Document:

INTL EXHIBIT 10.30 09.30.2012

Exhibit 10.30

RETIREMENT AND CONSULTING AGREEMENT

THIS AGREEMENT is made as of October 1, 2012, by and between INTL FCStone Inc., a Delaware corporation, on behalf of itself and its affiliates (collectively the “Company”), and Paul G. Anderson (the “Executive”). 

WHEREAS, Executive and the Company have mutually agreed to Executive's retirement from employment as of October 1st, 2012 (hereinafter the “Retirement Date”) on the terms set forth herein; and
 
WHEREAS, the Company desires to retain Executive as a consultant for a period of time to perform certain consulting service to the Company in conjunction with matters with which he has had experience with the Company, and Executive desires to provide such consulting services to the Company;
 
NOW, THEREFORE, the Company and Executive enter into the following Agreement:
1.    Executive's Retirement. 
(a)    The Executive retired, and his employment with the Company terminated, effective as of the Retirement Date. Effective as of the Retirement Date, Executive shall be deemed to have resigned from the executive office of President of INTL FCStone Inc. and from all other positions that he held as an officer or employee of INTL FCStone Inc. or as director, officer or employee of any and all of its subsidiaries or affiliates. 
(b)    From the Retirement Date through the end of the one year term Consulting Period (hereinafter the “Consulting Period”), Executive shall serve as a consultant to the Company on the terms set forth in this Agreement. 
(c)    Following the Retirement Date, Executive may carry a business card that references his position of Vice-Chairman and Non-Executive Director, INTL FCStone Inc., for so long as that remains the case. 
2.    Retirement from Service. In connection with Executive's retirement on the Retirement Date and, with respect to any of the following compensation and benefits to which Executive is not currently entitled or that are not required by law, subject to Executive signing and letting become effective a general release of claims in the form attached hereto as Exhibit A (the “Release”) within the period of time specified therein: 

(a)    On the Retirement Date, the Company shall pay Executive his unpaid base salary through the Retirement Date plus any accrued and unused vacation pay and floating holidays. The Company shall reimburse Executive for his business expenses incurred prior to the Retirement Date in accordance with Company policies. In addition, the Company shall pay to Executive any bonus determined to be payable to him by the INTL FCStone Inc. Compensation Committee (“the Compensation Committee”) for the fiscal year ended September 30, 2012, at such time as any such bonus is normally paid.
(b)    On the Retirement Date, Executive's participation in any Company employee benefit plans or programs (including without limitation any matching contributions under the Company's 401(k) plan, life insurance premium programs and other medical programs and any car allowance or other personal benefits and perquisites) shall cease, except as otherwise expressly provided in this Agreement 

or in the applicable Company plan. For the avoidance of doubt, Executive shall not be eligible for severance benefits under any Company plan. Executive may elect, at his own expense, as other similarly situated retirees, to participate in the Company group health care benefit plan applicable to retirees, through Company's current health insurance carrier. In the event that the Company changes its health insurance carrier, it undertakes to use its best efforts to procure that any new health insurance carrier should provide health insurance coverage to the Company's retirees, at their own expense.
(c)    Any unvested restricted stock shall become fully vested on the Retirement Date. Executive currently holds 21,529 unvested restricted stock. 
(d)   Executive currently holds 171,752 options, all of which have vested. Such options shall expire on the third anniversary of the Retirement Date.
 (e)    Executive agrees to cooperate with the Company in connection with any litigation, whether pending as of the Retirement Date or future litigation on matters of which Executive has relevant knowledge, as reasonably requested by the Company. Following the Consulting Period, the Company will reimburse Executive for reasonable expenses incurred by him in connection with providing such assistance, within 30 days of the submission of the appropriate documentation to the Company. 
3.    Compensation During Consulting Period. Subject to Executive signing and letting become effective the Release within the period of time specified therein: 
(a)    During the Consulting Period, the Company shall pay Executive an annualized amount of $200,000 per year, payable in monthly installments of $16,666 on the last business day of the month without any withholdings or deductions. Payments will not be considered “wages” and will not be eligible for benefit consideration or tax withholding and will be reported on a Form 1099 at the end of the year.  All tax liability will be Employee's responsibility.  

(b)  In consideration for Executive's services as a consultant for the fiscal year ending September 30, 2013, Executive shall be entitle to receive an amount equal to such target bonus as may be determined by the Company's Compensation Committee, adjusted at the end of fiscal 2013 after taking account of such factors as may be prescribed by the Company's Compensation Committee. . Such bonus shall be subject to final approval by the Compensation Committee and may be paid up to three months after the expiration of the Consulting Period, payable all in cash and not restricted stock. If Executive terminates this Agreement pursuant to 4(d), such bonus amount as may have been awarded for the full 2013 fiscal year shall be pro-rated accordingly. If the Company terminates the Consulting Period pursuant to 4(d), the bonus shall be calculated as if the Consulting Period had ended on September 30, 2013.
(c)    Executive will continue to use his current office space in Kansas City, at the Company's expense, for consulting work to be done by Executive pursuant to this Agreement; and the Company shall provide Executive with secretarial support from an employee of the Company during the Consulting Period. The Company intends that such support shall be provided by Executive's current secretary for so long as she remains a Company's employee. 
(d)   During the Consulting Period, the Company shall pay or reimburse Executive for all reasonable out-of-pocket expenses incurred in connection with Executive's performance of the Consulting Services, upon presentation of written documentation thereof in accordance with Company expense reimbursement policies. 
(e)   During the Consulting Period, Executive shall continue to have access to the Company's airplanes, as appropriate and subject to the Company's policy in relation to use of the airplanes.

(f) Executive agrees to waive any fees or restricted stock award that would in the normal course be owing to him in his capacity as a non-executive director of INTL FCStone Inc. during the Consulting Period.
4.    Consulting Agreement. 
(a)    From the Retirement Date through the earlier of (i) September 30, 2013, (ii) Executive's termination of the Consulting Period (iii) the Company's termination of the Consulting Period or (iv) Executive's death or Disability, Executive will provide consulting and advisory services (the “Consulting Services”) from time to time as may be reasonably requested by the Company's Chief Executive Officer (the “CEO”). Such services may consist of any matters of concern to the CEO, provided that the Company will take into consideration Executive's other business and personal commitments that may arise during the Consulting Period. Such matters are expected to include, without limitation, 
		
	•
	Spending half the business days of each month working for the Company in a sales and promotion capacity, as requested by the CEO. This will not necessarily require Executive to be in the Company's offices when not traveling.

