Document:

Exhibit 10.02

Exhibit 10.2

SETTLEMENT AND LICENSE AGREEMENT

This SETTLEMENT AND LICENSE AGREEMENT (“Agreement”), effective as of the Effective Date (as
defined below), is made by and among LecTec Corporation, a Minnesota corporation having its
principal place of business at 1407 S. Kings Highway, Texarkana, TX 75501 (“LecTec”) and
Endo Pharmaceuticals Inc., a Delaware corporation having its principal place of business at 100
Endo Boulevard, Chadds Ford, PA 19317 (“Endo”). LecTec and Endo are hereinafter
collectively referred to as the “Parties”, and each individually as a “Party”.

RECITALS

WHEREAS, LecTec is the owner of United States Patent Nos. 5,536,263 and 5,741,510 (the
“Patents-In-Suit”);

WHEREAS, LecTec and Endo are litigants in a civil action pending in the United States District
Court for the Eastern District of Texas, captioned LecTec Corporation v. Chattem, Inc., Endo
Pharmaceuticals Inc., et al, Civil Action No. 5:08cv130 (DF) (the “Texas Litigation”);

WHEREAS, LecTec and Endo recognize the uncertainty of the outcome of disputed, complex
litigation such as the Texas Litigation, as well as the extended time it could take to resolve
matters by litigation, and have independently concluded that their respective interests are best
served by compromising and thereby terminating and concluding the Texas Litigation and all disputes
between them.

NOW, THEREFORE, in consideration of the covenants, conditions and obligations expressed
herein, and intending to be legally bound thereby, the Parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1. Definitions. The following terms will have the meanings provided below:

“Affiliate” shall mean, with respect to any entity, any other entity that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is under common
control with such first entity. The term “control” (including its correlative meanings “controlled
by” and “under common control with”) shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).

“Agreement” has the meaning specified in the introductory paragraph hereof.

“Covenant Not To Sue” has the meaning specified in Section 3.2.

 

 

 

“Covenant Patents” means (a) any and all United States and foreign patents and patent
applications owned or controlled by LecTec or its Affiliates as of the Effective Date, (b) all
continuations, continuations-in-part and divisionals thereof, (c) any United States patents
resulting from the reissue or reexamination of any of the patents and applications set forth in
clauses (a) or (b) above, and (d) any United States and foreign patents or patent applications
claiming common priority with any of the patents or applications set forth in clauses (a), (b) or
(c) above (whether claiming priority from such patents and patent applications or forming the basis
of priority for such patents and patent applications), in each case including all extensions
thereof.

“Covenant Term” has the meaning specified in Section 3.3(b).

“Dismissal Date” means the date on which the Texas Litigation is dismissed against
Endo pursuant to the Stipulation of Dismissal to be filed by the Parties pursuant to this
Agreement.

“Effective Date” means the latest date on which each Party has provided to the other a
fully executed counterpart of this Agreement.

“Endo” has the meaning specified in the introductory paragraph hereof.

“Endo Products” means any and all products offered for sale or sold by Endo or any of
its Affiliates at any time on or prior to the Effective Date.

“Endo Releasing Parties” has the meaning specified in Section 2.2(b).

“Field of Use” means any and all uses in connection with any and all prescription pain
medicines and treatments, in any dosage form, for humans or animals.

“LecTec” has the meaning specified in the introductory paragraph hereof.

“LecTec Releasing Parties” has the meaning specified in Section 2.2(a).

“License” has the meaning specified in Section 3.1.

“Licensed Patents” means the (a) Patents-In-Suit, (b) any continuations,
continuations-in-part or divisionals of the Patents-In-Suit and any United States patents resulting
from any reissue or reexamination of the Patents-In-Suit, (c) any United States or foreign patents
or patent applications claiming common priority to any of the patents or patent applications set
forth in clauses (a) and (b) above (whether claiming priority from such patents and patent
applications or forming the basis of priority for such patents and patent applications), and (d)
any foreign counterparts to any of the patents and patent applications set forth in clauses (a),
(b) and (c) above, in each case including all extensions thereof.

“License Fee” has the meaning set forth in Section 3.4.

“License Term” has the meaning specified in Section 3.3(a).

 

Page 2 of 18

 

“Orange Book” has the meaning specified in Section 3.5.

“Party” and “Parties” have the meanings specified in the introductory
paragraph hereof.

“Patents-In-Suit” has the meaning set forth in the recitals.

“Person” means any person, corporation, partnership, joint venture, association,
joint-stock company, trust or unincorporated organization.

“Texas Litigation” has the meaning set forth in the recitals.

“Third Party” means any Person other than Endo and LecTec and their respective
Affiliates.

ARTICLE II.

SETTLEMENT; DISMISSAL OF ACTION; RELEASE

Section 2.1. Required Filings. On the Effective Date, LecTec and Endo will execute
and deliver to the other Party, or cause their respective attorneys of record in the Texas
Litigation to execute and deliver to the other Party, the Stipulation of Dismissal attached hereto
as Appendix A, pursuant to which the Parties will stipulate to the dismissal of the Texas
Litigation with prejudice and without costs. Promptly after the Effective Date, the attorneys for
Endo and LecTec shall submit such executed Stipulation of Dismissal to the court in the Texas
Litigation. Within sixty (60) days of the filing of the Stipulation of Dismissal, LecTec will
comply with Section 23 of the Agreed Protective Order with respect to all Endo Confidential
Discovery Material (as defined in the Protective Order), including without limitation by returning
to Endo (rather than destroying) all of Endo’s production documents received by LecTec.

Section 2.2. Releases. (a) Effective on the Dismissal Date, LecTec, on behalf of
itself and its past and present Affiliates and its and their respective successors and assigns
(collectively, the “LecTec Releasing Parties”), does hereby release and forever discharge
Endo and its respective past, present and future Affiliates and their respective successors and
assigns and their respective past, present and future employees, officers, directors, principals,
agents, attorneys, accountants, shareholders, licensees, sublicensees, customers, suppliers,
contractors, importers, manufacturers, distributors, insurers, or any heirs, administrators,
executors, predecessors, successors, affiliates, or assigns of the foregoing, from any and all
claims, rights, causes of action, counterclaims, defenses, damages and liabilities whatsoever,
whether based on federal, state, local, statutory or common law or any other law, rule or
regulation, whether known or unknown, whether accrued and existing or which may arise or accrue
after the date hereof, which (i) relate to any products sold or offered for sale by Endo and (ii)
either (a) were asserted or could have been asserted in the Texas Litigation by any LecTec
Releasing Party, or (b) in any way relate to, arise from, or are in any manner connected to the
Patents-In-Suit.

 

Page 3 of 18

 

(b) Effective on the Dismissal Date, Endo, on behalf of itself and its past and present
Affiliates and its and their respective successors and assigns
(collectively, the “Endo Releasing Parties”), does hereby release and forever
discharge LecTec and its respective past, present and future Affiliates and their respective
successors and assigns and their respective past, present and future employees, officers,
directors, principals, agents, attorneys, accountants, shareholders, licensees, sublicensees,
customers, suppliers, contractors, importers, manufacturers, distributors, insurers, or any heirs,
administrators, executors, predecessors, successors, affiliates, or assigns of the foregoing, from
any and all claims, rights, causes of action, counterclaims, defenses, damages and liabilities
whatsoever, whether based on federal, state, local, statutory or common law or any other law, rule
or regulation, whether known or unknown, whether accrued and existing or which may arise or accrue
after the date hereof, which were asserted or could have been asserted in the Texas Litigation by
any Endo Releasing Party which relate to the Patents-in-Suit or any products sold or offered for
sale by LecTec.

(c) LecTec and Endo agree and acknowledge that this Agreement is the result of a compromise
and shall never be construed as any admission by either of them of any liability, wrongdoing, or
responsibility on its part.

Section 2.3. Costs; Dismissals. All dismissals of all claims and counterclaims
specified in Section 2.1 will be without costs to either Party and will include an
irrevocable release by each Party, on behalf of itself and its Affiliates, of all claims for
attorneys’ fees. Each Party will bear its own costs in connection with entering into this
Agreement and the negotiation and submission of the dismissals specified in Section 2.1.

ARTICLE III.

LICENSE AND COVENANT NOT TO SUE

Section 3.1. License. LecTec hereby grants to Endo, and Endo hereby accepts, a
perpetual, irrevocable, non-terminable, fully paid-up, royalty-free and worldwide license (the
“License”), under the Licensed Patents, during the Licensed Term, to develop, make, have
made, use, sell, offer to sell, market, distribute, import and otherwise exploit any and all
current and future products, services, methods and processes. The License shall be exclusive to
Endo and sublicenseable by Endo within the Field of Use. The License shall be non-exclusive and
non-sublicenseable as to all fields outside of the Field of Use, except that Endo may grant
sublicenses outside of the Field of Use to manufacturers for the sole and limited purpose of making
Endo products and selling/importing such Endo products to Endo, which Endo ultimately re-sells
under this License. LecTec retains no rights under the Licensed Patents in the Field of Use. Endo
shall have the exclusive right to grant sublicenses under the License within the Field of Use (but
not outside the Field of Use) in its sole discretion.

