Document:

EXHIBIT
      10.1

    

    VOCALSCAPE
      NETWORKS, INC.

    

    EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (the “Agreement”) is dated as of September 22, 2006 by and
      between Robert Koch (“Executive”) and Vocalscape Networks, Inc., a Nevada
      corporation (the “Company”). 

    

    1.
      Duties.
      

    

    1.1
      Position.
      Executive is employed as Head of Business Development, reporting to the board
      of
      directors of the Company (the “Board”). The duties and responsibilities of
      Executive shall be those normally associated with Executive’s position as Head
      of Business Development of the Company. The Executive shall perform such duties
      as from time to time may be prescribed for him by the Board, in all cases to
      be
      consistent with Executive’s corporate offices and positions. 

    

    1.2
      Obligations
      to the Company.
      Executive agrees to the best of his ability and experience that he will at
      all
      times loyally and conscientiously perform all of the duties and obligations
      required of and from Executive pursuant to the express and implicit terms
      hereof, and to the reasonable satisfaction of the Company. During the term
      of
      Executive’s employment relationship with the Company, Executive further agrees
      that he will devote all of his business time and attention to the business
      of
      the Company, the Company will be entitled to all of the benefits and profits
      arising from or incident to all such work services and advice, and Executive
      will not render commercial or professional services of any nature to any person
      or organization, whether or not for compensation, without the prior written
      consent of the Company’s Board, and will not directly or indirectly engage or
      participate in any business that is competitive in any manner with the business
      of the Company. Executive will comply with and be bound by the Company’s
      operating policies, procedures and practices from time to time in effect during
      the term of Executive’s employment. 

    

    2.
      Term
      of Employment.
      Subject
      to the terms and conditions set forth in this Agreement, the Company agrees
      to
      employ Executive and Executive agrees to be employed by the Company for an
      initial term of five years, starting September 22, 2006; provided,
      however,
      that
      this initial five-year term automatically shall extend for one additional year
      on such fifth anniversary date and on each subsequent anniversary of such date.
      

    

    3.
      Compensation.
      For the
      duties and services to be performed by Executive hereunder, the Company shall
      pay Executive, and Executive agrees to accept, the salary, stock options,
      bonuses and other benefits described below in this Section 3. 

    

    3.1
      Salary.
      

    

    (i)
      During calendar year 2006, Executive shall receive a monthly base salary of
      $30,000, which is equivalent to Three Hundred Sixty Thousand United States
      Dollars ($360,000) on an annualized basis. Executive’s monthly base salary will
      be payable pursuant to the Company’s normal payroll practices for payment of
      salary to executive employees. Executive’s base salary will be reviewed as part
      of the Company’s normal salary review process, provided,
      however,
      Executive’s annualized salary shall increase at a rate not less than five
      percent (5%) from the previous year’s annualized salary, beginning on the first
      anniversary date of the date of this Agreement and on each subsequent
      anniversary. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii)
      In
      the event that the Company does not pay Executive’s monthly base salary (“Past
      Due Salary”) within thirty (30) day of when such monthly base salary was due
      Executive, then Executive shall have the option to convert such Past Due Salary
      into the number of shares of common stock of the Company obtained by dividing
      (a) the outstanding principal balance of the Past Due Salary by (b) the average
      closing bid price per share of common stock of the Company, as reported by
      the
      Over-the-Counter Bulletin Board or such other interdealer quotation service
      or
      exchange on which such shares are primarily traded (as adjusted for any stock
      split, combination, consolidation or stock distributions or stock dividends
      or
      recapitalizations or the like) for the ten (10) business days prior to the
      date
      when the Past Due Salary was due Executive. 

    

    3.2
      Stock
      Options.
      

    

    (i)
      Stock
      Incentive Program.
      In
      addition to new hire option grants and any other outstanding options that
      Executive may currently hold, Executive is eligible to participate in the Stock
      Incentive Program (the “Program”) whereby each year Executive may receive an
      option for up to eight hundred thousand (800,000) shares of Company Common
      Stock
      (the “Option”). The number of shares awarded, if any, will be based solely on
      the Company’s achievement of business and other goals solely determined by the
      Board prior to the start of each fiscal year. Options earned under this Program,
      if any, will be granted no later than February following the close of the
      applicable fiscal year. Any Option granted pursuant to this Program will have
      a
      purchase price equal to the fair market value on the grant date, and shall
      be
      subject to the terms of an incentive stock option agreement or a notice of
      stock
      option grant, as is appropriate. Vesting shall be contingent upon Executive’s
      continued employment with the Company. 

    

    (ii)
      Change
      of Control Benefit.
      

    

    (A)
      Acceleration.
      In the
      event of a Change of Control (as defined in Section 5.1 of this Agreement),
      (i)
      if any of Executive’s outstanding options (the “Awards”), if any, are assumed or
      an equivalent option is substituted by such successor corporation or a parent
      or
      subsidiary of such successor corporation (the “Successor Corporation”), one half
      of the then unvested portion of the Awards shall be deemed to have vested
      immediately prior to the transaction, (ii) if the Awards are not assumed or
      an
      equivalent option is not substituted by the Successor Corporation, all of the
      then unvested portion of the Awards shall be deemed to have vested immediately
      prior to such transaction and (iii) if Executive is terminated without Cause
      (as
      defined below in Section 5.2) or if Executive Resigns for Good Reason (as
      defined in Section 5.3) within twelve (12) months following the consummation
      of
      the transaction where the Successor Corporation assumed the Awards or
      substituted an equivalent option, the entire unvested portion of the Awards
      held
      by Executive shall be deemed to have vested and become fully exercisable
      immediately prior to any such termination or resignation. If the vesting of
      the
      Awards is accelerated pursuant to this Section 3.2(ii)(A), the Company shall
      notify Executive that the vesting of the Awards has been accelerated and
      Executive shall have the right to exercise the Awards prior to the transaction,
      termination or resignation as applicable. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (B)
      Limitation
      on Payments.
      In the
      event that the vesting acceleration provided for in Section 3.2(ii)(A) above
      (i)
      constitutes “parachute payments” within the meaning of Section 280G of the
      Internal Revenue Code (the “Code”), and (ii) but for this Section 3.2(ii)(B)
      would be subject to the excise tax imposed by Section 4999 of the Code (or
      any
      corresponding provisions of state income tax law), then such vesting
      acceleration shall be either (aa) delivered in full, or (bb) delivered as to
      such lesser extent which would result in no portion of such severance benefits
      being subject to excise tax under Code Section 4999, whichever amount, taking
      into account the applicable federal, state and local income taxes and the excise
      tax imposed by Code Section 4999, results in the receipt by Executive on an
      after-tax basis of the greater amount of acceleration benefits, notwithstanding
      that all or some portion of such benefits may be taxable under Code Section
      4999. Any determination required under this Section 3(b)(ii)(B) shall be made
      in
      writing by the Company’s independent accountants, whose determination shall be
      conclusive and binding for all purposes on the Company and any affected
      Executive. In the event that (aa) above applies, then the Executive shall be
      responsible for any excise taxes imposed with respect to such benefits. In
      the
      event that (bb) above applies, then each benefit provided hereunder shall be
      proportionately reduced to the extent necessary to avoid imposition of such
      excise taxes. 

    

    3.3
      Discretionary
      Bonus.
      Executive is eligible for an annual discretionary cash bonus equal to up to
      20%
      of Executive’s then current base salary. This discretionary bonus will be based
      upon (i) the Company’s achievement of business and other goals solely determined
      by the Board in November of the previous fiscal year and (ii) the Executive’s
      achievement of personal performance objectives established and approved by
      the
      Company no later than February each fiscal year. Payment of any earned bonus
      shall be made no later than February following the close of the applicable
      fiscal year. In addition, Executive may be entitled to other incentive bonuses
      as solely determined by the Board or the Company’s Compensation Committee from
      time to time. 

    

    3.4
      Additional
      Benefits.
      Executive is eligible to and shall participate in the Company’s employee benefit
      plans of general application, so long as any such plans exist, in accordance
      with the rules established for individual participation in any such plan and
      under applicable law.

    

    3.5
      Indemnification.
      Executive has previously entered into the Company’s standard form of
      Indemnification Agreement, substantially in the form attached hereto as
Exhibit
      A,
      providing indemnification to Executive to the maximum extent permitted by law,
      and in accordance therewith, the Company has agreed to advance any expenses
      for
      which indemnification is available to the extent allowed by applicable law.
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.6
      Vacation.
      Executive is eligible to accrue up to 10 days of paid vacation per year, which
      vacation may be used in the year in which accrued or in a subsequent year,
      subject to the Company’s policies with respect to maximum accrual of unused
      vacation.

    

    3.7
      Non-dilution.

    

    (i)
      The
      Company and Executive hereby acknowledge that Executive currently holds twenty
      thousand (20,000) shares (the “Executive Series A Preferred Shares”) of Series A
      Convertible Preferred Stock of the Company, equal to the voting power of
      100,000,000 shares of common stock of the Company.

    

    (ii)
      For
      so long as Executive is an employee of the Company, Executive agrees that
      Executive shall not resell any shares of the Executive Series A Preferred
      Shares, and that the Company may put stop transfer orders on its books and
      refuse any transfer of the Executive Series A Preferred Shares.

    

    (iii)
      For
      so long as Executive is an employee of the Company, the Company agrees that
      Executive shall hold equity securities in the Company which have an aggregate
      voting power equal to not less than a majority of the voting control of all
      equity securities of the Company. Prior to any issuance of equity securities
      of
      the Company the effect of which would cause Executive to not hold a majority
      of
      the voting control of all equity securities of the Company, the Company shall
      issue to Executive that number of shares of Series A Convertible Preferred
      Stock, common stock or other securities of the Company, fully-paid and
      non-assessable, to Executive prior to the issuance of any equity securities
      the
      effect of which would cause Executive to not hold a majority of the voting
      control of all equity securities of the Company. A certificate(s) representing
      any securities issued to Executive pursuant to this paragraph shall be delivered
      by overnight courier to, and received by, Executive not later than the fifth
      business day following any issuance of securities to Executive pursuant to
      this
      Paragraph 3.7; provided,
      however,
      that
      Executive shall have the absolute and unconditional right to vote any securities
      issued to Executive or obligated by the Company to be issued to Executive
      pursuant to this Paragraph 3.7 at any meeting of the stockholders or as part
      of
      any consent to action of the stockholders irrespective of whether of the Company
      has delivered any certificate representing securities it is obligated to deliver
      pursuant to this Paragraph 3.7. Any certificate representing securities
      delivered pursuant to this Paragraph 3.7 shall be made at such address as such
      Executive designates below Executive’s signature block to this Agreement, or as
      may hereafter be made in writing to the Company in accordance with this
      Agreement. 

    

    (iv)
      The
      transferability of any securities issued by the Company to Executive pursuant
      to
      this Section 3.7 shall be limited by sub-clause (ii) of this Section
      3.7.

    

    3.8
      Stock
      Grant.
      The
      Company shall issue Executive fifteen thousand (15,000) shares of its Series
      Convertible Preferred Stock upon execution of this Agreement by
      Executive.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.
      Severance
      Benefits.
      Executive shall be entitled to receive severance benefits upon termination
      of
      employment only as set forth in this Section 4. Executive’s entitlement to such
      severance benefits shall be conditioned upon Executive’s execution and delivery
      to the Company of (i) a general release of all claims, (ii) a resignation from
      all of Executive’s positions with the Company and (iii) an agreement not to
      directly or indirectly be employed or involved with any business developing
      or
      exploiting any products or services that are competitive with products or
      services (a) being commercially developed or exploited by the Company during
      Executive’s employment and (b) on which Executive worked or about which
      Executive learned proprietary information or trade secrets of the Company during
      Executive’s employment with the Company. Any payment of severance benefits under
      the terms of this Agreement will be subject to all applicable tax withholding.
      

    

    4.1
      Voluntary
      Termination or Termination for Cause.
      If
      Executive voluntarily elects to terminate his employment with the Company other
      than by Executive’s Resignation for Good Reason, as defined in Section 5.3
      below, or if the Company or a successor entity terminates Executive’s employment
      for Cause, as defined in Section 5.2 below, or the Executive dies or becomes
      incapacitated or otherwise disabled in such a manner that, in the sole
      determination of the Board, the Executive cannot perform reasonably the duties
      specified in Section 1 above, then Executive shall not be entitled to receive
      payment of any severance benefits. Executive will receive payment for all salary
      and unpaid vacation accrued as of the date of Executive’s termination of
      employment and Executive’s benefits will be continued solely to the extent of
      the Company’s then existing benefit plans and policies in accordance with such
      plans and policies in effect on the date of termination and in accordance with
      applicable law. 

