Document:

Technology License Agreement

    Exhibit
      10.3

     

    
      
        
          

        

      TECHNOLOGY
        LICENSE

      

      FROM

      

      ARKENOL,
        INC.

      

      IN
        FAVOR
        OF

      

      BlueFire
        Ethanol, Inc.

      

      FOR
        THE
        PROCESSING OF

      

      CELLULOSE
        TO ETHANOL

      

      IN
        NORTH
        AMERICA

      

      
 

      Dated
        as
        of

      March
        1,
        2006

      

      
        
          

        

      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      TABLE
        OF
        CONTENTS

       

      
        
          	ARTICLE I    DEFINITIONS
                  AND INTERPRETATION 	
                  1

                
	 	 
	
                  1.1  Terms
                    Defined Above 

                	
                   1

                
	
                  1.2  Additional
                    Defined Terms 

                	
                   1

                
	
                  1.3  References

                	
                   5

                
	
                  1.4  Articles
                    and Sections 

                	
                   5

                
	
                  1.5  Number
                    and Gender

                	
                   5

                
	
                  1.6  Incorporation
                    of Exhibits 

                	
                   5

                
	 	 
	ARTICLE
                  II           TERMINATION
                  OF ORIGINAL AGREEMENT; GRANT OF RIGHTS 	
                   5

                
	 	 
	
                  2.1  License 

                	
                   5

                
	
                  2.2  Limitation
                    on Use of Technology 

                	
                  6

                
	
                  2.3  Confidentiality 

                	
                   6

                
	
                  2.5  Royalty
                    Payment 

                	
                   7

                
	 	 
	ARTICLE
                  III          OWNERSHIP
                  AND IMPROVEMENTS 	
                   8

                
	 	 
	
                  3.1  Licensor
                    as Sole Owner 

                	
                   8

                
	
                  3.2  Improvements
                    Assigned to Licensor 

                	
                   8

                
	
                  3.3  Cooperation 

                	
                   8

                
	
                  3.4  No
                    Challenge to Ownership 

                	
                   8

                
	
                  3.5  Enforcement
                    of Intellectual Property Rights 

                	
                  9

                
	
                  3.6  Appointment
                    of Licensor as Attorney-in-Fact 

                	
                   9

                
	 	 
	
                  ARTICLE
                    IV          ACCESS
                    TO PROJECTS AND INFORMATION 

                	
                   10

                
	 	 
	ARTICLE
                  V           
                  REPRESENTATIONS
                  AND WARRANTIES 	
                   10

                
	 	 
	
                  5.1  Licensor
                    Representations 

                	
                   10

                
	
                  5.2  Negation
                    of Certain Warranties 

                	
                   11

                
	
                  5.3  Licensee
                    Representations 

                	
                   11

                
	 	 
	ARTICLE
                  VI          
                  TERM
                  AND TERMINATION 	
                   11

                
	 	 
	
                  6.1  Term 

                	
                   11

                
	
                  6.2  Event
                    of Default 

                	
                   12

                
	
                  6.4  Default
                    Remedies 

                	
                   13

                
	
                  6.5  Obligations
                    of the Parties 

                	
                   13

                
	
                  6.6  Survival
                    of Claims 

                	
                   13

                
	
                  6.7  Survival
                    of Certain Provisions 

                	
                   13

                

        

      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      

      
        
          	ARTICLE
                  VII   INDEMNIFICATION 	
                   13

                
	 	
                   

                
	
                  7.1  Indemnification
                    by
                    Licensor 

                	
                   13

                
	
                  7.2  Indemnification
                    by
                    Licensee 

                	
                   14

                
	
                  7.3  Duty
                    to Defend 

                	
                   14

                
	
                  7.4  Settlement 

                	
                   14

                
	 	 
	ARTICLE
                  VIII          DISPUTE
                  RESOLUTION 	
                   15

                
	 	 
	
                  8.1  Agreement
                    to Dispute Resolution 

                	
                   15

                
	
