Manufacturing Technology Lease Agreement Fluid-Quip Inc. dated September 17, 2008

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2.     Grant.

 

2.1.           Licensor hereby grants to Licensee a non-exclusive right under the Patent Rights to operate at the Regina Plant a hydraulic cavitation system installed in the Regina Plant by Licensor for the mixing of methoxide and oil (transesterification) in the production of bio-diesel fuel.

 

2.2.           The foregoing License does not include the right to sublicense or assign rights granted hereunder without the prior written consent of Licensor.

 

3.     Installation.

 

3.1.           Licensor will install as soon as possible Licensor's hydraulic cavitation system including a cavitation generator of Licensor's design and three pumps, preferably of the type designated MTH T51-R, with five horsepower motors and three phase variable speed drives at a total cost of US$16,000. Licensee will ensure that a source of heat with the ability to heat 30,000 liters per day will be available at the Regina Plant.

 

3.2.           At its option, Licensee may supply the necessary pumps referenced above. It is estimated that each pump motor setup will cost approximately US$2,000, so that if Licensee supplies the appropriate pump motor setups, the cost thereof, up to a maximum of US$6,000, may be deducted from the estimated total cost of US$16,000. Depending upon which option it selects, Licensee shall promptly issue its purchase order in the amount of either US$16,000 or that amount minus up to US$6,000 if Licensee supplies the pump motor setups.

 

 

 

 

 

3.3.           For a period of six months from the Effective Date of this License Agreement, Licensor will provide reasonable technical assistance with the start-up and operation of Licensor's hydraulic cavitation system. There will be no manpower charge for such assistance. Licensee shall reimburse Licensor for reasonable out-of-pocket costs incurred in providing such assistance, including transportation, food and lodging.

 

4.     Royalties.

 

4.1.           In consideration of the non-exclusive license granted to Licensee, it shall pay to Licensor 1.5 Canadian cents per liter of bio-diesel fuel produced at the Regina Plant.

 

4.2.           Such royalty shall be applicable beginning with the first production after installation of Licensor's hydraulic cavitation system of a saleable bio-diesel fuel product at the Regina Plant and thereafter for the term of this License Agreement.

 

5.     Reports and Payments.

 

5.1.           Licensee will submit to Licensor each month during the term of this Agreement a royalty report showing the amount of bio-diesel fuel produced at the Regina Plant in the preceding month and the amount of royalty due for the preceding month. Such report shall be accompanied by payment of the royalty then due.

 

6.     Books and Records.

 

6.1.           Licensee shall keep books and records in accordance with generally accepted accounting principles of all information necessary to document the royalties due under paragraph 5. Such books and records may be inspected not more than once

 

 

 

 

 

 

9.     Notices.

 

9.1.           Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficiently given when delivered in person, transmitted by telegram, telefax, e-mail or facsimile (confirmed contemporaneously by registered or certified mail, postage prepaid, return receipt requested), or if originally sent by registered or certified mail, postage prepaid, return receipt requested, such notice or other communication shall be deemed to have been received three business days after such mailing. Any notice or other communication required or permitted to be given under this Agreement shall be addressed as follows:

 

AS TO LICENSEE:

 

Michael Shenher, President

Canadian Green Fuels Inc.

1620 McAra Street

Regina, Saskatchewan

CANADA S4N 6H6

 

 

 

AS TO LICENSOR:

 

Andrew Franko, President

Fluid-Quip, Inc.

1940 South Yellow Springs Street

Springfield, Ohio 45506

 

Either party may change its address as above given by first notifying the other party in writing.

 

10.   Miscellaneous.

 

10.1.    Waiver of any term, covenant, or condition by either party shall not constitute a waiver of any other term, covenant, or condition hereof nor a waiver of the same term, covenant, or condition at any other time.

 

10.2.    This Agreement is entered into and shall be construed in accordance with the laws of the State of Ohio. The parties hereto irrevocably and unconditionally submit to the exclusive jurisdiction of (a) the Courts of the State of Ohio and (b) the United States District Court for the Southern District of Ohio for the purposes of any action, suit or proceeding arising out of this Agreement or the License granted hereunder, and agree not to commence any such action, suit or proceeding relating thereto except in such Courts as identified above.

 

10.3.    This instrument incorporates the entire understanding of the parties hereto with respect to the subject matter hereof and may not be altered or amended except by an instrument in writing signed by the parties hereto.

 

 

10.4. If any term or provision of this Agreement shall be determined by a Court of competent jurisdiction to be unenforceable or invalid, the remaining terms and provisions hereof shall remain in effect.

 

10.5. The captions herein are for the convenience of reference only, does not constitute part of this Agreement, and will not be deemed to limit or otherwise affect any of the provisions hereof.