or as reasonably requested, as will
permit, in accordance with the law of any relevant jurisdiction in
which the Company or SHELL (as the case may be) is resident for tax
purposes or any double taxation agreement to which such jurisdiction is
a party, any sum payable under this Agreement to be paid free and
clear, or at a reduced rate, of any deduction or withholding. All sums
payable hereunder (for the avoidance of doubt whether or not payable
under this Clause 5.8 or otherwise) to SHELL shall be exclusive of any
sales tax, value added tax or any other taxes on sales, turnover or
value added similar or corresponding thereto.
5.9 All royalties payable to SHELL under this Clause 5 shall be payable
only in respect of Products and Services sold, leased, supplied or
otherwise disposed of or provided during the Payment Period, after
which the licences to which such royalties relate shall be treated as
fully paid-up and no further royalties shall be payable by the Company
to SHELL in respect of such licences.
5.10 If the Company fails to pay any amount due under this Agreement by the
due date, it shall pay interest (calculated on a daily basis) on the
amount outstanding (before and after termination of this Agreement)
from the date that the same became due until actual payment, at a rate
of 3% (three percent) above the annual prime rate from time to time of
XX Xxxxxx Xxxxx Bank, New York.
5.11 In the event that Xxxxxxxxxxx, at any time during the period commencing
on the Effective Date and expiring on the tenth anniversary thereof,
declares and pays a dividend in cash on all of its outstanding shares
of common stock, par value $1.00 per share ("Dividend"), the Company
shall include with the next royalty payment remitted to Shell pursuant
to Clause 5.4 hereof an additional amount equal to the product of three
million, two hundred and thirty-two thousand, two hundred and fourteen
(3,232,214) times the per share amount of such cash dividend. Provided
that where a royalty payment is not due or is due but is not paid by
the Company to SHELL within the period for payment of a royalty as
specified in Clause 5.4 hereof which falls immediately following the
declaration and payment of such Dividend ("Relevant Period") then the
Company shall remit the additional amount as aforesaid within the
Relevant Period.
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6. PROVISION OF INFORMATION
6.1 SHELL or an Affiliate of SHELL will provide the Company with the
Technical Information referred to in paragraphs (a) and (b) of the
definition of Technical Information. The Technical Information referred
to in Schedule 2 shall be provided by or on behalf of SHELL to the
Company within 30 days of the Effective Date. SHELL agrees to provide
through an Affiliate of SHELL technical support and assistance, of a
scope and during a term and at a cost to the Company and on such other
terms as may be agreed between such Affiliate of SHELL and the Company
at the time in question, to the Company in connection with the
implementation and development of products based upon the SHELL
Intellectual Property, on the understanding that SHELL shall be under
no obligation to provide such support to the extent it is restricted
from doing so by other contractual arrangements to which it or any of
its Affiliates is a party.
6.2 SHELL or an Affiliate of SHELL will provide the Company with a
description of all information which SHELL is able and free to provide
at the Effective Date directly relating to the expansion of tubulars in
a wellbore ("Information"). Within 30 days following the provision of
such description of the Information, the Company shall notify SHELL in
writing whether it wishes to accept the Information. Such acceptance in
writing shall be effected by way of an exchange of a schedule listing
the Information and upon such exchange the Information shall
immediately become Technical Information under this Agreement and SHELL
or an Affiliate of SHELL shall thereupon provide the Company with
details of such Technical Information.
6.3 The Company agrees that it will not make use of or in any way circulate
within its own organization or permit its Affiliates to make use of or
in any way circulate any Confidential Information except to the extent
necessary for the performance of the Company's obligations and rights
pursuant to this Agreement.
6.4 The Company agrees that the Company will disclose Confidential
Information only to its Affiliate Sub-Licensees and its Affiliates,
officers, directors, employees, (hereinafter individually referred to
as a "Representative" and collectively referred to as the
"Representatives") who have a need (related to the performance of the
Company's obligations and exercise of rights pursuant to this
Agreement) to know such information for the purposes of exercising its
rights or complying with its obligations under this Agreement and
certifies that such Representatives have previously agreed, either as a
condition to employment or in order to obtain the Confidential
Information, to be bound by terms and conditions substantially similar
to those of this Agreement,
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including, without limitation, terms and conditions restricting the use
and disclosure of the Confidential Information. The Company agrees that
it will inform each of its Representatives to whom Confidential
Information is to be disclosed of the confidential nature of such
Confidential Information and direct such Representatives not to (i)
disclose such Confidential Information to any third Person or (ii) use
such Confidential Information except in connection with the performance
of the Company's obligations and exercise of rights pursuant to this
Agreement and any other purpose SHELL may hereafter authorize in
writing. The Company will be liable for (i) the unauthorized use or
disclosure by its Representatives of Confidential Information and (ii)
any other breach by the Company's Representatives of the terms and
conditions of this Clause 6.