                  8.2  Initiation
                    of Dispute Resolution 

                	
                   15

                
	
                  8.3  Mediation 

                	
                   15

                
	
                  8.4     
                    Expense of Mediation

                	
                   15

                
	 	 
	ARTICLE
                  IX             MISCELLANEOUS
                  PROVISIONS 	
                   16

                
	 	 
	
                  9.1  Assignment
                    and Sublicensing 

                	
                   16

                
	
                  9.2  Successors
                    and
                    Assigns 

                	
                  16

                
	
                  9.3  Parties
                    in Interest 

                	
                   16

                
	
                  9.4  Amendments 

                	
                   16

                
	
                  9.5  Non-Waiver 

                	
                   16

                
	
                  9.6  Notices 

                	
                   16

                
	
                  9.7  Attorneys'
                    Fees 

                	
                   17

                
	
                  9.8  Injunctive
                    Relief 

                	
                   18

                
	
                  9.9  Remedies 

                	
                   18

                
	
                  9.10   
                    Further
                    Assurances 

                	
                   18

                
	
                  9.11   
                    No
                    Agency, Joint Venture, Partnership 

                	
                   18

                
	
                  9.12   
                    Severability 

                	
                   18

                
	
                  9.13   
                    Negotiated
                    Transaction 

                	
                   18

                
	
                  9.14   
                    Counterparts 

                	
                   19

                
	
                  9.15    Entire
                    Agreement 

                	
                   19

                
	
                  9.16   
                    Jurisdiction
                    and Venue 

                	
                   19

                
	
                  9.17   
                    Governing
                    Law 

                	
                   19

                

        

      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

    

    

    TECHNOLOGY
      LICENSE

     

    THIS
      TECHNOLOGY LICENSE (as amended, modified, supplemented or restated from time
      to
      time, this "Agreement")
      is
      made and entered into as of the 1st day of March, 2006, by and between ARKENOL,
      INC., a corporation organized under the laws of the State of Nevada
      ("Licensor"),
      and
      BlueFire Ethanol, Inc., a to be formed Nevada corporation ("Licensee").
      Licensor and Licensee are sometimes hereinafter referred to individually as
      a
      "Party"
      and
      collectively as the "Parties."

     

    RECITALS

    

    WHEREAS,
      Licensee is a to be formed company to promote, among other things, conversion
      of
      the cellulose fractions of municipal solid waste and other opportunistic
      feedstocks into ethanol; 

    

    WHEREAS,
      Licensor has developed the Technology, owns the patents and intellectual
      property for and has maintained exclusive rights to license the Technology
      (as
      herein defined);

    

    WHEREAS,
      Licensee wishes to license the Technology from Licensor for use and sublicense
      in connection with Licensee’s desire to develop and commercialize the production
      of Ethanol from cellulose, and Licensor desires to grant such license to
      Licensee, all on the terms and conditions set forth herein; 

    

    WHEREAS,
      Licensor’s Technology is capable and pre-commercially developed to process this
      type of feedstock; and

    

    WHEREAS,
      Licensee desires to obtain from Licensor an exclusive license to use and
      sublicense the Technology in North America, and Licensor desires to grant such
      license to Licensee, all on the terms and conditions set forth
      herein;

    

    NOW,
      THEREFORE, in consideration of the foregoing premises and the mutual promises
      and covenants contained herein, Licensor and Licensee hereby agree as
      follows:

     

    ARTICLE
      I

    

    DEFINITIONS
      AND INTERPRETATION

    

    1.1    Terms
      Defined Above.
      As used
      in this Technology License, each of the terms "Agreement,"
      "Licensee,"
      "Licensor,"
      "Party,"
      and
      "Parties"
      shall
      have the meaning assigned to such term hereinabove.

    

    1.2    Additional
      Defined Terms.
      As used
      in this Agreement, each of the following terms shall have the meaning assigned
      to such term below.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    "Additional
      Facility License"
      shall
      have the meaning set forth in Section
      2.7.

