Document:

<PAGE>

                                                                   EXHIBIT 10.43

(QLT INC. LOGO)
887 GREAT NORTHERN WAY
VANCOUVER, BC CANADA V5T 4T5
T 604.707.7000
F 604.707.7001
WWW.QLTINC.COM

[Date]

To:[[FIRST_NAME]] [[LAST_NAME]]

Personal and Confidential

Re:   Notification of Stock Option Grant

I am pleased to inform you that the Board of Directors has approved the granting
to you of an option (the "Option") to purchase [[AMOUNT]] common shares of the
Company's common stock (the "Optioned Shares") at an exercise price of [PRICE]
(the "Exercise Price"), effective [GRANT DATE] (the "Grant Date"), in
recognition of your contribution to the Company. The Option will expire FIVE
years from the Grant Date, on [GRANT DATE + 5 YRS] (the "Expiry Date").

The terms and conditions which govern this Option are set out in three places:
in this letter (the "Notification Letter"), in the attached schedule which sets
out general terms and conditions relating to option grants to Company employees
(the "General Terms"), and in the 2000 QLT Incentive Stock Option Plan (the
"Plan") from which your Option has been granted.

By signing this letter where indicated, you and the Company agree that the
Option is granted under and governed by the terms and conditions of this
Notification Letter, the General Terms and the Plan, all of which together
constitute the agreement (the "Agreement"), between you and the Company relating
to the Option.

Please confirm receipt of this Notification Letter by signing both copies, and
returning one copy to the Human Resources department, attention Vivian Jung, as
soon as possible. You may keep the second copy for your personal records.

In the event that you do not return this Notification Letter signed, you will be
deemed to have accepted the Agreement upon the exercise by you of the Option in
respect of any Optioned Share(s).

Yours truly,

QLT Inc.
Per:

Senior Vice-President, Human Resources and Organizational Development

Accepted and agreed to:                     Date:

-----------------------                     ------------------------
<PAGE>
                                     - 2 -

                          GENERAL TERMS AND CONDITIONS

                        STOCK OPTION GRANTS TO EXECUTIVES

1.    DEFINED TERMS. All capitalized terms which are not defined in the
      Notification Letter or below have the meaning given to them in the Plan.

2.    TERM. Subject to the terms and conditions of the Agreement and the
      terms of the Plan, the Option will terminate on the earlier of:

      (a)   The date on which the Option is exercised with respect to all of the
            Optioned Shares; and

      (b)   5:00 p.m. (Vancouver time) on the Expiry Date.

3.    VESTING. Subject to the terms and conditions of the Agreement, the
      Optioned Shares will vest and become exercisable in 36 equal monthly
      instalments on the monthly anniversary of the Grant Date (the "VESTING
      DATE"), provided that, if the number of Optioned Shares is not equally
      divisible by 36, at each Vesting Date the cumulative number of Optioned
      Shares vested will be rounded to the nearest whole number.

4.    EXERCISE OF OPTIONS.

      (a)   Exercise Notice. The employee to whom the Option has been granted
            may exercise the Option in respect of vested Optioned Shares by
            giving three days' (or less, in the sole discretion of the Company)
            written notice of exercise (the "EXERCISE NOTICE") signed and dated
            by the Optionee (and not postdated), stating that the Optionee
            elects to exercise his or her rights to purchase Optioned Shares
            under the Option and specifying the number of Optioned Shares in
            respect of which the Option is being exercised.

      (b)   Delivery and Payment. The Optionee shall deliver the Exercise Notice
            to the Company at its principal office at 887 Great Northern Way,
            Vancouver, British Columbia, Canada, V5T 4T5 (or at such other
            address as the principal office of the Company may be located at the
            time of exercise) addressed to the attention of the secretary or
            assistant secretary of the Company (or a designee notified in
            writing from time to time by the Company) and be accompanied by full
            payment (payable at par in Vancouver, British Columbia) in any
            combination of the following: (i) cash, bank draft or certified
            cheque; or

            (ii)  irrevocable instructions to:

                  (A)   a brokerage firm designated by the Company to deliver
                        promptly to the Company the aggregate amount of sale or
                        loan proceeds to pay the Option exercise price and any
                        withholding tax obligations (if applicable) that may
                        arise in connection with the exercise, and

                  (B)   the Company to deliver the certificates for such
                        purchased shares directly to the brokerage firm,

                                                                               2
<PAGE>
                                     - 3 -

                        all in accordance with the regulations of any relevant
                        regulatory authorities.