    

    4.2
      Involuntary
      Termination Apart From a Change of Control.
      If
      Executive’s employment is terminated by the Company or a successor entity
      without Cause or by Executive’s Resignation for Good Reason prior to or more
      than twelve (12) months after a Change of Control (as defined below), Executive
      will receive payment for all salary and unpaid vacation accrued as of the date
      of Executive’s termination of employment, and, in addition, Executive will be
      entitled to receive the following severance benefits: 

    

    (i)
      continued payment of his base salary for a period equal to the term of
      employment of Executive remaining under this Agreement immediately prior to
      the
      date of termination, in accordance with the Company’s normal payroll practices;

    

    (ii)
      reimbursement of his premium cost for continuation of health insurance coverage
      with terms and conditions substantially similar to Company’s health insurance
      plan, if any, in effect at the time of termination for the lesser of the first
      twelve (12) months of continuation coverage or that number of months until
      Executive becomes eligible for reasonably comparable benefits under any future
      employer’s health insurance plan, provided Executive makes a timely election for
      such continuation coverage and presents reasonably requested documentation
      of
      payment of such premiums; 

    

    (iii)
      payment of 100% of Executive’s current year discretionary cash bonus regardless
      of the Company’s or the Executive’s achievement of the goals referred to in
      Section 3.3 of this Agreement; 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iv)
      accelerated vesting as to 50% of Executive’s then unvested option shares; and

    

    (v)
      reimbursement for up to $20,000 of expenses incurred in obtaining new
      employment, provided Executive submits evidence that is satisfactory to the
      Company that the amount involved was expended and related to obtaining new
      employment. 

    

    4.3
      Involuntary
      Termination Following a Change of Control.
      If
      Executive’s employment is terminated by the Company or a successor entity
      without Cause or by Executive’s Resignation for Good Reason in either case
      within twelve (12) months following a Change of Control, Executive will receive
      payment for all salary and unpaid vacation accrued as of the date of Executive’s
      termination of employment, and, in addition, Executive will be entitled to
      receive the following severance benefits: 

    

    (i)
      continued payment of his base salary for a period equal to the term of
      employment of Executive remaining under this Agreement immediately prior to
      the
      date of termination, in accordance with the Company’s normal payroll practices;

    

    (ii)
      reimbursement of his premium cost for continuation of health insurance coverage
      with terms and conditions substantially similar to Company’s health insurance
      plan, if any, in effect at the time of termination for the lesser of the first
      twelve (12) months of continuation coverage or that number of months until
      Executive becomes eligible for reasonably comparable benefits under any future
      employer’s health insurance plan, provided Executive makes a timely election for
      such continuation coverage and presents reasonably requested documentation
      of
      payment of such premiums; 

    

    (iii)
      payment of 150% of Executive’s current year discretionary cash bonus regardless
      of the Company’s or the Executive’s achievement of the goals referred to in
      Section 3.3 of this Agreement; 

    

    (iv)
      accelerated vesting of 100% of all the unvested option shares pursuant to the
      terms of Section 3.2(ii) of this Agreement; and 

    

    (v)
      reimbursement for up to $20,000 of expenses incurred in obtaining new
      employment, provided Executive submits evidence that is satisfactory to the
      Company that the amount involved was expended and related to obtaining new
      employment. 

    

    5.
      Definitions.
      For
      purposes of this Agreement, the following definitions shall apply: 

    

    5.1
      “Change
      of Control”
means
      a
      sale of all or substantially all of the Company’s assets, or any merger or
      consolidation of the Company with or into another corporation other than a
      merger or consolidation in which the holders of more than 50% of the shares
      of
      capital stock of the Company outstanding immediately prior to such transaction
      continue to hold (either by the voting securities remaining outstanding or
      by
      their being converted into voting securities of the surviving entity) more
      than
      50% of the total voting power represented by the voting securities of the
      Company, or such surviving entity, outstanding immediately after such
      transaction. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.2
      “Cause”
means
      the determination by the Board of any of the following: (i) Executive’s failure
      to perform Executive’s duties and responsibilities to the Company in a manner
      consistent with those normally associated Executive’s position as a head of
      business development of the Company; or (ii) Executive’s unauthorized use or
      disclosure of any proprietary information or trade secrets of the Company or
      any
      other party to whom the Executive owes an obligation of nondisclosure as a
      result of his relationship with the Company. 

    

    5.3
      “Resignation
      for Good Reason”
means,
      subject to the right of either party to arbitrate a dispute with respect thereto
      in accordance with Section 12 below, Executive’s resignation as a result of, and
      within 30 days following: (i) a change in Executive’s position such that he is
      not a corporate officer of the Company (or a successor company, in the event
      of
      a Change of Control); (ii) a significant and substantial reduction in
      Executive’s job, duties, or responsibilities in a manner that is substantially
      and materially inconsistent with the position, duties, or responsibilities
      held
      by Executive immediately before such reduction; (iii) any reduction in
      Executive’s base salary other than in connection with and consistent with a
      general reduction of all officer base salaries; or (iv) a relocation of the
      Company’s executive offices to a location more than 50 miles away from their
      current location provided such change increases Executive’s commute by 25 miles
      or 45 minutes. 

    

    6.
      Confidentiality
      Agreement.
      Executive has signed a Proprietary Information and Inventions Agreement (the
      “Proprietary Agreement”) that is incorporated by reference and made a part of
      this Agreement and the form of which is attached hereto as Exhibit
      B.
      Executive hereby represents and warrants to the Company that Executive has
      complied with all obligations under the Proprietary Agreement and agrees to
      continue to abide by the terms of the Proprietary Agreement and further agrees
      that the provisions of the Proprietary Agreement shall survive any termination
      of this Agreement or of Executive’s employment relationship with the Company in
      accordance with the terms of the Proprietary Agreement. 

    

    7.
      Confidentiality
      of Terms.
      Executive agrees to follow the Company’s strict policy that employees must not
      disclose, either directly or indirectly, any information, including any of
      the
      terms of this Agreement, regarding salary or stock purchase allocations to
      any
      person, including other employees of the Company (other than such employees
      who
      have a need to know such information); provided,
      however,
      that
      Executive may discuss such terms with members of his immediate family and any
      legal, tax or accounting specialists who provide Executive with individual
      legal, tax or accounting advice. 

    

    8.
      Covenants.
      In
      addition to the obligations to which the Executive agreed by executing the
      Proprietary Agreement, Executive understands and agrees that during the term
      of
      Executive’s employment with the Company, and for the greater of (i) the duration
      of any payments to Executive of severance benefits pursuant to Section 4 of
      this
      Agreement or (ii) two years after the termination of Executive’s employment with
      the Company, Executive will not do any of the following: 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.1
      Compete.
      Without
      the Company’s prior written consent, Executive will not directly or indirectly
      be employed or involved with any business developing or exploiting any products
      or services that are competitive with products or services (i) being
      commercially developed or exploited by the Company during Executive’s employment
      and (ii) on which Executive worked or about which Executive learned proprietary
      information or trade secrets of the Company during Executive’s employment with
      the Company. 

    

    8.2
      Solicit
      Business.
      Solicit
      or influence or attempt to influence any client, customer or other person either
      directly or indirectly, to direct his, her or its purchase of the Company’s
      products and/or services to any person, firm, corporation, institution or other
      entity in competition with the business of the Company. 

    

    8.3
      Solicit
      Personnel.
      Solicit
      or influence or attempt to influence any of the Company’s employees, consultants
      or other service providers to terminate or otherwise cease his, her or its
      employment, consulting or service relationships with the Company or to become
      an
      employee, consultant or service provider of any competitor of the Company.
      

    

    9.
      Breach
      of the Agreement.
      Executive acknowledges that upon his breach of this Agreement or the Proprietary
      Agreement, the Company would sustain irreparable harm from such breach, and,
      therefore, Executive agrees that in addition to any other remedies which the
      Company may have under this Agreement or otherwise, the Company shall be
      entitled to obtain equitable relief, including specific performance and
      injunctions, restraining Executive from committing or continuing any such
      violation of the Agreement or the Proprietary Agreement. Executive acknowledges
      and agrees that upon Executive’s material or intentional breach of any of the
      provisions of the Agreement (including Section 8) or the Proprietary Agreement,
      in addition to any other remedies the Company may have under this Agreement
      or
      otherwise, the Company’s obligations to provide benefits to Executive as
      described in this Agreement, including without limitation those benefits
      provided in Section 4, shall immediately terminate. 

    

    10.
      Entire
      Agreement.
      This
      Agreement, including the Proprietary Agreement that the Executive has signed,
      sets forth the entire agreement and understanding of the parties relating to
      the
      subject matter herein, supersedes any prior agreement, and merges all prior
      discussions between them. 

    

    11.
      Conflicts.
      Executive represents and warrants that his performance of all the terms of
      this
      Agreement will not breach any other agreement or understanding to which
      Executive is a party. Executive has not, and will not during the term of this
      Agreement, enter into any oral or written agreement in conflict with any of
      the
      provisions of this Agreement. 

    

    12.
      Dispute
      Resolution.
      In the
      event of any dispute, controversy or claim arising under or in connection with
      this Agreement, or the breach hereof (including a dispute as to whether Cause
      or
      Resignation for Good Reason exists), the parties hereto shall first submit
      their
      dispute to formal mediation. The Company shall select a mediator reasonably
      acceptable to both parties. In the event that the parties cannot reach
      resolution through formal mediation, the dispute shall be settled by arbitration
      in Seattle, Washington, in accordance with the Rules of the American Arbitration
      Association then in effect. Each party shall pay his, her or its own costs
      (including attorneys’ fees) in connection with such mediation or arbitration. To
      the extent such mediation or arbitration requires the submission of any
      information that either party claims is confidential information, the parties
      agree that such mediation or arbitration shall be confidential proceeding.
      Judgment upon the award rendered by the mediator or arbitrator may be entered
      in
      any court of competent jurisdiction. If any proceeding is necessary to enforce
      the mediation or arbitration award, the prevailing party shall be entitled
      to
      reasonable attorneys fees and costs and disbursements, in addition to any other
      relief to which such party may be entitled. Notwithstanding the foregoing,
      the
      Company shall be entitled to seek equitable relief directly from a court of
      competent jurisdiction (without prior arbitration) with respect to any alleged
      breach of the Proprietary Agreement or Section 8, including specific performance
      and injunctions, restraining Executive from committing or continuing to commit
      such alleged breach. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.
      Successors.
      Any
      successor to the Company (whether direct or indirect and whether by purchase,
      lease, merger, consolidation, liquidation or otherwise) to all or substantially
      all of the Company’s business and/or assets shall assume the obligations under
      this Agreement and agrees expressly to perform the obligations under this
      Agreement in the same manner and to the same extent as the Company would be
      required to perform such obligations in the absence of a succession. The terms
      of this Agreement and all of Executive’s rights hereunder shall inure to the
      benefit of, and be enforceable by, Executive’s personal or legal
      representatives, executors, administrators, successors, heirs, distributees,
      devisees and legatees. 

    

    14.
      Miscellaneous
      Provisions.
      

    

    14.1
      Amendments
      and Waivers.
      Any
      term of this Agreement may be amended or waived only with the written consent
      of
      the parties. The failure by either party to enforce any rights under this
      Agreement shall not be construed as a waiver of any rights of such party.

    

    14.2
      Notices.
      Any
      notice required or permitted by this Agreement shall be in writing and shall
      be
      deemed sufficient upon receipt, when delivered personally or by a
      nationally-recognized delivery service (such as Federal Express or UPS), or
      48
      hours after being deposited in the U.S. mail as certified or registered mail
      with postage prepaid, if such notice is addressed to the party to be notified
      at
      such party’s address as set forth below or as subsequently modified by written
      notice. 

    

    14.3
      Choice
      of Law.
      The
      validity, interpretation, construction and performance of this Agreement shall
      be governed by the laws of the State of Washington, without giving effect to
      its
      or any other jurisdiction’s principles of conflict of laws. 

    

    14.4
      Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable under
      applicable law, the parties agree to renegotiate such provision in good faith.
      In the event that the parties cannot reach a mutually agreeable and enforceable
      replacement for such provision, then (i) such provision shall be excluded from
      this Agreement, (ii) the balance of the Agreement shall be interpreted as if
      such provision were so excluded and (iii) the balance of the Agreement shall
      be
      enforceable in accordance with its terms. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    14.5
      Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which together will constitute one and the same instrument.
      

