LICENSE AGREEMENT FOR USE OF THE TEXACO GASIFICATION PROCESS, TEXACO HYDROGEN GENERATION PROCESS, AND TEXACO GASIFICATION POWER SYSTEMS
PORTIONS
OF THIS EXHIBIT DENOTED WITH THREE ASTERISKS [***] HAVE BEEN OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIALITY.
EXHIBIT 10.4
FOR USE OF THE TEXACO GASIFICATION PROCESS,
TEXACO HYDROGEN GENERATION PROCESS,
AND TEXACO GASIFICATION POWER SYSTEMS
THIS AGREEMENT, effective as of the 30th day of May, 1997 (“Effective Date”), by and between
TEXACO DEVELOPMENT CORPORATION, a subsidiary of Texaco Inc., hereinafter referred to as “TEXACO
DEVELOPMENT,” and FARMLAND INDUSTRIES, INC., hereinafter referred to as “LICENSEE”,
RECITALS
WHEREAS, TEXACO DEVELOPMENT and its parent corporation, Texaco Inc., have conducted research
and development work on the Texaco Gasification Process (“TGP”) and further applications or
variants thereof, including without limitation, the Texaco Hydrogen Generation Process (“THGP”)
and Texaco Gasification Power Systems (“TGPS”) (as more fully defined in Schedule I attached
hereto), and have developed and acquired technical data and information pertinent to, and have
been granted patents covering certain aspects of, the design, construction, operation and
maintenance of plants for the practice of the TGP, THGP and TGPS; and
WHEREAS, TEXACO DEVELOPMENT is prepared to grant nonexclusive licenses to LICENSEE for the
use of such technical data and information and under certain patent rights relating to the design,
construction, operation and maintenance of the Plant described in Paragraph 3.1 below, for the
practice of the TGP and THGP and, in the event the Plant is subsequently modified, TGPS, including
certain patent rights of Texaco Inc.; and
WHEREAS, LICENSEE now desires to have access to such technical data and information from
TEXACO DEVELOPMENT with the right to use the same, and a nonexclusive license under TEXACO
DEVELOPMENT’s Patent Rights (as defined in Schedule I attached hereto)
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to commercially practice the THGP (which by design includes practice of the TGP) and, at LICENSEE’s
option, the TGPS at the Plant; and
WHEREAS, in addition to the granting of licenses, a company Affiliated with TEXACO
DEVELOPMENT will operate and maintain the Plant and provide certain technical services under the
terms of a separate agreement which will be entered into between LICENSEE and such affiliated
company.
NOW, THEREFORE, for and in consideration of the above premises and of the covenants
hereinafter set forth, the parties hereto mutually covenant and agree as follows:
1. DEFINITIONS
1.1 The terms defined in Schedule I attached to and made a part of this License
Agreement shall have those meanings wherever used herein.
2. GRANTS
2.1 TEXACO DEVELOPMENT hereby grants and agrees to grant to LICENSEE, subject to the terms
and conditions of this License Agreement, a nonexclusive license under TEXACO DEVELOPMENT’s Patent
Rights to practice the TGP, THGP and/or TGPS for the production of Synthesis Gas where such
Synthesis Gas will be used in the production of high purity hydrogen (in the case of THGP) and/or
electric power (in the case of TGPS), in and only in the Plant, together with the right to use and
sell the products thereby produced. The license so granted to LICENSEE shall be nontransferable,
except as provided in Section 9.
2.2 TEXACO DEVELOPMENT hereby grants and agrees to grant to LICENSEE, subject to the terms
and conditions of this License Agreement, a nonexclusive license to use TEXACO DEVELOPMENT’s
Technical Information to practice the TGP, THGP and/or TGPS for the production of Synthesis Gas
where such Synthesis Gas will be used in the production of high purity hydrogen (in the case of
THGP) and/or electric power (in the case of TGPS), in and only in the
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Plant, together with the right to use and sell the products thereby produced. After LICENSEE has
made the first royalty payment required hereunder, TEXACO DEVELOPMENT’s Technical Information shall
be made available in writing or otherwise to LICENSEE directly by TEXACO DEVELOPMENT or through
its nominee(s). The license so granted to LICENSEE shall be nontransferable except as provided in
Section 9. The license granted in this Paragraph 2.2 shall in no event be construed as granting
any license by implication, estoppel or otherwise under any patent rights or letters patent, such
rights being granted only under Paragraph 2.1 hereof.
2.3 Notwithstanding the definitions afforded TGPS and THGP in Schedule I, if LICENSEE
produces electric power or high purity hydrogen from Synthesis Gas generated through the practice
of TGP, regardless of the technique or process employed to produce those products, for purposes of
Section 5 of this License Agreement, the parties hereto agree that such practice shall be regarded
as TGPS or THGP, whichever appropriate.
2.4 For general illustrative purposes, Schedule III (attached to and made a part of this
License Agreement) includes a non-limiting, non-exhaustive list of
certain of the unexpired U. S.
Patents that are subject to the grant of Paragraph 2.1 hereof.
3. THE PLANT
3.1 LICENSEE represents that it presently intends to build and place in commercial
operation in, or within the proximity of, Coffeyville, Kansas, a plant for the practice of the THGP
(which, by design, includes the practice of the TGP) within a reasonable time, but not later than
December 31, 2002 (the “Plant”). The Gasifier Feed to such Plant is expected to be a solid
carbonaceous substance derived from petroleum, including a carbonaceous solid (i.e., coal or
petroleum coke), along with refinery or chemical plant byproducts and water. It is expected that
the Plant shall have a configuration using direct quench in the Gasification section and shall have
a designed capacity of about Eighty-six Thousand (86,000) MSCF of Output per operating day from the
Gasification section. It is understood and agreed that LICENSEE shall be permitted to use other
carbonaceous substances as Gasifier Feed in the Plant in addition to, or in lieu of, coal or
petroleum coke; provided, however: (i) LICENSEE shall first advise TEXACO DEVELOPMENT in writing
that it is contemplating the use of
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such other
feedstock; and (ii) TEXACO DEVELOPMENT will perform, or arrange to perform, the
necessary study to assess the feasibility of processing such other carbonaceous substance in the
Plant, and shall provide the engineering services, pursuant to the terms set forth in Paragraph
14.2 hereof.
3.2 TEXACO DEVELOPMENT’s representatives alone or accompanied by TEXACO DEVELOPMENT’s
licensees or potential licensees shall have reasonable access to the Plant for the purpose of
promoting the TGP and further applications or variants thereof, including without limitation TGPS
and THGP, upon reasonable advance notice and during normal business hours. Such visits shall take
place at such times as reasonably agreed upon between the parties hereto so as not to unduly
interfere with the operations of the Plant or otherwise cause undue inconvenience for LICENSEE.
3.2.1 All visitors to the Plant, including employees of TEXACO DEVELOPMENT and its Affiliates,
but excluding any personnel present as a result or in support of the Operations and Maintenance
Agreement, process Guarantee Agreement or Texaco’s equity interest in the Plant, shall be required
to sign the Release attached as Schedule IV to this License
Agreement, in their individual capacity.
The parties hereto contemplate that Farmland may determine that it is necessary or desirable from
time to time to revise such Release due to certain changes in the applicable laws which may occur.
Any such revision(s) shall require the written consent of TEXACO DEVELOPMENT, which consent shall
not be unreasonably withheld. In the event a proposed revision has not been agreed upon by TEXACO
DEVELOPMENT, then the visit shall take place in any event with the visitor being responsible to
sign the Release as it existed prior to any proposed revision(s).
3.2.2 TEXACO DEVELOPMENT shall indemnify LICENSEE against any claims brought by any employee
of TEXACO DEVELOPMENT or its Affiliate for injury, death or damage which occurs during any Plant
visit and which is directly caused by the gross negligence or willful misconduct of such
employee(s), TEXACO DEVELOPMENT or its Affiliates. Any such indemnity shall be subject to the limit
on TEXACO DEVELOPMENT’s liability set forth in Paragraph 8.6 of this License Agreement.
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3.2.3 TEXACO DEVELOPMENT agrees to use its reasonable efforts to cause visitors to comply
with LICENSEE’s safety rules, provided that LICENSEE shall provide all visitors with safety
training and instruction regarding such rules at no cost to TEXACO
DEVELOPMENT or the visitors.
Furthermore, such training and instruction shall be reasonable, shall not exceed thirty (30)
minutes in duration, shall directly relate to the Plant, and shall be provided to all such
visitors within two (2) hours of their arrival at the Plant on the day of the scheduled visit.
3.2.4 LICENSEE, on request of TEXACO DEVELOPMENT a reasonable time in advance, shall furnish
TEXACO DEVELOPMENT information and data relating to the operation of the Plant and samples of
Gasifier Feed and other materials.
3.3 The visitation rights contemplated under Paragraph 3.2 shall remain in full force and
effect for a period of twenty (20) years from the Effective Date of this License Agreement. Within
a reasonable time prior to the expiration of said period, TEXACO DEVELOPMENT may request that the
visitation rights be extended for additional five (5) year
intervals. Any such extension(s) shall
become effective in the event the parties hereto mutually agree to such extensions. Furthermore,
Plant visits shall not be available to LICENSEE’s top five competitors in the nitrogen fertilizer
business without LICENSEE’s prior written approval. LICENSEE shall identify to TEXACO DEVELOPMENT
in writing, on an annual basis on or before the first day of March of each year, its top five
competitors in the nitrogen fertilizer business. In the event LICENSEE does not update the
aforesaid top five competitors in any particular year, the top five competitors last identified by
LICENSEE shall be used for purposes of this Paragraph.
4. ROYALTIES AND ACCOUNTING
4.1 LICENSEE shall pay royalties and fees at rates and under terms set forth in
Schedule II attached to and made a part of this License Agreement.
4.2 LICENSEE shall keep such accurate, complete and detailed records and
accounts of all TGP, THGP and TGPS operations conducted at the Plant by LICENSEE as may be
necessary to determine the royalties and fees payable by LICENSEE
hereunder. LICENSEE further
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agrees that TEXACO DEVELOPMENT, through its representatives who are authorized by TEXACO
DEVELOPMENT in writing, may, during business hours and upon providing LICENSEE with reasonable
advance notice, make such examinations of LICENSEE’s TGP, THGP and TGPS operations and such
examinations and copies of such records and accounts as may be necessary to verify the royalties
and fees contemplated hereunder, as well as all other information LICENSEE is required to report
to TEXACO DEVELOPMENT under Section 4 of this License Agreement.
4.3 LICENSEE shall render to TEXACO DEVELOPMENT annual statements in a form acceptable to
TEXACO DEVELOPMENT, on or before the first day of March of each year, with respect to all TGP,
THGP and TGPS operations conducted by LICENSEE during the preceding twelve (12) calendar months,
but reported as six (6) calendar month accounting periods ending on the last day of December and
the last day of June, respectively, and which statement shall contain the following information:
4.3.1 The total Daily Average Output from the Gasification section of the Plant for all
operations conducted by LICENSEE during the accounting periods;
4.3.2 The excess (in daily averages), if any, of the total Daily Average Output from the
Gasification section of the Plant reported under Subparagraph 4.3.1 above, over the total Daily
Average Output for all operations conducted by LICENSEE for which paid-up capacity has been
theretofore purchased by LICENSEE under this License Agreement;
4.3.3 The total Output from the Gasification section of the Plant for all operations
conducted by LICENSEE during the accounting periods;
4.3.4 The total Output from the Gasification section of the Plant that is
allocated for THGP operations and TGPS operations, respectively; and
4.3.5 The total Gasifier Feed to the Gasification section of the Plant for all
operations conducted by LICENSEE during the accounting periods, including a report of the
relative amount of each component of the total feed, i.e., the amount of petroleum coke, coal, and the
by-
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product
feeds contemplated in Paragraph l(b) of Schedule II. Further in connection with Paragraph
l(b) of Schedule II, LICENSEE shall report all payments it receives for processing the
feedstock(s) contemplated thereunder and all costs incurred for modification of the Plant for the
processing of such feedstock(s).
4.4 The first accounting period shall commence when the Plant has produced synthesis gas for a
continuous forty-eight (48) hour period, and terminate at the end of the next December, and each
succeeding accounting period shall be the succeeding six (6) month period, except in the event of
the termination of this License Agreement prior to the end of such six (6) month accounting period,
in which event the accounting period shall be deemed to be the fractional part of such six (6)
month period which ends on the effective date of such termination except as specified otherwise in
Paragraph 7.3 below.
5. CROSS-LICENSING
5.1 LICENSEE hereby grants and agrees to grant to TEXACO DEVELOPMENT, without obligation to
account to LICENSEE therefor or for grants made thereunder, an irrevocable, paid-up license and the
irrevocable right and power to grant, either directly or through others, to Texaco Inc. and its
affiliates and to the TGP licensees of TEXACO DEVELOPMENT, nonexclusive licenses under LICENSEE’s
Patent Rights relating to the TGP and for the use of LICENSEE’s Technical Information relating to
the TGP in any and all countries throughout the world together with the right to use and sell any
products produced thereby. LICENSEE agrees to make LICENSEE’s Technical Information relating to the
TGP available to TEXACO DEVELOPMENT for use under the aforesaid licenses.