Section 3.2. Covenant Not To Sue. During the Covenant Term, LecTec, on behalf of
itself and its Affiliates and their respective successors and assigns (including any successors and
assigns of the Covenant Patents), covenant that they will not sue, assert any claim or counterclaim
against, or otherwise participate in any action or proceeding against Endo or any of its Affiliates
or any of their respective past, present and future employees, officers, directors, principals,
agents, attorneys, accountants shareholders, licensees, sublicensees, customers, suppliers,
contractors, importers,
manufacturers, distributors, insurers, or any heirs, administrators, executors, predecessors,
successors, affiliates, or assigns of the foregoing, or cause, authorize or assist any Person to do
any of the foregoing, in each case relating to any Endo Products with respect to any Covenant
Patents anywhere in the world (the “Covenant Not to Sue”).

 

Page 4 of 18

 

Section 3.3. License Term; Covenant Term. (a) The term of the License (“License
Term”) will commence on the Effective Date and will continue until the expiration of the last
to expire claims of the Licensed Patents.

(b) The term of the Covenant Not To Sue (“Covenant Term”) will commence on the
Effective Date and will continue until the expiration of the last to expire claims of the Covenant
Patents.

Section 3.4. License Fee. Conditioned upon the Dismissal Date having occurred, Endo
shall pay to LecTec a one-time, non-refundable license fee equal to $23,000,000 (twenty three
million dollars) on or before December 15, 2009 (such amount, the “License Fee”), by wire
transfer of immediately available funds to the following account:

	 	 	 
	Receiving Bank Name:

	 	 National City Bank of Michigan/Illinois
	 

	 	 755 West Big Beaver Road
	 

	 	 Troy, MI 48084
	 
	 	 
	Receiving Bank ABA#

	 	 072000915
	 
	 	 
	Beneficiary Account Name:

	 	 RADER, FISHMAN & GRAUER PLLC
	 
	 	 
	Beneficiary Account Number:

	 	 
	 
	 	 
	Swift:

	 	 

It is hereby agreed that the foregoing payment is accepted by LecTec as the sole consideration for
the execution of this Agreement and the License, covenants and releases set forth herein. LecTec
shall be solely responsible for any and all taxes, duties, levies or fees charged or owing with
respect to the License Fee. Endo agrees that the License Fee is non-refundable, including in the
event that any of the Licensed Patents are subsequently adjudicated to be invalid or unenforceable.

Section 3.5. Patent Listing. If requested by Endo, LecTec shall reasonably cooperate
in effecting the listing of the Patents-In-Suit on the U.S. Food and Drug Administration’s Orange
Book: Approved Drug Products with Therapeutic Equivalence Evaluations or any successor thereto (the
“Orange Book”). Any such listing shall be at Endo’s sole discretion.

Section 3.6. Assignment. Neither LecTec nor any of its Affiliates may assign or
transfer (whether by operation of law, contract or otherwise) the Licensed Patents or Covenant
Patents without first requiring the proposed assignee or transferee to acknowledge and agree in
writing to the terms and conditions of this Agreement,
including the License and Covenant Not To Sue, relating to the Licensed Patents and Covenant
Patents, a copy of such written agreement to be promptly provided to Endo.

 

Page 5 of 18

 

Section 3.7. Bankruptcy Rights. All rights and licenses granted under or pursuant to
this Agreement by LecTec are, and shall otherwise be deemed to be, for purposes of Section 365(n)
of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section
101 of the U.S. Bankruptcy Code. The Parties agree that Endo, as a licensee of intellectual
property under this Agreement, shall retain and may fully exercise all of its rights and elections
under the U.S. Bankruptcy Code. The Parties further agree that, in the event of a rejection of
this Agreement by LecTec in any bankruptcy proceeding by or against such Party under the U.S.
Bankruptcy Code, LecTec shall not interfere with Endo’s rights to intellectual property and all
embodiments of intellectual property, and shall assist and not interfere with Endo in obtaining
intellectual property and all embodiments of intellectual property from another entity. The term
“embodiments” of intellectual property includes all tangible, intangible, electronic or other
embodiments of rights and licenses hereunder, including all compounds and products embodying
intellectual property, regulatory filings and related rights, and Licensed Patents and Covenant
Patents.

ARTICLE IV.

MAINTENANCE; ENFORCEMENT

Section 4.1. Maintenance.

(a) LecTec shall maintain the Licensed Patents during the term of this Agreement. LecTec
shall keep Endo apprised of the continuing maintenance of the Licensed Patents. Payment of all
fees and costs relating to the maintenance of the Licensed Patents shall be the sole responsibility
of LecTec. LecTec promptly shall provide to Endo copies of all patent-related documents that it
files with any patent office with respect to the Licensed Patents. In the event LecTec decides not
to continue to maintain any United States or foreign patent comprised within the Licensed Patents,
LecTec timely shall notify Endo in writing of such decision so that Endo may continue said
maintenance of such Licensed Patents at its own expense. In such case, such Licensed Patents shall
be assigned, and hereby are assigned, to Endo.

(b) Enforcement. Endo shall have the sole and exclusive right to prosecute, at its
own expense and utilizing counsel of its choice, any infringement of the Licensed Patents within
the Field of Use, and to control any lawsuits or other actions relating thereto.

(i) The total cost of any such action commenced by Endo shall be borne by Endo. Any damages
or settlement payments resulting from any such action commenced by Endo, whether in an out-of-court
settlement or through legal adjudication of such action, shall be retained solely by Endo.

(ii) In any infringement action Endo may institute pursuant to this Section 4.1(b),
LecTec shall, at the request of Endo, cooperate in all respects and, to the
extent possible, have its employees testify when requested and make available relevant
records, papers, information, samples, specimens, and the like. Endo shall reimburse LecTec for
its reasonable out-of-pocket costs and expenses incurred in providing such cooperation.

 

Page 6 of 18

 

Section 4.2. Cooperation. In furtherance of Section 4.1, LecTec agrees, if
necessary under the applicable law to be legally joined as a party in any suit, action or
proceeding that is the subject of such Sections, at the expense of Endo, and Endo shall have the
right to control and settle any such litigation. LecTec shall have no right to require Endo to
join in any suit.

ARTICLE V.

CONFIDENTIALITY

Section 5.1. The Parties shall issue press releases in the form attached as Appendix B to this
Agreement on or after the Effective Date. No Party may make any press release or public disclosure
(written or oral) concerning the existence of, or the transactions contemplated by, this Agreement,
prior to issuing that press release. The Parties shall be permitted to make any filings required
by the Securities and Exchange Commission.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

Section 6.1. Representations by Endo. Endo hereby represents and warrants to LecTec
as follows:

(a) it has the corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance of this Agreement
has been duly and validly authorized by it. Upon execution and delivery of this Agreement by it,
this Agreement will constitute a legal, valid and binding agreement, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors’ rights generally and other general equitable principles
which may limit the right to obtain certain remedies;

(b) neither the execution and delivery of this Agreement, nor consummation of the transactions
contemplated herein requires it to obtain any permits, authorizations or consents from any
governmental body or from any other Person other than such permits, authorizations or consents as
it has already obtained; and

(c) it has not assigned or otherwise transferred to any Person any of its claims, rights,
causes of action, counterclaims or defenses that are covered by the release granted under
Section 2.2(b).

 

Page 7 of 18

 

Section 6.2. Representations by LecTec. LecTec represents and warrants to Endo as
follows:

(a) It has the corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance of this Agreement
has been duly and validly authorized by it. Upon execution and delivery of this Agreement by
LecTec, this Agreement will constitute a legal, valid and binding agreement of LecTec, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforceability of creditors’ rights generally and other general
equitable principles which may limit the right to obtain certain remedies;

(b) neither the execution and delivery of this Agreement nor consummation of the transactions
contemplated herein requires LecTec to obtain any permits, authorizations or consents from any
governmental body or from any other Person;

(c) LecTec has not assigned or otherwise transferred to any Person any of its claims, rights,
causes of action, counterclaims or defenses that are covered by the release granted under
Section 2.2(a);

(d) Subject to its agreements with the Mentholatum Company and Novartis, LecTec exclusively
owns all right, title, and interest in and to the Licensed Patents, including all right, title, and
interest to sue for infringement thereof, and has the right and ability to grant the License and
Covenant Not To Sue, in each case free and clear of any liens, encumbrances, claims and charges.
LecTec has obtained and properly recorded all assignment agreements as necessary to fully perfect
its rights and title in the Licensed Patents in accordance with governing law in each respective
jurisdiction. LecTec is the owner of record with the U.S. Patent and Trademark Office and all
other applicable patent offices of the Licensed Patents;

(e) There is no obligation imposed on LecTec or any prior owner to license any of the Licensed
Patents on particular terms or conditions. Other than the rights granted to the Mentholatum
Company and Novartis in their respective agreements, no licenses or other rights under the Licensed
Patents have been granted by LecTec, any prior owners, or inventors;

(f) LecTec is not subject to any covenant not to sue or similar restrictions on its
enforcement or enjoyment of the Licensed Patents in the Field of Use as a result of any prior
transaction related to the Licensed Patents. The Licensed Patents are not subject to any
governmental or court order or decision of any kind. None of the Licensed Patents have been
created, developed or authored under any contract or other understanding with any governmental
entity or educational institution or utilizing the funding, facilities or resources of any
governmental entity or educational institution. LecTec has not invited any third party to enter
into a license under any of the Licensed Patents within the Field of Use;

 

Page 8 of 18

 

(g) None of the Licensed Patents has ever been found invalid, unpatentable, or unenforceable
for any reason in any administrative, arbitration, judicial or other proceeding. The Licensed
Patents are in good standing and have not expired,
been cancelled or abandoned. If any of the Licensed Patents are terminally disclaimed to
another patent or patent application, all patents and patent applications subject to such terminal
disclaimer are included in this transaction as Licensed Patents;

(h) All maintenance fees, annuities, and the like due or payable on the Licensed Patents have
been timely paid. For the avoidance of doubt, such timely payment includes payment of any
maintenance fees for which the fee is payable (e.g., the fee payment window opens) even if the
surcharge date or final deadline for payment of such fee would be in the future; and

(i) No representation or warranty made by LecTec in this Agreement contains any untrue
statement of a material fact or omits to state any material fact necessary to make any such
representation or warranty not misleading to a prospective buyer of the Licensed Patents and other
rights to be transferred under this Agreement seeking full information as to the Licensed Patents
and such other rights.

