REVISED AMENDED AND RESTATED TECHNOLOGY LICENSE AGREEMENT

 

            REVISED AMENDED AND RESTATED TECHNOLOGY LICENSE AGREEMENT

 

      This   Revised   Amended and   Restated   Technology   License   Agreement   (the

"Agreement")   is made and entered   into August 19,   2005,   between   Bio-Products

International,   Inc. ("Bio-Products"),   a company incorporated under the laws of

the State of Alabama (the "Licensor"), and World Waste Technologies, Inc. (WWT),

a   company   incorporated   under   the   laws   of   the   State   of   California   (the

"Licensee")   (the Licensor and Licensee may   hereinafter be either   individually

referred to as the "Party" or collectively referred to as the "Parties").

 

                                    PREMISES:

 

      Whereas,   Dr. Michael H. Eley ("Eley"),   in his continuous   capacity as an

employee of the University of Alabama in Huntsville   ("UAH"),   developed certain

proprietary   intellectual   property,   patented   processes,   and   patent   pending

processes   for the volume   reduction,   separation,   recovery,   and   recycling of

various components of waste materials,   including without limitation,   Municipal

Solid Waste ("MSW"),   which   technology has been reduced to United States Patent

No. 6,306,248 (the "U.S. Patent") and Patent Cooperation   Treaty,   International

Application No. PCT/US01/50049 (the "PCT") (collectively, the "UAH Technology").

The UAH Technology   constitutes   the first of the two parts of the   "Technology"

(as defined   herein).   Eley is the   majority   stockholder,   a Director,   and the

President and CEO of Bio-Products;

 

      Whereas,   pursuant to that certain Amended and Restated License Agreement,

effective   August 18, 2003,   which   supersedes and replaces the original license

agreement dated November 13, 1992, which was amended effective   November 5, 1997

and amended again effective August 31, 1999,   between UAH and Bio-Products   (the

"UAH   License") (a complete copy of which is attached as Exhibit A), UAH granted

an exclusive   worldwide   license to   Bio-Products   covering the UAH   Technology,

including the rights to make, have made,   use, lease and sell certain   products,

and to   practice   certain   processes,   and to license   some or all of the rights

granted to Bio-Products by UAH to others, such products and processes being more

specifically defined in the UAH License;

 

      Whereas,    Donald   E.   Malley   ("Malley")   developed   certain   proprietary

intellectual   property,   equipment   designs,   and process   operating   procedures

related   to the   UAH   Technology,   including   the   expertise   and   know-how   for

fabrication and continuous operation of a small waste reduction process plant at

a commercial   sanitary   landfill for a period of eighteen months   (collectively,

the "Malley/M&M Technology").   Malley (the Developer") and M&M Consulting,   Inc.

("M&M", a company   incorporated under the laws of the State of Mississippi) have

assigned to Bio-Products, exclusively throughout the world, all right, title and

interest   in the   Malley/M&M   Technology.   A complete   copy of the   Amended   and

Restated Stock Purchase and Assignment   Agreement (the "Malley/M&M   Assignment")

is attached as Exhibit B. The Malley/M&M   Technology   constitutes   the second of

the two parts of the "Technology"   (as defined herein).   M&M is a stockholder in

Bio-Products, and Malley is a Vice President of Bio-Products;

 

      Whereas,   the original Technology License Agreement,   dated June 21, 2002,

was between Bio-Products and World Waste Holdings,   Inc. ("WWHI"),   incorporated

under international law in Anguilla,   British West Indies, and WWHI assigned the

said Technology   License Agreement to World Waste of America,   Inc.   ("WWA"),   a

company   incorporated   under the laws of the State of California,   effective May

12, 2003 (a complete copy of which is attached as Exhibit C);

 

      Whereas, WWA and all of its assets, including the June 21, 2002 Technology

License   Agreement   with   Bio-Products,   was acquired by Waste   Solutions,   Inc.