		
	•
	Representing the Company at events such as the Outlook conferences in Chicago, Las Vegas, London, Miami (et al) and promoting the Company to customers in attendance.

		
	•
	Visiting offices during the course of the year to promote the Company to customers, liaising with staff as to strategy and requirements, and reporting to the CEO as necessary. 

•Hosting the Company's customer golf outings in August 2013.
•Working on special projects as designated by the CEO. 

 Executive will perform the Consulting Services in a commercially reasonable manner. 
(b)    The parties understand and agree that all of the Consulting Services will be performed by Executive as an independent contractor and not as an employee of the Company.  Executive will not have any authority to act as an agent or representative of the Company, and will not have any authority to bind the Company or any of its subsidiaries in any matter.  Executive's duties pursuant to this Section are purely those of a consultant, and the Company is free to accept or reject his advice, as it deems appropriate.  The Company is responsible for all actions it chooses to take based on Executive's advice, and the Company agrees to indemnify and hold  Executive harmless for the results of those actions, including all losses and damages resulting from any legal or regulatory action. During the Consulting Period, Executive shall not be an employee of the Company and shall not be entitled to receive any perquisites or fringe benefits from the Company except as expressly provided otherwise in this Agreement. 
 (c)   During the Consulting Period, Executive agrees not to work for any client or competitor of the Company. Notwithstanding, Executive may engage in other consultancy work on a part-time, non-exclusive basis, with prior approval of the Company, which shall not be unreasonably withheld. For the avoidance of doubt, any breach of this clause (c) shall constitute a material breach of this Agreement. 
(d)    Executive may terminate this Agreement at any time with thirty (30) days' notice to the Company. The Company may terminate the Consulting Period at any time with thirty days' notice to Executive, in which event the Company shall pay to Executive all amounts due under 3(a) by the thirtieth day following such notice. 

5.    Covenants by Executive. 
 (a)    During the Consulting Period, Executive agrees to continue to be bound by the Company's Code of Ethics as currently in effect. In the event of any conflict or inconsistency between the terms of this Agreement and the terms of the Company's Code of Ethics, the terms of this Agreement shall control.
(b)    In consideration of eligibility for bonus under 3(b) above, Executive agrees not to compete with the Company during the term of the agreement and for a period of one year after termination of the agreement.

(c)    During the Consulting Period, Executive agrees not to solicit any client of the Company for his own benefit; and, for a period of one year after termination of this Agreement, nor to solicit any person that was a client of the Company at any time during the twelve months prior to termination.

(d)    During the Consulting Period Executive agrees not to solicit the services of any employee of the Company for the benefit of any person other than the Company; and, for a period of one year after termination of the Agreement, not to solicit the services of any person that was an employee of the Company at any time during the six months prior to termination.
(e)    Executive agrees not to disclose any Confidential Information gained during or as a result of his employment by or service to the Company. “Confidential Information” means any information that is, or should reasonably be understood to be, confidential or proprietary to the Company, including, but not limited to all information, whether in written, oral, electronic, magnetic, photographic or any other form, that relates to the Company's: past, present and future businesses, products, product specifications, designs, drawings, concepts, samples, intellectual property, inventions, know-how, sources, costs, pricing, technologies, customers, vendors, other business relationships, business ideas and methods, distribution methods, inventories, manufacturing processes, computer programs and systems, employees, employee salary information, hiring practices, operations, marketing strategies and other technical, business and financial information. Confidential Information also includes the identity, capabilities and capacity of vendors and of former vendors or others that were considered but rejected. Notwithstanding the foregoing, Confidential Information shall not include information that: (i) has entered the public domain without Executive's breach of any obligation owed to the Company or (ii) is rightfully received by Executive from a third party without confidentiality restrictions. 
(f)    During the Consulting Period, Executive agrees to refrain from making any disparaging or negative statements or comments about the Company and its employees, officers, and directors, including, without limitation, the business, products, intellectual property, financial standing, or employment/compensation/benefit practices of the Company, and the Company agrees to refrain from making any disparaging or negative statements or comments about Executive; provided that the foregoing shall not be construed to prevent either party from testifying truthfully before any court, tribunal or other legal proceeding. 
(g)    Executive agrees, upon one or more requests from the Company, and in any event upon termination of this Agreement, to deliver to it all documents and materials, of whatever nature, relating to the Company, its products and/or its services, including reports, files, memoranda, records, software, credit cards, door and file keys, computers, computer access codes, disks and instructional manuals and other physical or personal property which Executive received, prepared or helped prepare in connection with Executive's employment with the Company. Executive further agrees that he will not keep any copies or excerpts of any of the above items, other than personal items of continuing utility to Executive. 

(h)    Notwithstanding any other provision of this Agreement, in the event of a breach or threatened breach by Executive of any provision of this Section, Executive and the Company agree that the Company shall be entitled to injunctive and declaratory relief from a court of competent jurisdiction to restrain Executive from committing such breach of this Agreement. 