ARTICLE VII.

TERMINATION

Section 7.1. General. The Parties shall have the rights and remedies with respect to
the termination and/or enforcement of this Agreement which are set forth in this Article
VII.

Section 7.2. Term. The term of this Agreement shall commence on the Effective Date,
and unless earlier terminated pursuant to Section 7.3, shall remain in force through the
later of the License Term and the Covenant Term.

ARTICLE VIII.

MISCELLANEOUS

Section 8.1. Governing Law; Jurisdiction. The validity and interpretation of this
Agreement and the legal relations of the Parties to it will be governed exclusively by the internal
laws, and not the law of conflicts, of the Commonwealth of Pennsylvania. Each of the Parties
agrees to the non-exclusive jurisdiction of any state or federal court located in the Commonwealth
of Pennsylvania with respect to any action or dispute arising under or relating to this Agreement,
and waives personal service of any and all process upon it, and consents that all services of
process be made by registered mail, directed to it or him at its or his address as set forth in
Section 8.2, and service so made shall be deemed to be completed when received. Each of
the Parties waives any objection based on forum non conveniens and waives any objection to venue of
any action instituted hereunder. Nothing in this Section 8.1 shall affect the right of any
Party to serve legal process in any other manner permitted by law.

 

Page 9 of 18

 

Section 8.2. Notices. All notices, requests and other communications hereunder will
be in writing, will be addressed to the receiving Party’s address set forth below or to such other
address as a Party may designate by notice hereunder, and will be either (a) delivered by hand, (b)
made by facsimile transmission (to be followed with written confirmation by the delivering Party),
(c) sent by private courier service
providing evidence of receipt, or (d) sent by registered or certified mail, return receipt
requested, postage prepaid. The addresses and other contact information for the Parties are as
follows:

	 	 	 
	For Endo:

	 	Endo Pharmaceuticals Inc.
	 

	 	100 Endo Boulevard
	 

	 	Chadds Ford, PA 19317
	 
	 	 
	with a copy to:

	 	General Counsel
	 
	 	 
	For LecTec:

	 	Judd Berlin
	 

	 	LecTec Corporation

1407 South Kings Highway

Texarkana, Texas 75501
	 
	 	 
	with a copy to:

	 	R. Terrance Rader
	 

	 	Thomas E. Bejin
	 

	 	Glenn E. Forbis
	 

	 	RADER, FISHMAN & GRAUER PLLC
	 

	 	39533 Woodward Avenue, Suite 140
	 

	 	Bloomfield Hills, MI 48304

or to such other addresses as will have been subsequently furnished by written notice to the other
Parties.

Section 8.3. Entire Agreement; Waiver. This Agreement, including the Appendices
attached hereto, contains the entire agreement between the Parties with respect to the subject
matter hereof and supersedes all prior drafts or understandings, including without limitation the
Term Sheet executed November 6, 2009. No change, modification, amendment or waiver of any
obligation, term or provision contained herein will be valid or enforceable unless the same is
reduced to writing and signed by a duly authorized representative of each of the Parties to be
bound hereby. The waiver by a Party to this Agreement of a breach of any provision set forth
herein or of any right contained herein will not operate as or be construed as a continuing waiver
or a waiver of any subsequent breach or right granted herein.

Section 8.4. Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed be an original, but all of which together will constitute one agreement.

Section 8.5. No Third Party Beneficiaries. Except as expressly provided herein,
nothing is intended or will be construed to confer upon any Person other than the Parties hereto
and their successors or assigns, any rights or remedies under or by reason of this Agreement.

 

Page 10 of 18

 

Section 8.6. Assignment. This Agreement will be binding upon and inure to the benefit
of the Parties and their permitted successors and assigns. This Agreement and
the rights granted herein may not be assigned or transferred (whether by contract, operation
of law or otherwise) by any Party without the prior written consent of the other Parties,
provided that this Agreement shall be assignable by a Party in connection with the sale of
all or substantially all of the assets of the business of such Party to which this Agreement
relates, and provided further that (a) the Party whose assets are being sold
notifies the other Parties of any such assignment of this Agreement in writing (including the
identity of the assignee) and (b) the purchaser of those assets provides written confirmation that
it agrees to assume all of the assigning Party’s obligations hereunder. The covenants, rights and
obligations of each Party under this Agreement shall remain binding upon such Party notwithstanding
any assignment or transfer of this Agreement by such Party as permitted by this Section
8.6, and also shall inure to the benefit of and be binding upon any permitted assignee or
transferee of this Agreement.

Section 8.7. Limitation of Liability. In no event shall either party be liable to the
other Party for any indirect, incidental, special, punitive or consequential damages of any kind
arising out of or in connection with this Agreement.

Section 8.8. Expenses. Each Party will pay its own expenses incurred in connection
with its negotiation of this Agreement and the consummation of the transactions contemplated
hereby.

Section 8.9. Headings. The headings contained in this Agreement are for convenience
of reference only and will not affect the meaning or interpretation of this Agreement.

Section 8.10. Rules of Construction. (a) The definitions of the terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall”. The word “any” shall mean “any and all” unless otherwise clearly indicated by context.
“$” as used in this Agreement means the lawful currency of the United States of America. Where
either Party’s consent is required hereunder, except as otherwise specified herein, such Party’s
consent may be granted or withheld in such Party’s sole discretion.

(b) Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set forth herein or
therein), (ii) any reference to any laws herein shall be construed as referring to such laws as
from time to time enacted, repealed or amended, (iii) any reference herein to any person shall be
construed to include the person’s successors and assigns, (iv) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, and (v) all references herein to Articles,
Sections
or Appendices, unless otherwise specifically provided, shall be construed to refer to
Articles, Sections and Appendices of this Agreement.

 

Page 11 of 18

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first above written.

	 	 	 	 	 	 	 
	ENDO PHARMACEUTICALS INC.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ David Holveck	 	 
	 	 	 	 	 
	 

	 	Name and Title:
	 	David Holveck, Chief Executive Officer	 	 
	Date: November 11, 2009	 	 
	 
	 	 	 	 	 	 
	LECTEC CORPORATION	 	 
	 
	By:	 	/s/ Judd Berlin	 	 
	 	 	 	 	 
	 

	 	Name and Title:
	 	Judd Berlin, Chief Executive Officer and	 	 
	 

	 	 	 	Chairman of Board of Directors	 	 
	Date: November 11, 2009	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ C. Andrew Rollwagon	 	 
	 	 	 	 	 
	 

	 	Name and Title:
	 	C. Andrew Rollwagon, Member of Board of Directors	 	 
	Date: November 11, 2009	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Daniel Sigg	 	 
	 	 	 	 	 
	 

	 	Name and Title:
	 	Daniel Sigg, Member of Board of Directors	 	 
	Date: November 11, 2009	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Sanford Brink	 	 
	 	 	 	 	 
	 

	 	Name and Title:
	 	Sanford Brink, Member of Board of Directors	 	 
	Date: November 11, 2009	 	 

 

Page 12 of 18

 

APPENDIX A

STIPULATION OF DISMISSAL

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

TEXARKANA DIVISION

	 	 	 	 	 
	LECTEC CORPORATION

	 	§	 	 
	 

	 	§	 	 
	Plaintiff,

	 	§	 	 
	 

	 	§
	 	No. 5:08cv130 (DF)
	v.

	 	§	 	 
	 

	 	§
	 	JURY
	CHATTEM, INC.; ENDO

	 	§	 	 
	PHARMACEUTICALS, INC.

	 	§	 	 
	JOHNSON & JOHNSON CONSUMER

	 	§	 	 
	COMPANY, INC.; THE MENTHOLATUM

	 	§	 	 
	COMPANY, INC. and PRINCE OF PEACE

	 	§	 	 
	ENTERPRISES, INC.,

	 	§	 	 
	 

	 	§	 	 
	Defendants.

	 	§	 	 

WHEREAS, plaintiff LecTec Corporation (“Plaintiff”) is the assignee and owner of United
States Patent Nos. 5,536,263 and 5,741,510 (the “Patents-In-Suit”);

WHEREAS, Plaintiff and Endo Pharmaceuticals, Inc. (“Defendant”) are parties to litigation
relating to the Patents-In-Suit; and

WHEREAS, Plaintiff and Defendant have entered into a Settlement and License Agreement, dated as of
November
 _____, 2009 (“Settlement Agreement”), pursuant to which the parties have resolved
the above-referenced actions and Plaintiff has granted to Defendant an exclusive license under the
Patents-In-Suit.

