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EXHIBIT 10.5
THIS AGREEMENT by and between BP EXPLORATION OPERATING COMPANY LIMITED having
an office at the BP Research & Engineering Centre, Chertsey Road,
Sunbury-on-Thames, Middlesex, TW16 7LN, England ("BPX") and DONLAR CORPORATION
having an office at Xxxxxxx Campus, 0000 X. Xxxxxx Xxxxxx, Xxxxxxx Xxxx,
Xxxxxxxx 00000-0000 XXX ("DONLAR") hereinafter sometimes referred to
individually as "PARTY" and collectively as "Parties".
WITNESSETH:
WHEREAS DONLAR possesses confidential information, know-how and patents
relating to methods of manufacturing polyamino acids, particularly polyaspartic
acid, their compositions and subsequent end uses.
WHEREAS BPX and DONLAR entered into an Agreement effective 15 December 1994
under which BPX and DONLAR collaborated in the evaluation of polyaspartic acid
hydrogels manufactured by DONLAR's processes, in applications where BPX desires
to control water and gas shut off in hydrocarbon reservoirs, and
WHEREAS BPX and DONLAR now wish to extend the term of that Agreement and to
broaden its scope to include the evaluation of polyaspartates as hydrate
inhibitors, wax inhibitors and drag reducers in pipelines and associated
equipment used in conjunction with hydrocarbon reservoirs.
NOW THEREFORE the PARTIES agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 AFFILIATE means a company or corporation or other entity
which directly or indirectly controls or is
controlled by a PARTY hereto including
the ultimate holding company corporation
or other entity of such a PARTY and any
company corporation or other entity
controlled by such ultimate holding
company corporation or other entity.
In the definition of "Affiliate" the words
"controls" and "controlled" mean the ability
to exercise the majority voting power of a
company corporation or entity and a
reference to the voting power in such a
company corporation or entity is a
reference to the maximum number of votes
that might be cast at a general meeting
thereof.
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1.2. "BPX KNOW-HOW" shall mean information, including technical
and economic information, relating to
BPX's oil and gas fields and reservoirs
and the operation thereof.
1.3 "DONLAR KNOW-HOW" shall mean information, including technical
and economic information, relating to
methods of manufacturing polyamino
acids, particularly polyaspartic acid,
compositions and end uses thereof.
1.4 "PATENTS" shall mean all US patents issued to
DONLAR and all patents and patent
applications, continuations, continuations-
in-part, divisions, reissues and extensions
thereof, related to DONLAR KNOW-HOW.
1.5 "PRODUCT" shall mean polyaspartic acid formulations
manufactured using DONLAR KNOW-HOW.
1.6 "FIELD" shall mean the use of PRODUCT in the
control of water and gas shut off in
hydrocarbon reservoirs as hydrate
inhibitors, wax inhibitors and drag reducers
in pipelines and associated equipment.
1.7 "EFFECTIVE DATE" shall be the date of the last signature of this
Agreement.
ARTICLE 2 - EVALUATION
2.1 DONLAR agrees to use its reasonable and diligent efforts to provide
PRODUCT to BPX for evaluation in the FIELD during the term of this
Agreement.
2.2 DONLAR agrees to use its reasonable and diligent efforts to modify PRODUCT
such that an optimum performance criteria may be made based on BPX shared
evaluation results at no cost to BPX for laboratory samples.
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2.3 BPX agrees to work with DONLAR exclusively during the term of this
Agreement in the evaluation of polyaspartic acid hydrogels in the FIELD.
Services provided by BPX or DONLAR during the evaluation will be at their
own costs. BPX agrees that all PRODUCT provided by DONLAR hereunder shall
be used only for investigational purposes relating to the use of such
PRODUCTS in the FIELD, and BPX agrees that it shall not, nor shall it
allow any third parties to, analyze the composition or attempt to derive
the structure or manufacturing processes for such PRODUCTS.
ARTICLE 3 - TERM AND TERMINATION
3.1 Unless terminated earlier by the mutual written consent of both DONLAR and
BPX, the term of the Agreement shall be for a period of twelve (12) months
from the EFFECTIVE DATE.
3.2 This Agreement may be extended for another twelve (12) months upon written
consent of both DONLAR and BPX.