5.2 LICENSEE hereby grants and agrees to grant to TEXACO DEVELOPMENT, without obligation to
account to LICENSEE therefor or for grants made thereunder, an irrevocable, paid-up license to use
and the irrevocable right and power to grant, either directly or
through others, to Texaco Inc. and
its affiliates and to the THGP licensees of TEXACO DEVELOPMENT, nonexclusive licenses to use
LICENSEE’s Patent Rights relating to the THGP and for the use of LICENSEE’s Technical Information
relating to the THGP in any and all countries throughout the
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world,
together with the right to use and sell any products produced thereby. LICENSEE agrees to
make LICENSEE’s Technical Information relating to the THGP available to TEXACO DEVELOPMENT
for use
under the aforesaid licenses.
5.3 LICENSEE hereby grants and agrees to grant to TEXACO DEVELOPMENT, without obligation to
account to LICENSEE therefor or for grants made thereunder, an irrevocable, paid-up license and
the irrevocable right and power to grant, either directly or through others, to Texaco Inc. and
its affiliates and to the TGPS licensees of TEXACO DEVELOPMENT, nonexclusive licenses under
LICENSEE’s Patent Rights relating to the TGPS and for the use of LICENSEE’s Technical Information
relating to the TGPS in any and all countries throughout the world together with the right to use
and sell any products produced thereby. LICENSEE agrees to make LICENSEE’s Technical Information
relating to the TGPS available to TEXACO DEVELOPMENT for use under the aforesaid licenses.
5.4 TEXACO DEVELOPMENT and LICENSEE understand and agree that Paragraphs 5.1, 5.2 and 5.3
each include separate and distinct grants of LICENSEE’s Patent Rights and LICENSEE’s Technical
Information and TEXACO DEVELOPMENT and LICENSEE further agree that, for all purposes, these grants
should be treated as separate grants as if they were made herein in separate paragraphs or
subparagraphs.
5.5 TEXACO DEVELOPMENT and LICENSEE understand and agree that for purposes of this Section 5,
the rights of extension granted to TEXACO DEVELOPMENT in Paragraphs 5.1, 5.2 and 5.3 permit TEXACO
DEVELOPMENT to grant LICENSEE’s Patent Rights and Technical Information to TEXACO DEVELOPMENT’s
licensees of the TGP and all further applications or variants thereof, including without
limitation TGPS and THGP.
6. CONFIDENTIAL INFORMATION
6.1 Unless previously authorized by TEXACO DEVELOPMENT in writing, LICENSEE shall use TEXACO
DEVELOPMENT’s Technical Information only in connection with licensed operations in the Plant and
shall not make any disclosure of, and shall use its best efforts to
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prevent the duplication or disclosure of such information which is not public information or
otherwise generally available to the public, and shall not export or re-export such information or
data or the product thereof. LICENSEE shall be permitted to disclose such information if and only
if it is legally compelled to make such disclosure; provided, however, that prior to making any
disclosure LICENSEE shall first notify TEXACO DEVELOPMENT in writing of the need to make the
disclosure and the parties hereto shall cooperate in connection with obtaining a protective order
or other mechanism which will preserve the proprietary value of such information. The parties do
not intend this Section 6 to include confidential business information. The terms and conditions
under which the parties hereto will exchange business information that is confidential is covered
in a separate business information confidentiality agreement dated May 27, 1997.
6.2 With respect to the obligations incurred under this Section 6, information disclosed
through an unauthorized disclosure by a third party under a confidentiality obligation with TEXACO
DEVELOPMENT with respect to such information shall not in itself be deemed to be public
information or otherwise generally available to the public.
6.3 The prohibition on disclosure set forth in Paragraph 6.1 above prohibits LICENSEE from
disclosing TEXACO DEVELOPMENT’s Technical Information to any third party, including without
limitation LICENSEE’s contractors and LICENSEE’s affiliates. Such third parties, including
contractors and affiliates, shall only be permitted to have access to TEXACO DEVELOPMENT’s
Technical Information directly from TEXACO DEVELOPMENT and after having entered into a written
secrecy agreement with TEXACO DEVELOPMENT.
6.4 If LICENSEE enters into a contract with any third party to perform work related to the
design, construction, operation and maintenance of the Plant who shall receive or have access to
TEXACO DEVELOPMENT’s Technical Information, any such third party may not perform any of the
aforementioned work until LICENSEE first receives TEXACO
DEVELOPMENT’s written approval, which
approval shall not be unreasonably withheld. Furthermore, where such third party will receive
LICENSEE’s Technical Information or provide back to LICENSEE technical data and operating
information which may become LICENSEE’s Technical Information, LICENSEE shall use commercially
reasonable efforts to obtain a written agreement from such third party allowing
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LICENSEE to disclose such information to others without obligation to account to such third party
therefor. The obligation set forth in this Paragraph 6.4 does not apply to any information that
must be kept confidential pursuant to the terms of a prior written confidentiality obligation that
is in effect before entering into such a contract with LICENSEE, provided TEXACO DEVELOPMENT is
notified by LICENSEE of such preexisting confidentiality obligation.
7. TERM AND TERMINATION
7.1 Unless previously terminated in accordance with Paragraph 7.2 or canceled
and, hence, terminated under Paragraph l (c) of Schedule II, this License Agreement shall
terminate and expire upon the cessation of the commercial operation of the Plant. The parties hereto
do not intend to allow this License Agreement to terminate due to a suspension (of finite duration)
of commercial operations. In this regard, if the LICENSEE decides to suspend commercial
operation of the Plant, LICENSEE shall so notify TEXACO DEVELOPMENT in writing. The parties hereto will
then engage in good faith discussions to reach agreement on what constitutes a reasonable
period for suspension of commercial operations to avoid termination of this License Agreement, In no
event shall the period of suspension exceed three (3) years.
7.2 If, however, LICENSEE shall fail to make any of the payments set forth in this
License Agreement, or any part thereof when due, or shall fail to achieve Plant Startup by
December 31, 2002, or shall fail to perform any other of its promises or obligations under this License
Agreement, TEXACO DEVELOPMENT may terminate this License Agreement and revoke all licenses, rights,
privileges, and authorizations of this License Agreement by giving forty-five (45) days
written notice to LICENSEE to that effect, at the end of which time this License Agreement shall terminate
unless during that time LICENSEE shall have fully remedied such
default to TEXACO DEVELOPMENT’s
satisfaction. In the event that LICENSEE contends that an event of default cannot possibly be
cured in the forty-five (45) days, LICENSEE shall so advise TEXACO DEVELOPMENT in writing stating the
reasons that support its position. If TEXACO DEVELOPMENT, in its sole discretion, indicates
in writing that it agrees with LICENSEE’s position, TEXACO DEVELOPMENT agrees that this
License Agreement shall not terminate until one additional forty-five (45) day period has
elapsed, provided that LICENSEE commences the cure of such default within the initial forty-five (45)
day
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period and
continues to work diligently, in TEXACO DEVELOPMENT’s sole opinion, to cure such
default. Furthermore, TEXACO DEVELOPMENT agrees that in the event (i) LICENSEE violates any of the
confidentiality provisions of Paragraph 6.1, or (ii) LICENSEE violates any of the other provisions
of this License Agreement, TEXACO DEVELOPMENT may not initiate the termination proceedings
contemplated in this Paragraph 7.2 except as may be permitted by the provisions of Paragraph
13.3.1. Notwithstanding anything contained herein, in the event LICENSEE breaches this License
Agreement under Section 6 (Confidential Information) as a result of LICENSEE’s gross negligence or
willful misconduct as determined through arbitration, TEXACO DEVELOPMENT may terminate this License
Agreement and revoke all licenses, rights, privileges and authorizations of this License Agreement.
Furthermore, in the event TEXACO DEVELOPMENT has actually received the payments set forth in
Paragraphs 1(a)(i), (ii) and (iii) of Schedule II, as well as any other amounts that have become
due and payable by LICENSEE hereunder, prior to December 31, 2002, TEXACO DEVELOPMENT agrees that
it will not terminate this License Agreement for failure to achieve Plant Startup prior to December
31, 2002.
7.3 After the effective date of any termination or expiration of this License Agreement,
neither LICENSEE nor TEXACO DEVELOPMENT shall have any further rights under this License Agreement
except that: (i) such termination or expiration shall not relieve LICENSEE of any obligation
(e.g., visitation) or liability accrued hereunder prior to the effective date of such termination
or expiration; (ii) such termination or expiration shall not affect in any way the then existing
licenses, rights and powers granted or agreed to be granted by, or obligations of LICENSEE under
Section 5 (Cross Licensing); (iii) such termination or expiration shall not relieve LICENSEE of
its obligations under Section 6 (Confidential Information); (iv) such termination or expiration
shall not relieve LICENSEE of its obligations incurred under
Paragraph 1(b) of Schedule II; and
(v) other than for termination due to the default of LICENSEE pursuant to Paragraph 7.2 above,
LICENSEE shall have the right to continue operations licensed hereunder only up to the paid-up
capacity acquired prior to termination and LICENSEE shall continue to render annual statements as
required by the accounting provisions of Section 4 (Royalties and Accounting).
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8. LIABILITY — WARRANTIES
8.1 LICENSEE and TEXACO DEVELOPMENT understand and agree that, as
between LICENSEE and TEXACO DEVELOPMENT, the construction, operation and maintenance
of the Plant is the sole responsibility of LICENSEE. Accordingly, TEXACO DEVELOPMENT shall
have no liability to LICENSEE or to third parties for any injuries to person or property
arising in connection with the construction, operation or maintenance of the Plant and LICENSEE shall
indemnify TEXACO DEVELOPMENT for any liability, claims, costs and
expenses associated therewith.
Except as may be specified in the guarantee agreement described in Paragraph
14.1, TEXACO DEVELOPMENT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OTHER
THAN AS PROVIDED IN PARAGRAPHS 8.2, 8.3 (PATENT INDEMNITY) AND 8.4 BELOW,
AND SPECIFICALLY EXCLUDES ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OR USE WITH RESPECT TO ANY INFORMATION OR DATA FURNISHED HEREUNDER OR THE PERFORMANCE OF THE PLANT OR
ANY COMPONENT THEREOF. In no event shall TEXACO DEVELOPMENT be liable for loss of
prospective profits or special or consequential losses, damages, and/or related expenses,
whether or not TEXACO DEVELOPMENT has been advised of the possibility of such damages.
8.2 TEXACO DEVELOPMENT and LICENSEE each represents and warrants
that it has the right, power and authority to grant the licenses and rights of extension and
make the agreements set forth in this License Agreement.
8.3 TEXACO DEVELOPMENT will, at its sole cost and expense, upon LICENSEE’S written demand,
defend any suit or action brought against LICENSEE by a third party, alleging infringement of
process claims, as further qualified hereinbelow, of an unexpired United States patent, which is
in full force and effect as of the Effective Date of this License Agreement and which results from
the use of TEXACO DEVELOPMENT’S Technical Information in accordance with this License Agreement in
the operation of the Plant with respect to TGP or THGP only, and to the extent such operation is
based on process designs for TGP or THGP specifically approved by
TEXACO DEVELOPMENT in writing; provided, however, such indemnity shall not apply if such infringement is the result of
combination of TEXACO
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DEVELOPMENT Technical Information with technical information supplied by a party other than TEXACO
DEVELOPMENT. LICENSEE will use its best efforts to obtain a right of defense and indemnity against
any claim for patent infringement, from each and every supplier of materials (such as, but not
limited to, catalysts, solvents, etc.) which are to be used in the equipment used in the processes
licensed hereunder. The indemnification by TEXACO DEVELOPMENT hereunder shall not apply to the
extent LICENSEE is indemnified by any supplier under an indemnification obtained by LICENSEE
pursuant to LICENSEE’s efforts under the immediately preceding
sentence. This paragraph does not
apply to equipment supplied by third parties as discussed in Paragraph 8.3.3 of this License
Agreement.
8.3.1 TEXACO DEVELOPMENT will, upon LICENSEE’s written demand, indemnify LICENSEE and hold
LICENSEE harmless from and against all expenses of defending such suits and actions and from all
payments which by final judgments therein may be assessed against and are actually paid by
LICENSEE on account of such suit or action; provided, however, that if LICENSEE elects to
participate in the defense of any of such suits or actions, all costs
associated with LICENSEE’s
participation shall be borne by LICENSEE. TEXACO DEVELOPMENT shall not be liable to LICENSEE for
any indirect, consequential or other damages, costs or expenses under this Section 8.3.
8.3.2 The obligations of TEXACO DEVELOPMENT under this Section 8.3 are subject to the
requirement that LICENSEE shall give TEXACO DEVELOPMENT prompt written notice for any such suit or
threat of suit. Neither party shall settle nor compromise any such suit without the other party’s
prior written consent if by such settlement, the other party is obligated to make any substantial
modification to THGP, to make any monetary payment, to part with any property or any interest
therein, to assume any obligation, to be subject to any injunction, or to grant any license or
other right under the settling party’s patent rights, with the understanding that any such consent
may not be unreasonably withheld.
8.3.3 TEXACO DEVELOPMENT shall not have any obligation hereunder for any alleged or actual
infringement that is not expressly described in this Section 8.3. If the alleged or actual
infringement meets the express requirements of this Section 8.3, TEXACO
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DEVELOPMENT shall not have any obligation hereunder if such infringement is caused by the use of
any design, equipment (to the extent the alleged infringing process is practiced within the
equipment) or processes supplied by a party other than TEXACO DEVELOPMENT, or which TEXACO
DEVELOPMENT did not approve for use in writing prior to any alleged infringing use.
8.3.4 TEXACO DEVELOPMENT’s obligation under the above provisions in this Section 8.3 shall be
further subject to Section 8.6 hereof and shall not exceed in
total, an amount equal to [***] of the royalties and fees due and actually received by TEXACO DEVELOPMENT
with respect to the Plant pursuant to this License Agreement or [***], whichever is less.