 

Page 13 of 18

 

NOW, THEREFORE, Plaintiff and Defendant stipulate that:

	 	1.	 	All claims and counterclaims in the above-referenced actions are dismissed with
prejudice.
	 
	 	2.	 	Each party shall bear its own costs, expenses and attorneys’ fees in connection with
the above-referenced actions.
	 
	 	3.	 	The parties waive any right of appeal from this Stipulation of Dismissal.

IT IS SO ORDERED, this                      day of November, 2009.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Hon. David J. Folsom, U.S.D.J. 	 

Stipulated as to form and entry:

	 	 	 	 	 	 	 	 	 	 	 
	Dechert llp	 	 	 	Rader, Fishman & Grauer PLLC	 	 
	Attorneys for Defendant and Counterclaim Plaintiff	 	 	 	Attorneys for Plaintiff LecTec Corporation	 	 
	Endo Pharmaceuticals, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Robert D. Rhoad
	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Robert D. Rhoad	 	 	 	R. Terrance Rader	 	 
	902 Carnegie Center	 	 	 	Thomas E. Bejin	 	 
	Suite 500	 	 	 	Glenn E. Forbis	 	 
	Princeton, NJ 08540	 	 	 	39533 Woodward Ave., Suite 140	 	 
	Telephone: (609) 955-3200	 	 	 	Bloomfield Hills, MI 48304	 	 
	 	 	 	 	 	 	Telephone: (248) 594-0636	 	 

Martin J. Black

DECHERT LLP

Cira Centre

2929 Arch Street

Philedelphia, PA 19104-2808

Telephone: (215) 994-4000

 

Page 14 of 18

 

APPENDIX B

FORM OF PRESS RELEASES

ENDO PRESS RELEASE:

ENDO PHARMACEUTICALS AND LECTEC SETTLE PATENT DISPUTE

CHADDS FORD, Pa., Nov. 11, 2009 — Endo Pharmaceuticals (Nasdaq: ENDP) announced today that it has
reached a settlement with LecTec Corporation on outstanding patent litigation related to LecTec’s
U.S. Patent Nos. 5,536,263 and 5,741,510.

Endo Pharmaceuticals has agreed to make a one-time, $23 million payment for the exclusive license
to these two patents for use in the field of prescription pain medicines and treatment. “We are
pleased to add these patents to our IP inventory especially as they relate to Lidoderm®,” said
Caroline Manogue, executive vice president and chief legal officer of Endo Pharmaceuticals.

About Endo

Endo Pharmaceuticals is a specialty pharmaceutical company engaged in the research, development,
sale and marketing of branded and generic prescription pharmaceuticals used to treat and manage
pain, prostate cancer and the early onset of puberty in children, or central precocious puberty
(CPP). Its products include LIDODERM®, a topical patch to relieve the pain of
postherpetic neuralgia; Percocet® and Percodan® tablets for the relief of
moderate-to-moderately severe pain; FROVA® tablets for the acute treatment of migraine
attacks with or without aura in adults; OPANA® tablets for the relief of
moderate-to-severe acute pain where the use of an opioid is appropriate; OPANA® ER
tablets for the relief of moderate-to-severe pain in patients requiring continuous,
around-the-clock opioid treatment for an extended period of time; Voltaren® Gel, which
is owned and licensed by Novartis AG, a nonsteroidal anti-inflammatory drug indicated for the
relief of the pain of osteoarthritis of joints amenable to topical treatment, such as those of the
hands and the knees; VANTAS® for the palliative treatment of advanced prostate cancer;
SUPPRELIN® LA for the treatment of early onset puberty in children; and VALSTARTM for the
treatment of BCG-refractory carcinoma in situ (CIS) of the urinary bladder in patients for whom
immediate cystectomy would be associated with unacceptable medical risks. The company markets its
branded pharmaceutical products to physicians in pain management, urology, endocrinology, oncology,
neurology, surgery
and primary care. More information, including this and past press releases of Endo Pharmaceuticals,
is available at www.endo.com.

 

Page 15 of 18

 

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 regarding, among other things, the company’s financial position,
results of operations, market position, product development and business strategy, as well as
estimates of future net sales, future expenses, future net income and future earnings per share. 
Statements including words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,”
“plan,” “will,” “may,” “intend,” “guidance” or similar expressions are forward-looking statements. 
Because these statements reflect our current views, expectations and beliefs concerning future
events, these forward-looking statements involve risks and uncertainties. Investors should note
that many factors could affect our future financial results and could cause our actual results to
differ materially from those expressed in forward-looking statements contained in this press
release. These factors include, but are not limited to: the possibility that the acquisition of
Indevus is not complementary to Endo; the inherent uncertainty of the timing and success of, and
expense associated with, research, development, regulatory approval and commercialization of our
products and pipeline products; competition in our industry, including for branded and generic
products, and in connection with our acquisition of rights to assets, including intellectual
property; government regulation of the pharmaceutical industry; our dependence on a small number of
products and on outside manufacturers for the manufacture of our products; our dependence on third
parties to supply raw materials and to provide services for certain core aspects of our business;
new regulatory action or lawsuits relating to our use of controlled substances in many of our core
products; our exposure to product liability claims and product recalls and the possibility that we
may not be able to adequately insure ourselves; our ability to protect our proprietary technology;
our ability to successfully implement our in-licensing and acquisition strategy; the availability
of third-party reimbursement for our products; the outcome of any pending or future litigation or
claims by the government; our dependence on sales to a limited number of large pharmacy chains and
wholesale drug distributors for a large portion of our total net sales; a determination by a
regulatory agency that we are engaging in inappropriate sales or marketing activities, including
promoting the “off-label” use of our products; the loss of branded product exclusivity periods and
related intellectual property; and exposure to securities that are subject to market risk including
auction-rate securities the market for which is currently illiquid; and other risks and
uncertainties, including those detailed from time to time in our periodic reports filed with the
Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on
Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A,
RISK FACTORS” in our annual report on Form 10-K for the year ended December 31, 2008, which was
filed with the Securities and Exchange Commission on March 2, 2009. The forward-looking statements
in this press release and on the related conference call are qualified by these risk factors.
These are factors that, individually or in the aggregate, we think could cause our actual results
to differ materially from expected and historical results. We assume no obligation to publicly
update any forward-looking statements, whether as a result of new information, future developments
or otherwise.

 

Page 16 of 18

 

LECTEC PRESS RELEASE:

LecTec Corporation and Endo Pharmaceuticals Inc. Settle Patent Dispute

November 11, 2009 — Texarkana, Texas — LecTec Corporation (OTCBB: LECT) announced today that
it has reached a settlement with Endo Pharmaceuticals Inc. on outstanding patent litigation related
to LecTec’s U.S. Patent Nos. 5,536,263 and 5,741,510. Endo Pharmaceuticals has agreed to make a
one–time, $23 million payment for the exclusive license to these two patents for use in the field
of prescription pain medicines and treatment. “LecTec is pleased to have reached an agreement with
Endo Pharmaceuticals which avoids the uncertainties of litigation and provides LecTec with the
capital to explore the opportunities in its patent portfolio,” said Judd Berlin, chief executive
officer of LecTec.

LecTec filed a patent infringement action in U.S. District Court in July 2008 against Endo
Pharmaceuticals and others in the topical medicated patch business alleging patent infringement of
the core structure and composition claims of two of LecTec’s patents.

About LecTec Corporation

LecTec Corporation is an intellectual property licensing and holding company. The Company’s
primary focus is to derive royalty and other income from patents that the Company owns based on its
advanced skin interface technologies. The Company was an innovator in hydrogel–based topical
delivery of therapeutic over–the–counter medications, which provide alternatives to topical creams
and ointments. A hydrogel is a gel–like material having an affinity for water and similar
compounds. These gels are ideal for delivering medication onto the skin. The Company holds multiple
domestic and international patents on its hydrogel technology.

 

Page 17 of 18

 

Cautionary Statements

This press release contains forward–looking statements concerning possible or anticipated
future results of operations or business developments which are typically preceded by the words
“believes,” “wants,” “expects,” “anticipates,” “intends,” “will,” “may,” “should,” or similar
expressions. Such forward-looking statements are subject to risks and uncertainties, which could
cause results or developments to differ materially from those, indicated in the forward–looking
statements. Such risks and uncertainties include, but are not limited to, the Company’s dependence
on royalty payments from Novartis Consumer Health, Inc., which recently re–launched an adult vapor
patch licensed by the Company, the Company’s dependence on key personnel and Board of Director
members, the Company’s pending patent infringement litigation against
Chattem, Inc. (NASDAQ: CHTT), Johnson & Johnson Consumer Company, Inc., a subsidiary of Johnson &
Johnson (NYSE: JNJ), and Prince of Peace Enterprises, Inc., the issuance of new accounting
pronouncements, the availability of opportunities for licensing agreements related to patents that
the Company holds, limitations on market expansion opportunities, and other risks and uncertainties
detailed from time to time in the Company’s filings with the Securities and Exchange Commission,
and particularly as described in the “Risk Factors” included in our Form 10–K for the year ended
December 31, 2008.

 

Page 18 of 18Exhibit 10.1

Exhibit 10.1

Amended and Restated License Agreement

This Amended and Restated License Agreement (the “Agreement”) is made and entered into this 5th day
of November, 2009 by and between Synthesis Energy Systems, Inc., a Delaware corporation having its
principal place of business at Three Riverway, Suite 300, Houston, Texas 77056 and a representative
office at 777 Zhao Jia Bang Road, Unit 516 Pine City Center, Shanghai, 200032 P.R. China
(hereinafter referred to as “SES”) and Gas Technology Institute, an Illinois non-profit corporation
having its principal place of business at 1700 South Mount Prospect Road, Des Plaines, Illinois
60018 (hereinafter referred to as “GTI”) (SES and GTI hereinafter referred to collectively as the
“parties” and each of them as a “party”).

