SYNTROLEUM CORP
DEPOSIT AGREE. SYNM AUS. LIC. AND COMMON
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>DEPOSIT AGREE. SYNM AUS. LIC. AND COMMON
<TEXT>




                                DEPOSIT AGREEMENT
                                -----------------
     This  Deposit  Agreement  (this "Agreement"), is entered into on this third
                                      ---------
day  of  August,  2000,  between the Commonwealth of Australia (the "Licensee"),
                                                                     --------
Syntroleum  Australia Licensing Corporation (the "Licensor") and Westpac Banking
                                                  --------
Corporation  ABN  33  007  457  141  (the  "Bank").
                                            ----
WHEREAS,  the  Licensee  and  the  Licensor  have entered into a certain License
Agreement  dated  August  3,  2000  (the  "License  Agreement").
                                           ------------------
WHEREAS,  under the terms of the License Agreement, the Licensee may be required
to  pay  the Escrow Amount (as this term is defined in the License Agreement) to
the  Bank,  to  be held and disbursed on the terms and subject to the conditions
set  forth  in  this  Agreement.
NOW,  THEREFORE, for and in consideration of the mutual benefits and obligations
of  the  parties  herein  stated, and other good and valuable consideration, the
receipt  and  sufficiency  of  which are hereby acknowledged by the parties, the
Licensee,  the  Licensor  and  the  Bank  hereby  agree  as  follows:
1.     Account.  The  Bank has established a segregated interest-bearing account
       -------
in  Australia  in  the  name  of  the Licensor, account number BSB036000 Account
Number 398957 (the "Account").  The Bank acknowledges that the Licensee may from
     time  to  time remit funds to the Bank for deposit into the Account; and in
such  case, the Bank shall deposit such funds into the Account and maintain such
funds  in  the  Account,  solely  on the terms and conditions of this Agreement.
2.     Release  and  Delivery of Funds.  The Bank shall release and transfer any
funds  on  deposit  in,  or  credited  to,  the  Account  as  follows:
(a)     Promptly  upon  the Bank's receipt of a written notice from the Licensee
and  the  Licensor  substantially  in  the  form of the attached Exhibit A, that
appears on its face to be genuine, the Bank will comply with the instructions to
     transfer  the  amount specified in such notice to the order of the Licensor
(to  the  account  specified  in  such  notice).
(b)     Promptly  upon  the Bank's receipt of a written notice from the Licensee
substantially in the form of the attached Exhibit B, that appears on its face to
be  genuine,  the  Bank will comply with the instructions to transfer the amount
specified  in such notice to the order of the Licensee (to the account specified
in  such  notice).
(c)     The  Bank  agrees  not to permit any funds on deposit or credited to the
Account  to  be  transferred to any person or entity other than (i) as expressly
set  forth in clauses (a) and (b) of this Section 2 or (ii) upon express written
instructions  jointly  signed  by the Licensee and the Licensor and containing a
representation  by each of the Licensee and the Licensor that the person signing
the  same is authorized to do so in accordance with the terms of this Agreement.
The  Licensor  and the Licensee hereby agree that in the event that the Licensor
is  liquidated as a result of an involuntary proceeding brought against it under
any  applicable bankruptcy, insolvency, reorganization or other similar law, the
Licensee  shall  be  entitled  to  all  amounts  then on deposit in the Account.
(d)     The  Licensee  agrees not to provide to the Bank any notice contemplated
by Exhibit B prior to 5:00 p.m. United States Central Standard Time on 31 August
2004.  In  the event that the Bank nevertheless receives any notice contemplated
by Exhibit B prior to September 1, 2004, the Bank shall not withdraw or transfer
funds  or  take  any  action  on  the  basis  of  any  such  notice.
3.     Interest.  Credit balances in the Account shall bear interest, which will
       --------