("WSI"), a California   corporation,   in a merger and reorganization in which WWA

became a wholly owned   subsidiary of WSI,   dated March 22, 2004 (a complete copy

of which is attached as Exhibit D);

 

 

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      Whereas, WSI filed a Certificate of Amendment of Articles of Incorporation

to the   Secretary of State of the State of   California   changing the name of the

corporation   to World   Waste   Technologies,   Inc.   ("WWT") on March 24,   2004 (a

complete copy of which is attached as Exhibit E);

 

      Whereas,   Bio-Products   desires to enter   into this   Revised   Amended   and

Restated   Technology   Agreement   with the Licensee to provide the Technology and

future   improvements   for the construction and operation of commercial scale MSW

processing   and recycling   facilities   subject to the terms and   conditions   set

forth herein;

 

      Whereas, the Licensee either has the financial resources, or has agreed to

use their best   efforts   to secure   the   financial   resources,   for the   design,

engineering, and fabrication of processing equipment and facilities, acquisition

and   permitting   of   construction   sites,    purchase   of   processing   equipment,

construction   and operation of   commercial   scale MSW   processing   and recycling

facilities,   and marketing and promotion of said commercial   facilities that are

compatible with the Technology;

 

      Whereas,   the   Licensee   desires to enter into this   Revised   Amended   and

Restated Technology Agreement with Bio-Products to use the Technology and future

improvements   for   the   construction   and   operation   of   commercial   scale   MSW

processing   and   recycling   facilities   subject   to   the   terms   and   conditions

hereinafter set forth;

 

      Whereas,   the Parties wish to execute   this   Revised   Amended and Restated

Technology   Agreement   between the Parties as herein set forth to supercede   and

replace the Amended and Restated Technology License Agreement,   executed on June

21,   2004,   which   superceded   and   replaced   the   original   Technology   License

Agreement,   dated June 21, 2002,   and June 21, 2002 shall   remain the   effective

date of this Agreement; and

 

      Now, therefore,   in consideration of the premises and the mutual covenants

contained herein, the Parties hereto agree as follows:

 

                             ARTICLE I - DEFINITIONS

 

      For purposes of this Agreement, the following words and phrases shall have

the following meanings:

 

      1.1 "Technology"   shall mean the inventions,   technology,   and proprietary

intellectual property and information   developed by Bio-Products,   Eley, Malley,

and UAH   created   or   discovered   prior to or after the   effective   date of this

Agreement,   including,   but   not   limited   to,   inventions,   processes,   process

operating   procedures   and   discoveries,   patents,   patent   applications,   trade

secrets, developments, facility designs, equipment designs, works of authorship,

formulas, software programs, techniques, information, expertise, know-how, data,

research,   mask works, all   intellectual   and industrial   property rights of any

sort, all rights of integrity,   disclosure   and   withdrawal,   copyrights,   trade

names   and   trademarks,    which   are   related   to   the   recycling,    processing,

collection,   storage, disposal, treatment,   utilization or reduction of waste or

waste   components.   Technology as defined in this   Agreement does not include or

prohibit   any end uses of the   cellulosic   product or other   by-products   of the

process, with the exception of the use of the cellulosic product in applications

in which the cellulosic product of waste, including MSW, processed utilizing the

Technology   is either used   directly as a fuel source or   converted   into an end

product   for   energy    production    which    remains    exclusively    licensed   to

Bio-Products.    Technology   otherwise   includes   without   limitation,    the   UAH

Technology, the Malley/M&M Technology, United States Patent Number 6,306,248 and

Patent Cooperation Treaty International Application Number PCT/US01/50049.

 

 

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      1.2 "Third Party" shall mean any person or entity other than Bio-Products,

Eley, Malley, UAH, the Licensee and Sub-Licensees of the Licensee.

 

      1.3 "Operating Day" shall mean the day in which the facility (i) processes

waste equal to or in excess of the facility's daily design capacity as warranted

in Section 5.7; or (ii)   processes   all of the waste brought to the facility for

processing   on such day;   or (iii)   processes   as much   waste as   allowed by any

downstream   limitations,   such as but not   limited   to, any   limitations   on the

downstream processing or disposal of the cellulosic product.