WITNESSETH

WHEREAS, GTI and Synthesis Energy Systems, LLC (the predecessor to SES) entered into a LICENSE
AGREEMENT dated January 22, 2004, which (together with the amendments thereto) was replaced and
superseded by an Amended and Restated License Agreement dated 31 August 2006 (together with
Amendment No. 1 thereto dated June 14, 2007) (the “2006 Agreement”); and

WHEREAS, GTI and SES wish to replace and supersede the 2006 Agreement in its entirety with this
Amended and Restated License Agreement.

NOW THEREFORE, in consideration of the mutual covenants and undertakings contained herein and other
good and valuable consideration, receipt of which is hereby acknowledged by both parties, the
parties do hereby agree as follows:

ARTICLE 1.  DEFINITIONS

1.1 “2006 Agreement” has the meaning given to it in the first paragraph of the recitals above.

1.2 “Affiliate” shall mean any entity that directly, or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with, a party.

1.3 “Biomass” shall mean organic material such as wood, municipal solid waste, manures and other
animal waste, agricultural residue and crops, and refuse derived fuel, that can be converted to
energy.

1.4 “Carried Interest” shall mean an equity ownership in an entity granted to SES or an SES
Affiliate whereby SES or its Affiliate does not pay cash consideration for such ownership interest.

1.5 “Coal” shall mean anthracite, bituminous, sub-bituminous, lignite, peat, cannel, waste from
coal cleaning/preparation facilities (including but not limited to middlings, coarse refuse, gob,
culm and gangue). Additionally, for the purposes of this Agreement, the term Coal would
additionally include oil shale, petroleum coke and other non-biomass solid and heavy liquid
hydrogen-carbon materials.

Certain information in this exhibit has been omitted in reliance upon Rule 24b-2 under the Securities Exchange Act of 1934,
as amended, and has been filed separately with the Securities and
Exchange Commission.

 

 

 

1.6 “Coal and Biomass Mixture” shall mean a feed stock for U-GAS that consists of no less than
sixty percent (60%) Coal and no more than forty percent (40%) Biomass.

1.7 “Control” means with respect to any entity, possession of the power, directly or indirectly, to
direct or cause the direction of the management policies of such entity, whether through the
ownership of voting securities, by contract or otherwise and “Controls” and “Controlled” shall be
construed accordingly.

1.8 “Effective Date” of this Agreement is defined as the date first written hereinabove.

1.9 “GTI’s Confidential Information” has the meaning given to it in Section 3.1.

1.10 “GTI’s Sublicense Royalty Share” has the meaning given to it in Section 4.3.

1.11 “Improvements” shall mean any improvements, modifications, further inventions and designs that
SES, its Affiliates, any Third Party or any SES Investee may discover, make or develop at any time
during the Term with respect to the Licensed Process, and the methods and apparatus used in the
operation of the Licensed Process.

1.12 “Initial Term” has the meaning given to it in Section 10.1.

1.13 “Know-How” shall mean all technical information, including trade secrets, pertaining to GTI’s
proprietary U-GAS system including, but not limited to, theses, designs, drawings, blueprints,
specifications, test data, charts, fabrication techniques, materials of construction, and
formulations, graphs, operating and test procedures, shop practices and instruction manuals.

1.14 “Licensed Process” shall mean any Coal, mixture of Coal and Biomass, or Biomass gasification
process that incorporates Know-How as defined hereinabove.

1.15 “March-In Payment” has the meaning given to it in Section 4.2.

1.16 “SES’ Confidential Information” has the meaning given to it in Section 3.8.

1.17 “SES Investee” means any entity in which SES or any of its Affiliates is proposing to invest
in, has a contractual option to invest in, has invested in, or has received a Carried Interest in,
when such investment, option, to invest, and Carried Interest in the aggregate exceeds * of the
entity’s equity, and which is not Controlled by SES nor by any of its Affiliates.

1.18 “Standard Royalty” has the meaning given to it in Section 4.5.

1.19 “Sublicense” has the meaning given to it in Section 2.2, and “Sublicensed” shall be construed
accordingly.

1.20 “Sublicense Royalties” has the meaning given to it in Section 4.3.

1.21 “Term” means the Initial Term and any extensions thereto pursuant to Section 10.1.

1.22 “Third Party” means any third party that sublicenses the Know-How during the Term,
specifically excluding any SES Investees and any Affiliates of SES.

	 	 	 
	[*]	 	This information has been omitted in reliance upon Rule 24b-2 under the Securities Exchange Act of 1934, as amended,
and has been filed separately with the Securities and Exchange
Commission.

 

2

 

1.23 “U-GAS” shall mean a process involving conversion of Coal, a mixture of Coal and Biomass, or
Biomass to fuel gas by reaction of Coal, a mixture of Coal and Biomass, or Biomass with air,
enriched air, or oxygen with the addition of steam, carbon dioxide or other diluent gases in a
fluidized bed reactor system with a sloping grid and central nozzle in which high carbon conversion
is obtained by utilizing techniques with or without ash agglomeration with control of ash sintering
and the withdrawal of high ash material or agglomerates, wherein crushed Coal, a mixture of Coal
and Biomass, or Biomass is fed directly into the fluidized bed with recycle of Coal dust or char
fines entrained in effluent gas back into the fluidized bed.

ARTICLE 2. LICENSE GRANT

2.1 Scope of License.

	 	(a)	 	GTI hereby grants to SES, and SES hereby accepts, an irrevocable, world-wide,
exclusive license to manufacture, make, use and sell U-GAS systems for conversion of
Coal and/or Coal and Biomass Mixture incorporating or using the Know-How.

	 
	 	(b)	 	GTI also hereby grants to SES, and SES hereby accepts, an irrevocable,
world-wide, non-exclusive license to manufacture, make, use and sell U-GAS systems for
conversion of Biomass and/or mixtures of Coal and Biomass incorporating or using the
Know-How.

	 
	 	(c)	 	Affiliates of SES and subcontractors of SES (including but not limited to third
party manufacturers appointed by SES or any of its Affiliates) shall be permitted to
access and use the Know-How provided such access and use is (subject to the sublicense
and use rights granted pursuant to Section 2.2) only for the business purposes of SES
or the relevant Affiliate, is subject to written agreements of strict confidentiality
and is in accordance with the terms of this Agreement (in particular, paragraphs (i) to
(iii) of Section 2.2(d) below shall apply, subject to the appropriate language changes
having been made thereto, to the access and use of the Know-How by an Affiliate of
SES).

	 
	 	(d)	 	SES shall not sell products that use the Know-How of GTI other than as part of
a U-GAS system.

2.2 Sublicense and Use Rights. SES and its Affiliates shall have the right to grant
sublicenses of the Know-How to third parties for the purpose of enabling such third parties to
manufacture, make and use U-GAS Coal gasification systems incorporating or using the Know-How of
GTI (each a “Sublicense”), provided that each Sublicense is granted pursuant to a signed, written
sublicense agreement between SES or its Affiliate (as applicable) and the relevant third party and
subject to the following:

	 	(a)	 	neither SES nor its Affiliates shall grant a Sublicense to any Third Party
unless such Sublicense has been previously approved in writing by GTI as follows:

	 	(i)	 	SES may from time to time, during the initial stages of a
project, provide GTI with notice in writing setting out the name of the Third
Party to which

 

3

 

	 	 	 	it wishes to grant a Sublicense, and the initial terms thereof including the
preliminary licensed design capacity, unique planned application
considerations, and a minimum and maximum license fee range, and requesting
GTI’s approval for the purpose of this sub-Section 2.2(a);

	 
	 	(ii)	 	within 10 business days of the date of such notice from SES,
GTI shall notify SES in writing of the approval or non-approval of such Third
Party, and in the event of a non-approval such notification from GTI shall
specify the reasons for such non-approval, it being acknowledged and agreed by
the parties that such approval shall not be unreasonably withheld or
conditioned;

	 
	 	(iii)	 	in the event GTI fails to notify SES of the approval or
non-approval of the relevant Third Party as contemplated in paragraph (ii)
above, the Third Party will be deemed to have been approved by GTI for the
purposes of this sub-Section 2.2(a);

	 	(b)	 	SES shall no less frequently than once every 3 months during the Term provide
GTI with a report on the status of its negotiations with any third party in respect of
any Sublicense;

	 
	 	(c)	 	any such Sublicense may be for a U-GAS system which uses as its feed stock
either entirely Coal, entirely Biomass or a mixture of Coal and Biomass in any
proportion as determined by SES or its Affiliate (as applicable) and the relevant third
party;

	 
	 	(d)	 	SES or its Affiliate (as applicable) may enter into Sublicense agreements with
third parties on such terms as SES reasonably considers appropriate, provided that such
agreements shall contain provisions substantially similar to the following:

	 	(i)	 	each Sublicense may not be transferred from the Sublicensed
site, project or facility to another site, project or facility without the
prior written consent of SES or its Affiliate, and GTI;

	 
	 	(ii)	 	the process design package engineering services to be provided
in respect of the Sublicensed project shall be performed jointly by SES or its
Affiliate (as applicable) and its production engineering subcontractor; and

	 
	 	(iii)	 	the Third Party may construct a U-GAS system having a capacity in
excess of the syngas capacity expressly permitted in the Sublicense,
provided that (A) if the excess capacity is equal to or less than *% of the
Sublicensed syngas capacity, no additional Sublicense Royalties shall be
payable by the Third Party and (B) if the excess capacity is more than *% of
the Sublicensed syngas capacity, and such excess capacity is a result of the
Third Party exceeding the design limits set out in the process design
package, the Third Party shall pay additional Sublicense Royalties to
SES

	 	 	 
	[*]	 	This information has been omitted in reliance upon Rule 24b-2 under the Securities Exchange Act of 1934,
as amended, and has been filed separately with the Securities and
Exchange Commission.