8.4 TEXACO DEVELOPMENT represents, warrants and agrees as follows:
8.4.1 TEXACO DEVELOPMENT is a corporation duly organized and validly existing under the laws
of the State of Delaware, TEXACO DEVELOPMENT has the complete and unrestricted power and right to
enter into this License Agreement and there is no fact of which TEXACO DEVELOPMENT has actual
knowledge as of the Effective Date that would prevent it from performing its obligations hereunder;
this License Agreement has been duly authorized, executed and delivered by TEXACO DEVELOPMENT and
constitutes a legal, valid and binding obligation of TEXACO DEVELOPMENT enforceable against TEXACO
DEVELOPMENT in accordance with its terms, neither the execution and delivery by TEXACO DEVELOPMENT
of this Agreement nor the consummation of the transaction contemplated by this Agreement, as far as
TEXACO DEVELOPMENT is actually aware of as of the Effective Date, violates any law or any court or
governmental agency order binding on TEXACO DEVELOPMENT or requires the consent or approval of, or
the giving of notice by any person to or the taking of any other action in respect of any
governmental agency or authority or any person not a party to this
License Agreement.
8.4.2 There is no fact of which TEXACO DEVELOPMENT has actual knowledge as of the Effective
Date that would prevent it from stating that, except to the extent
owned by TEXACO DEVELOPMENT’s
licensees and/or third party contractors, TEXACO
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DEVELOPMENT owns the entire right, title and interest in and to TEXACO DEVELOPMENT’s Technical
Information. TEXACO DEVELOPMENT or Texaco Inc. owns and has the right to license each of the
patents listed in Schedule III and each of such patents is in full force and effect.
8.4.3 TEXACO DEVELOPMENT has no knowledge as of the Effective
Date of any constraints, restrictions, or other impediments of any nature or kind which would
prevent the ability of LICENSEE to practice the TGP or THGP.
8.4.4 TEXACO DEVELOPMENT’s Technical Information, that was or will
be supplied under a separate Process Information Package Letter Agreement dated March 6, 1997,
was prepared and delivered in accordance with accepted engineering practices or TEXACO
DEVELOPMENT’s engineering practices, whichever standard is
higher.
8.4.5 Certain Patent Rights licensed to LICENSEE under Paragraph 2.1 of
this License Agreement are owned by Texaco Inc. TEXACO DEVELOPMENT has the full right and
authority to grant LICENSEE the license set forth in
Paragraph 2.1 under such Patent Rights.
Analogously, TEXACO DEVELOPMENT has the full right and authority to grant LICENSEE the
license set forth in Paragraph 2.2 under all of TEXACO DEVELOPMENT’s Technical Information
that is in fact owned by TEXACO DEVELOPMENT or Texaco Inc., as well as TEXACO
DEVELOPMENT’s licensees and/or third party contractors.
8.4.6 TEXACO DEVELOPMENT has used its reasonable efforts to assure
that it has delivered or shall deliver to LICENSEE all of TEXACO DEVELOPMENT’s Technical
Information that is necessary to operate the Plant.
8.5 LICENSEE represents and warrants that LICENSEE is a corporation duly organized and
validly existing under the laws of the State of Kansas; LICENSEE has the complete and unrestricted
power and right to enter into this License Agreement and to perform its obligations hereunder;
this License Agreement has been duly authorized, executed and delivered by LICENSEE
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and constitutes a legal, valid and binding obligation of LICENSEE enforceable against LICENSEE in
accordance with its terms, neither the execution and delivery by LICENSEE of this License
Agreement nor the consummation of the transactions contemplated by this License Agreement by
LICENSEE violates any law or any court or governmental agency order binding on LICENSEE or
requires the consent or approval of, or the giving of notice by any person to or the taking of any
other action in respect of any governmental agency or authority or any person not a party to this
License Agreement.
8.6 Subject to Paragraph 8.3.3, the total cumulative liability of TEXACO DEVELOPMENT under
this License Agreement and its liability under any separate performance guarantee agreement shall
not exceed [***] of the total royalties and fees due and actually received by
TEXACO DEVELOPMENT with respect to the Plant under this License Agreement and which are directly
attributable to this License Agreement or [***], whichever is less.
Accordingly, any fees received under the provisions of a separate agreement do not pertain to this
Paragraph 8.6. This paragraph 8.6 is intended to address TEXACO
DEVELOPMENT’s limit of liability
and shall not be construed as a liquidated damages provision.
9. PARTIES BOUND
9.1 This License Agreement shall benefit and be binding upon the parties hereto
and their respective successors and assigns; provided, however, that LICENSEE shall not assign
any of the rights and privileges granted or be relieved of its obligations hereunder without the
prior written consent of TEXACO DEVELOPMENT, which consent shall not be unreasonably withheld.
9.2 In no event shall TEXACO DEVELOPMENT be expected to give its consent
to assignment of this License Agreement to an entity that (a) TEXACO DEVELOPMENT or Texaco
Inc. is precluded from doing business with under Texaco Inc.’s written corporate policy in
effect at the time LICENSEE requests TEXACO DEVELOPMENT’s consent for assignment, it being understood
that the mere fact that the prospective assignee is in the fertilizer business shall not
constitute a sufficient basis for TEXACO DEVELOPMENT to withhold its
consent under this clause 9.2(a); (b)
TEXACO DEVELOPMENT or Texaco Inc. is precluded from doing business with, by reason or law
-16-
or
governmental regulations; or (c) is in competition with TEXACO DEVELOPMENT or Texaco Inc.
relative to gasification, hydrogen production and/or power generation.
9.3 Subject to Paragraph 9.4 hereof, TEXACO DEVELOPMENT will consent to an assignment of this
License Agreement to an Affiliate of LICENSEE; provided, however, that LICENSEE remains liable
hereunder to the extent the assignee fails to perform any obligations
hereunder.
9.4 No assignment of this License Agreement shall be effective unless and until the
designated assignee accepts all of the terms and obligations of this License Agreement and
satisfies all conditions set forth in Paragraph 9.2 hereof.
10. EXPORT CONTROL REGULATIONS
10.1 The obligation of TEXACO DEVELOPMENT to provide Technical
Information as well as the subsequent use, sale or any disposition of the products directly
produced by the TGP, THGP and/or TGPS, are subject to U.S. export control laws and regulations and
LICENSEE shall comply therewith in regard to any information or data
furnished by TEXACO
DEVELOPMENT and with regard to such use, sale or disposition.
11. ADDRESSES OF PARTIES
11.1 The addresses and telefax numbers of the parties hereto for all purposes specified in
this License Agreement including notices and payments shall be as follows:
TEXACO DEVELOPMENT:
TEXACO DEVELOPMENT CORPORATION
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
XXX
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
XXX
| Attention: Telefax: | Vice President 000-000-0000 |
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LICENSEE:
FARMLAND
INDUSTRIES, INC.
Department 62
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Department 62
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
| Attention: Telefax: |
General Counsel 000-000-0000 |
Either party hereto shall have the right to change its address or telefax number by prior
notice in writing directed to the other party.
12. PUBLICITY
12.1 TEXACO DEVELOPMENT and LICENSEE shall each be permitted to issue
press releases or otherwise publicize the fact that the parties have entered into this License
Agreement and may describe the general nature of this License Agreement in any publication, written or
otherwise, provided, however, that TEXACO DEVELOPMENT and LICENSEE shall first mutually agree on
the content of the subject matter contained in any such publication. TEXACO DEVELOPMENT and
LICENSEE shall also mutually agree upon the content of releases of information available for
public review or inspection, including, without limitation, information related to safety related
regulatory reviews and environmental permit applications. Notwithstanding the foregoing provisions of
this Paragraph 12.1, any party hereto may disclose information contemplated under this Paragraph
12.1 where such disclosure is required by law or regulation, provided that the disclosing party
first gives the other party an opportunity to comment on such disclosures. In no event shall anything
contained in this Section 12 be construed to permit disclosure
of TEXACO DEVELOPMENT’s confidential
information.
12.2 Subject to the provisions of Paragraph 12.1 above, if this License Agreement
terminates or is canceled by LICENSEE, or if LICENSEE decides not to build the Plant and place
it into commercial operation or to delay the construction or commercialization of the Plant, any
public
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statement to that effect, whether written or otherwise, shall be mutually agreed to by TEXACO
DEVELOPMENT and LICENSEE.
12.3 Each party hereto shall have the right to delay any such publication anticipated in
Paragraphs 12.1 and 12.2 above for a reasonable period if it would have an adverse impact on its
own commercial activities or relationships.
13. DISPUTE RESOLUTION AND ARBITRATION
13.1 TEXACO DEVELOPMENT and LICENSEE will attempt in good faith to resolve any controversy or
claim arising out of or relating to this License Agreement promptly by negotiations between senior
executives or officers of the parties hereto who have authority to settle the controversy,
including, but not limited to, any controversy or claim arising out of or relating to Section 7 of
this License Agreement.
13.2 The disputing party hereto shall give the other party written notice of the dispute.
Within twenty (20) days after receipt of said notice, the receiving party shall submit to the
other party a written response. The notice and response shall include (i) a statement of each
party’s position and a summary of the evidence and arguments supporting its position; and (ii) the
name and title of the representative who will represent that party. The representatives shall meet
at a mutually acceptable time and place within thirty (30) days of the date of the disputing
party’s notice and thereafter as often as such representatives reasonably deem necessary to
exchange relevant information and to attempt to resolve the dispute.
13.3 If the matter has not been resolved pursuant to Paragraphs 13.1 and 13.2 within sixty
(60) days of the disputing party’s notice, or as the parties may otherwise agree in writing, or if
any party hereto will not participate in such procedure, the controversy shall be settled by
arbitration in accordance with American Arbitration Association rules and policies pursuant to
which three arbitrators (the “Arbitrators”) shall be appointed, one by each party hereto and the
third by the first two appointed Arbitrators. Judgment upon the award rendered by the Arbitrators
may be entered by any court having jurisdiction thereof, or in a U.S. District Court, or in the
courts of the State of
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New York or the State of Missouri. The place of arbitration shall be the United States of America.
The arbitration shall be conducted in the English language. Each party shall bear its own costs
and expenses associated with any arbitration.
13.3.1 In the event the controversy is related to a violation by LICENSEE of any of the
confidentiality provisions of Paragraph 6.1, or any of the other provisions of this License
Agreement, and TEXACO DEVELOPMENT is seeking termination of this License Agreement as part or all
of the remedy for any such violation, the Arbitrators first shall determine whether LICENSEE has
violated the applicable provision of this License Agreement, and, if so, the Arbitrators shall
determine if the remedy sought by TEXACO DEVELOPMENT is the appropriate remedy by considering,
among other things, the following:
| a) | the nature and gravity of such violation; | |
| b) | the nature, gravity and similarity of any previous violations by LICENSEE; | |
| c) | the steps and/or procedures LICENSEE has implemented or plans to implement to prevent any future violations of the applicable provision; | |
| d) | the impact of the remedy on each party; and |
|
| e) | the harm to TEXACO DEVELOPMENT caused by the violation. |
Among other possible remedies, the Arbitrators shall have the authority to award TEXACO DEVELOPMENT
double its actual damages in appropriate circumstances. In the event that the Arbitrators grant
TEXACO DEVELOPMENT the right to terminate this License Agreement as a fair and appropriate remedy,
then the Arbitrators shall grant to TEXACO DEVELOPMENT such right pursuant to a written opinion
setting forth their reasons in support of such remedy. In that event, TEXACO DEVELOPMENT shall have
the right, but not the obligation, to terminate this License Agreement and revoke all licenses,
rights, privileges and authorizations of this License Agreement. The foregoing provisions of this
Paragraph shall in no way be deemed to limit, restrict or otherwise modify any rights of TEXACO
DEVELOPMENT under Paragraph 13.5.
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13.4 Neither TEXACO DEVELOPMENT, LICENSEE, any witness nor the
Arbitrators may disclose the contents of any arbitration hereunder without the written consent
of both the parties, unless and then only to the extent required to enforce the award, or as may be
required by law, or as are normal and necessary for financial and tax
reports and audits.
13.5 If TEXACO DEVELOPMENT believes that LICENSEE is using TEXACO
DEVELOPMENT’s Technical Information or any other data, trade secrets, technical information,
know-how, or other proprietary information accessed hereunder by LICENSEE, unlawfully or is
treating the same in a manner which could compromise its proprietary value, or if TEXACO
DEVELOPMENT believes LICENSEE is not complying with Section 9 (Parties Bound) or Section 10
(Export Control Regulations), then TEXACO DEVELOPMENT shall be permitted to immediately
submit the matter to arbitration under Paragraph 13.3. In such case, the parties hereto
agree that the Arbitrators shall have full authority to immediately enjoin any further activity of LICENSEE
upon a finding by the Arbitrators that LICENSEE is engaging in activity referred to in the
immediately preceding sentence, and LICENSEE agrees that it will be fully bound by any injunction or
restraining order issued by the Arbitrators respecting such activities. Such injunction or restraining
orders shall become effective immediately and shall not have to be entered by any court to become effective
and shall not preclude any award of monetary damages. Alternatively, if TEXACO DEVELOPMENT
decides that a proper injunction could not be issued expeditiously enough through arbitration,
the parties hereto agree that TEXACO DEVELOPMENT may go directly to the courts specified in
Paragraph 13.3 to seek injunctive relief.
