Exhibit 10.6
AMENDMENT NO. 2
TO
MASTER LICENSE AGREEMENT
(formerly the Volume License
Agreement)
THIS
AMENDMENT NO. 2 TO MASTER LICENSE AGREEMENT (“Amendment
No. 2”) is made and entered into as of this 1st day of
June, 2002 by and between Syntroleum Corporation, a Delaware
corporation (“Licensor”), and Ivanhoe Energy Inc., a
company organized under the laws of the Yukon, Canada
(“Licensee”).
A. WHEREAS,
Licensor and Licensee previously entered into that certain Volume
License Agreement dated as of April 26, 2000, as amended by
Amendment No. 1 to Volume License Agreement dated as of
October 11, 2000 which, among other things, changed the Volume
License Agreement to a Master License Agreement. (collectively, the
“Master License Agreement”); and
B. WHEREAS,
Licensor and Licensee desire to amend certain provisions of the
Master License Agreement as set forth in this Amendment
No. 2.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Amendment No. 2, the Parties agree as
follows. Unless otherwise provided in this Amendment No. 2,
capitalized terms used in this Amendment No. 2 but not defined
shall have the meanings set forth in the Master License
Agreement.
1. Attachment
3 to the Master License Agreement is amended and restated to read
in its entirety as set forth on Exhibit A to this Amendment
No. 2.
2. Except
as expressly amended by this Amendment No. 2, the Master
License Agreement is and shall remain in full force and effect
in
1
accordance with its terms and
the parties hereby ratify and reaffirm the Master License Agreement
as amended hereby.
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Licensor
SYNTROLEUM CORPORATION
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By:
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/s/ Larry J.
Weick
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Larry J. Weick,
Vice President
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Licensee
IVANHOE ENERGY INC.
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By:
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/s/ E. Leon
Daniel
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E. Leon Daniel,
President & CEO
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2
Exhibit A to Amendment
Number 2
ATTACHMENT 3
to Master License Agreement
License Fee Calculation
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I.
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For
purposes of this Attachment 3 , the following terms shall
have the meanings ascribed thereto:
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A.
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“Licensed
Plant” means the Licensed Plant in which a
Site License Agreement for such plant is issued to and remains in
the name of the Licensee who has executed this Agreement with
Licensor and, in which the Participating Interest held by Licensee,
or collectively by Licensee and any other Person who has executed a
license agreement (which is applicable to the Licensed Plant) with
Licensor, represents at least 10% of the entire Participating
Interest not held by a governmental authority regardless of
operatorship of the Licensed Plant.
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B.
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“Large Licensed
Plant” means a Licensed Plant under a
single Site License Agreement with a maximum daily design capacity,
as defined in a single Process Design Package, of nominally 180,000
or more barrels of Synthetic Product per day and which may be
constructed in two phases of nominally 90,000 or more barrels per
day for each phase and with the second phase constructed either
concurrently with the first phase or in a separate consecutive
period starting no more than 1 year following the start of
construction of the first phase.
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C.
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“Royalty
Rate” shall mean (i) the lowest
royalty rate per Barrel of Synthetic Product accepted by Licensor
for a Site License Agreement with a non-Affiliate for a facility of
comparable size, in the Licensed Territory, which is not under a
master preferred license agreement, during the twelve
(12) months immediately preceding the execution date of the
applicable Site License Agreement under this Agreement, or
(ii) if no such Site License Agreement has been executed
during the twelve (12) months immediately preceding, then the
royalty rate per Barrel of Synthetic Product in the last Site
License Agreement with a non-Affiliate, in the Licensed Territory,
executed by Licensor, which is not under a master preferred license
agreement, or (iii) if none of the foregoing applies, then
US$0.50 per Barrel of Synthetic Product. Market Royalty Rate does
not include the catalyst price as provided for under
Section 2.03 of this Agreement.
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D.
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“BLS Index”
shall mean the index for
January of the year in question represented by the Producer Price
Index for Industrial Commodities as published by the Bureau of
Labor Statistics, U.S Department of Labor, using the year 1982 as
the base index equal to 100. If, at any time, the above index
should cease to be published, then
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3
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another suitable index published by
the U.S. Government or other authoritative organization and
generally recognized by the trade as authoritative with respect to
changes in the U.S. of equivalent commodity costs shall be
used.
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II.
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For
each Site License Agreement executed under this Agreement for a
Licensed Plant with a maximum daily design capacity, as defined by
the Process Design Package, of less than 30,000 barrels of
Synthetic Product per day, Licensee agrees to pay License Fees to
Licensor on a prepaid license basis as follows:
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A.
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Licensee agrees to pay Licensor a
one-time, prepaid License Fee calculated in accordance with the
following formula:
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License Fee = “C” x 350
x 7.5 x “R” wherein:
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“C”
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=
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the maximum
daily design capacity, as defined by the Process Design Package, of
such Licensed Plant to produce Marketable Products measured in
Barrels of Synthetic Product per day for which such Licensed Plant
is originally designed and constructed, and
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“R”
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=
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and
payable in installments as follows:
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(i)
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20%
within thirty (30) days after the execution of the Site
License Agreement for such Licensed Plant;
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(ii)
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30%
within thirty (30) days after delivery of the Process Design
Package or within one hundred twenty (120) days after the
execution of the Site License Agreement for such Licensed Plant,
whichever first occurs;
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(iii)
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20%
within thirty (30) days after the commencement of field
construction move-in:
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(iv)
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30%
within one-hundred and twenty (120) days after the Start-Up
Date of the Licensed Plant or a successful Performance Test as
specified in the Process Guarantee and Performance Test Agreement,
whichever first occurs.
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B.
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Notwithstanding any other provision
of this Agreement, payments made by Licensee to Licensor under
Section 5.01 of this Agreement and Section 5 of Amendment
No. 1 to Volume License Agreement between Licensee and
Licensor dated October 11, 2000, shall be fully credited
against the License Fees payable by Licensee to Licensor under
Section II.A.
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4
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C.
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In
the event the actual production capacity of any Licensed Plant,
under II.A. above, is determined to have either exceeded the
original maximum daily design capacity established in its Site
License Agreement or is increased through major equipment
modification, by more than five percent (5%) or by more than 500
barrels per day, at any time after the Start-up Date, Licensee
shall pay Licensor an additional License Fee, on a prepaid basis,
equal to the difference between (a) the prepaid License Fee as
would have been calculated with the higher production capacity for
such Licensed Plant substituted for “C” in the
calculation method set forth in II.A. above, and (b) the
License Fee as would have
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