Product Development And Marketing Agreement

PRODUCT DEVELOPMENT AND MARKETING AGREEMENT


BETWEEN


SPECIAL ANALYSIS AND SIMULATION TECHNOLOGY LIMITED


AND


SIMULATION SCIENCES INCORPORATED 2
STAR DEVELOPMENT AND MARKETING AGREEMENT


This Agreement ("AGREEMENT") which is dated 31 July, 1991, is entered into by Special Analysis and Simulation Technology Limited, a private limited company incorporated in the United Kingdom ("SAST"), and Simulation Sciences Inc., a California corporation ("SIMSCI").


SAST and SIMSCI agree as follows:


1. PURPOSE


To develop and market a general purpose dynamic process simulator.


2. SOFTWARE INVOLVED AND AS DESCRIBED IN THE AGREEMENT


OTISS - SAST's existing dynamic simulation program.
XENG - SAST's existing engineering user interface to OTISS.
TAPPS - SAST's existing Thermodynamic And Physical Property system.
PRO/II - SIMSCI's existing steady-state simulator.
PTP - SIMSCI's existing physical and thermodynamic properties
packages.
GUI - SIMSCI's new partially developed graphical user interface for
PRO/II.
PRISM - SIMSCI's new partially developed integrated engineering
environment.


3. BACKGROUND


SAST is an engineering consultant specializing in performing dynamic simulation studies and supplying dynamic process simulators. SAST has developed a dynamic simulator program ("OTISS") used by themselves to model process plants for purposes of design and operations analysis and also for inclusion in engineering, plant management and operator training simulators. SAST markets its consulting services and simulators to the process industries in Europe, The Middle East and Australasia. SAST is also investigating extending its activities into North America.


SIMSCI develops and markets simulation software to the process industries worldwide. SIMSCI's steady-state simulator ("PRO/II") is used for design and analysis of process plants. PRO/II is licensed to many of the major petroleum and chemical companies in the USA, Europe, Middle East, Far East, and South America.


SAST and SIMSCI believe there is a potentially significant market for a general purpose, dynamic chemical process simulation program. They believe that a program which integrates OTISS and PRO/II functionalities within a consistent graphical user interface would offer the user unique and powerful capabilities. It is the intention of SAST and SIMSCI to cooperate in producing such a simulation program, which is hereinafter referred to as "STAR".


An integrated engineering environment ("PRISM"), is currently under development by SIMSCI. It is intended that PRISM will ultimately be used to integrate OTISS and PRO/II, allowing the transparent interchange of data between both programs.


A new graphical user interface ("GUI") being developed by SIMSCI for PRO/II which allows input preparation and output review of a steady-state process model via forms, menus and a PFD drawing can be extended to be used for inputting data to OTISS to allow input preparation and output review of a dynamic simulation model via forms, menus and a P&ID drawing.


4. STAR CONCEPT


STAR will be an integration of SIMSCI's new GUI, the PRO/II physical and thermodynamic properties packages ("PTP"), and the PRO/II steady-state simulator, together with SAST's dynamic simulator packages OTISS, XENG and TAPPS within an integrated engineering environment. The environment will provide a consistent user interface and also allow for the 3 transparent exchange of data between PRO/II and OTISS for both steady-state and dynamic simulation modeling.


5. ORGANIZATION RESPONSIBILITIES


SIMSCI will assemble a product team in Denver, Colorado to develop and market STAR.


SIMSCI will be responsible for co-ordination of the overall STAR developments to be carried out within SAST and SIMSCI and, for STAR sales, marketing and technical support.


SIMSCI will be responsible for carrying out all STAR developments excluding developments specific to OTISS which will be the responsibility of SAST.


SAST will contribute experts to the product team to support SIMSCI in development, marketing, customer training and support. SAST may also carryout STAR developments at its UK office in co-ordination with the SIMSCI product team.


SAST may engage in custom STAR developments independently for its own internal use and, at its option, such developments may be made available to SIMSCI and the product team for integration into STAR.


Backed up by the product team, SIMSCI's field sales and support Organization will provide all STAR sales and customer training and support.


5.1 DEVELOPMENT


Development will include:


(a) enhancing OTISS as necessary to improve its user friendliness, diagnostics and robustness;


(b) developing PRISM application servers to transfer PRO/II PFD model information on topology, unit and stream information, and physical and thermodynamic properties to OTISS and to transfer OTISS unit and stream information from OTISS back to PRO/II;


(c) developing the extended GUI for OTISS input and output including P&ID drawings, forms and menus;


(d) writing applications, training aids and user documentation.