13.6 The parties hereto agree and agree to use their best efforts to cause their
respective Affiliates to seek to adopt Paragraph 13 of this Agreement in various additional
agreements that are entered into with third parties and that relate to the subject matter of
this Agreement.
13.7 This Section 13 shall survive the termination or expiration of this License Agreement and
remain in force so long as there remain outstanding rights or obligations of either party subject
to arbitration.
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14. ADDITIONAL AGREEMENTS
14.1 In addition to this License Agreement, TEXACO DEVELOPMENT and
LICENSEE have entered into a separate Process Information Package Letter Agreement dated March
6, 1997 for engineering services relating to the design basis and process design specification
of the Plant. TEXACO DEVELOPMENT and LICENSEE shall enter into a mutually acceptable separate
Guarantee Agreement which will cover certain performance guarantees of the process licensed
hereunder. TEXACO DEVELOPMENT, or an Affiliate, and LICENSEE shall enter into the O & M
Agreement with respect to the Plant.
14.2 In the event LICENSEE considers modification of the Plant for the practice of
the TGPS or if LICENSEE considers processing a feedstock other than, or in addition to, coal
and/or
petroleum coke or if LICENSEE considers making a Fundamental Modification to the Plant, then
LICENSEE shall notify TEXACO DEVELOPMENT in writing and TEXACO DEVELOPMENT
shall prepare, or arrange to prepare, the process information package relating to the design
basis and
process design specification for any of the aforementioned modifications or any preliminary
studies
relating thereto. The process information package contemplated under
this Paragraph 14.2 or
any
preliminary studies shall be prepared under a separate agreement pursuant to a mutually
acceptable
scope of work and TEXACO DEVELOPMENT shall be compensated as follows:
(i) for any preliminary studies and/or for the TGP portion of the process engineering
package, TEXACO DEVELOPMENT shall perform such services at the most favorable rate it has
performed similar services within the two (2) calendar years prior to the effective date of the
preliminary study or process engineering package letter agreement in question, whichever
appropriate; and
(ii) for the THGP and/or TGPS portion of the process engineering package, TEXACO DEVELOPMENT
shall perform such services for a fee that is mutually acceptable to LICENSEE and TEXACO
DEVELOPMENT, which fee shall be determined through good faith negotiations between LICENSEE and
TEXACO DEVELOPMENT. In the event the parties cannot reach mutual agreement, LICENSEE shall be free
to have such services performed by a third party(ies)
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provided such third party(ies) are acceptable to TEXACO DEVELOPMENT in writing. TEXACO
DEVELOPMENT’s acceptance shall not be unreasonably withheld.
[***]
16. SEVERABILITY
16.1 If any part, term, or provision of this License Agreement shall be found illegal
or in conflict with any valid controlling law, the validity of the remaining provisions shall not
be affected thereby.
17. LAW GOVERNING
17.1 THIS LICENSE AGREEMENT SHALL BE CONSTRUED AND THE LEGAL RELATIONS BETWEEN THE PARTIES
HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE SUBSTANTIVE AND PROCEDURAL LAWS OF THE STATE
OF NEW YORK, WITHOUT RECOURSE TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the parties hereto have respectively caused this instrument to be
duly executed on the dates hereinafter indicated.
| TEXACO DEVELOPMENT CORPORATION | ||||||
| By: | /s/ Xxxx X. Xxxxx | |||||
| Title: | Vice President | |||||
| Date: | Xxxxxx 00, 0000 | |||||
| XXXXXXXX INDUSTRIES, INC. | ||||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Title: | Executive Vice President and | |||||
| Chief Operating Officer | ||||||
| Date: | August 5, 1997 | |||||
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SCHEDULE I
DEFINITIONS
DEFINITIONS
The following terms shall be deemed to have the following meanings as used in this License
Agreement of which this Schedule I is a part. The definitions set forth in this Schedule I shall
not be construed to define or limit the scope of any patent claim.
(a) “Affiliates” of a company designated herein shall mean all corporations (i) of
which such designated company now or hereafter owns or controls, directly or indirectly, not
less than
fifty percent (50%) of the stock having the right to vote for directors thereof, or (ii) by
which such
designated company is owned or controlled, directly or indirectly by a parent corporation
owning or
controlling not less than fifty percent (50%) of the stock having the right to vote for
directors thereof,
or (iii) which are sister corporations owned or controlled directly or indirectly, by such
parent
corporation of such designated company, where such parent corporation owns or controls not
less than
fifty percent (50%) of the stock having the right to vote for directors thereof. For the
purpose of this
definition, the stock owned or controlled by a company shall be deemed to include all stock
owned or
controlled, directly or indirectly, by any other company of which it owns or controls not less than
fifty
percent (50%) of the stock having the right to vote for directors thereof. The foregoing shall
include without limitation any organization not in corporate form such as a partnership if the
designated company, directly or indirectly, has acquired a proprietary or equity interest, whether
as a partner or otherwise, in such organization for not less than fifty percent (50%).
(b) “Daily Average Output” shall mean the aggregate Output during any
accounting period divided by the total number of days in such
accounting period.
(c) “Exchange Period” shall mean the period of time beginning with the first
disclosure of TEXACO DEVELOPMENT’s Technical Information to LICENSEE pursuant to this
License Agreement and ending with the expiration or termination of this License Agreement.
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(d) “Financial Closure” shall mean the time at which funds necessary to proceed
with the construction of the Plant are advanced or are available to be advanced without any
condition
other than the request of the LICENSEE.
(e) “Fundamental Modification” of the Plant shall have the meaning set forth in
Paragraph l(d) of Schedule II.
(f) “Gasification” shall have the meaning defined in definitions of this Schedule I
for the Texaco Gasification Process.
(g) “Gasifier Feed” shall mean the number of: short tons (each of 2,000 pounds)
of moisture-free carbonaceous solids; barrels (equivalent) (each of 64 million BTU or higher
heating
value) of gaseous carbonaceous substances, and barrels (each of 42 gallons of 231 cubic inches
measured at 60°F) of liquid carbonaceous substances, as appropriate, including byproduct
streams,
charged to the Gasification operations, measured and determined in accordance with methods,
procedures and correction factors mutually acceptable to TEXACO DEVELOPMENT and
LICENSEE.
(h) “LICENSEE’s Technical Information” shall mean such, but only such, engineering, operating
and technical data and operating information, specifications, documents and know-how pertaining to
the design, construction, operation and maintenance of equipment for and the operation of the TGP,
THGP, and/or TGPS for the production of Synthesis Gas and its use in the production of high purity
hydrogen and/or electric power (and ancillary products), and which is in the possession of
LICENSEE prior to the end of the Exchange Period, and which LICENSEE is free to disclose to others
without obligation to account to a third party therefor.
(i) “MSCF” shall mean One Thousand (1,000) Standard Cubic Feet at 60°F and at atmospheric
pressure (29.92 inches of mercury absolute), measured and determined in accordance with methods,
procedures and correction factors mutually acceptable to TEXACO DEVELOPMENT and LICENSEE.
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(j) “Operations and Maintenance Agreement” or “O & M Agreement” shall mean the agreement that
shall be entered into between LICENSEE and an affiliate of TEXACO DEVELOPMENT setting forth the
terms and conditions under which said affiliate will provide technical services and operate and
maintain the Plant on LICENSEE’s behalf.
(k) [***]
(I) “Output” shall mean the number of MSCF of hydrogen plus carbon monoxide produced as the
product of any Gasification operations conducted by LICENSEE.
(m) “Patent Rights” shall mean all such, but only such, claims of Letters Patent of the
United States and all countries foreign thereto, and transferable rights thereunder, as cover
processes for, or apparatus designed for the practice of TGP, THGP,
and/or TGPS and are based upon
inventions made prior to the end of the Exchange Period and of which the designated party hereto
has ownership or the power to grant licenses thereunder to others without obligation to account to
a third party therefor.
(n) “Plant” shall mean the THGP Plant described in Paragraph 3.1 of this License Agreement
which, at LICENSEE’s option, may be modified for practice of TGPS in accordance with the terms of
this License Agreement.
(o) “Power Systems”, hereinafter “PS”, shall mean the system and parts thereof, including
process(es) and equipment for the generation of electric power, such as gas turbine(s), steam
turbine(s) and heat recovery steam generator(s) along with any supporting and peripheral
equipment.
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(p) “Purification” shall mean the separation of the effluent gas from any process step
following Gasification into high purity hydrogen for recovery and a reject gas mixture which may
or may not be returned to the partial oxidation and/or shift conversion reaction zone(s).
(q) “Shift Conversion” shall mean the reaction of Synthesis Gas with steam in a reaction zone
to convert carbon monoxide into a raw gas mixture including carbon dioxide and hydrogen.
(r) “Startup” of the Plant shall occur at the time the Plant has first produced Synthesis Gas
for a continuous forty-eight (48) hour period and the first to occur of (i) the Plant having
satisfied either of the Guaranteed Performance Standards under the Guarantee Agreement between the
parties, of even date herewith, in a Guarantee Test run using the No. 1 Gasification Unit, as such
terms are defined and used in said Guarantee Agreement, or (ii) one hundred eighty (180) days has
elapsed from such forty-eight (48) hour period, or if LICENSEE is then pursuing the passage of the
Guarantee Test for the No. 1 Gasification Unit, such later date upon which LICENSEE is no longer
continuing such pursuit. In the event Synthesis Gas is produced for at least a continuous
twenty-four (24) hour period, LICENSEE shall not be permitted to cease operating the Plant without
a reasonable basis until Startup has occurred.
(s) “Synthesis Gas” shall mean carbon monoxide and hydrogen produced by Gasification.
(t) “TEXACO
DEVELOPMENT’s Technical Information” shall mean such, but only such, engineering,
operating and technical data and operating information, specifications, documents and know-how
which, in TEXACO DEVELOPMENT’s sole opinion, is necessary for the design, construction, operation
and maintenance of a facility for the practice of the TGP, THGP, and/or TGPS for the production of
Synthesis Gas and its use in the production of high purity hydrogen and/or electric power (and
ancillary products) (whichever appropriate) and which is in the possession or control of TEXACO
DEVELOPMENT (including that obtained from its licensees) prior to the end of the Exchange Period,
and which TEXACO DEVELOPMENT is free to disclose to others without obligation to account to a third
party therefor.
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(u) “Texaco Gasification Power Systems” or “TGPS” shall mean the process licensed by
TEXACO DEVELOPMENT where the TGP is used with PS including any means or methods for integrating and
optimizing TGP and PS with any related removal and recovery of byproducts (such as sulfur) and air
separation systems, and any modifications or improvements to any or
all of the foregoing.
(v) “Texaco Gasification Process” or “Gasification” or “TGP” shall mean the process licensed
by TEXACO DEVELOPMENT and improvements therein producing carbon monoxide and hydrogen by partial
oxidation of carbonaceous substances, including without limitation refining or chemical plant
byproducts streams, using oxygen or an oxygen-containing gas and including, but without limiting
the foregoing, any means or methods of (i) preparing such substances to the extent useful in such
partial oxidation, (ii) introducing and reacting materials in a partial oxidation reaction zone;
(iii) cooling the effluent of said reaction zone and recovering and conserving reaction heat; (iv)
removing from said effluent materials which may or may not be returned to said reaction zone; and
(v) treating by-product or waste discharges.
(w) “Texaco Hydrogen Generation Process” or “THGP” shall mean the process licensed by TEXACO
DEVELOPMENT for producing high purity hydrogen which combines the TGP with one or more of the
following process steps: Shift Conversion, Purification as each is hereinafter defined, membrane
separation, methanation, and/or acid gas removal including any means or methods for integrating
said combination, and any modifications or improvements to any of the foregoing.
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SCHEDULE II
ROYALTIES AND TERMS OF PAYMENT
ROYALTIES AND TERMS OF PAYMENT
LICENSEE shall pay royalties and fees to TEXACO DEVELOPMENT or its nominee, in U.S. Dollars
in immediately available funds in New York, as set forth below:
1. (a) Subject
to Paragraph 1(b) of this Schedule II, LICENSEE shall acquire paid-up
capacity for the Plant based upon the designed capacity of the Plant
set forth in Paragraph 3.1 of this License Agreement by making
the following payments, the cumulative total of which shall be [***]:
(i) Within
forty-five (45) days of signing this License Agreement, LICENSEE
will pay to TEXACO DEVELOPMENT [***] of the total lump-sum royalty
for the designed Daily Average Output capacity of the Plant
calculated as per the royalty schedule in Paragraph 2 of this
Schedule II; and
(ii) Within
forty-five (45) days of Financial Closure or by June 30, 1998,
whichever first occurs, LICENSEE will pay to TEXACO DEVELOPMENT [***]
of the total lump-sum royalty for the designed Daily Average Output
capacity of the Plant calculated as per the royalty schedule in
Paragraph 2 of this Schedule II; and
(iii) Within
forty-five (45) days of Plant Start-up or December 31, 2002,
whichever first occurs, LICENSEE will pay to TEXACO DEVELOPMENT [***]
of the total lump-sum royalty for the designed Daily Average Output
capacity of the Plant calculated as per the royalty schedule in
Paragraph 2 of this Schedule II.
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(b) LICENSEE shall also pay TEXACO DEVELOPMENT, or its
nominee, in immediately available funds in New York, the lesser of [***] of LICENSEE’s fee it has received for processing each ton of any imported
refinery/chemical plant by-product feedstock or other imported by-product feeds processed in
the Plant
during each accounting period prescribed in Section 4.3 of this License Agreement; provided,
however,
that LICENSEE shall not be required to make such payments to TEXACO DEVELOPMENT until
the aggregate amount of fees received by LICENSEE for processing such feedstock(s) equals the
costs
incurred by LICENSEE, if any, to modify the Plant to enable the Plant to process such
feedstock(s).