ARTICLE 4 - CONFIDENTIALITY
4.1 BPX shall keep confidential all DONLAR KNOW-HOW. The obligation of
confidence shall not apply to:
(a) DONLAR KNOW-HOW which, at the time of the disclosure, BPX can
demonstrate was in the public domain;
(b) DONLAR KNOW-HOW which, after disclosure, becomes part of the public
domain, by publication or otherwise, other than by BPX;
(c) DONLAR KNOW-HOW which BPX can demonstrate, by written
documentation, was in BPX'S possession at the time of disclosure
and was not acquired directly or indirectly from DONLAR; or
(d) DONLAR KNOW-HOW which has been, is now or is hereafter,
furnished or made known to BPX by a third party who had the
right to disclose such information without restrictions and who did
not derive the information improperly from DONLAR.
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4.2 DONLAR shall keep confidential all BPX KNOW-HOW. The obligation of
confidence shall not apply to:
(a) BPX KNOW-HOW which, at the time of the disclosure, DONLAR
can demonstrate was in the public domain;
(b) BPX KNOW-HOW which, after disclosure, becomes part of the
public domain, by publication or otherwise, other than by
DONLAR;
(c) BPX KNOW-HOW which DONLAR can demonstrate, by written
documentation, was in DONLAR'S possession at the time of
disclosure and was not acquired directly or indirectly from BPX; or
(d) BPX KNOW-HOW which has been, is now or is hereafter,
furnished or made known to DONLAR by a third party who had
the right to disclose such information without restrictions and who
did not derive the information improperly from BPX.
4.3 Each party shall treat as confidential all CONFIDENTIAL INFORMATION of the
other party, shall not use such CONFIDENTIAL INFORMATION except as
expressly set forth herein or otherwise authorised in writing, shall
implement reasonable procedures to prohibit the disclosure, duplication,
misuse or removal of the other party's CONFIDENTIAL INFORMATION and shall
not disclose such CONFIDENTIAL INFORMATION to any third party except as
may be necessary and required in connection with the rights and
obligations of such party under this Agreement, and subject to
confidentiality obligations at least as protective as those set forth
herein. Without limiting the foregoing, each of the parties shall use
at least the same procedures and degree of care which it uses to prevent
the disclosure of its own confidential information of like importance to
prevent the disclosure of CONFIDENTIAL INFORMATION disclosed to it by the
other party under this Agreement, but in no event less than reasonable
care.
4.4 The obligation of confidence under this Article shall remain in effect for
a period of ten (10) years from the EFFECTIVE DATE, regardless of the
expiration or termination of this Agreement for any reason.
4.5 DONLAR and BPX may disclose to third parties certain information related to
PRODUCT, KNOW-HOW and the FIELD only if written consent is provided.
Provisions of the disclosure must include confidentiality of DONLAR
KNOW-HOW at least as stringent as found in this Agreement. In addition,
DONLAR's involvement in the evaluation shall be made known to the third
party. BPX may also disclose to AFFILIATES information related to
PRODUCT, DONLAR KNOW-HOW and the FIELD provided that such disclosure is
made on terms at least as stringent as found in this Agreement.
4.6 Any breach of the restrictions contained in this Section 4 is a breach of
this Agreement which will cause irreparable harm to either PARTY entitling
such party to injunctive relief in addition to all legal remedies.
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ARTICLE 5 - INTELLECTUAL PROPERTY RIGHTS
5.1 Each PARTY shall retain the ownership of data and information which:
(i) was in its possession prior to the EFFECTIVE DATE; or
(ii) was developed or otherwise acquired by that PARTY as a result of
activities carried out independently of this Agreement and without
referring to the CONFIDENTIAL INFORMATION supplied by the other
PARTY.
5.2 The PARTIES anticipate the possible development of intellectual property
rights derived from the evaluation and work under this Agreement.
