Document:

Exhibit 10.4

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

 

This Intellectual Property License Agreement (this “License Agreement”) is entered into on [·], 2014 (the “Effective Date”), by and between OCCIDENTAL PETROLEUM CORPORATION, a Delaware corporation (“OPC”), and CALIFORNIA RESOURCES CORPORATION, a Delaware corporation (“CRC”) (each a “Party” and collectively, the “Parties”).

 

Recitals

 

A.                                    OPC and its Affiliates desire to grant CRC rights to the Object Code, Source Code and Code Documentation of certain software that was used in the conduct of the business of CRC and its Affiliates prior to the Effective Date and listed in Exhibit A (the “Oxy Owned Software”).

 

B.                                    OPC and its Affiliates desire to grant CRC rights to certain user manuals, technical manuals, training manuals, protocols, policies, specifications or other explanatory or informational materials, which are listed in Exhibit B (the “Operations Documentation”).

 

C.                                    OPC’s Affiliate, OXY USA Inc. (“OXY USA”), is the assignee of U.S. Patent No. 7,731,037, and desires to grant CRC rights to this patent and any extensions, divisions, continuations, reexaminations, and reissues thereof that OXY USA owns or controls (collectively, the “Licensed Patents”).

 

D.                                    CRC and its Affiliates desire to grant OPC rights to certain data, technical information, and other materials, which are listed in Exhibit C (the “CRC Data and Documentation”).

 

E.                                     Pursuant to the Separation and Distribution Agreement between the Parties, dated [·] (the “Separation Agreement”), (i) OPC has agreed to grant to CRC a limited non-exclusive license to the Oxy Owned Software, Operations Documentation, and Licensed Patents and (ii) CRC has agreed to grant OPC a limited non-exclusive license to the CRC Data and Documentation, on the terms and conditions set forth in this License Agreement.

 

Agreement

 

In consideration of the promises and the respective agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.                                      Definitions

 

1.1                               When used in this License Agreement, the following terms shall have the meanings set forth below:

 

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(a)                                 “Action” means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

 

(b)                                 “Acquirer” means any Third Party that acquires, either directly or indirectly, Control, whether accomplished by statutory merger, consolidation or share exchange, stock or asset sale or purchase, or any other form of transaction.

 

(c)                                  “Affiliate” means any Person which (i) Controls directly or indirectly a Party, or (ii) is Controlled directly or indirectly by such Party, or (iii) is directly or indirectly Controlled by a Person which directly or indirectly Controls such Party.

 

(d)                                 “Code Documentation” means (i) any design specifications (e.g., logic manuals, flow charts, and principles of operation), testing specifications, test procedures (automated or manual), internal documentation (e.g., database schema designs, functional specifications, training materials, sales guides, build procedures) and (ii) any internal development tools (e.g., build tools, install tools, test tools, debug/diagnostic tools, reviewer guides), and localization versions, all of the foregoing as provided to CRC by OPC under this License Agreement and related to the Source Code of the software listed in Exhibit A.

 

(e)                                  “Confidential Information” means any information of a Party or its Affiliates (each a “Discloser”) that is not generally available to the public and is (i) disclosed to the other Party or its Affiliates (each a “Recipient”) and (ii) in the case of OPC or its Affiliates as a Discloser, related to the Oxy Owned Software, Operations Documentation, or any unpublished patent applications or (iii) in the case of CRC or its Affiliates as a Discloser, related to the CRC Data and Documentation.  Confidential Information includes any information that meets the criteria above, regardless of the form in which such information appears, or by which it is communicated whether in tangible or intangible form, whether or not marked as confidential or otherwise identified as confidential.  However, Confidential Information does not include any information that: (A) is already in the public domain at the time of disclosure or becomes available to the public through no breach of this License Agreement and without the fault of the Recipient; (B) was rightfully known to the Recipient without obligation of confidentiality at the time of its disclosure; (C) is independently developed by the Recipient without the use of any Confidential Information; or (D) is subsequently learned from a Third Party that has the right to disclose the Confidential Information and is not under a confidentiality obligation to the Discloser.

 

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(f)                                   “Control” means the ability to direct, manage or dictate the actions of or determine the management of the entity in question, whether by the elections of members of the board of directors or other governing body of such entity, or by having a majority number of members of such governing body, or by any other means.

 

(g)                                  “Governmental Authority” means any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof.

 

(h)                                 “Intellectual Property” means any and all intellectual property rights, under the law of any jurisdiction, both statutory and common law rights, including: (i) utility models, supplementary protection certificates, statutory invention registrations, patents and applications for same, and extensions, divisions, continuations, reexaminations, and reissues thereof; (ii) trademarks, service marks, trade names, slogans, domain names, logos, and trade dress (including all goodwill associated with the foregoing), and registrations and applications for registrations thereof; (iii) copyrights, moral rights, other rights in works of authorship and registrations and applications for registration of the foregoing; and (iv) trade secrets, know-how, and rights in confidential information, including designs, concepts, compilations of information, methods, techniques, procedures, processes, whether or not patentable.

 

(i)                                     “License Agreement” is defined in the preamble.

 

(j)                                    “CRC” is defined in the preamble.

 

(k)                                 “CRC Data and Documentation” is defined in the recitals.

 

(l)                                     “CRC Indemnitees” means CRC and its Affiliates, each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing.

 

(m)                             “OPC” is defined in the preamble.

 

(n)                                 “OPC Indemnitees” means OPC and its Affiliates, each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing.

 

(o)                                 “Losses” means losses (including any diminution in value), costs, damages, penalties and expenses (including legal and accounting fees and expenses and costs of investigation and litigation), whether or not involving an Action.

 

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(p)                                 “Object Code” means the machine-readable version of the software listed in Exhibit A and provided to CRC by OPC under this License Agreement.

 

(q)                                 “OXY USA” is defined in the recitals.

 

(r)                                    “Oxy Owned Software” is defined in the recitals.

 

(s)                                   “Party” or “Parties” is defined in the preamble.

 

(t)                                    “Person” means an individual, group, partnership, corporation, limited liability company, trust or other association or entity, including Governmental Authorities.

 

(u)                                 “Source Code” means code, or any portions thereof, in human readable, high-level language, which when compiled or assembled, becomes the executable Object Code, or any portion thereof, of the software listed in Exhibit A and provided to CRC by OPC under this License Agreement.

 

(v)                                 “Separation Agreement” is defined in the recitals.

 

(w)                               “Third Party” means any Person that is not a Party to this License Agreement other than an Affiliate of a Party.

