Exhibit 10.8

Execution Copy

 

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CONSOLIDATION AND LICENSE AGREEMENT

between

MARATHON OIL COMPANY

and

SYNTROLEUM CORPORATION

dated as of January 16, 2007

 

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Execution Copy

CONSOLIDATION AND LICENSE AGREEMENT

This CONSOLIDATION AND LICENSE AGREEMENT (this “Agreement”) is made and entered
into this 16th day of January, 2007 (the “Effective Date”), by and between
Marathon Oil Company (“Marathon”), an Ohio corporation, and Syntroleum
Corporation, a Delaware corporation (“Syntroleum”) (each, a “Party”, and
collectively, the “Parties”).

RECITALS

WHEREAS, Marathon and Syntroleum are parties to the Existing Agreements (as
defined below), pursuant to which, among other things, (i) Syntroleum granted to
Marathon a non-exclusive right and license to use Syntroleum’s proprietary
technology to design, construct, operate and maintain one or more plants, and
(ii) Syntroleum and Marathon entered into certain confidentiality undertakings;
and

WHEREAS, pursuant to the terms and conditions of this Agreement, Marathon and
Syntroleum desire to terminate the Existing Agreements, to release each other
from any claims under the Existing Agreements, and to enter into certain new
undertakings to govern their future relationship.

NOW, THEREFORE, in consideration of mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1. General. As used herein, the following terms have the following
meanings. Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the Exhibits hereto:

“Affiliate” means, with respect to a Party, any entity that directly or
indirectly controls, is controlled by, or is under common control with, such
Party. For purposes of this definition, “control” means the power to direct the
management and affairs of an entity, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise. In the case of a
corporation, the direct or indirect ownership of fifty percent (50%) or more of
its outstanding voting shares shall in any case be deemed to confer control,
provided that, the direct or indirect ownership of a lower percentage of such
securities shall not necessarily preclude the existence of control.

“Competitor” has the meaning set forth in Exhibit E.

“Confidential Information” of a Party means any and all information prominently
labeled as such by such Party that (i) has independent economic value by reason
of the fact that it is not generally known to the relevant public and that has
been the subject of reasonable measures to maintain confidentiality, and
(ii) was disclosed by such Party to the other Party in performing under the
Existing Agreements or is disclosed by such Party to the other Party in
performing under this Agreement.

 

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“EPC Contract” means the contract under which Marathon or a Project Company
engages an EPC contractor to carry out the detailed engineering design,
procurement, construction and/or commissioning of a Licensed Plant.

“Existing Agreements” means the agreements listed in Exhibit A hereto.

“Inventions or Improvements” means improvements, additions, modifications,
enhancements, derivative works, or changes to Syntroleum Technology.

“Licensed Plant” means any Fischer-Tropsch plant, whether the feedstock of such
plant is natural gas, coal, petroleum, petroleum-coke, or other feedstock,
whether air- or oxygen-based, land- or marine-based, or based on cobalt
catalysts (including modification, expansion or replacement thereof), in which
Marathon (or its successor) or an Affiliate has a working, net profits, equity,
or other economic interest, provided that, a Licensed Plant may not utilize
biomass or municipal waste as a feedstock.

“Licensed Territory” means all the countries of the world and their respective
territorial seas, except for the People’s Republic of China, and India and their
respective territorial seas.

“Listed Confidential Information” means any of the following that comprises
Confidential Information of Syntroleum:

(a) Mass and Energy Balance

(b) Process Flow Diagrams

(c) Stream Summaries (Component Set = H2O, H2, N2, CO, O2, Ar, CO2, C1, C2, C3,
C4, C5—C9, C10—C20, C21+)

(d) Process Descriptions

“Lubricants” means (a) automotive lubricating oils such as PCMO, HIDD,
transmission and hydraulic fluids, and gear oils; (b) industrial lubricants such
as metalworking lubricants, process oils, white oils, agricultural spray oils,
de-foamers, cutting and quenching oils, and rubber processing oils; (c) greases;
(d) drilling fluids; or (e) any other specialty product.

“Marathon Group” means Marathon, its Affiliates, and their respective Personnel.
The Marathon Group shall include James P. Wick.

“Person” means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or any other
entity.

“Personnel” means officers, directors, employees, subcontractors, consultants,
lenders, insurers, underwriters, representatives and agents.

 

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“Process Design Package” means a compilation of text, figures, drawings and
documentation, relating to the design and construction of a Licensed Plant and
prepared in accordance with standard industry practices.

“Products” means any and all products and/or compositions of any type,
including, but not limited to: (i) Fischer-Tropsch waxes and other intermediate
products; and (ii) finished hydrocarbon fuels or products, hydrocarbons consumed
as fuel, or fuel blending stocks, in each case, processed from Synthetic Crude,
including, but not limited to, diesel, kerosene, gasoline, and naphtha, waxes,
chemicals, Lubricants, or any other specialty hydrocarbon products.

“Project Company” means any Person that is developing or operating a Licensed
Plant in which Marathon (or its successor) or an Affiliate has at least a ten
percent (10%) working, net profits, equity, or other economic interest on the
start-up date of the Licensed Plant.

“Synthetic Crude” means those hydrocarbons, having a chemical composition
substantially consisting of molecules with five (5) or more carbon atoms each,
produced using a Fischer-Tropsch conversion process.

“Syntroleum Group” means Syntroleum, its Affiliates, and their respective
Personnel.

“Syntroleum Technology” has the meaning set forth in Exhibit C.

ARTICLE 2

TERMINATION AND RELEASE

Section 2.1. Termination of Existing Agreements. The Parties acknowledge and
agree that, as of the Effective Date, each of the Existing Agreements is hereby
terminated in its entirety. Each Party hereby waives any provisions of any of
the Existing Agreements that survives the termination thereof in accordance with
its terms. Neither the Marathon Group nor the Syntroleum Group shall have any
further rights or obligations of any kind under the Existing Agreements.

Section 2.2. Forgiveness of Loan. Without limiting the generality of
Section 2.1, Marathon acknowledges that no payment of either principal or
interest under the Secured Promissory Notes shall hereafter be due from
Syntroleum to Marathon, either of cash or Syntroleum shares. Following the
Effective Date, Marathon shall (i) deliver an original of the Secured Promissory
Notes conspicuously marked “cancelled” or “terminated”, and (ii) use reasonable
efforts to release any surviving liens and mortgage on Syntroleum assets
established as security for repayment of the obligations under the Secured
Promissory Notes within forty-five (45) days of the Effective Date.

Section 2.3. Syntroleum Release. Syntroleum and the Syntroleum Group hereby
release and forever relinquish, surrender, waive, bargain away, acquit,
exonerate and discharge Marathon and each member of the Marathon Group from any
and all causes of action, in law or in equity, suits, debts, liens, contracts,
agreements, promises, liabilities, claims,

 

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demands, damages, losses, costs or expenses, of any kind or nature whatsoever,
known or unknown, fixed or contingent, based on any act or omission of any
member of the Marathon Group from the beginning of time to the date of this
Agreement that they may now have or may hereafter have against the Marathon
Group including, but not limited to, any claims arising out of or relating to
the Existing Agreements.