The obligations of this Paragraph l(b) shall remain ongoing and shall survive any termination
or expiration of this License Agreement.
(c) In the event LICENSEE is unable to achieve Financial Closure by June
30, 1998, LICENSEE shall be permitted to cancel this License Agreement by providing TEXACO
DEVELOPMENT with ten (10) days written cancellation notice, and upon the expiration of ten
(10) days from the time TEXACO DEVELOPMENT receives such notice, this License Agreement shall be
deemed canceled and terminated; provided, however, that LICENSEE shall use all reasonable
efforts to achieve Financial Closure and further provided that TEXACO DEVELOPMENT has actually
received the payment set forth in Paragraph l(a)(i) of this
Schedule II. Upon cancellation of
this License Agreement, LICENSEE shall be relieved of its obligation for the remaining royalty
payments set forth in Paragraphs l(a)(ii) and (iii) of this Schedule II, and this License Agreement
shall be terminated.
(d) LICENSEE shall
be permitted to exceed the designed capacity of the
Plant by up to [***] ( i.e., [***] MSCF) of Daily Average Output without having to pay TEXACO DEVELOPMENT any royalties for
the [***] additional capacity provided that such additional capacity results from
improved operations and does not result from a Fundamental Modification (as defined hereinbelow) of the
Plant LICENSEE shall be required to make additional royalty payments in accordance with the royalty
schedule of Paragraph 2 of this Schedule II in the event the Daily Average Output exceeds
[***] MSCF. It is understood and agreed that a fundamental modification of the Plant shall mean (i) the
simultaneous operation of more than one gasifier, (ii) the addition, modification or replacement of
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charge pump(s), feed injector(s), or
gasifier(s) that increase the designed capacity by [***] or more, (iii) an increase in the
capacity of the
air separation unit by [***] or more from the capacity of the air separation unit at the time of
Plant Start-up;
and/or (iv) if the TGPS is practiced at the Plant (“Fundamental Modification”) In
the event such
additional capacity results from a Fundamental Modification, LICENSEE shall be required to make
additional royalty payment in accordance with the royalty schedule in Paragraph 2 of this
Schedule
II. Furthermore, in the event LICENSEE does in fact produce more than Eighty-six Thousand (86,000) MSCF but less than
[***] MSCF of Daily Average
Output without a Fundamental Modification and then subsequently the Plant undergoes a Fundamental
Modification, LICENSEE shall pay TEXACO DEVELOPMENT for all additional capacity beyond the
designed capacity in accordance with the royalty schedule of Paragraph 2 of this
Schedule II.
After TEXACO DEVELOPMENT receives such payment, LICENSEE shall be entitled to further increase
the
Daily Average Output of the Plant by up to an additional [***] MSCF without any further cost to
LICENSEE. Any additional capacity beyond this [***] MSCF shall be subject to the royalty fees in
accordance with the royalty schedule of Paragraph 2 of Schedule II of this License
Agreement.
(e) [***]
(f) [***]
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[***]
2.
Lump-sum (viz., paid-up) royalties shall be paid with respect to all
Gasification operations conducted by LICENSEE in accordance with the following
royalty schedule:
| (a) | For the first 10,000 MSCF of Daily Average Output or any part thereof, the sum of [***]; and | ||
| For the next 15,000 MSCF of Daily Average Output, i.e., over 10,000 and up to and including 25,000 MSCF of Daily Average Output total, at the rate of [***] per MSCF of Daily average Output; and | |||
| For the next 175,000 MSCF of Daily Average Output, i.e., over 25,000 and up to and including 200,000 MSCF of Daily Average Output total, at the rate of [***] per MSCF of Daily Average Output; and | |||
| For all over 200,000 MSCF of Daily Average Output at the rate of [***] per MSCF of Daily Average Output, and | |||
| (b) | [***] |
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[***]
For
the next 114,000 MSCF of Daily Average Output, i.e., over
86,000 and up to and
including 200,000 MSCF of Daily Average output total, at the rate of [***] per
MSCF of Daily Average Output; and
For
all over 200,000 MSCF of Daily Average output at the rate of [***] per MSCF
of Daily Average Output;
all in
accordance with the payment provisions of this Schedule II.
3. At the time specified for the submission of accounting statements under Section
4.3 of this License Agreement, LICENSEE will also pay to TEXACO DEVELOPMENT or its
nominee, in U.S. Dollars in immediately available funds in New York, the lump-sum
royalties in accordance with the royalty rate schedule set forth in Paragraph 2 above
and modified as provided in Paragraph 4 of this Schedule II required to purchase paid-up
capacity for that part (if any) of the total Daily Average Output from all Gasification
operations conducted by LICENSEE during the accounting period covered by said statement
for which paid-up capacity shall not have been theretofore purchased by LICENSEE and,
also, the fees specified in Paragraph 2 and modified as provided in Paragraph 4 of this
Schedule II for all Gasification operations of LICENSEE during
said accounting period.
4. (a) All payments made pursuant to Paragraphs 1 and 3, may, at
TEXACO DEVELOPMENT’s discretion, be modified by a factor in which the numerator is the
average “Producer Price Index for Industrial Commodities” as published by the Bureau of
Labor Statistics, U.S. Department of Labor (hereinafter called “BLS Index”) for the
twelve-month period ending the thirty- first day of October preceding the first day of
January of the year in which such payment becomes due
-34-
and the denominator is the average of said BLS Index for the twelve-month period
ending October 31,1996 (127.2). Such factor shall not apply to the payment set forth in Paragraph
l(a)(iii) of this Schedule II, provided such amount is actually received by TEXACO DEVELOPMENT
prior to December 31, 2000.
(b) If at any time during the term of the License Agreement publication of the BLS Index shall
cease, another appropriate index published in the United States by the U.S. Government, or other
organization generally recognized in the United States as
authoritative on changes of equivalent or substantially equivalent commodity costs in the United States
agreeable to both parties, shall be used.
5. If any payment hereunder, or part thereof, shall become due and remain unpaid for a period
in excess of ten (10) days, LICENSEE agrees to pay to TEXACO DEVELOPMENT, in addition to the amount
unpaid, interest on such amount at the rate of one percent (1%) per month for each month or
portion thereof for the period beginning when such payment becomes due and until payment of such
unpaid amount. Such interest shall be in addition to any other rights of TEXACO DEVELOPMENT arising
as a result of LICENSEE’s failure to make such payment or part
thereof within the time specified.
-35-
SCHEDULE IV
RELEASE
The undersigned desires to have access to the gasification plant and related facilities (the
“Plant”) of Farmland Industries, Inc.
(“Farmland”) located near Coffeyville, Kansas. The
undersigned acknowledges that the undersigned’s access to the Plant premises is for the sole
purpose of participating in a guided tour of the Plant and in activities directly associated with
such tour.
The undersigned acknowledges that:
(a) the Plant is an industrial facility that produces synthesis gas from carbonaceous
substances; and
(b)
the Plant is located adjacent to other industrial facilities (the “Other
Facilities”) including, without limitation, fertilizer production and storage facilities and
a petroleum refinery; and
(c) the operation of the Plant and the Other Facilities involves chemical and other
processes that are inherently dangerous; and
(d) the operation of the Plant and the Other Facilities involves toxic materials and
materials under extremely high pressure and/or at extremely high temperatures, all of which
being inherently dangerous; and
(e) being industrial facilities, the Plant and the Other Facilities, regardless of
whether they currently are operating, are inherently dangerous; and
(f) the undersigned’s physical presence at, near or on the premises of the Plant and/or
the Other Facilities INVOLVES THE RISK OF SIGNIFICANT PERSONAL INJURY AND/OR DEATH TO THE
UNDERSIGNED.
The undersigned agrees that in consideration of the undersigned receiving the above-described
access to the Plant premises, THE UNDERSIGNED UNCONDITIONALLY ASSUMES ALL RISKS OF PERSONAL INJURY
AND/OR DEATH TO THE UNDERSIGNED that may occur in connection with the undersigned’s physical
presence at, near or on the premises of the Plant and/or the Other Facilities, whether during the
undersigned’s above-described access to the Plant or at any time thereafter and regardless of the
direct or indirect cause thereof (including, without limitation, the acts, omissions or negligence
of Farmland or its directors, officers, employees, agents or representatives), and THE UNDERSIGNED
DOES HEREBY RELEASE AND FOREVER DISCHARGE FARMLAND AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
AND REPRESENTATIVES from any and all claims, demands or actions in connection with or otherwise
relating to any such personal injury or death to the undersigned.
Also, the undersigned covenants never to make a claim or demand, or pursue any action,
against Farmland or its directors, officers, employees, agents and representatives on account of
any such personal injury or death to the undersigned.
The undersigned acknowledges and agrees that the undersigned’s signing and delivery of this
Release to Farmland is the free and voluntary act of the undersigned, that this Release is a
legally binding document, and that this Release shall be binding on the undersigned and the
undersigned’s heirs and personal representatives.
| Date: | ||||||
Print Name: |
||||||
-36-
SCHEDULE
III
NON-EXHAUSTIVE
LIST OF TEXACO U.S. PATENTS