 

(x)                                 “Transfer” is defined in Section 8.1.

 

(y)                                 “Use” means to copy, install, use, access, display, run, and otherwise interact with, in its intended manner.

 

2.                                      Oxy Owned Software and Operations Documentation License

 

2.1                               License Grant.  Subject to CRC’s compliance with the terms and conditions of this License Agreement, OPC, on behalf of itself and its Affiliates, hereby grants to CRC (for itself and the beneficial use of CRC’s Affiliates) a royalty-free, perpetual, non-exclusive, sublicensable license to Use, modify, and create, Use and modify derivative works of, the Oxy Owned Software and Operations Documentation solely and exclusively for CRC’s or its Affiliates’ internal business purposes.  Neither CRC nor its Affiliates shall Use the Oxy Owned Software or Operations Documentation for the sole or direct benefit of a Third Party.  Any use or modification of the Oxy Owned Software or Operations Documentation not expressly permitted in this License Agreement is prohibited.  For clarity, Use of the Oxy Owned Software or Operations Documentation that benefits other interest owners in oil and gas leases or assets with respect to which CRC or any of its Affiliates is the operator is not a violation of this Section 2.1.

 

2.2                               Ownership.  As between the Parties, all right, title, and interest in and to the Oxy Owned Software and Operations Documentation, including any derivative works of and all Intellectual Property related to the Oxy Owned Software and Operations Documentation, are and at all times will be, the sole and exclusive

 

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property of OPC or its Affiliates, as applicable.  CRC, on behalf of itself and its Affiliates, hereby assigns to OPC and its applicable Affiliates, all right, title, and interest it has or may have in any derivative works of the Oxy Owned Software and Operations Documentation.  Except as expressly set forth in this License Agreement, CRC acquires no rights in or to the Oxy Owned Software or Operations Documentation.  All rights not expressly granted in this License Agreement are reserved to OPC and its Affiliates, including the right to apply for any patents or other Intellectual Property registrations related to the Oxy Owned Software or Operations Documentation.

 

2.3                               Proprietary Notices.  CRC shall not alter, obscure, or remove any trademark, patent notice, or other proprietary or legal notice displayed by or contained in any portion of the Oxy Owned Software, Operations Documentation or any associated materials.

 

2.4                               No Updates.  OPC has no obligation to provide CRC with any fixes or updates to the Oxy Owned Software or Operations Documentation, or otherwise maintain the Oxy Owned Software or Operations Documentation in any way.

 

3.                                      Licensed Patents

 

3.1                               License Grant.  Subject to CRC’s compliance with the terms and conditions of this License Agreement, OXY USA hereby grants to CRC (for itself and the beneficial use of CRC’s Affiliates) a royalty-free, non-exclusive, sublicensable license to make or have made, use, sell, and offer for sale, export, and import into the United States and any other country or countries, any and all goods and services covered by the Licensed Patents and to otherwise practice, exploit, modify, enhance and use the Licensed Patents, including any such modifications or enhancements, solely and exclusively for the benefit of CRC and CRC’s Affiliates.  For clarity, exploitation of the foregoing license that benefits other interest owners in oil and gas leases or assets with respect to which CRC or any of its Affiliates is the operator is not a violation of this Section 3.1.

 

3.2                               Marking.  CRC will mark all goods covered by the Licensed Patents with all applicable proprietary legends (e.g., patent pending, patent numbers) as required to ensure the enforceability of the Licensed Patents under all applicable laws.

 

3.3                               Ownership.  As between the Parties, all right, title, and interest in and to the Licensed Patents, including any modifications or improvements of and all Intellectual Property related to the Licensed Patents, are and at all times will be, the sole and exclusive property of OXY USA or its Affiliates, as applicable.  CRC, on behalf of itself and its Affiliates, hereby assigns to OXY USA and its applicable Affiliates all right, title, and interest it has or may have in any modifications or enhancement of the Licensed Patents.  Except as expressly set forth in this License Agreement, CRC acquires no rights in or to the Licensed Patents.  All rights not expressly granted in this License Agreement are reserved to OPC and

 

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its Affiliates, including the right to apply for any patents or other Intellectual Property registrations related to the Licensed Patents.

 

3.4                               Infringement Notice. If CRC at any time becomes aware or receives notice of any suspected or actual unauthorized use or other infringement of a Licensed Patent, then CRC shall promptly give written notice thereof to OXY USA providing all information in CRC’s or its Affiliates’ possession regarding such infringement.

 

3.5                               Enforcement.  OXY USA has the sole right to bring a legal action for infringement of any and all Licensed Patents and to seek the recovery of damages related to such infringement.  Upon notice of suspected or actual infringement in accordance with Section 3.4, at OXY USA’s sole discretion, OXY USA may bring a legal action for such patent infringement or begin negotiations for the cessation of such infringement.  As between the Parties, OXY USA (a) has the sole and exclusive right to sue and recover past, present, and future damages related to the Licensed Patents incurred by OXY USA, CRC, and their respective Affiliates; (b) has the sole and exclusive right and option to name CRC and any of its Affiliates as a party plaintiff in such suit; and (c) may seek any damages incurred as a result of such infringement of the Licensed Patents.  Any amount awarded or paid as a result of such legal action shall be paid to OXY USA.  CRC shall have the right to employ separate counsel and participate in the prosecution of any infringement cause of action instituted by OXY USA at CRC’s sole cost.

 

4.                                      CRC Data and Documentation License

 

4.1                               License Grant.  Subject to OPC’s compliance with the terms and conditions of this License Agreement, CRC, on behalf of itself and its Affiliates, hereby grants to OPC (for itself and the beneficial use of OPC’s Affiliates) a royalty-free, perpetual, non-exclusive, sublicensable license to Use, modify, and create, Use and modify derivative works of, the CRC Data and Documentation solely and exclusively for OPC’s or its Affiliates’ internal business purposes.  Neither OPC nor its Affiliates shall Use the CRC Data and Documentation for the sole or direct benefit of a Third Party.  Any use or modification of the CRC Data and Documentation not expressly permitted in this License Agreement is prohibited.  For clarity, Use of the CRC Data and Documentation that benefits other interest owners in oil and gas leases or assets with respect to which OPC or any of its Affiliates is the operator is not a violation of this Section 4.1.