      (c)   Certificate. As soon as practicable after any exercise of the
            Option, the Company will deliver or cause to be delivered to the
            Optionee or the Optionee's designated brokerage firm, as applicable,
            a certificate or certificates representing the Common Shares in
            respect of which the Option is exercised.

5.    RULES UPON RETIREMENT, DEATH, DISABILITY OR TERMINATION. The Option will
      terminate on the earlier of the 90th day after the date on which the
      Optionee ceases to be an employee of the Company or its Affiliates or the
      expiry of the Option, provided that:

      (a)   Retirement. If the Optionee ceases to be an employee of the Company
            or any Affiliate by reason of retirement (the date of retirement or
            cessation herein being called the "RETIREMENT DATE") and:

            (i)   the Optionee:

                  (A)   has worked on behalf of the Company or any Affiliate for
                        at least 20 years, or

                  (B)   is at least 60 years of age and has worked continuously
                        on behalf of the Company or any Affiliate for at least
                        five years,

                  then all Optioned Shares of the Optionee will become
                  immediately vested and will be exerciseable on and after the
                  retirement date until the expiry of the Option; or

            (ii)  the Optionee has received the consent of the Committee at or
                  after an earlier age and upon completion of that number of
                  years of service as the Committee may specify, then all
                  Optioned Shares of the Optionee will become immediately vested
                  and will be exerciseable on and after the retirement date,
                  during a period of the earlier of:

                  (A)   90 days following the retirement date, or

                  (B)   the expiry of the Option,

            unless otherwise determined by the Committee and approved by the
            Exchange (if applicable).

      (b)   Death. If the Optionee dies while the Option is otherwise
            exerciseable, unless otherwise determined by the Committee and
            approved by the Exchange (if applicable), all Optioned Shares of the
            Optionee will become immediately vested and will be exerciseable by
            the legal personal representatives of the estate of the Optionee
            during a period of the earlier of:

            (i)   12 months following the date of death, or

            (ii)  the expiry of the Option.

      (c)   Disability. If the Optionee has his or her Continuous Status as an
            employee of the Company or any Affiliate terminated as a result of
            the Optionee's complete disability, as determined by the Committee
            in its sole discretion, unless otherwise determined by the Committee
            and approved by the Exchange (if applicable), the Optioned Shares
            will become immediately vested and will be exerciseable by the
            Optionee (or in the case of an Optionee who is legally

                                                                               3
<PAGE>
                                     - 4 -

            incapacitated, by his or her guardians or legal representatives)
            during the period ending on the earlier of:

            (i)   12 months following the date of such termination, or

            (ii)  the expiry of the Option.

      (d)   Termination.

            (i)   If the Optionee is terminated by the Company (which, for
                  greater certainty, excludes a resignation of the Optionee) as
                  an employee of the Company or any Affiliate other than for
                  cause (the date of termination herein being called the
                  "TERMINATION DATE"), unless otherwise determined by the
                  Committee and approved by the Exchange (if applicable),
                  one-half of the previously unvested Optioned Shares of the
                  Optionee will become immediately vested and all of the
                  Optioned Shares which have vested will be exercisable on and
                  after the termination date, for the period ending on the
                  earlier of:

                  (A)   90 days following the termination date, or

                  (B)   the expiry of the Option.

            (ii)  If the Optionee is terminated by the Company as an employee of
                  the Company or any Affiliate for cause, unless otherwise
                  determined by the Committee and approved by the Exchange (if
                  applicable), the Option will expire automatically on the date
                  that the Optionee ceases to be an employee of the Company or
                  any Affiliate.

      The Optioned Shares will cease to vest (on a monthly basis or at all)
      after the date on which the Optionee ceases to be an employee of the
      Company.