 

      1.4   "Cellulose   Product"   shall be defined as the smallest   size material

obtained   from   screening   the   processed    materials    produced   utilizing   the

Technology,   typically   through a one-half inch screening   device, in which more

than   fifty   percent   (50%) by dry   weight can be   chemically   characterized   as

material originating from forest products or other living plants.

 

      1.5   "Bio-Products   Affiliate"   means a corporation   or other legal entity

formed and doing business,   and in which Bio-Products directly holds or owns (i)

at least   fifty-one   percent   (51%) of the equity or ownership   interest in such

corporation or other legal entity;   and (ii) sufficient   voting rights to enable

Bio-Products to nominate and elect at least a majority of the board of directors

or other   managing   authority   and   maintain   control   in the   direction   of the

business   operations and   strategies of such   corporation or other legal entity;

and (iii) an   active   operational   interest,   not   merely a   passive   investment

interest, in such corporation or other legal entity.

 

      1.6 "Proposed Construction Notice" means a written notice containing (i) a

description   of the   proposed   facility,   (ii) the   identity of the   prospective

location for the proposed facility, (iii) a detailed financial and business plan

for the   proposed   facility   and its   operation,   and (iv) the   identity   of the

proposed feedstock provided and its proposed feedstock contract.

 

                          ARTICLE II - GRANT OF LICENSE

 

      2.1 Subject to the terms and   conditions of this   Agreement,   Bio-Products

hereby   grants a license to the Licensee to utilize the   Technology to construct

and operate   commercial   scale MSW   processing   and recycling   facilities in the

United States of America ("USA").

 

      (a)    The   license   granted by   Bio-Products   to the   Licensee   under this

            Agreement shall be exclusive in all of the States, territories,   and

            possessions    of   the   USA   with   the   following    exceptions:    (i)

            Bio-Products shall retain the exclusive right and license to utilize

            the   Technology   to   construct   and   operate   commercial   scale   MSW

            processing and recycling   facilities in the USA for   applications in

            which the   cellulosic   product of waste,   including   MSW,   processed

            utilizing the Technology is either used directly as a fuel source or

            converted into an end product for energy production;   (ii) except as

            otherwise   provided   for   herein,    Bio-Products   shall   retain   the

            exclusive   right and license to utilize the   Technology to construct

            and operate commercial scale MSW processing and recycling facilities

             in the State of   Arkansas;   and (iii)   Bio-Products   shall   retain a

            non-exclusive   right and license to construct and operate additional

            commercial scale MSW processing and recycling   facilities   utilizing

            the   Technology   in one or all of the States of Alabama,   Tennessee,

            Georgia,   and/or   South   Carolina,   providing   the   total   number of

            facilities    in   these    States    does   not   exceed   four   (4)   (the

            "Bio-Products    Retained    Sites")    and   further    providing    that

            Bio-Products   shall be required to draw its MSW   feedstock   for said

            four   Bio-Products    Retained   Sites   only   from   within   the   State

            boundaries   of each of said four States   and/or from within 75 miles

            from the State   border   outside   the   State in which   the   operating

            facility exists.   The above   notwithstanding,   upon written requests

            from   the   Licensee,   (i)   Bio-Products   shall   grant   site-specific

            sub-licenses    to   the   Licensee   for    applications   in   which   the

            cellulosic product of waste,   including MSW, processed utilizing the

            Technology   is either used   directly   as a fuel source or   converted

            into an end product for energy   production;   (ii) Bio-Products shall

            grant   site-specific   sub-licenses   to the Licensee to construct and

            operate   facilities    utilizing   the   Technology   in   the   State   of

             Arkansas.   In addition,   Bio-Products   hereby   grants the Licensee a

            first   right of   refusal   in   accordance   with the terms of   Section

            2.1(b) hereof.