 

4.2                               Ownership.  As between the Parties, all right, title, and interest in and to the CRC Data and Documentation, including any derivative works of and all Intellectual Property related to the CRC Data and Documentation, are and at all times will be, the sole and exclusive property of CRC or its Affiliates, as applicable.  OPC, on behalf of itself and its Affiliates, hereby assigns to CRC and its applicable Affiliates, all right, title, and interest it has or may have in any derivative works of the CRC Data and Documentation.  Except as expressly set forth in this License Agreement, OPC acquires no rights in or to the CRC Data and Documentation.  All rights not expressly granted in this License Agreement are reserved to CRC

 

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and its Affiliates, including the right to apply for any patents or other Intellectual Property registrations related to the CRC Data and Documentation.

 

4.3                               Proprietary Notices.  OPC shall not alter, obscure, or remove any trademark, patent notice, or other proprietary or legal notice displayed by or contained in any portion of the CRC Data and Documentation or any associated materials.

 

4.4                               No Updates.  CRC has no obligation to provide OPC with any fixes or updates to the CRC Data and Documentation, or otherwise maintain the CRC Data and Documentation in any way.

 

5.                                      Confidential Treatment

 

5.1                               Protection.  Each Party agrees to secure and protect the Confidential Information of the other Party using at least as great a degree of care as it uses to protect its own confidential information of a similar nature, but in no event less than reasonable care.  Each Party agrees to hold the Confidential Information in confidence and not disclose it to Third Parties, except as permitted under this License Agreement.

 

5.2                               Other CRC Obligations.  Except as expressly permitted by this License Agreement, CRC agrees:

 

(a)                                 to keep the Oxy Owned Software and Operations Documentation confidential and to take appropriate steps to ensure that the employees, agents, officers and representatives of CRC, contractors and CRC’s Affiliates (as well as contractors of any such Affiliate) that Use the Oxy Owned Software or Operations Documentation pursuant to this License Agreement keep the Oxy Owned Software and Operations Documentation confidential; and

 

(b)                                 not disclose or provide the Oxy Owned Software or Operations Documentation to any Third Party.

 

5.3                               Other OPC Obligations.  Except as expressly permitted by this License Agreement, OPC agrees:

 

(a)                                 to keep the CRC Data and Documentation confidential and to take appropriate steps to ensure that the employees, agents, officers and representatives of OPC, contractors and OPC’s Affiliates (as well as contractors of any such Affiliate) that Use the CRC Data and Documentation pursuant to this License Agreement keep the CRC Data and Documentation confidential; and

 

(b)                                 not disclose or provide the CRC Data and Documentation to any Third Party.

 

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5.4                               Legally Required Disclosure.  Notwithstanding the foregoing, a Recipient may disclose Confidential Information of a Discloser to a Governmental Authority but only to the extent such disclosure is specifically required by applicable law, stock exchange rules or by a governmental order, decree or regulation, in each case, in the opinion of Recipient’s legal counsel.  In addition, each Recipient shall use best efforts to preserve the confidentiality of the Confidential Information of the Discloser in any such disclosure to the extent the applicable law, stock exchange rule, governmental order, decree or regulation gives such Recipient the right to do so.  Each Recipient agrees to inform the Discloser of (a) any request or demand for disclosure made upon such Recipient by a Governmental Authority and (b) such legal counsel’s opinion that such disclosure is necessary prior to making such disclosure.

 

6.                                      Use by Affiliates

 

6.1                               Same Rights.  Any Affiliate of CRC shall have the same right to exploit the Oxy Owned Software, Operations Documentation, and Licensed Patents as CRC.  Any Affiliate of OPC shall have the same right to exploit the CRC Data and Documentation as OPC. Each Affiliate that exercises such right shall be bound by, and shall comply with all of the terms and conditions of, this License Agreement as though it were “CRC” or “OPC,” as applicable, hereunder, but CRC or OPC, as applicable, shall at all times remain responsible for all Use or other exploitation of the Oxy Owned Software, Operations Documentation, Licensed Patents or CRC Data and Documentation, as applicable, under this License Agreement by such Affiliate.

 

6.2                               Change in Affiliate Status.  If at any time a prior Affiliate of CRC no longer meets the definition of an Affiliate or should cease to exist, such prior Affiliate shall immediately return to CRC all Oxy Owned Software and Operations Documentation in its possession and deliver a certificate from an authorized officer stating that such delivery comprises and includes all Oxy Owned Software and Operations Documentation previously in its possession, and such prior Affiliate shall cease to have the right to exploit such Oxy Owned Software and Operations Documentation as well as the Licensed Patents.  If at any time a prior Affiliate of OPC no longer meets the definition of an Affiliate or should cease to exist, such prior Affiliate shall immediately return to OPC all CRC Data and Documentation in its possession and deliver a certificate from an authorized officer stating that such delivery comprises and includes all CRC Data and Documentation previously in its possession, and such prior Affiliate shall cease to have the right to exploit such CRC Data and Documentation.

 

7.                                      Indemnities

 

7.1                               CRC Indemnity.  CRC agrees for itself and its Affiliates, successors, and assigns, to defend, indemnify and hold the OPC Indemnitees harmless from and against any and all Losses whatsoever incurred by and/or Actions imposed on any OPC Indemnitee in connection with, related to, or arising from CRC’s or its Affiliates’

 

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possession, Use, and/or other exploitation of the licenses granted by OPC pursuant to this License Agreement; REGARDLESS OF WHETHER SUCH CLAIM INVOLVES THE NEGLIGENCE, STRICT LIABILITY, OR FAULT OF AN OPC INDEMNITEE.

 

7.2                               OPC Participation in Defense.  Any OPC Indemnitee may participate in its defense at its own cost and expense and CRC will consult with OPC in connection with defense and settlement.

 

7.3                               OPC Indemnity.  OPC agrees for itself and its Affiliates, successors, and assigns, to defend, indemnify and hold the CRC Indemnitees harmless from and against any and all Losses whatsoever incurred by and/or Actions imposed on any CRC Indemnitee in connection with, related to, or arising from OPC’s or its Affiliates’ possession, Use, and/or other exploitation of the license granted by CRC pursuant to this License Agreement; REGARDLESS OF WHETHER SUCH CLAIM INVOLVES THE NEGLIGENCE, STRICT LIABILITY, OR FAULT OF A CRC INDEMNITEE.

 

7.4                               CRC Participation in Defense.  Any CRC Indemnitee may participate in its defense at its own cost and expense and OPC will consult with CRC in connection with defense and settlement.