6.5 The Company further agrees that (i) it will not (except as expressly
authorized herein) disclose any Confidential Information to any third
Person, and (ii) it will use all reasonable means adequate to preserve
its secrecy.
6.6 The obligations under Clauses 6.3, 6.4 and 6.5 of the Company with
respect to any portion of Confidential Information will not apply if
and to the extent that the Company can document that:
(a) such Confidential Information was in the public domain at the
time it was communicated directly or on behalf of SHELL or any
Affiliate of SHELL to the Company;
(b) such Confidential Information entered the public domain
subsequent to the time it was communicated directly or on
behalf of SHELL or any Affiliate of SHELL to the Company
through no fault of the Company;
(c) such Confidential Information was in the Company's or an
Affiliate's possession free of any obligation of confidence at
the time it was communicated direct or on behalf of SHELL or
an Affiliate of SHELL to the Company;
(d) such Confidential Information was rightfully communicated by a
source other than SHELL and/or an Affiliate of SHELL free of
any obligation of confidence subsequent to the time it was
communicated to the Company by SHELL or an Affiliate of SHELL;
or
-16-
(e) information which is of the same nature as or identical to
Confidential Information and was independently developed for
the Company or an Affiliate by Persons who did not access the
Confidential Information in any way other than in
circumstances where the exceptions in Clauses 6.6 (a) to (d)
above apply.
6.7 In the event the Company is required by order of a court or
governmental authority having competent jurisdiction, to disclose any
Confidential Information, it shall give SHELL prompt notice of such
requirement so that SHELL may seek an appropriate protective order and
shall withhold disclosure until SHELL has had reasonable opportunity to
procure, and shall exercise its best efforts to assist SHELL in
procuring, such a protective order unless SHELL has given written
notice to the Company of its decision not to seek a protective order.
If despite such prompt notice and reasonable efforts the protective
order is denied or disclosure is mandated before the order can be
sought, the Company may disclose Confidential Information without
liability hereunder; provided, however, that the Company shall use its
reasonable efforts to obtain assurances that confidential treatment
will be accorded to such Confidential Information and provided further
that such disclosure shall be limited to the specific information
necessary to comply with such order. Except as expressly set forth
herein, the Company will not be deemed to have acquired by reason of
this Agreement any rights with respect to Confidential Information.
Except as expressly set forth herein, all Confidential Information
furnished to the Company in electronic, written or documentary form
(including, without limitation, documents, drawings, models, apparatus,
sketches, designs and lists), together with all copies thereof, or
extracts made therefrom, will remain the property of SHELL and will, at
the request of SHELL, be destroyed or returned to SHELL upon
termination of this Agreement; however, the Company's external counsel
in England may, upon entering into an undertaking with SHELL to keep
the same confidential, retain a copy of the Technical Information for
archival purposes only.
6.8 SHELL hereby undertakes for so long as the licence hereunder subsists
and save as provided in Clause 6.9 that it shall not and shall procure
that no Affiliate of SHELL brings proceedings against the Company or
any of its Affiliates, permitted assigns and customers anywhere in the
world alleging infringement of any claim or claims of any patent
directed to Expanded Tube Technology and based on Technical
Information, and which is owned by Shell Oil Company or Shell
Internationale Research Maatschappij B.V. by the use of Technical
Information in accordance with the terms of
-17-
this Agreement by the use of the licence in Clause 3.1 to manufacture
and have manufactured, use and have used, lease and have leased, sell
and have sold, dispose and have disposed of on behalf of the Company
products or the use of methods in each case falling within the claims
of any of the Licensed Patents within the Field of Use.
6.9 Within a period of 45 days following the provision by or on behalf of
SHELL of any Technical Information (other than the Technical
Information described in Schedule 2 at the Effective Date) to the
Company or any Affiliates of the Company after the Effective Date,
SHELL shall be entitled by notice in writing to notify the Company or
any Affiliates of the Company (as the case may be) of any such
Technical Information which it is not free to provide to the Company or
Affiliates of the Company. Forthwith upon receipt of such notice in
writing, the Company shall and/or shall procure that its Affiliates
shall (a) not use for any purpose, (b) return to SHELL and (c) keep
confidential pursuant to the provisions of Clause 6, the Technical
Information which is the subject matter of such notice ("Returned
Information"). Any Returned Information shall upon its return to SHELL
no longer be deemed to be Technical Information.