6.    CHANGE IN CONTROL.

      (a)   Definitions. For the purposes of this Section, "CHANGE IN CONTROL"
            means any of the following events:

            (I)   MERGER. A merger, consolidation, reorganization or arrangement
                  involving the Company other than a merger, consolidation,
                  reorganization or arrangement in which stockholders of the
                  Company immediately prior to such merger, consolidation,
                  reorganization or arrangement own, directly or indirectly,
                  securities possessing at least 65% of the total combined
                  voting power of the outstanding voting securities of the
                  corporation resulting from such merger, consolidation,
                  reorganization or arrangement in substantially the same
                  proportion as their ownership of such voting securities
                  immediately prior to such merger, consolidation,
                  reorganization or arrangement,

            (II)  TENDER OFFER. The acquisition, directly or indirectly, by any
                  person or related group of persons acting jointly or in
                  concert (other than the Company or a person that directly or
                  indirectly controls, is controlled by, or is under common
                  control with, the Company) of beneficial ownership of
                  securities possessing more than 35% of the total combined
                  voting power of the Company's outstanding securities pursuant
                  to a tender offer made directly to the Company's stockholders,

                                                                               4
<PAGE>
                                     - 5 -

            (III) SALE. The sale, transfer or other disposition of all or
                  substantially all of the assets of the Company other than to
                  an Affiliate of the Company as part of a corporate
                  reorganization of the Company, or

            (IV)  BOARD CHANGE. A change in the composition of the Board over a
                  period of 24 consecutive months or less such that a two-thirds
                  majority of the Board members ceases to be comprised of
                  individuals who either:

                  (A)   Have been Board members continuously since the beginning
                        of such period, or

                  (B)   Have been elected or nominated for election as Board
                        members during such period by at least a majority of the
                        Board members described in clause (A) who were still in
                        office at the time the Board approved such election or
                        nomination.

      (b)   Acceleration. Immediately upon the occurrence of a Change in
            Control, all Optioned Shares of the Optionee will become immediately
            vested and will be exercisable on and after the date of the Change
            of Control until the expiry of the Option.

7.    CONDITIONS TO EXERCISE. Notwithstanding any of the provisions of the
      Agreement, the Company's obligation to issue Common Shares to the Optionee
      upon exercise of the Option is subject to the following:

      (a)   Qualification. Completion of registration or other qualification of
            the Common Shares or obtaining approval of such governmental
            authority as the Company determines is necessary or advisable in
            connection with the authorization, issuance or sale of the Common
            Shares;

      (b)   Listing. The admission of the Common Shares to listing or quotation
            on the Exchange; and

      (c)   Undertakings. The receipt by the Company from the Optionee of such
            representations, agreements and undertakings, including as to future
            dealings in the Common Shares, as the Company determines are
            necessary or advisable in order to safeguard against the violation
            of securities laws of any jurisdiction.

8.    ADJUSTMENTS. In the event that there is any material change in the Common
      Shares resulting from subdivisions, consolidations, substitutions or
      reclassifications of the Common Shares, the payment of stock dividends by
      the Company (other than dividends in the ordinary course) or other
      relevant changes in the capital of the Company or from a proposed merger,
      amalgamation or other corporate arrangement or reorganization involving
      the exchange or replacement of Common Shares for those in another
      corporation, appropriate adjustments in the number of Optioned Shares and
      the exercise price thereof will be conclusively determined by the
      Committee.

9.    FURTHER ADJUSTMENTS. Subject to Sections 6 and 8, if, because of a
      proposed merger, amalgamation or other corporate arrangement or
      reorganization, the exchange or replacement of Common Shares for those in
      another corporation is imminent, the Committee may, in a fair and
      equitable manner, determine the manner in which all unexercised option
      rights granted under this Option will be treated including, without
      limitation, requiring the acceleration of the time for the exercise of the
      option rights by the Optionee and of the time for the fulfilment of any
      conditions or restrictions on exercise. All determinations of the
      Committee under this Section will be final, binding and conclusive for all
      purposes subject to the approval of the Exchange, if applicable.

