DATED NOVEMBER 29, 2005
(1) NEWGEN
TECHNOLOGIES INC
(2) NEWGEN FUEL
TECHNOLOGIES LTD
TECHNOLOGY LICENCE &
DEVELOPMENT AGREEMENT
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CONTENTS
CLAUSE
HEADING
PAGE
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-------
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1
DEFINITIONS
3
2
LICENCE
4
3
PAYMENT
5
4
COMMUNICATION OF IMPROVEMENTS
6
5
PROMOTION OF SALES
6
6
NON-DISCLOSURE OF INFORMATION
6
7
IMPROVEMENTS TO LICENCED TECHNOLOGY
7
8
REGISTRATION MAINTENANCE AND ENFORCEMENT OF RIGHTS
7
9
THIRD PARTY RESTRICTION
7
10
DURATION OF AGREEMENT
7
11
TERMINATION
8
12
ASSIGMNENT AND SUB-LICENCING
9
13
NO WARRANTY AS TO PATENT OR GOODS
9
14
NOTICES
10
15
SEVERABILITY
11
16
RESERVED RIGHTS
11
17
INDEMNITY BY LICENSOR
11
18
INDEMNITY BY LICENSEE
12
19
GOVERNING LAW AND JURISDICTION
12
SCHEDULE 1 - LICENSOR'S TRADEMARK
SCHEDULE 2 - ANNUAL PERFORMANCE TARGETS
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THIS AGREEMENT is made the 29th day of
November, 2005 BETWEEN:
1) NEWGEN
TECHNOLOGIES INC having its registered office at 6000 Fairview
Road,
suite 1201, (Charlotte, NC, USA 28210 ('the Licensor') and
2) NEWGEN
FUEL TECHNOLOGIES LTD having its registered office at KSB Law,
Elan House
5-11 Fetter (LaneLondon EC4A 1QD ) ('the Licensee')
IT IS AGREED as follows:
1 DEFINITIONS
In this Agreement the following expressions
shall have the following meanings:
'Business'
exploiting technology in the field of
petro-diesel, petrol, biodiesel, biodiesel
mixtures and by-products, ethanol, ethanol
mixtures and by-products, fuel additives;
and, the manufacture, sale and distribution
of products derived therefrom;
'Effective Date'
the date of this Agreement;
'Goods Sold'
the motor fuel additives manufactured by or
for Licensee or its affiliates, using the
Licensed Technology, sold either as
stand-alone products, or as component
products, in each case as sold by or for
Licensee or its affiliates.
'Infringement Claim'
means a claim by any third party alleging
misappropriation or infringement of such
third party's trade secret, patent,
copyright or trademark rights;
'Patents'
means Great Britain Patent Applications
(reference numbers GB0509818.1, GB0509653.2
and GB0509649.0) filed with the Patent
Office on May 12, 2005.
"Improvements"
additional proprietary intellectual
property, including patents; all patents
issued on Patents, and all extensions,
continuations, divisions thereof and, all
Improvements thereon, to the extent owned by
the Licensor, trade secrets, business
methods, processes, know-how and copyrights,
based, solely or primarily, upon, the
Patents and/or Processes or Goods Sold.
'New Technology'
all technology, including all patents issued
thereon; all extensions, continuations,
divisions thereof; and, the related
technical information, know-how,
manufacturing techniques, engineering data,
chemical formulae and specifications of
materials produced, developed or acquired by
one or both of the parties in connection
with the Business, BUT EXCLUDING
Improvements;
3
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'Processes'
the processes and methods of working,
current at the date of the License and
relating to, or in respect of, or for the
manufacture of, the Goods Sold;
"Licensed Technology"
collectively, the Patents, Licensor's New
Technology, Improvements, Processes and
Technical Knowledge.
'Product Liability Claim'
means a claim (whether in contract, tort, or
otherwise) by any third party alleging that
any Goods Sold have caused any destruction
of, or injury (including death) to, property
or persons, or are defective;
'Quarter Days'
31 March, 30 June, 30 September, and 31
December;
'Technical Knowledge'
knowledge about the Patents, Improvements,
Licensor's New Technology and Processes and
all technical information, know-how,
manufacturing techniques, engineering data,
chemical formulae, specifications of
materials and other information in the
possession of the Licensor relating to or in
respect of or for use with the Patents, New
Technology, Improvements and Processes and
all or part of which may be necessary to
enable the Licensee to work or practice the
Processes for the manufacture of the Goods
Sold to a standard and quality similar to
the standard and quality of the equivalent
goods manufactured by or for the Licensor
'Territories'
means Europe (excluding Germany),
Scandinavia and the Nordic Region, the
Middle East, Pakistan and India, the ASEAN
region (Indonesia, Malaysia, Philippines,
Singapore, Thailand, Brunei Darussalam,
Vietnam. Lao People's Democratic Republic,
Burma/Myanmar and Cambodia), and Australia.