    

    14.6
      Advice
      of Counsel.
      Each
      party to this agreement acknowledges that, in executing this Agreement, such
      party has had the opportunity to seek the advice of independent legal counsel,
      and has read and understood all of the terms and provisions of this Agreement.
      This Agreement shall not be construed against any party by reason of the
      drafting of preparation hereof. 

    

    The
      parties have executed this Employment Agreement as of the date first written
      above. 

    
      	 	 	 
	 	COMPANY:
	 	VOCALSCAPE NETWORKS, INC.
              
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
              Ron McIntyre
	 	Title:
              President 
	 	 
	 	Address: 170 E. Post Road, Suite 206
	 	White Plains, New York
              10601

    

    
      	 	 	 
	 	EXECUTIVE:
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              
Name:
              Robert Koch
	 	 
	 	 
	 	Address: _______________________
	 	      
              ____________________

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A 

    

    INDEMNIFICATION
      AGREEMENT

    

    This
      Indemnification Agreement (the “Agreement”) is made as of September 22, by and
      between Vocalscape Networks, Inc., a Nevada corporation (the “Company”), and
      Robert Koch (the “Indemnitee”).

    

    RECITALS

    

    The
      Company and Indemnitee recognize the increasing difficulty in obtaining
      liability insurance for directors, officers and key employees, the significant
      increases in the cost of such insurance and the general reductions in the
      coverage of such insurance. The Company and Indemnitee further recognize the
      substantial increase in corporate litigation in general, subjecting directors,
      officers and key employees to expensive litigation risks at the same time as
      the
      availability and coverage of liability insurance has been severely limited.
      Indemnitee does not regard the current protection available as adequate under
      the present circumstances, and Indemnitee and agents of the Company may not
      be
      willing to continue to serve as agents of the Company without additional
      protection. The Company desires to attract and retain the services of highly
      qualified individuals, such as Indemnitee, and to indemnify its directors,
      officers and key employees so as to provide them with the maximum protection
      permitted by law.

    

    AGREEMENT

    

    In
      consideration of the mutual promises made in this Agreement, and for other
      good
      and valuable consideration, receipt of which is hereby acknowledged, the Company
      and Indemnitee hereby agree as follows:

    

    1.
      Indemnification.

    

    (a)
      Third
      Party Proceedings.
      The
      Company shall indemnify Indemnitee if Indemnitee is or was a party or is
      threatened to be made a party to any threatened, pending or completed action,
      suit or proceeding, whether civil, criminal, administrative or investigative
      (other than an action by or in the right of the Company) by reason of the fact
      that Indemnitee is or was a director, officer, employee or agent of the Company,
      or any subsidiary of the Company, by reason of any action or inaction on the
      part of Indemnitee while an officer or director or by reason of the fact that
      Indemnitee is or was serving at the request of the Company as a director,
      officer, employee or agent of another corporation, partnership, joint venture,
      trust or other enterprise, against expenses (including attorneys’ fees),
      judgments, fines and amounts paid in settlement (if such settlement is approved
      in advance by the Company, which approval shall not be unreasonably withheld)
      actually and reasonably incurred by Indemnitee in connection with such action,
      suit or proceeding if Indemnitee acted in good faith and in a manner Indemnitee
      reasonably believed to be in or not opposed to the best interests of the
      Company, and, with respect to any criminal action or proceeding, had no
      reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
      of any action, suit or proceeding by judgment, order, settlement, conviction,
      or
      upon a plea of nolo contendere or its equivalent, shall not, of itself, create
      a
      presumption that Indemnitee did not act in good faith and in a manner which
      Indemnitee reasonably believed to be in or not opposed to the best interests
      of
      the Company, or, with respect to any criminal action or proceeding, that
      Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
      unlawful.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)
      Proceedings
      by or in the right of the Company.
      The
      Company shall indemnify Indemnitee if Indemnitee was or is a party or is
      threatened to be made a party to any threatened, pending or completed action
      or
      proceeding by or in the right of the Company or any subsidiary of the Company
      to
      procure a judgment in its favor by reason of the fact that Indemnitee is or
      was
      a director, officer, employee or agent of the Company, or any subsidiary of
      the
      Company, by reason of any action or inaction on the part of Indemnitee while
      an
      officer or director or by reason of the fact that Indemnitee is or was serving
      at the request of the Company as a director, officer, employee or agent of
      another corporation, partnership, joint venture, trust or other enterprise,
      against expenses (including attorneys’ fees) and, to the fullest extent
      permitted by law, amounts paid in settlement (if such settlement is approved
      in
      advance by the Company, which approval shall not be unreasonably withheld),
      in
      each case to the extent actually and reasonably incurred by Indemnitee in
      connection with the defense or settlement of such action or suit if Indemnitee
      acted in good faith and in a manner Indemnitee reasonably believed to be in
      or
      not opposed to the best interests of the Company and its stockholders, except
      that no indemnification shall be made in respect of any claim, issue or matter
      as to which Indemnitee shall have been finally adjudicated by court order or
      judgment to be liable to the Company in the performance of Indemnitee’s duty to
      the Company and its stockholders unless and only to the extent that the court
      in
      which such action or proceeding is or was pending shall determine upon
      application that, in view of all the circumstances of the case, Indemnitee
      is
      fairly and reasonably entitled to indemnity for such expenses which such court
      shall deem proper.

    

    (c)
      Mandatory
      Payment of Expenses.
      To the
      extent that Indemnitee has been successful on the merits or otherwise in defense
      of any action, suit or proceeding referred to in Section 1(a) or Section 1(b)
      or
      the defense of any claim, issue or matter therein, Indemnitee shall be
      indemnified against expenses (including attorneys’ fees) actually and reasonably
      incurred by Indemnitee in connection therewith.

    

    2.
      No
      Employment Rights.
      Nothing
      contained in this Agreement is intended to create in Indemnitee any right to
      continued employment.

    

    3.
      Expenses;
      Indemnification Procedure.

    

    (a)
      Advancement
      of Expenses.
      The
      Company shall advance all expenses incurred by Indemnitee in connection with
      the
      investigation, defense, settlement or appeal of any civil or criminal action,
      suit or proceeding referred to in Section l(a) or Section 1(b) hereof (including
      amounts actually paid in settlement of any such action, suit or proceeding).
      Indemnitee hereby undertakes to repay such amounts advanced only if, and to
      the
      extent that, it shall ultimately be determined that Indemnitee is not entitled
      to be indemnified by the Company as authorized hereby.

    

    (b)
      Notice/Cooperation
      by Indemnitee.
      Indemnitee shall, as a condition precedent to his or her right to be indemnified
      under this Agreement, give the Company notice in writing as soon as practicable
      of any claim made against Indemnitee for which indemnification will or could
      be
      sought under this Agreement. Notice to the Company shall be directed to the
      President of the Company and shall be given in accordance with the provisions
      of
      Section 12(d) below. In addition, Indemnitee shall give the Company such
      information and cooperation as it may reasonably require and as shall be within
      Indemnitee’s power.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)
      Procedure.
      Any
      indemnification and advances provided for in Section 1 and this Section 3 shall
      be made no later than twenty (20) days after receipt of the written request
      of
      Indemnitee. If a claim under this Agreement, under any statute, or under any
      provision of the Company’s Articles of Incorporation or Bylaws providing for
      indemnification, is not paid in full by the Company within twenty (20) days
      after a written request for payment thereof has first been received by the
      Company, Indemnitee may, but need not, at any time thereafter bring an action
      against the Company to recover the unpaid amount of the claim and, subject
      to
      Section 11 of this Agreement, Indemnitee shall also be entitled to be paid
      for
      the expenses (including attorneys’ fees) of bringing such action. It shall be a
      defense to any such action (other than an action brought to enforce a claim
      for
      expenses incurred in connection with any action, suit or proceeding in advance
      of its final disposition) that Indemnitee has not met the standards of conduct
      which make it permissible under applicable law for the Company to indemnify
      Indemnitee for the amount claimed, but the burden of proving such defense shall
      be on the Company and Indemnitee shall be entitled to receive interim payments
      of expenses pursuant to Section 3(a) unless and until such defense may be
      finally adjudicated by court order or judgment from which no further right
      of
      appeal exists. It is the parties’ intention that if the Company contests
      Indemnitee’s right to indemnification, the question of Indemnitee’s right to
      indemnification shall be for the court to decide, and neither the failure of
      the
      Company (including its Board of Directors, any committee or subgroup of the
      Board of Directors, independent legal counsel, or its stockholders) to have
      made
      a determination that indemnification of Indemnitee is proper in the
      circumstances because Indemnitee has met the applicable standard of conduct
      required by applicable law, nor an actual determination by the Company
      (including its Board of Directors, any committee or subgroup of the Board of
      Directors, independent legal counsel, or its stockholders) that Indemnitee
      has
      not met such applicable standard of conduct, shall create a presumption that
      Indemnitee has or has not met the applicable standard of conduct.

    

    (d)
      Notice
      to Insurers.
      If, at
      the time of the receipt of a notice of a claim pursuant to Section 3(b) hereof,
      the Company has director and officer liability insurance in effect, the Company
      shall give prompt notice of the commencement of such proceeding to the insurers
      in accordance with the procedures set forth in the respective policies. The
      Company shall thereafter take all necessary or desirable action to cause such
      insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
      of
      such proceeding in accordance with the terms of such policies.

    

    (e)
      Selection
      of Counsel.
      In the
      event the Company shall be obligated under Section 3(a) hereof to pay the
      expenses of any proceeding against Indemnitee, the Company, if appropriate,
      shall be entitled to assume the defense of such proceeding, with counsel
      approved by Indemnitee, upon the delivery to Indemnitee of written notice of
      its
      election so to do. After delivery of such notice, approval of such counsel
      by
      Indemnitee and the retention of such counsel by the Company, the Company will
      not be liable to Indemnitee under this Agreement for any fees of counsel
      subsequently incurred by Indemnitee with respect to the same proceeding,
      provided that (i) Indemnitee shall have the right to employ counsel in any
      such
      proceeding at Indemnitee’s expense; and (ii) if (A) the employment of counsel by
      Indemnitee has been previously authorized by the Company, (B) Indemnitee shall
      have reasonably concluded that there may be a conflict of interest between
      the
      Company and Indemnitee in the conduct of any such defense or (C) the Company
      shall not, in fact, have employed counsel to assume the defense of such
      proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the
      expense of the Company.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.
      Additional
      Indemnification Rights; Nonexclusivity.

    

    (a)
      Scope.
      Notwithstanding any other provision of this Agreement, the Company hereby agrees
      to indemnify the Indemnitee to the fullest extent permitted by law,
      notwithstanding that such indemnification is not specifically authorized by
      the
      other provisions of this Agreement, the Company’s Articles of Incorporation, the
      Company’s Bylaws or by statute. In the event of any change, after the date of
      this Agreement, in any applicable law, statute, or rule which expands the right
      of a Nevada corporation to indemnify a member of its board of directors or
      an
      officer, such changes shall be deemed to be within the purview of Indemnitee’s
      rights and the Company’s obligations under this Agreement. In the event of any
      change in any applicable law, statute or rule which narrows the right of a
      Nevada corporation to indemnify a member of its board of directors or an
      officer, such changes, to the extent not otherwise required by such law, statute
      or rule to be applied to this Agreement shall have no effect on this Agreement
      or the parties’ rights and obligations hereunder.

     

    

    (b)
      Nonexclusivity.
      The
      indemnification provided by this Agreement shall not be deemed exclusive of
      any
      rights to which Indemnitee may be entitled under the Company’s Articles of
      Incorporation, its Bylaws, any agreement, any vote of stockholders or
      disinterested members of the Company’s Board of Directors, the Nevada General
      Corporation Law, or otherwise, both as to action in Indemnitee’s official
      capacity and as to action in another capacity while holding such office. The
      indemnification provided under this Agreement shall continue as to Indemnitee
      for any action taken or not taken while serving in an indemnified capacity
      even
      though he or she may have ceased to serve in any such capacity at the time
      of
      any action, suit or other covered proceeding.