6.    Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs (in the case of Executive) and permitted assigns. This Agreement is personal to Executive and neither this Agreement nor any rights hereunder may be assigned by Executive. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or pursuant to a sale of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law. 
7.    Arbitration.  Any dispute or controversy based on, arising under or relating to this Agreement shall be settled exclusively by final and binding arbitration, conducted before a single neutral arbitrator in Kansas City, Missouri, in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association (the “AAA”) then in effect. Arbitration may be compelled, and judgment may be entered on the arbitration award in any court having jurisdiction. Notwithstanding the foregoing, the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any violation of or continuation of any violation of the restrictive covenants, and you hereby consent that such restraining order or injunction may be granted without requiring the Company to post a bond. Only individuals who are (a) lawyers engaged full-time in the practice of law and (b) on the AAA roster of arbitrators shall be selected as an arbitrator. Within 20 days following the conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law. Each party shall bear its own costs and attorneys' fees in connection with an arbitration, and the costs of the arbitrator and the AAA's administrative fees shall be split evenly between the parties.
8.   Notice. Any notice to either party hereunder shall be in writing, and shall be deemed to be sufficiently given to or served on such party, for all purposes, if the same shall be personally delivered to such party, or sent to such party by registered mail, postage prepaid, at, in the case of the Company, 708 Third Avenue, Suite 1500, New York, NY 10017 and, in the case of Executive, his principal residential address as shown in the records of the Company. Notices to the Company shall be addressed to the Chief Executive Officer, INTL FCStone Inc. Either party hereto may change the address to which notices are to be sent to such party hereunder by written notice of such new address given to the other party hereto. Notices shall be deemed given when received if delivered personally or three days after mailing if mailed as aforesaid. 
9. Section 409A. The payments to be made pursuant to this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Internal Revenue Code, as amended (the “Code”), and the Department of Treasury Regulations thereunder (“Section 409A”), and the provisions of this Agreement shall be administered, interpreted and construed in accordance with and to implement such intent.
10.   Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Missouri applicable to contracts to be performed therein. 
11.   Miscellaneous. 

(a)    Executive acknowledges that he has received, or had the opportunity to receive, independent legal advice from legal counsel of his choice prior to executing this Agreement and that he has not relied on any representations or statements made by the Company that are not specifically set forth in this Agreement. 
(b)    This Agreement represents the entire understanding of the parties hereto with respect to the matters set forth herein and supersedes any prior understandings or agreements between the parties with respect thereto. The terms and provisions of this Agreement may not be modified or amended except in a writing signed by both parties. If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
(c)    No waiver by either party of any breach by the other party of any condition or provision contained in this Agreement to be fulfilled or performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Except to the extent otherwise specifically provided herein, any waiver must be in writing and signed by Executive or, on behalf of the Company, by the Company's CEO. 
(d)    Nothing in this Agreement shall be construed as prohibiting the Company from, pursuing any other, remedy or remedies not specified herein, including, without limitation, the recovery of damages. 

 IN WITNESS WHEREOF, the undersigned parties have caused this Amendment to be executed as of the date first set forth above. 
 
	
				
	 
	 
	 
	INTL FCSTONE INC.

	 
	 
	 
	 

	 
	 
	By:
	/s/ Brian Sephton

	 
	 
	Name:
	Brian Sephton

	 
	 
	Title:
	Chief Legal and Governance Officer

	 
	 
	 
	 

	 
	 
	 
	EXECUTIVE

	 
	 
	 
	/s/ Paul G. Anderson

	 
	 
	 
	Paul G. Anderson

EXHIBIT A
Mutual Release of Claims
This Mutual Release of Claims (this “Release”) is entered into in connection with the Retirement and Consulting Agreement dated October 1, 2012 (the “Agreement”) between Paul G. Anderson (“Executive”) and INTL FCStone Inc. (the “Company”). 
1.        Except for claims arising out of the promises contained in the Agreement, any and all Claims (as defined below), which Executive may have against INTL (as defined below) and which INTL may have against Executive arising out of Executive's employment with INTL or the termination of that employment, are fully and completely settled, and all liability or potential liability arising out of any such Claim is hereby released. “Claims,” as used in this Release, shall include but not be limited to those based upon or arising out of any alleged violation of Executive's civil rights, wrongful discharge, breach of contract, tort, common law, statutory and constitutional claims, or any state, local or federal statute (including, but not limited to, the Americans with Disabilities Act; Title VII of the Civil Rights Act of 1964, as amended; the Fair Labor Standards Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act; the Sarbanes-Oxley Act of 2002; the Family and Medical Leave Act, except as prohibited by law) and any other law prohibiting race, sex, sexual orientation, age, national origin, religion, disability, or discrimination or harassment. “INTL” as used in this Release, shall include, in addition to the Company, any predecessor, successor, parent, subsidiary or affiliate of INTL FCStone Inc. or any officer, director, employee, shareholder or affiliate of it, including any attorneys, advisors, or authorized agents thereof. 
2.        Each party acknowledges that it is its intention to fully and finally resolve and release the other party for any and all Claims, known or unknown, which may exist against the other party and recognizes that it may later discover facts in addition to or different from those which it now knows or believes to be true. In furtherance of this intention, each of Executive and the Company agrees to waive and relinquish any and all rights and benefits afforded by law. Notwithstanding the foregoing, INTL does not release Executive from any unknown Claims relating to any intentional misconduct constituting fraud, misappropriation of trade secrets, embezzlement or other intentionally unlawful conduct. 
3.        In addition to the release set forth above, Executive voluntarily and knowingly waives all rights or claims arising under the Federal Age Discrimination in Employment Act (the “ADEA”). This waiver is given only in exchange for consideration set forth in the Agreement that is in addition to anything of value to which Executive is entitled. This waiver does not waive rights or claims that may arise under the ADEA after the date of execution of this Release. Executive acknowledges that: 
(a) this Release is written in a manner calculated to be understood by Executive, 
(b) Executive has been hereby advised in writing to consult with an attorney before executing this Release, 
(c) Executive is being given a period of 21 days within which to consider this Release, and 
(d) to the extent Executive executes this Release before the expiration of the 21-day period, Executive does so knowingly and voluntarily. 
Executive will have the right to cancel and revoke this Release during a period of 7 days following his execution of it. In order to cancel and revoke this Release, Executive must deliver to INTL, prior to the expiration of the 7-day period, a written notice of cancellation and revocation. Notwithstanding anything to 

the contrary in this Release, any rights to indemnification for third-party claims to which Executive is entitled in his capacity as an officer or director of INTL shall be unaffected by this Release. 
4.        Executive understands and agrees that to the fullest extent permitted by law, Executive is precluded from filing or pursuing any legal claim of any kind against INTL at any time in the future, in any federal, state or municipal court, administrative agency or other tribunal, arising out of any of the claims that Executive has waived by virtue of executing this Release. Executive agrees not to file or pursue any such legal claims. 

	
				
	 
	 
	 
	INTL FCSTONE INC.