7. LIMITATION OF LIABILITY/INDEMNITY/WARRANTIES
7.1 SHELL does not make and SHELL hereby disclaims any warranty regarding
the accuracy, quality or fitness for purpose of the Technical
Information disclosed or otherwise provided to the Company, Xxxxxxxxxxx
or any of their respective Affiliates and takes no responsibility for
any expense, loss, or action incurred or undertaken in reliance upon
such information, and save as expressly provided in Clause 7.2 hereof
makes no warranty that such information provided hereunder can be used
without regard to third-party intellectual property rights. Save in
respect of claims for any loss, cost, damage, liability or expense
(including attorney's fees) arising out of any matters expressly
provided for in Clause 7.2 the Company hereby waives any right to
recover from SHELL or any Affiliate of SHELL any loss, cost, damage,
liability or expense (including attorney's fees) incurred as a result
of or arising out of the use of any Technical Information disclosed by
or obtained from SHELL or any Affiliate of SHELL pursuant to this
Agreement.
7.2 SHELL warrants to the Company, as at the Effective Date:
(a) it has full power and authority (including all necessary
corporate approvals) to execute and deliver this Agreement and
to perform its obligations hereunder and that this Agreement
is a legal, valid and binding obligation of SHELL and
-18-
no further corporate approvals (including all necessary
approvals from Affiliates) are necessary for SHELL to execute
and deliver this Agreement and perform its obligations
hereunder;
(b) SHELL is entitled to grant the licence provided for in this
Agreement. The Licensed Patents listed in Schedule 1 at the
Effective Date are beneficially owned by Affiliates of SHELL
and are legally owned and registered or proceeding in the name
of the Affiliate of SHELL as indicated in Schedule 1. No
person other than SHELL and Affiliates of SHELL owns solely or
jointly any of the Licensed Patents listed in Schedule 1 at
the Effective Date;
(c) none of SHELL, Shell Oil Company or Shell Internationale
Research Maat-Schappij B.V. has received any notice or is
otherwise aware of any infringement by SHELL or any of its
Affiliates of any third Person's Patent Rights by the making,
importation, use or sale of products or the supply of services
utilizing Expanded Tube Technology in the Field of Use with
the exception of infringement alleged by Xxxxx Oil Tools of US
patent no. 6,098,717 and foreign equivalents, and infringement
alleged by Schlumberger Technology of the latter's US patent
6,085,838 and foreign equivalents;
(d) there are no licences or sub-licences under the Licensed
Patents listed in Schedule 1 at the Effective Date granted by
SHELL or any of its Affiliates to, or other agreements
conferring a right or interest in or to the Licensed Patents
listed in Schedule 1 at the Effective Date entered into by
SHELL or any of its Affiliates with, third parties other than
Affiliates of SHELL in the Field of Use subsisting at the
Effective Date except for Enventure, Halliburton Company and
their respective Affiliates (as referred to in Clause 3.1) and
the licence granted to Petroline Wireline Services Limited
with an effective date of 15th April, 1996; and, further SHELL
has not received any notice and is not aware of any
infringement in the Field of Use of any patents forming part
of the SHELL Intellectual Property listed in Schedule 1 and/or
Schedule 2 at the Effective Date by the making, use or sale of
products or the supply of services utilizing Expanded Tube
Technology by any third party with the exception of Xxxxx Oil
Tools for sale of, and possible sale of their Express Screen
and FORMlock expandable liner hangers, the manufacture, use or
sale of which may infringe any such patents; and
-19-
(e) to the best of the knowledge of SHELL, Shell Oil Company,
Shell Internationale Research Maatschappij B.V. and Shell
Technology Ventures Limited, the entry into this Agreement by
SHELL will not constitute a breach (which would have an
adverse effect on the enjoyment of the Company's licence
hereunder) by SHELL of any agreement relating to any of the
Licensed Patents listed in Schedule 1 at the Effective Date or
the information referred to in paragraph (a) of the definition
of Technical Information and provided at the Effective Date;
Provided that in relation to any granted patents and/or any pending
patent applications that SHELL may from time to time agree after the
Effective Date to add to Schedule 1 (in accordance with the provisions
of Clause 16) and which thereby become Licensed Patents, SHELL agrees
that at the date when such patents or pending patent applications
become Licensed Patents (by adding such patents or pending patent
applications to Schedule 1 by way of a modification to this Agreement
in accordance with the provisions of Clause 16) it shall give a
warranty in respect of such patents and/or pending patent applications
mutatis mutandis on the same terms as the warranty set out in Clause
7.2(b) save that references to "the Effective Date" shall be replaced
with the relevant date of the modification to this Agreement as
aforesaid. For the avoidance of doubt, SHELL shall decide in its sole
discretion whether any pending patent applications shall be added to
Schedule 1 prior to the date such pending patent applications mature
into granted patents.
7.3 The warranties set out above are subject to all matters fairly
disclosed in the documents listed in Schedule 4 to this Agreement.