be  calculated  daily  and paid monthly to the Account.  Interest will be set at
the  weekly  average  30-day  Bank  Bill  Offer Rate less 75 basis points (0.75%
p.a.),  resulting  in  a current rate of approximately 5.36% p.a. (as at 13 July
2000).  The  30-Day Bank Bill Offer Rate is published each day in the Australian
Financial  Review  newspaper and can be monitored via Reuters BBSY screen.  This
rate is published daily and the average weekly rate can be calculated internally
     from  the  published rate.  Interest earned on funds that are on deposit in
or credited to the Account shall, in all events be deemed earned by the Licensor
and  shall  be  added  to  the  funds  on  deposit in the Account or paid to the
Licensor  upon  request  by the Licensor; provided, however, that if the Bank at
any  time  receives a written notice from the Licensee substantially in the form
of  the  attached  Exhibit  C that appears on its face to be genuine (the "Major
Default  Notice"), then the Licensor shall not be entitled to receive any amount
of  interest accrued from the date specified in the Major Default Notice and the
Bank  shall  not  pay such amount of interest to the Licensor until such time as
the  Bank  receives from the Licensee a written notice substantially in the form
of  the  attached  Exhibit  D  that  appears  on  its  face  to  be  genuine.
4.     Extent  of  Bank's  Responsibilities.  The  Bank's  liabilities  and
obligations  are limited to those specifically set forth in this Agreement.  The
Bank  shall  not  be  liable  for  any  act  or  omission by it in good faith in
connection with this Agreement, provided, however, that the Bank shall be liable
for  any  negligence  or  willful  misconduct  on  its  part.
5.     No  Set-off.  The  Bank  agrees  that  it  will not obtain (by agreement,
operation of law or otherwise) a lien on or other charge over the Account or any
funds  on deposit in or credited to the Account; and that such funds will not be
subject to deduction, set-off, banker's lien, or any other right in favor of any
person or entity other than the Licensor or the Licensee, provided that the Bank
may  set  off  amounts  due  to  it  in respect of fees and expenses customarily
charged  for  its  performance  of the services described in this Agreement only
against  accrued  interest.
6.     Expenses of Bank.  All taxes (other than taxes on its overall net income)
costs and expenses incurred by Bank in carrying out the Bank's obligations under
this Agreement or in opening, operating, or closing the Account shall be paid or
reimbursed  by  the  Licensor as incurred and the Bank may debit those costs and
expenses  to  the  Account  (but  only  against  accrued interest) when they are
incurred.
7.     Indemnification of Bank.  The Licensor hereby agrees to indemnify, defend
and  hold harmless Bank for all losses, costs and expenses (including reasonable
attorneys'  fees)  suffered  or  incurred  by  Bank and arising out of documents
entered into by the Bank, or matters, things and activities (acts and omissions)
of  the  Bank under this Agreement, provided that such activities were performed
by  the  Bank  in good faith and without any negligence or willful misconduct on
the  part  of  the  Bank.  This  indemnification  obligation  shall  survive the
termination  of  this  Agreement.
8.     Notices.  All  notices, requests, claims, demands or other communications
hereunder must be in writing and must be given by delivery in person, by prepaid
post  (airmail,  if  appropriate)  or  by facsimile to the respective parties as
follows:
(a)     If  to  Licensee,  to:
        Commonwealth  of  Australia
        represented  by  Department  of  Industry  Science
        and  Resources  (Invest  Australia)
        Level  6,  20  Allara  Street
        Canberra  ACT  2601
        Australia
        Facsimile:  (61  2)  6213  7843
        Telephone:  (61  2)  6213  7560
        Attention:  General  Manager,  Invest  Australia
(b)     If  to  Licensor,  to:
        Syntroleum  Australia  Licensing  Corporation
        1350  S.  Boulder,  Suite  1100
        Tulsa,  Oklahoma  74119-3295
        United  States  of  America
        Facsimile:  (918)  592-7979
        Telephone:  (918)  592-7900
        Attention:  Carla  Covey