    

    "Affiliate"
      shall
      mean, with respect to any Person, any other Person who, directly or indirectly,
      controls, is controlled by, or is under common control with such Person. For
      purposes of this definition, "control" means the ability to direct or cause
      the
      direction of the management or affairs of a Person, whether through the direct
      or indirect ownership of voting interests, by contract or otherwise. For
      purposes of this Agreement, neither Party shall be considered an Affiliate
      of
      the other Party unless otherwise expressly stated.

    

    "By-Products"
      shall
      mean salable materials, which result from operation of the Process to create
      sugars from lignocellulosic feedstocks, and which are not the intended final
      product from sugars fermentation; for example lignin, gypsum, yeast, carbon
      dioxide.

    

    "Commercial
      Operation"
      shall
      mean the continuous operation of a Project after completion of the commissioning
      of the Project, which shall be deemed to occur no earlier than the satisfaction
      of all contractual requirements (e.g., completion of all tests required under
      applicable construction contracts) and material regulatory requirements (e.g.,
      tests required under applicable governmental permits and approvals) in
      connection with the commencement of continuous commercial
      operations.

    

    "Confidential
      Information"
      shall
      mean, in whatever form, tangible or intangible, whether written, oral or visual,
      including electronic data recorded or retrieved by any means, any and all trade
      secrets, confidential knowledge, and proprietary data of a Party (the
      "Disclosing Party"), including technical specifications, diagrams, flow charts,
      methods, processes, procedures, discoveries, concepts, calculations, techniques,
      formulas, systems, production plans, designs, research and development plans,
      business opportunities, cost and pricing data, customer records and lists,
      special chemical, engineering, manufacturing, financial, and marketing know-how,
      but expressly excluding information which (a) was generally available to the
      public prior to the time of disclosure to the other Party (the "Receiving
      Party"), (b) becomes generally available to the public through no act or
      omission of the Receiving Party, or any employee, Affiliate, agent or contractor
      of the Receiving Party, or (c) becomes available to the Receiving Party through
      or from a third party who is not an agent, contractor, employee or Affiliate
      of
      the Receiving Party and who is not, to the knowledge of the Receiving Party
      after reasonable investigation, under any obligation of confidentiality to
      the
      Disclosing Party.

    

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

    

    "Event
      of Default"
      shall
      have the meaning set forth in Section
      6.2.

    

    "Exclusive
      Payment"
      shall
      have the meaning set forth in Section
      2.5.

    

    "Force
      Majeure"
      shall
      mean an event or occurrence that is not reasonably foreseeable by a Party,
      is
      beyond such Party's reasonable control, and is not caused by its negligence
      or
      lack of due diligence, including acts of God, strikes, labor disputes, lockouts
      or other industrial disturbances, riots, epidemics, landslides, lightning,
      earthquakes, fires, storms, washouts, the enactment of, or changes in, Laws,
      the
      cancellation or withdrawal of a governmental permit, arrests and restraints
      of
      governments and people, civil disturbances and explosions; provided,
      however,
      neither
      economic hardship of either Party nor changes in market conditions shall
      constitute a Force Majeure.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    "Governmental
      Authority"
      shall
      mean any national, state or local government, any political subdivision or
      any
      governmental, quasi-governmental, judicial, public or statutory instrumentality,
      authority, body or entity, or other regulatory bureau, authority, body or
      entity.

    

    "Improvements"
      shall
      mean all inventions, modifications, revisions, alterations, enhancements,
      betterments, ideas, and discoveries (whether or not patentable) conceived or
      reduced to practice (actually or constructively) by either Party or under the
      direction of either Party or acquired by Licensor or Licensee by operation
      of
      any license or sublicense of the Technology to any Person, or from any other
      source and which, in any case, are based in any way on, or arise in any manner
      out of, all or any portion of the Process, the Patents, the Licensor
      Confidential Information or the Intellectual Property, or any such invention,
      modification, revision, alteration, enhancement, betterment, idea or discovery
      to any of the foregoing, including any developed through reverse engineering
      or
      independent derivation.