                                                                               5
<PAGE>
                                     - 6 -

10.   TAX. The Optionee is solely responsible for the payment of any applicable
      taxes arising from the grant, vesting or exercise of the Option.
      Notwithstanding the foregoing, the Company will have the right to withhold
      from any Optioned Shares or from any cash amounts otherwise due to the
      Optionee an amount equal to the applicable taxes.

11.   LOCK OUT PERIODS. The Optionee acknowledges and agrees that the Agreement
      and the grant of the Option to the Optionee is subject to the Optionee's
      agreement to at all times comply with the Company's policies with respect
      to Lock Out Periods, as more particularly set out in the Company's Policy
      and Procedures Manual, as amended from time to time.

12.   NO RIGHTS AS SHAREHOLDER. The Optionee will not have any rights as a
      shareholder of the Company in respect of any of the Common Shares covered
      by the Option until the Optionee has exercised the Option and the Company
      has issued Common Shares to the Optionee, both in accordance with the
      terms of the Plan and the Agreement.

13.   NO EFFECT ON EMPLOYMENT. Nothing in the Agreement will:

      (a)   Continue Employment. Confer upon the Optionee any right to continue
            in the employ of or under contract with the Company or any Affiliate
            or affect in any way the right of the Company or any Affiliate to
            terminate his or her employment at any time.

      (b)   Extend Employment. Be construed to constitute an agreement, or an
            expression of intent, on the part of the Company or any Affiliate to
            extend the employment of the Optionee beyond the time that he or she
            would normally be retired pursuant to the provisions of any present
            or future retirement plan or policy of the Company or any Affiliate,
            or beyond the time at which he or she would otherwise be retired
            pursuant to the provisions of any contract of employment with the
            Company or any Affiliate.

14.   ENUREMENT. The Agreement shall enure to the benefit of and be binding upon
      the parties to the Agreement and upon the successors or assigns of the
      Company and upon the executors, administrators and legal personal
      representatives of the Optionee.

15.   FURTHER ASSURANCES. Each of the parties to the Agreement will do such
      further acts and execute such further documents as may required to give
      effect to and carry out the intent of the Agreement.

16.   NON-ASSIGNABLE. The Option is personal to the Optionee and may not be
      assigned or transferred in whole or in part, except by will or by the
      operation of the laws of devolution or distribution and descent.

17.   AMENDMENTS. Any amendments to the Agreement must be in writing duly
      executed by the parties and will be subject to the approval of the
      applicable regulatory authorities.

18.   TIME OF THE ESSENCE. Time will be of the essence of the Agreement.

19.   GOVERNING LAW. The Agreement shall be governed, construed and enforced
      according to the laws of the Province of British Columbia and is subject
      to the exclusive jurisdiction of the courts of the Province of British
      Columbia.

                                                                               6
<PAGE>
                                     - 7 -

20.   INTERPRETATION OF THE AGREEMENT AND THE PLAN. If any question or dispute
      arises as to the interpretation of the Agreement, the question or dispute
      will be determined by the Committee and such determination will be final,
      conclusive and binding on both the Company and the Optionee. If there is
      any conflict between these General Terms and the Plan, the Plan, as
      amended from time to time, will govern.

THESE GENERAL TERMS AND CONDITIONS ARE DATED FOR REFERENCE: MARCH 19, 2003

                                                                               7Amendment 2 to Master License Agrmnt-Syntroleum

 

Exhibit 10.6

CONFIDENTIAL

AMENDMENT NO. 2

TO

          MASTER LICENSE AGREEMENT          

(formerly the Volume License Agreement)

     THIS AMENDMENT NO. 2 TO MASTER LICENSE AGREEMENT (“Amendment No. 2”) is made and entered into
as of this 1st day of June, 2002 by and between Syntroleum Corporation, a Delaware corporation
(“Licensor”), and Ivanhoe Energy Inc., a company organized under the laws of the Yukon, Canada
(“Licensee”).