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,261,167
|
04/14/81 | PROCESS FOR THE GENERATION OF POWER FROM SOLID CARBONACEOUS FUELS | ||
4,298,452
|
11/03/81 | COAL LIQUEFACTION | ||
4,351,645
|
09/28/82 | PARTIAL OXIDATION BURNER APARATUS | ||
4,371,378
|
02/01/83 | SWIRL BURNER FOR PARTIAL OXIDATION PROCESS | ||
4,377,132
|
03/22/83 | SYNTHESIS GAS COOLER AND WASTE HEAT BOILER | ||
4,385,906
|
05/31/83 | START-UP METHOD FOR A GASIFICATION REACTOR | ||
4,390,347
|
06/28/83 | TRIM CONTROL PROC. FOR PARTIAL OX. GAS GENERATOR | ||
4,390,348
|
06/28/83 | TRIM CONTROL PROC. FOR PARTIAL OX. GAS GENERATOR | ||
4,411,670
|
10/25/83 | PROD. OF SYNTHESIS GAS FROM HEAVY HYDROCARBON FUELS CONTAINING HIGH METAL CONCENTRATIONS | ||
4,411,817
|
10/25/83 | PRODUCTION OF SYNTHESIS GAS | ||
4,443,228
|
04/17/84 | PARTIAL OXIDATION BURNER | ||
4,462,928
|
07/31/84 | PARTIAL OX. OF HEAVY REFINERY FRACTIONS | ||
4,466,810
|
08/21/84 | PARTIAL OXIDATION PROCESS | ||
4,468,376
|
08/28/84 | DISPOSAL PROC. FOR HALOGENATED ORGANIC MATERIAL | ||
4,474,581
|
10/02/84 | TRIM CONTROL SYSTEM FOR PARTIAL OXIDATION GAS GENERATOR |
||
4,474,582
|
10/02/84 | TRIM CONTROL SYSTEM FOR PARTIAL OXIDATION GAS GENERATOR | ||
4,479,810
|
10/30/84 | PARTIAL OXIDATION SYSTEM | ||
4,483,690
|
11/20/84 | APPARATUS FOR PROD. OF SYNTHESIS GAS FROM HEAVY HYDROCARBON FUELS CONTG. HIGH METAL CONCENTRATIONS | ||
4,490,156
|
12/25/84 | PARTIAL OXIDATION SYSTEM | ||
4,491,456
|
01/01/85 | PARTIAL OXIDATION PROCESS | ||
4,510,057
|
04/09/85 | ROTATING DISK BIOTREATMENT OF SYNGAS WASTE WATER | ||
4,525,176
|
06/25/85 | PREHEATING AND DESLAGGING A GASIFIER | ||
4,533,363
|
08/06/85 | PRODUCTION OF SYNTHESIS GAS | ||
4,545,330
|
10/08/85 | SELF-CLEANING LINER | ||
4,559,061
|
12/17/85 | MEANS FOR SYNTHESIS GAS GENERATION WITH CONTROL OF RATIO STEAM TO DRY GAS | ||
-37-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,581,899
|
04/15/86 | SYNTHESIS GAS GENERATION WITH PREVENTION OF DEPOSIT FORMATION IN EXIT LINES | ||
4,590,326
|
05/20/86 | MULTI-ELEMENT THERMOCOUPLE | ||
4,597,773
|
07/01/86 | PROC. FOR PARTIAL OX. OF HYDROCARBONACEOUS FUEL AND RECOVERY OF WATER FROM DISPERSIONS OF SOOT | ||
4,605,423
|
08/12/86 | APPARATUS FOR GENERATING AND COOLING SYNTHESIS GAS | ||
4,624,683
|
11/25/86 | QUENCH RING AND DIP TUBE COMBINATION WITH IMPROVEMENT | ||
4,637,823
|
01/20/87 | HIGH TEMPERATURE FURNACE | ||
4,639,312
|
01/27/87 | FILTER PRESS FLOW CONTROL SYSTEM FOR DEWATERING SLUDGE | ||
4,647,294
|
03/03/87 | PARTIAL OXIDATION APPARATUS | ||
4,655,792
|
04/07/87 | PARTIAL OXIDATION PROCESS | ||
4,657,698
|
04/14/87 | PARTIAL OXIDATION PROCESS | ||
4,666,463
|
05/19/87 | CONTROLLING TEMPERATURE OF BURNERS | ||
4,668,428
|
05/26/87 | PARTIAL OX. OF PETROLEUM COKE AND/OR HEAVY LIQUID FUEL | ||
4,668,429
|
05/26/87 | PARTIAL OX. OF PETROLEUM COKE AND/OR HEAVY LIQUID FUEL | ||
4,704,137
|
11/03/87 | UPGRADING WATER FOR COOLING AND CLEANING | ||
4,705,536
|
11/10/87 | PARTIAL OXIDATION PROCESS | ||
4,705,542
|
11/10/87 | PRODUCTION OF SYNTHESIS GAS | ||
4,743,194
|
05/10/88 | COOLING SYSTEM FOR GASIFIER BURNER | ||
4,749,381
|
06/07/88 | STABLE SLURRIES OF SOLID CARBONACEOUS FUEL AND WATER | ||
4,776,705
|
10/11/88 | THERMOCOUPLE FOR USE IN HOSTILE ENVIRONMENT | ||
4,776,860
|
10/11/88 | HIGH TEMPERATURE DESULFURIZATION OF SYNTHESIS GAS | ||
4,778,483
|
10/18/88 | GASIFICATION REACTOR WITH INTERNAL GAS BAFFLING AND LIQUID COLLECTOR | ||
4,778,485
|
10/18/88 | POX PROCESS WITH HIGH TEMPERATURE DESULFURIZATION OF SYNGAS | ||
4,781,731
|
11/01/88 | INTEGRATED METHOD OF CHARGE FUEL PRETREATMENT AND TAIL GAS SULFUR REMOVAL | ||
4,784,670
|
11/15/88 | PARTIAL OXIDATION PROCESS | ||
4,788,003
|
11/29/88 | PARTIAL OXIDATION OF ASH-CONTAINING LIQUID HYDROCARBONACEOUS AND SOLID CARBONACEOUS FUELS | ||
4,801,306
|
01/31/89 | QUENCH RING FOR A GASIFIER |
-38-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,826,627
|
05/02/89 | PARTIAL OXIDATION PROCESS | ||
4,828,578
|
05/09/89 | INTERNALLY CHANNELLED GASIFIER QUENCH RING | ||
4,828,579
|
05/09/89 | THERMALLY INSULATED QUENCH RING FOR A GASIFIER | ||
4,828,580
|
05/09/89 | QUENCH RING INSULATING COLLAR | ||
4,857,229
|
08/15/89 | PARTIAL OX. OF SULFUR, NICKEL AND VANADIUM-CONTG. FUELS | ||
4,876,031
|
10/24/89 | PARTIAL OXIDATION PROCESS | ||
4,876,987
|
10/31/89 | SYNTHETIC GAS COOLER WITH THERMAL PROTECTION | ||
4,880,439
|
11/14/89 | HIGH TEMPERATURE DESULFURIZATION OF SYNTHESIS GAS | ||
4,889,657
|
12/26/89 | PARTIAL OXIDATION PROCESS | ||
4,889,658
|
12/26/89 | PARTIAL OXIDATION PROCESS | ||
4,891,950
|
01/09/90 | CONTROL SYSTEM AND METHOD FOR A SYNTHESIS GAS PROCESS | ||
4,909,958
|
03/20/90 | PREVENTION OF FORMATION OF NICKEL SUBSULFIDE IN PARTIAL OX. OF HEAVY LIQUID AND/OR SOLID FUELS | ||
4,936,376
|
06/26/90 | SYNTHETIC GAS COOLER WITH THERMAL PROTECTION | ||
4,948,387
|
08/14/90 | SYNTHESIS GAS BARRIER AND REFRACTORY SUPPORT | ||
4,957,544
|
09/18/90 | PARTIAL OXIDATION PROCESS INCL. THE CONCENTRATION OF V/NI IN SLAG PHASE | ||
4,983,296
|
01/08/91 | PARTIAL OXIDATION OF SEWAGE SLUDGE | ||
4,992,081
|
02/12/91 | REACTOR DIP TUBE COOLING SYSTEM | ||
5,000,580
|
03/19/91 | APP. & METH. FOR MEAS. TEMP. INSIDE PROC. VESSELS CONTG. A HOSTILE ENV. | ||
5,005,986
|
04/09/91 | SLAG RESISTANT THERMOCOUPLE SHEATH | ||
5,087,271
|
02/11/92 | PARTIAL OXIDATION PROCESS | ||
5,152,975
|
10/06/92 | PROCESS FOR PRODUCING HIGH PURITY H2 | ||
5,152,976
|
10/06/92 | PROCESS FOR PRODUCING HIGH PURITY H2 | ||
5,188,741
|
02/23/93 | TREATMENT OF SEWAGE SLUDGE | ||
5,211,723
|
05/18/93 | PROCESS FOR REACTING PUMPABLE HIGH SOLIDS SEWAGE SLUDGE SLURRY | ||
5,211,724
|
05/18/93 | PARTIAL OXIDATION OF SEWAGE SLUDGE | ||
5,233,943
|
08/10/93 | SYNTHETIC GAS RADIANT COOLER WITH INTERNAL QUENCHING AND PURGING FACILITIES | ||
5,234,468
|
08/10/93 | PROCESS FOR UTILIZING A PUMPABLE FUEL FROM HIGHLY DEWATERED SEWAGE SLUDGE | ||
5,234,469
|
08/10/93 | PROCESS FOR DISPOSING OF SEWAGE SLUDGE |
-39-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
5,250,083
|
10/05/93 | PROCESS FOR PRODUCTION OF DESULFURIZED SYNTHESIS GAS | ||
5,251,433
|
10/12/93 | POWER GENERATION PROCESS | ||
5,261,602
|
11/16/93 | PARTIAL OXIDATION PROCESS AND BURNER WITH POROUS TIP | ||
5,265,635
|
11/30/93 | CONTROL MEANS AND METHOD FOR CONTROLLING FEED GASES | ||
5,295,350
|
03/22/94 | COMBINED POWER CYCLE WITH LIQUEFIED NATURAL GAS (LNG) AND SYNTHESIS OR FUEL GAS | ||
5,319,924
|
06/14/94 | PARTIAL OXIDATION POWER SYSTEM | ||
5,324,336
|
06/28/94 | PARTIAL OXIDATION OF LOW RANK COALS AND RESIDUAL OIL | ||
5,345,756
|
09/13/94 | PARTIAL OXIDATION PROCESS WITH PRODUCTION OF POWER | ||
5,358,696
|
10/25/94 | PRODUCTION OF H2-RICH GAS | ||
5,364,996
|
11/15/94 | PARTIAL OXIDATION OF SCRAP RUBBER TIRES AND USED MOTOR OIL | ||
5,394,686
|
03/07/95 | COMBINED POWER CYCLE WITH LIQUEFIED NATURAL GAS (LNG) AND SYNTHESIS OR FUEL GAS | ||
5,401,282
|
03/28/95 | PARTIAL OXIDATION PROCESS FOR PRODUCING A STREAM OF HOT PURIFIED GAS | ||
5,403,366
|
04/04/95 | PARTIAL OXIDATION PROCESS FOR PRODUCING A STREAM OF HOT PURIFIED GAS | ||
5,415,673
|
05/16/95 | ENERGY EFFICIENT FILTRATION OF SYNGAS COOLING AND SRUBBING WATER | ||
5,423,992
|
06/08/95 | CHEMICALLY DISINFECTED SEWAGE SLUDGE-CONTAINING MATERIALS | ||
5,423,894
|
06/13/95 | PARTIAL OXIDATION OF LOW-RANK COALS | ||
5,441,990
|
08/15/95 | CLEANED H2-ENRICHED SYNGAS MADE USING WATER-GAS SHIFT REACTION | ||
5,445,669
|
08/29/95 | PARTIAL OXIDATION OF PRODUCTS OF LIQUEFACTION OF PLASTIC MATERIALS | ||
5,496,859
|
03/05/96 | GASIFICATION PROCESS COMBINED WITH STEAM METHANE REFORMING TO PRODUCE SYNGAS SUITABLE FOR METHANOL PRODUCTION | ||
5,515,794
|
05/14/96 | PARTIAL OXIDATION PROCESS BURNER WITH RECESSED TIP AND GAS BLASTING | ||
5,534,040
|
07/09/96 | PARTIAL OXIDATION OF PARTIALLY LIQUIFIED PLASTIC MATERIALS | ||
5,554,202
|
09/10/96 | GASIFIER MONITORING APPARATUSGASIFIER MONITORING APPARATUS | ||
5,578,094
|
11/26/96 | VANADIUM ADDITION TO PETROLEUM COKE SLURRIES TO FACILITATE DESSLAGGING FOR CONTROLLED OXIDATION |
-40-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,218,423
|
08/19/80 | QUENCH RING AND DIP TUBE ASSEMBLY FOR A REACTOR VESSEL | ||
4,247,302
|
01/27/81 | PROCESS FOR GASIFICATION AND PRODUCTION BY-PRODUCT SUPERHEATED STEAM | ||
4,248,604
|
02/03/81 | GASIFICATION PROCESS | ||
4,251,228
|
02/17/81 | PRODUCTION OF CLEANED AND COOLED SYNTHESIS GAS | ||
4,252,539
|
02/24/81 | SOLID FUEL COMPOSITION | ||
4,255,278
|
03/10/81 | PARTIAL OXIDATION PROCESS WITH RECOVERY OF UNCOVERTED SOLID FUEL FROM SUSPENSION IN WATER | ||
4,261,167
|
04/14/81 | PROCESS FOR THE GENERATION OF POWER FROM CARBONACEOUS FUELS WITH MINIMAL ATMOSPHERIC POLLUTION | ||
4,265,407
|
05/05/81 | METH. OF PRODUCING A COAL-WATER SLURRY OF PREDETERMINED CONSISTENCY | ||
4,277,365
|
07/07/81 | PRODUCTION OF REDUCING GAS | ||
4,279,622
|
07/21/81 | GAS-GAS QUENCH COOLING AND SOLIDS SEPARATION PROCESS | ||
4,289,502
|
09/15/81 | APPARATUS FOR THE PROD. OF CLEANED AND COOLED SYNTHESIS GAS | ||
4,304,571
|
12/08/81 | COAL BENEFICIATION | ||
4,304,572
|
12/08/81 | PRODUCTION OF SOLID FUEL-WATER SLURRIES | ||
4,312,637
|
01/26/82 | SLAG OUTLET FOR GASIFICATION GENERATOR | ||
4,324,563
|
04/13/82 | GASIFIC. APPARATUS WITH MEANS FOR COOLING AND SEPARATING SOLIDS WITH PRODUCT GAS | ||
4,326,856
|
04/27/82 | PRODUCTION OF CLEANED AND COOLED SYNTHESIS GAS | ||
4,326,948
|
04/27/82 | LIQUEFACTION AND GASIFICATION OF LOW RANK COALS | ||
4,328,006
|
05/04/82 | APP. FOR THE PROD. OF CLEANED AND COOLED SYNGAS | ||
4,328,008
|
05/04/82 | METHOD FOR THE PRODUCTION OF CLEANED AND COOLED SYNTHESIS GAS | ||
4,351,645
|
09/28/82 | PARTIAL OXIDATION BURNER APPARATUS | ||
4,364,744
|
12/21/82 | BURNER FOR THE PARTIAL OX. OF SLURRIES OF SOLID CARBONACEOUS FUELS | ||
4,371,378
|
02/01/83 | SWIRL BURNER FOR PARTIAL OX. PROCESS | ||
4,377,132
|
03/22/83 | SYNTHESIS GAS COOLER AND WASTE HEAT BOILER | ||
4,377,394
|
03/22/83 | APP. FOR THE PROD. OF CLEANED AND COOLED SYNGAS | ||
4,385,906
|
05/31/83 | START-UP METHOD FOR A GASIFICATION REACTOR |
-41-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,386,941
|
06/07/83 | PROC. FOR THE PARTIAL OX. OF SLURRIES OF SOLID CARBONACEOUS FUEL | ||