(c)     If  to  the  Bank,  to:
        Westpac  Banking  Corporation
        Level  14,  109  St  George's  Terrace,
        Perth,  Western  Australia  6000
        Facsimile:  (61  8)  9426  2866
        Attention:  Mr.  Tony  Lofthouse

Or  such  other address and/or facsimile as is furnished in writing by any party
to  the  others in accordance herewith, except that notices of change of address
are  only  effective  upon  receipt.  Communications hereunder will be deemed to
have  been  received:
(i)     immediately  upon  delivery  in  person;
(ii)     if sent by post, they are taken to be received three days after posting
(or  seven  days  after  posting  if sent to or from a place outside Australia).
(iii)     if sent by fax, they are taken to be received at the time shown in the
transmission  report  as  the  time  that  the  whole  fax  was  sent.
     Despite  clauses  8(ii)  and 8(iii) if they are received after 5.00 p.m. in
the  place of receipt or on a non-business day, they are taken to be received at
9.00 a.m. in the place of receipt on the next business day.  For the purposes of
this  clause  8  "business  day" means a day on which banks are open for general
banking  business in the place where the notice is sent.  All notices, requests,
claims, demands or other communications hereunder furnished by the Licensor must
be  executed  by  one of the authorized signatories with respect to the Account.
The  Licensor  may,  at  any  time,  designate  new  or  replacement  authorized
signatories  with  respect  to  the  Account, by providing written notice to the
Bank.  All  notices, requests, claims, demands or other communications hereunder
furnished  by the Licensee must be executed by one of the authorized signatories
agreed  upon  by  the  Licensee  and  the  Bank.  The Licensee may, at any time,
designate  new or replacement authorized signatories with respect to the Account
by  providing  written  notice  to  the  Bank.
9.     Miscellaneous
       -------------
(a)     This  Agreement  is  the  final  expression  of  the parties hereto with
respect  to the subject matter described herein and supersedes any and all other
agreements and understandings between the parties hereto, both written and oral;
(b)     This  Agreement  may  be amended, modified, supplemented and/or replaced
only  by  a  written  agreement  signed  by  all  of  the  parties hereto and in
accordance  with  the  terms  and  conditions  hereof;
(c)     This  Agreement  shall not be assigned without the prior written consent
of  the  Bank,  which  consent  will  not  be  unreasonably  withheld;
(d)     This  Agreement  shall be governed by, and construed in accordance with,
the  laws  of  the  Australian  Capital  Territory.  Each  party irrevocably and
unconditionally  submits  to the non-exclusive jurisdiction of the courts of the
Australian  Capital Territory and courts of appeal from them.  Each party waives
any  right  it  has  to  object  to  an  action  being  brought in those courts,
including,  without  limitation, by claiming that the action has been brought in
an  inconvenient  forum  or  that  those  courts  do  not  have  jurisdiction;
(e)     Without  preventing any other mode of service, any document in an action
(including, without limitation, any writ of summons or other originating process
or  any  third  or  other  party  notice)  may  be  served on any party by being
delivered  to or left for that party at its address for service of notices under
clause  9.
(f)     This Agreement may be executed in any number of counterparts and by each
party  as  separate counterparts, each of which when so executed shall be deemed
to  be  an  original and all of which, when taken together, shall constitute one
and  the  same  instrument;
(g)     This  Agreement  shall be binding upon, and inure to the benefit of, the
successors  and  assigns  of  the  parties  hereto;
(h)     If,  at any time, any provision hereof is or becomes illegal, invalid or
unenforceable  in  any  respect  under  the law of any jurisdiction, neither the
legality,  validity or enforceability of the remaining provisions hereof nor the
legality,  validity  or  enforceability  of  such provision under the law of any
other  jurisdiction  shall  in  any  way  be  affected  or  impaired  thereby;
(i)     Each  of  the Licensee and the Licensor separately represent and warrant
to  the Bank that any direction or request given by them to the Bank relating to
the  payment  of  any  amount  from  the  Account;
(i)     will  be  a correct and accurate direction or request in conformity with
the  provisions  of  this  Agreement;  and
(ii)     will  have been validly authorized, executed and able to be relied upon
by  the  Bank  in  accordance  with  its  terms.
(j)     The  Parties agree and acknowledge that under this Agreement the Bank is
acting only in the capacity of a banker and not in any other capacity whatsoever
including, without limitation, as trustee or as escrow agent; provided that this
                                                              --------
clause  9(j)  is  not  intended  to reduce, limit or otherwise affect the Bank's
responsibility  for  its  negligence, willful misconduct, bad faith or breach of
its  obligations  in  this  Agreement.
(k)     The Bank is not required to verify or ensure that the Account funds once
paid by the Bank as required by this Agreement are used in any manner and is not
liable  for  any loss or damage suffered by any person in relation to their use.


