CONFIDENTIAL LICENSE AGREEMENT

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This License Agreement (this “Agreement”) is made and entered into as of the 11th day of March, 2010, by and among AlphaKat GmbH, a company organized under the laws of Germany (“AlphaKat”), and AlphaKat – Global Energy GmbH, a company organized and existing under the laws of Germany (the “Marketing Company”).

 

WHEREAS, AlphaKat owns or has rights to a proprietary technology to convert waste material which contains hydrocarbons into diesel oil (as further defined below, the “Technology”);

WHEREAS, Dr. Christian Koch (“Dr. Koch”) is the sole owner of AlphaKat;

WHEREAS, the Marketing Company has been granted certain rights with respect to the Technology pursuant to (i) the “Terms of Agreement” dated May 2, 2007, (ii) the “Shareholders’ Agreement” dated July 10, 2007 and (iii) the Articles of Association of the Marketing Company dated November 14, 2007 and November 22, 2007 (collectively, the “Other Rights Agreements”); and

WHEREAS, AlphaKat and the Marketing Company want to enter into a license agreement to detail such rights to the Technology;

 

NOW, THEREFORE, in light of the mutual premises set forth herein and other good and valuable consideration, the receipt and the sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows.

 

 

Section 1.1                      Capitalized Terms.  Unless otherwise specified herein, the following capitalized terms shall have the following meanings:

“Affiliate” means, in relation to any Person, any other Person that controls, is controlled by, or is in common control with, such Person.  For the purpose of this definition, control means the direct or indirect control of fifty percent (50%) or more of the voting rights in such Person or the power to direct the management or policies of such Person, whether by operation of law, by contract or otherwise, except that AlphaKat and the Marketing Company shall not be deemed to be Affiliates for all purposes of this Agreement.

“Agreement” has the meaning set forth in the first paragraph hereof.

 

 

 

“Approved Supplier” means any Person securing rights from AlphaKat to make or have made Systems and Parts and/or to sell Systems and Parts.

“Approved Supplier Purchase Order” means any purchase order to sell one or more Systems entered into by and between an Approved Supplier, as the seller, and any Person as the purchaser.

“Dispute” has the meaning set forth in Section 9.1.

“Dr. Koch” has the meaning set forth in the first paragraph hereof.

“Effective Date” has the meaning set forth in Section 5.1.

“Excluded Countries” has the meaning set forth in Section 2.3.

“Full Right” means that the Person being granted the right(s) described herein shall be the only Person that is entitled to exercise such right(s) so long as this Agreement is in effect and that no other Person shall be authorized, by the grantor of such right(s), to exercise such right(s) or be granted such right(s).

“Improvements” means all the techniques, enhancements, modifications, changes, experience, methods, information, data or knowledge that will be created or acquired in the future relating to the Technology and/or the manufacturing of the Systems and Parts (whether or not patentable, useful or workable) through the implementation, development, re-design, testing, operation, maintenance, monitoring, control, modeling, fabrication and improvement of the Technology and/or the manufacturing of the Systems and Parts and/or the operation of Systems.

“Intellectual Property” means any intellectual property and/or proprietary information and materials relating to the Technology along with all rights therein, whether existing before or conceived or developed after the Effective Date (except as otherwise expressly provided), including:  (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice), including the Patents; (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) trade secrets, conf idential information and know-how (including ideas, formulae, compositions, manufacturing and production processes and techniques, research and development information, test data and results, drawings, specifications, designs, supplier lists and related information); and (vi) registrations, applications, divisionals, continuations, continuations-in-part, foreign counterparts and renewals for any of the foregoing.

“KDV 500” means a System capable of producing a minimum of 500 liters of diesel oil per hour.

 

 

 

“Marketing Company” has the meaning set forth in the first paragraph hereof and includes its successors and permitted assigns.

“Marketing Company Purchase Order” means any purchase order to sell one or more Systems entered into by and between the Marketing Company as the seller and any Person as the purchaser.

“Licenses” has the meaning set forth in the recitals hereto.

“Other Rights Agreements” has the meaning set forth in the recitals hereto.

“Parties” means AlphaKat and the Marketing Company.

“Party” means AlphaKat or the Marketing Company, as the case may be.

“Parts” means any subsystem, component, item of equipment (including the KDV Turbine), part, spare part and any other items which are used in the operation of the System.

“Patents” means any existing or future patent applications, patents, registrations, utility models and utility model applications relating to the Technology which are necessary or useful to manufacture or to sell, offer for sale, use or otherwise make available Systems or the components of Systems, including those set forth in Exhibit 1 attached hereto.

“Person” means any natural person, corporation, company, partnership, business trust, governmental authority or other entity.

“Purchase Order” means an Approved Supplier Purchase Order or a Marketing Company Purchase Order.

“Purchaser” means the original purchaser of one or more Systems pursuant to a Purchase Order.

“Qualified Rights” means that the Person being granted the right(s) described herein shall be entitled to exercise such right(s) so long as this Agreement is in effect, but the grantor of such right(s) shall be entitled to grant such right(s) or allow such right(s) to be exercised by all other Persons except a Person that is precluded from exercising such right(s) under the express terms hereof.

“Sublicensee” means a Person that enters into a license agreement with the Marketing Company for the commercialization, marketing, offering for sale, use, practice and/or making of Improvements to the Technology, including Systems and Parts.