 

8.                                      Transfer and Assignment

 

8.1                               No Transfer except as Permitted.  Except as expressly permitted by this License Agreement, neither Party shall sell, sublicense, assign or transfer, in whole or in part, directly or indirectly, by contract, operation of law or otherwise (“Transfer”) this License Agreement or any rights granted herein to any Third Party without the other Party’s prior written consent, which may be withheld, conditioned or delayed at the sole discretion of the other Party.  A change of control is considered a Transfer.  Any Transfer to a Third Party not permitted by this License Agreement shall automatically and, without any further action, be void ab initio.

 

8.2                               Permitted Transfer.  Upon written notice to the other Party, a Party may Transfer this Agreement in its entirety to (a) an Affiliate or (b) an Acquirer, provided that such Affiliate or Acquirer agrees in writing to be bound by all terms and conditions of this License Agreement, including all obligations and liabilities.

 

9.                                      Termination of License

 

9.1                               Conditions of Termination.  This License Agreement and the licenses granted herein may be terminated immediately by a Party:

 

(a)                                 if the other Party breaches, in any material respect, any provision of this License Agreement and fails to remedy such breach within thirty (30) days following notice thereof from the non-breaching Party; or

 

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(b)                                 automatically, without any further action, should the other Party voluntarily file a petition in bankruptcy or assign, voluntarily or involuntarily, its assets for the benefit of its creditors or should proceedings be commenced against or by the other Party under any bankruptcy, insolvency or similar statute.

 

9.2                               Effect of Termination.

 

(a)                                 Upon termination of this License Agreement by OPC pursuant to Section 9.1, CRC and each Affiliate in possession of Oxy Owned Software or Operations Documentation shall destroy all such Oxy Owned Software or Operations Documentation in its possession, shall retain no copies thereof, and shall provide evidence satisfactory to OPC of such destruction.

 

(b)                                 Upon termination of this License Agreement by CRC pursuant to Section 9.1, OPC and each Affiliate in possession of CRC Data and Documentation shall destroy all such CRC Data and Documentation in its possession, shall retain no copies thereof, and shall provide evidence satisfactory to CRC of such destruction

 

(c)                                  All provisions of this License Agreement relating to the confidentiality of or restrictions on the use of the Oxy Owned Software, Operations Documentation, Licensed Patents, or CRC Data and Documentation shall survive any termination of this License Agreement.

 

9.3                               No Cross Default.  A breach of a Party’s obligations as a licensee under this License Agreement will not be deemed to be a breach of a Party’s obligations as a licensor under this License Agreement and will not affect such Party’s rights to its Intellectual Property licensed hereunder.

 

10.                               Warranty and Disclaimers

 

10.1                        Warranty.  Each Party warrants to the other Party that it has full power and authority to grant the licenses granted to the other Party under this License Agreement.

 

10.2                        No Liability.  OPC and its Affiliates shall not be liable for any loss, damage, injury or other casualty of any kind or by whomsoever caused, to the person or property of anyone, including CRC or its Affiliates, agents or customers, arising out of or resulting from CRC’s and/or its Affiliates or their respective successors, or assigns, possession, Use, or other exploitation of any of the Oxy Owned Software, Operations Documentation, or the Licensed Patents.  CRC and its Affiliates shall not be liable for any loss, damage, injury or other casualty of any kind or by whomsoever caused, to the person or property of anyone, including OPC or its Affiliates, agents or customers, arising out of or resulting from OPC’s and/or its Affiliates or their respective successors, or assigns, possession, Use, or other exploitation of any of the CRC Data and Documentation.

 

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10.3                        No Other Warranties.  CRC ACCEPTS THE OXY OWNED SOFTWARE, OPERATIONS DOCUMENTATION, AND LICENSED PATENTS “AS IS” AND “WITH ALL FAULTS” (WHETHER DETECTABLE OR NOT).  OPC ACCEPTS THE CRC DATA AND DOCUMENTATION “AS IS” AND “WITH ALL FAULTS” (WHETHER DETECTABLE OR NOT).  EXCEPT AS EXPRESSLY SET FORTH IN THIS LICENSE AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR DESCRIPTION WITH RESPECT TO THE OXY OWNED SOFTWARE, OPERATIONS DOCUMENTATION, LICENSED PATENTS, OR CRC DATA AND DOCUMENTATION, INCLUDING ANY WARRANTY REGARDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT, INCLUDING ANY NON-INFRINGEMENT BASED ON THE POSSESSION, USE, OR OTHER EXPLOITATION OF THE OXY OWNED SOFTWARE, OPERATIONS DOCUMENTATION, LICENSED PATENTS, OR CRC DATA AND DOCUMENTATION.  IN ADDITION, (A) NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR DESCRIPTION WITH RESPECT TO THE QUALITY, ACCURACY, VALUE OR USEFULNESS OF THE OXY OWNED SOFTWARE, OPERATIONS DOCUMENTATION, LICENSED PATENTS, OR THE CRC DATA AND DOCUMENTATION, AND (B) OPC MAKES NO REPRESENTATION OR WARRANTY THAT CRC’S USE OF THE OXY OWNED SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE.  ALL OF THE FOREGOING WARRANTIES ARE HEREBY DISCLAIMED.

 

10.4                        No Consequential Damages.  NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON (INCLUDING ANY AFFILIATE OF THE OTHER PARTY) FOR ANY PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WHATSOEVER RESULTING FROM OR ARISING OUT OF THIS LICENSE AGREEMENT OR THE POSSESSION, USE, OR OTHER EXPLOITATION BY A PARTY OR ITS AFFILIATES OR SUCH OTHER PERSON OF THE OXY OWNED SOFTWARE, OPERATIONS DOCUMENTATION, LICENSED PATENTS, OR CRC DATA AND DOCUMENTATION, INCLUDING LOSS OF PROFIT, LOSS OF OPPORTUNITY, OR BUSINESS INTERRUPTION, HOWEVER THE SAME MAY BE CAUSED AND EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSS.

 

11.                               Miscellaneous

 

11.1                        Non-exclusivity.  This License Agreement is non-exclusive. Nothing in this License Agreement prevents OPC from granting rights to any or all of the Oxy Owned Software, Operations Documentation, and/or Licensed Patents to any Third Parties on such prices and terms as OPC may establish and nothing in this License Agreement prevents CRC from granting rights to any or all of the CRC Data and Documentation to any Third Parties on such prices and terms as CRC may establish.

 

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11.2                        Entirety of Agreement.  This License Agreement and the Separation Agreement contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein.