 

 

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      (b)    Right of First Refusal. As stated in Paragraph 2.1(a),   Bio-Products

            or a   Bio-Products   Affiliate,   as defined in paragraph   1.5,   shall

            retain   (i) a   non-exclusive   right and   license   to   construct   and

            operate up to four (4) Bio-Products Retained Sites, i.e., up to four

            (4)   facilities   utilizing the   Technology in the States of Alabama,

            Tennessee,   Georgia, and South Carolina and (ii) the exclusive right

            and license to construct and operate commercial scale MSW processing

            and recycling   facilities   utilizing the   Technology in the State of

            Arkansas (the   "Arkansas   Sites")   (collectively,   the   Bio-Products

            Retained Sites and the Arkansas Sites shall be referred to herein as

            the "ROFR   Sites").   Bio-Products   and Licensee   hereby agree that a

            right of first refusal is hereby   granted to Licensee to participate

            in the ROFR Sites as follows:

 

            (i)    Proposal Notice. If at any time Bio-Products or a Bio-Products

                  Affiliate   proposes to develop and construct a ROFR Site, then

                  Bio-Products   shall   give   Licensee   a   Proposed   Construction

                  Notice   pursuant to Section 14.15 hereof of   Bio-Products'   or

                  Bio-Products   Affiliate's intention to develop a ROFR Site. To

                  the extent Bio-Products has been discussing the ROFR Site with

                  a   Bio-Products   Affiliate   or any Third   Party,   the Proposed

                  Construction   Notice shall also include all details   regarding

                  those   discussions   and a copy of any written   proposal,   term

                  sheet or letter of intent or other   agreement   relating to the

                  proposed ROFR Site with said   Bio-Products   Affiliate or other

                  Third Party(ies).

 

            (ii)   Licensee's Option.   Licensee shall have an option for a period

                  of ninety (90) days from receipt of the Proposed   Construction

                  Notice to elect to finance,   own and control up to one hundred

                  percent (100%) of the project in accordance   with the material

                  terms and conditions as described in the Proposed Construction

                  Notice.    Licensee   may   exercise   such   option   by   notifying

                  Bio-Products   in   writing   pursuant   to Section   14.15   hereof

                  before   expiration of the ninety (90) day period.   If Licensee

                  exercises   such option and elects to own and control more than

                  50%, (i) each facility   covered by said exercise   shall not be

                  considered   as one   of the   Bio-Products   Retained   Sites,   if

                   Licensee has majority   interest   (interest   greater than 50%),

                  and (ii) the Licensee   shall   reimburse   Bio-Products   for its

                  actual   out-of-pocket    expenses   incurred   in   securing   said

                   facility within ninety (90) days of exercising its option, and

                  pay   Bio-Products   a Sales   Commission   equal to three percent

                  (3%) of the proposed   capital cost of the facility   (excluding

                  the cost of the vessel(s)), payable in four equal installments

                  with each such   installment   due 90 days,   180 days, 270 days,

                  and 360 days, respectively, from the date Licensee secures and

                  completes   financing   for the facility or begins   construction

                  and   placing   orders   for   equipment   prior to   completion   of

                  financing   of the   facility.   Notwithstanding   the   foregoing,

                  Licensee   shall not have an option   pursuant   to this   Section

                  2.1(b) with respect to the first two "Proposed Exempt Site(s)"

                  (as   defined   below).    For   the   purposes   hereof,   the   term

                  "Proposed   Exempt   Site(s)"   shall mean a   proposed   ROFR Site

                  which   processes,   or is capable of   processing,   no more than

                  2000 tons per day located in the State of   Arkansas,   Alabama,

                  Tennessee, Georgia, and South Carolina."

 

 

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            (iii) Non-Exercise   of Rights.   To the extent that   Licensee has not

                  exercised its rights to develop the proposed   facility   within

                  the   time   periods    specified    above,    Bio-Products    or   a

                  Bio-Products   Affiliate   shall have the right to construct the

                  facility   upon terms and   conditions   (including   the   capital

                  commitment)   no more   favorable   than those   specified   in the

                  Proposed Construction Notice and the Licensee shall then grant

                  a site-specific   sub-license   (said   sub-license   shall not be

                  sub-licensable   or   otherwise    transferable   for   any   reason

                   without the prior written consent of Licensee) to Bio-Products

                  or a Bio-Products   Affiliate, as the case may be. Every effort

                  will be made by the Parties to avoid locating   facilities that

                  would compete for waste in the same collection areas.