	 
	 
	 
	 

	 
	 
	By:
	/s/ Brian Sephton

	 
	 
	Name:
	Brian Sephton

	 
	 
	Title:
	Chief Legal and Governance Officer

	 
	 
	 
	 

	 
	 
	 
	EXECUTIVE

	 
	 
	 
	/s/ Paul G. Anderson

	 
	 
	 
	Paul G. Andersonexh10-1.htm

Exhibit 10.1

INTELLECTUAL PROPERTY LICENSE AGREEMENT

THIS LICENSE AGREEMENT (the “Agreement”), made and entered into as of the 10th day of December, 2012, by and between HDS International Corporation, a corporation organized under the laws of the State of Nevada, USA (“HDS International”),  HDS Energy and Ecosystems NB, Ltd., a business incorporated under the laws of New Brunswick, Canada ("LICENSEE"), and Hillwinds Energy Development Corporation, a corporation organized under the laws of the State of Connecticut, USA ("LICENSOR") (each of HDS INTERNATIONAL, LICENSOR, and LICENSEE a "Party," and collectively, the "Parties").

RECITALS

WHEREAS, LICENSOR is the owner of certain "Intellectual Property” as defined in Section 1 below, relating to the “Primary Fields”;

WHEREAS, LICENSOR desires to grant licenses under said Intellectual Property;

WHEREAS, HDS INTERNATIONAL currently licenses certain intellectual property from LICENSOR pursuant to two separate license agreements between HDS INTERNATIONAL and LICENSOR, the first dated August 15, 2011 and the second dated September 2, 2011 (together, the “Back Bay Licenses”).

WHEREAS, HDS INTERNATIONAL is the parent company of LICENSEE, and LICENSEE is a wholly-owned subsidiary of HDS INTERNATIONAL;

WHEREAS, LICENSEE desires to have the Intellectual Property developed and utilized in the public interest;

WHEREAS, as a result of recent events and negotiations between the Parties, HDS INTERNATIONAL wishes to cancel the Back Bay Licenses and LICENSEE desires to acquire an exclusive license under the Intellectual Property from LICENSOR upon the terms and conditions hereinafter set forth; and

WHEREAS, LICENSOR has the power and authority to grant to LICENSEE such license.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein the Parties agree as follows:

1.            DEFINITIONS

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

	
1.1            

	
"Effective Date" shall mean the date first written above.

 

 

	
1.2           

	
"Primary Fields" shall mean the methods and areas of technology involving the methods and areas of technology involving design, development, commercialization, manufacture and sale of processes and systems relating to, among other things, industrial algae biomass production; hydroponics production;  the capture and removal of carbon dioxide from waste gases and other sources; the fixation of carbon dioxide in biological systems through photosynthetic organisms and otherwise; the production of micro and macro algae, and other photosynthetic crops, for commercial purposes, in lab-based, open-pond, and ocean-based settings; the harvesting of algae; the processing of algae and separation into various components, for the ultimate production of biofuels, biomass and related co-products; and the production of such end products; and the reutilization of carbon dioxide from emissions using certain genetically modified algae as an active agent in a biological reactor, to reduce carbon dioxide emissions and produce methane that can be used for energy production.

	
1.3            

	
"Intellectual Property" shall mean and include:

 

  

  

  

	
(a)          

	
any United States and foreign patents and patent applications (together, the “Patents”) as further described  in Appendix A, any patents issued from such applications, and any divisional, continuation, continuation-in-part, reissue, re-examination, substitute and/or extension of the Patents as they arise; and

	
(b)          

	
any copyrights, copyright applications, trademarks, trademark applications, Know-how, trade secrets, data and other information relating to the Primary Fields owned by LICENSOR as of the date first written above.

	 	
1.4  

	
A "Licensed Product" shall mean any material, composition, product, service or part thereof which (i) is covered in whole or in part by an issued, unexpired or pending claim contained in the Intellectual Property, (ii) is manufactured by using a process which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Intellectual Property, or (iii) is otherwise derived from the Intellectual Property.

	
1.5           

	
A "Licensed Process" shall mean any process or method which (i) is covered in whole or in part by an issued, unexpired or pending claim contained in the Intellectual Property, or (ii) is otherwise derived from the Intellectual Property.

	
1.6           

	
"Net Sales" shall mean LICENSEE's (and its sublicensees') billings for Licensed Products and Licensed Processes during a particular accounting period less the sum of (a) discounts allowed in amounts customary in the trade, (ii) sales taxes, tariff duties, and/or use taxes which are directly imposed and are with reference to particular sales, (iii) outbound transportation prepaid or allowed; and (iv) amounts allowed or credited on returns.

In the event that a Licensed Product is sold in combination with another product and/or service ("Combination Product"), Net Sales, for purposes of royalty payments on the Combination Product, shall be calculated by multiplying the Net Sales on sale of that combination by the fraction A/B, where A is the gross selling price of the Licensed Product sold separately and B is the gross selling price of the Combination Product. In the event that no such separate sales are made by the Company, Net Sales for royalty determination shall be calculated by multiplying Net Sales of the combination by the fraction C/(C+D) where C is the fully allocated cost of the Licensed Product and D is the fully allocated cost of other components, such standard costs being determined using LICENSEE’s standard accounting procedures.

	
1.7           

	
"Know-how" shall mean the ideas, methods, characterization and techniques developed by the LICENSOR before the Effective Date, which are necessary for practicing the Intellectual Property.

	
1.8           

	
“Non-Royalty Sublicense Income” shall mean sublicense issue fees, sublicense maintenance fees, sublicense milestone payments, and similar non-royalty payments made by sublicensees to LICENSEE on account of sublicenses pursuant to this Agreement.

	
1.9            

	
"Licensed Territory" shall mean the Province of New Brunswick, Canada.

2.            LICENSE

2.1           Terminating, Superseding and Replacing Back Bay Licenses. This Agreement shall terminate, replace and supersede in entirety the Back Bay Licenses.

2.2           Grant.  LICENSOR hereby grants to LICENSEE, subject to the terms and conditions set forth in this Agreement, an exclusive and perpetual license in the Licensed Territory to use the Intellectual Property to develop, make, use, market and sell Licensed Products and to practice Licensed Processes.  In order to establish such exclusivity, LICENSOR shall not grant to third parties a further license under the Intellectual Property within the Licensed Territory during the term of this Agreement.