 

11.3                        Incorporation of Provisions of Separation Agreement.  The following provisions of the Separation Agreement are hereby incorporated by reference and will apply to this License Agreement as if fully set forth herein: Article IV (Dispute Resolution); Sections 10.1 (Counterparts; Corporate Power), 10.2 (Governing Law; Waiver of Trial by Jury); 10.4 (Third Party Beneficiaries), 10.6 (Severability), 10.7 (Force Majeure), 10.9 (Expenses), 10.11 (Headings), 10.13 (Waivers of Default), 10.14 (Specific Performance), 10.15 (Amendments), 10.16 (Interpretation) and 10.17 (Relationship of the Parties).

 

11.4                        Notices.  All notices, requests, claims, demands or other communications under this License 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, by facsimile or electronic transmission with receipt confirmed (followed by delivery of an original via overnight courier service), or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 11.4):

 

If to OPC:

 

Occidental Petroleum Corporation

5 Greenway Plaza

Houston, Texas 77046-0506

Facsimile: [                        ]

Attention:  General Counsel

 

If to CRC:

 

California Resources Corporation

10889 Wilshire Boulevard

Los Angeles, California 90024

Facsimile: 310-443-6192

Attention:  General Counsel

 

Any Party may, by notice to the other Party, change the address and contact person to which any such notices are to be given.

 

11.5                        Survival.  Those provisions that would require survival in order to give them full force and effect, including Sections 7–11, shall survive the termination or

 

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expiration of this License Agreement, regardless of the date, cause or manner of such termination.

 

11.6                        No Partnership or Joint Venture.  This License Agreement shall not be deemed to create a legal partnership, agency or joint venture between or among any of the Parties hereto or between or among any partners, members or stockholders or any Affiliates (as defined in the Securities Act of 1933, as amended) of any of them.  All liabilities and obligations hereunder are the sole and separate responsibility of each Party, and are not joint and several.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the Parties have signed this License Agreement as of the Effective Date.

 

	
 
    	
OPC:
    
	
 
    	
 
    
	
 
    	
OCCIDENTAL   PETROLEUM CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[Name]
    
	
 
    	
 
    	
[Title]
    
	
 
    	
 
    
	
 
    	
OXY   USA (for purposes of Section 3 only):
    
	
 
    	
 
    
	
 
    	
OXY   USA Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[Name]
    
	
 
    	
 
    	
[Title]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CRC:
    
	
 
    	
 
    
	
 
    	
CALIFORNIA   RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[Name]
    
	
 
    	
 
    	
[Title]
    

 

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Exhibit A

 

Oxy Owned Software

 

	
 
    	
No.
    	
 
    	
Name
    	
 
    	
Notes
    	
 
    
	
 
    	
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2.
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
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Notes:

(a):

(b):

 

15

 

Exhibit B

 

Operations Documentation

 

16

 

Exhibit C

 

CRC Data and Documentation

 

17Exhibit 10.6

 

CALIFORNIA RESOURCES CORPORATION

LONG-TERM INCENTIVE PLAN

 

[FORM OF]

NONSTATUTORY STOCK OPTION AWARD TERMS AND CONDITIONS

 

	
DATE OF GRANT:
    	
 
    	
[·]
    
	
 
    	
 
    	
 
    
	
SHARES OF COMMON STOCK SUBJECT TO   THIS OPTION:
    	
 
    	
See Morgan Stanley Benefit Access   “Stock Options and SARs /My Grants/Granted”
    
	
 
    	
 
    	
 
    
	
VESTING SCHEDULE:
    	
 
    	
Zero prior to the first   anniversary of the Date of Grant; 1/3 on the first   anniversary of the Date of Grant; an additional 1/3 on the second   anniversary of the Date of Grant; and an additional 1/3 on the third   anniversary of the Date of Grant (each such anniversary of the Date of Grant   being a “Vesting Date”)
    
	
 
    	
 
    	
 
    
	
PURCHASE PRICE PER SHARE:
    	
 
    	
See Morgan Stanley Benefit Access   “Stock Options and SARs /My Grants/Granted”
    

 

The following Terms and Conditions (these “Terms and Conditions”) are set forth as of the Date of Grant between CALIFORNIA RESOURCES CORPORATION, a Delaware corporation (“CRC” and, with its subsidiaries, the “Company”), and the eligible employee receiving this award (the “Grantee”).

 

1.                                      Grant of Option.  In accordance with these Terms and Conditions and the California Resources Corporation Long-Term Incentive Plan, as the same may be amended from time to time (the “Plan”), CRC hereby grants to the Grantee the right and option (“Option”) to purchase all or any part of the aggregate number of shares of CRC common stock, $0.01 par value (“Common Stock”), set forth above.  In the event of any conflict between the terms of these Terms and Conditions and the Plan, the Plan shall control.  Capitalized terms used but not defined in these Terms and Conditions shall have the meanings attributed to such terms under the Plan, unless the context requires otherwise.  This Option shall not be treated as an incentive stock option within the meaning of section 422(b) of the Code.

 

If the Grantee fails to accept this award prior to the next record date for the payment of dividends on the Common Stock subsequent to the Date of Grant, then, notwithstanding any other provision of this award, the Grantee shall forfeit this Option and all rights under this award and this award will become null and void. For purposes of these Terms and Conditions, acceptance of the award shall occur on the date the Grantee accepts this Nonstatutory Stock Option Award through Morgan Stanley Benefit Access or any replacement on-line system designated by the Company.

 

2.                                      Purchase Price.  The purchase price of Common Stock purchased pursuant to the exercise of this Option shall be the purchase price per share set forth above, which has been

 

 

determined to be not less than the Fair Market Value of a share of Common Stock at the Date of Grant.  For all purposes of these Terms and Conditions, the Fair Market Value of a share of Common Stock shall be determined in accordance with the provisions of the Plan.

 

3.                                      Vesting and Exercise of Option.  Subject to the earlier expiration of this Option as herein provided, this Option may be exercised, by written notice to CRC at its principal executive office addressed to the attention of its corporate secretary (or such other officer, employee or designee of the Company as CRC may designate from time to time), at any time and from time to time after the Date of Grant, but, except as otherwise provided below, this Option shall not be exercisable for more than that portion of the aggregate number of shares of Common Stock offered by this Option determined under the vesting schedule set forth above.