Recitals

     A.     WHEREAS, Licensor and Licensee previously entered into that certain Volume License
Agreement dated as of April 26, 2000, as amended by Amendment No. 1 to Volume License Agreement
dated as of October 11, 2000 which, among other things, changed the Volume License Agreement to a
Master License Agreement. (collectively, the “Master License Agreement”); and

     B.     WHEREAS, Licensor and Licensee desire to amend certain provisions of the Master License
Agreement as set forth in this Amendment No. 2.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this
Amendment No. 2, the Parties agree as follows. Unless otherwise provided in this Amendment No. 2,
capitalized terms used in this Amendment No. 2 but not defined shall have the meanings set forth in
the Master License Agreement.

     1.     Attachment 3 to the Master License Agreement is amended and restated to read in
its entirety as set forth on Exhibit A to this Amendment No. 2.

     2.     Except as expressly amended by this Amendment No. 2, the Master License Agreement
is and shall remain in full force and effect in

1

 

accordance with its terms and the parties hereby ratify and reaffirm the Master
License Agreement as amended hereby.

	 	 	 	 	 
	 	Licensor

SYNTROLEUM CORPORATION

 	 
	 	By:  	/s/ Larry J. Weick
 	 
	 	 	Larry J. Weick, Vice President 	 
	 	 	 	 
	 
	 	Licensee

IVANHOE ENERGY INC.

 	 
	 	By:  	/s/ E. Leon Daniel
 	 
	 	 	E. Leon Daniel, President & CEO 	 
	 	 	 	 

2

 

	 	 	 	 	 

Exhibit A to Amendment Number 2

 

ATTACHMENT 3

 

to Master License Agreement

 

License Fee Calculation

	I.	 	For purposes of this Attachment 3, the following terms shall have the meanings
ascribed thereto:
	 
	A.	 	“Licensed Plant” means the Licensed Plant in which a Site License Agreement for such plant is
issued to and remains in the name of the Licensee who has executed this Agreement with
Licensor and, in which the Participating Interest held by Licensee, or collectively by
Licensee and any other Person who has executed a license agreement (which is applicable to the
Licensed Plant) with Licensor, represents at least 10% of the entire Participating Interest
not held by a governmental authority regardless of operatorship of the Licensed Plant.
	 
	B.	 	“Large Licensed Plant” means a Licensed Plant under a single Site License Agreement with a
maximum daily design capacity, as defined in a single Process Design Package, of nominally
180,000 or more barrels of Synthetic Product per day and which may be constructed in two
phases of nominally 90,000 or more barrels per day for each phase and with the second phase
constructed either concurrently with the first phase or in a separate consecutive period
starting no more than 1 year following the start of construction of the first phase.
	 
	C.	 	“Royalty Rate” shall mean (i) the lowest royalty rate per Barrel of Synthetic Product
accepted by Licensor for a Site License Agreement with a non-Affiliate for a facility of
comparable size, in the Licensed Territory, which is not under a master preferred license
agreement, during the twelve (12) months immediately preceding the execution date of the
applicable Site License Agreement under this Agreement, or (ii) if no such Site License
Agreement has been executed during the twelve (12) months immediately preceding, then the
royalty rate per Barrel of Synthetic Product in the last Site License Agreement with a
non-Affiliate, in the Licensed Territory, executed by Licensor, which is not under a master
preferred license agreement, or (iii) if none of the foregoing applies, then US$0.50 per
Barrel of Synthetic Product. Market Royalty Rate does not include the catalyst price as
provided for under Section 2.03 of this Agreement.
	 
	D.	 	“BLS Index” shall mean the index for January of the year in question represented by the
Producer Price Index for Industrial Commodities as published by the Bureau of Labor
Statistics, U.S Department of Labor, using the year 1982 as the base index equal to 100. If,
at any time, the above index should cease to be published, then

3

 

	 	 	another suitable index published by the U.S. Government or other authoritative organization and
generally recognized by the trade as authoritative with respect to changes in the U.S. of
equivalent commodity costs shall be used.
	 