7.4 Any termination of this Agreement will be without prejudice to any
accrued liability of either Party to the other Party for breach of this
Agreement existing immediately prior to such termination.
7.5 Neither the Company nor Xxxxxxxxxxx shall be entitled to recover from
SHELL in respect of a breach or breaches of any of the warranties
contained in or to be given pursuant to Clauses 7.2 (a) or (b) (whether
for breach of contract, tort (including negligence), breach of
statutory obligation or otherwise, except fraud or fraudulent
misrepresentation), a sum in excess of one hundred and fifty million US
Dollars (US$150 million) in aggregate, less any amounts recovered under
Clause 7.6 (which sum shall include claims for reasonable legal,
professional and other costs and expenses incurred by Xxxxxxxxxxx in
connection with such breach(es)). Neither the
-20-
Company nor Xxxxxxxxxxx shall be entitled to bring any claims
whatsoever in respect of a breach or breaches of the warranties
contained in or to be given pursuant to Clause 7.2 after the expiry of
the period of seventeen years from the Effective Date.
7.6 Neither the Company nor Xxxxxxxxxxx shall be entitled to recover from
SHELL in respect of a breach or breaches of any of the warranties
contained in Clauses 7.2(c), (d) or (e) and under any other claim
(other than a claim made under Clause 7.5 for breach of any of the
warranties contained in or to be given pursuant to Clauses 7.2(a) and
(b)) arising directly or indirectly out of or relating to this
Agreement (whether for breach of contract, tort (including negligence),
breach of statutory obligation or otherwise, except fraud or fraudulent
misrepresentation) and the Framework Agreement, a sum in excess of X in
aggregate (which sum shall include claims for reasonable legal,
professional and other costs and expenses incurred by Xxxxxxxxxxx in
connection with such breach(es)). In this Clause 7.6, X shall be
interpreted as follows:
(a) during the period from the Effective Date to the day prior to
the first anniversary of the Effective Date (the "First
Year"), X = one hundred and fifty million US Dollars (US$ 150
million) less any amounts received under Clause 7.5;
(b) during the period from the first anniversary of the Effective
Date to the day prior to second anniversary of the Effective
Date (the "Second Year"), X = one hundred and twenty million
US Dollars (US$ 120 million) less any amounts recovered during
the First Year and any amounts recovered under Clause 7.5;
(c) during the period from the second anniversary of the Effective
Date to the day prior to the third anniversary of the
Effective Date (the "Third Year"), X = ninety million US
Dollars (US$ 90 million) less any amounts recovered during the
First Year and the Second Year and any amounts recovered under
Clause 7.5;
(d) during the period from the third anniversary of the Effective
Date to the day prior to the fourth anniversary of the
Effective Date (the "Fourth Year") X = sixty million US
Dollars (US$ 60 million) less any amounts recovered during the
First Year, Second Year and/or Third Year and any amounts
recovered under Clause 7.5;
-21-
(e) during the period from the fourth anniversary of the Effective
Date to the day prior to the seventeenth anniversary of the
Effective Date, X = thirty million US Dollars (US$30 million)
in aggregate less any amounts recovered during the First Year,
the Second Year, the Third Year, the Fourth Year and in any of
the years falling between the fourth and seventeenth
anniversaries of the Effective Date and any amounts recovered
under Clause 7.5; and
(f) after the expiry of the period of seventeen years from the
Effective Date X shall be zero and the amount referred to in
Clause 7.5 shall also be zero,
save that where X pursuant to these calculations is a sum less than
zero, X shall be deemed to be zero. Any claim made in accordance with
Clause 7.5 or this Clause 7.6 that is made against SHELL in one (1)
period identified in subclauses (a) to (f) of this Clause 7.6 and
resolved in another such period shall be limited only by the
calculation of X corresponding to the period in which such claim was
commenced.
7.7 In no event shall any Party be liable in respect of a breach or
breaches of any of the warranties contained in Clause 7.2 or any other
claim (whether for breach of contract, indemnity, tort (including
negligence), breach of statutory obligation or otherwise, except fraud,
fraudulent misrepresentation and except for the avoidance of doubt,
claims for infringement of Patent Rights) under this Agreement or the
Framework Agreement or any act or omission in connection with this
Agreement for any loss of profit or any indirect or consequential loss
or damage suffered by any of the Parties or any of their Affiliates or
exemplary or punitive damages.
8 ENFORCEABILITY OF RIGHTS AND OBLIGATIONS
Any failure by any Party to enforce any of the provisions of this
Agreement or to require at any time performance by any other Party of
any of the provisions hereof, will not affect the validity of this
Agreement or any provision hereof, or the right of any Party thereafter
to enforce each and every provision. Should any provision of this
Agreement be held unenforceable or in conflict with the law of any
jurisdiction, to the extent permitted by law, the validity of the
remaining provisions will not be affected by such holding.