 

This Option may be exercised only while the Grantee remains an employee of the Company and will terminate and cease to be exercisable upon the Grantee’s termination of employment with the Company, except that:

 

(a)                                 If, prior to the final Vesting Date, the Grantee dies, becomes permanently disabled while in the employ of the Company and terminates employment as a result thereof, retires with the consent of the Company, or terminates employment without cause (as determined by the Company) for the convenience of the Company (each of the foregoing, a “Forfeiture Event”), then the unvested portion of this Option will be reduced on a pro rata basis based upon the number obtained by (i) multiplying the aggregate number of shares of Common Stock offered by this Option by a fraction, the numerator of which is the number of days between the Date of Grant and the Forfeiture Event, and the denominator of which is the number of days between the Date of Grant and the final Vesting Date, and (ii) subtracting from the product the number of shares of Common Stock with respect to which this Option became vested and exercisable prior to the Forfeiture Event. This Option shall become vested and exercisable with respect to such pro rata unvested shares of Common Stock offered by this Option as of the date of the Forfeiture Event (and shall remain exercisable for the remaining term of this Option with respect to such shares as well as the shares with respect to which this Option became vested and exercisable prior to the Forfeiture Event), and this Option shall cease to be exercisable as of such date with respect to any other shares of Common Stock offered under this Option that have not become vested and exercisable on or prior to such date. If the Grantee terminates employment voluntarily or the Grantee’s employment is terminated for cause (as determined by the Company) before the final Vesting Date, then (i) the Grantee shall forfeit the portion of this Option that has not become vested and exercisable prior to the Grantee’s termination date and (ii) this Option may be exercised by the Grantee (or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of the death of Grantee) at any time during the period of 90 days following such termination, but only as to the number of shares the Grantee was entitled to purchase hereunder as of the date the Grantee’s employment so terminates.

 

(b)                                 If a Change in Control occurs prior to the final Vesting Date and the Grantee’s employment is terminated by the Company on or after the date of such event and as a result of such event, then this Option shall become fully vested and exercisable

 

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as of the date of such termination of employment (and shall remain exercisable for the remaining term of this Option) unless, prior to the occurrence of the Change in Control, the Committee, as provided in Section 7.1 of the Plan, determines that such event will not accelerate the vesting and exercisability of this Option. Any such determination by the Committee is binding on the Grantee.

 

Notwithstanding anything herein to the contrary, in no event will this Option be exercisable after the expiration of seven years from the Date of Grant.  The purchase price of shares as to which this Option is exercised shall be paid in full at the time of exercise (i) in cash, cash equivalent, or by electronic funds transfer, (ii) if permitted by the Committee in its sole discretion, by delivering or constructively tendering to CRC shares of Common Stock having a Fair Market Value equal to the purchase price (provided such shares used for this purpose must have been held by the Grantee for such minimum period of time as may be established from time to time by the Committee), (iii) if the Common Stock is readily tradable on a national securities exchange, through a “cashless exercise” in accordance with a Company established policy or program for the same, or (iv) in any other legal consideration the Committee deems appropriate.  No fraction of a share of Common Stock shall be issued by CRC upon exercise of an Option or accepted by CRC in payment of the exercise price thereof; rather, the Grantee shall provide a cash payment for such amount as is necessary to effect the issuance and acceptance of only whole shares of Common Stock.  Unless and until a certificate or certificates representing such shares shall have been issued by CRC to the Grantee, the Grantee (or the person permitted to exercise this Option in the event of the Grantee’s death) shall not be or have any of the rights or privileges of a stockholder of CRC with respect to shares acquirable upon an exercise of this Option.

 

4.                                      Taxes and Withholding.  Regardless of any action the Company takes with respect to any or all income tax (including U.S. federal, state and local tax and non-U.S. tax), social insurance, payroll tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee (“Tax-Related Items”), the Grantee acknowledges that the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and may exceed the amount actually withheld by the Company. The Grantee further acknowledges that the Company (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Nonstatutory Stock Option Award, including the grant, vesting or exercise of the Nonstatutory Stock Option Award; and (ii) does not commit to and is under no obligation to structure the terms of the grant or any aspect of the Nonstatutory Stock Option Award to reduce or eliminate the Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee has become subject to tax in more than one jurisdiction between the Date of Grant and the date of any relevant taxable event, the Grantee acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

Prior to the relevant taxable event, the Grantee shall pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the Company to withhold all applicable Tax-Related Items legally payable by the Grantee, first, from the shares purchased upon exercise of this Nonstatutory Stock Option Award and, if not sufficient, from the Grantee’s wages or other cash compensation. The Grantee shall pay to the Company any amount of Tax-Related Items that the Company may be required to

 

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withhold as a result of the Grantee’s receipt, vesting or exercise of this Nonstatutory Stock Option Award that cannot be satisfied by the means previously described.

 

5.                                      Status of Common Stock.  CRC intends to register for issuance under the Securities Act of 1933, as amended (the “Act”) the shares of Common Stock acquirable upon exercise of this Option, and to keep such registration effective throughout the period this Option is exercisable.  In the absence of such effective registration or an available exemption from registration under the Act, issuance of shares of Common Stock acquirable upon exercise of this Option will be delayed until registration of such shares is effective or an exemption from registration under the Act is available.  CRC intends to use its reasonable efforts to ensure that no such delay will occur.  In the event exemption from registration under the Act is available upon an exercise of this Option, the Grantee (or the person permitted to exercise this Option in the event of the Grantee’s death or incapacity), if requested by the Company to do so, will execute and deliver to the Company in writing an agreement containing such provisions as the Company may require to assure compliance with applicable securities laws.

 

The Grantee agrees that the shares of Common Stock which the Grantee may acquire by exercising this Option will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws.  The Grantee also agrees that (i) the certificates representing the shares of Common Stock purchased under this Option may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws, (ii) CRC may refuse to register the transfer of the shares of Common Stock purchased under this Option on the stock transfer records of CRC if such proposed transfer would in the opinion of counsel satisfactory to CRC constitute a violation of any applicable securities law, and (iii) CRC may give related instructions to its transfer agent, if any, to stop registration of the transfer of the shares of Common Stock purchased under this Option.