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2.3           Improvements.  All modifications, design changes, updates, or similar revisions in scope which relate to the Intellectual Property or any derivative of the Intellectual Property ("Improvements") made by LICENSEE shall be promptly disclosed to LICENSOR.  All Improvements made by LICENSEE shall become the property of LICENSOR and shall be deemed to be included in the license granted to LICENSEE by this Agreement.  LICENSEE agrees to provide reasonable cooperation in connection with perfection of rights in such Improvements, and to execute any and all documents necessary to perfect LICENSOR’s rights therein.

2.4           Sublicense.  The rights and obligations licensed to LICENSEE herein are personal in nature and directed solely to LICENSEE.  LICENSEE shall not enter into sublicensing agreements for the rights, privileges and licenses granted hereunder without the prior written consent of LICENSOR and upon terms and conditions agreed to by LICENSOR.  Upon such approval, all such sublicense agreements shall, among other things, provide that the obligations to LICENSOR of this Agreement shall be binding upon the sublicensee as if it were a party to this Agreement.

2.5           Other Territories.  LICENSEE may submit proposals to LICENSOR to use the Intellectual Property or establish operations to develop and make Licensed Products and to practice Licensed Processes outside of the Licensed Territory (but not within a territory licensed by LICENSOR to a third party under a separate agreement).  LICENSOR may authorize or reject LICENSEE’s proposal(s) at LICENSOR’s sole discretion.  LICENSEE shall have reasonable access to territory information regarding LICENSOR's license agreements with third parties and LICENSOR shall make commercially reasonable efforts to notify LICENSEE of licensing agreements reached with third parties within thirty (30) days of reaching such agreements.  Notwithstanding the foregoing, LICENSEE shall be permitted to, subject to the confidentiality requirements hereto, apply for or obtain grant funding in any jurisdiction, provided that such grant funds are applied within the Licensed Territory.

2.6           Ownership.  The Parties acknowledge and agree that the Intellectual Property shall remain the sole property of LICENSOR throughout the term of this Agreement and after any termination or cancellation of this Agreement.

2.7           Costs.  LICENSEE shall be solely responsible for the manufacture, production, marketing, sale and distribution of the Licensed Products and the practice of Licensed Processes, and shall be solely responsible for any and all costs associated therewith.

3.            REQUIREMENTS

3.1           Best Efforts.  LICENSEE shall use its best efforts to apply and practice Licensed Processes and to bring one or more Licensed Products to market through a thorough, vigorous, and diligent program for exploitation of the Intellectual Property to attain maximum commercialization of Licensed Products and Licensed Processes and shall thereafter continue such efforts throughout the life of this Agreement.

3.2           Milestones.  LICENSEE shall adhere to the following milestones:

	
(a)            

	
Progress Report.  LICENSEE shall deliver to LICENSOR an annual progress report as to (i) LICENSEE's (and any sublicensee's) efforts and accomplishments during the preceding year in diligently commercializing the Licensed Products and Licensed Processes in the Licensed Territory, and (ii) LICENSEE's (and any sublicensee's) commercialization plans for the upcoming year.

The annual report shall be due on or before each anniversary of the Effective Date.  The report shall summarize in writing the progress for the activities described above.  Licensee shall allow 1-3 paragraphs for each of the following:

1)            Efforts.  Activities currently under investigation, i.e., ongoing activities including objectives and parameters of such activities, when initiated, and projected date of completion.

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2)            Accomplishments.  Activities completed since last report including the objectives and parameters of the development, when initiated, when completed and the results.

3)            Commercialization plans.  Activities to be undertaken before the next annual report including, but not limited to, the type and objective of any necessary efforts and their projected starting and completion dates.

4)            Commercialization timeline. Estimated total time remaining before Licensed Products and Licensed Processes will be commercialized.

5)            Changes to plan. Describe any changes to the initial commercialization plan with reasons for the change.

	
(b)            

	
LICENSOR reserves the right to audit LICENSEE's records relating to the development of Licensed Products and Licensed Processes as required hereunder subject to the procedures and restrictions set forth for audit of the financial records of LICENSEE in Section 5.

3.3           General Performance Requirement.  If LICENSEE fails to perform in accordance with Paragraphs 3.1 and 3.2 above, then LICENSOR shall have the right and option to either (a) terminate this Agreement pursuant to Paragraph 11.3 hereof or (b) change LICENSEE’s exclusive license to a nonexclusive license.  This right if exercised by LICENSOR shall supersede the rights granted in Paragraph 2.2.

3.4           Performance Requirements within Licensed Territory.  Beginning ten (10) years from the Effective Date of this Agreement, LICENSOR shall have the right at any time and from time to time, to terminate or limit the scope of the exclusive license granted herein with respect to any field of use or any national political jurisdiction in which LICENSEE fails to use its best efforts to commercialize the Intellectual Property.  In order to limit the scope of the license pursuant to this Paragraph 3.4, LICENSOR shall provide LICENSEE with ninety (90) days' prior written notice specifying the field of use or geographic area in which it intends to terminate or limit the scope of the license of the Intellectual Property, and the license shall be terminated or limited in scope as specified in such notice unless LICENSEE provides  reasonable evidence satisfactory to LICENSOR, within the said ninety-day period, that LICENSEE is exercising its best efforts to commercialize the Intellectual Property in the identified field of use or national political jurisdiction.  As used herein, (i) "commercialize" means having Net Sales of Licensed Products or Licensed Processes in such jurisdiction; and (ii) "efforts to commercialize" means having Net Sales of Licensed Products or Licensed Processes or an effective, ongoing and active research, development, manufacturing, marketing or sales program as appropriate, directed toward obtaining regulatory approval, production or Net Sales of Licensed Products or Licensed Processes in any jurisdiction, and plans acceptable to LICENSOR, in its sole discretion, to commercialize licensed inventions in the jurisdiction(s) that LICENSOR intends to terminate or limit in scope.

4.            ROYALTIES AND FEES

4.1           License Maintenance Fee.  There shall be no License Maintenance Fee.

4.2           Running Royalty.  This Agreement has no running royalty rate and LICENSEE is not obligated to pay any royalty on Net Sales of Licensed Products, Licensed Processes or for Non-Royalty Sublicense Income.