Section 2.4. Marathon Release. Marathon and the Marathon Group hereby release
and forever relinquish, surrender, waive, bargain away, acquit, exonerate and
discharge Syntroleum and each member of the Syntroleum Group from any and all
causes of action, in law or in equity, suits, debts, liens, contracts,
agreements, promises, liabilities, claims, demands, damages, losses, costs or
expenses, of any kind or nature whatsoever, known or unknown, fixed or
contingent, based on any act or omission of any of the Syntroleum Group from the
beginning of time to the date of this Agreement that they may now have or may
hereafter have against the Syntroleum Group including, but not limited to, any
claims arising out of or relating to the Existing Agreements.

Section 2.5. Release. No Party shall assert any claim arising under or related
to the Existing Agreements and the Parties agree that this provision is an
absolute defense to any such claim.

Section 2.6. Payments. In consideration of the foregoing and the rights and
licenses granted hereunder, (i) on or before December 1, 2008, Syntroleum shall
pay to Marathon the amount of Three-Million U.S. Dollars ($3,000,000) in
immediately available funds, and (ii) on or before December 1, 2009, Syntroleum
shall pay to Marathon the amount of Three-Million U.S. Dollars ($3,000,000) in
immediately available funds, for a total of Six Million U.S. Dollars
($6,000,000).

ARTICLE 3

LICENSE GRANT

Section 3.1. License Grant. Subject to the terms and conditions of this
Agreement, Syntroleum grants to Marathon and its Affiliates a non-exclusive,
non-transferable (except as provided in Section 13.3) right and license to use
the Syntroleum Technology to (i) design, purchase, construct, operate, maintain,
modify, replace, and expand Licensed Plants throughout the Licensed Territory,
(ii) to practice the Syntroleum Technology in Licensed Plants, (iii) to make
intermediate streams, by-products, and Synthetic Crude in Licensed Plants,
(iv) to use (including further process and/or consume), and/or sell such
intermediate streams, by-products and Synthetic Crude, (v) to produce, use,
and/or sell Products throughout the world, and (vi) to use the Syntroleum
Technology for any purpose not prohibited hereunder within the Licensed
Territory.

Section 3.2. Marathon Grant for R&D. Subject to the terms and conditions of this
Agreement, including Section 8.5, Syntroleum grants to Marathon and its
Affiliates a worldwide non-exclusive, non-transferable (except as provided in
Section 13.3) right and license to use the Syntroleum Technology within the
Licensed Territory (i) to perform research and development of Fischer Tropsch
technology, including, but not limited to, the research and

 

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development of Fischer-Tropsch Reactors, Fischer-Tropsch Reaction,
Fischer-Tropsch wax separation and filtration, Fischer-Tropsch Catalyst fines
removal from Fischer-Tropsch wax, Fischer-Tropsch Catalyst regeneration, product
separation, Fischer-Tropsch slurry transport, (ii) to develop Inventions and
Improvements to the Syntroleum ATR Process and FT Conversion Process, and
(iii) subject to ARTICLE 10, to develop Fischer-Tropsch technology or
Fischer-Tropsch plants, either alone or with third parties (“Development
Partners”), whether air- or oxygen-based, land- or marine-based, or based on
cobalt catalysts, using Syntroleum Technology.

Section 3.3. Independent Design and Development. Without limiting the generality
of Section 3.1 and Section 3.2, and subject to the confidentiality provisions in
this Agreement, Syntroleum acknowledges that Marathon shall have the right to
conduct research and development on Fischer-Tropsch reactors, Fischer-Tropsch
catalysts, Fischer-Tropsch reaction, Fischer-Tropsch conversion processes, and
ATR processes independently, by itself or with third parties. Marathon shall
have the right to contract directly with reactor vendors selected at the sole
discretion of Marathon, on terms and conditions to be determined at the sole
discretion of Marathon and such reactor vendors, for the engineering and
fabrication of ATR reactors and Fischer-Tropsch Reactors for any Licensed Plant,
whether or not such Licensed Plant utilizes Syntroleum Technology, on terms and
conditions to be determined at the sole discretion of Marathon and such reactor
vendor.

Section 3.4. Sublicensing/Performance Responsibility. Marathon shall have the
right to grant sublicenses of the rights granted under Section 3.1 solely to
Project Companies, provided that all sublicenses of the rights granted hereunder
shall be in writing and shall include provisions consistent with the terms and
conditions of this Agreement. Marathon shall cause all sublicensees to fully
comply with the terms and conditions of this Agreement. Marathon shall remain
responsible for the acts and omissions of all Affiliates of Marathon, Project
Companies and Development Partners in connection with this Agreement, including
the payment of License Fees in accordance with Section 6.1.

Section 3.5. Project Technology. Notwithstanding Section 11.7, Marathon, shall
have the right to retain and use Confidential Information pertaining to and
including “Project Technology” as defined and used in the Participation
Agreement (the “Project Technology”). Syntroleum hereby grants to Marathon and
its Affiliates a worldwide, non-exclusive, irrevocable, royalty-free, license to
use and to improve all Project Technology of Syntroleum and intellectual
property rights therein arising from, or made available to Marathon under, the
Participation Agreement related to the operation or maintenance of Fischer
Tropsch plants. The right granted under this Section shall include the right of
Marathon and its Affiliates to license or sublicense such rights to owners,
developers or interested parties of Fischer-Tropsch gas-to-liquids projects. Any
Project Technology of Syntroleum and intellectual property rights therein
arising from, or made available to Marathon under, the Participation Agreement
related to the design of Fischer Tropsch plants shall be included in Syntroleum
Technology hereunder.

Section 3.6. Limitation as to Products. Marathon acknowledges that the license
granted under Section 3.1 is to Syntroleum Technology only, and shall not
include any Syntroleum product upgrade or Syntroleum Lubricant manufacture
technology used to produce end products, including Products, from Synthetic
Crude. Nothing in this Agreement shall limit

 

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the right of Marathon to produce any Products, including Lubricants, from
Synthetic Crude produced using Syntroleum Technology, provided that, it shall be
the sole obligation of Marathon to obtain rights to any product upgrade
technology selected by Marathon to produce Products.

Section 3.7. Third Party Rights. During the term of this Agreement, Syntroleum
shall reasonably cooperate with Marathon to identify any third party
intellectual property rights that may be material to use of the Syntroleum
Technology or infringed by use of the Syntroleum Technology as contemplated
hereunder.

Section 3.8. Patent License. Marathon grants to Syntroleum a non-exclusive,
irrevocable, royalty-free, worldwide right and license under U.S. Patent Nos.
5,733,941; 5,861,441; 6,313,361 B1; 6,201,029 B1; and 6,130,259, together with
any continuations, reexaminations or renewals thereof (the “Licensed Patents”),
to make, have made, use, and practice the FT Conversion Process, and to
sublicense the foregoing to Syntroleum licensees of the FT Conversion Process.
The foregoing does not in any way limit Marathon’s right to use and/or license
the technology described in the Licensed Patents, and Marathon hereby retains
all rights thereto. On the request of Syntroleum no more than once per year,
Marathon shall notify Syntroleum if Marathon has determined to discontinue
paying the maintenance fees on one or more of the Licensed Patents. Following
such notification, on the request of Syntroleum Marathon shall offer to transfer
and assign the same to Syntroleum, subject to the further negotiations of the
Parties at the time of said transfer.