 

      2.2 The term of this license shall extend from the   effective   date of the

original   Technology License Agreement,   which is June 21, 2002, for a period of

twenty (20) years,   unless extended,   terminated or replaced by agreement of the

Parties   hereto,   or unless   otherwise   extended   or   terminated,   as   elsewhere

provided in this Agreement. This Agreement shall be extended automatically until

the   expiration   date of the last   patent   issued   to   Bio-Products   and/or   UAH

covering the Technology.

 

      2.3   Anything   to the   contrary   contained   elsewhere   in   this   Agreement

notwithstanding,   Bio-Products   shall retain all of the exclusive rights granted

under the UAH License and all of the exclusive rights assigned by the Malley/M&M

Assignment,   including the worldwide   exclusive   right to license some or all of

its rights not granted to the Licensee   under this Agreement to Third Parties to

utilize the Technology.

 

      2.4 Subject to the terms and   conditions of this   Agreement,   Bio-Products

hereby grants to Licensee the right to obtain an exclusive   option or license to

utilize the Technology to construct and operate   commercial scale MSW processing

and   recycling    facilities    outside   the   United   States   upon   the   following

conditions:

 

      (a)    From   the   date of this   Amended   and   Restated   Technology   License

            Agreement,   Bio-Products   agrees to inform   Licensee   of any written

            offer from a Third   Party to obtain an   exclusive   option or license

            for a foreign   country not   currently   under an exclusive   option or

            license that is acceptable to Bio-Products. Licensee will be granted

            a period of thirty (30) days from the date of   notification in which

            to elect to purchase   the option or license for said   country on the

            same terms and conditions as contained in the written offer from the

            Third Party. If Licensee   exercises its right to purchase the option

            or license for said country during the thirty (30) day period,   then

            Bio-Products   shall grant an exclusive option or license to Licensee

            under the terms and conditions   stated in the written offer from the

             Third Party. If Licensee fails to exercise its right to purchase the

            option   or   license    within   the   thirty   (30)   day   period,    then

            Bio-Products   may   grant an   exclusive   option or   license   for said

            country to the Third Party making the initial offer.

 

 

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      (b)    The   Licensee   may from   time to time   submit a written   request   to

            Bio-Products   naming   each   country   in which it wishes to obtain an

            option   for an   exclusive   license   to utilize   the   Technology.   If

            Bio-Products   has not   previously   granted   an   exclusive   option or

            license to or   received a written   offer from a Third Party for that

             country,    Bio-Products   shall   grant   Licensee   an   option   for   an

            exclusive   license   for that   country   upon the   payment   of fifteen

            thousand   dollars   ($15,000)   per country (the "Option   Fee").   Said

            Option Fee shall be due and   payable   within   thirty (30) days after

            Bio-Products   has informed   Licensee in writing that said country is

            available. Licensee acknowledges that the deadline for submission of

            foreign   patent   applications   based on the current PCT has expired,

            therefore no patent protection can be provided to Licensee under the

            current PCT. However,   Licensee agrees to pay all fees and expenses,

            including,   but not limited   to,   maintenance   fees   incurred in the

            prosecution   of future   patents as may be necessary or useful in the

            countries licensed to Licensee under this Paragraph 2.4. Such option

            for an   exclusive   license   granted   to   Licensee   pursuant   to this

            Paragraph   2.4(b)   shall be for a term of three (3)   years   from the

            date   that the   Option   Fee is paid to   Bio-Products;   provided   the

            Licensee has also paid all fees and expenses for patent   prosecution

            incurred   during   the   term   of   the   option,   and   Licensee   is   in

            compliance    with   all    requirements    under   this    Agreement   for

            exclusivity in the United States.

 

      (c)    At any time prior to the   expiration of the term of an option for an

            exclusive   license to Licensee in any country   under   Paragraph   2.4

            (b),   the option   may be   converted   to an   exclusive   license   upon

            payment by Licensee to   Bio-Products of a license fee of eighty-five

            thousand   dollars   ($85,000)   per country,   in addition to the above

            Option Fee and any patent   prosecution   fees and expenses.   Licensee

            shall also continue to pay all fees and expenses, including, but not

            limited to,   maintenance fees incurred in the prosecution of patents

            as may be   necessary   or useful in the country   licensed to Licensee

            under this Paragraph 2.4.