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9 U.S. EXPORT ADMINISTRATION ACT
The Company agrees that no Technical Information nor the direct product
of such Technical Information will be shipped, either directly or
indirectly, to any country as may be prohibited under the U.S.
Re-export Controls (issued by the U.S. Department of Commerce as they
now exist or may be amended ("the Re-export Controls"). The Company
further certifies that, unless prior authorisation is obtained from the
U.S. Bureau of Export Administration, the Company will not knowingly:
(a) export or re-export, directly or indirectly, to any country
any technical data (including software) comprised of the
Technical Information; or
(b) export, directly or indirectly, to any country any direct
product (including processes and services) of such technical
data (including software),
if without such prior authorization such re-export or export would be
in violation of the Re-export Controls as they now exist or as they may
be amended.
10 INDEMNIFICATION
10.1 The Company shall indemnify SHELL, its Affiliates, directors, officers
and employees against, and pay any related costs of, any claim or
action for negligence or whatever other cause brought against SHELL or
any of its Affiliates by any third party in respect of any loss or
damage (including personal injury or death) sustained by such third
party and arising out of a breach of the obligations of the Company in
this Agreement and/or the use of Products or Services and/or Licensed
Patents and/or Technical Information by the Company or any of its
Affiliate Sub-Licensees or permitted assignees or by any third party to
whom the Company or any of its Affiliate Sub-Licensees or other
Affiliates or permitted assignees has provided Products or Services,
other than loss or damage directly arising from any matter that is a
breach of the warranties in Clause 7.2 or from fraud, fraudulent
misrepresentation or from the Wilful Misconduct of SHELL or its
Affiliates but always having regard to the novel nature of any
application of Expanded Tube Technology. Nothing in this Clause 10.1
shall operate to override the terms of any commercial contract entered
into between Weatherford and/or its Affiliates and SHELL and/or its
Affiliates in respect of the sale, lease, supply or other disposal of
Products to SHELL and/or it Affiliates or the provision of Services to
SHELL and/or its Affiliates and the terms of such commercial contracts
shall be unaffected by this Clause 10.1.
-23-
10.2 "Wilful Misconduct" in Clause 10.1, in relation to the performance of
the obligations of SHELL under this Agreement, shall mean an
intentional, conscious or reckless disregard by a person who is
employed by SHELL or any of its Affiliates as a director or other
corporate officer or who occupies a senior managerial position having
direct responsibility for research and development with respect to
applications of Expanded Tube Technology (including, for the avoidance
of doubt, the person having overall supervisory authority over the team
carrying out such research and development), of good and prudent oil
and gas field practice in utter disregard of avoidable and harmful
consequences. In assessing whether an event of Wilful Misconduct has
occurred, regard shall be had to the novel nature of any application of
Expanded Tube Technology.
11 EXPIRY AND TERMINATION
SHELL may terminate this Agreement (including the licences granted
herein) forthwith by notice in writing if:
(a) the Company fails to make any of the payments due or otherwise
perform any of its obligations in each case pursuant to
Clauses 5.2 (a), 5.2 (b), 5.2 (c) or 5.11 or under the
documents referred to therein within 30 days of any relevant
date upon which such payments fall due or such obligations
fall due to be performed and provided that the Company has not
made such payments or performed such obligations within 15
days of receiving written notice from SHELL of such
non-payment or non-performance;
(b) (except insofar as the Company has a right to pay royalties
into an escrow account pursuant to Clause 4.3 or as there is a
bona fide dispute as to whether or not royalties are payable
and the dispute resolution procedure set out in the first two
sentences of Clause 13.2 has been invoked), any royalties due
hereunder have remained unpaid for a period of six (6) months
from the date on which they are due pursuant to Clause 5.4,
provided SHELL has first given the Company notice that the
royalties in question are overdue and the Company has failed
to pay the same within 30 days of the notice;
(c) the Company has assigned or purported to assign this licence
or granted a sub-licence or purported to grant a sub-licence
under this licence in circumstances where the Company was not
entitled under Clauses 3.1, 14.2 or 14.3 (as appropriate) to
do so and SHELL has given the Company written notice
-24-
requiring, in the case of an assignment, a reassignment, and,
in the case of a licence or sub-licence, the termination of
such licence or sub-licence and/or such other arrangement, all
on terms reasonably satisfactory to SHELL and the Company has
failed to do so within 30 days of such notice;
(d) the Company or any Affiliate of the Company in any formal
court or patent office proceedings launches a challenge aiming
to invalidate any patents in the Licensed Patents or to
adversely affect SHELL's ownership of any of the Licensed
Patents, or otherwise formal court or patent office
proceedings are launched by another party pursuant to any
agreement between the Company and/or any of its Affiliates and
that other party;
(e) the Company becomes subject to a Change of Control; or
(g) either the Company or Weatherford makes an assignment for the
benefit of creditors, files a petition under any bankruptcy
law or any insolvency law or any other law for the relief or
aid of debtors, including, without limitation, the United
States Federal Bankruptcy Code of 1986 or any amendment
thereto (any such law or code being herein referred to as a
"Bankruptcy Law") or files a petition or answer seeking for
itself, or consenting to or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any Bankruptcy Law or
fails to deny, in a timely manner, the material allegations of
or to contest any such petition filed against it or should any
action commenced by any such petition continue undismissed,
unstayed or in effect for more than 90 days or should a
receiver, custodian, liquidator, fiscal agent or trustee of
any of them or of the whole or any substantial part of their
properties or assets be appointed or should a court enter an
order, judgment or decree approving a petition filed against
any one of them seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any Bankruptcy Law or should an order of relief
be entered pursuant to any such Bankruptcy Law with respect to
either one of them.