ARTICLE 4

SUPPORT

Section 4.1. No Syntroleum Support Commitment. Except as provided in this
ARTICLE 4 and ARTICLE 7, Marathon acknowledges that Syntroleum shall have no
support obligations with respect to the Syntroleum Technology, provided that
Syntroleum shall not unreasonably withhold consent to any support requested
under this ARTICLE 4 and ARTICLE 7. Except as expressly provided herein,
Syntroleum shall provide any such support at its then-standard billing rates and
costs. Any support under this ARTICLE 4 and ARTICLE 7 shall be subject to any
resource constraints and availability of Syntroleum Personnel at the time the
support is requested, and Marathon acknowledges that lack of adequate Syntroleum
resources at the time a request for support is received hereunder shall be
considered reasonable grounds for denial or reduction of the level of support by
Syntroleum. The foregoing shall not apply to any fully-supported license that
Marathon may obtain in accordance with ARTICLE 7.

Section 4.2. Commercial/Research Support. Syntroleum shall provide reasonable
support to Marathon in its efforts to competitively secure project opportunities
using Syntroleum Technology throughout the Licensed Territory. Syntroleum shall
provide support to Marathon on an as-needed basis in support of designing,
constructing and/or operating Licensed Plants using Syntroleum Technology.

Section 4.3. Cooperation with Other Marathon Technology Providers. On the
request of Marathon, Syntroleum shall reasonably cooperate with third party
providers to Marathon of portions of Fischer Tropsch technology to ensure that
all process components and Syntroleum Technology utilized by Marathon are
effectively integrated.

 

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Section 4.4. Process Design Package. Marathon shall have the right to obtain a
Process Design Package for any Licensed Plant using Syntroleum Technology from a
third party (a “Third Party PDP Provider”) in its sole discretion, and Marathon
is under no obligation to request a Process Design Package from Syntroleum. In
the event that Marathon, elects to engage a Third Party PDP Provider to prepare
such a Process Design Package, no fee or percentage markup shall be due
Syntroleum for such Process Design Package. Syntroleum shall fully cooperate
with Marathon and such Third Party PDP Provider in preparing such Process Design
Package.

Section 4.5. Syntroleum Process Design Package. Upon the request of Marathon,
Syntroleum shall provide Marathon with a Process Design Package for any Licensed
Plant using Syntroleum Technology pursuant to a procurement agreement as
mutually agreed by the Parties. Syntroleum’s fee for the Process Design Package
shall be invoiced by Syntroleum to Marathon in accordance with the terms of such
procurement agreement.

Section 4.6. Syntroleum Inventions and Improvements. Syntroleum shall have no
ongoing obligation to disclose to Marathon any Syntroleum Inventions or
Improvements. Any Syntroleum Inventions or Improvements shall be exclusively
owned by Syntroleum. Except as expressly provided herein, nothing herein shall
be construed as obligating Syntroleum to license to Marathon any Syntroleum
Inventions or Improvements. In the event Syntroleum discloses any Inventions and
Improvements to Marathon, such Inventions and Improvements shall be considered
within the scope of the Syntroleum Technology.

Section 4.7. Disclosure of Marathon Inventions and Improvements. Marathon shall
have no ongoing obligation to disclose to Syntroleum any Marathon Inventions and
Improvements. Any Marathon Inventions or Improvements shall be exclusively owned
by Marathon. Marathon may, at its sole discretion, file patent applications with
respect to such Inventions or Improvements in its own name and at its own
expense, and take such other steps as are necessary, in the sole judgment of
Marathon, to protect its rights in such Inventions or Improvements. Nothing
herein shall be construed as obligating Marathon to license back to Syntroleum
any Marathon Inventions or Improvements.

ARTICLE 5

CATALYST-RELATED MATTERS

Section 5.1. Certain Limitations on James P. Wick. The Parties acknowledge that
James P. Wick (“Wick”) is, together with Marathon and Syntroleum, a party to the
Red-Hat Agreement, which agreement is included in the Existing Agreements and
terminated hereunder. Subject to the exceptions set forth in Section 10.3,
following the Effective Date, Wick shall make no use whatsoever, and shall not
disclose to any person, any information received by Wick that was covered by the
Red-Hat Agreement (“Red-Hat Information”). Following the Effective Date and for
a period of five (5) years thereafter (as modified in accordance with this
Section 5.1, the

 

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“Blackout Period”), Wick shall not participate in the development of
cobalt-based Fischer-Tropsch catalysts. The foregoing shall not restrict Wick
from (i) evaluating or participating in the evaluation of Fischer-Tropsch
catalysts, whether or not cobalt-based, for use in air-based or oxygen-based
Fischer Tropsch processes, or (ii) otherwise working on projects involving
Fischer Tropsch catalysts or processes. Syntroleum shall advise Marathon if
Syntroleum adopts restrictions on any of its employees hired following the
Effective Date that have access to such information that are less stringent than
the foregoing, which restrictions shall thereafter apply to this Agreement.
Syntroleum agrees that any cause of action it might have resulting from Wick’s
performance on behalf of Marathon under the Red Hat Agreement, or under this
Agreement, shall be solely against Marathon.

Section 5.2. Wick Development Election. During the Blackout Period, Marathon may
elect, on written notice to Syntroleum, to have Wick participate in the
development of cobalt-based Fischer-Tropsch catalysts for use in Fischer Tropsch
gas-to-liquids processes. Following such election, Wick shall have the right to
participate in the development of Fischer-Tropsch catalysts for use in Fischer
Tropsch gas-to-liquids processes, whether air- or oxygen-based, land- or
marine-based, or based on cobalt catalysts, and shall have the right to use the
Red-Hat Information in connection therewith. Subject to Section 6.1, to the
extent applicable, Marathon shall have the right to manufacture, have
manufactured, and use in Licensed Plants any catalysts in which Wick
participated in the development in accordance with this Section 5.2.

Section 5.3. Catalyst R&D. Without limiting Section 5.1 and Section 5.2,
Syntroleum acknowledges that Marathon shall have the right to conduct research
and development on Fischer-Tropsch Catalysts, provided that, research and
development on Syntroleum’s Fischer-Tropsch Catalysts shall be limited by the
provisions of Section 5.2.

Section 5.4. No Catalyst Purchase Obligation. Syntroleum acknowledges that
Marathon shall have no obligation to purchase Fischer-Tropsch Catalysts from
Syntroleum, or to use Syntroleum Fischer-Tropsch Catalysts in any Licensed
Plant. Marathon may select the Fischer-Tropsch Catalysts for use in a Licensed
Plant in its sole discretion with no markup or payment to Syntroleum for such
catalyst, and Marathon shall have the right to negotiate manufacturing and other
terms and conditions directly with any catalyst manufacturer selected by
Marathon on terms and conditions to be determined in its sole discretion.

ARTICLE 6

LICENSE FEES

Section 6.1. License Fees. Marathon shall pay to Syntroleum license fees for
each Licensed Plant (“License Fees”) in accordance with the License Fee
calculation attached as Exhibit B. Marathon shall have the right to increase or
reduce the capacity of any Licensed Plant, move any Licensed Plant to a
different location within the Licensed Territory, or otherwise modify any
Licensed Plant, including by adding additional Fischer-Tropsch Reactor trains,
at its sole discretion. For the avoidance of doubt, if a Licensed Plant is based
on third-party technology, no License Fees shall be due hereunder.

 

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Section 6.2. Payments. All amounts payable under this Agreement shall be paid in
U.S. Dollars at the applicable Party’s corporate address or to another address
specified by such Party in writing, or to an account at a bank specified by such
Party in writing.