'Year'
each period of 365 days calculated from the
calendar quarter day following the date on
which the Licensee shall have commenced the
manufacture of the goods for commercial
purposes
2 LICENCE
2.1
The Licensor
grants to the Licensee an exclusive license of the
Licensor's right, title and interest in and to the Licensed
Technology in the Territories in order to:(i) commercialize,
manufacture, use, promote, market, sell and distribute any
products
or services in connection with the Licensed Technology, (ii)
develop, commercialize, manufacture, use, promote, market, sell
and
distribute any products or services in connection with any New
Technology (including Improvements), (iii) develop,
commercialize,
manufacture, use, promote, market, sell and distribute
Improvements
and (iv) otherwise conduct the Business, in each case, within
the
Territories (collectively, the "License").
4
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2.2
As consideration
for the License, the Licensee shall pay to the
Licensor royalties pursuant to the terms of clause 3 of this
Agreement.
3 PAYMENT
The Licensee shall pay to the Licensor as
follows:
3.1
On [March] 3rd
2006, and on each March 3rd thereafter the Licensee
shall pay a sum of $US25,000.00 (the "Retainer") to the Licensor
for
as long as this Agreement remains in effect. The Retainer will
be
adjusted as and when the Licensee grants sub-licenses from the
License, to take account of the increased market size (if any)
expected to be derived from such sub-licensing. Market size will
be
determined based on total oil consumption in the market covered
by
the sub-license. The retainer will be determined as a ratio of
this
oil consumption v. US oil consumption, multiplied by the US
retainer
rate of $250,000.
3.2
As long as this
Agreement remains in effect, the Licensee shall pay
to the Licensor, on the Quarter Days, a royalty in respect of
the
use of the Licensed Technology. Such royalty shall be calculated
at
the rate of 0.115% of the Total Gross Turnover (defined below)
since
the previous Quarter Day ("Royalties"). The Retainer will be
deducted from the Royalties if and to the extent that the
total,
annual Royalties in any one year exceed the Retainer.
3.3
The first
payment of Royalties shall be due immediately after the
Licensee has been paid for its first sale of Goods Sold in the
Territories ("First Payment"). All subsequent Royalties shall
be
paid on the Quarter Days of each year the first such Quarter
Day
being that which falls first after the First Payment. .
3.4
'Total Gross
Turnover' means the aggregate price of the Goods Sold
in the relevant period which the Licensee (or any person, firm
or
corporation controlling or controlled by the Licensee) actually
receives from its customers including: the cost of manufacturing
the
Goods Sold in the Territories and a proportionate allocation of
manufacturing overhead costs, all as determined in accordance
with
generally accepted accounting principals, consistently applied,
in
the United States ("GAAP") as stated in financial statements to
be
prepared by Licensee; transport charges and other delivery
costs;
and, taxes of the nature of sales, purchase, excise or other
similar
taxes charged upon or included in the selling price or invoice
value
to such customers; and before the deduction, by the Licensee, of
any
taxes on income, profit or otherwise; and before the deduction
of
any currency exchange or bank fees.
3.5
To minimize the
exchange rate risk to Licensor, Licensee shall
accrue Royalties in US$ on a monthly basis at the exchange rate
(US$
: invoice currency) current on the last business day in the City
of
London in each month. Payment on each Quarter Day shall be the
aggregate of such accrued amounts.
5
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4 IMPROVEMENTS BY LICENSOR OR LICENSEE
4.1 (a)
Each of Licensor and Licensee (as the case may be) shall,
during
the
continuance of this Agreement and at no additional charge to
the
other,
communicate to the other any Improvements which the Licensor or
Licensee
(as the case may be) may acquire, invent, make or discover.
Licensor
shall permit the Licensee to use and apply the Licensor's
Improvements within the Territories on an exclusive basis.
(b) To the extent that Improvements belong to the Licensor, such
use
and
application by Licensee shall be in accordance with the Licence.
The
Licensor
shall also grant to the Licensee any patent or similar license
which may
be necessary to give effect to this clause.
(c) To the extent that Improvements belong to the Licensee, the
Licensor
shall receive an exclusive, sub-licensable right and license to
exploit,
develop, commercialize, manufacture, use, promote, market, sell
and
distribute the Licensee's Improvements throughout the world,
other
than in
the Territories, at no charge to the Licensor.
4.2 All
Improvements made solely or primarily by the Licensor shall be
owned by
the Licensor. All Improvements made solely or primarily by the
Licensee
shall be owned by the Licensee. All other Improvements shall be
owned
jointly by the Licensee and Licensor on terms to be agreed
between
themselves
on a case-by-case basis and, failing such agreement, on a
simple,
royalty-free joint ownership basis.
4.3 The
Licensor shall use its reasonable efforts to comply with all
applicable
laws relating to Licensee's Improvements. The Li
