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Re: Development and commercial exploitation of a BIO MASS PRODUCTION SYSTEM

Joint Venture JV Agreement

Re: Development and commercial exploitation of a BIO MASS PRODUCTION SYSTEM | Document Parties: GLOBAL GREEN SOLUTIONS INC. | Pagic LP | WEST PEAK VENTURES OF CANADA LIMITED You are currently viewing:
This Joint Venture JV Agreement involves

GLOBAL GREEN SOLUTIONS INC. | Pagic LP | WEST PEAK VENTURES OF CANADA LIMITED

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Title: Re: Development and commercial exploitation of a BIO MASS PRODUCTION SYSTEM
Date: 3/16/2007
Industry: Non-Metallic Mining    

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Exhibit 10.4

VALCENT PRODUCTS INC.
420-475 Howe Street
Vancouver, BC
V6C 2B3
Tel: 604-606-7977

October 2, 2006

GLOBAL GREEN SOLUTIONS INC . (“GGS”)
880-609 Granville Street
PO Box 10321
Vancouver, BC V7Y 1G5

Pagic LP (“PAGIC”)
(Formerly MK Enterprises LLC)
1057 Doniphan Park Circle
Suite H El Paso Texas 79922

WEST PEAK VENTURES OF CANADA LIMITED (“WPK”)
420-475 Howe Street
Vancouver BC V6C 2B3

Dear Sirs:

Re: Development and commercial exploitation of a BIO MASS PRODUCTION SYSTEM

The purpose of this letter is to establish a Letter of Agreement between our respective companies pursuant to which we will jointly participate in the development of the intellectual property, knowhow, confidential processes, modifications and derivative works (the “Licensed Item”) arising out of a patent pending for the development of a Bio Mass System employed to produce hydrocarbons while sequestering CO2 from the environment by growing certain algae. The Bio Mass System and certain modifications and derivative works related thereto are herein sometimes referred to as the “Licensed Items”.

This Letter of Agreement will be the basis for a contract between Valcent Products Inc.(Licensor) and Global Green Solutions Inc., (Licensee) which shall be the governing document for their joint participation in the Venture. The contract will be signed by the Licensor and Licensee on or before the last day of June 2007 which shall include amongst other things, the basic terms of this Letter of Agreement.

Valcent represents to you the following:

         

1)     

It has conditionally received an exclusive world wide license known as the PAGIC/WPK License to develop the Licensed Items and to manufacture, market, promote, develop and distribute the Licensed Item on a world wide basis subject to a royalty of 4.5% of gross revenues due and payable to PAGIC and WPK as detailed in the attached Schedule “A”.

 

 


         

2)     

The Licensee is required to complete the following in order for Valcent to maintain its License in good standing:

 

 

 

 

a)     

Use its best efforts in the research and development of the Technology in order to deliver a working prototype of the Invention on or before July 1, 2007 ; and

 

 

 

 

b)     

Use its best efforts to achieve the commercial exploitation of the Technology on or before December 31, 2007; and

 

 

 

3)     

The Licensor has agreed to provide product support, Research and Development personnel, know how, office, warehouse, and lands during the initial R&D phase at its cost and when required, provide similar services during the future commercial exploitation phase.

GGS as evidenced by this Letter of Agreement has agreed to enter into a commercial venture with Valcent for the purpose of completing the research and development of the Licensed Item, to construct a working prototype of the Bio Mass System and to develop the Licensed Item to the commercial exploitation stage by providing capital of up to US$3,000,000 conditional upon GGS receiving an exclusive sublicense (with the exception of Nevada, Ghana, and Malawi) to the Licensed Items and the additional rights provided for herein. The sublicense shall be known as the GGS License.

Formation of Venture

Valcent and GGS hereby agree to establish a venture (the “Venture”) for the purpose of developing, promoting, licensing, marketing, manufacturing, distributing and selling and exploiting the Licensed Item, the Bio Mass System and the Licensed Items.

Term

The term of the Venture shall be for as long as the Licensee deems it to be a commercial venture with revenues in excess of the minimum revenues required to keep the PAGIC/WPK License in good standing.

Funding of Venture

All funds required to complete the research and development related to the Bio Mass System to a working prototype stage, the construction of a pilot plant utilizing the Bio Mass System and the construction and delivery of Licensed Items embodying the Bio Mass System for exploitation purposes shall be paid for by GGS.

Contributions by Valcent

Valcent shall contribute to the Venture the following:

        

1)     

the GGS License;

 

 

 

2)     

the non-exclusive services of Malcolm Glen Kertz as the inventor and conceiver of the Licensed Items for support and to provide know-how and technical expertise as a research

 

 


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consultant to the Venture but on a basis sufficient to meet the R&D and commercial project exploitation schedules;

 

 

        

3)     

the non-exclusive use of the warehouse and laboratory space currently maintained by Valcent in El Paso, Texas; but on a prioritized basis to meet the R&D and commercial project exploitation schedules;

 

 

 

4)     

non-exclusive use of a parcel of land located in the County of El Paso consisting of approximately 6.2 acres of land on which a working prototype of the Invention can be constructed but on a prioritized basis to meet the R&D and commercial project exploitation schedules;

 

 

 

5)     

other Valcent personnel and office services to be charged to the venture on a cost basis

Participating Interests

Before payout of the Licensee’s capital account and acceptable third party expenses, the Venture interests shall be 80% in favor of the Licensee and 20% in favor of the Licensor whereby both interests in total shall be subject to a 0.9% royalty payable to PAGIC and WPK as detailed in the attached Schedule “A”. The 20% venture interest held by the Licensor shall be a carried interest.

After payout of the Licensee’s capital account and acceptable third party expenses, the venture interest shall be 70% in favor of the Licensee and 30% in favor of the Licensor whereby both interests in total shall be subject to a 4.5% royalty payable to PAGIC and WPK as detailed in the attached Schedule “A”. At the end of the R&D and pilot plant phase, Valcent will have the option to purchase an additional 10% interest for 40% of GGS’s investment.

Additional facilities constructed to exploit the Licensed Item shall be accounted for as separate and distinct Ventures (the “Sub-Ventures”) and any distributions made shall be subject to the same distribution terms as stated above.

The parties anticipate that Venture income will be derived from the following:

            

1)     

the sale or lease of plants employing the Licensed Item and the Bio Mass System;

 

2)     

the sub-licensing of the Licensed Item;

 

3)     

the sale of capital assets;

 

4)     

the harvesting of by-products derived from the application of the Licensed Item;

 

5)     

green credits

Note: Any government grants shall be treated as cost offsets.

Income derived from the above events, less cost of sales and selling, general and administrative costs shall be included for distribution purposes. A capital account shall be established for the Licensee which reflects the amount of money contributed to the venture or sub venture(s) decreased by any reimbursement(s) made.

Valcent has the right to develop a sub-venture to commercialize the Licensed Items for retail/consumer (non-industrial) applications of this technology/apparatus. For such a sub-venture, Valcent will be the

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operator, and shall fund all of the sub-venture investments. GGS shall also have a capita


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