Exhibit 10.3

 

Carbon Geo-Tek Consultants, Inc.

and

ECO Waste Conversion Solutions Corporation

Joint Venture Agreement – TCOM Facilities – Hawaii

 

Recital A:Carbon Geo-Tek Consultants, Inc. (“CGTC”) and ECO Waste Conversion
Solutions Corporation (“EWCSC”) have elected to form a joint venture for the
development of fixed waste conversion facilities and mobile equipment for the
entire State of Hawaii beginning with the islands of Oahu and Hawaii that will
employ the Thermal Conversion of Organic Materials (“TCOM”) Technology. Together
the companies are hereinafter referred to as “Parties”. The Joint Venture shall
operate under the name of “CGTC/EWCSC Joint Venture” and is hereinafter referred
to as the “Joint Venture”.

 

Recital B:The TCOM Technology has been developed over a number of years by
Michael J. Lurvey, who now holds U.S. Patent No. 8328991 (“Patent”) issued
December 11, 2012. The following paragraph is the language of the Abstract that
has been taken from the Patent:

 

“A processing vessel is loaded with a feedstock including organic material and
at least one additive which is non-inert to the organic material. A bottom
portion of the feedstock is heated to a pyrolysis state for producing a
horizontal thermal layer with the feedstock, which thermally decomposes organic
material into carbon as the non-inert additive reacts with the organic material.
Vapor is directed downwardly through the feedstock while discharging volatile
organic compounds from a lower portion of the chamber. Prior to complete thermal
decomposition of the feedstock, the direction of vapor flow within the feedstock
is reversed wherein the vapor flows upwardly through the feedstock while the
volatile compounds are discharged from an upper portion of the chamber. Pressure
and vapor flow within the chamber are regulated during upward vapor flow to
regulate vertical movement of the thermal layer within the feedstock for
controlling the extent of thermal decomposition of the feedstock.”

 

Recital C:The State of Hawaii through legislative session in 2011 approved the
issuance of Special Revenue Bond(s) further described in HB 423 that was signed
into law. The issuance one or more series of Special Revenue Bond(s) of up to
the total amount of Forty Million Dollars USD ($40,000,000 USD) has been
approved. The Bond(s) were to be issued to Carbon Bio-Engineers Inc. or to a
partnership in which Carbon Bio-Engineers Inc. is a partner.

 

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Recital D:Mr. Lurvey currently is the sole remaining shareholder of Carbon
Bio-Engineers Inc., however he has now formed a new company, Carbon Geo-Tek
Consultants, Inc. to conduct business previously being conducted by Carbon
Bio-Engineers Inc. The Parties believe that the Special Revenue Bond(s) can
still be issued and used to fund projects consistent with the language of HB
423.

 

Recital E:The financing that becomes available from the Special Revenue Bond(s)
will be in part be utilized on the island of Oahu for the development of a fixed
location TCOM Waste Conversion Facility (“Oahu Facility”) on the western side of
the island of Oahu, west of Honolulu. The Oahu Facility will initially be
developed as both a commercial facility and a research & development facility.
The commercial facility will include four 3.5 ton capacity TCOM Processors that
will operate in a batch-mode to produce Synthetic Fuels and Carbons as their
principal by-products that will be sold to end-users. In the future the Oahu
Facility will likely be expanded to at least eight 3.5 ton capacity TCOM
Processors. The research & development facility will continue the ongoing
research and development to both increase productivity from the existing
patented design and proprietary technology and also work to develop a
continuous-feed TCOM Processor for sale to other users.

 

Recital F:A second fixed location TCOM Waste Conversion Facility (“Hawaii
Facility”) will be developed on the eastern side of the island of Hawaii in the
area of Hilo. It initially will consist of either two or four 3.5 ton capacity
TCOM Processors depending upon the amount of feedstock that will be available on
an economic basis.

 

Recital G:In addition to the development activity discussed in Recital E above,
the Joint Venture will develop a Mobile TCOM Waste Conversion Unit (“Mobile TCOM
Unit”) that will be mounted on a low-boy semi-trailer or trailers, depending
upon the amount of waste feedstock available for processing in a given area. The
principal initial focus of the Mobile TCOM Units will be to process an invasive
plant species known as “gorse” that is creating major problems on one or more of
the Hawaiian Islands. Gorse is very difficult to eradicate and tends to crowd
our more desirable plants. The Joint Venture will harvest and process gorse and
convert it into both Synthetic Fuels and Carbon on the island of Hawaii in the
Mobile TCOM Units.