    

    "Intellectual
      Property"
      shall
      mean the Patents and all United States and foreign patents, applications
      therefore, know-how, copyrightable works and applications for registration
      and
      registrations thereof, trademarks, trade names, service marks and all other
      intellectual property rights with respect to or relating to all or any portion
      of the Process.

    

    "Law"
      shall
      mean any applicable Federal, state, local or other constitution, charter, act,
      statute, law, ordinance, code, rule, regulation, or order, or other legislative
      or administrative action of a Governmental Authority, or a final decree,
      judgment, or order of a court having jurisdiction over any relevant Project
      or
      any Party.

    

    "License"
      shall
      have the meaning assigned in Section
      2.1.

    

    "License
      Fee"
      shall
      have the meaning assigned in Section
      2.6.

    

    "Licensee
      Indemnitees"
      shall
      have the meaning assigned in Section
      7.1.

    

    "Licensor
      Confidential Information"
      shall
      mean any Confidential Information relating to or arising out of any aspect
      of
      the Technology or Licensor's business other than information specifically
      related to a Project that is in the public domain. For purposes of this
      Agreement, and without otherwise affecting the respective ownership rights
      of
      Persons thereto, where any Confidential Information relating to or arising
      out
      of any aspect of the Technology is developed by any Person who is an Affiliate
      of both Parties, then such Confidential Information shall be deemed to be
      Licensor Confidential Information.

    

    "Licensor
      Indemnitees"
      shall
      have the meaning assigned in Section
      7.2.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    "Notice"
      shall
      have the meaning assigned to such term in Section
      9.6.

    

    "North
      America"
      shall
      include all 50 United States and Canada.

    

    "Patents"
      shall
      mean, collectively, Patent Nos. 5,562,777 and 5,580,389 issued by the United
      States Patent and Trademark Office on October 8, 1996 and December 3, 1996,
      respectively; any and all continuations, continuations-in-part, divisionals,
      reissues, reexaminations or extensions thereof; all corresponding foreign
      counterpart patents and applications thereto; and any additional patents issued
      to Licensor from time to time by the United States Patent and Trademark
      Office.

    

    "Person"
      shall
      mean any individual, partnership, corporation, Limited Liability Company,
      association, business, trust, government or political subdivision thereof,
      Governmental Authority, or other entity.

    

    "Prime
      Rate"
      shall
      mean the per annum rate of interest announced or published from time to time
      by
      The Chase Manhattan Bank, N.A., as its reference or prime rate.

    

    "Process"
      shall
      mean the acid hydrolysis process for lignocellulosic materials as more
      particularly described on Exhibit
      A.

    

    "Products"
      shall
      mean By-Products, goods and materials produced through the
      Technology.

    

    "Project"
      shall
      mean a facility established for the purpose of using and practicing the
      Technology in the production of one or more Products.

    

    "Project
      Entity"
      shall
      mean each entity formed for the ownership of a Project.

    

    "Project
      Lender"
      shall
      mean any bank, financial institution or other Person (or trustee or agent for
      any such Person) providing any financing for, in whole or in part, the design,
      acquisition, construction, refurbishment, modification, start-up, testing,
      operation, maintenance or repair of any Project.

    

    "Royalty"
      shall
      have the meaning assigned in Section
      2.4.

    

    "Technology"
      shall
      mean, collectively, the Process, the Patents, the Intellectual Property, the
      Licensor Confidential Information, and all Improvements.