 

6.                                      Employment Relationship.  For purposes of these Terms and Conditions, the Grantee shall be considered to be in the employment of the Company as long as the Grantee remains an employee of any of the Company, an Affiliate, or a corporation or other entity or a parent or subsidiary of such corporation or other entity assuming or substituting a new option for this Option.  Without limiting the scope of the preceding sentence, it is expressly provided that the Grantee shall be considered to have terminated employment with the Company at the time of the termination of the “Affiliate” status under the Plan of the entity or other organization that employs the Grantee.  Nothing in the adoption of the Plan, nor the award of this Option thereunder pursuant to these Terms and Conditions, shall affect in any way the right of the Grantee or the Company or any such Affiliate or other entity to terminate such employment at any time.  Unless otherwise provided in a written employment agreement or by applicable law, the Grantee’s employment by the Company or any such Affiliate or other entity shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Grantee or the Company or any such Affiliate or other entity for any reason whatsoever, with or without cause or notice.  Any question as to whether and when there has been a termination of the Grantee’s employment with the Company or any such Affiliate or other entity, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

 

4

 

7.                                      Acknowledgements Regarding Section 409A of the Code.  The Grantee understands that if the purchase price of the Common Stock under this Option is less than the fair market value of such Common Stock on the date of grant of this Option, then the Grantee may incur adverse tax consequences under section 409A of the Code.  The Grantee acknowledges and agrees that (a) he is not relying upon any determination by the Company, any Affiliate, or any of their respective employees, directors, managers, officers, attorneys or agents (collectively, the “Company Parties”) of the fair market value of the Common Stock on the date of grant of this Option, (b) he is not relying upon any written or oral statement or representation of the Company Parties regarding the tax effects associated with the Grantee’s acceptance of these Terms and Conditions and his receipt, holding and exercise of this Option, and (c) in deciding to accept these Terms and Conditions, the Grantee is relying on his own judgment and the judgment of the professionals of his choice with whom he has consulted.  The Grantee hereby releases, acquits and forever discharges the Company Parties from all actions, causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature whatsoever, known or unknown, on account of, arising out of, or in any way related to the tax effects associated with the Grantee’s acceptance of these Terms and Conditions and his receipt, holding and exercise of this Option.

 

8.                                      Notices.  Any notices or other communications provided for in these Terms and Conditions shall be sufficient if in writing.  In the case of the Grantee, such notices or communications shall be effectively delivered if hand delivered to the Grantee at the Grantee’s principal place of employment or if sent by certified mail, return receipt requested, to the Grantee at the last address the Grantee has filed with the Company.  In the case of the Company, such notices or communications shall be effectively delivered if sent by certified mail, return receipt requested, to CRC at its principal executive offices.

 

9.                                      Privacy Rights.  By accepting this Award, the Grantee explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s Data (as defined below) by and among, as applicable, the Company and its affiliates for the exclusive purpose of implementing, administering and managing the Grantee’s participation in the Plan.  The Company holds or may receive from any agent designated by the Company certain personal information about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of this Nonstatutory Stock Option Award or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the purpose of implementing, administering and managing the Plan, including complying with applicable tax and securities laws (“Data”).  Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan.  These recipients may be located in the Grantee’s country or elsewhere, and may have different data privacy laws and protections than the Grantee’s country.  By accepting these Terms and Conditions, the Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes described above.  The Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting the administrator in writing.  Refusing or withdrawing consent may affect the Grantee’s ability to participate in the Plan.

 

5

 

10.                               Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to this Nonstatutory Stock Option Award granted under the Plan or future awards that may be granted under the Plan (if any) by electronic means or to request the Grantee’s consent to participate in the Plan by electronic means.  The Grantee hereby consents to receive such documents by electronic delivery and, if requested, to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

11.                               Binding Effect.  These Terms and Conditions shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Grantee.

 

12.                               Entire Agreement; Amendment.  These Terms and Conditions constitute the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to this Option; provided, however, that the terms of these Terms and Conditions shall not modify and shall be subject to the terms and conditions of any employment and/or severance agreement between the Company (or an Affiliate) and the Grantee in effect as of the date a determination is to be made under these Terms and Conditions.  Without limiting the scope of the preceding sentence, except as provided therein, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect.  The Committee may, in its sole discretion, amend these Terms and Conditions from time to time in any manner that is not inconsistent with the Plan; provided, however, that except as otherwise provided in the Plan or these Terms and Conditions, no amendment will adversely affect the rights of the Grantee under these Terms and Conditions in any material respect without the Grantee’s consent.

 

By accepting this Nonstatutory Stock Option Award, the Grantee agrees, to the extent not contrary to applicable law, to the General Terms of Employment set out on Attachment 1 and the Arbitration Provisions set out on Attachment 2, which, in each case, are incorporated in these Terms and Conditions by reference.

 

13.                               Governing Law.  The laws of the State of Delaware govern the interpretation, performance, and enforcement of these Terms and Conditions.

 

6

 

Attachment 1

General Terms of Employment

 

A.                                    Except as otherwise required by law or legal process, the Grantee will not publish or divulge to any person, firm, corporation or institution and will not use to the detriment of CRC, or any of its subsidiaries or other affiliates, or any of their respective officers, directors, employees or stockholders (collectively, “CRC Parties”), at any time during or after the Grantee’s employment by any of them, any trade secrets or confidential information of any of them (whether generated by them or as a result of any of their business relationships), including such information as described in CRC’s ethics code and other corporate policies, without first obtaining the written permission of an officer of the Company.

 

B.                                    At the time of leaving employment with the Company, the Grantee will deliver to the Company, and not keep or deliver to anyone else, any and all credit cards, drawings, blueprints, specifications, devices, notes, notebooks, memoranda, reports, studies, correspondence and other documents, and, in general, any and all materials relating to the CRC Parties (whether generated by them or as a result of their business relationships), including any copies (whether in paper or electronic form), that the Grantee has in the Grantee’s possession or control.

 

C.                                    The Grantee will, during the Grantee’s employment by the Company, comply with the provisions of CRC’s ethics code.

 

D.                                    Except as otherwise required by the Grantee’s job or permitted by law, the Grantee will not make statements about any CRC Parties (1) to the press, electronic media, to any part of the investment community, to the public, or to any person connected with, employed by or having a relationship with any of them without permission of an officer of the Company or (2) that are derogatory, defamatory or negative. Nothing herein, however, shall prevent Grantee from making a good faith report or complaint to appropriate governmental authorities. To the fullest extent permitted by law, Grantee will not interfere with or disrupt any of the Company’s operations or otherwise take actions intended directly to harm any of the CRC Parties.

 

E.                                    All inventions, developments, designs, improvements, discoveries and ideas that the Grantee makes or conceives in the course of employment by the Company, whether or not during regular working hours, relating to any design, article of manufacture, machine, apparatus, process, method, composition of matter, product or any improvement or component thereof, that are manufactured, sold, leased, used or under development by, or pertain to the present or possible future business of the Company shall be a work-for-hire and become and remain the property of CRC, its successors and assigns.