4,390,347
|
06/28/83 | TRIM CONTROL PROCESS FOR PARTIAL OX. GAS GENERATOR | ||
4,390,348
|
06/28/83 | TRIM CONTROL PROCESS FOR PARTIAL OX. GAS GENERATOR | ||
4,390,957
|
06/28/83 | COAL SLURRY MONITOR MEANS AND METHOD | ||
4,411,533
|
10/25/83 | SYSTEM FOR MEASURING TEMPERATURE OF HOT GASES LADEN WITH ENTRAINED SOLIDS | ||
4,411,670
|
10/25/83 | PROD. OF SYNTHESIS GAS FROM HEAVY HYDROCARBON FUELS CONTG. HIGH METAL CONCENTRATIONS | ||
4,411,817
|
10/25/83 | PRODUCTION OF SYNTHESIS GAS | ||
4,436,530
|
03/13/84 | PROC. FOR GASIFYING SOLID CARBON CONTG. MATERIALS | ||
4,436,531
|
03/13/84 | COAL. GASIFICATION: PROMOTING THE REACTION OF CARBON IN THE EFFLUENT | ||
4,443,228
|
04/17/84 | PARTIAL OXIDATION BURNER | ||
4,443,230
|
04/17/84 | PARTIAL OX. PROCESS FOR SLURRIES OF SOLID FUEL | ||
4,445,444
|
05/01/84 | BURNER FOR COMBUSTING OXYGEN-COAL MIXTURE | ||
4,465,496
|
08/14/84 | REMOVAL OF SOUR WATER FROM COAL GASIFICATION SLAG | ||
4,466,808
|
08/21/84 | METH. OF COOLING PRODUCT GASES OF INCOMPLETE COMBUSTION CONTAINING ASH AND CHAR WHICH PASS THROUGH A VISCOUS STICKY PHASE | ||
4,466,810
|
08/21/84 | PARTIAL OXIDATION PROCESS | ||
4,468,376
|
08/28/84 | DISPOSAL PROC. FOR HALOGENATED ORGANIC MATERIAL | ||
4,474,581
|
10/02/84 | TRIM CONTROL SYSTEM FOR PARTIAL OX. GAS GENERATOR | ||
4,474,582
|
10/02/84 | TRIM CONTROL SYSTEM FOR PARTIAL OX. GAS GENERATOR | ||
4,479,810
|
10/30/84 | PARTIAL OXIDATION SYSTEM | ||
4,483,690
|
11/20/84 | APPARATUS FOR PROD. OF SYNTHESIS GAS FROM HEAVY HYDROCARBON FUELS CONTG. HIGH METAL CONCENTRATIONS | ||
4,490,156
|
12/25/84 | PARTIAL OXIDATION SYSTEM | ||
4,491,456
|
01/01/85 | PARTIAL OXIDATION PROCESS | ||
4,510,057
|
04/09/85 | ROTATING DISK BIOTREATMENT OF SYNGAS WASTE WATER | ||
4,525,175
|
06/25/85 | BURNER FOR PARTIAL OXIDATION PROCESS FOR SLURRIES | ||
4,525,176
|
06/25/85 | PREHEATING AND DESLAGGING A GASIFIER | ||
4,526,676
|
07/02/85 | INTEGRATED H-OIL PROCESS INCLUDING RECOVERY AND TREATMENT OF VENT AND PURGE GAS STREAMS AND SOOT NAPHTHA STREAM |
-42-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,533,363
|
08/06/85 | PRODUCTION OF SYNTHESIS GAS | ||
4,545,330
|
10/08/85 | SELF-CLEANING LINER | ||
4,559,061
|
12/17/85 | MEANS FOR SYNTHESIS GAS GENERATION WITH CONTROL OF RATIO OF STEAM TO DRY GAS | ||
4,581,899
|
04/15/86 | SYNTHESIS GAS GENERATION WITH PREVENTION OF DEPOSIT FORMATION IN EXIT LINES | ||
4,590,326
|
05/20/86 | MULTI-ELEMENT THERMOCOUPLE | ||
4,597,773
|
07/01/86 | PROCESS FOR PARTIAL OXIDATION OF HYDROCARBONACEOUS FUEL AND RECOVERY OF WATER FROM DISPERSIONS OF SOOT AND WATER | ||
4,605,423
|
08/12/86 | APPARATUS FOR GENERATING AND COOLING SYNTHESIS GAS | ||
4,624,683
|
11/25/86 | QUENCH RING AND DIP TUBE COMBINATION WITH IMPROVEMENT | ||
4,637,823
|
01/20/87 | HIGH TEMPERATURE FURNACE | ||
4,639,312
|
01/27/87 | FILTER PRESS FLOW CONTROL SYSTEM FOR DEWATERING SLUDGE | ||
4,647,294
|
03/03/87 | PARTIAL OXIDATION APPARATUS | ||
4,650,497
|
03/17/87 | QUENCH CHAMBER FOR HIGH PRESSURE | ||
4,655,792
|
04/07/87 | PARTIAL OXIDATION PROCESS | ||
4,657,698
|
04/14/87 | PARTIAL OXIDATION PROCESS | ||
4,666,462
|
05/19/87 | CONTROL PROCESS FOR SOLID FUELS | ||
4,666,463
|
05/19/87 | CONTROLLING TEMPERATURE OF BURNERS | ||
4,668,428
|
05/26/87 | PARTIAL OX. OF PETROLEUM COKE AND/OR HEAVY LIQUID FUEL | ||
4,668,429
|
05/26/87 | PARTIAL OX. OF PETROLEUM COKE AND/OR HEAVY LIQUID FUEL | ||
4,671,803
|
06/09/87 | SYNGAS FREE FROM VOLATILE METAL HYDRIDES | ||
4,676,805
|
06/30/87 | PROCESS FOR OPERATING GAS GENERATOR | ||
4,704,137
|
11/03/87 | UPGRADING WATER FOR COOLING AND CLEANING PARTIAL OX. PROCESS | ||
4,705,536
|
11/10/87 | PARTIAL OXIDATION PROCESS | ||
4,705,542
|
11/10/87 | PRODUCTION OF SYNTHESIS GAS | ||
4,743,194
|
05/10/88 | COOLING SYSTEM FOR GASIFIER BURNER | ||
4,749,381
|
06/07/88 | STABLE SLURRIES OF CARBONACEOUS FUEL AND WATER | ||
4,774,021
|
09/27/88 | PARTIAL OX. OF SULFUR-CONTG. SOLID FUEL | ||
4,776,860
|
10/11/88 | HIGH-TEMPERATURE DESULFURIZATION OF SYNGAS | ||
-43-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,778,483
|
10/18/88 | QUENCH CHAMBER WITH TROUGH AT BOTTOM OF BAFFLE | ||
4,778,485
|
10/18/88 | PARTIAL OXIDATION WITH SECOND STAGE ADDITION OF ADDITIVE | ||
4,781,731
|
11/01/88 | INTEGRATED METHOD OF CHARGE FUEL PRETREATMENT AND TAIL GAS SULFUR REMOVAL IN A PARTIAL OXIDATION PROCESS | ||
4,784,670
|
11/15/88 | PARTIAL OXIDATION PROCESS | ||
4,788,003
|
11/29/88 | PARTIAL OXIDATION OF ASH-CONTAINING LIQUID HYDROCARBONACEOUS AND SOLID CARBONACEIOUS FUELS | ||
4,801,306
|
01/31/89 | QUENCH RING FOR GASIFIER | ||
4,826,627
|
05/02/89 | PARTIAL OXIDATION PROCESS | ||
4,828,578
|
05/09/89 | INTERNALLY CHANNELLED GASIFIER QUENCH RING | ||
4,828,579
|
05/09/89 | THERMALLY INSULATED QUENCH RING FOR A GASIFIER | ||
4,828,580
|
05/09/89 | QUENCH RING INSULATING COLLAR | ||
4,857,229
|
08/15/89 | PARTIAL OX. OF SULFUR, NICKEL AND VANADIUM-CONTG. FUELS | ||
4,863,489
|
09/05/89 | PROD. OF DEMERCURIZED SYNTHESIS GAS | ||
4,875,906
|
10/24/89 | PARTIAL OX. OF LOW HEATING VALUE WASTE PETROLEUM PRODUCTS | ||
4,876,031
|
10/24/89 | PARTIAL OXIDATION PROCESS | ||
4,876,987
|
10/31/89 | SYNTHETIC GAS COOLER WITH THERMAL PROTECTION | ||
4,880,439
|
11/14/89 | HIGH TEMPERATURE DESULFURIZATION OF SYNTHESIS GAS | ||
4,889,657
|
12/26/89 | PARTIAL OXIDATION PROCESS | ||
4,889,658
|
12/26/89 | PARTIAL OXIDATION PROCESS | ||
4,889,699
|
12/26/89 | PARTIAL OXIDATION PROCESS | ||
4,904,277
|
02/27/90 | REHYDRATING INHIBITORS FOR PREPARATION OF HIGH-SOLIDS CONCENTRATION LOW RANK COAL SLURRIES | ||
4,909,958
|
03/20/90 | PREVENTION OF FORMATION OF NICKEL SUBSULFIDE IN PARTIAL OX. OF HEAVY LIQUID AND/OR SOLID FUELS | ||
4,919,688
|
04/24/90 | GASIFIER WITH GAS SCROURED THROAT | ||
4,936,376
|
06/26/90 | SYNTHETIC GAS COOLER WITH THERMAL PROCTECTION | ||
4,946,476
|
08/07/90 | PARTIAL OX. OF BITUMINOUS COAL | ||
4,948,387
|
08/14/90 | SYNTHESIS GAS BARRIER AND REFRACTORY SUPPORT | ||
4,957,544
|
09/18/90 | PARTIAL OX. PROCESS INCLUDING THE CONCENTRATION OF V/NI IN SLAG PHASE | ||
4,983,296
|
01/08/91 | PARTIAL OXIDATION OF SEWAGE SLUDGE | ||
-44-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
4,992,081
|
02/12/91 | REACTOR DIP TUBE COOLING SYSTEM | ||
5,000,580
|
03/19/91 | APPARATUS AND METHOD FOR MEASURING TEMPERATURES INSIDE PROCESS VESSELS CONTG. A HOSTILE ENVIRONMENT | ||
5,005,986
|
04/09/91 | SLAG RESISTANT THERMOCOUPLE SHEATH | ||
5,087,271
|
02/11/92 | PARTIAL OXIDATION PROCESS | ||
5,183,478
|
02/02/93 | PROCESS AND APPARATUS FOR DEWATERING QUENCHED SLAG | ||
5,188,739
|
02/23/93 | DISPOSAL OF SEWAGE SLUDGE | ||
5,188,740
|
02/23/93 | PUMPABLE FUEL SLURRY OF SEWAGE SLUDGE & LOW GRADE SOLIDS CARBONACEOUS FUELS | ||
5,188,741
|
02/23/93 | TREATMENT OF SEWAGE SLUDGE | ||
5,211,723
|
05/18/93 | PROCESS FOR REACTING PUMPABLE HIGH SOLIDS SEWAGE SLUDGE SLURRY | ||
5,211,724
|
05/18/93 | PARTIAL OXIDATION OF SEWAGE SLUDGE | ||
5,217,625
|
06/08/93 | PROCESS FOR DISPOSING OF SEWAGE SLUDGE | ||
5,230,211
|
07/27/93 | PARTIAL OXIDATION OF SEWAGE SLUDGE | ||
5,233,943
|
08/10/93 | SYNTHETIC GAS RADIANT COOLER WITH INTERNAL QUENCHING AND PURGING FACILITIES | ||
5,234,469
|
08/10/93 | PROCESS FOR DISPOSING OF SEWAGE SLUDGE | ||
5,250,083
|
10/05/93 | PROCESS FOR PRODUCTION OF DESULFURIZED SYNTHESIS GAS | ||
5,251,433
|
10/12/93 | POWER GENERATION PROCESS | ||
5,261,602
|
11/16/93 | PARTIAL OXIDATION PROCESS AND BURNER WITH POROUS TIP | ||
5,264,009
|
11/23/93 | PROCESSING OF SEWAGE SLUDGE FOR USE AS A FUEL | ||
5,266,085
|
11/30/93 | PROCESS FOR DISPOSING OF SEWAGE SLUDGE | ||
5,273,556
|
12/28/93 | PROCESS FOR DISPOSING OF SEWAGE SLUDGE | ||
5,281,243
|
01/25/94 | TEMPERATURE MONITORING BURNER MEANS AND METHOD | ||
5,292,442
|
03/08/94 | PROCESS FOR DISPOSING OF SEWAGE SLUDGE | ||
5,295,350
|
03/22/94 | COMBINED POWER CYCLE WITH LIQUEFIED NATURAL GAS (LNG) AND SYNTHESIS OR FUEL GAS | ||
5,319,924
|
06/14/94 | PARTIAL OXIDATION POWER SYSTEM | ||
5,324,336
|
06/28/94 | PARTIAL OXIDATION OF LOW RANK COALS | ||
5,338,489
|
08/16/94 | DESLAGGING GASIFIERS BY CONTROLLED HEAT AND DERIVATIZATION | ||
5,345,756
|
09/13/94 | PARTIAL OXIDATION PROCESS WITH PRODUCTION OF POWER | ||
5,356,540
|
10/18/94 | PUMPABLE OXIDATION PROCESS WITH PRODUCTION OF POWER | ||
-45-
| PATENT NO. | DATE OF ISSUE | TITLE | ||
5,358,696
|
10/25/94 | PRODUCTION OF H2 RICH GAS | ||
5,394,686
|
03/07/95 | COMBINED POWER CYCLE WITH LIQUEFIED NATURAL GAS (LNG) AND SYNTHESIS OR FUEL GAS | ||
5,401,282
|
03/28/95 | PARTIAL OXIDATION PROCESS FOR PRODUCING A STREAM OF HOT PURIFIED GAS | ||
5,403,366
|
04/04/95 | PARTIAL OXIDATION PROCESS FOR PRODUCING A STREAM OF HOT PURIFIED GAS | ||
5,415,673
|
05/16/95 | ENERGY EFFICIENT FILTRATION OF SYNGAS COOLING AND SCRUBBING WATER | ||
5,423,992
|
06/08/95 | CHEMICALLY DISINFECTED SEWAGE SLUDGE-CONTAINING MATERIALS | ||
5,423,894
|
06/13/95 | PARTIAL OXIDATION OF LOW-RANK COALS | ||
5,441,990
|
08/15/95 | CLEANED, H2-ENRICHED SYNGAS MADE USING WATER-GAS SHIFT REACTION | ||
5,464,592
|
11/07/95 | GASIFIER THROAT | ||
5,464,503
|
11/07/95 | TIRE LIQUEFYING PROCESS REACTOR DISCHARGE SYSTEM AND METHOD | ||
5,484,554
|
01/16/96 | OXIDANT INJECTION FOR IMPROVED CONTROLLED OXIDATION | ||
5,498,827
|
03/12/96 | HYDROTHERMAL TREATMENT AND PARTIAL OXIDATION OF PALSTIC MATERIALS | ||
5,515,794
|
05/14/96 | PARTIAL OXIDATION PROCESS BURNER WITH RECESSED TIP AND GAS BLASTING | ||
5,534,040
|
07/09/96 | PARTIAL OXIDATION OF PARTIALLY LIQUIFIED PLASTIC MATERIALS | ||
5,545,238
|
08/13/96 | METHOD OF MONITORING SLAG REMOVAL DURING CONTROLLED OXIDATION OF PARTIAL OXIDATION REACTOR | ||
5,554,202
|
09/10/96 | GASIFIER MONITORING APPARATUS | ||
5,566,891
|
10/22/96 | METHOD FOR GRINDING HOT MATERIAL AND RECOVERING GASES ENITTED THEREFROM | ||
5,578,094
|
11/26/96 | VANADIUM ADDITION TO PETROLEUM COKE SLURRIES TO FACILITATE DESLAGGING FOR CONTROLLED OXIDATION |
-46-
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT, made and entered into this 11th day of
December, 1997, by and between TEXACO DEVELOPMENT CORPORATION (“TEXACO
DEVELOPMENT”) and FARMLAND INDUSTRIES, INC. (“LICENSEE”).
