TECHNOLOGY LICENSE AND BINDER PURCHASE AGREEMENT
THIS TECHNOLOGY LICENSE AND BINDER PURCHASE AGREEMENT (the
"Agreement"), is made and entered into as of May 5, 1998 by and between
Mountaineer Synfuel, L.L.C., a Delaware limited liability company (the
"Licensee"), and Covol Technologies, Inc., a Delaware corporation (the
"Licensor").
WHEREAS Licensor has developed a proprietary process to produce
synthetic coal fuel extrusions, pellets, and briquettes (collectively referred
to herein as "briquettes") from waste coal dust, coal fines and other coal
derivatives, and Licensor is entitled to license the synthetic Coal Briquetting
Technology to Licensee;
WHEREAS Licensor has or will purchase a synthetic fuel manufacturing
plant under a binding construction contract with Centerline Engineering
Corporation (the "Facility") located near Tallmansville, Upshur County, West
Virginia on property owned by Upshur Property, Inc. (the "Project");
WHEREAS Licensee wishes to obtain and Licensor wishes to grant to
Licensee a license for the synthetic Coal Briquetting Technology in connection
with the Project on the terms and conditions set forth in this Agreement, and
Licensee wishes to obtain and Licensor wishes to sell to Licensee the
Proprietary Binder Material (as defined below) manufactured by Licensor for use
in the operation of the Project.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Licensor and Licensee each agree as follows:
Section 1. Definitions.
"Applicable Percentage" means the Licensor's Earned Royalty
rate per MM Btu as set forth in Section 3.3 divided by the amount of Section 29
Tax Credit per MM Btu.
"Coal Briquetting Technology" means all intellectual property,
patents (including but not limited to United States Patent Numbers 5,599,361;
5,487,764; and 5,453,103) and applications therefor, printed and not printed
technical data, know-how, trade secrets, copyrights and other intellectual
property rights, inventions, discoveries, techniques, works, processes, methods,
plans, software, designs, drawings, schematics, specifications, communications
protocols, source and object code and modifications, test procedures, program
cards, tapes, disks, algorithms and all other scientific or technical
information in whatever form relating to, embodied in or used in the proprietary
process to produce synthetic coal fuel briquettes from waste coal dust, coal
fines and other similar coal derivatives, including all such information in
existence as of the date of this Agreement as well as related information later
developed by Licensor; provided, however, that the defined term "Coal
Briquetting Technology" shall not include the proprietary process/method or
other binder material or composition developed by Licensor to produce synthetic
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coke briquettes from coke breeze, iron revert materials, or any technology for
other than the processing and production of synthetic coal fuel briquettes.
Nothing in this Agreement is intended to grant to Licensee the right to apply
the Coal Briquetting Technology to produce anything other than synthetic coal
fuel intended to qualify for tax credits under Section 29(c)(1)(C) of the
Internal Revenue Code.
"Code" means the Internal Revenue Code of 1986, as amended.
"Developed Technology" means any inventions, "Improvement," or
new technology that Licensor may conceive, make, invent, or suggest in
connection with Licensor's disclosure to Licensee of the Coal Briquetting
Technology, all of which the parties hereto acknowledge and agree constitutes
the sole and exclusive property of Licensor. "Developed Technology" also means
any inventions, "Improvement," or new technology directly related to the Coal
Briquetting Technology that Licensor or Licensee may conceive, make, invent or
suggest relating to the Coal Briquetting Technology during the Term of this
Agreement. "Improvement" means an alteration or addition to an invention or
discovery which enhances, to some extent, performance or economics without
changing or destroying a product's, device's, or method's basic identity and
essential character. An Improvement may comprise alterations or additions to
either patented or unpatented inventions, discoveries, technology, or devices,
and may or may not be patentable.
"Earned Royalty" has the meaning set forth in Section 3.3.
"Effective Date" means the date of this Agreement set forth
above.
"Facility" has the meaning set forth in the preamble.
"Final Determination" has the meaning set forth in Section
3.5(3).
"Initial Royalty" has the meaning set forth in Section 3.2.