 

4

 

	 	 	 	or its Affiliate (as applicable), such additional Sublicense Royalties to be
calculated based on the amount of excess syngas capacity.

ARTICLE 3.  CONFIDENTIAL DISCLOSURE AND NON-USE

GTI’s Confidential Information

3.1 SES and GTI acknowledge and agree that GT1 owns and/or controls certain information and trade
secrets relating to the Know-How which are confidential and which afford GTI an advantage over its
competitors which do not have such information. For purposes of this Agreement, information
required to be maintained secret (hereinafter referred to as “GTI’s Confidential Information”) is
defined to be all information related to the Know-How which is disclosed by GTI to SES pursuant to
this Agreement, except that which:

	 	(a)	 	was in the public domain prior to receipt under this Agreement or which
thereafter becomes part of the public domain through no fault or breach of duty to
maintain it confidential by SES; or

	 
	 	(b)	 	SES can show was in its possession at the time of receipt under this Agreement;
or

	 
	 	(c)	 	SES receives from a third party, which was not under an obligation of
confidentiality or non-use to GTI, either directly or indirectly.

3.2 Confidential Information disclosed pursuant to this Agreement shall, where possible, be reduced
to writing, pictorial form, or electronic recording and marked “Confidential” or “Proprietary” or
with words of similar import. Neither party shall be deemed to have disclosed Confidential
Information due to the fact that such Confidential Information can be discerned from a U-GAS system
sold by such party, either through reverse engineering or observation or due to the nature of the
product itself.

3.3 All Confidential Information disclosed pursuant to this Agreement by GTI shall remain the
property of GTI and, except as otherwise licensed hereunder, no license or grant of rights in any
of the Confidential Information covered hereunder is conveyed by GTI solely by its disclosure
hereunder.

3.4 SES agrees that during the Term and for a period of ten (10) years thereafter, SES will hold
secret and confidential, will not disclose in any manner to any person or concern, except to any of
its or its Affiliates’ employees or contractors or Third Parties as are required to use such
information, and only then under an obligation of secrecy binding upon such employees or
contractors, and as otherwise permitted under the provisions of this Agreement, and will not use,
except pursuant to this Agreement, any of the Confidential Information.

3.5 SES hereby agrees to indemnify and hold harmless GTI and its Affiliates against any liability
or loss resulting from unauthorized disclosure or use of the Confidential Information by itself,
its agents, or its Affiliates, to whom the Confidential Information is disclosed pursuant to this
Agreement. No indemnity payments hereunder shall relieve the breaching party from liability under
applicable patent, copyright or trade secret laws, nor shall such payments

 

5

 

constitute a grant or continuation of a grant of any express or implied license or covenant not to
sue under any patents, copyrights or trade secrets of GTI.

3.6 In the event that Confidential Information of GTI shall be required by law to be made available
to any government agency by SES, SES shall notify GTI in writing of the requirement of such
disclosure at least thirty (30) days prior to such disclosure, unless disclosure in less than
thirty (30) days is required, in which case SES shall immediately notify GTI of the requirement. A
copy of the disclosed Confidential Information shall be sent to GTI coincidental with the
transmission of the Confidential Information to the government.

3.7 Notwithstanding anything herein to the contrary, SES hereby provides GTI with the assurance
that no Confidential Information disclosed to SES pursuant to this Agreement shall be re-exported
or trans-shipped directly or indirectly to any destination requiring the approval of the United
States Government for such export or shipment until a request to do so has been submitted to and
approved by the United States Government.

SES’ Confidential Information

3.8 SES and GTI acknowledge and agree that, as between GTI and SES, SES owns and/or controls
certain information and trade secrets relating to the Improvements which are confidential and which
afford SES an advantage over its competitors which do not have such information. For purposes of
this Agreement, information required to be maintained secret (hereinafter referred to as “SES’
Confidential Information”) is defined to be all information related to the Improvements which is
disclosed by SES to GTI pursuant to this Agreement, except that which:

	(a)	 	was in the public domain prior to receipt under this Agreement or which
thereafter becomes part of the public domain through no fault or breach of duty to
maintain it confidential by GTI; or

	 
	(b)	 	GTI can show was in its possession at the time of receipt under this Agreement;
or

	 
	(c)	 	GTI receives from a third party, which was not under an obligation of
confidentiality or non-use to SES, either directly or indirectly.

3.9 SES’ Confidential Information disclosed pursuant to this Agreement shall, where possible, be
reduced to writing, pictorial form, or electronic recording and marked “Confidential” or
“Proprietary” or with words of similar import. Neither party shall be deemed to have disclosed SES’
Confidential Information due to the fact that such SES’ Confidential Information can be discerned
from a U-GAS system sold by such party, either through reverse engineering or observation or due to
the nature of the product itself.

3.10 All SES’ Confidential Information disclosed pursuant to this Agreement by SES shall remain the
property of SES and, except as otherwise licensed hereunder, no license or grant of rights in any
of the SES’ Confidential Information covered hereunder is conveyed by SES solely by its disclosure
hereunder, except for Improvements, in accordance with Section 5.1.

 

6

 

3.11 GTI agrees that during the Term and for a period of ten (10) years thereafter, GTI will hold
secret and confidential, will not disclose in any manner to any person or concern, except to any of
its or its Affiliates’ employees or contractors as are required to use such information, or to any
licensee or prospective licensee of the Know-How as relates solely to Improvements, and only then
under an obligation of secrecy binding upon such employees, contractors, licensees, or prospective
licensees, and as otherwise permitted under the provisions of this Agreement, and will not use,
except pursuant to this Agreement, any of the SES’ Confidential Information.

3.12 GTI hereby agrees to indemnify and hold harmless SES and its Affiliates against any liability
or loss resulting from unauthorized disclosure or use of the SES’ Confidential Information by
itself, its agents, or its Affiliates, to whom the SES’ Confidential Information is disclosed
pursuant to this Agreement. No indemnity payments hereunder shall relieve the breaching party from
liability under applicable patent, copyright or trade secret laws, nor shall such payments
constitute a grant or continuation of a grant of any express or implied license or covenant not to
sue under any patents, copyrights or trade secrets of SES.

3.13 In the event that any SES’ Confidential Information shall be required by law to be made
available to any government agency by GTI, GTI shall notify SES in writing of the requirement of
such disclosure at least thirty (30) days prior to such disclosure, unless disclosure in less than
thirty (30) days is required, in which case GTI shall immediately notify SES of the requirement. A
copy of the disclosed SES’ Confidential Information shall be sent to SES coincidental with the
transmission of the SES’ Confidential Information to the government.

3.14 Notwithstanding anything herein to the contrary, GTI hereby provides SES with the assurance
that no SES’ Confidential Information disclosed to GTI pursuant to this Agreement shall be
re-exported or trans-shipped directly or indirectly to any destination requiring the approval of
the United States Government for such export or shipment until a request to do so has been
submitted to and approved by the United States Government.

ARTICLE 4. CONSIDERATION AND ROYALTIES

4.1 In consideration of the license grants from GTI to SES pursuant to this Agreement, SES (i)
shall not offer for sale any competing Coal or a Coal and Biomass Mixture gasification technology
during the Term; and (ii) shall pay to GTI the March-In Payment, the Royalties and GTI’s Sublicense
Royalty Share in accordance with the remainder of this ARTICLE 4. GTI acknowledges and agrees that
it has received from SES the one hundred ninety thousand five hundred shares (190,500) of SES
restricted Common Stock required to be delivered to GTI by SES pursuant to the 2006 Agreement.

4.2 March-In Payment. SES agrees to pay to GTI the sum of * (the “March-In Payment”) during
each calendar year of the Term, subject to the following:

	 	(a)	 	subject to paragraphs (b) and (c) below, for each calendar year during the Term
SES shall pay GTI the March-In Payment on or before January 31 in the immediately
following calendar year;

	 
	 	(b)	 	no March-In Payment shall be payable for the calendar year ending 31st December
2009;

	 	 	 
	[*]	 	This information has been omitted in reliance upon Rule 24b-2 under the Securities Exchange Act of 1934,
as amended, and has been filed separately with the Securities and
Exchange Commission.

 

7

 

	 	(c)	 	SES shall be entitled to deduct from the March-In Payment due in any calendar
year any Royalties and Sublicense Royalties which are payable to GTI for the same
calendar year, it being acknowledged and agreed by the parties that if the total amount
of Royalties and Sublicense Royalties in any calendar year exceeds * then no March-In
Payment shall be due to GTI in respect of that calendar year.