    

    "Term"
      shall
      have the meaning assigned in Section
      6.1.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    1.3    References.
      References in this Agreement to Exhibit, Article or Section numbers shall be
      to
      Exhibits, Articles and Sections of this Agreement, unless expressly stated
      herein to the contrary. References in this Agreement to "hereby," "herein,"
      "hereinabove," "hereinafter," "herein below," "hereof," "hereunder," or words
      of
      similar import shall be to this Agreement in its entirety and not only to the
      particular Exhibit, Article or Section in which such reference appears.
      References in this Agreement to "includes" or "including" shall mean "includes,
      without limitation," or "including, without limitation," as the case may be.
      References in this Agreement to statutes, sections or regulations are to be
      construed as including all statutory or regulatory provisions consolidating,
      amending, replacing, succeeding or supplementing the statute, section or
      regulation referred to. References in this Agreement to "writing" include
      printing, typing, lithography, facsimile reproduction and other means of
      reproducing words in a tangible visible form. References in this Agreement
      to
      agreements and other contractual instruments shall be deemed to include all
      exhibits and appendices attached thereto and all subsequent amendments and
      other
      modifications to such instruments, but only to the extent such amendments and
      other modifications are not prohibited by the terms of this Agreement.
      References in this Agreement to Persons include their respective successors
      and
      permitted assigns.

    

    1.4    Articles
      and Sections.
      This
      Agreement, for convenience only, has been divided into Articles and Sections
      and
      it is understood that the rights, powers, privileges, duties, and other legal
      relations of the Parties shall be determined from this Agreement as an entirety
      and without regard to the aforesaid division into Articles and Sections and
      without regard to headings affixed to such Articles or Sections.

    

    1.5    Number
      and Gender.
      Whenever the context requires, reference herein made to the single number shall
      be understood to include the plural and likewise the plural shall be understood
      to include the singular. Words denoting sex shall be construed to include the
      masculine, feminine, and neuter, when such construction is appropriate, and
      specific enumeration shall not exclude the general, but shall be construed
      as
      cumulative. Definitions of terms defined in the singular or plural shall be
      equally applicable to the plural or singular, as the case may be.

    

    1.6    Incorporation
      of Exhibits.
      The
      Exhibits attached to this Agreement are incorporated herein and shall be
      considered a part of this Agreement for all purposes.

     

    ARTICLE
      II

    

    GRANT
      OF LICENSE

    

    2.1    License.
      Subject
      to the further provisions of this Section
      2.1
      and
Section
      9.1,
      and for
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Licensor hereby grants to Licensee from and after the Effective
      Date, and Licensee hereby accepts from and after the Effective Date, an
      exclusive, non-transferable, North American license (the "License")
      during
      the Term to use and sublicense the Technology for any purpose pursuant to the
      terms and conditions set forth herein. Notwithstanding the foregoing, Licensee
      shall not use or sublicense the Technology, or allow the use of the Technology
      by any permitted assignee or sublicensee of Licensee, outside of North America.
      Licensor shall not permit any Person other than Licensee and its sublicensees
      to
      use the Technology; provided,
      however,
      this
      limitation shall not apply to rights established in other Persons in accordance
      with the express provisions of Section
      9.1
      or
      following termination of this Agreement. Licensor and Licensee acknowledge
      and
      agree that the proprietary rights of Licensor in the Technology are extremely
      valuable separate and apart from any patent rights related thereto, including
      the Patents and any rights related thereto, and that the issuance of any
      additional patent related to the Process or the Technology or the invalidation,
      expiration or failure to obtain or prosecute any of the Patents shall not in
      any
      way affect the rights granted in this Section
      2.1.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    2.2    Limitation
      on Use of Technology.
      Licensee and its sublicensees shall use the Technology in the precise manner
      indicated in this Agreement and in any specifications that may be provided
      to
      Licensee by Licensor from time to time. Licensee and its sublicensees shall
      not
      make any material changes in the use or application of the Technology as set
      forth in such specifications without the prior written consent of Licensor,
      which consent shall not be unreasonably withheld so long as Licensor has been
      provided with all reasonably necessary information as to the basis for the
      requested change and has received reimbursement for the reasonable direct cost
      to Licensor of evaluating such requested change and submitted information.
      