"IRS" means the Internal Revenue Service.
"Licensee" has the meaning set forth in the preamble.
"Licensor" has the meaning set forth in the preamble.
"Maximum Tax Credit Amount at Risk" has the meaning set forth
in Section 3.5(4).
"Project" has the meaning set forth in the preamble.
"Proprietary Binder Material" means and refers to the binder
compound necessary for the production, by Licensee, of synthetic coal briquettes
as contemplated under the Purchase Agreement and/or the Limited Liability
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Company Agreement of Licensee and which briquettes are reasonably expected to
constitute "qualified fuels" pursuant to the terms of Section 29(c)(1)(C) of the
Code and with respect to which Section 29 is applicable pursuant to Section
29(f) and 29(g) of the Code. The parties acknowledge and agree that the
Proprietary Binder Material is not a staple article of commerce suitable for
substantial non-infringing uses, but rather is an integral and inseparable part
of the Coal Briquetting Technology and developed technology owned by Licensor.
"Royalty" means the Initial Royalty and the Earned Royalty.
"Tax Credit" means tax credit for federal income tax purposes
pursuant to Section 29 of the Internal Revenue Code, as amended.
Terms used herein and not defined herein shall have the meanings
assigned thereto in the Asset Purchase Agreement of even date herewith between
the Licensor and the Licensee.
Section 2. License Grant.
2.1 General. Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee, for the full and entire term
hereof, a non-exclusive license to use the Coal Briquetting Technology for
commercial exploitation (and not for research development purposes), including
the non-exclusive right to make, have made or use at the Facility and to sell or
otherwise transfer products which have been manufactured with the Coal
Briquetting Technology. Licensee hereby accepts the license on the terms hereof
and agrees to make and have made products using the Coal Briquetting Technology
at the Facility only under this License Agreement. Licensee shall not make or
have made products using the Coal Briquetting Technology or similar technology
except at the Facility. Licensee shall not have the right to sublicense the Coal
Briquetting Technology.
2.2 Licensor's Ownership of Developed Technology. Licensee
shall have the right and is hereby granted a non-exclusive license to use all
Developed Technology and/or Improvements relating to the Coal Briquetting
Technology without payment of any additional compensation to Licensor,
throughout the Term of this Agreement, subject to the restrictions and
limitations in this Section 2. All Developed Technology and/or Improvements
shall become Licensor's absolute property. Licensee shall at any time during the
Term of this Agreement and thereafter, at Licensor's reasonable request, execute
any patent papers covering such Developed Technology and/or Improvements as well
as any other documents that Licensor may consider necessary or helpful in the
prosecution of applications for a patent thereon or in connection with any
litigation or controversy related thereto; provided, however, that all expenses
incident to the filing of such applications and the prosecution thereof and the
conduct of such litigation shall be borne by Licensor.
2.3 Exclusive Technology. Licensee agrees to use only the Coal
Briquetting Technology and the Developed Technology at the Facility and not to
use any other technology for the production of solid synthetic fuel intended to
qualify for tax credits under Section 29(c)(1)(C) of the Code. Licensee further
agrees to use the Coal Briquetting Technology only under
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authority of this License Agreement with Licensor. Licensee shall act in good
faith to comply with the Exclusive Technology provisions of this Agreement so as
to preserve Licensor's ownership of the proprietary Developed Technology.
2.4 Non-licensed Technology. Licensor retains the absolute
right to fully exploit its proprietary technology and processes, including but
not limited to the application of such technology embodied in the Coal
Briquetting Technology together with any improvements thereto, to produce,
market and use synthetic coke briquettes from coke breeze, iron revert
materials, and any other materials to which Licensor's technology can be
applied.