 

      (d)    For each country   exclusively   licensed to Licensee under   Paragraph

            2.4(c),   the   terms   and   conditions   set   forth   elsewhere   in this

            Agreement shall apply and Licensee shall pay royalties, bonuses, and

            fees to   Bio-Products   in   accordance   with Article   III,   excluding

            Paragraph   3.1,   and all   waste   processing   facilities   both in the

            United   States and outside the United   States shall be combined on a

            cumulative   basis for   purposes of   calculating   all payments due to

            Bio-Products,   unless   another   financial   arrangement   is   mutually

            agreed to by the Parties.

 

      2.5 For each facility to be constructed   and operated under this Agreement

by the   Licensee,   a Proposed   Construction   Notice,   as defined in Article 1.6,

shall be   prepared   and   submitted   to   Bio-Products   for   review   and   comment.

Bio-Products   shall   submit its   comments in writing to the Licensee in a timely

manner,   not to exceed ninety (90) days. The Licensee   shall, at its discretion,

then grant a site-specific sub-license to a USA entity (the "Sub-Licensee"),   if

any, that shall own and/or   operate the   facility.   Such   sub-license   agreement

shall be subject to the approval of   Bio-Products,   which   approval shall not be

unreasonably   withheld and shall be deemed given if not provided   within   ninety

(90) days of written   notice to   Bio-Products   as per the terms of Section 14.15

hereof.

 

             ARTICLE III - FEES, ROYALTIES, AND OTHER CONSIDERATION

 

      3.1 The Licensee shall pay to Bio-Products a one time Technology licensing

fee of Three Hundred Fifty Thousand Dollars ($350,000) for the USA. Bio-Products

acknowledges   that it has received payment in full of this Technology   licensing

fee.

 

 

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      3.2 The Licensee shall pay to Bio-Products a royalty of fifty cents ($.50)

for every ton of waste received and processed utilizing the Technology,   up to a

maximum of two thousand   (2,000) tons per day of waste   processed.   The Licensee

shall pay to Bio-Products a royalty of one dollar ($1.00) for every ton of waste

received and processed in excess of two thousand tons per day up to a maximum of

ten thousand (10,000) tons per day of waste processed. The Licensee shall pay to

Bio-Products   a royalty of one dollar and fifty   cents   ($1.50) for every ton of

waste   received and   processed in excess of ten thousand   (10,000) tons per day.

The royalty   payments shall become payable on the thirtieth (30th) day following

the end of the calendar   month in which such amount   becomes due and owing until

this Agreement or any extension   thereof expires or is terminated.   Bio-Products

agrees that no royalty shall be due and payable with respect to waste   processed

at any   facility   until such   facility   has been in   operation   for thirty   (30)

Operating   Days,   as   defined   in   Paragraph   1.3   (the    "Operational    Date").

Bio-Products   further   agrees   that no royalty   shall be   assessed   on the first

facility   until   either the sale of the   cellulosic   product is   confirmed   by a

written   agreement   between the   Licensee   and a purchaser   or the   facility has

operated,   producing   and   disposing of the   cellulosic   product,   for more than

ninety (90) days after the Operational Date.   Payment of said royalties shall be

by wire transfer of funds to a Bio-Products   bank account or by cashier's   check

or other bank certified negotiable instrument.

 

      3.3 The Licensee   shall pay to   Bio-Products   a bonus (the "Bonus") of two

and one half   percent   (2.5%) of the gross   sales price in excess of ten dollars

($10.00) per ton for the cellulosic product from waste, including MSW, utilizing

the Technology.   The Bonus shall become due and payable on the ninetieth   (90th)

day following the end of the calendar   quarter in which such recyclable   product

sales are made until   this   Agreement   or any   extension   thereof   expires or is

terminated.   The Bonus shall be paid by wire transfer of funds to a Bio-Products

bank   account   or by   cashier's   check or by   other   bank   certified   negotiable

instrument.   The above   notwithstanding,   no Bonus shall be due and payable with

respect to the   cellulosic   product   produced at the facility until the facility

reaches its Operational Date.