Section 6.3. Taxes. In the event Marathon is required to withhold any taxes from
amounts payable to Syntroleum under this Agreement, Marathon shall provide
Syntroleum at the time of such withholding with a receipt or other evidence
reflecting the deposit of such taxes with the appropriate governmental agency.

Section 6.4. Audits.

 

  (a) Upon the reasonable request by Syntroleum, but not more than once per
calendar year, Syntroleum shall have the right to have a duly qualified
independent auditor, selected by Syntroleum and not reasonably objected to by
Marathon, review the records of Marathon or Project Companies, as applicable,
related to License Fees to ascertain compliance with this Agreement within the
twenty-four (24) month period following the end of such calendar year; provided
that (i) Marathon or the applicable Project Company is given prior written
notice of no less than thirty (30) business days, (ii) the inquiry is limited to
that information directly related to License Fees, (iii) such audit is conducted
during normal business hours, (iv) such audit is performed solely at
Syntroleum’s expense, (v) any third parties retained by Syntroleum to perform
the audit shall execute a mutually acceptable confidentiality agreement in which
such persons agree to use the information to which it is exposed only for
purposes of the audit and not disclose any such information to any third party
other than to Syntroleum, and (vi) Syntroleum’s retained third parties comply
with all rules and protocols of the facilities to which Syntroleum is notified
in writing in advance.

 

  (b) The auditor will make a reasonable effort to prepare and distribute a
written report to each of Syntroleum and Marathon as soon as possible, but, in
any event, within ninety (90) days after the conclusion of each audit. The
report shall include all claims arising from such audit together with comments
pertinent to the operation of the accounts and records. Marathon shall make a
reasonable effort to reply to the report in writing as soon as possible, but, in
any event, no later than ninety (90) days after receipt of the report. Should
Syntroleum consider that the report or reply requires further investigation of
any item therein, Syntroleum shall have the right to conduct further
investigation in relation to such matter. All adjustments resulting from an
audit and agreed between Marathon and Syntroleum shall be reflected promptly. If
any dispute shall arise in connection with an audit, it shall be subject to
ARTICLE 12.

 

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ARTICLE 7

COAL LICENSE RIGHTS

Section 7.1. Coal Plant Support. Subject to Section 4.1, for each Licensed Plant
using coal or petroleum coke feedstock, (i) on the request of Marathon,
Syntroleum shall provide a pre-feasibility study, as described in Exhibit D, for
such Licensed Plant at no cost to Marathon, provided that, during the first five
(5) years following the Effective Date, Syntroleum shall be obligated to prepare
no more than one (1) pre-feasibility study per year, and (ii) any other terms
governing such Licensed Plant shall be embodied in a site-specific license in
accordance with Section 7.2. Except as provided in the previous sentence, no
site-specific licenses shall be required for Marathon to utilize the Syntroleum
Technology as provided hereunder. Any other support by Syntroleum shall be
subject to ARTICLE 4.

Section 7.2. Fully Supported License. On the request of Marathon, the Parties
shall negotiate in good faith a fully supported license of Syntroleum Technology
utilizing coal or petroleum coke as a feedstock. The fully supported license
shall include the services and support of Syntroleum, including all warranties,
support, indemnities, and guarantees made available to others for use of
Syntroleum Technology. During the term, Syntroleum shall treat Marathon as a
most favored customer, and in the event Marathon desires to expand the scope of
this Agreement or obtain services or support from Syntroleum, all prices,
warranties, support, indemnities, and guarantees for use of Syntroleum
Technology shall be equivalent to or better than those offered by Syntroleum to
any of its other customers, provided that, the foregoing shall not apply with
respect to terms and conditions in joint ventures and strategic arrangements in
which Syntroleum has offered below-market license fees in exchange for other
consideration. During the Coal Initial Term or any Coal Renewal Term arising
thereafter, Syntroleum shall continue to make available this option for a fully
supported license, subject to applicable License Fees.

ARTICLE 8

REPRESENTATIONS AND WARRANTIES

Section 8.1. Mutual Representations. Each Party hereby represents and warrants
to the other Party as follows:

 

  (a) Due Authorization/Execution. Such Party is a corporation duly incorporated
and in good standing as of the Effective Date, and has taken all necessary
actions on its part to duly authorize the execution, delivery and performance of
this Agreement. This Agreement has been duly executed and delivered by such
Party and constitutes a legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms.

 

  (b) No Conflict. Such Party’s execution, delivery and performance of this
Agreement does not: (i) violate, conflict with or result in the breach of any
provision of the charter or by-laws of such Party; (ii) conflict with or violate
any law, rule, regulation or governmental order applicable to such Party or any
of its assets, properties or businesses; or (iii) conflict with, result in any
breach of, constitute a default under, require any consent under any agreement
to which it is a party.

 

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  (c) Legal Advice. Such Party has received independent legal advice from its
attorneys with respect to the settlement provided for herein and the
advisability of executing this Agreement. Such Party has made such investigation
of the facts pertaining to this Agreement, and of all the matters pertaining
thereto, as it deems necessary.

 

  (d) No Transfer. Such Party has not assigned, transferred, or granted, or
purported to assign, transfer, or grant, any claims, demands, and cause or
causes of action disposed of by this Agreement.

Section 8.2. Syntroleum Representations. Syntroleum hereby represents and
warrants to Marathon that as of the Effective Date:

(i) Ownership. Syntroleum is the owner of all right, title and interest in and
to, or has the right to sublicense, the Syntroleum Technology and the Syntroleum
Red Hat Information, and has the right to grant to Marathon the licenses and
other rights granted hereunder, and to perform all other obligations required.

(ii) No Conflict. Syntroleum has neither assigned nor otherwise entered into any
agreement by which it purports to assign, license or transfer any right, title
or interest in or to the Syntroleum Technology and the Syntroleum Red Hat
Information that would conflict with its obligations under this Agreement.

(iii) Required Consents. Syntroleum has obtained and possesses any and all
necessary rights and consents to perform all of its obligations under this
Agreement, including the right to grant the licenses granted hereunder.

Section 8.3. Marathon Representation. Marathon hereby represents and warrants to
Syntroleum that, as of the Effective Date, to the knowledge of Marathon, neither
Marathon nor Wick is in material breach of the Red Hat Agreement as regards
improper disclosure or use of Red Hat Information.

Section 8.4. No Admission of Liability. This Agreement affects the settlement of
claims that are denied and contested, and nothing contained herein shall be
construed as an admission by any Party of any liability of any kind to the other
Party.

Section 8.5. Warranty Disclaimers. EXCEPT AS PROVIDED IN Section 7.2, AND EXCEPT
FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
WARRANTIES, EXPRESS OR IMPLIED, AND HEREBY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, NONINFRINGEMENT, AND IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

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Section 8.6. No Performance Guarantees. Except as provided in Section 7.2,
Marathon acknowledges that, except as provided in this ARTICLE 8, the Syntroleum
Technology is provided on an “AS-IS” basis with no performance guarantees of any
type.

ARTICLE 9

INDEMNIFICATION

Section 9.1. Syntroleum Indemnification of Wick. Syntroleum shall protect,
defend, release, indemnify and hold harmless Wick from and against any and all
claims, demands, liabilities, losses, damages (including exemplary and punitive
damages), proceedings, causes of action and expenses (including court costs,
attorneys’ fees and other litigation costs) (“Losses”)arising from the
performance by Wick under this Agreement. Any cause of action resulting from the
performance of Wick under this Agreement shall be solely against Marathon during
the term of employment of Wick by Marathon or its Affiliates.