2.5 Confidentiality. Each of the parties hereby agree to
maintain the Coal Briquetting Technology confidential and not to disclose the
Coal Briquetting Technology, or any aspect thereof, or the Developed Technology
or Improvements, or any aspect thereof (collectively, the "Confidential
Information"). Notwithstanding the foregoing, information which (i) is or
becomes generally available to the public other than as a result of an
unauthorized disclosure by the parties or their respective agents, employees,
directors or representatives, (ii) was available to the party receiving
disclosure on a non-confidential basis prior to its receiving disclosure
hereunder, (iii) lawfully becomes available to the party receiving disclosure on
a non-confidential basis from a third party source (provided that such source is
not known by the party receiving disclosure or its agents, employees, directors
or representatives to be prohibited from transmitting the information), or (iv)
a party is compelled by legal process by any court or other authority to
disclose shall not be subject to the terms of this Section 1.5. In the case of
(iv) above, the compelled party shall give the other party prompt written notice
of such legal process in order that an appropriate protective order can be
sought and each party agrees not to oppose the other party's efforts to prevent
the disclosure of Confidential Information. At the termination of this
Agreement, all copies of any Confidential Information (including without
limitation any reports or memoranda) shall be returned by the party receiving
disclosure.
2.6 Know-How and Assistance. To enable Licensee to benefit
fully from the license of the Coal Briquetting Technology, Licensor shall
provide access to all relevant documentation, drawings, engineering
specifications and other know-how in its possession, reasonable access to its
employees or agents who are familiar with the Coal Briquetting Technology,
Developed Technology, and Improvements and shall provide such technical
assistance and training as is reasonably requested by Licensee relevant to the
provisions of this Agreement. Licensee shall reimburse the Licensor the travel
and other similar out-of-pocket expenses of Licensor in performing services
under this section; provided however, that Licensee shall obtain the prior
approval of Licensee for any expenditures in excess of $5,000.
Section 3. License Fee and Royalty.
3.1 License Fee. Licensee shall pay the Initial Royalty and
Earned Royalty as a license fee to Licensor.
3.2 Initial Royalty. Upon the execution of this Agreement,
Licensee shall pay * dollars ($*) to Licensor in immediately available funds
(the "Initial Royalty") as an initial
* Exhibit contains confidential material which has been omitted
pursuant to a Confidential Treatment Request. The omitted
information has been filed separately with the Securities and
Exchange Commission.
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royalty payment. Licensor shall thereupon lend such amount to Licensee as a
working capital loan, such loan to be repaid out of cash available after payment
of operating expenses on the basis set forth for subordinated payments of Earned
Royalty under Section 3.3.
3.3 Earned Royalty.
(a) Licensee shall be obligated to pay to Licensor
quarterly earned royalty payments ("Earned Royalty") which shall be due and
payable on each Quarterly Payment Date and on the Final Adjustment Date (subject
to Section 3.4). With respect to each Calendar Quarter, the Earned Royalty due
on the Quarterly Payment Date immediately following such Calendar Quarter shall
be an amount equal to the sum of (i) * % of the aggregate Estimated Tax Credits
generated by the Project during such Calendar Quarter and (ii) with respect to
the Earned Royalty due on any Adjustment Date, plus or minus *. Notwithstanding
the foregoing, the Licensor agrees that the Licensee shall not have any
obligation to make any Quarterly Payments of Earned Royalty unless and until the
date the conditions set forth in Section 3.1(g) in the Company Agreement have
been satisfied or waived. The final Earned Royalty shall be due on the Final
Adjustment Date and shall be in the amount of the Final Adjustment Amount if
such Final Adjustment Amount is a positive amount.
(b) The Manager of Licensee shall prepare its
calculation of the Estimated Tax Credits and the Earned Royalty for each
Calendar Quarter at the same time that the Manager prepares its calculation of
the amount of the Quarterly Contribution as provided in Section 3.1(e) of the
Company Agreement and shall submit a report showing the determination of the
Earned Royalty to the Licensor at the same time as the Manager submits the
report described in Section 3.1(f) of the Company Agreement to the Members'
Accountant for review.
(c) If the Licensor objects to the Manager's
calculation of any Earned Royalty, the Licensor shall notify the Purchaser
within two weeks after the Purchaser has submitted the report to the Licensor.