 

Recital H:The Parties have elected to provide a significant portion of the net
income from the operations of the Joint Venture to two entities whose principal
purpose is to provide benefits and support to the indigenous population of the
Hawaiian Islands.

 

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Recital I:The Parties have agreed that the Joint Venture will allocate the net
income from the operations of the Joint Venture as follows:

 

CGTC – Thirty Percent (30%)

 

EWCSC – Thirty Percent (30%)

 

OWI – Thirty Percent (30%)

 

Hawaiian Homelands – Ten Percent (10%)

 

Section 1. - License Fees – Pre-Construction of Joint Venture Owned TCOM
Facilities:

 

The Joint Venture agrees that for each fixed TCOM Facility location and for each
Mobile TCOM Unit location that the Joint Venture develops and owns that Lurvey,
or his designated entity, or his designated beneficiary should Lurvey become
incapacitated or deceased, shall be paid a one-time Licensing Fee per Location
in the amount of One Hundred Twenty-Five Thousand Dollars ($125,000) prior to
the commencement of construction. This fee will pay for the initial expense of
designing the specific equipment needed for either the fixed or mobile locations
for the TCOM facilities. This Licensing Fee shall be paid from the initial draw
of funding for the respective fixed TCOM Facility Location following that fixed
TCOM Facility Location obtaining the required building permits for the
construction of the fixed TCOM Facility and upon commencement of the
construction or manufacturing of the equipment that will comprise the Mobile
TCOM Unit. There shall be NO limitation on the number of such Licensing Fees
that shall be paid to Lurvey.

 

Section 2. – Licensed Technology – No Production Royalties

 

Mr. Lurvey will provide the TCOM Licensed Technology that will include both the
Patent and the related proprietary intellectual property for the development and
operation of both the fixed TCOM Facilities and the Mobile TCOM Units. No
on-going Production Royalties will be paid to either Mr. Lurvey or to his
company, Carbon Geo-Tek Consultants, Inc.

 

Section 3. – Licensed Technology – Special Prepaid License Fee to CGTC

 

CGTC is undertaking upgrading its current Demonstration Facility on the island
of Oahu. The anticipated financing that will be required to convert the
Demonstration Facility into a commercial TCOM Waste Conversion Facility that
will solely process Scrap Tires in its three 1 Ton TCOM Processors is Two
Million Dollars USD ($2,000,000 USD). EWCSC is

 

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assisting CGTC to obtain this financing. The Joint Venture will make a one-time
Special Prepaid License Fee payment from the financing that it obtains from the
monetization of the Special Revenue Bond(s) in the amount of Two Million Dollars
USD ($2,000,000 USD) to CGTC that will be used by CGTC to retire the
indebtedness that it has obtained for the conversion of the Demonstration
Facility into a commercial TCOM Waste Conversion Facility. CGTC will continue to
own that TCOM Facility “free and clear” with no participation by EWCSC or the
Joint Venture following the retirement of the indebtedness.

 

Section 4. – TCOM Facilities, Mobile Units, and Equipment Design and Acquisition

 

Mr. Lurvey and CGTC will provide the requisite fixed TCOM Facilities’ design and
equipment specifications for the Oahu Facility, the Hawaii Facility, and the
Mobile TCOM Units. The Joint Venture will not compensate Mr. Lurvey or CGTC for
this work, except as provided in Section 1 above. All TCOM Processing and
Auxiliary Equipment will be purchased by the Joint Venture with no fee or
mark-up being paid to Mr. Lurvey or CGTC. Further, all TCOM Processing and
Auxiliary Equipment may be purchased from any manufacturer in the world based
upon specifications and design input from Mr. Lurvey and/or any other entity
that is providing design assistance. In addition, no mark-up will be paid to Mr.
Lurvey or CGTC for any of the design, specification, development activities, or
outside services for these projects, except as provided in Section 1 above.