	II.	 	For each Site License Agreement executed under this Agreement for a Licensed Plant with a
maximum daily design capacity, as defined by the Process Design Package, of less than 30,000
barrels of Synthetic Product per day, Licensee agrees to pay License Fees to Licensor on a
prepaid license basis as follows:

	 	A.	 	Licensee agrees to pay Licensor a one-time, prepaid License Fee calculated in
accordance with the following formula:
	 
	 	 	 	License Fee = “C” x 350 x 7.5 x “R” wherein:

	 	 	 	 	 
	“C”
	 	=
	 	the maximum daily design capacity, as defined by the
Process Design Package, of such Licensed Plant to produce Marketable Products
measured in Barrels of Synthetic Product per day for which such Licensed Plant
is originally designed and constructed, and

	“R”
	 	=
	 	the Royalty Rate.

	 	 	 	and payable in installments as follows:

	 	(i)	 	20% within thirty (30) days after the execution of the Site
License Agreement for such Licensed Plant;
	 
	 	(ii)	 	30% within thirty (30) days after delivery of the Process
Design Package or within one hundred twenty (120) days after the execution of
the Site License Agreement for such Licensed Plant, whichever first occurs;
	 
	 	(iii)	 	20% within thirty (30) days after the commencement of field
construction move-in:
	 
	 	(iv)	 	30% within one-hundred and twenty (120) days after the
Start-Up Date of the Licensed Plant or a successful Performance Test as
specified in the Process Guarantee and Performance Test Agreement, whichever
first occurs.

	 	B.	 	Notwithstanding any other provision of this Agreement, payments made by
Licensee to Licensor under Section 5.01 of this Agreement and Section 5 of Amendment
No. 1 to Volume License Agreement between Licensee and Licensor dated October 11,
2000, shall be fully credited against the License Fees payable by Licensee to Licensor
under Section II.A.

4

 

	 	C.	 	In the event the actual production capacity of any Licensed Plant, under
II.A. above, is determined to have either exceeded the original maximum daily design
capacity established in its Site License Agreement or is increased through major
equipment modification, by more than five percent (5%) or by more than 500 barrels per
day, at any time after the Start-up Date, Licensee shall pay Licensor an additional
License Fee, on a prepaid basis, equal to the difference between (a) the prepaid
License Fee as would have been calculated with the higher production capacity for such
Licensed Plant substituted for “C” in the calculation method set forth in II.A. above,
and (b) the License Fee as would have been calculated for such Licensed Plant by the
method set forth in II.A. above using the original maximum daily design capacity
established in each Site License Agreement. The incremental License Fee due will be
reduced by any previous incremental adjustments. Such additional License Fee shall be
payable within thirty (30) days after the end of the calendar year in which such
increase in production capacity of such Licensed Plant occurs. Incremental License
Fees for increased production capacity in any Licensed Plant shall not be due if the
increased production capacity is the result of the initial use of Licensee Patent
Rights or Licensee Technical information. The total cumulative incremental capacity
adjustments under each Site License Agreement will be limited to 50 percent of the
initial maximum daily capacity under such Agreement.
	 
	 	D.	 	Upon payment of all fees due under the Site License Agreement for each
Licensed Plant under this Section II, Licensee shall be deemed to have acquired a
fully paid license for such Licensed Plant up to the original maximum daily design
capacity or any adjusted daily design capacity made under the provisions of Section
II.B. above. Any additional incremental increases in the Licensed Plant capacity will
be subject to additional License Fees as calculated under incremental adjustments
pursuant to this Section II.

	III.	 	For each Site License Agreement executed under this Agreement for a Licensed Plant with a
maximum daily design capacity, as defined in the Process Design Package, equal to or more than
30,000 barrels but less than nominally 180,000 barrels of Synthetic Product per day, Licensee
agrees to pay License Fees to Licensor as follows:

	 	A.	 	Prepaid License Fee.

1. Licensee agrees to pay Licensor a one-time, prepaid License Fee calculated in
accordance with the following formula:

License Fee = “C” x 350 x 7.5 x “R” x .50 wherein:

	 	 	 	 	 
	“C”
	 	=
	 	the maximum daily design capacity, as defined by the
Process Design Package, of such Licensed Plant to produce Marketable Products
measured in Barrels of Synthetic Product per day for

5

 

	 	 	 	 	 
	 	 	 	 	which such Licensed Plant is originally designed and constructed, and

	 	 	 	 	 

	“R”
	 	=
	 	the Royalty Rate.

	 	 	 	and payable in installments as follows:

	 	(i)	 	20% within thirty (30) days after the execution of the Site
License Agreement for such Licensed Plant;
	 
	 	(ii)	 	30% within thirty (30) days after delivery of the Process
Design Package or within one hundred twenty (120) days after the execution of
the Site License Agreement for such Licensed Plant, whichever first occurs;
	 
	 	(iii)	 	20% within thirty (30) days after the commencement of field
construction move-in;
	 
	 	(iv)	 	30% within one-hundred and twenty (120) days after the
Start-Up Date of the Licensed Plant or a successful Performance Test as
specified in the Process Guarantee and Performance Test Agreement, whichever
first occurs.