Section 9.2. Marathon Indemnification. Marathon shall indemnify and hold
harmless the Syntroleum Group from and against any Losses for personal injury
(including illness, bodily injury or death) of any member of the Marathon Group
and/or loss, damage or destruction of the property of the Marathon Group arising
out of operation of a Licensed Plant. The foregoing shall not apply to any fully
supported license obtained by Marathon under ARTICLE 7, any indemnifications
related to which shall be covered in a separate agreement among the Parties.

Section 9.3. No Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, INCLUDING FOR MISREPRESENTATIONS OR DISCLOSURE OF CONFIDENTIAL
INFORMATION.

ARTICLE 10

CONFIDENTIALITY

Section 10.1. Confidentiality. Each Party (the “Receiving Party”) shall maintain
in confidence all Confidential Information of the other Party (each a
“Disclosing Party”) (i) for a period of fifteen (15) years after the date of
disclosure for information received in the course of performance under this
Agreement, (ii) for a period of fifteen (15) years after the date of disclosure
for information already in the possession of such Party, but in each case, not
to exceed five (5) years after termination of this Agreement. Subject to
Section 10.2, Marathon shall not disclose such Confidential Information to any
third party except (i) banks, lenders or their representatives, project partners
or potential project partners, governmental or quasi-governmental authorities,
and national oil companies under conditions of written confidentiality
consistent with the confidentiality terms of this Agreement, (ii) to those of
its Personnel and Development Partners who reasonably require such Confidential
Information in connection with such Party’s activities as contemplated by this
Agreement. In maintaining the confidentiality of Confidential Information of the
other Party, the Receiving Party shall exercise the same degree

 

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of care that it exercises with its own confidential information, and in no event
less than a reasonable degree of care. Each Party shall ensure that each of its
Personnel and Development Partners holds in confidence and makes no use of the
Confidential Information of the other Party for any purpose other than those
permitted under this Agreement or otherwise required by law. Notwithstanding
anything to the contrary herein, each sublicensee of Marathon under Section 3.4
shall be bound by the confidentiality provisions hereof (i) for a period of
fifteen (15) years after the date of disclosure by the disclosing Party for
information received in the course of performance under this Agreement, (ii) for
a period of fifteen (15) years after the date of disclosure by the disclosing
Party for information already in the possession of the other Party Syntroleum
acknowledges that the mere fact that Marathon Personnel are in the possession of
Confidential Information and are working with a third party shall be
insufficient to prove a breach of confidentiality. Proof of a breach shall
require proof of an actual improper disclosure.

Section 10.2. Disclosure to Development Partners. Notwithstanding the foregoing,
Marathon shall not disclose Listed Confidential Information to any Competitors
of Syntroleum.

Section 10.3. Exceptions to Confidentiality. The obligation of confidentiality
contained in this Agreement shall not apply to the extent that (i) the Receiving
Party is required to disclose information by order or regulation of a
governmental agency, stock exchange, or a court of competent jurisdiction;
provided, however, that (a) the Receiving Party shall promptly notify the
disclosing Party of such order or regulation (when legally permissible) and
shall not make any such disclosure without first notifying the Disclosing Party
and allowing the Disclosing Party a reasonable opportunity to seek injunctive
relief from (or a protective order with respect to) the obligation to make such
disclosure, and (b) such disclosure shall not affect the confidential nature of
the information unless and until an exception in (ii) below applies; or (ii) the
Receiving Party can demonstrate that (a) the disclosed information was at the
time of such disclosure to the Receiving Party already in (or thereafter enters)
the public domain other than as a result of a breach of an obligation of
confidentiality to the Disclosing Party; (b) the disclosed information was
rightfully known to the Receiving Party prior to the date of disclosure to the
Receiving Party; (c) the disclosed information was received by the Receiving
Party on an unrestricted basis from a source unrelated to the Disclosing Party
and not under a duty of confidentiality to the Disclosing Party; or (d) the
disclosed information was independently developed by the Receiving Party without
the benefit of any Confidential Information of the Disclosing Party. Specific
aspects or details of Confidential Information shall not be deemed to be within
the public domain or possession of the Receiving Party merely because the
Confidential Information is embraced by general disclosures in the public domain
or possession of the Receiving Party. In addition, any combination of
Confidential Information shall not be considered in the public domain or
possession of the Receiving Party merely because individual elements thereof are
in the public domain or possession of the Receiving Party unless the combination
and its principles are in the public domain or possession of the Receiving
Party.

 

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ARTICLE 11

TERM AND TERMINATION

Section 11.1. Term. The term of this Agreement shall commence on the Effective
Date and shall continue for (i) ten (10) years from the Effective Date for the
license of Syntroleum Technology using coal or petroleum coke as feedstocks (the
“Coal Initial Term”), and (ii) ten (10) years from the Effective Date for the
license to Syntroleum Technology using natural gas or any other feedstocks, as
limited by the definition of a “Licensed Plant” (the “NG Initial Term”); in
either case, unless earlier terminated in accordance with this ARTICLE 11.

Section 11.2. Renewal. This Agreement shall automatically renew for additional
five (5) year periods (i) with respect to the license of Syntroleum Technology
using coal or petroleum coke as feedstocks (a “Coal Renewal Term”), in the event
Marathon or a Project Company enters into an EPC Contract for the construction
of a Licensed Plant using coal or petroleum coke as a feedstock during the Coal
Initial Term or any Coal Renewal Term; or (ii) with respect to the license of
Syntroleum Technology using any other feedstock (a “NG Renewal Term”), in the
event Marathon or a Project Company enters into an EPC Contract for the
construction of a Licensed Plant using any other feedstock during the NG Initial
Term or any NG Renewal Term.

Section 11.3. Termination for Cause. Either Party may terminate this Agreement
at any time in the event that the other Party materially breaches this Agreement
and, if the material breach is capable of cure, such material breach continues
uncured for a period of forty-five (45) days after written notice thereof;
provided, however, in the event that the breaching Party has in good faith
commenced cure within such forty-five (45) day period, but cannot practically
complete such cure within such forty-five (45) day period, the breaching Party
shall have an additional forty-five (45) day cure period. In the event a
material breach is incapable of cure, without limiting any other rights of the
non-breaching Party, including the right to seek injunctive relief, the
non-breaching Party shall have the right to terminate this Agreement only if
(i) the breach is the result of ongoing willful misconduct by the breaching
Party, or (ii) the breaching Party is not providing cooperation to mitigate the
breach.

Section 11.4. Marathon Termination. Marathon shall have the right to terminate
this Agreement in its sole discretion upon written notice of termination to
Syntroleum no less than 90 days prior to the date of such termination.

Section 11.5. Upon Expiration. Upon expiration of the license granted hereunder
in accordance with Section 11.1 or Section 11.2 as to a particular feedstock,
this Agreement shall continue to apply as to other feedstocks not subject to
expiration. Upon expiration of this Agreement as to all feedstocks, the
provisions of Articles 2, 6 (as to any Licensed Plants then in existence), and
9-13 and Sections 3.1 and 3.2 (as to any Licensed Plants then in existence),
3.3, 3.5, 3.8, 5.1, 5.3, 5.4, 8.4, 8.5, and 8.6 shall survive such expiration.
Upon expiration of this Agreement as to any particular feedstock, this Agreement
shall remain in full force and effect as to other feedstocks, and Article 6
shall remain in full force and effect as to any Licensed Plants then in
existence based on the expired feedstock.