    

    5.
      Partial
      Indemnification.
      If
      Indemnitee is entitled under any provision of this Agreement to indemnification
      by the Company for some or a portion of the expenses, judgments, fines or
      penalties actually or reasonably incurred in the investigation, defense, appeal
      or settlement of any civil or criminal action, suit or proceeding, but not,
      however, for the total amount thereof, the Company shall nevertheless indemnify
      Indemnitee for the portion of such expenses, judgments, fines or penalties
      to
      which Indemnitee is entitled.

    

    6.
      Mutual
      Acknowledgment.
      Both
      the Company and Indemnitee acknowledge that in certain instances, Federal law
      or
      public policy may override applicable state law and prohibit the Company from
      indemnifying its directors and officers under this Agreement or otherwise.
      For
      example, the Company and Indemnitee acknowledge that the Securities and Exchange
      Commission (the “SEC”) has taken the position that indemnification is not
      permissible for liabilities arising under certain federal securities laws,
      and
      federal legislation prohibits indemnification for certain ERISA violations.
      Indemnitee understands and acknowledges that the Company has undertaken or
      may
      be required in the future to undertake with the SEC to submit the question
      of
      indemnification to a court in certain circumstances for a determination of
      the
      Company’s right under public policy to indemnify Indemnitee.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.
      Officer
      and Director Liability Insurance.
      The
      Company shall, from time to time, make the good faith determination whether
      or
      not it is practicable for the Company to obtain and maintain a policy or
      policies of insurance with reputable insurance companies providing the officers
      and directors of the Company with coverage for losses from wrongful acts, or
      to
      ensure the Company’s performance of its indemnification obligations under this
      Agreement. Among other considerations, the Company will weigh the costs of
      obtaining such insurance coverage against the protection afforded by such
      coverage. In all policies of director and officer liability insurance,
      Indemnitee shall be named as an insured in such a manner as to provide
      Indemnitee the same rights and benefits as are accorded to the most favorably
      insured of the Company’s directors, if Indemnitee is a director; or of the
      Company’s officers, if Indemnitee is not a director of the Company but is an
      officer; or of the Company’s key employees, if Indemnitee is not an officer or
      director but is a key employee. Notwithstanding the foregoing, the Company
      shall
      have no obligation to obtain or maintain such insurance if the Company
      determines in good faith that such insurance is not reasonably available, if
      the
      premium costs for such insurance are disproportionate to the amount of coverage
      provided, if the coverage provided by such insurance is limited by exclusions
      so
      as to provide an insufficient benefit, or if Indemnitee is covered by similar
      insurance maintained by a parent or subsidiary of the Company.

    

    8.
      Severability.
      Nothing
      in this Agreement is intended to require or shall be construed as requiring
      the
      Company to do or fail to do any act in violation of applicable law. The
      Company’s inability, pursuant to court order, to perform its obligations under
      this Agreement shall not constitute a breach of this Agreement. The provisions
      of this Agreement shall be severable as provided in this Section 8. If this
      Agreement or any portion hereof shall be invalidated on any ground by any court
      of competent jurisdiction, then the Company shall nevertheless indemnify
      Indemnitee to the full extent permitted by any applicable portion of this
      Agreement that shall not have been invalidated, and the balance of this
      Agreement not so invalidated shall be enforceable in accordance with
      its

    terms.

    

    9.
      Exceptions.
      Any
      other provision herein to the contrary notwithstanding, the Company shall not
      be
      obligated pursuant to the terms of this Agreement:

    

    (a)
      Claims
      Initiated By Indemnitee.
      To
      indemnify or advance expenses to Indemnitee with respect to proceedings or
      claims initiated or brought voluntarily by Indemnitee and not by way of defense,
      except with respect to proceedings brought to establish or enforce a right
      to
      indemnification under this Agreement or any other statute or law or otherwise
      as
      required under the Nevada General Corporation Law, but such indemnification
      or
      advancement of expenses may be provided by the Company in specific cases if
      the
      Board of Directors finds it to be appropriate;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)
      Lack
      of Good Faith.
      To
      indemnify Indemnitee for any expenses incurred by Indemnitee with respect to
      any
      proceeding instituted by Indemnitee to enforce or interpret this Agreement,
      if a
      court of competent jurisdiction determines that each of the material assertions
      made by Indemnitee in such proceeding was not made in good faith or was
      frivolous;

    

    (c)
      Insured
      Claims.
      To
      indemnify Indemnitee for expenses or liabilities of any type whatsoever
      (including, but not limited to, judgments, fines, ERISA excise taxes or
      penalties, and amounts paid in settlement) to the extent such expenses or
      liabilities have been paid directly to Indemnitee by an insurance carrier under
      a policy of officers’ and directors’ liability insurance maintained by the
      Company; or

    

    (d)
      Claims
      Under Section 16(b).
      To
      indemnify Indemnitee for expenses or the payment of profits arising from the
      purchase and sale by Indemnitee of securities in violation of Section 16(b)
      of
      the Securities Exchange Act of 1934, as amended, or any similar successor
      statute.

    

    10.
      Construction
      of Certain Phrases.

    

    (a)
      For
      purposes of this Agreement, references to the “Company” shall include, in
      addition to the resulting corporation, any constituent corporation (including
      any constituent of a constituent) absorbed in a consolidation or merger which,
      if its separate existence had continued, would have had power and authority
      to
      indemnify its directors, officers, and employees or agents, so that if
      Indemnitee is or was a director, officer, employee or agent of such constituent
      corporation, or is or was serving at the request of such constituent corporation
      as a director, officer, employee or agent of another corporation, partnership,
      joint venture, trust or other enterprise, Indemnitee shall stand in the same
      position under the provisions of this Agreement with respect to the resulting
      or
      surviving corporation as Indemnitee would have with respect to such constituent
      corporation if its separate existence had continued. 

    

    (b)
      For
      purposes of this Agreement, references to “Other Enterprises” shall include
      employee benefit plans; references to “Fines” shall include any excise taxes
      assessed on Indemnitee with respect to an employee benefit plan; and references
      to “Serving at the Request of the Company” shall include any service as a
      director, officer, employee or agent of the Company which imposes duties on,
      or
      involves services by, such director, officer, employee or agent with respect
      to
      an employee benefit plan, its participants, or beneficiaries; and if Indemnitee
      acted in good faith and in a manner Indemnitee reasonably believed to be in
      the
      interest of the participants and beneficiaries of an employee benefit plan,
      Indemnitee shall be deemed to have acted in a manner “Not Opposed to the Bests
      Interests of the Company” as referred to in this Agreement.

    

    11.
      Attorneys’
      Fees.
      In the
      event that any action is instituted by Indemnitee under this Agreement to
      enforce or interpret any of the terms hereof, Indemnitee shall be entitled
      to be
      paid all court costs and expenses, including reasonable attorneys’ fees,
      incurred by Indemnitee with respect to such action, unless as a part of such
      action, the court of competent jurisdiction determines that each of the material
      assertions made by Indemnitee as a basis for such action were not made in good
      faith or were frivolous. In the event of an action instituted by or in the
      name
      of the Company under this Agreement or to enforce or interpret any of the terms
      of this Agreement, Indemnitee shall be entitled to be paid all court costs
      and
      expenses, including attorneys’ fees, incurred by Indemnitee in defense of such
      action (including with respect to Indemnitee’s counterclaims and cross-claims
      made in such action), unless as a part of such action the court determines
      that
      each of Indemnitee’s material defenses to such action were made in bad faith or
      were

    frivolous.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.
      Miscellaneous.

    

    (a)
      Governing
      Law.
      This
      Agreement and all acts and transactions pursuant hereto and the rights and
      obligations of the parties hereto shall be governed, construed and interpreted
      in accordance with the laws of the State of Washington, without giving effect
      to
      principles of conflict of law.

    

    (b)
      Entire
      Agreement; Enforcement of Rights.
      This
      Agreement sets forth the entire agreement and understanding of the parties
      relating to the subject matter herein and merges all prior discussions between
      them. No modification of or amendment to this Agreement, nor any waiver of
      any
      rights under this Agreement, shall be effective unless in writing signed by
      the
      parties to this Agreement. The failure by either party to enforce any rights
      under this Agreement shall not be construed as a waiver of any rights of such
      party.

    

    (c)
      Construction.
      This
      Agreement is the result of negotiations between and has been reviewed by each
      of
      the parties hereto and their respective counsel, if any; accordingly, this
      Agreement shall be deemed to be the product of all of the parties hereto, and
      no
      ambiguity shall be construed in favor of or against any one of the parties
      hereto.  

    

    (d)
      Notices.
      Any
      notice, demand or request required or permitted to be given under this Agreement
      shall be in writing and shall be deemed sufficient when delivered personally
      or
      sent by telegram or forty-eight (48) hours after being deposited in the U.S.
      mail, as certified or registered mail, with postage prepaid, and addressed
      to
      the party to be notified at such party’s address as set forth below or as
      subsequently modified by written notice.

    

    (e)
      Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall constitute one instrument.
      

    

    (f)
      Successors
      and Assigns.
      This
      Agreement shall be binding upon the Company and its successors and assigns,
      and
      inure to the benefit of Indemnitee and Indemnitee’s heirs, legal representatives
      and assigns.

    

    (g)
      Subrogation.
      In the
      event of payment under this Agreement, the Company shall be subrogated to the
      extent of such payment to all of the rights of recovery of Indemnitee, who
      shall
      execute all documents required and shall do all acts that may be necessary
      to
      secure such rights and to enable the Company to effectively

    bring
      suit to enforce such rights.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      parties hereto have executed this Agreement as of the day and year set forth
      on
      the first page of this Agreement.

    
      
        	 	 	 
	 	COMPANY:
	 	VOCALSCAPE NETWORKS, INC.
                
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
                Ron McIntyre
	 	Title:
                President 
	 	 
	 	Address: 170 E. Post Road, Suite 206
	 	White Plains, New York
                10601

                         
        AGREED TO AND ACCEPTED:

      
        	 	 	 
	 	INDEMNITEE:
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                
Name:
                Robert Koch
	 	 
	 	 
	 	Address: _______________________
	 	      
                ____________________

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    

    PROPRIETARY
      INFORMATION AND

    INVENTIONS
      AGREEMENT

    

    VOCALSCAPE
      NETWORKS, INC.

    

    In
      consideration of my employment or consultancy (as the case may be) by Vocalscape
      Networks, Inc., a Nevada corporation (the “Company”, which term includes the
      Company’s subsidiaries and any of its affiliates), any opportunity for
      advancement or reassignment that the Company may offer me, the compensation
      paid
      to me in connection with such employment and any stock and/or stock options
      which have been or may be granted to me by the Company, I, Robert Koch, hereby
      agree as follows: 

    

    1.
      Whenever used in this Agreement the following terms will have the following
      meanings: 

    

    1.1
      “Invention(s)”
means
      discoveries, developments, designs, improvements, inventions and/or works of
      authorship, whether or not patentable, copyrightable or otherwise legally
      protectable. This includes, but is not limited to, any new machine, article
      of
      manufacture, biological material, method, process, technique, use, equipment,
      device, apparatus, system, compound, formulation, composition of matter, design
      or configuration of any kind, or any improvement thereon. 

    

    1.2
      “Proprietary
      Information”
means
      information or physical material not generally known or available outside the
      Company or information or physical material entrusted to the Company by third
      parties. This includes, but is not limited to, Inventions, confidential
      knowledge, trade secrets, copyrights, product ideas, techniques, processes,
      formulas, object codes, biological materials such as nucleic acids, proteins,
      organisms, strands, cell lines, antibodies or antigen source materials, or
      fragments thereof, mask works and/or any other information of any type relating
      to documentation, data, schematics, algorithms, flow charts, mechanisms,
      research, manufacture, improvements, assembly, installation, marketing,
      forecasts, pricing, customers, the salaries, duties, qualifications, performance
      levels and terms of compensation of other employees, and/or cost or other
      financial data concerning any of the foregoing or the Company and its
      operations. Proprietary Information may be contained in material such as
      drawings, samples, procedures, specifications, reports, studies, customer or
      supplier lists, budgets, cost or price lists, compilations or computer programs,
      or may be in the nature of unwritten knowledge or know-how. 

    

    1.3
      “Company
      Documents”
means
      documents or other media that contain Proprietary Information or any other
      information concerning the business, operations or plans of the Company, whether
      such documents have been prepared by me or by others. “Company Documents”
include, but are not limited to, blueprints, drawings, photographs, charts,
      graphs, notebooks, customer lists, computer disks, tapes or printouts, sound
      recordings and other printed, typewritten or handwritten documents.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.
      I
      understand that the Company is engaged in a continuous program of research,
      development and production. I also recognize that the Company possesses or
      has
      rights to Proprietary Information (including certain information developed
      by me
      during my employment or consultancy (as the case may be) by the Company that
      has
      commercial value in the Company’s business. 