4.3 Sublicense Royalties. All license fees and royalties payable by a Third Party under a
Sublicense agreement with SES or its Affiliate (as applicable) (the “Sublicense Royalties”, which
shall be deemed to include any additional license fees as contemplated in Section 2.2(d) (iii)
above) shall be shared between SES and GTI in the ratio of *% to SES and *% to GTI (GTI’s share of
such Sublicense Royalties being “GTI’s Sublicense Royalty Share”). SES shall pay to GTI GTI’s
Sublicense Royalty Share as and when the Sublicense Royalties are actually received by SES or its
Affiliate (as applicable) from the relevant Third Party and after deduction from GTI’s Sublicense
Royalty Share of all applicable withholdings, liabilities to taxation or other deductions or
set-offs which are required by law to be made by the Third Party (in which case the deduction from
GTI’s Sublicense Royalty Share shall be *% of the total deduction made by the Third Party), SES or
its Affiliate (as applicable). SES agrees to use all reasonable commercial endeavours to maximize
the amount of Sublicense Royalties under the Sublicenses, and to collect associated payments when
due in accordance with Sublicences.

4.4 If SES or an SES Affiliate invests in, or has an option to invest in, * percent or less of the
equity in a Third Party, and the Sublicense Royalty payable by such Third Party equals or exceeds
the Standard Royalty, then SES shall pay to GTI GTI’s Sublicense Royalty Share as contemplated
above. If SES or an SES Affiliate invests in, or has an option to invest, * percent or less of the
equity in a Third Party, and the Sublicense Royalty is less than the Standard Royalty, then in
addition to GTI’s Sublicense Royalty Share contemplated above, SES shall also pay to GTI a
percentage of its dividends and proceeds from liquidation of its equity position in said Third
Party (the “Dividend Share”) based on the amount of GTI’s Sublicense Royalty Share. The Dividend
Share shall be between * percent and * percent of the revenues actually received by SES from its
interest in the Third Party and shall be calculated as the Standard Royalty less GTI’s Sublicense
Royalty Share, the difference of which is divided by the Standard Royalty, and the resultant
dividend multiplied by * percent. For example, if SES or an Affiliate own * percent of the equity
of a Third Party, and the Sublicense Royalty is USD * /MMBtu/hour of dry syngas production, then
GTI shall receive GTI’s Sublicense Royalty Share plus a Dividend Share of *% [{(*/MMBtu/hour —
*/MMBtu/hour) ÷ */MMBtu/hour}X *%]; that is *% of the proceeds received by SES resulting from its
equity interest. Dividend Share payments shall be made to GTI when dividends or proceeds from
liquidation of its equity position are actually received by SES or its Affiliate (as applicable)
and shall be net of all applicable withholdings, liabilities to taxation or other deductions or
set-offs which are required by law to be made by the Third Party.

4.5 Equity Royalty. SES agrees to pay to GTI for each U-GAS unit licensed, designed, built
and/or operated by or for SES, or any party other than a Third Party an upfront royalty of USD
*/MMBtu/hour of dry syngas production of rated design capacity of the U-GAS system using Coal, a
mixture of Coal and Biomass, or Biomass as the feed stock (the “Standard Royalty”). The Standard
Royalty shall be paid in two equal installments: the first installment shall be paid upon the
earlier of the securing of binding commitments for necessary debt financing for

	 	 	 
	[*]	 	This information has been omitted in reliance upon Rule 24b-2 under the Securities Exchange Act of 1934,
as amended, and has been filed separately with the Securities and
Exchange Commission.

 

8

 

construction of the associated U-GAS system and related facilities or SES (or its Affiliate)
transferring to the licensee the detailed U-GAS system gasifier production drawings or the complete
U-GAS system control logic; and the last installment shall be paid upon the completion of the build
of the U-GAS system. If the U-GAS system consists of more than one unit to be built over a period
of years, then the second installment of the Standard Royalty shall be paid proportionately at the
completion of each unit. Payments shall be made to GTI no earlier than the associated triggering
event, and no later than 30 days after the associated triggering event. As necessary, the amount of
the last installment shall be adjusted so that the total Standard Royalty corresponds to the rated
design capacity of the U-GAS system as per the U-GAS system production drawings and associated
calculations and models.

4.6 Carried Interest Royalty. In the event that SES or an Affiliate of SES is granted a
Carried Interest in a Third Party, and such Carried Interest is equal to or less than * percent of
the equity in the Third Party, in such case SES shall have the option to:

	 	(a)	 	Pay GTI the Standard Royalty contemplated in Section 4.5 above; or

	 
	 	(b)	 	Pay GTI the GTI’s Sublicense Royalty Share in accordance with Section 4.3
above, and also pay to GTI *% of SES’ proceeds resulting from its Carried Interest.

4.7 SES shall provide GTI with a copy of each contract (including any Sublicense agreement entered
into with any Third Party) entered into by SES for the licensing, design, construction or operation
of a U-GAS system. SES shall report to GTI either in writing or by e-mail its progress in
commercializing the U-GAS system at least every six months beginning with the Effective Date.

4.8 Failure of SES to complete any of the requirements of Section 4.1 to 4.6 inclusive shall allow
GTI to terminate this Agreement pursuant to the provisions of Section 10.2 hereof.

ARTICLE 5. IMPROVEMENTS

5.1 SES hereby agrees to disclose to GTI each SES Improvement, and shall fully disclose the nature
and manner of applying and utilizing such Improvement within 6 months of conception. SES hereby
grants to GTI a royalty-free non-exclusive irrevocable license, with the right to grant
sublicenses, to make, have made, manufacture, have manufactured, use, market, import, offer for
sale, and sell systems incorporating said Improvements, but excluding therefrom any use for which
SES enjoys the exclusive U-GAS rights, such as the conversion of Coal or Coal and Biomass Mixture.

ARTICLE 6. INDEMNIFICATION

6.1 SES agrees to hold harmless, defend and indemnify GTI and its Affiliates against all damage,
expense and liability, including attorneys fees, resulting from injury to or death of any person or
damage to any property by reason of SES’s use of the Know-How and relating to U-GAS systems.
Notwithstanding, GTI reserves the right to be represented, at its own expense, by legal counsel of
its choice, in any proceedings arising under this Section 6.1.

	 	 	 
	[*]	 	This information has been omitted in reliance upon Rule 24b-2 under the Securities Exchange Act of 1934,
as amended, and has been filed separately with the Securities and
Exchange Commission.

 

9

 

6.2 GTI shall promptly notify SES in writing of any claim asserted against GTI that SES has an
obligation to indemnify and defend GTI against pursuant to this Agreement; provided,
however, that a failure to so notify SES shall not relieve SES of its indemnity obligations
unless SES can demonstrate that it was substantially prejudiced by GTI’s failure to notify. SES
shall not settle such claim or cause of action prior to obtaining the consent of GTI. In the event
that there is an actual or potential conflict of interest between SES and GTI with respect to any
such claim or cause of action, such that counsel selected by SES cannot represent both SES and GTI
without waivers of such conflict, SES shall pay the reasonable costs and expenses of GTI’s separate
legal representation, in addition to the cost of counsel selected by SES.

ARTICLE 7. REPRESENTATIONS AND WARRANTIES.

7.1 GTI represents that at the time of execution hereof:

	 	(a)	 	There are no agreements, assignments, encumbrances or licenses in existence
that are inconsistent with the provisions of this Agreement;

	 
	 	(b)	 	GTI owns or has a right to license all right, title and interest in and to
Know-How licensed to SES hereunder;

	 
	 	(c)	 	The Know-How licensed to SES hereunder are not known to infringe upon or
otherwise violate, nor to be inconsistent with, the rights of any other person or
entity;

	 
	 	(d)	 	There are no disputes, conflicts, claims (actual or threatened), actions,
litigation, arbitrations, suits, proceedings, judgments, or decrees existing, pending,
threatened by or against, or affecting or relating to the Know-How licensed to SES
hereunder (collectively, the “Claims”).

7.2 It is understood and agreed that there shall be no warranty by GTI, express or implied, as to
the results to be obtained utilizing GTI’s Confidential Information and Know-How of GTI.

7.3 GTI states that:

	 	(a)	 	GTI is aware of the provisions of Rule 144 promulgated under the Securities Act
of 1933 (“Rule 144”) which permit limited resale of securities purchased in a private
placement (a) by nonaffiliates of a company not less than two (2) years after such
nonaffiliate has purchased and paid for the security to be sold, or (b) subject to the
satisfaction of certain conditions, including among other things, the existence of a
public market for the securities, the availability of certain current public
information about SES, the resale occurring not less than one (1) years after the
securities to be sold have been purchased and paid for, the resale being effected
through a “broker’s transaction” or in transactions directly with a “market maker” (as
provided by Rule 144(f)) and the number of securities sold during any three (3) month
period not exceeding specified limitations. SES has no obligation to supply the
information required for sales under Rule 144.

 

10

 

	 	(b)	 	GTI is acquiring the Common Stock for investment for its own account and not
with the view to, or for resale in connection with, any distribution thereof. It
understands that the Common Stock have not been registered under the Act by reason of a
specified exemption from the registration provisions of the Act, which requires, among
other things, the bona fide nature of GTI’s investment intent as expressed herein.

	 
	 	(c)	 	GTI is authorized and otherwise duly qualified to acquire and hold the Common
Stock and has not been formed or reorganized for the specific purpose of acquiring the
Common Stock.