 

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Section 11.6. Upon Termination. Upon termination of this Agreement, the
provisions of Articles 2, 6 (as to any Licensed Plants then in existence), and
9-13 and Sections 3.1 and 3.2 (as to any Licensed Plants then in existence),
3.3, 3.5, 3.8, 5.1, 5.3, 5.4, 8.4, 8.5, and 8.6 shall survive such expiration.
Upon termination of this Agreement as to any particular feedstock, this
Agreement shall remain in full force and effect as to other feedstocks, and
Article 6 shall remain in full force and effect as to any Licensed Plants then
in existence based on the expired feedstock.

Section 11.7. Return of Information. As soon as possible following termination
of this Agreement, each Party shall return to the other Party, or destroy all
Confidential Information of the other Party, including Red Hat Information,
prominently marked as such in its possession or control, including any copies or
reproductions thereof, to the extent practicable. Temporary retention of
Confidential Information pursuant to a Parties normal records retention policy
for data backup in a manner that does not permit normal access to such
Confidential Information in violation of the obligations herein shall be
permitted by each Party. Each Party shall further be permitted to retain one
copy of all Confidential Information in its legal department for record
retention purposes.

Section 11.8. Use of General Skills. Syntroleum acknowledges that nothing in
this Agreement shall prevent Marathon and its Personnel from using general
skills, knowledge and experience gained by Marathon or its employees in
performing under this Agreement or the Existing Agreements, so long as Marathon
and such employees abide by the confidentiality limitations hereunder.

Section 11.9. Bankruptcy. All rights and licenses granted to Marathon pursuant
to this Agreement are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the United States Bankruptcy Code (the “Code”), licenses to
“Intellectual Property” as defined in the Code. Marathon shall retain and may
fully exercise all of their rights and elections under the Code. The Parties
further agree that, in the event of the commencement of bankruptcy proceeding by
or against Syntroleum under the Code, Marathon shall be entitled to retain all
of its rights under this Agreement.

ARTICLE 12

DISPUTE RESOLUTION

Section 12.1. Disputes. In the event of any dispute or difference between the
Parties arising in connection with this Agreement, senior representatives of
each Party who have authority to settle the dispute shall, within fourteen
(14) days of a written request from one Party to the other, meet in an effort to
resolve such dispute or difference. If the Parties fail to reach agreement to
resolve the dispute or difference within twenty one (21) days of such written
request, (or such other period as may be agreed by the Parties), then any
dispute or difference between them shall be settled in accordance with
Section 12.2.

Section 12.2. Arbitration. Except as provided below in Section 12.3 or
Section 12.4, all disputes arising out of or related to this Agreement shall be
determined by arbitration administered by the American Arbitration Association
in accordance with its Commercial

 

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Arbitration Rules (the “Rules”) except as modified herein. Any such arbitration
shall be conducted in Houston, Texas in the English language. The arbitration
panel shall consist of three arbitrators. Within 30 days of a demand for
arbitration, the Parties shall each appoint one party arbitrator, which shall
not be required to meet the requirements of Rule R-17(a). The Party arbitrators
shall appoint a chairperson within 45 days of the demand for arbitration, and if
they cannot agree, the chairperson shall be appointed as provided in Rule R-13.
Notwithstanding the Rules:

 

  (a) The arbitration panel shall apply the Federal Rules of Evidence.

 

  (b) Discovery shall be conducted pursuant to the Federal Rules of Civil
Procedure.

 

  (c) The Parties shall have the right to appeal the award of the arbitration
panel to any court with personal and subject matter jurisdiction with regard to
errors of law.

 

  (d) The arbitration panel shall render a reasoned award.

Section 12.3. Judgment and Confidentiality. Judgment upon the award of
arbitration may be entered in any court having jurisdiction. Any arbitration
shall be confidential, and except as required by law, or as a result of the
filing of a request for injunctive relief under Section 12.4, or as a result of
the filing of an arbitration award (judgment) in a court of competent
jurisdiction, no Party may disclose the content or results of any arbitration
hereunder without the prior written consent of the other Party, except that
disclosure is permitted to a Party’s auditors and legal advisers.

Section 12.4. Injunctive Relief. Either party may, without waiving any remedy
available at law or equity or under this Agreement, seek from any Texas State
District Court of Harris County, Texas any interim or provisional relief that is
necessary to protect the rights or property of that party, pending the
establishment of the arbitral tribunal or pending the arbitral tribunal’s
determination of the merits of the controversy. Either Party may also, without
waiving any remedy available at law or equity or under this Agreement, apply to
the arbitrators seeking injunctive relief until the arbitration award is
rendered or the controversy is otherwise resolved.

Section 12.5. Governing Law. This agreement shall be governed by and interpreted
in accordance with the laws of the State of New York.

ARTICLE 13

MISCELLANEOUS

Section 13.1. Notices. All notices, requests, claims, demands and other
communications regarding this Agreement shall be in writing and shall be given
or made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service (with signature required), by
facsimile, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective Parties at the following addresses:

 

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If to Syntroleum:

4322 South 49th West Avenue

Tulsa, Oklahoma 74107

Attn: General Counsel

Tel: (918) 592-7900

Fax: (918) 592-7979

If to Marathon:

Marathon Oil Company

5555 San Felipe Road

Houston, Texas 77056-2723

Attn: General Counsel

Telephone: (713) 296-4137

Fax: (713) 296-3294

Section 13.2. Amendment. This Agreement may not be amended or modified except by
an instrument in writing signed by authorized representatives of each Party
hereto.

Section 13.3. Assignment. This Agreement may not be assigned by either Party
without the other Party’s prior written consent, provided that Marathon may
assign this Agreement (i) to an Affiliate (an “Affiliate-Assignee”), and/or
(ii) in connection with the sale of all or substantially all of the assets of
Marathon to which this Agreement pertains, in each case, on written notice to
Syntroleum. This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. Nothing herein
shall prevent an Affiliate-Assignee of Marathon from thereafter ceasing to be an
Affiliate of Marathon.

Section 13.4. Entire Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof, and no oral or
written statement that is not expressly set forth in this Agreement may be used
to interpret or vary the meaning of the terms and conditions hereof. This
Agreement, the Exhibits hereto, and the agreements referred to herein, supersede
any prior agreements and understandings, whether written or oral, between the
Parties with respect to the subject matter hereof.

Section 13.5. Third Party Beneficiaries. The Parties acknowledge and agree that
James P. Wick, each member of the Marathon Group, and each member of the
Syntroleum Group are intended third-party beneficiaries under this Agreement.
Except as provided in the previous sentence, nothing in this Agreement, either
express or implied, is intended to or shall confer upon any third party any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

Section 13.6. No Waiver. The failure of any Party to enforce at any time for any
period the provisions of or any rights deriving from this Agreement shall not be
construed to be a waiver of such provisions or rights or the right of such Party
thereafter to enforce such provisions.

 

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Section 13.7. Independent Contractors. Marathon and Syntroleum are and shall be
independent contractors under this Agreement, and nothing herein shall be
construed to create a partnership, joint venture, or agency relationship between
or among Marathon and Syntroleum.

