Exhibit 10.2 License
Agreement
LICENSE AGREEMENT FOR USE OF
PATENT NO. US 6,709,573 B2
This is
a License Agreement effective this 8 th day of February
2006 (“Effective Date”), by and between The Anthon Leon
Smith and Rosalie Joyce Johnson Smith Revocable Living Trust
hereafter known as “Smith Trust”, and EnShale, Inc. a
Wyoming Corporation.
BACKGROUND RECITALS
A. “Smith Trust” is the owner of United States Patent
#U.S. 6,709,573 B2 and foreign patents as represented in Exhibit A
attached hereto, which cover a process for extracting hydrocarbon
products and related products from oil shale and tar sands (the
“Patented Process”). “Smith Trust”
has invested substantial amounts of time and funding to
develop proprietary technical and business information relating to
the Patented Process and related applications.
B. EnShale, Inc. has attained substantial expertise and know how in
mining and the marketing of minerals and related products.
C. EnShale, Inc. will obtain a nonexclusive license from
“Smith Trust” to develop, manufacture, use and sell
products that use the Patented Process and “Smith
Trust” is willing to grant such a license to them on the
terms and subject to the conditions of this Agreement.
D. EnShale, Inc. will purchase a non-exclusive license from
“Smith Trust” for a payment of $500,000 dollars and an
ongoing royalty as defined in 4.1.
WHEREFORE, THE PARTIES AGREE AS FOLLOWS :
1. Definitions.
For the purpose of this Agreement, and solely for that purpose, the
terms set forth in this Section 1 shall be defined as follows:
1.1 “Licensed Patent Rights”
Licensed Patent Rights shall mean that aforementioned grant of
rights to certain United States Patent and or its foreign
counterparts which has been registered with the United States
Patent Office developed by Leon Smith, used in the production of
oil from shale or tar sands, and any reissues, reexaminations, or
improvements that may be based upon the aforementioned such patent
which “Smith Trust” has the right to grant a license
hereunder (See Exhibit “B”).
1.1 “ Licensed Patents or Patent”
As attached hereto and made part of this agreement as Exhibit
“A”.
1.1 “Licensed Products”
Licensed products shall mean any hydrocarbon or oil produced from
oil shale or tar sands in an extraction process utilizing the
Licensed Patent Rights or any Licensed Equipment. For
purposes of this Agreement, the term Licensed Products shall also
include any electricity produced, chemical by-products or waste
shale products which can be sold and are therefore included within
the definition of Licensed Products.
1.4 “Gross Revenue”
Gross Revenue is based upon the sale price of all hydrocarbon
products, electricity, other by-products and waste shale
products.
1.5 “Operating Costs”
Operating costs exclude interest, tax, depreciation, and
amortization and includes all other costs.
1.6 “Net Gross Margin”
Net gross margin is defined as “gross revenue” per
barrel less “operating costs” per barrel of finished
oil products.
2.
Non-exclusive License Grant.
2.1 Grant . Upon the terms and subject to the
conditions of this Agreement, “Smith Trust” hereby
grants to EnShale, Inc., and the EnShale, Inc. hereby accepts from
“Smith Trust”, a non-exclusive, worldwide license for
the term of this agreement hereof to practice, use, develop,
commercialize and otherwise utilize the Licensed Patent Rights to
make, use and sell Licensed Products under any terms or at any
price EnShale, Inc. deems appropriate (Attached as Exhibit
“C”).
2.2 Grant Restriction. “Smith Trust”
expressly acknowledges and agrees that EnShale, Inc. shall have no
right to sell or grant to independent parties any rights under the
foregoing license grant. “Smith Trust” also
agrees to not sell or offer to sell the same or similar Licensed
Patent Rights at a price or value of less than the terms of this
agreement.
3.
Representations and Warranties of “Smith
Trust”.
“Smith Trust” hereby represents and warranties that it
is the owner of the Licensed Patent Rights of the patent described
above. “Smith Trust” warrants that it has no
knowledge of any claim of infringement pertaining to the Licensed
Patent Rights, and it knows of no litigation or claim, which if
successful, would interfere with or preclude the grant of the
license made in this Agreement.
4.
Records and Reports
4.1 Records . EnShale, Inc. shall keep full, true and
accurate books of accounts containing all particulars which may be
necessary for the purpose of showing the amounts payable to
“Smith Trust”. Such books and the supporting data
shall be open at all reasonable times upon reasonable advance
notice, for three (3) years following the end of the calendar year
to which they pertain to the inspection of “Smith
Trust”. The inspection of records shall be at
“Smith Trust’s” sole cost and expense unless a
deficit in payment is found which exceeds $10,000. EnShale
Inc. will then be responsible for all inspection and audit
expenses.
4.2 Reports . EnShale, Inc., within forty five (45)
days after the first day of January, April, July and October of
each year, shall deliver to “Smith Trust” a true and
accurate report, giving such particulars of the business conducted
by the new company during the preceding three (3) cale