4.3           Patent Costs.

	
(a)            

	
Reimbursement.  LICENSEE shall reimburse LICENSOR for all future (on or after the Effective Date) costs, fees and expenses incurred in connection with the filing, prosecution and maintenance of the Intellectual Property.  Such reimbursement shall be made within thirty (30) days of receipt of an itemized invoice from LICENSOR and shall bear interest, if overdue, at the rate specified in Paragraph 5.5.

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(b)            

	
Restriction of Rights for Non-payment.  If LICENSEE elects not to support the expense of filing or prosecution of any patent application or to maintain any patent for any reason, it shall promptly notify LICENSOR of its decision and LICENSOR shall thereafter have the sole and exclusive right to undertake such filing, prosecution or maintenance at its own expense, and LICENSOR shall have the right to dispose of such patent applications or patents as it chooses and without further obligation to LICENSEE with respect to such patent applications or patents, and such patent applications or patents shall be removed from the scope of this Agreement.

4.4           So long as LICENSEE has not undertaken the manufacture or production of any proprietary chemical compounds utilized in conjunction with the Intellectual Property, which LICENSOR shall first approve and consent to at its sole discretion, based on criteria determined in the sole discretion of LICENSOR, LICENSEE shall utilize LICENSOR as its exclusive supplier for such proprietary chemical compounds.

4.5           Payments shall be paid in United States dollars at LICENSOR or at such other place as LICENSOR may reasonably designate consistent with the laws and regulations controlling in any foreign country.  If any currency conversion shall be required in connection with the payment of fees hereunder, such conversion shall be made in using the exchange rate published in The Wall Street Journal on the last business day of the calendar month in which payment falls due (or the closest business day prior thereto on which such rate is published).

4.6           All payments due hereunder shall be paid in full without deduction of taxes or other fees, except those listed in Paragraph 1.6 above, which may be imposed by any government or governmental authority and all such governmental taxes and fees shall be paid by LICENSEE or sublicensees if any.

5.            REPORTS AND RECORDS

5.1           Records.  LICENSEE shall keep full, true, and accurate books of accounting containing all particulars that may be necessary for the purpose of showing the amounts payable to LICENSOR hereunder.  Said books of account shall be kept at LICENSEE's principal place of business or the principal place of business of the appropriate division of LICENSEE.  Said books and the supporting data shall be open at all reasonable times for five years following the end of the calendar year to which they pertain for the inspection of LICENSOR or its agents for the purpose of compliance in any respects with this Agreement.  Should such inspection lead to the discovery of a ten percent (10%) or greater discrepancy in reporting, then LICENSEE shall pay the full cost of such inspection.

5.2           Quarterly Reports.  After the first commercial sale of a Licensed Product, LICENSEE, within forty-five (45) days after March 31, June 30, September 30 and December 31, of each year, shall deliver to LICENSOR true and accurate reports, giving such particulars of the business conducted by LICENSEE and its sublicensees during the preceding three-month period under this Agreement.  These reports shall include at least the following:

	 	
(a)

	
number of Licensed Products manufactured and sold;

 

	 	
(b)

	
total billings for Licensed Products sold;

 

	 	
(c)

	
total billings for Licensed Processes practiced;

	 	
(d)

	
sublicense income and details;

	 	
(e)

	
deductions applicable as provided in Paragraph 1.6;

	 	
(f)

	
names and addresses of all sublicensees of LICENSEE.

5.4           Financial Statements.  At LICENSOR’s request, on or before the sixtieth day following the close of LICENSEE's fiscal year, LICENSEE shall provide LICENSOR with a statement for the preceding fiscal year stating, at a minimum, the correctness of the reported billings of Licensed Products and Licensed Processes, and

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total fees paid to LICENSOR.  Such statement shall be certified as correct by an officer of LICENSEE or by an independent auditor.

5.5           Interest Penalty.  The license fees and reimbursements for patent-related expenses set forth in this Agreement shall, if overdue, bear interest until payment in full at the monthly rate of one percent (1%) above the prime rate in effect at the Chase Manhattan Bank (N.A.) on the date that any royalty payment, license fee, or other reimbursement is due.  The payment of such interest shall not foreclose LICENSOR from exercising any other rights it may have as a consequence of the lateness of any payment.

6.            PATENT PROSECUTION

6.1           Provided that LICENSEE has reimbursed LICENSOR for Patent Costs pursuant to Section 4, LICENSOR shall diligently prosecute and maintain the United States and, if available, foreign patents, and applications in the Intellectual Property using counsel of its choice. Such counsel shall take instructions only from LICENSOR, and all patents and patent applications in the Intellectual Property shall be assigned solely to LICENSOR.

7.            INFRINGEMENT

7.1           LICENSEE shall inform LICENSOR promptly in writing of any alleged infringement of the Intellectual Property by a third party and of any available evidence thereof.

7.2           During the term of this Agreement, LICENSOR shall have the right, but shall not be obligated, to prosecute at its own expense any such infringements of the Intellectual Property.  If LICENSOR prosecutes any such infringement, LICENSEE agrees that LICENSOR may include LICENSEE as a co-plaintiff in any such suit, without expense to LICENSEE.  The total cost of any such infringement action commenced or defended solely by LICENSOR shall be borne by LICENSOR, but LICENSOR shall keep any recovery or damages for past infringement derived from said suit, whether resulting from a judgment, settlement, or otherwise, as reimbursement for any and all expenses, costs, and efforts expended by LICENSOR in pursuit of the claim.  The remainder, if any, shall then be divided between LICENSOR and LICENSEE in an equitable manner to allow LICENSEE to receive a portion of the income it would have received but for the infringement.