Section 13.8. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.

Section 13.9. Counterparts. This Agreement may be executed in one or more
counterparts, and by the respective Parties in separate counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same Agreement. This Agreement may be
executed and delivered via facsimile transmission with the same force and effect
as if it were executed and delivered in writing.

Section 13.10. Headings. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of the Agreement.

Section 13.11. Legal Compliance. Marathon agrees that it will not export or
re-export or otherwise transfer any Syntroleum Technology provided hereunder to
any country, person, entity or end-user subject to U.S. export restrictions.
Marathon specifically agrees not to export or re-export any Syntroleum
Technology (i) to any country or party to which the United States has at the
time of the transfer embargoed or restricted the export or re-export of goods or
services; (ii) to any party who Marathon knows will utilize any Syntroleum
Technology in the design, development or production of nuclear, chemical or
biological weapons; or (iii) to any party who has been prohibited from
participating in U.S. export transactions by any federal agency of the U.S.
government.

 

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IN WITNESS WHEREOF, Marathon and Syntroleum hereto have caused this Agreement to
be executed by their duly authorized representatives as set forth below.

 

Marathon Oil Company     Syntroleum Corporation By  

/s/ D.E. Roberts, Jr.

    By  

/s/ John B. Holmes, Jr.

Title  

Senior Vice President

    Title  

President and CEO

Date   January 16, 2007     Date   January 16, 2007

Acknowledged and agreed this 16th day of January, 2007

 

/s/ James P. Wick

James P. Wick

Address:

 

2501 Foxbury Ln, Ohio

 

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EXHIBIT A

Existing Agreements

 

1) Non-Disclosure [Letter] Agreement, dated September 23, 1994 relating to
Syntroleum’s methane conversion technology;

 

2) Non-Disclosure [Letter] Agreement dated October 18, 1994 relating to
Marathon’s methane conversion technology;

 

3) Master Preferred License Agreement, dated March 7, 1997;

 

4) Intellectual Property Agreement dated March 7, 1997;

 

5) Confidentiality Agreement between Marathon Ashland Petroleum and Syntroleum
Corporation dated March 7, 1997.

 

6) Confidentiality Agreement, dated January 26, 2001 relating to Syntroleum’s
upgrading process;

 

7) Letter Agreement eliminating restriction on Marathon ownership of Syntroleum
stock, dated May 8, 2002.

 

8) Intellectual Property Agreement, dated March 21, 2001 relating to
Syntroleum’s product refining process;

 

9) Confidentiality Agreement, dated October 3, 2001 relating to Marathon’s
patent on converting a stable wax slurry;

 

10) Confidentiality Agreement, dated February 25, 2002 relating to staff
provided by Marathon;

 

11) Participation Agreement Syntroleum/DOE for SFP, dated May 8, 2002 effective
January 1, 2001 with a “flow down” amendment effective December 10, 2002 and an
Amendment #1 dated January 23, 2003 effective February 1, 2003, (the
“Participation Agreement”);

 

12) Syntroleum Corporation Secured Promissory Note for $2.3 million dated
February 1, 2003 and amended on June 9, 2004, March 4, 2005, and May 10, 2006
and Secured Promissory Note for $19 million dated May 8, 2002, as amended
June 9, 2004, March 4, 2005, and May 10, 2006 (the “Secured Promissory Notes”);

 

13) Security Agreement, Financing Statement and Leasehold Mortgage dated
October 16, 2002, filed October 29, 2002 and amended February 1, 2003.

 

14) Letter Agreement among Marathon, Syntroleum, Nexant and Bechtel regarding
confidentiality; November 6, 2002.

 

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15) Technical Service Agreement for Marathon Oil Company, dated January 24,
2003;

 

16) Short Term Sale & Purchase Agreement for Natural Gas between Marathon and
Syntroleum effective September 1, 2003.

 

17) Letter Agreement among Marathon, Syntroleum, and Jenkens & Gilchrist
regarding legal representation on patent matters dated April 1, 2003.

 

18) Letter Agreement, dated November 21, 2003 relating to “Rules of Engagement
for Handling Confidential Information” for the Qatar GTL Project;

 

19) Confidentiality and Non-Compete Agreement, dated January 31, 2004 relating
to due diligence on Syntroleum Catalyst performed by James P. Wick (the “Red-Hat
Agreement”);

 

20) Agreement for Testing and Analytical Services effective November 15, 2005 to
April 30, 2006 for CAER to conduct catalyst testing and provide confidential
results to Marathon;

 

21) Agreement for Testing and Analytical Services between Johnson Matthey,
Marathon, and Syntroleum, effective February, 2006 to April 30, 2006, to test
catalyst.

 

22) Blue Hat Confidentiality Agreement between Marathon, Syntroleum, and Juan
Inga effective from May 26, 2006 until December 31, 2006,

 

23) Business Development Confidentiality Agreement between Marathon and
Syntroleum effective from May 26, 2006 until December 31, 2006, and

 

24) Any and all other agreements, including any agreements that have expired by
their own terms but have provisions that survive such expiration, between
Syntroleum, Marathon, and any Affiliate, employee or former employee of
Marathon.

 

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EXHIBIT B

License Fees

“Barrel” means forty-two (42) gallons of two hundred thirty-one (231) cubic
inches each, measured at sixty degrees Fahrenheit (60°F) and one (1) atmosphere
pressure.

1) For any Licensed Plant (other than those covered by (3) below) that
incorporates material proprietary elements of the Syntroleum process or
equipment included in the Syntroleum Technology, the License Fee shall be:

$0.10/Barrel of Synthetic Crude

For the avoidance of doubt, License Fees are due on a Licensed Plant only if
such Licensed Plant incorporates material proprietary elements of the Syntroleum
process or equipment included in the Syntroleum Technology.

2) For any Licensed Plant (other than a plant covered by (3) below) utilizing
cobalt-based Fischer Tropsch Catalyst for which James P. Wick participated in
the development of such catalysts using Red Hat Information during the Blackout
Period following an election under Section 5.2, the License Fee shall be, in
addition to the License Fee in (1) above:

$0.15/Barrel of Synthetic Crude

3) For any Licensed Plant utilizing coal or petroleum coke as a feedstock and
utilizing Syntroleum Technology, which Licensed Plant is subject to a fully
supported license in accordance with ARTICLE 7, the License Fee shall be the
prevailing license fees charged by Syntroleum for use of Syntroleum Technology
utilizing coal or petroleum coke as a feedstock taking due allowance and
adjustment for the level of support, process guarantees and/or infringement
indemnification provided by Syntroleum. For any Licensed Plant utilizing coal or
petroleum coke as a feedstock and utilizing Syntroleum Technology, which
Licensed Plant is not subject to a fully supported license in accordance with
ARTICLE 7, the License Fee shall be 75% of the prevailing license fees charged
by Syntroleum for use of Syntroleum Technology for coal-to-liquids or
petroleum-coke-to liquids plants taking due allowance and adjustment for whether
or not Syntroleum will be providing any support, process guarantees and/or
infringement indemnification. Notwithstanding (2) above or (5) below, no other
License Fees, including fees for use of Syntroleum catalysts shall be due with
respect to such Licensed Plant.

4) The obligation to pay License Fees on a Licensed Plant shall expire fifteen
(15) years from the start-up date of such Licensed Plant.