    

    3.
      I
      understand that the Company possesses Company Documents that are important
      to
      its business. 

    

    4.
      I
      understand and agree that my employment or consultancy (as the case may be)
      creates a relationship of confidence and trust between me and the Company with
      respect to (i) all Proprietary Information and (ii) the confidential information
      of another person or entity with which the Company has a business relationship
      and is required by terms of an agreement with such entity or person to hold
      such
      information as confidential. At all times, both during my employment or
      consultancy (as the case may be) by the Company and after its termination,
      I
      will keep in confidence and trust all such information, and I will not use
      or
      disclose any such information without the written consent of the Company, except
      as may be necessary in the ordinary course of performing my duties to the
      Company. 

    

    5.
      In
      addition, I hereby agree as follows: 

    

    5.1
      All
      Proprietary Information will be the sole property of the Company and its
      assigns, and the Company and its assigns will be the sole owner of all trade
      secrets, patents, copyrights and other rights in connection therewith. I hereby
      assign to the Company any rights I may presently have or I may acquire in such
      Proprietary Information. 

    

    5.2
      All
      Company Documents, apparatus, equipment and other physical property, whether
      or
      not pertaining to Proprietary Information, furnished to me by the Company or
      produced by me or others in connection with my employment or consultancy (as
      the
      case may be) will be and remain the sole property of the Company. I will return
      to the Company all such Company Documents, materials and property as and when
      requested by the Company, excepting only (i) my personal copies of records
      relating to my compensation; (ii) my personal copies of any materials previously
      distributed generally to stockholders of the Company; and (iii) my copy of
      this
      Agreement (my “Personal Documents”). Even if the Company does not so request, I
      will return all such Company Documents, materials and property upon termination
      of my employment or consultancy (as the case may be) by me or by the Company
      for
      any reason, and, except for my Personal Documents, I will not take with me
      any
      such Company Documents, material or property or any reproduction thereof upon
      such termination. 

    

    5.3
      I
      will promptly disclose to the Company, or any persons designated by it, all
      Inventions relating to the Field, as defined below, made or conceived, reduced
      to practice or learned by me, either alone or jointly with others, prior to
      the
      term of my employment or consultancy (as the case may be) and for one (1) year
      thereafter. For purposes of this Agreement, “Field” means research, development,
      marketing or manufacturing of any products also researched, developed, marketed
      or manufactured by the Company. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.4
      All
      Inventions that I conceive, reduce to practice, develop or have developed (in
      whole or in part, either alone or jointly with others) during the term of my
      employment or consultancy (as the case may be) will be the sole property of
      the
      Company and its assigns to the maximum extent permitted by law (and to the
      fullest extent permitted by law will be deemed “works made for hire”), and the
      Company and its assigns will be the sole owner of all patents, copyrights and
      other rights in connection therewith. I hereby assign to the Company my entire
      right, title and interest, whether possessed now or later acquired, in such
      Inventions. I agree that any Invention required to be disclosed under paragraph
      (c) above within one (1) year after the term of my employment or consultancy
      (as
      the case may be) will be presumed to have been conceived during my employment
      or
      consultancy (as the case may be). I understand that I may overcome the
      presumption by showing that such Invention was conceived after the termination
      of my employment or consultancy (as the case may be). 

    

    NOTICE
      REQUIRED BY REVISED CODE OF WASHINGTON 49.44.140: ANY ASSIGNMENT OF INVENTIONS
      REQUIRED BY THIS AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO
      EQUIPMENT, SUPPLIES, FACILITIES OR TRADE SECRET INFORMATION OF THE COMPANY
      WAS
      USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE’S OWN TIME, UNLESS (a) THE
      INVENTION RELATES (i) DIRECTLY TO THE BUSINESS OF THE COMPANY OR (ii) TO THE
      COMPANY’S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (b) THE
      INVENTION RESULTS FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE COMPANY.
      

    

    5.5
      During or after my employment, upon the Company’s request and at the company’s
      expense, I will execute all papers in a timely manner and do all acts necessary
      to apply for, secure, maintain or enforce patents, copyrights and any other
      legal rights in the United States and foreign countries in Inventions assigned
      to the Company under this Agreement, and I will execute all papers and do any
      and all acts necessary to assign and transfer to the Company or any person
      or
      party to whom the Company is obligated to assign its rights, my entire right,
      title and interest in and to such Inventions. This obligation will survive
      the
      termination of my employment or consultancy (as the case may be), but the
      Company will compensate me at a reasonable rate after such termination for
      time
      actually spent by me at the Company’s request on such assistance. In the event
      that the Company is unable for any reason whatsoever to secure my signature
      to
      any document reasonably necessary or appropriate for any of the foregoing
      purposes, (including renewals, extensions, continuations, divisions or
      continuations in part), I hereby irrevocably designate and appoint the Company
      and its duly authorized officers and agents as my agents and attorneys-in-fact
      to act for and in my behalf and instead of me, but only for the purpose of
      executing and filing any such document and doing all other lawfully permitted
      acts to accomplish the foregoing purposes with the same legal force and effect
      as if executed by me. 

    

    5.6
      So
      that the Company may be aware of the extent of any other demands upon my time
      and attention, I will disclose to the Company (such disclosure to be held in
      confidence by the Company) the nature and scope of any other business activity
      in which I am or become engaged during the term of my employment or consultancy
      (as the case may be). During the term of my employment or consultancy (as the
      case may be), I will not engage in any other business activity that is related
      to the Company’s business or its actual or demonstrably anticipated research and
      development. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.
      As a
      matter of record I attach hereto as Exhibit
      A
      a
      complete list of all Inventions (including patent applications and patents)
      relevant to the Field that have been made, conceived, developed or first reduced
      to practice by me, alone or jointly with others, prior to my employment or
      consultancy (as the case may be) with the Company that I desire to remove from
      the operation of this Agreement, and I covenant that such list is complete.
      If
      no such list is attached to this Agreement, I represent that I have no such
      Inventions at the time of signing this Agreement. If in the course of my
      employment or consultancy with the Company, I use or incorporate into a product
      or process an Invention not covered by Paragraph 5(d) of this Agreement in
      which
      I have an interest, the Company is hereby granted a nonexclusive, fully paid-up,
      royalty-free, perpetual, worldwide license of my interest to use and sublicense
      such Invention without restriction of any kind. 

    

    7.
      I
      represent that my execution of this Agreement, my employment or consultancy
      (as
      the case may be) with the Company and my performance of my proposed duties
      to
      the Company in the development of its business will not violate any obligations
      I may have to any former employer, or other person or entity, including any
      obligations to keep confidential any proprietary or confidential information
      of
      any such employer. I have not entered into, and I will not enter into, any
      agreement that conflicts with or would, if performed by me, cause me to breach
      this Agreement. 

    

    8.
      In the
      course of performing my duties to the Company, I will not utilize any
      proprietary or confidential information of any former employer. 

    

    9.
      I
      agree that this Agreement does not constitute an employment or consultancy
      (as
      the case may be) agreement for a specific duration and that, unless otherwise
      provided in a written contract signed by both an officer of the Company and
      me.

    

    10.
      This
      Agreement will be effective as of the first day of my employment or consultancy
      (as the case may be) by the Company and the obligations hereunder will continue
      beyond the termination of my employment and will be binding on my heirs, assigns
      and legal representatives. This Agreement is for the benefit of the Company,
      its
      successors and assigns (including all subsidiaries, affiliates, joint ventures
      and associated companies) and is not conditioned on my employment for any period
      of time or compensation therefor. I agree that the Company is entitled to
      communicate any obligations under this Agreement to any future employer or
      potential employer of mine. 

    

    11.
      During the term of my employment and for two (2) years thereafter, I will not,
      without the Company’s written consent, directly or indirectly be employed or
      involved with any business developing or exploiting any products or services
      that are competitive with products or services (a) being commercially developed
      or exploited by the Company during my employment and (b) on which I worked
      or
      about which I learned Proprietary Information during my employment with the
      Company. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.
      During the term of my employment and for two (2) years thereafter, I will not
      personally or through others recruit, solicit or induce in any way any employee,
      advisor or consultant of the Company to terminate his or her relationship with
      the Company. 

    

    13.
      I
      acknowledge that any violation of this Agreement by me will cause irreparable
      injury to the Company and I agree that the Company will be entitled to
      extraordinary relief in court, including, but not limited to, temporary
      restraining orders, preliminary injunctions and permanent injunctions without
      the necessity of posting a bond or other security and without prejudice to
      any
      other rights and remedies that the Company may have for a breach of this
      Agreement. 

    

    14.
      I
      agree that any dispute in the meaning, effect or validity of this Agreement
      will
      be resolved in accordance with the laws of the state of Washington without
      regard to its or any other jurisdiction’s conflict of laws provisions. I further
      agree that if one or more provisions of this Agreement are held to be
      unenforceable under applicable Washington law, such provision(s) will be
      excluded from this Agreement and the balance of the Agreement will be
      interpreted as if such provision were so excluded and will be enforceable in
      accordance with its terms. 

    

    15.
      I
      HAVE READ AND UNDERSTOOD THIS AGREEMENT. THIS AGREEMENT MAY ONLY BE MODIFIED
      BY
      A SUBSEQUENT WRITTEN AGREEMENT EXECUTED BY AN OFFICER OF THE COMPANY.

    

    Dated:
      September 22, 2006. 

    

    

    
      	 By: 	 	 	 
	 	
              
Name:
              Robert Koch	 	 
	 	 	 	 

    

     

    Accepted
      and Agreed to: 

    

    VOCALSCAPE
      NETWORKS, INC. 

    

    
      

      
        	 By: 	 	 	 
	 	
                
Name:
                Ron McIntyre 	 	 
	 	Title: President	 	 

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    Vocalscape
      Networks, Inc. 

    170
      E.
      Post Road, Suite 206

    White
      Plains, New York 10601

    

    Ladies
      and Gentlemen: 

    

    1.
      The
      following is a complete list of all inventions or improvements relevant to
      the
      subject matter of my employment or consultancy (as the case may be) by
      Vocalscape Networks, Inc. (the “Company”) that have been made or conceived or
      first reduced to practice by me, alone or jointly with others, prior to my
      employment or consultancy (as the case may be) by the Company that I desire
      to
      remove from the operation of the Proprietary Information and Inventions
      Agreement entered into between the Company and me. 

     

    
      	 	No inventions or improvements.	 	 
	
              

            	 	 	 
	 	Any and all inventions regarding:	 	 
	
              

            	 	 	 

    

    

    

    

    

    

     

     

    
      
        	 	Additional sheets attached.	 	 
	
                

              	 	 	 

      

       

    

    2.
      I
      propose to bring to my employment or consultancy (as the case may be) the
      following materials and documents of a former employer:

    
       

      
        	 	No materials or documents.	 	 
	
                

              	 	 	 
	 	See below:	 	 
	
                

              	 	 	 

      

      
 

    

    
      
        	 By: 	 	 	 
	 	
                
Name:
                Robert KochExhibit
      10.1

    

    PATENT
      LICENSE AGREEMENT

    

    License
      Number: 00-1001R
      Amendment
      Four

    

    

    THIS
      AGREEMENT by and between Honeywell
      Federal Manufacturing & Technologies, LLC.
      (hereinafter “Honeywell”), a corporation organized and existing under the laws
      of the State of Delaware and having a place of business at 2000 East
      95th
      Street,
      P.O. Box 419159, Kansas City, Missouri 64141-6159, and Itec
      Environmental Group
      (hereinafter “Licensee”), a corporation organized and existing under the laws of
      the State of Delaware
      and
      having a place of business at PO
      Box 760, Riverbank, CA 95364

    

    

    WHITNESSETH:

    

    WHEREAS,
      Honeywell, pursuant to Contract
      No. DE-AC04-01AL66850
      (hereinafter “Prime Contract”) with the United States Government, as represented
      by the Department of Energy (Hereinafter “DOE”) has developed and /or obtained
      rights to Proprietary Rights, subject to the DOE nonexclusive, nontransferable,
      irrevocable, paid-up license for the United states Government and certain
      march-in rights and any other conditions of waivers granted by the DOE;
      and

    

    WHEREAS,
      Licensee desires to obtain an exclusive right in a limited field of use in
      the
      Proprietary Rights.