If the Licensor disputes the Purchaser's calculations, the Purchaser shall, in
good faith, consider the issues raised or in dispute and discuss such issues
with the Licensor and attempt to reach a mutually satisfactory agreement, taking
into account as well, any issues raised by the Members' Accountant and if such
dispute is promptly resolved, the adjusted amount agreed upon shall be the
Earned Royalty due. If the dispute is not promptly resolved, the Purchaser shall
pay, on the Quarterly Payment Date, the amount not in dispute. Thereafter, the
Licensor, the Manager and the Members' Accountant shall promptly select an
independent entity qualified and knowledgeable in the area who shall be
instructed to resolve the dispute promptly and, upon resolution of the dispute,
if it is determined that additional Quarterly Contributions are due from the
Members, the corresponding additional amount shall be paid to the Licensor
within ten days of the date of such determination, together with interest
thereon from the date sixty days after the relevant Quarterly Payment Date, at
the rate of 6% per annum.
* Exhibit contains confidential material which has been omitted
pursuant to a Confidential Treatment Request. The omitted
information has been filed separately with the Securities and
Exchange Commission.
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3.4 Payment Terms.
(a) The Earned Royalty with respect to each
Calendar Quarter shall be due to the Licensor not later than five days after the
Quarterly Contribution for such Calendar Quarter is due to the Purchaser from
the Members under the terms of Section 3.1(f) of the Company Agreement. Such due
date for Earned Royalty, being the date which is five days after the Quarterly
Contribution Date, is herein referred to as the "Quarterly Payment Date.
(b) *.
3.5 Tax Event. (1) *:
(i) *
(ii) *.
(2) For purposes of this Agreement, "Tax Event'"means *.
(3) For purposes of this Agreement, "Final Determination" means, with
respect to Tax Credits related to the Licensee,
(i) unless an adjustment is proposed with respect to any such
Tax Credits, the expiration of the applicable statute of limitations;
(ii) unless an administrative appeal or a judicial proceeding
is initiated by the Licensee or the affected Member, the date ninety
days after the issuance of a notice of deficiency;
(iii) unless judicial proceedings are initiated by the
Licensee or the affected Member, a final decision with respect to the
proposed adjustment by an IRS appeals officer, as evidenced by the
issuance of a 90-day letter, 870-AD or like notice and the expiration
of the period for initiating judicial proceedings;
(iv) unless appealed by the Licensee or the affected Member, a
final decision with respect to the proposed adjustment by the United
States Tax Court, Court of Federal Claims or the appropriate Federal
District Court and the expiration of the period for filing an appeal of
such decision;
(v) a final decision of a United States Court of Appeals with
respect to the proposed adjustment, unless a petition for certiorari to
the United States Supreme Court has been applied for and is pending or
has been granted with respect to such decision;
(vi) denial of certiorari by, or final decision of, the
United States Supreme Court; or
* Exhibit contains confidential material which has been omitted
pursuant to a Confidential Treatment Request. The omitted
information has been filed separately with the Securities and
Exchange Commission.
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(vii) the settlement of a proposed adjustment as evidence by a
closing agreement.
(4) For purposes of this Agreement, "Maximum Tax Credit Amount
at Risk" means the amount reasonably determined by any affected Member to be
potentially subject to disallowance by the Internal Revenue Service following a
Tax Event, plus interest and substantial understatement penalties, which amount
shall not exceed the product of (x) and sum of (I) the Tax Credits claimed by
such Member with respect to the operations of the Licensee for all open tax
years (so long as such claims are consistent with the applicable final tax
return of the Licensee as to any such tax year), it being understood that such
amount is not limited to amounts directly implicated by the Tax Event (since an
audit of one issue related to Tax Credits could result in a disallowance of
other such discovered later), plus (II) any interest and penalties payable by
such affected Member (to the extent attributable to Tax Credits arising from the
Licensee, multiplied by (y) the Applicable Percentage.
(5) Each of the Licensor and the Licensee agrees that, after
obtaining knowledge thereof and subject to restrictions or limitations that may
exist under confidentiality agreements with other licensees, it will give prompt
notice of any matter that is or could become a Tax Event or that the IRS has
commenced an examination of any other synthetic fuel production project
utilizing the proprietary process licensed under this Agreement, and the parties
as promptly thereafter as practicable shall meet to discuss in good faith
whether a Tax Event in fact exists or will likely occur and the consequences
thereof.