5) In the event Marathon desires to use any Syntroleum Fischer Tropsch Catalyst
manufactured by or on behalf of Syntroleum in any Licensed Plant covered by
(1) above, such use shall be subject to a separate agreement to be negotiated
among the Parties.

 

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EXHIBIT C

Syntroleum Technology

“Syntroleum Technology” means all Syntroleum Technical Information, Syntroleum
Patent Rights, Syntroleum Catalyst Information and Syntroleum Catalyst Patent
Rights, but excluding Red-Hat Information.

“Fischer-Tropsch Catalyst” means any cobalt based catalyst for use in a
Fischer-Tropsch Reaction.

“Fischer-Tropsch Reaction” means the catalytic reaction of carbon monoxide and
hydrogen using a cobalt based catalyst, the primary products of which are
hydrocarbons having a carbon number equal to or greater than five (5). A
Fischer-Tropsch Reaction does not include catalytic reactions employed in the
intentional production of methane, oxygenated hydrocarbons and/or ammonia.

“Fischer-Tropsch Reactor” means the reactor in which the Fischer-Tropsch
Reaction occurs.

“FT Conversion Process” means any proprietary process of Syntroleum for the
conversion of:

an intermediate stream containing carbon monoxide and molecular hydrogen that
has been produced from a normally gaseous hydrocarbon feed stream in the
presence of air or oxygen-enriched air,

into a mixture of hydrocarbons that may be a combination of normally gaseous,
liquid, or solid hydrocarbons at atmospheric temperatures and pressures,

such process comprised of reacting the intermediate feed stream in a
Fischer-Tropsch Reactor to produce product stream(s) consisting of any
combination of gaseous, liquid or solid hydrocarbons at atmospheric temperature
and pressure.

The FT Conversion Process includes all associated Syntroleum proprietary
internal processes and technologies such as heat integration, on-stream and
delayed measurement, monitoring, and analysis methods, separation, recycle of
Fischer-Tropsch products within the FT Conversion Process, including catalyst
regeneration, and unreacted Fischer-Tropsch Reactor feed stream recycle.

The FT Conversion Process does not include any technology related to
(i) pre-treatment of the natural gas feedstock to the Syntroleum ATR Process,
(ii) reforming of feedstock to produce the intermediate stream, (iii) processing
and clean-up of the intermediate feed stream (syngas), or processing a stream
emanating from the outlet flange of a Fischer-Tropsch conversion process for a
purpose other than that defined above.

“Reactor Information” means all information, including but not limited to data,
processes, plans, specifications, flow sheets, designs, and drawings, relating
to the internal

 

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design or functions, including, without limitation, tube count, tube size and
configuration and catalyst volume, relating to the Syntroleum autothermal
reformer, and/or Syntroleum Fischer-Tropsch Reactors.

“Syntroleum ATR Process” means Syntroleum’s proprietary process for the
autothermal reforming of a feed stream consisting substantially of gaseous
hydrocarbons in the presence of air or enriched air to create an intermediate
feed stream containing carbon monoxide and molecular hydrogen. The Syntroleum
ATR Process includes any Syntroleum proprietary technology related to
pre-treatment of the natural gas feedstock to the Syntroleum ATR Process.

“Syntroleum Catalyst Information” means, without limitation, all unpatented
information relating to any catalyst raw material sources and specifications,
conditioning procedure, start-up procedure, process operating techniques and
apparatus, regeneration procedure, performance, and/or manufacturing
specifications and methods proprietary to Syntroleum or acquired by Syntroleum
that is useful in or otherwise relates to the practice of the Syntroleum ATR
Process and the FT Conversion Process (including, without limitation,
autothermal reforming catalysts and Fischer-Tropsch Catalysts).

“Syntroleum Catalyst Patent Rights” means all worldwide rights with respect to
patents and patent applications to the extent that the claims cover features or
aspects of catalysts proprietary to Syntroleum and useable in the Syntroleum ATR
Process or FT Conversion Process (including, without limitation, autothermal
reforming catalysts and Fischer-Tropsch Catalysts) and expressly excluding any
process operating techniques or apparatus or methods for manufacturing such
catalysts, which are owned or acquired by, or licensed to, Syntroleum; in each
case to the extent that, and subject to the terms and conditions, including the
obligation to account to and/or make payments to others, under which Syntroleum
has the right to grant licenses, immunities or licensing rights.

“Syntroleum Patent Rights” means all worldwide rights with respect to patents
and patent applications to the extent that the claims cover features or aspects
of the Syntroleum ATR Process, the FT Conversion Process and/or Reactor
Information proprietary to Syntroleum (including, without limitation, any
operating techniques and apparatus but expressly excluding Syntroleum Catalyst
Patent Rights) that are owned or acquired by, or licensed to, Syntroleum or are
based on inventions conceived by Syntroleum during the term of this Agreement;
in each case to the extent that, and subject to the terms and conditions,
including the obligation to account to and/or make payments to others, under
which Syntroleum has the right to grant licenses, immunities or licensing
rights.

“Syntroleum Technical Information” means all unpatented information owned or
acquired by, or licensed to, Syntroleum relating to the Syntroleum ATR Process,
the FT Conversion Process and/or Reactor Information (including, without
limitation, operating techniques and apparatus for carrying out the Syntroleum
ATR Process and/or the FT Conversion Process); in each case to the extent that,
and subject to, the terms and conditions, including the obligation to account to
and/or make payments to others, under which Syntroleum has the right to disclose
and grant rights to others.

 

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EXHIBIT D

Pre-Feasibility Study

Contents

Table of Contents

List of Figures

List of Tables

 

1. EXECUTIVE SUMMARY

 

2. PROJECT SCOPE

 

3. LOCATION

 

  3.1. Geography

 

  3.2. Hydrocarbon Feedstock Reserves

 

4. HYDROCARBON FEEDSTOCK SUPPLY AND TRANSPORTATION

 

5. SITE SPECIFICS

 

6. PLANT DESCRIPTION

 

  6.1. Process Description

 

  6.1.1. Inside Battery Limits (ISBL)

 

  6.1.2. Outside Battery Limits (OSBL) [Syntroleum scope of work limited to ISBL
only]

 

  6.2. Overall Material Balance

 

  6.3. Area Plot Plan

 

7. PLANT PRODUCTS

 

8. CAPITAL AND OPERATING COSTS (+/- 40%)

 

9. SCHEDULE

 

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EXHIBIT E

COMPETITORS

Competitors means:

 

  1. British Petroleum;

 

  2. Conoco Phillips;

 

  3. ENI-Agip-IFP (together or separately);

 

  4. ExxonMobil;

 

  5. Japan Oil, Gas and Metals National Corp.(JOGMEC)-Nippon Oil Corp.-Nippon
Steel Corp.-Japan Petroleum Exploration Co.-Inpex Corp.-Cosmo Oil Co.-Chiyoda
Corp. (together or separately);

 

  6. JOGMEC- Osaka Gas Co.-JGC Corp. (together or separately);

 

  7. Rentech;

 

  8. Sasol (including the Sasol Chevron joint venture);

 

  9. Shell;

 

  10. Statoil/Petro SA (together or separately);

 

  11. Total SA;

 

  12. University of West Virginia;

 

  13. World GTL; and

 

  14. Any other company (existing now or arising in the future) that acquires a
controlling interest in one or more of the foregoing companies on this list.

 

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