     IN  WITNESS  WHEREOF, the parties hereto have executed this Agreement as of
the  date  first  written  above.
     COMMONWEALTH  OF  AUSTRALIA


     By:             /s/
              ----------------
     Name:    Mike  Holthuyzen
               ---------------
     Title:    Deputy  CEO
               ---------------

             "LICENSEE"
     SYNTROLEUM  AUSTRALIA  LICENSING  CORPORATION


     By:                /s/
               ------------------------
     Name:    Randall  M.  Thompson
              --------------------------
     Title:   Chief  Financial  Officer
              --------------------------

             "LICENSOR"
     WESTPAC  BANKING  CORPORATION
     as  the  Bank


     By:               /s/
              --------------------
     Name:    Leith  Lyon  Wintour
              --------------------
     Title:    Manager,  Legal
               ACT  Legal  Unit
               -------------------
             "BANK"


                                    EXHIBIT A
                              To Deposit Agreement
                                     [Date]

               NOTICE OF INSTRUCTION TO TRANSFER FUNDS TO LICENSOR

Westpac  Banking  Corporation
Level  14,  109  St  George's  Terrace,
Perth,
Western  Australia  6000
Facsimile:  (61  8)  9426  2866
Attention:  Mr.  Tony  Lofthouse

Re:     Account  No.  BSB036000  Account  Number  398957  (the  "Account")
        ------------------------------------------------------------------

Ladies  and  Gentlemen:

We  refer  to  the  Deposit Agreement, dated as of August __, 2000 (the "Deposit
Agreement")  between  you,  Syntroleum  Australia  Licensing  Corporation  (the
"Licensor")  and  the  Commonwealth  of  Australia  (the  "Licensee").

The  Licensee  hereby  gives you notice that the Licensor is entitled to receive
the  funds  in  the  Account;  and,  accordingly, you may transfer such all or a
portion  of  such  funds  upon  the  order  of  the  Licensor.

The Licensor hereby instructs you to transfer [all] [SPECIFY AMOUNT IF LESS THAN
ALL]  of  the funds in the Account, by electronic delivery of funds, to [SPECIFY
BANK  OR  INSTITUTION TO WHICH FUNDS ARE TO BE WIRED], account number [_______].

Each  of  the  undersigned  represents for your benefit that it is authorized to
execute  and  deliver  this  notice  to  you in accordance with the terms of the
Deposit  Agreement.

Very  truly  yours,

Commonwealth  of  Australia     Syntroleum  Australia  Licensing  Corporation


By:                             By:
Name:                           Name:
Title:                          Title:
------------                    ------------


                                    EXHIBIT B
                              To Deposit Agreement
                          [Letterhead of the Licensee]
                          [Date - AFTER AUG. 31, 2004]

             NOTICE OF INSTRUCTION TO TRANSFER ALL FUNDS TO LICENSEE

Westpac  Banking  Corporation
Level  14,  109  St  George's  Terrace,
Perth,
Western  Australia  6000
Facsimile:  (61  8)  9426  2866
Attention:  Mr.  Tony  Lofthouse

Re:     Account  No.  BSB036000  Account  Number  398957  (the  "Account")
        ------------------------------------------------------------------

Ladies  and  Gentlemen:

We  refer  to  the  Deposit Agreement, dated as of August __, 2000 (the "Deposit
Agreement")  between  you,  Syntroleum  Australia  Licensing  Corporation  (the
"Licensor")  and  the  Commonwealth  of  Australia  (the  "Licensee").

The  Licensee  has previously remitted for deposit into the Account an aggregate
amount  equal  to  AUD$________.  The  amounts  in  the  Account  are  no longer
available  to  the Licensor.  Accordingly, the Licensee hereby requests that you
transfer all of the funds on deposit in the Account (after deducting all accrued
and  unpaid  interest  earned  thereon) to [SPECIFY BANK OR INSTITUTION TO WHICH
FUNDS  ARE  TO  BE  WIRED],  account  number  [_______].  The accrued and unpaid
interest  referred to in the preceding sentence is to be paid to the Licensor or
upon  its  order.  [IF A NOTICE IN THE FORM OF EXHIBIT C HAD BEEN GIVEN UPON THE
OCCURRENCE  OF  A  "MAJOR  EVENT OF DEFAULT" AND THE SAME IS STILL IN EXISTENCE,
THEN  REPLACE  THE LAST SENTENCE WITH: "The accrued and unpaid interest referred
to  in the preceding sentence is to be paid to the Licensee at [INSTRUCTIONS FOR
PAYMENT]].

The undersigned represents for your benefit that it is authorized to execute and
deliver this notice to you in accordance with the terms of the Deposit Agreement
and  further represents for the benefit of the Licensor that it is authorized to
execute  and  deliver  this  notice  in accordance with the terms of the License
Agreement  referred  to  in  the  Deposit  Agreement.