12 CONSEQUENCES OF TERMINATION
After termination the Company shall:
(a) make no further use of any:
-25-
(i) Licensed Patents (but this restriction shall only
apply in relation to a particular patent while that
patent is in force); and
(ii) Confidential Information insofar as it does not fall
within one of the exceptions provided for in Clause
6.6;
(b) immediately destroy (with verification thereof on oath) or, in
the Company's sole discretion return to SHELL all records of
and documents containing Confidential Information (and all
copies thereof) in the possession, power or control of the
Company and/or its Affiliates (save that the Company's
external counsel in England may, upon entering into an
undertaking with Shell to keep the same confidential, retain a
copy of the Technical Information for archival purposes only).
13 LAW AND JURISDICTION
13.1 This Agreement shall be governed by and construed in accordance with
English law and each Party to this Agreement submits to the exclusive
jurisdiction of the English courts.
13.2 If there is any dispute, claim, or controversy, regardless of the legal
or equitable theory involved, arising out of or relating to this
Agreement (including any such matter involving any parent, subsidiary,
Affiliate, successor in interest or agent of either of the Parties) (a
"Disputed Matter"), the Parties will first attempt to amicably resolve
such Disputed Matter in good faith. If the initial efforts to resolve
such Disputed Matter are not successful, the Parties will submit the
Disputed Matter jointly to the respective senior executive officers of
the Company and SHELL, or such other senior executive as each Party may
designate from time to time. The Parties agree that any legal action or
proceedings arising out of or in connection with this Agreement may be
brought in the High Court of Justice in England, and the parties hereby
irrevocably submit to the exclusive jurisdiction of such court in
connection with any such legal action or proceedings. The parties agree
that any legal action or proceedings shall be initiated in the Patents
Court (part of the Chancery Division of the High Court of Justice in
England).
13.3 SHELL irrevocably appoints Shell Technology Ventures Limited as its
agent to accept service of legal proceedings in connection with all
matters arising out of this Agreement and the transactions contemplated
by this Agreement and agrees that any
-26-
claim form, judgment or other notice of legal process in connection
with any such legal action or proceedings shall be sufficiently served
if delivered to the Company Secretary, Shell Technology Ventures
Limited at Xxxxx Xxxxxx, Xxxxxx XX0 0XX
13.4 Each of the Company and Weatherford irrevocably appoints Xxxxxxx Xxxxx
of Royal Xxxxxx Xxxxx, 00/00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX as its
agent to accept service of legal proceedings in connection with all
matters arising out of this Agreement and the transactions contemplated
by this Agreement and agree that any claim form, judgment or other
notice of legal process in connection with any such legal action or
proceedings shall be sufficiently served if delivered to Xxxxxxx Xxxxx
at such address.
14 PARTIES BOUND/ASSIGNMENT
14.1 This Agreement will be binding upon and inure to the benefit of the
Parties hereto and to their permitted successors and assigns.
14.2 Subject to Clause 14.3 the Company shall not assign any of its rights
arising from this Agreement without the prior written consent of SHELL,
such consent not to be unreasonably withheld.
14.3 The Company shall be entitled to assign its rights arising from this
Agreement to an Affiliate of the Company without the prior written
consent of SHELL
14.4 Subject to Clause 14.5, SHELL shall not assign any of its rights
arising from this Agreement without the prior written consent of the
Company, such consent not to be unreasonably withheld.
14.5 SHELL shall be free without requiring the consent of any other Party to
assign any of its rights arising from this Agreement to any Affiliate
of SHELL, provided the Affiliate to whom SHELL's rights are assigned
enters into an agreement with the Company that it will observe the
obligations contained in this Agreement.