    

    NOW
      THEREFORE, in consideration of the foregoing premises, covenants, and agreements
      contained herein, Honeywell and Licensee (collectively the “Parties”) hereto
      agree to be bound as follows:

     

    1.
      Definitions

    1.1  “Proprietary
      Rights” shall mean the patents and applications listed in Exhibit A, which is
      attached to and incorporated into this Agreement. The Parties agree to
      periodically update Exhibit A as new patent applications are filed and/or
      applications issue.

    1.2  “Products”
      shall mean any and all products manufactured, used, sold, or transferred by
      Licensee covered by one or more claims of the Proprietary Rights.

    1.3  “Services”
      shall mean any and all services provided which utilize the methods encompassed
      in one or more of the claims of the Proprietary Rights.

    1.4  “Gross
      Sales” shall mean the total amounts invoiced to purchasers during the accounting
      period in question for products and/or services sold by Licensee. Gross Sales
      in
      the case of Products used or transferred or Services performed shall mean the
      total amounts invoiced for such products or Services, but not less than fair
      market value of products and/or services as if they were sold to an unrelated
      third party in similar quantities. Gross Sales shall exclude sales tax or
      similar tax shown on the invoice to be paid by buyer to Licensee.

    

    2.  Grants

    2.1  
      Subject
      to the terms and conditions of this agreement, Honeywell hereby grants to
      Licensee an exclusive,
      nontransferable, worldwide license to practice the methods and to make, use,
      and
      sell, the products and/or Services covered by the Proprietary Rights limited
      to
      the field of use described in U.S. Patent #5,711,820, and other patents or
      applications as listed in Exhibit A, and specifically, separating, removing
      and
      cleaning all contaminants, including all forms of oil, from synthetic resin
      material (especially all forms of plastic) using a first stage organic solvent
      system and a second stage carbon dioxide system, where the organic solvent
      is
      utilized for removing the contaminants from the synthetic resin material.
      Honeywell grants no license, either expressed or implied, to Licensee hereunder
      with respect to any patent or information except as specifically provided
      herein. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    2.2 
      No
      license, either expressed or implied, is granted hereunder to use as a trademark
      or otherwise the words “Honeywell” or any other trademark or product name of
      Honeywell or any word or mark similar thereto unless otherwise specified
      herein.

    2.3 
      Licensee
      may indicate the products are made under license from Honeywell by suitable
      legend, if the form of such legend and the extent of Licensee’s use thereof have
      received prior written approval of Honeywell. Honeywell may amend or revoke
      prior approvals to use such legends at any given time during the term of this
      Agreement, and all rights to use such legends shall terminate with this
      Agreement.

    

    3.
      Sublicensing
      Rights and Obligations 

     

    3.1 
      Honeywell
      also grants to the licensee, so long as licensee retains its exclusive rights
      in
      the field of use defined in Paragraph 2.1, to sublicenses to Affiliates, Joint
      Ventures, or other third parties to make, use, sell, import, and have made
      for
      Licensed Products using Licensed Services in the United States and other
      countries. For the avoidance of doubt, Affiliates Joint Ventures and Third
      Parties shall have no licenses under this Agreement unless such Affiliates,
      Joint Ventures and Third Parties are explicitly granted a sublicense under
      the
      Agreement..

    3.2 
      Licensee
      must include in any sublicense all the rights and obligations due Honeywell
      and
      the Government set forth in this Agreement.

    3.3 
      Licensee
      must require sublicensees to provide it with copies of all progress reports
      and
      royalty reports in accordance with the provisions of this Agreement, and the
      Licensee will collect and deliver to Honeywell all such reports due from
      sublicensees. 

    3.4 
      Licensee
      must include in all sublicenses the notice that upon termination of this
      Agreement for any reason, Honeywell, at its sole discretion, will determine
      whether any or all sublicenses will be cancelled or assigned to Honeywell.
      

    3.5 
      The
      Licensee will notify Honeywell of each sublicense granted hereunder and provide
      Honeywell with a complete copy of each executed sublicense within thirty (30)
      days of issuance of the sublicense.

    3.6 
      For
      the
      purpose of this Agreement, the operations of all sublicensees shall be deemed
      to
      be the operations of the Licensee, for which the Licensee shall be responsible.
      

    3.7 
      In
      the
      event the Honeywell and the Licensee each own an undivided interest in any
      patent or patent applications included in the Proprietary Rights licensed
      hereunder, the Licensee will not separately grant a license to an third party
      under its rights without concurrently granting a license under Honeywell rights
      on the terms and conditions described in this Article 3.

    3.8 
      Honeywell
      will notify Licensee if Honeywell is approached by a third party seeking a
      license to make, use, or sell Licensed Products in Licensee’s Field of Use
      because commercial demand is not being met. Licensee will negotiate in good
      faith with that third party to grant a sublicense for any licensed patents
      in
      the market for which Licensee and existing sublicenses are not meeting
      commercial demand. The determination to grant a sublicense may be based on
      Licensee’s business interests. Licensee will provide Honeywell with
      justification for denying any such sublicense.

    

    4. Consideration

    4.1 
      In
      consideration of the rights and licenses granted in this Agreement, Licensee
      and
      its sublicensees agree to the applicable provisions of Exhibit B and Exhibit
      C
      attached and incorporated into this Agreement 

    4.2 
      No
      royalties shall be owed on any Products sold to Honeywell, Federal Manufacturing
      & Technologies.

    4.3 
      No
      earned
      royalties will be collected or paid hereunder to Honeywell on Licensed Products
      or Licensed Services Sold to the account of the U.S. Government. Licensee and
      its sublicensees will reduce the amount charged for Licensed Products or
      Licensed Services Sold to the U.S. Government by an amount equal to the royalty
      for such Licensed Products or Licensed Services otherwise due Honeywell.
      Licensee will provide Honeywell with U.S. Government contract numbers and a
      written statement by Licensee’s contracting officer that Sale of Licensed
      Products to the U.S. government were reduced by the same amount of royalty
      due
      Honeywell. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4.4 
      Upon
      termination of this Agreement for any reason whatsoever, any royalties that
      remain unpaid shall be properly reported and paid to Honeywell within thirty
      (30) days of any such termination.

    4.5 
      Payment
      of royalties due shall be made during the month following the calendar
      quarter covered
      thereby in U.S. Dollars, payable to the order of
      Honeywell Federal Manufacturing & Technologies LLC.,
      pursuant to the report to be transmitted in accordance with section 5 below.
      All
      amounts paid in USA currency are to be calculated at the official rate of
      exchange on the last day of the calendar quarter for which payment is due,
      or if
      more than one rate of exchange is available, then at the most favorable rate
      to
      Honeywell for such day.

    4.6
      Any
      and
      all funds or financial receivables owed to Honeywell by the Licensee under
      this
      Agreement that remain overdue for a period of 90 days or more after date of
      invoice shall be declared delinquent, and Honeywell shall have the right, but
      not the obligation, to refer any or all such delinquent receivables to any
      collection agency or agencies for collection according to whatever DOE
      procedures, rules and requirements are then in effect for overdue or delinquent
      collections.

    4.7
      In
      the
      event of a sublicense, consideration owed to Honeywell will be paid to Honeywell
      on or before the due date of the royalty report applicable to the quarter in
      which consideration was due and owing to the Licensee under the sublicense.
      The
      Licensee will collect from the sublicensee and will pay to Honeywell all fees,
      royalties, and cash equivalent of any consideration due Honeywell. 

    

    5 Records
      and Reports

    5.1 
      Licensee
      agrees to keep adequate and sufficiently detailed records of utilization of
      the
      Proprietary Rights to enable royalties payable hereunder to be determined and
      to
      make such records available for inspection by authorized representatives of
      Honeywell at any time during the regular business hours of Licensee. Licensee
      agree that any additional records of Licensee, as Honeywell may reasonably
      determine are necessary to verify the utilization of proprietary Rights, shall
      also be maintained during and for a minimum of three (3) years following
      termination of this Agreement.

    5.2 
      Within
      thirty (30) calendar days after the close of each calendar quarter during the
      term of this Agreement, Licensee shall furnish Honeywell a written report
      providing:

    
      	(a)  	
              a
                list of all separately identifiable types (i.e. model numbers or
                equivalent) of Products sold, leased or otherwise utilized, or Services
                rendered,

            

    

    
      	(b)  	
              the
                quantity of each type of product or
                service,

            

    

    
      	(c)  	
              the
                Gross sales for each type of product or
                Service,

            

    

    
      	(d)  	
              sales
                to any U.S. governmental agency

            

    

    
      	(e)  	
              a
                separate report shall be prepared for each country in which Products
                or
                Services are sold,

            

    

    
      	(f)  	
              amount
                of royalties due in U.S. Dollars for the preceding calendar quarter
                pursuant to the provisions hereof.

            

    

    

    6 
      Technical
      Assistance

    6.1 
      Honeywell
      agrees, upon the written request of Licensee, to assist Licensee in obtaining
      necessary approvals for technical assistance at Honeywell’s facilities under
      appropriate agreements. The cost of such technical assistance shall be paid
      by
      the Licensee.

    

    7 
      Patent
      Provisions

    7.1 
      Licensee
      shall place appropriate patent notices on Products which incorporate any
      invention covered by any licensed Proprietary Rights.

    7.2 
      In
      the
      event that Honeywell or the Licensee learns of infringement of potential
      commercial significance of any patent licensed under this Agreement, the
      knowledgeable party will provide the other ( i ) with written notice of such
      infringement and ( ii ) with any evidence of such infringement available to
      it
      (an “Infringement Notice”). During the period in which, and in the jurisdiction
      where, the Licensee has exclusive rights under this Agreement, neither Honeywell
      nor the Licensee will notify a third party (including the infringer) of
      infringement or put such third party on notice of the existence of any Patent
      Rights without first obtaining consent of the other. Honeywell shall have the
      right to terminate this Agreement immediately without the obligation to provide
      the 60 day’s notice as set forth in Paragraph 11.1 if the Licensee notifies a
      third party of infringement or puts such third party on notice of the existence
      of any Patent Rights with respect to such infringement without first obtaining
      the written consent of Honeywell. Both Honeywell and the Licensee will use
      diligent efforts to cooperate with each other to terminate such infringement
      without litigation.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    7.3 
      If
      infringing activity of potential commercial significance by the infringer has
      not been abated, or if the Licensee becomes aware of a third party that may
      commence potentially significant infringing activity, within ten (10) business
      days following the date of the Infringement Notice, the Licensee may institute
      suit for patent infringement, including seeking injunctive relief, against
      the
      infringer. Honeywell may voluntarily join such suit at its own expense, but
      may
      not thereafter commence suit against the infringer for the acts of infringement
      that are the subject of the licensee’s suit or any judgment rendered in that
      suit. The Licensee may not join Honeywell in a suit initiated by the Licensee
      without Honeywell’s prior written consent. If in a suit initiated by the
      Licensee, Honeywell is involuntarily joined other than by the Licensee, the
      Licensee will pay any costs incurred by Honeywell arising out of such suit,
      including but not limited to, any legal fees of counsel that Honeywell selects
      and retains to represent it in the suit. 

    7.4 
      If,
      within a hundred and twenty (120) days following the date the Infringement
      Notice takes effect, infringing activity of potential commercial significance
      by
      the infringer has not been abated and if the Licensee has not brought suit
      against the infringer, Honeywell may institute suit for patent infringement
      against the infringer. If Honeywell institutes such suit, the Licensee may
      not
      join such suit without Honeywell’s consent and may not thereafter commence suit
      against the infringer for the acts of infringement that are the subject of
      Honeywell’s suit or any judgment rendered in that suit.

    7.5 
      Any
      recovery or settlement received in connection with any suit will first be shared
      by Honeywell and the licensee to cover any litigation costs each incurred,
      and
      shall next be paid to Honeywell or Licensee to cover any additional litigation
      costs incurred in excess of the litigation costs of the other. In any suit
      initiated by the Licensee, regardless if Honeywell is a party to the suit or
      not, or in a suit initiated by Honeywell and which licensee voluntarily joins,
      Honeywell shall receive, in excess of any litigation costs as distributed above,
      fifteen percent (15%) of any recovery or settlement with the remainder
      distributed to the licensee. In any suit initiated by Honeywell, which Licensee
      refuses to voluntarily join, or is forced to join, Honeywell shall receive
      the
      entire recovery in excess of the litigation costs distributed as outlined
      above..

    7.6 
      Any
      agreement made by Licensee for purpose of settling litigation or other dispute
      shall comply with the requirements of Article 3 (Sublicenses) of this
      Agreement.