Section 4. Sales of Binder.
4.1 Sale and Purchase. Licensor shall sell to Licensee, and
Licensee shall purchase from Licensor, Licensee's requirements of Proprietary
Binder Material required to operate the Project. Licensor shall deliver the
Proprietary Binder Material at such times and in such amounts as requested by
Licensee. Licensor shall invoice Licensee for Proprietary Binder Material
monthly. Payments for Proprietary Binder Material delivered by Licensor during
any calendar month shall be due and payable to Licensor on the tenth Business
Day of the immediately succeeding month. Payments after the applicable due dates
shall accrue interest at the rate of one percent per month.
4.2 Price. The price which Licensee shall pay for the
Proprietary Binder Material delivered by Licensor shall be an amount equal to
(i) Licensor's direct and actual costs (including, but not limited to material,
labor, and transportation costs) and a percentage of the total overhead costs of
Licensor reasonably reflecting the ratio of the administrative costs incurred in
connection with the manufacture and sale of the Proprietary Binder Material,
plus (ii) * ($ * ) per ton of synthetic fuel product (based upon 2% binder).
4.3 Representations and Warranties. Licensor represents,
warrants and covenants as follows:
* Exhibit contains confidential material which has been omitted
pursuant to a Confidential Treatment Request. The omitted
information has been filed separately with the Securities and
Exchange Commission.
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(a) Licensor shall convey to Licensee good title to all
Proprietary Binder Material purchased by Licensee from Licensor
hereunder, free and clear of any and all liens, claims and encumbrances
of any type whatsoever.
(b) All Proprietary Binder Material shall be delivered in
compliance with applicable environmental laws and governmental
regulations.
(c) At Licensee's reasonable request, Licensor shall replace,
or refund the purchase of, all non-conforming Proprietary Binder
Material.
(d) There will be available at the Facility from time to time
as reasonably requested by Licensee sufficient quantities of the
Proprietary Binder Material to supply the requirements of the Licensee
for the production of up to 480,000 tons of Product per year from the
date hereof until at least December 31, 2007.
(e) The Proprietary Binder Material may be produced from the
ETG-400 mix of monomers; other monomers may be substituted in such mix,
to produce Proprietary Binder Material that will achieve the same
reaction and resulting polymerization pursuant to Licensor's patented
Coal Briquetting Technology, that will achieve the same significant
chemical change, and that will result in an end product chemically
indistinguishable other than for trace substances that have an
immaterial effect on the net change, in each case compared to an end
product that is produced using the Proprietary Binder Material
incorporating the ETG-400 formula. Prior to and as a condition to
substituting other monomers for ETG-400, the Licensor will provide to
the Licensee a written report of Craig N. Eatough, Ph.D., or another
third party fuels expert reasonably acceptable to the Licensor and
Licensee to the effect that (in such third party's professional
judgment) the monomers so to be substituted will achieve the results
set forth in the first sentence of this Section 4.3(e).
4.4 Order Procedure. Licensee shall deliver all purchase
orders for Proprietary Binder Materials at least thirty (30) days in advance of
the first day of the month in which delivery of such Proprietary Binder Material
is required under such purchase order, and all such purchase orders received by
Licensor during the term of this Agreement shall be deemed to have been accepted
by Licensor. (For example, Licensee shall deliver a purchase order for December
delivery by no later than November 1st). Each such purchase order shall be
delivered either (i) in writing (including by fax), or (ii) orally by telephone
by an authorized agent of Licensee (subject to the condition that it is followed
by a written purchase order within 24 hours). Such purchase orders shall be sent
to Licensor at such address as Licensor shall direct.