Ownership of an invention made, arising out of and relating to the work
and any intellectual property or other proprietary rights relating thereto
shall, subject to the rights of any third party, and unless otherwise
agreed by the PARTIES, be vested in DONLAR provided that all costs
associated with the acquisition of such proprietary rights as aforesaid
shall be for the sole account of DONLAR. To the extent any such
intellectual property rights vest in BPX or its AFFILIATES or contractors,
BPX agrees that it shall assign (or caused to be assigne) and does hereby
assign to DONLAR all right, title and interest in and to any such
intellectual property rights. To ensure that DONLAR can keep track of any
intellectual property that might arise out of the development effort
contemplated under this Agreement, BPX agrees that it shall inform DONLAR
of any inventions discovered or first reduced to practice under this
Agreement.
5.3 In the event that the invention relates to the use of the PRODUCT in the
FIELD, BPX and its AFFILIATES shall be entitled to non-exclusive world-
wide royalty free license under any PATENT or other form of proprietary
right relating to such invention to use such invention in the FIELD. For
the avoidance of doubt such rights shall extend to use by any contractor
acting on behalf of BPX or its AFFILIATES and to any third party
associated with BPX or its AFFILIATES in a bona fide joint venture activity
with BPX related to the exploration for and/or exploitation of
hydrocarbons.
ARTICLE 6 - COMMERCIAL SUPPLY OF PRODUCT
6.1 To the extent not otherwise precluded by regulations of the EEC, BPX
hereby grants DONLAR a right of first refusal to enter into a supply
agreement providing for DONLAR to supply BPX, its AFFILIATES and any
contractor doing work for either of the foregoing all of their requirements
for PRODUCT for a period extending from the date of exercise through up
to three (3) years following termination of this Agreement.
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6.2 DONLAR shall use reasonable endeavors to give priority to meet BPX (or its
AFFILIATES) reasonable requirements for the supply of PRODUCT for use in
the FIELD from time to time on fair and reasonable terms including a
price equal to DONLAR'S then current selling price for the time being and
for this purpose DONLAR may subcontract in part or in whole or establish
manufacture under license as the case may be to supplement its own
capacity.
6.3 Any supply agreement as referred to Article 6.1 will provide that in the
event DONLAR may become unable or unwilling on any occasion to meet the
reasonable requirement of BPX or an AFFILIATE for PRODUCT then BPX or an
Affiliate shall then have the right to manufacture itself, or, at its
option, to have PRODUCT manufactured by a third party contractor to meet
its requirements for use of the same and DONLAR shall grant any such
royalty bearing license as may be required to the third party contractor
for such time as DONLAR is unable or unwilling to meet the reasonable
requirements of BPX or an AFFILIATE as aforesaid and shall indemnify and
hold harmless that BPX or an AFFILIATE and/or its contractor from suit for
infringement of any DONLAR'S intellectual property rights. BPX or an
AFFILIATE shall procure from any proposed third party contractor a binding
undertaking to preserve the confidentiality of all data and information
in connection with the PRODUCT and to use any and all such data or
information only to fulfil the specific order of BPX or an AFFILIATE
pursuant to this Article 6.3.
6.4 It is understood and agreed that nothing in this Agreement shall
prevent either DONLAR or BPX from working alone or together with a third
party in research and development of the control of water and gas shut off
in hydrocarbon reservoirs.
ARTICLE 7 - NATURE OF MATERIALS
7.1 It is acknowledged that all materials provided to BPX by DONLAR hereunder
are provided "AS IS" and are to be used by BPX for investigational purposes
only. DONLAR makes no warranties, express, implied, statutory or
otherwise, of any kind, and DONLAR specifically disclaims any implied
warranties of non-infringement, merchantability and fitness for a
particular purpose. The materials are chemical substances with known
properties and their ingredients are not specifically listed in the
federal water pollution control act, are not covered by the clean air act,
and are not ordinarily hazardous so long as individuals handle these
materials in accordance with the recommended safety precautions as
indicated in the product safety data sheet.
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ARTICLE 8 - LAW
8.1 This Agreement shall be construed and governed by the laws of the State of
New York, USA.
BP EXPLORATION OPERATING DONLAR CORPORATION
COMPANY LIMITED
X X Xxxxxxxxxxx Xxxxx X. Xxxxxx
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SIGNATURE SIGNATURE
X X XXXXXXXXXXX XXXXX X XXXXXX
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TYPED NAME TYPED NAME
COMMERCIAL MANAGER PRESIDENT
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TITLE TITLE
16/2/96 2/28/96
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DATE DATE
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