2. Notwithstanding any other provision of this Agreement, payments made by Licensee to
Licensor under Section 5.01 of this Agreement and Section 5 of Amendment No. 1 to
Volume License Agreement between Licensee and Licensor dated October 11, 2000, shall be
credited against the License Fee payments due by Licensee to Licensor under Section
III.A.1. at the rate of up to 50%, such that the Licensor shall receive a cash payment
of at least 50% of the scheduled installment payment under Section III.A.1.

3. In the event the actual production capacity of any Licensed Plant for which a
prepaid License Fee has been paid under Section III.A. above is determined to have
exceeded the original maximum daily design capacity established in its Site License
Agreement by more than five percent (5%) or by more than 500 barrels per day, at any
time after the Start-up Date, Licensee shall pay Licensor an additional License Fee, on
a prepaid basis, equal to the difference between (a) the prepaid License Fee as would
have been calculated with the higher production capacity for such Licensed Plant
substituted for “C” in the calculation method set forth in II.A. above, and (b) the
License Fee as would have been calculated for such Licensed Plant by the method set
forth in Section III.A. above using the original maximum daily design capacity
established in each Site License Agreement. Such additional License Fee shall be
payable within thirty (30) days after the end of the calendar year in which such
increase in production capacity of such Licensed Plant occurs. Incremental License
Fees for increased production capacity in any Licensed

6

 

Plant shall not be due if the increased production capacity is the result of the
initial use of Licensee Patent Rights or Licensee Technical information. The total
cumulative incremental capacity adjustments under each Site License Agreement will be
limited to 50 percent of the initial maximum daily capacity under such Agreement.

	 	B.	 	Running Royalty License Fees.

	 	1.	 	In addition to the prepaid License Fee payable by Licensee to
Licensor in accordance with Paragraph A above, Licensee agrees to pay Licensor, on
or before thirty (30) days after the end of each calendar month, a monthly running
royalty license fee based on the actual operation of the Licensed Plant and
calculated in accordance with the following formula:
	 
	 	 	 	Monthly Running Royalty License Fee = “MP” x (“R” x .50) x “BLS”
	 
	 	 	 	wherein:

	 	 	 	 	 
	“MP”
	 	=
	 	the total monthly production in Barrels of
Synthetic Product during a calendar quarter as measured in a manner
specified in the Process Design Package,

	“R”
	 	=
	 	the Royalty Rate, and

	“BLS”
	 	=
	 	the factor equal to (a) the BLS Index for the
calendar year in which the payment is being made divided by (b) the BLS
Index applicable as of the Effective Date of the Master License Agreement.

	IV.	 	For each Site License Agreement executed under this Agreement for a Large Licensed
Plant, Licensee agrees to pay License Fees to Licensor as follows:

	 	1.	 	First Phase

	 	A.	 	Prepaid License Fee
	 
	 	 	 	25% of the Prepaid License Fee for the first nominal 90,000 barrels per day of a
Large Licensed Plant (“First Phase”) will be paid in accordance with the
installment payment schedule set forth in Section III.A. above
	 
	 	 	 	AND
	 
	 	B.	 	Running Royalty License Fees
	 
	 	 	 	The remaining License Fee in respect to the First Phase of a Large Licensed Plant,
will be paid, on or before thirty (30) days after the end of each calendar month,
as a running royalty license fee (“First Phase

7

 