    7.7 
      Each
      party will cooperate with the other in litigation proceedings instituted
      hereunder but at the expense of the party who initiated the suit.

    7.8 
      Any
      litigation will be controlled by the party bringing the suit, except that
      Honeywell may be represented by counsel of its choice in any suit brought by
      the
      Licensee. 

    7.9 
      Licensee
      is aware that DOE concurrence may be required in certain situations including
      those involving litigation and/or changes to patent rights.

    

    8.0 Patent
      Prosecution and Maintenance

    
      
        8.1 
          Honeywell
          will prosecute U.S. patent applications and maintain U.S. patents licensed
          under
          this Agreement at Honeywell’s expense, unless otherwise agreed by the Parties.

      

    

    
      
        8.2 
          Licensee
          may request foreign rights in Licensed Patents, if such rights are available.
          Licensee must request rights in writing, and specify the countries in which
          it
          wants rights, within seven (7) months after the filing date of the U.S.
          applications. Failure to seek such rights will be considered an election
          not to
          seek foreign rights. Honeywell may file in any country in which Licensee
          has not
          elected to secure foreign rights, and licensee has no rights to any such
          foreign
          applications and resultant patents. 

      

    

    
      
        8.3 
          All
          costs
          of preparing, filing, prosecuting, and maintaining foreign patent applications
          and patents covering the Inventions listed in Exhibit A will be borne by
          Licensee. All such patents will be held in the name of Honeywell and obtained
          using counsel selected by Honeywell. The costs of any interference and
          oppositions for foreign patents will be considered prosecution expenses
          and also
          will be borne by Licensee. An advance fee (Fee) will be invoiced to the
          Licensee
          by Honeywell for any future foreign filing of Licensed Patents listed in
          Exhibit
          A. Honeywell is authorized to pay the incurred fees from the Fee. As evidence
          of
          expense incurred Honeywell will supply invoices for foreign filing requested
          by
          Licensee to the Licensee. Honeywell shall credit to Licensee any remaining
          balance of the Fee not used for foreign filing expenses incurred. The Fee
          is not
          an advance against any fees or royalties due Honeywell under this
          Agreement.

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

    

    
      
        8.4 
          The
          preparation, filing, and prosecution of foreign patent applications, as
          well as
          the maintenance of the resulting patents, shall be at the expense of the
          Licensee. Honeywell shall invoice Licensee for payment of costs for foreign
          patent application preparation, filing, prosecution, and maintenance. If
          such
          payment is not received within ninety (90) days, such foreign license rights
          shall be automatically excluded from this license agreement. Any over payments
          by Licensee for foreign patent filing and maintenance costs shall be credited
          towards Licensee’s future foreign patent cost or obligations.

      

    

    
      
        8.5 
          Licensee
          may terminate its license to foreign patent applications or patents, and
          its
          obligation to pay any further costs for those foreign rights, upon ninety
          (90)
          days written notice to Honeywell. Licensee is responsible for payment of
          all
          fees incurred by Honeywell for a period of ninety (90) days subsequent
          to
          receipt of such written notification to Honeywell. Honeywell or the U.S.
          Government may, at its sole discretion and expense, continue prosecution
          and/or
          maintenance of any patents or applications for which Licensee has relinquished
          rights. 

      

    

    

    9.0 Representations
      and Warranties

    9.1 
      Honeywell
      represents and warrants that Exhibit A contains a complete listing of all
      proprietary rights licensed pursuant to this Agreement and that Honeywell is
      the
      owner of the proprietary rights and has the right to grant the rights, licenses,
      and privileges granted herein.

    9.2 
      Honeywell
      represents and warrants that it has received no notice of any claim of
      infringement made to date against Honeywell for practicing the Proprietary
      Rights anywhere in the world. Honeywell makes no representation to Licensee
      regarding the scope or enforceability of the Proprietary Rights and does not
      warrant that any Products manufactured or sold or Services performed pursuant
      to
      this agreement will not infringe patents of others.

    9.3 
      Except
      as
      set forth above, Honeywell makes NO REPRESENTATIONS AND WARRANTIES, expressed
      or
      implied, with regard to the infringement of Proprietary Rights of any third
      party.

    9.4 
      Licensee
      is hereby put on notice that export of any goods or technical data from the
      United States may require some form of license from the U.S. Government. Failure
      to obtain necessary export licenses may result in criminal liability of Licensee
      under U.S. laws.

    

    10. Disclaimers

    10.1 Neither
      Honeywell, DOE, nor persons acting on their behalf will be responsible for
      any
      injury to or death of persons or other living things or damage to or destruction
      of property or any other loss, damage, or injury of any kind whatsoever
      resulting from Licensee’s manufacture, use or sale of materials, information, or
      Proprietary Rights hereunder.

    10.2 EXCEPT
      AS
      SET FORTH ABOVE, NEITHER Honeywell, DOE, NOR PERSONS ACTING ON THEIR BEHALF
      MAKE
      ANY WARRANTY, EXPRESS OR IMPLIED: (1) WITH RESPECT TO THE MERCHANTABILITY,
      ACCURACY, OR COMPLETENESS, OR USEFULNESS OF ANY SERVICES, MATERIALS, OR
      INFORMATION FURNISHED HERUNDER; (2) THAT THE USE OF ANY SUCH SERVICES,
      MATERIALS, OR INFORMATION MAY NOT INFRINGE PRIVATELY OWNED RIGHTS; (3) THAT
      THE
      SERVICES, MATERIALS, OR INFORMATION FURNISHED HEREUNDER WILL NOT RESULT IN
      INJURY OR DAMAGE WHEN USED FOR ANY PURPOSE; OR (4) THAT THE SERVICES, MATERIALS,
      OR INFORMATION FURNISHED HEREUNDER WILL ACCOMPLISH THE INTENDED RESULTS OR
      ARE
      SAFE FOR ANY PURPOSE, INCLUDING THE INTENDED OR PARTICULAR PURPOSE. FURTHERMORE,
      HONEYWELL, AND DOE HEREBY SPECIFICALLY DISCLAIM ANY AND ALL MANUFACTURED, USED,
      OR SOLD BY LICENSEE. NEITHER HONEYWELL, NOR THE DOE SHALL BE LIABLE FOR
      CONSEQUENTIAL OR INCIDENTAL DAMAGES IN ANY EVENT.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    10.3
      Except
      for patent infringement actions, Licensee agrees to indemnify Honeywell, the
      DOE, and persons acting in their behalf for all damages, costs, and expenses,
      including attorney’s fees, arising from, but not limited to, Licensee’s making,
      using, selling, or exporting of any Products or performed Services, in whatever
      form furnished. Licensee warrants that it has sufficient insurance to cover
      its
      indemnification and hold harmless liabilities under this provision including
      coverage that recognizes this contractual liability. Licensee cannot, without
      30
      days prior notification to Honeywell, as listed in section 12.1, materially
      alter or change its coverage respecting its liabilities under this section
      of
      the Agreement. Honeywell shall have the option within 30 days to terminate
      Licensee’s rights under this Agreement or seek an alternative mutually
      satisfactory to the parties. 

    10.4
      Honeywell
      shall provide Licensee with accurate technical information, but Honeywell does
      not make any warranty and shall have no liability with respect to the technical
      information, Proprietary Rights or the use thereof; nor does Honeywell assume
      any responsibility or make any warranty with respect to Products or services,
      manufactured, sold or used under or as a result of this agreement.

    

    11. Term
      of Agreement and Early Termination

    11.1
      This
      Agreement shall remain in force for the life of the patent(s) as listed in
      Exhibit A from the date hereof unless sooner terminated by an agreement by
      both
      parties or as provided herein, with such notice of termination being provided
      at
      least sixty (60) days prior to the effective date, provided that this Agreement
      shall not extend beyond the life of the patents licensed hereunder. 

    
      
        11.2
          If
          either
          party defaults for any reason in any of its obligations hereunder, the
          other
          party will have the right to terminate this Agreement by giving written
          notice
          of termination at least sixty (90) days prior to the effective date of
          such
          termination, such notice specifying the default; however, that such notice
          will
          be of no effect and termination will not occur if the specified default
          is
          remedied prior to said effective date of termination.

      

    

    
      
        11.3
          Honeywell
          may terminate this Agreement forthwith in the event of (i) the bankruptcy
          of
          Licensee; (ii) an assignment for the benefit of creditors of Licensee,
          (iii) the
          nationalization of the industry which encompasses any of the Products and/or
          Services, limited only within the nationalizing country; (iv) any suspension
          of
          payments hereunder by governmental regulation, (v) the Licensee’s failure to
          commercialize the licensed technology under this Agreement; (vi) or the
          existence of a state of war between the United States of America and any
          country
          where the Licensee has a License to manufacture Products and/or Services.
          In the
          event of a change of control (defined below) of the Licensee, whether resulting
          from a merger, acquisition, consolidation or otherwise, shall also result
          in the
          termination of this Agreement unless the acquiring person or entity agrees
          to
          the terms and conditions of this Agreement in writing. A “Change of Control”
shall mean:

      

    

    

    the
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) under the Exchange Act) of beneficial ownership (within
      the
      meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent
      (20%) or more of the combined voting power of the outstanding voting securities
      of the Company entitled to vote generally in the election of directors;
      provided, however, that the following acquisitions shall not constitute a
      Change-of-Control: (w) any original
      issuance by the voting securities entitled to vote generally in the election
      of
      directors of the Company (the “Voting
      Stock”)
      outstanding immediately prior to consummation of such acquisition continue
      to
      hold at least fifty percent (50%) of the Company’s Voting Stock after such
      acquisition,
      (y) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company, or (z) any acquisition by any corporation pursuant
      to
      a transaction which complies with clauses (w), (x) and (y) immediately
      preceding; or

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    individuals
      who, as of the date hereof, constitute the Board of Directors of the Company
      (the “Incumbent
      Board”)
      cease
      for any reason to constitute at least a majority of the Board of Directors
      of
      the Company unless they are replaced with a slate nominated by at least a
      majority of the Incumbent Board and further provided that any individual
      becoming a director subsequent to the date hereof whose election, or nomination
      for election by the Company’s stockholders, was approved by a vote of at least a
      majority of the directors then compromising the Incumbent Board shall, for
      purposes of this subparagraph (ii), be considered as though such individual
      were
      a member of the Incumbent Board, but excluding, for this purpose, any such
      individual whose initial assumption of office occurs as a result of an actual
      or
      threatened election contest with respect to the election or removal of directors
      or other actual or threatened solicitation of proxies or consents by or on
      behalf of an individual, entity or group other than the Board of Directors
      of
      the Company acting by at least a majority thereof; or

    

    consummation
      of a reorganization, merger or consolidation or sale or disposition of all
      or
      substantially all of the assets of the Company (a “Business
      Combination”),
      in
      each case, unless, following such transaction: (x) all or substantially all
      of
      the individuals and entities who were the beneficial owners, respectively,
      of
      the outstanding voting securities of the Company entitled to vote generally
      in
      the election of directors immediately prior to such Business Combination
      beneficially own, directly or indirectly, more than fifty percent (50%) of
      the
Voting
      Stock
      of the
      corporation resulting from such Business combination (including without
      limitation, a corporation which as a result of such transaction owns the Company
      or all or substantially all of the Company’s assets either directly or through
      one of the subsidiaries) in substantially the same proportions as their
      ownership, immediately prior to such Business Combination, of the outstanding
      Voting
      Stock,
      (y) no
      individual, entity or group beneficially owns, directly or indirectly, twenty
      percent (20%) or more of the Voting
      Stock
      of such
      corporation except to the extent that such ownership existed prior to the
      Business Combination, and (z) at least a majority of the members of the board
      of
      directors of the corporation resulting from such Business Combination were
      members of the Incumbent Board, at the same time of execution of the initial
      agreement, or by the action of the Board providing for such Business
      Combination; or approval by the stockholders of the Company of a complete
      liquidation or dissolution of the Company. Any termination pursuant to this
      Paragraph 11.3 shall be without prejudice to any rights or claims Honeywell
      may
      have against Licensee.

     

    
      
        11.4
          At
          least
          30 days prior to filing a petition in bankruptcy, either party must inform
          the
          other of its intention to file the petition or of another’s intention to file an
          involuntary petition in bankruptcy. Further, failure to conform to this
          requirement shall be deemed a material, pre-petition, incurable
          breach.