 

The provisions of this Section do not apply to an invention that qualifies fully under the provisions of Section 2870 of the California Labor Code, which provides in substance that provisions in an employment agreement providing that an employee shall assign or offer to assign rights in an invention to his or her employer do not apply to an invention for which no equipment, supplies, facilities, or trade secret information of the employer was used and which was developed entirely on the employee’s own time, except for those inventions that either (a)

 

7

 

relate, at the time of conception or reduction to practice of the invention, (1) to the business of the employer or (2) to the employer’s actual or demonstrably anticipated research or development, or (b) result from any work performed by the employee for the employer.

 

F.                                     The foregoing General Terms of Employment are not intended to be an exclusive list of the employment terms and conditions that apply to the Grantee. The Company, in its sole discretion, may at any time amend or supplement the foregoing terms. The Grantee’s breach of the foregoing General Terms of Employment will entitle the Company to take appropriate disciplinary action, including, without limitation, reduction of the Nonstatutory Stock Option Award granted pursuant to these Terms and Conditions and termination of employment.

 

8

 

Attachment 2
  ARBITRATION PROVISIONS

 

ANY DISPUTE ARISING OUT OF OR IN ANY WAY RELATED TO THE GRANTEE’S EMPLOYMENT WITH THE COMPANY, OR THE TERMINATION OF THAT EMPLOYMENT, WILL BE DECIDED EXCLUSIVELY BY FINAL AND BINDING ARBITRATION AT A LOCATION WITHIN 50 MILES OF THE COMPANY OFFICE AT OR CLOSEST TO EMPLOYEE’S PRIMARY WORK LOCATION, PURSUANT TO ANY PROCEDURES REQUIRED BY APPLICABLE LAW. TO THE EXTENT NOT INCONSISTENT WITH APPLICABLE LAW, ANY ARBITRATION WILL BE SUBMITTED TO THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) AND SUBJECT TO AAA EMPLOYMENT ARBITRATION RULES AND MEDIATION PROCEDURES IN EFFECT AT THE TIME OF FILING OF THE DEMAND FOR ARBITRATION. THE AAA EMPLOYMENT ARBITRATION RULES AND MEDIATION PROCEDURES ARE AVAILABLE ONLINE AT WWW.ADR.ORG. YOU MAY ALSO CALL AAA AT 800.778.7879 IF THERE ARE QUESTIONS ABOUT THE ARBITRATION PROCESS. ONLY THE FOLLOWING CLAIMS ARE EXCLUDED FROM THESE TERMS AND CONDITIONS: (1) CLAIMS FOR WORKERS’ COMPENSATION, UNEMPLOYMENT COMPENSATION, OR STATE DISABILITY BENEFITS, AND CLAIMS BASED UPON ANY PENSION OR WELFARE BENEFIT PLAN THE TERMS OF WHICH CONTAIN AN ARBITRATION OR OTHER NON-JUDICIAL DISPUTE RESOLUTION PROCEDURE, (2) TO THE EXTENT PERMITTED BY APPLICABLE LAW, CLAIMS FOR PROVISIONAL REMEDIES TO MAINTAIN THE STATUS QUO PENDING THE OUTCOME OF ARBITRATION, (3) CLAIMS BASED ON COMPENSATION AWARD AGREEMENTS AND INCENTIVE PLANS AND (4) CLAIMS WHICH ARE NOT PERMITTED BY APPLICABLE LAW TO BE SUBJECT TO A BINDING PRE-DISPUTE ARBITRATION AGREEMENT.

 

ANY CONTROVERSY REGARDING WHETHER A PARTICULAR DISPUTE IS SUBJECT TO ARBITRATION UNDER THIS ARBITRATION PROVISION SHALL BE DECIDED BY A NEUTRAL ARBITRATOR SELECTED BY AGREEMENT OF GRANTEE AND THE COMPANY OR OTHERWISE SELECTED IN ACCORDANCE WITH AAA EMPLOYMENT ARBITRATION RULES AND MEDIATION PROCEDURES.

 

TO THE EXTENT REQUIRED UNDER APPLICABLE LAW, THE GRANTEE’S RESPONSIBILITY FOR PAYMENT OF THE NEUTRAL ARBITRATOR’S FEES AND EXPENSES SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE FILING FEE THAT WOULD BE REQUIRED FOR A STATE TRIAL COURT ACTION AND THE COMPANY SHALL PAY ALL REMAINING FEES AND EXPENSES OF THE ARBITRATOR. UNLESS OTHERWISE REQUIRED UNDER APPLICABLE LAW, THE PARTIES SHALL EACH PAY THEIR PRO RATA SHARE OF THE NEUTRAL ARBITRATOR’S EXPENSES AND FEES. ANY CONTROVERSY REGARDING THE PAYMENT OF FEES AND EXPENSES UNDER THIS ARBITRATION PROVISION SHALL BE DECIDED BY THE NEUTRAL ARBITRATOR.

 

9

 

THE NEUTRAL ARBITRATOR WILL ALLOW FOR ADEQUATE DISCOVERY BY BOTH PARTIES AND MAY AWARD ANY FORM OF REMEDY OR RELIEF (INCLUDING INJUNCTIVE RELIEF) THAT WOULD OTHERWISE BE AVAILABLE IN COURT. ANY AWARD PURSUANT TO SAID ARBITRATION SHALL BE ACCOMPANIED BY A WRITTEN OPINION OF THE ARBITRATOR SETTING FORTH THE REASON FOR THE AWARD. THE AWARD RENDERED BY THE ARBITRATOR SHALL BE CONCLUSIVE AND BINDING UPON THE PARTIES HERETO, AND JUDGMENT UPON THE AWARD MAY BE ENTERED, AND ENFORCEMENT MAY BE SOUGHT IN, ANY COURT OF COMPETENT JURISDICTION. TO THE EXTENT NOT INCONSISTENT WITH APPLICABLE LAWS, THE ARBITRATOR WILL HAVE THE AUTHORITY TO HEAR AND GRANT MOTIONS.

 

THIS AGREEMENT TO ARBITRATE IS FREELY AGREED TO BETWEEN GRANTEE AND THE COMPANY AND IS MUTUALLY ENTERED INTO BETWEEN THE PARTIES. EACH PARTY FULLY UNDERSTANDS AND AGREES THAT THEY ARE GIVING UP CERTAIN RIGHTS OTHERWISE AFFORDED TO THEM BY CIVIL COURT ACTIONS, INCLUDING BUT NOT LIMITED TO THE RIGHT TO A JURY TRIAL.

 

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