	 	 	 	Running Royalty License Fee”) per barrel of actual production of Marketable
Products for the life of the project. The First Phase Running Royalty License Fee
rate, will be equal to 75% of the standard Royalty Rate for a Licensed Plant
current at the time of execution of the Site License Agreement and escalated
annually thereafter based upon the Bureau of Labor Statistics published inflation
index, calculated as follows:
	 
	 	 	 	First Phase Running Royalty License Fee = “MP x (“R” x 0.75) x “BLS”
	 
	 	 	 	Wherein:

	 	 	 	 	 
	“QP”
	 	=
	 	total monthly production in Barrels
of Marketable Products during a calendar month

	 	 	 	 	 

	“R”
	 	=
	 	the Royalty Rate

	 	 	 	 	 

	“BLS”
	 	=
	 	the factor equal to (a) the BLS
index for the calendar year in which the payment is being made
divided by (b) the BLS Index applicable as of the Effective Date
of the Master License Agreement.

	 	2.	 	Second Phase
	 
	 	 	 	For the second nominal 90,000 barrels per day minimum or more for the Large Licensed Plant
under the same Site License Agreement referenced above (“Second Phase”) that will be
included in a combined design with the First Phase as a single project for purposes of
preparation of the Process Design Package, with the Second Phase constructed either
concurrently with the First Phase or in a separate consecutive period starting no more than
1 year following the start of construction of the First Phase, the License Fee associated
with the Second Phase of the Large Licensed Plant shall be paid as follows:

	 	A.	 	Prepaid License Fees

25% of the Prepaid License Fee for the Second Phase will be payable in installments
as follows:

(i) 50% at the closing of the financing on the First Phase with respect to a Large
Licensed Plant covered by a Site License (Financial Closing)

(ii) 20% within thirty (30) days after the commencement of field construction
move-in; and

(iii) 30% at the satisfactory Performance Test of the Second Phase of the Large
Licensed Plant.

8

 

AND

	 	B.	 	Running Royalty License Fees
	 
	 	 	 	The remaining License Fee in respect to the Second Phase of the Large Licensed
Plant, will be paid, on or before thirty (30) days after the end of each calendar
month, as a running royalty license fee (“Second Phase Running Royalty License
Fee”) per barrel of actual production of Marketable Products for the life of the
project. The Second Phase Running Royalty License Fee rate, will be equal to 50%
of the standard Royalty Rate for the Licensed Plant current at the time of
execution of the Site License Agreement and escalated annually thereafter based
upon the Bureau of Labor Statistics published inflation index, calculated as
follows:
	 
	 	 	 	Second Phase Running Royalty License Fee = “MP x (“R” x 0.50) x “BLS”
	 
	 	 	 	Wherein:

	 	 	 	 	 
	“MP”
	 	=
	 	total monthly production in Barrels of
Marketable Products during a calendar month

	 	 	 	 	 

	“R”
	 	=
	 	the Royalty Rate

	 	 	 	 	 

	“BLS”
	 	=
	 	the factor equal to (a) the BLS index
for the calendar year in which the payment is being made divided by
(b) the BLS Index applicable as of the Effective Date of the Master
License Agreement.

	 	3.	 	Accumulated credits, if any, to which Licensee is entitled against the
License Fee under the Site License may be applied at Financial Closing and any
remaining credits may be applied the thirty (30) days after commencement of field
construction move-in.

	V.	 	All payments required hereunder shall include a statement showing the details supporting the
calculation of the License Fees being paid. Licensee shall keep accurate and complete records
of all natural gas feedstock processed (volume and composition) and all Synthetic Product
produced at and either used internally within or removed from each Licensed Plant to enable
verification of statements and payments rendered to Licensor hereunder. Licensee agrees to
permit Licensor, at Licensor’s expense, to inspect such records on reasonable notice and at
reasonable

9

 

	 	 	intervals during normal business hours to verify the license fees paid and payable under this
Agreement.
	 
	VI.	 	If the Licensee can not achieve financing on commercially reasonable terms for the Licensed
Plant or if the project is terminated for any reason prior to such time, Licensee shall retain
25% of the License Fee payments made to Licensor for the project up to that date and the
remaining 75% shall be credited to any future Licensed Plant that is initiated within 15 years
from the Effective Dates of the Master License Agreement.

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]