      

    

    
      
        11.5
          If
          this
          Agreement is for any reason terminated before all of the payments herein
          provided for have been made (including minimum royalties for the year in
          which
          the Agreement is terminated), Licensee shall immediately submit a terminal
          report and pay to Honeywell any remaining unpaid balance even though the
          due
          date as provided herein has not been reached.

      

    

    
      
        11.6
          This
          Agreement shall automatically terminate upon any attempt by Licensee to
          transfer
          its interest in whole or in part of this Agreement to any other party not
          expressly authorized in writing by Honeywell.

      

    

    

    12
      Rights
      of Parties After Termination

    
      
        12.1
          Neither
          party shall be relieved of any obligation or liability under this Agreement
          arising from any act or omission committed prior to the effective date
          of such
          termination which obligation or liability accrued as of the date of such
          termination.

      

    

    
      
        12.2
          From
          and
          after any termination of this Agreement, Licensee shall have the right
          to sell
          any Products that Licensee had already manufactured prior to termination,
          provided that all royalties and reports required above shall be submitted
          to
          Honeywell.

      

    

    
      
        12.3
          From
          and
          after any termination of this Agreement, Licensee shall not manufacture
          nor have
          manufactured any Products pursuant to this Agreement.

      

    

    
      
        12.4
          The
          rights and remedies grated herein, and any other rights or remedies which
          the
          parties may have, either at law or in equity, are cumulative and not exclusive
          of others. On any termination, Licensee shall duly account to Honeywell
          and
          transfer to it all rights to which Honeywell may be entitled under this
          Agreement under any valid U.S. Patent as set forth in Exhibit A. Licensee’s duty
          to pay outstanding royalties includes, but is not limited to royalty payments
          from Products or Services provided pursuant to paragraph 10.2 or
          10.3.

      

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    13.
      Force
      Majeure

    
      
        13.1
          No
          failure or omission by Honeywell or by Licensee in the performance of any
          obligation under this Agreement shall be deemed a breach of this Agreement
          or
          create any liability if the same shall arise from acts of God; acts or
          omissions
          of any government or agency thereof, compliance with rules, regulations,
          or
          orders of any governmental authority; fire; storm; flood; earthquake; accident;
          acts of the public enemy; war; rebellion; insurrection; riot; sabotage;
          invasion; quarantine; restriction; or failures or delays in
          transportation.

      

    

    

    14
      Notices

    14.1
      All
      notices and reports shall be addressed to the parties hereto as
      follows:

     

    

      
        	
                If
                  to Honeywell:

              	 
	
                Attn:
                  Licensing Manager 

              	
                Telephone:
                  (816) 997-2645

              
	
                Honeywell
                  Federal Manufacturing & Technologies, LLC

              	
                Facsimile:
                  (816) 997-4651

              
	
                2000
                  East 95th
                  Street

              	 
	
                Kansas
                  City, MO 64141-6159

              	 
	 	 
	
                If
                  to Licensee:

              	 
	
                Gary
                  DeLaurentiis, President

              	
                Telephone:
                  (209) 881-3523

              
	
                itec
                  Environmental Group

              	
                Facsimile:
                  (209) 881-3529

              
	
                PO
                  Box 760

              	 
	
                Riverbank,
                  CA 9536

              	 

      

       

    

    14.2
      All
      payments due Honeywell should be made payable to:

    Honeywell
      Federal Manufacturing & Technologies, LLC.

    P.
      O. Box
      412833

    Kansas
      City, Missouri 64141-2833

    In
      addition, all payments and remittances shall reference the number of the
      Honeywell Invoice for which payment is being made, as well as the Honeywell
      Technology Licensing reference account number = 06953602,
      and the
      Honeywell License number of this license as follows:
      00-1001R.....

    

    
      
        14.3
          All
          notices provided herein shall be in writing and shall be deemed to have
          been
          duly given when received, if delivered personally, sent by facsimile, or
          sent by
          First Class U.S. Mail, postage prepaid, to the party entitled thereto at
          its
          above address or at such other address as designated in writing by the
          party in
          accordance with the provisions of this section.

      

    

    

    15
      Non-Abatement
      of Royalties

    
      
        15.1
          Honeywell
          and Licensee acknowledge that certain of the proprietary Rights may expire
          prior
          to the conclusion of the term of this Agreement; however, Honeywell and
          Licensee
          agree that the royalty rates provided for above shall be uniform and
          undiminished, except pursuant to the Agreement.

      

    

    

    16.
      Waivers

    
      
        16.1
          The
          failure of one Party at any time to enforce any provision of this Agreement
          or
          to exercise any right or remedy shall not be construed to be a waiver of
          such
          provisions or of such rights or remedy or the right of one Party thereafter
          to
          enforce each and every provision, right, or remedy.

      

    

    

    17.
      Modifications

    
      
        17.1
          It
          is
          expressly understood and agreed by the parties hereto that this instrument
          contains the entire agreement between the parties with respect to the subject
          matter hereof and that all prior representations, warranties, or agreements
          relating hereto have been merged into this document and are thus suspended
          in
          totality by this Agreement. This Agreement may be amended or modified only
          by a
          written instrument signed by the duly authorized representative of both
          of the
          parties.

      

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    18.
      Headings

    
      
        18.1
          The
          headings for this section set forth in this Agreement are strictly for
          the
          convenience of the parties and shall not be used in any way to restrict
          the
          meaning or interpretation of the substantive language of this
          Agreement.

      

    

    

    19.
      Law

    
      
        19.1
          This
          Agreement shall be construed according to the laws of the state of Missouri
          and
          the United States of America.

      

    

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed, in duplicate, in their respective names by their duly authorized
      representatives.

    

    

    HONEYWELL
      FEDERAL MANUFACTURING & TECHNOLOGIES, LLC

    

    By:______________________________________________________

    

    Name:
      (printed) ____________________________________________

    

    Title:_____________________________________________________

    

    Date:_____________________________________________________

    

    

    

    LICENSEE:

    

    

    By:_________________________________________________________

    

    Name
      (printed) _______________________________________________

    

    Title:_______________________________________________________

    

    Date:_______________________________________________________

     

     

    
 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A, Amendment Four

    

    PROPRIETARY
      RIGHTS

    

    

    U.S.
      Patent Number 5,711,820, “Method to Separate and Recover Plastic from Plastic
      Contaminated with Oil”, awarded to Honeywell by the U.S. Patent and Trademark
      Office on January 27, 1998. 

    

    U.S.
      Patent Application 11/096,880 “Improved Method to Separate and Recover Plastic
      from Plastic Contaminated with Oil” filed with the Patent and Trademark Office,
      April 1, 2005

    

    PCT/US200
      Patent Application 6/08971 “Improved Method to Separate and Recover Oil and
      Plastic from Plastic Contaminated with Oil” filed with the Patent and Trademark
      Office, March 10, 2006

    

    U.S.
      Patent Application - Continuation 11/277,587 “Method for Removing Contaminants
      from Plastic Resin” filed with the Patent and Trademark Office, March 27,
      2006

    

    U.S.
      Patent Application - Continuation 11/421,271 “Improved Method to Separate and
      Recover Oil and Plastic from Plastic Contaminated with Oil” filed with the
      Patent and Trademark Office, May 31, 2006

    

    U.S.
      Patent Application - Continuation-in-Part 11/426,503 “Method for Removing
      Contaminants from Plastic Resin” filed with the Patent and Trademark Office,
      June 26,2006

    

    U.S.
      Patent Application - Continuation-in-Part 11,426,522 “System for Removing
      Contaminants from Plastic Resin” filed with the Patent and Trademark Office,
      June 26,2006

    

    U.S.
      Patent Application - Continuation-in-Part 11/426,530 “A Solvent Cleaning System
      for Removing Contaminants from a Solvent Used in Resin Recycling filed with
      the
      Patent and Trademark Office, June 26, 2006

    

    

    

    

    Initials:

    

    Honeywell:
      ___________

    

    Date:
      ______________________

    

    Licensee:
      ___________________

    

    Date:
      ______________________

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B, Amendment 

    

    LICENSE
      FEE, ROYALTIES AND MINIMUM COMMERCIAL USE 

    

    B1. License
      Fee

    In
      consideration of the rights and licenses granted herein, Licensee agrees to
      pay
      Honeywell fifty thousand ($50,000) U.S. Dollars, which shall neither be
      refundable nor creditable toward the royalty called for under section B.2 or
      B.3. These funds shall be disbursed in three payments, the first of which will
      be $16,666; the second of which will be $5,000, the third of which will be
      the
      balance of $28,334. The first payment shall be due upon signature of the
      contract. The next payment shall be due March 31, 2004, the final payment shall
      be due upon signature of Amendment Three. Payments on these dates are subject
      to
      the successful performance of activities required to meet the business plan
      milestones. A business plan review by Honeywell will be required if adjustments
      to this schedule are requested. Subsequent payment schedule adjustments will
      be
      based on the results of this review.

    

    B.2. Earned
      Royalties

    Licensee
      shall pay Honeywell a royalty rate of one half of one cent ($.005) per pound
      of
      recycled plastic chips sold in the United States, under the License granted
      under this Agreement. Royalty payments shall be due within thirty (30) days
      after the close of the previous quarter as instructed in Section
      12.2.

    

    In
      the
      event that Licensee grants sublicenses, Licensee will collect an earned royalty
      equal to or greater than the earned royalty paid by Licensee to Honeywell in
      the
      United States ($.005) per pound. Licensee shall pay Honeywell either fifty
      percent (50%) of earned royalties, but in no event more than ($.005) per pound
      on Gross Sales by any sublicense in accordance with Section 3 of this
      Agreement.

    

    B.3. Minimum
      Royalties

    Licensee
      shall pay to Honeywell royalties as stated in paragraph B.1, but in no event
      shall royalties be less than the minimum royalties of fifty thousand ($50,000)
      U.S. Dollars during the first calendar year; one hundred thousand ($100,000)
      U.S. Dollars during the second calendar year; two hundred thousand ($200,000)
      U.S. Dollars during the third calendar year; three hundred thousand ($300,000)
      U.S. Dollars during the fourth calendar year and every year thereafter for
      the
      life of the agreement. Licensee shall pay the difference between the amount
      of
      actual royalties paid and the minimum royalty within thirty (30) days after
      the
      first month of the calendar year. The first annual minimum payment will be
      due
      in the month of February 2007, and will be considered delinquent after March
      2,
      2007.

    

    

    NOTICE

    This
      Exhibit contains financial and commercial information that is BUSINESS
      CONFIDENTIAL and the parties hereby agree not to use or disclose this Exhibit
      to
      any third party without the advance written approval of the other party hereto,
      except to those necessary to enable the parties to perform under this Agreement
      or as may be required by the Honeywell contract with the DOE under the same
      restrictions as set forth herein. 

    

    

    Initials:

    

    Honeywell:
      ________

    

    Date:____________________

    

    Licensee:_________________

    

    Date:____________________

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C, Amendment Four

    

    DEVELOPMENT,
      COMMERCIALIZATION PLAN

    

    Honeywell’s
      patented technology licensed in this Agreement is being used to operate
      in the ECO2 System, cleaning equipment used for the separation of plastic
      contaminated with oil. The ECO2 System will be set up to operate in multiple
      recycling centers and will be used to clean recycle plastic. Revenues for the
      business will be generated from the sale of recycled chips.
      Licensee
      agrees to invest in the commercial development of technology and market for
      this
      product by committing Licensees resources, at a minimum, to the requirements
      set
      forth in the Commercialization Plan. This
      Plan represents the company’s revised business model dated 2004, which has been
      provided by the Licensee for consideration in this Agreement.

    

    Progress
      and substantiation of Licensee meeting these requirements shall be provided
      to
      Honeywell in the form of a written report received by U.S. Mail or in the form
      of a presentation at a meeting between the parties at the mutual convenience
      of
      said parties but no later than the first anniversary and each anniversary
      thereafter of the effective date thereof. 

    

    

    NOTICE

    This
      Exhibit contains financial and commercial information that is BUSINESS
      CONFIDENTIAL and the parties hereby agree not to use or disclose this Exhibit
      to
      any third party without the advance written approval of the other party hereto,
      except to those necessary to enable the parties to perform under this Agreement
      or as may be required by the Honeywell contract with the DOE under the same
      restrictions as set forth herein. 

    

    

    Initials:

    

    Honeywell:
      _____________

    

    Date:
      ________________________

    

    Licensee:
      _____________________

    

    Date:_________________________

    

    
      
         

      

      
        13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]