 

      3.4

 

      (a) As   additional   consideration   and for their   experience   and know-how

regarding the Technology,   the Licensee shall pay Bio-Products a monthly fee for

technical services.   Such technical services shall initially be provided by Eley

and Malley who are employees of Bio-Products,   and who agree to provide whatever

technical   services are   reasonably   requested of them by Licensee.   Payments to

Bio-Products for the technical   services shall be ten thousand dollars ($10,000)

per month   payable   on or before   the first   (1st)   business   day of each   month

beginning six (6) months from June 21, 2002. Payments for the technical services

of   Bio-Products   shall be increased to twenty   thousand   dollars   ($20,000) per

month commencing on the first business day of the month following the Licensee's

initial down payment for the process vessels for   construction of the Licensee's

first   plant and   continuing   each   month   thereafter   until the first   facility

reaches its Operational Date.

 

      (b)   Following   the   Operational   Date   as   defined   above   in   3.4(a)   of

Licensee's first facility, and effective immediately, payments for the technical

services   of   Bio-Products   shall   be   decreased   to   fifteen   thousand   dollars

($15,000)   per   month for the   continued   provision   of   technical   services   by

Bio-Products   with respect to the   construction of additional   facilities or the

expansion of existing   facilities.   Licensee and Bio-Products shall enter into a

consulting   agreement   on   terms   mutually   agreeable   to both   Parties   for the

continued   provision of technical   services by Bio-Products   with respect to the

construction of additional   facilities or the expansion of existing   facilities.

Licensee agrees that said   consulting   agreement shall be for five (5) years and

shall include a minimum of fifteen thousand dollars   ($15,000) per month payable

to Bio-Products on the first (1st) business day of each month.

 

 

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      (c) If at any time   Bio-Products   fails to   undertake   technical   services

requested,   then Licensee may cease all payments as set forth in this   Paragraph

3.4,   until   such   time as the   failure   to   undertake   the   technical   services

requested is remedied.

 

      3.5   Additionally,   with   respect to the   technical   services   provided by

Bio-Products,   the Licensee shall either provide   pre-paid   expense   accounts or

reimburse   Bio-Products   employees for the reasonable   transportation,   lodging,

food, and other expenses   incurred by Bio-Products   employees in the performance

of such technical   services for the Licensee.   In either case,   itemized expense

reports   and   receipts   shall   be   submitted   to the   Licensee   by   Bio-Products

employees   within ten (10)   business   days of completion of travel or a specific

project in which expenses are incurred.   The Licensee   shall   establish a travel

expense   policy and   procedure,   which policy and procedure   Bio-Products   shall

adhere to unless the Parties agree, in writing, otherwise. Any reimbursement for

expenses shall be paid by the Licensee   within ten (10) business days of receipt

of such expense reports submitted by Bio-Products employees.

 

      3.6 The Licensee may enter into research and   development   contracts   with

Bio-Products to use the UAH pilot plant and facilities that are unrelated to the

Technology,   as defined herein, with Eley as the principal   investigator,   to be

defined   from   time   to   time in   exchange   for   results   and   information,   and

Bio-Products   shall   provide a royalty   free   unrestricted   license   to use said

results and   information   which are   unrelated to the   Technology   at Licensee's

facilities   for the   period of this   Agreement   unless a separate   agreement   is

prepared   and signed by both   Parties.   Such results and   information   which are

unrelated to the Technology,   including but not limited to test results,   notes,

and reports   regarding the work   performed as requested by the Licensee shall be

turned over to the Licensee by Eley within thirty (30) days of   completion,   and

all such   results   and   information   shall be   considered   as   jointly   owned by

Licensee   and   Bio-Products   as   provided   in Article   IV.   Eley shall allow the

Licensee   to visit the UAH pilot   plant   facility   for any   purposes,   including

demonstrations,   recyclable   product   production,   and testing   upon   reasonable

notice by the Licensee and mutual agreement with Eley as to the dates and times.