7.3           If within six (6) months after having been notified of any alleged infringement or such shorter time prescribed by law, LICENSOR shall have been unsuccessful in persuading the alleged infringer to desist and shall not have brought and shall not be diligently prosecuting an infringement action, or if LICENSOR shall notify LICENSEE at any time prior thereto of its intention not to bring suit against any alleged infringer, then, and in those events only, LICENSEE shall have the right, but shall not be obligated, to prosecute at its own expense any infringement of the Intellectual Property, and LICENSEE may, for such purposes, use the name of LICENSOR as party plaintiff; provided however that such right to bring an infringement action shall remain in effect only for so long as the license granted herein remains exclusive.  No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the consent of LICENSOR, which consent shall not be unreasonably withheld.  LICENSEE shall indemnify LICENSOR from and against all costs, expenses, judgments, or other adverse results that arise during or that result from such proceedings or the actions associated therewith.

7.4           In the event that a declaratory judgment action alleging invalidity or infringement of any of the Intellectual Property shall be brought against LICENSEE, LICENSOR, at its option, shall have the right, within thirty (30) days after notice of the commencement of such action, to intervene and take over the sole defense of the action at its own expense.

7.5           In any infringement suit as either Party may institute to enforce the Intellectual Property pursuant to this Agreement, the other Party hereto shall, at the request and expense of the Party initiating such suit, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

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8.            INDEMNIFICATION

8.1           LICENSEE shall at all times during the term of this Agreement and thereafter, indemnify, defend and hold LICENSOR, its officers, agents, employees, affiliates and assigns, both in their official and personal capacities, harmless against all claims and expenses, including legal expenses and reasonable attorney's fees, whether arising from a third party claim, whether resulting from LICENSOR's enforcing this indemnification clause against LICENSEE, or whether arising out of the death of or injury to any person or persons or out of any damage to property, and further against any other claim, proceeding, demand, expense and liability of any kind whatsoever resulting from the use of the Intellectual Property, the production, manufacture, sale, use, lease, consumption or marketing of Licensed Products or Licensed Processes, or arising from any obligation of LICENSOR or LICENSEE hereunder.

8.2           At LICENSOR’s request, LICENSEE shall obtain and carry in full force and effect liability insurance which shall protect LICENSEE and LICENSOR (including the other persons and entities identified in Paragraph 8.1) in regard to events covered by Paragraph 8.1 above.  LICENSEE shall provide LICENSOR with a copy of the certificate of coverage evidencing compliance with the above requirements within thirty (30) days of the Effective Date of this Agreement and annually thereafter to evidence constant and continuous coverage during the life of this Agreement and thereafter for as long as liability exposure exists. Such insurance shall:

	
(a)            

	
be written by an insurance company authorized to do business in the Licensed Territory;

	
(b)            

	
be endorsed to also include product liability coverage;

	
(c)            

	
provide and require thirty (30) days written notice to be given to LICENSOR prior to any cancellation or material change of the coverage;

	
(d)            

	
include limits of coverage of not less than $1,000,000 per occurrence with an aggregate of $3,000,000 for personal injury or death, and $1,000,000 per occurrence with an aggregate of $3,000,000 for property damage.

8.3           LICENSOR MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED, TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, OR FOR THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER DISCOVERABLE OR NOT DISCOVERABLE.  LICENSOR MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED IN CONNECTION WITH THE ABILITY TO OBTAIN REGULATORY APPROVALS OR ENVIRONMENTAL-BASED CLEARANCES TO DEVELOP, MAKE, USE AND SELL LICENSED PRODUCTS OR PRACTICE LICENSED PROCESSES.   NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY LICENSOR THAT THE PRACTICE BY LICENSEE OR SUBLICENSEE(S) OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.  IN NO EVENT SHALL LICENSOR, IT’S OFFICERS, AGENTS OR EMPLOYEES THEREOF BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOSS OF PROFITS, REGARDLESS OF WHETHER LICENSOR SHALL BE ADVISED OF, SHALL OTHERWISE HAVE REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY THEREOF.

9.            ASSIGNMENT

Neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person or entity, whether voluntarily or involuntarily, by operation of law, or otherwise, without the prior written approval of LICENSOR in each instance.  In the event of an attempted assignment of this Agreement without the prior written approval of LICENSOR, such attempted assignment shall be null and void and shall be of no effect.  LICENSOR shall have the right, at its sole discretion, to terminate this Agreement after any such attempted assignment by LICENSEE.  As a condition of such approval, LICENSEE shall provide LICENSOR with evidence to demonstrate that such transferee has or is likely to acquire capital and manpower resources

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sufficient to fulfill the obligations it is assuming hereunder.  Upon completion of such transfer, thereafter the term “LICENSEE” as used herein shall refer to such transferee.  If the transferee shall not have agreed in writing to be bound by the terms and conditions of this Agreement, or LICENSOR and such transferee do not agree upon new licensing terms and conditions, within sixty (60) days of close of such transfer of LICENSEE's business, LICENSOR shall have the right to terminate this Agreement.

10.          CONFIDENTIALITY

10.1         During the term, upon, and after the expiration or termination of this Agreement, the Parties shall keep all proprietary information within the scope of this Agreement confidential, including any and all proprietary and confidential information relating to the Intellectual Property, technical data, trade secret, Know-how or other confidential information disclosed by any party hereunder in writing, orally, or by drawing or other form and which shall be marked by the disclosing party as “Confidential” or “Proprietary”, or that by the nature of the circumstances surrounding disclosure ought reasonably to be treated as confidential (“Confidential Information”).  Confidential Information shall include information relating to any Improvement.

11.          TERMINATION

11.1         Cessation of Business.  If LICENSEE shall cease to carry on its business, this Agreement shall terminate immediately.

11.2         Non Payment.  Should LICENSEE fail to make any payment when due, LICENSOR shall have the right to terminate this Agreement on thirty (30) days' notice.  Upon the expiration of the thirty-day period, if LICENSEE shall not have paid such payment in full with any interest due thereon, the LICENSEE’s (and any sublicensees’) rights, privileges, and license granted hereunder shall automatically, and without any requirement for further action or notice from or by LICENSOR, terminate.

11.3         Material Breach.  Upon any material breach or default of this Agreement by LICENSEE other than those occurrences set out in Paragraphs 11.1 and 11.2 above which shall always take precedence in that order over any material breach or default referred to in this Paragraph 11.3, including, but not limited to, breach or default under Paragraph 4.3, LICENSOR shall have the right to terminate this Agreement and the rights, privileges, and license granted hereunder on ninety (90) days' notice to LICENSEE.  Such termination shall become effective unless LICENSEE shall have cured any such breach or default to the satisfaction of LICENSOR prior to the expiration of the ninety-day period.