5.2 SALES & MARKETING


SIMSCI's marketing and field sales and support staffs will be responsible for STAR sales and marketing. The product team will be significantly involved in supporting this activity.


SIMSCI will discuss its STAR sales and marketing plans with SAST and will keep SAST advised of sales activities on a regular basis.


SIMSCI will maintain a STAR sales register which will be made available to SAST immediately upon request.


5.3 TRAINING & TECHNICAL SUPPORT


SIMSCI product team and field support staff will provide all STAR customer training and support. The product team will be significantly involved in supporting this activity.


6. SCHEDULE AND RESOURCE COMMITMENTS


6.1 DEVELOPMENT 4
A STAR prototype will be developed within [ * ] of signing of this AGREEMENT. The prototype will be developed by SIMSCI at its Denver, Colorado office and a duplicate will be installed in SAST's offices in Brentford, UK.


The prototype will serve to demonstrate the basic functionality of STAR and to elicit feedback from interested customers. SAST and SIMSCI shall co-operate and use their respective best efforts to generate financial support for STAR development from existing and potential customers.


STAR product development will start in [ * ] or earlier should adequate customer funding be raised. The first STAR version will be ready for general release within [ * ] of the start of this development.


STAR development will be performed by a [ * ] team located in Denver, Colorado consisting of [ * ] SIMSCI developers and [ * .] SAST will also provide a [ * ] man support to the product team from its United Kingdom office. The SAST engineer will support development until the STAR product is ready for first general release to the market. After the first general release to the market, the SAST engineer will remain in Denver to continue development support and to respond to maintenance, enhancements and bug fixing-of OTISS. Prior to the first general release to the market, [ * ] additional SAST engineer will join the Denver product team to help with training and support as allowed for in Article 6.3.


6.2 SALES & MARKETING PLAN


Upon signing of this agreement SAST and SIMSCI will contribute marketing resources to the following activities:


- STAR market analysis
- STAR product funding activities with existing and potential customers
- OTISS and STAR prototype demonstrations
- STAR pre-release promotions and market awareness activities, mailings,
meetings


In 1992, as the STAR's first general release to the market approaches, SAST and SIMSCI will each contribute marketing resources to plan and prepare materials in preparation for the release:


- STAR materials and promotions SIMSCI sales and support staff training
- SIMSCI sales and support staff training
- STAR introduction planning worldwide


6.3 TECHNICAL SUPPORT


Prior to the first general release to the market of the STAR product a [ * ] SAST engineer will be stationed in Denver, Colorado for [ * ] to help train and support customers and train SIMSCI support people at the same time. In subsequent years SIMSCI will take on greater responsibility for the training and support. It is anticipated, however, that [ * ] SAST engineers will be required in Denver, Colorado for the first [ * ] years of this AGREEMENT.


6.4 OTISS LICENSES


Until STAR product development is completed and its first general release to the market, SAST and SIMSCI may agree to provide OTISS to customers under an early STAR license to generate early financial support and industry involvement in the STAR product development.


Terms for licensing and the incremental resources required to train and support early STAR licenses will be negotiated under an amendment to this AGREEMENT.


[


*


[ * ] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions. 5
*
.]


A list of existing and potential OTISS licensees is provided as Appendix A to this AGREEMENT.


SAST will have the continuing right to issue OTISS licenses in conjunction with their consulting business. [
*
.] These licenses, are hereinafter referred to as "RUN-TIME" licenses.


[ *
.]


SAST will have the continuing right to license OTISS in conjunction with its training simulator business.


SAST will have the continuing right to use its OTISS technology in conjunction with its advanced process control business.


[ *
.]


7. PROPRIETARY RIGHTS


OTISS, XENG and TAPPS, and the proprietary knowhow embodied within these programs, and all specifications, manuals, documents, drawings and other tangible materials pertaining to these programs will be and remain the property of SAST.


STAR (excluding OTISS, XENG, TAPPS and other software developed by SAST), PRO/II, PRISM, GUI and PTP, the proprietary knowhow embodied within those programs, and all specifications, manuals, documents, drawings, and other tangible materials pertaining to those programs will be and remain the property of S ...