Eley   shall   also   provide   training   for the   Licensee's   employees   to use the

licensed   Technology at the UAH pilot plant. Eley shall be compensated at a rate

of five   hundred   dollars   ($500.00)   per day plus   expenses for all pilot plant

operations.   For   demonstrations,   recyclable product production,   testing,   and

training   at the UAH pilot plant at the request of the   Licensee,   the   Licensee

shall compensate   Bio-Products   and UAH for the expenses for such   demonstration

and test runs as follows:

 

<TABLE>

<CAPTION>

<S>                                                                       <C>

      (a) For Each Series of Test Runs:

               (i)       Pilot Plant Preparation/Set up                        $500

               (ii)      Pilot Plant Clean-up/Shutdown                         $500

      (b) For Each Test Run in a Series:

               (i)       Boiler Fuel/Water Treatment                           $200

               (ii)      Labor                                                 $800

               (iii)     Waste Disposal                                        $100

       (c) Follow up Costs:

               (i)       Small Sample Collection, Packaging & Storage          $100

               (ii)      Large Sample   Collection & Packaging                  $250

               (iii)     Dry   Cellulose   Product   per ton                       $500  

               (iv)      Shipping Containers & Shipping Costs             Actual, plus 25%

      (d) Additional expenses:

               (i)       Tractor Rental                                        $100/day

               (ii)      Auto/Truck mileage for Laborers                       $0.40/mile

               (iii)     Truck towing mileage                                  $0.80/mile

               (iv)      Local Lodging for Laborers                            $50/day

               (v)       Per Diem allowance for Laborers                       $25/day

</TABLE>

 

 

                                       8

<PAGE>

 

      3.7 For the first facility to be sub-licensed   under this   Agreement,   the

Licensee agrees that the facility design,   equipment designs and specifications,

engineering firm, construction contractors and sub-contractors, and all facility

management and labor personnel must be approved by Bio-Products,   which approval

shall   not be   unreasonably   withheld.   The   Licensee   also   agrees to begin the

facility permitting,   facility and equipment design,   equipment   selection,   and

engineering   for the   first   facility   within   six (6)   months   from the date of

execution   of this   Agreement   and to begin   placing   orders for   equipment   and

construction   site work   within   one (1) year from the date of   approval   of all

permitting,   facility and equipment design, equipment selection, and engineering

for the first   facility.   Notwithstanding   the   foregoing,   Licensee shall begin

placing   orders   for   equipment   and   shall    commence   and   diligently    pursue

construction   and   completion   of the first   facility   no later than thirty (30)

months from the effective   date of this   Agreement,   which would be December 21,

2004.

 

      3.8 Due to the   proprietary   nature   of the   process   vessel   design,   the

Licensee agrees that   Bio-Products   shall maintain the exclusive right of vessel

manufacture,   and the Licensee and its Sub-licensees shall purchase all required

vessels   exclusively   from   Bio-Products.   The purchase price shall be cost plus

fifteen   percent   (15%),   not   including   shipping   costs or   taxes.   All   other

equipment   required   for   construction   and   operation of waste   processing   and

recycling   facilities   utilizing   the   Technology   may be   purchased   from other

vendors.   The first two vessels are to be built to Bio-Products'   specifications

in   Mississippi   and   shipped to the   requested   locations.   Shipping   costs and

applicable taxes shall be itemized and included in the cost of vessels and shall

be invoiced to and paid by the   Licensee.   Thereafter,   Bio-Products   shall from

time   to time   seek   the   qualifications   of and   obtain   cost   quotations   from

alternative vessel manufacturers to manufacture future process vessels as needed

such that the same may be provided to Licensee   having   equal or higher   quality

than that established by Bio-Products from its Mississippi   manufacturer and may

be transported by truck to the required facility at a cost equal to or less than

that established by Bio-Products from its Mississippi manufacturer including the

cost of shipping and taxes.   Bio-Products shall provide a minimum of thirty (30)

days training for Licensee   employees and a written   operations and   maintenance

manual for operating the process   vessels.   If future vessels are pur