4.5 Delivery and Acceptance. All Proprietary Binder Material
purchased hereunder shall be delivered F.O.B. the Facility. Licensor shall
arrange for any necessary transportation of the Proprietary Binder Material to
the Facility. Licensee shall bear the expense of unloading of Proprietary Binder
Material from the trucks. Licensee shall have a reasonable opportunity to sample
Proprietary Binder Material delivered to it hereunder to confirm that such
Proprietary Binder Material conforms to the terms and requirements hereof, and
Licensee shall
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not be deemed or required to accept any such Proprietary Binder Material prior
to the completion of such sampling.
4.6 Delivery Of Binder Material. If Licensor's ability to
deliver the Proprietary Binder Material to Licensee will be interrupted or
terminated for any reason, Licensor shall give not less than ninety (90) days
notice to Licensee. Subject to giving notice of its inability to deliver the
Proprietary Binder Material to Licensee (or, in the absence of such notice, the
actual failure to deliver the Proprietary Binder Material for at least twenty
days after Licensee gives written notice of non-delivery to Licensor), Licensor
hereby grants to Licensee a nonexclusive license for the term of this Agreement
(or such shorter period as provided in the proviso hereto) to use the technology
used to manufacture the Proprietary Binder Material to manufacture the
Proprietary Binder Material in sufficient quantities to operate the Facility to
full capacity, and such technology shall be deemed "Coal Briquetting Technology"
for the purposes of this Agreement; provided, however, that the license granted
to Licensee under this Section shall cease (subject to reinstatement upon the
reoccurrence of the events contemplated above) and sales of Proprietary Binder
Material under the terms of this Agreement shall be reinstated, in each case, on
a date not less than ninety (90) days after Licensor gives notice to Licensee,
together with evidence reasonably satisfactory to Licensee that Licensor is able
to deliver the Proprietary Binder Material in accordance with this Agreement. No
additional fee or royalty shall be payable to Licensor in connection with the
license granted pursuant to this Section and Licensee shall be responsible for
its own direct out-of-pocket operating costs incurred in connection with the
production of Proprietary Binder Material pursuant to this Section. Licensor
will deliver to a safety deposit box maintained by Licensor at the Bank of
American Fork, Highland Branch, with a mutually agreed upon trustee, a written
copy of the formula used by Licensor to manufacture the proprietary binder
material and any Improvements thereon. Such trustee shall agree to provide the
formula to Licensee upon Licensee's certifying to the trustee that Licensee has
a right of access to such formula pursuant to this Section 4.6 because
Licensor's ability to deliver the Proprietary Binder Material to Licensee has
been interrupted or terminated.
Section 5. Records; Inspection; Confidentiality. Each party hereto
shall keep accurate records containing all data reasonably required for the
computation and verification of the amounts to be paid by the respective parties
under this Agreement, and shall permit each other party or an independent
accounting firm designated by such other party to inspect and/or audit such
records during normal business hours upon reasonable advance notice. All costs
and expenses incurred by a party in connection with such inspection shall be
borne by it. Each party agrees to hold confidential from all third parties all
information contained in records examined by or on behalf of it pursuant to this
Section 5.
Section 6. Enforcement Of Proprietary Rights. Licensee shall
cooperate in good faith, with Licensor's efforts to enforce its proprietary
patent and trade secret rights.
Section 7. Representations and Warranties.
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7.1 Authority. Each of Licensee and Licensor represents and
warrants that (i) the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized on its behalf by all requisite action, corporate or otherwise, (ii)
it has the full right, power and authority to enter into this Agreement and to
carry out the terms of this Agreement, (iii) it has duly executed and delivered
this Agreement, and (iv) this Agreement is a valid and binding obligation of it
enforceable in accordance with its terms.
7.2 No Consent. Each of Licensee and Licensor represents and
warrants that no approval, consent, authorization, order, designation or
declaration of any court or regulatory authority or governmental body or any
third-party is required to be obtained by it, nor is any filing or registration
required to be made therewith by it for the consummation by it of the
transactions contemplated under this Agreement.