15. GUARANTEE
15.1 Weatherford irrevocably and unconditionally guarantees to SHELL the due
and punctual performance and/or collectibility of each obligation of
the Company contained in this Agreement. Weatherford shall pay to SHELL
from time to time on demand any sum of money which the Company is at
any time obligated to pay and is
-27-
due and payable to SHELL under or pursuant to this Agreement and which
has not been paid at the time the demand is properly made.
Xxxxxxxxxxx'x obligations under this Clause are primary obligations and
not those of a mere surety and Weatherford shall perform the Company's
obligations as called upon to do so by SHELL and as if it were
primarily liable for the performance. Xxxxxxxxxxx'x obligations under
this Clause 15 shall not be impaired, discharged or affected by;
(a) any failure, defect or unenforceability of any obligation,
term or condition of this Agreement; or
(b) any legal limitation, disability or incapacity of the
Company; or
(c) the fraud of the Company or any other Person; or
(d) the lack of authority of any director or other person
purporting to act on behalf of the Company,
as a result of which any obligation undertaken by the Company under
this Agreement is or may be rendered invalid, void or unenforceable
against the Company. All such circumstances shall be disregarded
between SHELL and Weatherford and this guarantee shall be construed as
if there were no such invalidity, voidness or unenforceability provided
always that Weatherford shall be entitled to the same defences and
rights (including limitation of liability) to which the Company is
entitled under or in respect of this Agreement.
15.2 Xxxxxxxxxxx'x obligations under Clause 15.1 are continuing obligations
and are not satisfied, discharged or affected by:
(a) an intermediate payment or settlement of account by, or a
change in the constitution or control of, or the insolvency
of, or bankruptcy, winding up or analogous proceedings
relating to, the Company; or
(b) any arrangement which the Company makes with SHELL (with the
prior written consent of Weatherford) which might operate to
diminish or discharge the liability of or otherwise provide a
defence to a surety.
15.3 SHELL may at any time it thinks fit and without reference to
Weatherford:
-28-
(a) grant time for payment or grant another indulgence or agree to
an amendment, variation, waiver or release in respect of an
obligation of the Company under this Agreement provided,
however, that in no case may SHELL extend or enlarge the
obligations guaranteed pursuant to this Clause 15 without the
prior written consent of Weatherford;
(b) give up, deal with, vary, exchange or abstain from perfecting
or enforcing other securities or guarantees held by SHELL;
(c) discharge a party to other securities or guarantees held by
SHELL and realise all or any of those securities or
guarantees; and
(d) compound with and make other arrangements with the Company or
a person or persons liable on other securities or guarantees
held or to be held by SHELL.
15.4 So long as the Company has any actual or contingent obligation under
this Agreement Weatherford shall not exercise a right which it may at
any time have by reason of the performance of its obligations under
Clause 15.1 to be indemnified by the Company, to claim a contribution
from another surety of the Company's obligations or to take the benefit
of any of the Company's rights under this Agreement (otherwise than
pursuant to an assignment permitted in accordance with Clause 14) or of
any other security taken by the Company in connection with this
Agreement.
15.5 Xxxxxxxxxxx'x liability under this Agreement shall in no circumstances
be greater than the liability expressed to be assumed by the Company
under this Agreement.
15.6 In the event of a proposed change of control of Weatherford as referred
to in the definition of Change of Control, Weatherford shall (if
requested by SHELL) use all commercially reasonable endeavours to
procure a guarantee of the Company's obligations from the successor
entity on terms reasonably satisfactory to SHELL.
16 MODIFICATION OF AGREEMENT
This Agreement will not be modified except by written instrument signed
by authorized representatives of the Parties hereto.
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17 HEADINGS/SCHEDULES
The Clause headings in this Agreement are solely for convenience and
will not be considered in its interpretation. This Agreement will be
deemed to have been jointly drafted by the Parties and accordingly,
resolution of ambiguities in drafting will not be resolved based upon
authorship. The Schedules and other attachments referred to throughout
this Agreement are incorporated into this Agreement.
18 WAIVER
The failure of any Party at any time to require performance by any
other Party of any provision of this Agreement will not affect in any
way the full right to require the performance at any subsequent time.
The waiver by any Party of a breach of any provision of this Agreement
will not be taken or held to be a waiver of the provision itself. Any
course of performance will not be deemed to amend or limit any
provision of this Agreement.