WHEREAS, the parties entered into a License Agreement, dated as of May 30,
1997 (the “License Agreement”) and now desire to amend the License Agreement to
provide for certain “at risk” elements to the payment of a portion of the
royalty fees payable thereunder;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
I. All initial capitalized terms used herein shall have the meaning
given them in the License Agreement.
II. Paragraph 1(a)
of Schedule II to the License Agreement is hereby amended to read in
its entirety as follows:
1. (a)(i)
The
parties acknowledge that LICENSEE has paid to Texaco Development the
[***] royalty payment anticipated in
Section 1(a)(i) of this Schedule II;
Section 1(a)(i) of this Schedule II;
(ii) Within
forty-five (45) days of Financial Closure or by June 30, 1998,
whichever first occurs, LICENSEE will pay TEXACO DEVELOPMENT a
royalty payment of [***];
(iii) LICENSEE
will pay TEXACO DEVELOPMENT running royalty payments, contingent on
production of Synthesis Gas by the Plant, as follows:
(1) The
maximum aggregate of the payments required under this clause
(iii)(1) shall be [***];
(2) as
to any accounting period (as defined in Section 4.3 of the
License Agreement), other than an accounting period that is less than
a full six calendar months, (x) if the Daily Average Output for
such accounting period is more than [***] MSCF, then [***] shall be
required to be paid with respect to such accounting period,
(y) if the Daily Average Output for such accounting period is
less than [***] MSCF, then no amount shall be required to be paid
with respect to such accounting period, and (z) if the Daily
Average Output for such accounting period is from [***] MSCF, then an
amount equal to [***], times a fraction, the numerator of which is
such Daily Average Output for such accounting period minus [***], and
the denominator of which is [***], shall be required to be paid with
respect to such accounting period; and
(3) Payments
required under this clause (iii) shall accompany the annual statement
required under Section 4.3 of the License Agreement.
(iv) The
balance of the royalty payments shall be paid, at LICENSEE’s
election, either (A) within forty-five (45) days of Plant Start-up or
December 31, 2002, whichever first occurs, a lump sum royalty of
[***], or (B) running royalty payments, contingent on the production
of Synthesis Gas by the Plant, as follows:
(1) the
maximum aggregate of the payments required to be paid under this
clause (iv)(B) shall be [***];
(2) as
to any accounting period, other than an accounting period that is
less than a six full calendar months, (x) if the Daily Average Output
for such accounting period is more than [***] MSCF, then [***] shall
be required to be paid with respect to such accounting period,
(y) if the Daily Average Output for such accounting period is
less than [***] MSCF, then no amount shall be required to be paid with
respect to such accounting period, and (z) if the Daily Average
Output for such accounting period is from [***] MSCF, to and including
[***] MSCF, then an amount equal to [***] times a fraction, the
numerator of which is such Daily Average Output for such accounting
period minus [***], and the denominator of which is [***], shall be
required to be paid with respect to such accounting period; and
(3) Payments
required under this clause (iv)(B) shall accompany the annual
statement required under Section 4.3 of the License Agreement.
Upon
payment to Texaco Development by LICENSEE of [***] under the above
clause (ii), the [***] under the above clause (iii) and either the
[***] under the above clause (iii)(A) or the [***] under the above
clause (iv)(B), all royalties for the designed Daily Average Output
of the Plant calculated per the royalty schedule in Paragraph 2
of this Schedule II shall be fully paid.
III. Paragraph
2 of Schedule II to the License Agreement is hereby
amended to read in its entirety as follows:
2. Royalties
shall be paid with respect to all Gasification operations conducted
by LICENSEE in accordance with the following royalty schedule:
(a) For
the first 86,000 MSCF of Daily Average Output or any part thereof, the
royalties provided in Paragraph 1(a) of this Schedule II;
For
the next 114,000 MSCF of Daily Average Output (i.e., over 86,000) and
up to and including 200,000 MSCF of Daily Average Output total,
lump-sum royalties at the rate of [***] per MSCF of Daily Average
Output; and
For
all over 200,000 MSCF of Daily Average Output lump-sum royalties at the
rate of [***] per MSCF of Daily Average Output; and
[***]
For
the next 114,000 MSCF of Daily Average Output, i.e., over 86,000 and up
to and including 200,000 MSCF of Daily Average Output total, lump-sum
royalties at the rate of [***] per MSCF of Daily Average Output; and
For
all over 200,000 MSCF of Daily Average Output lump-sum royalties at the
rate of [***] per MSCF of Daily Average Output;
all in
accordance with the payment provisions of this Schedule II.
IV. The
last sentence of paragraph 4(a) of Schedule II to the
License Agreement is hereby amended to read in its entirety as
follows:
“Such
factor shall not apply to (a) any running royalty payments to be
made under paragraph 1(a)(iii) or paragraph 1(a)(iv)(B) of
Schedule II to the License Agreement, or (b) the payment
(which may be made at LICENSEE’s election) set forth in
paragraph 1(a)(iv)(A) of Schedule II to the License
Agreement, provided such amount in paragraph 1(a)(iv)(A) is
actually received by TEXACO DEVELOPMENT prior to December 31,
2000.”
V. Section 4.3.2 of the License Agreement is hereby amended to read
in its entirety as follows:
4.3.2 The excess (in daily averages), if any, of the total Daily Average
Output from the Gasification section of the Plant reported under Subparagraph
4.3.1 above, over the total Daily Average Output for all operations conducted
by LICENSEE for which a license has been granted to LICENSEE under this
License Agreement;
VI. The
last sentence of Section 7.2 of the License Agreement is hereby amended
by deleting “Paragraphs 1(a)(i), (ii) and (iii)” and inserting in lieu thereof
“Paragraphs 1(a)(i) and
(ii)”.
VII.
Section 8.3.4 and the first sentence of Section 8.6 of the License
Agreement are hereby amended by adding, immediately following the phrase “due
and actually received by” appearing in each such provision, the following:
“, whether received prior or subsequent to the
incurrence of such liability,”
VIII. Except as provided herein, the License Agreement is not otherwise being
amended or modified and the provisions thereof shall continue in full force and effect, as
amended and modified herein.
IN WITNESS WHEREOF, the undersigned have executed this Amendment
Agreement as of the day and year first above written.
| FARMLAND INDUSTRIES, INC. | TEXACO DEVELOPMENT CORPORATION | |||||||||
By:
|
/s/ Xxxxx X. Holiday | By: | /s/ Xxxx X. Xxxxx | |||||||
Name:
|
Xxxxx X. Holiday | Name: | Xxxx X. Xxxxx | |||||||
Title:
|
Project Manager | Title | Vice President | |||||||
| Date: December 11, 1997 | Date: December 11, 1997 | |||||||||
Texaco Development Corporation
0000
Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxxxx, XX 00000
ChevronTexaco
October 24, 2003
Coffeyville Resources, LLC
c/o Pegasus Investors
00 Xxxxx Xxxx
Xxx Xxx, Xxxxxxxxxxx 00000
c/o Pegasus Investors
00 Xxxxx Xxxx
Xxx Xxx, Xxxxxxxxxxx 00000
| Re: | Texaco Gasification Process, Texaco Hydrogen Generation Process and Texaco | |||
| Gasification Power Systems | ||||
| License Agreement Effective May 30, 1997 | ||||
| Amendment No. Two |
Gentlemen,
Reference is made to the license agreement referenced above (“License Agreement”)
effective as of May 30, 1997, between Texaco Development Corporation (“TDC”) and Farmland
Industries, Inc. (“Former Licensee”). Reference is also made to the Consent agreement dated
December 11, 1997 wherein TDC consented to certain assignments
by Former Licensee, the Amendment
Agreement dated December 11, 1997 which amended the License Agreement, and the Consent to
Assignment and Assignment of License Agreement dated October 24, 2003 wherein the License
Agreement was assigned by the Former Licensee to Coffeyville
Resources, LLC (“Licensee”).
TDC and
Licensee wish to amend the License Agreement as indicated below to reflect the
new royalty payment schedule agreed to by the parties.
License Agreement
| 1. | Section 7.1, first line, delete “or canceled and, hence, terminated under Paragraph l(c) of Schedule II,”. | |
| 2. | Section 7.2, last sentence, delete in its entirety. | |
| 3. | Schedule II of the License Agreement is hereby amended as follows: | |
| i. | Paragraph 1(a), is hereby amended to read in its entirety as follows: |
[CHEVRON LOGO] [TEXACO LOGO]
|
Coffeyville Resources, LLC 2nd Amendment to License Agreement |
================================================================================
-2-
1(a)
The parties acknowledge and agree that the Former Licensee, Farmland, has paid to
Texaco Development all royalties and fees due and owing to TDC
through December 31, 2003.
For royalties and fees due and owing to TDC after December 31, 2003, the parties further
acknowledge and agree that the LICENSEE shall pay additional royalties and fees in the
total sum of Five Million Five Hundred Thousand United States Dollars ($5,500,000 USD) according to the payment schedule listed below:
| (i) | An initial payment of [***] shall be paid to TDC on or before June 1, 2004; | ||
| (ii) | A second payment of [***] shall be paid to TDC on or before June 1, 2005; | ||
| (iii) | A third payment of [***] shall be paid to TDC on or before June 1, 2006; and | ||
| (iv) | A fourth and final payment of [***] shall be paid to TDC on or before June 1, 2007. |
| ii. | Paragraph 1(c) is hereby deleted in its entirety. | |
| iii. | Paragraph 1(e) is hereby deleted in its entirety. | |
| iv. | Paragraph 1(f), last sentence, delete “Paragraph 2(b)”and insert in lieu “Paragraph 2”. | |
| v. | Paragraph 2 is hereby amended to read in its entirety as follows: |
2. Royalties
shall be paid with respect to all Gasification operations conducted
by Licensee in accordance with the following royalty schedule:
For
the next 114,000 MSCF of Daily Average Output, i.e., over 86,000 and up to and including
200,000 MSCF of Daily Average Output total lump-sum royalties,
at the rate of [***] per MSCF of Daily
Average Output;
and
For all over
200,000 MSCF of Daily Average Output lump-sum royalties at the rate of
[***] per MSCF of Daily Average Output;
all
in accordance with the payment provisions of this Schedule II.
| vi. | Paragraph 4(a) is hereby amended by deleting the last sentence. |
Coffeyville Resources, LLC
2nd Amendment to License Agreement
2nd Amendment to License Agreement
-3-
All other terms and conditions of the License Agreement shall remain in full force and effect.
The
obligations under this Letter Agreement are conditioned upon the
following: (i) Licensee becoming the “Successful Bidder” as such term
is defined pursuant to the Order Approving Bid Procedures entered by
the Bankruptcy Court (“Bankruptcy Court”) in Former Licensee’s
Bankruptcy Chapter 11 Case No. 02-50557-JWV, (ii) closing of the transaction pursuant to that certain Asset Sale and Purchase Agreement
dated September 25, 2003 between Former Licensee as
“Seller” and Licensee as “ Buyer” (the “APA”) on or before Xxxxx 00, 0000, (xxx) the
entry of an appropriate order by the Bankruptcy Court approving the
sale of the “Transferred Assets”, as such term is defined
under the APA, and (iv) the entry of a
final and non-appealable order by the Bankruptcy Court approving the compromise and settlement agreement between TDC and Former Licensee pursuant to the letter
agreement dated October 17, 2003.
If you are agreeable to the foregoing conditions, please indicate your acceptance and agreement by having a duly authorized
representative of Licensee execute both duplicate originals of the Letter Agreement and returning both signed copies to us for completion by TDC.
| Very truly yours, | ||||||
| TEXACO DEVELOPMENT CORPORATION | ||||||
| By | /s/ W. E. Preston | |||||
| Vice President | ||||||
| ACCEPTED AND AGREED TO: | ||||||
| COFFEYVILLE RESOURCES, LLC | ||||||
By: |
/s/ Xxxxxx X. Xxxxxxx | |||||
| Print Name: | Xxxxxx X. Xxxxxxx | |||||
Xxxxxx:
|
CEO | |||||
Date:
|
10/24/03 | |||||
Coffeyville Resources, LLC
2nd Amendment to License Agreement
2nd Amendment to License Agreement