11.4         Repetitive Non Payment.  LICENSOR may terminate this Agreement upon the occurrence of the third separate failure by LICENSEE within any consecutive three-year period for failure to pay fees when due, regardless of LICENSEE's compliance with Paragraph 11.2 above.

11.5         Challenge of Validity.  LICENSOR shall have the right to immediately terminate this license agreement in the event that LICENSEE challenges, directly or indirectly or at written urging of a third party on behalf of LICENSEE, whether as a claim, a cross-claim, counterclaim, or defense, the validity or enforceability of any of the licensed patents or Intellectual Property before any court, arbitrator, or other tribunal or administrative agency in any jurisdiction.

11.6         All amounts paid to date to LICENSOR by LICENSEE under this agreement shall be nonrefundable.

12.          PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS

Any payment, notice, or other communication pursuant to this Agreement shall be sufficiently made or given on the date of mailing if sent to such party by certified, first class mail, postage prepaid, addressed to it at its address below or as it shall designate by written notice given to the other party:

LICENSOR:                           Hillwinds Energy Development Corporation

501 Kinds Highway East, Suite 108

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Fairfield, CT  06825

LICENSEE:                            HDS Energy and Ecosystems NB, Ltd.

10 Dorrance Street, Suite 700

Providence, RI  20903

13.          MISCELLANEOUS

13.1         Governing Laws.  This Agreement shall be construed, governed, interpreted, and applied in accordance with the laws of the State of New York without regard to its choice of law or conflicts of law rules or principles, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent was granted. LICENSEE hereby consents to adjudication of any dispute, including the validity of any patent licensed hereunder, between LICENSOR and LICENSEE by the judicial court system in the State of New York and further acknowledges jurisdiction of such disputes to be subject to the "long-arm statutory jurisdiction" of the New York court system.

13.2         Use of Names. LICENSEE shall not use the names, logos, trademarks, or any other mark or image considered by LICENSOR to be identified with or protected by LICENSOR, or those of any of the LICENSOR's employees or former employees, or any adaptation thereof, in any advertising, promotional or sales literature without the prior written consent of LICENSOR in each case, except that LICENSEE may state that it is licensed by LICENSOR under the patents and/or applications comprising the Intellectual Property identified in this Agreement.

13.3         Severability.  The provisions of this Agreement are severable, and in the event that any provisions of this Agreement shall be determined to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof.

13.4         Patent Marking.  LICENSEE shall mark Licensed Products sold with all applicable identification numbers, when and where appropriate.

13.5         No Waiver.  The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party.

13.6         Term.  This Agreement shall remain in full force and effect unless otherwise terminated as provided herein.

13.7.        Export Controls.  LICENSEE hereby agrees that it shall not sell, transfer, export or reexport any Licensed Products or related information in any form, or any direct products of such information, except in compliance with all applicable laws, including the export laws of U.S. government agencies and any regulations thereunder, and will not sell, transfer, export or reexport any such Licensed Products or information to any persons or any entities with regard to which there exist grounds to suspect or believe that they are violating such laws.  LICENSEE shall be solely responsible for obtaining all licenses, permits or authorizations required from the U. S. and any other governmental entity for any such export or reexport.  To the extent not inconsistent with this Agreement, LICENSOR agrees to provide LICENSEE with such assistance as it may reasonably request in obtaining such licenses, permits or authorizations.

13.8         Headings.  The headings of the sections of this Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

13.9         Entire Agreement.  The Parties acknowledge that this Agreement together with any exhibits, schedules or other attachments specified herein, sets forth the entire Agreement and understanding of the Parties as to the subject matter hereof, and shall not be subject to any change or modification except by the execution of a

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written instrument subscribed to by the Parties.  Accordingly, this Agreement supersedes all prior agreements or understandings, written or oral, among the Parties.

IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused their duly authorized representatives to execute this document as of the Effective Date.

LICENSOR

HILLWINDS ENERGY DEVELOPMENT CORP.

By:          TASSOS RECACHINAS

Name:     Tassos Recachinas

Title:       President

LICENSEE

HDS ENERGY AND ECOSYSTEMS NB, LTD.

By:          TASSOS RECACHINAS

Name:     Tassos Recachinas

Title:       Director & President

HDS INTERNATIONAL CORP.

By:          TASSOS RECACHINAS

Name:     Tassos Recachinas

Title:       President & Chief Executive Officer

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APPENDIX A

Patents and Patent Applications

LICENSOR owns, holds or otherwise controls numerous Patents and other Intellectual Property relating to the Primary Fields, which, among other things, cover methods and processes to:

	
·     

	
Develop non-toxic ocean-based algae production systems for commercial purposes.

	
·     

	
Capture and remove carbon dioxide (“CO2”) from waste emissions for future high percentage utilization in industrial ocean-based algae farming without secondary release.

	
·     

	
Provide for the fixation of such captured carbon dioxide with virtually no atmospheric loss, CO2 to photosynthetic organisms such as algae with breakthrough efficiency.

	
·     

	
Control gas exchange during the algae production process.

	
·     

	
Control of nutrient media, including the concentration of CO2 available for algae growth and limiting factors such as oxygen and other inhibitors, boosting growth rates.

	
·     

	
Increase the productivity, growth rate and energy content of biomass.

	
·     

	
Produce algae biomass for large-scale biofuel and bioproducts applications.

	
·     

	
Lower the cost of commercial scale carbon capture, sequestration, and production of algae for the ultimate production of biofuels and related co-products.

	
·     

	
Reutilize carbon dioxide from emissions using certain genetically modified algae as an active agent in a biological reactor to reduce carbon dioxide emissions produced during combustion by converting them into methane.

 

       LICENSOR believes that its Patents and Intellectual Property can be applied to, among other things, commercially produce and market large quantities of energy while reducing carbon emissions

More specific information regarding the Patents is not disclosed here for confidentiality and business reasons, but LICENSOR has furnished to LICENSEE, and LICENSEE has received, evaluated, and is in possession of, all relevant herein referenced Patent information.

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