19 WEATHERFORD ACKNOWLEDGEMENT
Each of the Company and Weatherford warrants to SHELL that:
(a) it is not aware as at the Effective Date of any fact, matter
or circumstance amounting to a breach of warranty by SHELL
hereunder; and
(b) it has not entered into this Agreement or any of the
agreements referred to herein in reliance on any
representation, statement, assurance, covenant, undertaking,
indemnity, guarantee or commitment of any kind whatsoever
other than as set out herein or therein as the case may be and
it will have no remedy against SHELL or any of its Affiliates
in respect of any such representation, statement, assurance,
covenant, undertaking, indemnity, guarantee or commitment of
any kind whatsoever made on or prior to the date of this
Agreement aforesaid provided that nothing in this Sub-Clause
shall have the effect of limiting or restricting any liability
of SHELL or any of its Affiliates arising as a result of any
fraud and fraudulent misrepresentation.
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20 SEVERABILITY
If any part of this Agreement shall be held to be in whole or in part
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not impair or affect the remaining
provisions or parts thereof, of this Agreement. The Parties shall in
such an event negotiate in good faith in order to agree the terms of a
mutually satisfactory provision to be substituted for the invalid,
illegal or unenforceable provision which as nearly as possible validly
gives effect to their intentions as expressed herein.
21 NOTICES, ETC.
21.1 All notices, demands, requests or other communications that may be or
are required to be given, served or sent by either Party to the other
Party pursuant to this Agreement will be in writing and will be mailed
by first-class, registered or certified mail, return receipt requested,
postage prepaid, or transmitted by hand delivery, telegram or facsimile
transmission addressed as follows:
(a) If to SHELL: Shell Technology Ventures Limited
Xxxxx Xxxxxx
Xxxxxx
XX0 0XX
with a copy (which will not constitute notice) to:
Xxxxx Xxxxxxxxxxxxx X.X.
00 Xxxxx xxx Xxxxxxxxxxx,
0000 XX The Hague
the Netherlands
Facsimile Transmission No.: 31 70 3776141
Attn.: Intellectual Property Services
(b) If to the Company or to Weatherford:
Xxxxxxxxxxx/Lamb, Inc. or Xxxxxxxxxxx
International Inc.
000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimilie: 000-000-0000
Attn.: Vice President - Law
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21.2 Any Party may designate by written notice a new address to which any
notice, demand, request or communication may thereafter be given,
served or sent. Each notice, demand, request or communication that is
mailed, delivered or transmitted in the manner described above will be
deemed sufficiently given, served, sent and received for all purposes
at such time as it is delivered to the addressee with the return
receipt, the delivery receipt, the affidavit of messenger or (with
respect to a facsimile transmission) the answer back being deemed
conclusive evidence of such delivery or at such time as delivery is
refused by the addressee upon presentation.
22 ENTIRE AGREEMENT
This Agreement and the other agreements referred to herein constitute
the sole and entire agreement between SHELL and the Company with
respect to the subject matter hereof, and supersede any and all prior
agreements and understandings with respect to such subject matter
(including the entire provisions of the confidentiality agreement dated
15 November 2001 and the Memorandum of Understanding dated 31 October
2001 in each case, between Weatherford and Shell Technology Ventures
Limited).
23 INTERPRETATION
Words of any gender used in this Agreement will be held and construed
to include any other gender, words in the singular number will be held
to include the plural and the words "including" or "include" shall be
construed as being by way of illustration only and shall not be
construed as limiting the generality of either of the foregoing words.
24 FORCE MAJEURE
No Party to this Agreement will be liable to the other for any delay or
failure by such Party to perform its obligations (excluding obligations
to pay consideration sums and royalties and the confidentiality
obligations) under this Agreement if such delay or failure arises from
any cause or causes beyond the reasonable control of such Party,
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including, without limitation, labour disputes, strikes, acts of God,
floods, lightning, shortages of materials, rationing, utility or
communication failures, earthquakes, casualty, war, acts of the public
enemy, riots, insurrections, embargoes, blockades or regulations or
orders of governmental authorities. If a Party to this Agreement is
delayed or prevented from performing such Party's obligations pursuant
to this Agreement due to any cause beyond such Party's reasonable
control, such delay will be excused during the continuance of such
delay and the period of performance will be extended to the extent
necessary to enable such Party to perform its obligations after the
cause of such delay has been removed.
25. THIRD PARTIES
Save as otherwise expressly provided in this Agreement, no term of this
Agreement is enforceable under the Contracts (Rights of Third Parties)
Xxx 0000 by a Person who is not a Party to this Agreement and the
Parties shall be entitled to amend or vary the terms of this Agreement
without the consent of any Person who is not a Party to this Agreement.
IN WITNESS WHEREOF, SHELL, Weatherford and the Company have caused this
Agreement to be executed by their duly authorized representatives.
SHELL TECHNOLOGY VENTURES INC.
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Attorney In Fact
XXXXXXXXXXX/LAMB, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
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XXXXXXXXXXX INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President - Law
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