    

    2.3    Confidentiality.
      (a)
      During
      the Term and for a period of two (2) years after the expiration of the Term
      or
      earlier termination of this Agreement pursuant to Section
      6.4,
      each of
      Licensee and Licensor shall hold, and shall take all reasonable precautions
      to
      cause each of their Affiliates, and the directors, officers, managers,
      employees, agents, contractors and advisors of the Parties and their respective
      Affiliates, and, in the case of the Licensee, those of its permitted sub
      licensees, and each of such sub licensees' and its Affiliates' respective
      directors, officers, managers, employees, agents, and contractors coming into
      possession or knowledge of any Confidential Information of the other Party,
      to
      hold the Confidential Information of the other Party in strictest confidence
      and
      trust (making only such copies thereof as necessary or appropriate for the
      location, feasibility assessment, development, design, engineering, procurement,
      construction, testing, modification, operation and maintenance of the Projects).
      Notwithstanding the foregoing, (i) Licensor may make all disclosures which
      are
      reasonably necessary, appropriate or advisable to obtain protection of the
      confidential and proprietary character of the Technology in the United States
      and Canada, and (ii) Licensee may disclose Licensor Confidential Information
      to
      other Persons in connection with any financing whether through debt, equity
      or
      otherwise), assignment, sale, transfer or other disposition of any Project
      Entity or interest in any Project Entity, provided,
      that
      Licensee shall be required to take all necessary precautions to cause such
      other
      Persons to hold the Licensor Confidential Information in strictest confidence
      and to prevent its misappropriation, including the execution of written
      confidentiality agreements with such Persons (containing terms and conditions
      similar to those in this Section
      2.3)
      providing Licensor Confidential Information only on a limited need-to-know
      basis, and taking reasonable security measures to ensure that only such portion
      of the Licensor Confidential Information that is reasonable under the
      circumstances is disclosed. Licensor shall be either (i) expressly named as
      a
      party to any such confidentiality agreement entered into by Licensee with any
      of
      its Affiliates, directors, managers, employees, agents, contractors, creditors
      or other Persons permitted to come into possession or knowledge of any Licensor
      Confidential Information, or (ii) shall be expressly named as a third-party
      beneficiary of any such confidentiality agreement, and, in either case, Licensor
      shall be entitled to enforce any such confidentiality agreement, including,
      by
      way of injunctive or other equitable relief. 

    

    (b)    In
      addition to the disclosures permitted under the second sentence of Section 2.3
      (a),
      each
      Party may disclose Confidential Information of the other Party only (i) to
      those
      of its then current Affiliates, and the directors, officers, managers,
      employees, agents, contractors, and advisors (including attorneys, accountants,
      and consultants) of the Parties and such Affiliates, together with the permitted
      sub licensees of Licensee, and the directors, officers, managers, employees,
      agents, contractors, and advisors of such sub licensees and their Affiliates,
      who need to know the Confidential Information for purposes of performing the
      services for which they have been engaged, (ii) pursuant to the order or
      subpoena of a Governmental Authority with subpoena power or as otherwise
      required pursuant to applicable Law; provided,
      however,
      should
      either Party receive any such order or subpoena or propose to make voluntary
      disclosure pursuant to any Law deemed by such Party to require such disclosure,
      such Party shall notify the other Party promptly and in any event sufficiently
      prior to compliance with the relevant order or subpoena or deemed applicable
      Law
      to enable such other Party to seek an appropriate protective order; provided,
      further,
      any
      disclosure pursuant to such an order or subpoena or deemed applicable Law shall
      not act to relieve any Party of its continuing obligation to hold the
      Confidential Information in strictest confidence and trust and cause other
      Persons to do so as provided above in this Section
      2.3,
      and,
      except for such disclosure pursuant to order or subpoena or deemed applicable
      Law, each Party shall continue to be bound by the obligations of this
Section
      2.3
      with
      respect to the Confidential Information.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    (c)    The
      Parties may enter into a separate Confidentiality Agreement relating to the
      obligation to hold the Confidential Information in strictest confidence and
      trust. In such event, if there is any conflict between the terms and conditions
      of such Confidentiality Agreement and the terms and conditions of this Agreement
      relating to the Confidential Information and the obligations of the Parties
      in
      connection therewith, the terms and conditions of such Confidentiality Agreement
      shall govern and control.