	 
	 	(d)	 	GTI believes it is an “accredited investor” (as defined in. Section 501 of
Regulation D under the Securities Act of 1933), but, if it is not an “accredited
investor”, then it is by virtue of its business or financial experience or its
relationship to SES or SES’s management, capable of evaluating the merits and risks of
an investment in the Common Stock and GTI is capable of protecting its own interest
with respect to its investment in the Common Stock, and is financially capable of
bearing the risk of that investment.

7.4 Sole Licensee. GTI, for as long as this Agreement remains exclusive, hereby agrees that
it shall not license the Know-How to anyone else to manufacture, make, use, or sell U-GAS systems
for conversion of Coal and/or Coal and Biomass Mixture incorporating the Know-How.

ARTICLE 8. CONFIDENTIAL INFORMATION ENFORCEMENT

8.1 Upon learning of the possible misuse or misappropriation of GTI’s trade secrets or GTI’s
Confidential Information by a third party, SES shall inform GTI of that fact, and shall supply GTI
with any evidence available to it pertaining to the possible misuse or misappropriation. GTI shall
have the sole right to determine whether or not and how to proceed to protect such trade secrets
and GTI’s Confidential Information. SES agrees to cooperate with GTI in any enforcement action and
will join suit as a co-plaintiff at GTI’s request, if required for jurisdictional purposes. Any
damage recovery shall be shared by the parties in proportion to their contribution to the legal
expenses of any such lawsuit. GTI shall have the primary authority to settle any action or claim
brought hereunder.

8.2 Upon learning of the possible misuse or misappropriation of SES’ trade secrets or SES’
Confidential Information by a third party, GTI shall inform SES of that fact, and shall supply SES
with any evidence available to it pertaining to the possible misuse or misappropriation. SES shall
have the sole right to determine whether or not and how to proceed to protect such trade secrets
and SES’ Confidential Information. GTI agrees to cooperate with SES in any enforcement action and
will join suit as a co-plaintiff at SES’ request, if required for jurisdictional purposes. Any
damage recovery shall be shared by the parties in proportion to their contribution to the legal
expenses of any such lawsuit. SES shall have the primary authority to settle any action or claim
brought hereunder.

 

11

 

8.3 When SES mentions the U-GAS system that is the subject matter of this Agreement in writing in
any press release or other promotional documentation, SES shall include the phrase “Licensed from
Gas Technology Institute.” in said release or promotional documentation.

ARTICLE 9. NOTICES

9.1 All important notices to be given in connection with this Agreement or its performance shall be
given to each head office in writing. Any urgent matters shall be informed by telex or telefax,
however, important notices in such matter shall be confirmed in writing thereafter. Such notices
shall he deemed to be duly given when they have reached the addressees. All correspondence and
reports under this Agreement should be sent to the following addresses:

For SES:

Synthesis Energy Systems, Inc.

Three Riverway, Suite 300

Houston, Texas 77056

Attn: Francis Lau

For GTI:

Gas Technology Institute

1700 South Mount Prospect Road

Des Plaines, IL 60018-1804

Attn: Licensing Manager

	 
	or such other address to which either party shall give due written notice from time to time.

ARTICLE 10. TERM AND TERMINATION

10.1 This Agreement shall continue in full force and effect from the Effective Date of this
Agreement until 30 August 2016 (the “Initial Term”), unless otherwise terminated earlier pursuant
to Section 10.2 or 10.3 herein. Notwithstanding the above, the term of this Agreement may be
extended for an additional ten (10) years beyond the Initial Term by SES giving GTI, no earlier
than 180 days and no later than 90 days prior to the end of the original Term, written notice of
its election to extend this Agreement under the same terms and conditions, provided that SES has
satisfied and is in compliance with all of its duties and obligations under this Agreement,
including, but not limited to, its obligations under ARTICLE 4 hereof. Prior to the end of the
second ten (10) year term, SES may extend the Term of this Agreement for an additional ten (10)
years by SES giving GTI, no earlier than 180 days and no later than 90 days prior to the end of the
second ten (10) year Term, written notice of its election to extend this Agreement under the same
terms and conditions, provided that SES has satisfied and is in compliance with all of its duties
and obligations under this Agreement, including, but not limited to, its obligations under ARTICLE
4 hereof.

10.2 In the event that either party shall default by failing or refusing to perform any of its
obligations hereunder, the other party, may, without waiving other rights, provide the defaulting
party with a written notice specifying the particulars of such default and stating the notifying
party’s intent to terminate this Agreement on a date not less than ninety (90) days after such

 

12

 

notice is sent unless such default shall be fully remedied by such date, and this Agreement shall
terminate on such date.

10.3 This Agreement shall terminate immediately and automatically upon the act of SES admitting in
writing its inability to pay its debts generally as they become due, filing a petition in
bankruptcy or under any other insolvency act, making an assignment for the benefit of creditors, or
upon a petition in bankruptcy, or for the appointment of a receiver being filed against it, failing
to have the petition or appointment dismissed or vacated within sixty (60) days from the date
thereof.

10.4 Termination of this Agreement shall not relieve the parties of their obligations under ARTICLE
3 and ARTICLE 5 of this Agreement, said obligations to continue for ten (10) years after the date
of any such termination.

10.5 The waiver, express or implied, by either SES or GTI of any right hereunder or of any right to
seek remedies arising from any failure to perform or breach hereof by SES or GTI, shall not
constitute or be deemed a waiver of any other right hereunder, whether of a similar or dissimilar
nature thereto.

ARTICLE 11. GENERAL

11.1 Arbitration. All disputes, controversies or differences arising between SES and GTI
out of, or in relation to, or in connection with, this Agreement or for the breach hereof, which
SES and GTI are unable to resolve between themselves shall be settled finally and bindingly by
arbitration under the Rules of Arbitration of the International Chamber of Commerce by one or more
arbitrators in accordance with the Rules. All costs of the said arbitration shall be borne equally
by SES and GTI. The language used in the arbitral proceedings shall be English. The arbitration
shall be held in Chicago, Illinois, USA. The decision of the arbitrator shall be enforceable by and
through any court that has jurisdiction over the subject matter hereof.

11.2 If any article, paragraph, section, term, condition or provision of this Agreement shall
finally be adjudged to be unlawful or unenforceable for any reason, such article, paragraph,
section, term, condition, or provision hereof shall be deemed to be severable here from and shall
be deemed thereby to be stricken here from and this Agreement shall thereafter otherwise remain in
full force and effect as amended by such adjudication.

11.3 This Agreement shall not be assignable by either party except that either party may assign all
of its rights hereunder together with all of its obligations hereunder to an Affiliate, any third
party with which it may merge or consolidate or to a purchaser of substantially all of the assets
of such party. The parties shall notify each other hereunder immediately of any assignment made
pursuant to this Section 11.3. This Agreement shall be binding upon and inure to the benefit of the
parties, and their respective heirs, assigns, successors, and legal representatives.

11.4 Time and diligence of the parties are of the essence to this Agreement, it being understood
that in the event of any act of God, war, insurrection, strike or wildcat labor disturbance, or act
or occurrence solely outside the direction or control of the parties, which occasions some delay,
the time periods set forth hereunder shall be extended for the duration of such act or occurrence.

 

13

 

11.5 This Agreement, when executed by the parties, together with its exhibits, shall constitute the
entire Agreement between the parties with reference to the subject matter hereof and may only be
amended in a writing signed by the parties. There are no other understandings, agreements or
representations, express or implied, not specified herein.

11.6 Governing Law. The parties agree that, in the event of a dispute regarding this
Agreement, this Agreement shall be governed in all respects by the laws of the State of Illinois,
excluding its conflict of laws principles.

11.7 Headings. The headings used in this Agreement are intended for convenience only and
shall not be deemed to supersede or modify any provisions.

ARTICLE 12. EXPORT RESTRICTIONS, TAXES AND DUTIES.

12.1 SES acknowledges that the INDUSTRIAL PROPERTY RIGHTS referenced in this Agreement may be
subject to export control under U.S. Export Administration Regulations. SES accepts and assumes all
responsibility for compliance with United States export regulations with respect to their
exportation. SES covenants and agrees to comply strictly with these regulations, to cooperate fully
with GTI in any official or unofficial audit or inspection that relates to said regulations, and
not to export, re-export, divert, transfer or disclose directly or indirectly, or permit the export
of any item, component, or combination of the U-GAS system or Know-How to any country for which the
United States Export Administration Act of 1979 and the regulations issued thereunder, or any other
United States law or regulation, requires export or re-export authorization or approval under a
validated export license. SES will bear the expense of its compliance with all applicable United
States laws and regulations in this connection without reimbursement or offset.

12.2 SES acknowledges and agrees that GTI has no responsibility or liability for taxes or customs
duties, harbor fees or storage or transportation charges, related in any way to the U-GAS system or
Know-How licensed hereunder. SES agrees to assume all responsibility for their collection and/or
payment including, without limitation, for value added taxes, sales taxes, use taxes, excise taxes,
service taxes, customs duties, customs storage fees, or withholding taxes, if any, all without
reimbursement by GTI.

IN WITNESS WHEREOF, the parties have caused this Agreement to he executed by their duly authorized
representatives as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Synthesis Energy Systems, Inc.	 	 	 	Gas Technology Institute	 	 
	 
	By:	 	/s/ Donald P. Bunnell	 	 	 	By:	 	/s/ Paul Chromek	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	President & CEO — Asia Pacific
	 	 	 	 	 	Title:
	 	Corporate Secretary	 	 

 

14

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