 

Section 5. – Development and Operation of the Fixed TCOM Facilities

 

a.EWCSC will have the principal responsibility for the physical development and
construction of the fixed TCOM Facilities, both on the island of Oahu and on the
island of Hawaii. CGTC and EWCSC will work together to design and create the
most cost-effective and efficient TCOM Facility for each location.

b.EWCSC will have the principal responsibility for the daily operation of the
Oahu Facility subject to approval by CGTC.

c.EWCSC will have the principal responsibility for the daily operation of the
Hawaii Facility subject to approval by CGTC.

 

Section 6. – Development and Operation of the Mobile TCOM Units

 

a.CGTC will have the principal responsibility for the design and construction of
the Mobile TCOM Units subject to approval by EWCSC.

b.EWCSC will have the principal responsibility for the daily operation of the
Mobile TCOM Units on the island of Hawaii and any other islands in Hawaii
subject to approval by CGTC.

 

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Section 7. – Monetization of the Special Revenue Bond(s) and Other Financing

 

EWCSC will be responsible to arrange for the monetization of the Special Revenue
Bond(s) and to arrange any additional financing agreed to by the Parties that is
required to carry out the development plans for fixed TCOM Facilities and Mobile
TCOM Units as described above, or for additional fixed TCOM Facilities and/or
Mobile TCOM Units beyond those described above. EWCSC will not be compensated
for its efforts or any results obtained for arranging for the Joint Venture’s
financing.

 

Section 8. – Management Fees

 

EWCSC will be paid immediately following the end of each calendar quarter a
Management Fee equal to Five Percent (5%) of Revenue produced from each fixed
TCOM Facility and from each Mobile TCOM Unit. Each calendar quarter or any part
of a calendar quarter on a pro rata basis prior to the commercial operation of
either a fixed TCOM Facility or a Mobile TCOM Unit, EWCSC will be paid a
Management Fee of Seventy-Five Thousand Dollars USD ($75,000 USD).

 

Section 9. – Technical Data Package

 

The Parties will agree to establish a continental U.S. location to hold a
technical data package and escrowed software code (“TDP”). Assuming that there
are variations that will exist between components of TCOM Systems, upgrades,
etc., there should be a TDP for each unique TCOM System for each fixed TCOM
Facility for each Location or for each Mobile TCOM Unit. This TDP can be used by
an authorized contractor, such as but not limited to the use of Technip, that
will have the responsibility for the entire equipment installation and possibly
the operations of a given TCOM Facility to assure all Parties that a consistent,
duplicable, process for construction and parts replacement specifications
accurately exists and can be utilized in case of a situation wherein either Mr.
Lurvey is incapacitated, otherwise engaged so as to be unavailable, or is
deceased. The Parties will also agree to provide for inclusion in the secure
escrow location, a copy of the software source code used to operate the TCOM
System, including copies of all software upgrades, for the benefit of the Joint
Venture upon the need to access, modify or duplicate the software program to
operate each specific fixed TCOM Facility or Mobile TCOM Unit. Title to the TDP
and the software source code for a specific fixed TCOM Facility or Mobile TCOM
Unit shall be transferred to the Joint Venture when the fixed TCOM Facility
and/or each Mobile Unit is ready for commercial production of its intended
by-products.

 

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Section 10. – Allocation of Income and Income Tax Consequences

 

The Parties and each of the profit participants set forth in Recital I other
than the Parties shall each be responsible for the Income Tax Consequences, if
any, from the allocation of net income from the operations of the Joint Venture
to each entity. The Joint Venture will file both Federal and State of Hawaii
Income Tax returns.

 

Section 11. – Dispute Resolution

 

The Parties agree that any disputes that arise that cannot be amicably resolved
will be submitting to binding arbitration in Orange County, California with the
Parties splitting equally the costs of such arbitration.

 

Agreed to this day September 22, 2014 by:

 

Michael J. Lurvey, individually and as CEO of:

 

Carbon Geo-Tek Consultants Inc.

 

/s/ Michael J. Lurvey   Michael J. Lurvey, Individually and Witness

as Chief Executive Officer

 

ECO Waste Conversion Solutions Corporation

 

/s/ Jess Rae Booth   Jess Rae Booth, Chief Executive Officer Witness

 

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