    

    2.4    Royalty
      Payment.
      As
      consideration for the grant of the License pursuant to Section
      2.1,
      Licensee shall pay Licensor a royalty (the "Royalty")
      equal
      to three percent (3%) of the gross sales price for sales by Licensee, its
      Affiliates, sublicensees or assignees, of all Products produced from any use
      of
      the Technology pursuant to the License. For sales by sublicensees, the Royalty
      to Licensor is conditional upon the sublicense royalty fees being paid to
      Licensor. The Royalty shall be calculated on an accrual (rather than a cash)
      basis. The Royalty shall be payable semi-annually on each August 1 (as to sales
      accrued during the preceding January 1 through and including June 30) and on
      each February 1 (as to sales accrued during the preceding July 1 through and
      including December 31) during the Term. Royalty payments to Licensor shall
      be
      submitted with supporting documentation on a facility-by-facility basis as
      to
      (i) volumes of Products produced through the use or practice of the Technology
      pursuant to the License during the relevant period, (ii) the name, address,
      contact Person, and telephone number of the purchaser in each relevant sale
      of
      Products, and (iii) the gross sales price as to each relevant sale of Products.
      Any Royalty owed to Licensor by Licensee beyond the date such amount is due
      and
      payable shall accrue interest at the per annum rate equal to the Prime Rate
      in
      effect from time to time plus two percent (2%); provided,
      however,
      in no
      event shall such rate of interest exceed the maximum lawful rate under
      applicable Law. Failure to make any Royalty payment due shall constitute an
      Event of Default giving rise to a right of Licensor to terminate this Agreement
      and the License with notice from Licensor and the passage of time as provided
      in
Section
      6.2(a).

    

    2.5     Exclusivity
      Payment.
      As
      consideration for the grant of exclusive license for North
      America, Licensee shall pay Licensor a one time payment of One Million Dollars
      ($1,000,000) at first project construction funding or term of a Licensee or
      sublicense Project. A good faith payment of Thirty Thousand Dollars is to made
      upon first funding of BlueFire which is deducted from the total amount. These
      payments subject to subordination rights of lender only. 

    

    2.6    License
      Fee.
      A
      one-time License Fee will be paid by Licensee for Licensor and sublicensee
      Project in the amount of Forty Dollars U.S. ($40.00) per 1000 gallons of
      production capacity.

    

    2.7    Commercial
      Operation.
      Licensee shall use its good faith efforts to effect Commercial Operation of
      any
      Licensee Project as soon as practicable after the Effective Date; provided,
      however,
      that
      Licensee must complete the following or this Agreement shall terminate pursuant
      to Section
      6.2(b):
      (i) the
      expenditure of at least Five Hundred Thousand Dollars ($500,000) toward the
      commencement of development and Commercial Operation of the Project within
      eighteen (18) months after the Effective Date, which may include the retention
      of Licensor or its agent to perform the testing and analysis described in
      Exhibit “B” hereto in order to produce data suitable for the preparation and
      implementation of an engineering, procurement and construction contract between
      Licensee and a third party contractor, containing appropriate financeable
      performance guarantees, which testing and analysis shall use a feedstock that
      has been delivered to Licensor in a form suitable for conversion using the
      Technology, (ii) the expenditure of an additional One Million Five Hundred
      Thousand Dollars ($1,500,000.00) prior to the third (3rd)
      anniversary of the Effective Date, and
      (iii)
      the taking, on or before the 3rd
      anniversary of the Effective Date, of other significant actions to effectuate
      the commencement of Commercial Operation of the Project, such as obtaining
      significant written contracts for the sale of Ethanol, obtaining Project site
      control, and obtaining contracts for the supply of Biomass. Licensee’s
      compliance with all of the provisions of this Section
      2.7
      shall be
      deemed to be a material obligation within the meaning of paragraph (b) of
Section
      6.2
      herein;
provided,
      however,
      that
      Licensor’s sole remedy in the event Licensee shall fail to comply with this
Section
      2.7
      shall be
      the termination of this agreement pursuant to Section
      6.2(b).