7.3 Intellectual Property Matters. Licensor represents and
warrants to its best knowledge and good faith belief that it (i) owns, free and
clear of all liens and encumbrances, intellectual property, patents (including
but not limited to United States Patent Numbers 5,599,361; 5,487,764; and
5,453,103) and applications therefor, printed and not printed technical data,
know-how, trade secrets, copyrights and other intellectual property rights and
all other scientific or technical information in whatever form relating to,
embodied in or used in the proprietary process to produce synthetic coal fuel
briquettes from waste coal dust, coal fines and other similar coal derivatives,
and, the right to freely make use, sell and exploit Proprietary Binder Material
used in manufacturing synthetic coal fuel briquettes from waste coal dust, coal
fines and other similar coal derivatives, (ii) has the right and power to grant
to Licensee the licenses granted herein, (iii) has not made and will not make
any agreement with another in conflict with the rights granted herein, and (iv)
has no knowledge that the sale or use of the rights, Proprietary Binder Material
and/or licenses granted herein as contemplated by this Agreement would infringe
any third-party's intellectual property rights.
7.4 Indemnification. Each party agrees to indemnify, defend
and hold harmless the other party and its partners, directors, officers,
members, agents, representatives, subsidiaries and affiliates from and against
any and all claims, demands or suits (by any party, including any governmental
entity), losses, liabilities, damages, obligations, payments, costs and expenses
(including the costs and expenses of defending any and all actions, suits,
proceedings, demands and assessments which shall include reasonable attorneys'
fees and court costs) resulting from, relating to, arising out of, or incurred
in connection with any breach of any of the representations, warranties and/or
covenants contained in this Agreement.
Section 8. Term. The Term of this Agreement is (a) for the period
commencing on the effective date of this Agreement and ending on January 1, 2008
(or, if later, the last day on which sales of synthetic fuel can generate Tax
Credits); or (b) for the full life of the last U.S. Patents to expire which
disclose and claim Covol's proprietary Coal Technology, defined below, whichever
date is earlier. Any extension of this Agreement must be in writing, signed by
both parties.
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Section 9. Waiver. The failure of any party to enforce at any time any
provision of this Agreement shall not be construed as a waiver of such provision
or the right thereafter to enforce each and every provision. No waiver by any
party, either express or implied, of any breach of any of the provisions of this
Agreement shall be construed as a waiver of any other breach of such term or
condition.
Section 10. Severability. If any provision of this Agreement shall be
held by a court of competent jurisdiction to be invalid or unenforceable in any
respect for any reason, the validity and enforceability of any such provision in
any other respect and of the remaining provisions of this Agreement shall not be
in any way impaired.
Section 11. Notices. All notices required or authorized by this
Agreement shall be effective upon receipt and given to the parties in writing by
fax, mail, or courier as follows:
To Licensor: Covol Technologies, Inc.
3280 North Frontage Road
Lehi, UT 84043
Fax: (801) 768-4483
Attention: President
To Licensee: Mountaineer Synfuel, L.L.C.
c/o Covol Technologies, Inc.
3280 North Frontage Road
Lehi, UT 84043
Fax: (801) 768-4483
Attention: President
Section 12. Remedies Cumulative. Remedies provided under this Agreement
shall be cumulative and in addition to other remedies provided by law or in
equity.
Section 13. Entire Agreement. This Agreement constitutes the entire
agreement of the parties relating to the subject matter hereof. There are no
promises, terms, conditions, obligations, or warranties other than those
contained herein. This Agreement supersedes any and all prior communications,
representations, or agreements, verbal or written, between the parties relating
to the subject matter hereof. This Agreement may not be amended except in
writing signed by the parties hereto.
Section 14. Governing Law. This Agreement shall be governed in
accordance with the laws of the State of Utah, exclusive of its conflict of laws
rules.
Section 15. Assignment. This Agreement may not be assigned, in whole or
in part, by any party without the written consent of the other party, which
consent shall not be unreasonably withheld
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Executed by the duly authorized representative of the parties on the
date and year first above written.
COVOL TECHNOLOGIES, INC. MOUNTAINEER SYNFUEL, L.L.C.
By: COVOL TECHNOLOGIES, INC.
By: /s/ Stanley M. Kimball By: /s/ Brent M. Cook
Name: Stanley M. Kimball Name: Brent M. Cook
Title: CFO Title: President
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