Very  truly  yours,

Commonwealth  of  Australia

By:
      Name:
      Title:
cc:  Syntroleum  Australia  Licensing  Corporation


                                    EXHIBIT C
                              to Deposit Agreement
                          [Letterhead of the Licensee]
                                     [Date]

            NOTICE OF MAJOR DEFAULT -- INSTRUCTION TO FREEZE INTEREST

Westpac  Banking  Corporation
Level  14,  109  St  George's  Terrace,
Perth,
Western  Australia  6000
Facsimile:  (61  8)  9426  2866
Attention:  Mr.  Tony  Lofthouse

Re:     Account  No.  BSB036000  Account  Number  399052  (the  "Account")
Ladies  and  Gentlemen:
     We  refer  to  the  Deposit  Agreement,  dated  as  of August __, 2000 (the
"Deposit  Agreement")  between  you,  Syntroleum Australia Licensing Corporation
(the  "Licensor")  and  the  Commonwealth  of  Australia  (the  "Licensee").
The  Licensee  hereby  notifies you that a "Major Event of Default" has occurred
and  is  continuing  under  the  License  Agreement  (as  defined in the Deposit
Agreement).  Accordingly,  the  Licensee  hereby instructs you not to pay to the
Licensor  any  amount  of  interest earned on the Account from and after [INSERT
DATE  OF  DEFAULT],  which is the date of the occurrence of such "Major Event of
Default",  and  until  such  date  as  we  may  specify  to  you  in  writing in
substantially  the form of Exhibit D to the Deposit Agreement.  All such amounts
of  interest  are  to  be  added  to  the  Account.
The undersigned represents for your benefit that it is authorized to execute and
deliver this notice to you in accordance with the terms of the Deposit Agreement
and  further represents for the benefit of the Licensor that it is authorized to
execute  and  deliver  this  notice  in accordance with the terms of the License
Agreement  referred  to  in  the  Deposit  Agreement.
     Very  truly  yours,

Commonwealth  of  Australia


By:
      Name:
      Title:

cc:  Syntroleum  Australia  Licensing  Corporation



                                    EXHIBIT D
                              to Deposit Agreement
                          [Letterhead of the Licensee]
                                     [Date]

       NOTICE OF END OF MAJOR DEFAULT -- INSTRUCTION TO UNFREEZE INTEREST

Westpac  Banking  Corporation
Level  14,  109  St  George's  Terrace,
Perth,
Western  Australia  6000
Facsimile:  (61-8)  9426  2866
Attention:  Mr  Tony  Lofthouse

Re:     Account  No.  BSB036000  Account  Number  399052  (the  "Account")
Ladies  and  Gentlemen:
     We  refer  to  the  Deposit  Agreement,  dated  as  of August __, 2000 (the
"Deposit  Agreement")  between  you,  Syntroleum Australia Licensing Corporation
(the  "Licensor")  and  the  Commonwealth  of  Australia  (the  "Licensee").
The  Licensee  has previously delivered to you a written notice in substantially
the  form  of  Exhibit  C  to the Deposit Agreement, notifying you that a "Major
Event  of  Default"  had occurred and was continuing under the License Agreement
(as  defined  in  the  Deposit  Agreement) and instructing you not to pay to the
Licensor  (and  instead,  to  add  to  the amount on deposit in the Account) any
amount  of  interest  earned on the Account from and after the date specified in
that notice.  The Licensee hereby notifies you that the "Major Event of Default"
specified  in that notice no longer exists (or the Licensee otherwise waives its
rights  with  respect  thereto), and, accordingly, the Licensee hereby instructs
you  to  pay to the Licensor (at the Licensor's request) all amounts of interest
earned  on  the  Account  at  any  time.
The undersigned represents for your benefit that it is authorized to execute and
deliver this notice to you in accordance with the terms of the Deposit Agreement
and  further represents for the benefit of the Licensor that it is authorized to
execute  and  deliver  this  notice  in accordance with the terms of the License
Agreement  referred  to  in  the  Deposit  Agreement.
     Very  truly  yours,

Commonwealth  of  Australia


By:
      Name:
      Title:
cc:  Syntroleum  Australia  Licensing  Corporation


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</DOCUMENT>