“System” means any system of components (consisting primarily of the required KDV Turbines, the feed preparation system, the ash handling system, any system control hardware and software, structural steel, piping and electrical wiring), including all Parts, whether it is in existence today or developed hereafter by AlphaKat, Covanta or any other Person, and any future system of components to convert any hydrocarbon feedstock into diesel oil using the Technology.

 

 

 

“Technology” means the proprietary, renewable diesel technology developed by Dr. Christian Koch (as well as any related technology licensed to Dr. Christian Koch or to AlphaKat) to convert municipal solid waste, organic materials, sludge and other hydrocarbon materials to diesel oil, including all Improvements to such technology made or acquired from time to time, including Intellectual Property, Systems, the formulation of catalysts used in Systems and all related materials and information.

“Territory” means anywhere in the world other than the Excluded Countries.

“Third Party Purchaser” has the meaning set forth in Section 2.5.

“Use License” has the meaning set forth in Section 2.5.

Section 1.2                      Interpretation.  In this Agreement, unless otherwise indicated or required by the context:

(a)           Reference to and the definition of any document (including this Agreement) or any applicable law shall be deemed a reference to such document or applicable law as it may be amended, supplemented, revised or modified from time to time;

(b)           All references to an “Article,” “Section” or “Exhibit” are to an Article or Section hereof or to an Exhibit attached hereto;

(c)           Article and Section headings and other captions are for the purpose of reference only and do not limit or affect the meaning of the terms and provisions hereof;

(d)           Defined terms in the singular include the plural and vice versa, and the masculine, feminine and neuter gender include all genders;

(e)           The words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement;

(f)            The words “include,” “includes” and “including” mean include, includes, and including “without limitation” and “without limitation by specification;” and

(g)           All the references herein to the terms “diesel oil” or “diesel fuel” or any similar term shall include kerosene, jet fuel and any other fuel that feedstock can be converted into using the Technology.

 

 

Section 2.1                      Grant of License Rights.  Subject to the terms and conditions of this Agreement, AlphaKat hereby grants to the Marketing Company, for the term of this Agreement, (i) the Full Right in the Territory to commercialize, market, offer for sale, use and practice and make Improvements to the Technology, including the Systems and Parts (except that in the case of Canada, the foregoing rights of the Marketing Company shall be Qualified Rights) and (ii) the Qualified Right in the Territory to sell Systems and Parts for use in the Territory.   Notwithstanding anything that may be contained herein to the contrary, the Marketing Company shall have the right to issue sublicenses to any Person consistent with the license rights granted to it herein.

Section 2.2                      Reservation of Rights.  Notwithstanding anything contained herein to the contrary, AlphaKat shall be entitled to (i) make and have made, under and using the Technology, Systems and Parts anywhere in the world and (ii) to appoint any Person as an Approved Supplier.

Section 2.3                      Excluded Countries.  The four countries which are to be excluded from the Territory are Mexico, Spain, Bulgaria and Italy (collectively, the “Excluded Countries”).  If the Marketing Company wants to sell one or more Systems or give any Person the right to use any System in one or more projects in the Excluded Countries, the Marketing Company shall be required to get the prior written approval of AlphaKat to do so.

Section 2.4                      Purchase Orders.  All Systems shall be sold pursuant to Purchase Orders.  In all of the Marketing Company Purchase Orders, the Marketing Company will make a set of representations and warranties to the Purchaser which is consistent with those made by AlphaKat to the Marketing Company in Article 8.

Section 2.5                      Use License.  Each Purchase Order shall include a non-exclusive, irrevocable and perpetual royalty free right and license (a “Use License”) for the Purchaser to (i) use, practice, operate, maintain, repair and make Improvements to the System(s), (ii) purchase the catalyst that is required for the operation of the System(s) from AlphaKat and/or any other Person that is authorized to manufacture and/or sell such catalyst by AlphaKat, (iii) purchase Parts from AlphaKat and/or any Approved Supplier and (iv) reproduce, modify and distribute, in whole or in part, solely for internal purposes copies of any and all ma terials and information received from the Marketing Company, AlphaKat and/or any other Person relating to Systems.  Any Approved Supplier shall have the authority to and shall be entitled to grant a Use License to each Purchaser under an Approved Supplier Purchase Order and none of AlphaKat, the Marketing Company or any Affiliate of AlphaKat or the Marketing Company shall challenge the issuance, validity or enforceability of any Use License.  The Parties agree that if any Purchaser sells or transfers any of the System(s) which it has purchased pursuant to a Purchase Order to any Person (a “Third Party Purchaser”), the Purchaser shall be entitled to freely transfer its Use License to such Third Party Purchaser and each Third Party Purchaser shall be entitled to transfer such Use License to another Third Party Purchaser.  Notwithstanding anything to the contrary contained herein, all Purchasers and all Third Party Purchasers shall be entitled to procure Parts and catal ysts that are commercially available from any Person.  Further, if AlphaKat and any Approved Supplier of Parts that are not commercially available are unable to timely supply Parts ordered by a Purchaser or a Third Party Purchaser, such Purchaser or Third Party Purchaser shall be authorized to make or have made such Parts that are not supplied.

 

 

Section 3.1                      Reduction in Cost of Systems.  AlphaKat anticipates that the price of Systems will decrease as AlphaKat and the Approved Suppliers install and expand their production facilities for manufacturing Systems and put arrangements in place with third party suppliers for pipes, valves and other basic components of the Systems.  AlphaKat and the Marketing Company agree to cooperate together in good faith, and to cooperate with any Approved Suppliers and Sublicensees which the Marketing Company requests to include in such cooperation, to seek ways to help reduce the cost of manufacturing and delivering Systems.