    

    
      
        
        

      

      
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    ARTICLE
      III

    

    OWNERSHIP
      AND IMPROVEMENTS

    

    3.1    Licensor
      as Sole Owner.
      Licensee acknowledges and agrees that it does not now own, nor will it obtain
      any interest in, the Technology, except for the License granted
      herein.

    

    3.2    Improvements
      Assigned to Licensor.
      Licensee acknowledges and agrees that all Improvements shall be the exclusive
      property of Licensor, and Licensee agrees to assign, and does hereby assign,
      and
      agrees to cause each of its Affiliates, permitted assignees and sublicensees,
      and the Project Entities to assign, to Licensor any and all right, title, and
      interest each of them may now hold or hereafter obtain in any such Improvements,
      including any and all (a) applications for Letters Patent and all divisionals,
      renewals, continuations and continuations-in-part thereof, (b) Letters Patent
      of
      the United States which may now or hereafter be granted thereon and all reissues
      and extensions thereof, (c) rights of priority under international conventions
      and applications for Letters Patent which may hereafter be filed for such
      Improvements in any country other than the United States, and (d) all Letters
      Patent which may be granted for such Improvements in any country or countries
      other than the United States and all extensions, renewals, and reissues thereof.
      Licensor agrees to license, and does hereby license, without further
      consideration to Licensor, all such Improvements to Licensee pursuant to the
      terms and provisions of this Agreement.

    

    3.3    Cooperation.
      Licensee agrees to communicate to Licensor promptly upon becoming aware thereof,
      any facts known to Licensee respecting the Technology and to testify in any
      legal proceedings, sign all lawful papers, execute all divisional, continuing
      and reissue applications, make all rightful oaths and generally do everything
      possible to cooperate to effectuate the terms of this Article
      III.
      Upon
      the reasonable request of Licensee exercisable from time to time, the Parties
      shall meet to discuss any Improvements. 

    

    3.4    No
      Challenge to Ownership.
      Except
      in asserting rights of Licensee expressly granted hereunder, Licensee agrees
      not
      to take any action challenging or opposing, on any grounds whatsoever, the
      ownership or intellectual property rights of Licensor with respect to the
      Technology, the status thereof as the property of Licensor, or the validity
      or
      enforceability thereof by Licensor.

    

    
      
        
        

      

      
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    3.5    Enforcement
      of Intellectual Property Rights.
      Subject
      to the further provisions of this Section
      3.5,
      Licensor shall have the first right, but not the obligation, to enforce any
      and/or all of the rights granted herein to Licensee against any third parties
      believed by Licensor to be infringing, or about to infringe, upon any rights
      forming a part of the Technology. Licensor is hereby authorized to initiate
      any
      legal proceeding in any court or administrative body for the enforcement of
      any
      such rights in the name of Licensor and/or Licensee (pursuant to the authority
      granted in Section
      3.6),
      and
      Licensee shall do all lawful things required or desirable to assist Licensor
      in
      the enforcement of any such rights. The rights of enforcement by Licensor under
      this Section
      3.5
      shall
      include the initiation of any legal proceeding in any Federal or state court
      or
      administrative body in the form of an initial pleading or complaint, the filing
      of a counterclaim, the filing of a declaratory judgment action, and the defense
      of any action relating in any way to rights granted herein to Licensee. Any
      and
      all costs associated with such enforcement rights and actions initiated and
      continued by Licensor shall be the sole and exclusive obligation of Licensor,
      and Licensor shall retain all monetary damages, awards and recoveries there
      from
      and shall have the exclusive right to settle and/or compromise any matter
      relating thereto. Licensee shall be entitled to participate, at its sole
      expense, in any such action initiated by Licensor. Nothing contained in this
      Section
      3.5
      shall be
      construed as creating any obligation of Licensor to initiate or continue any
      proceedings involving the enforcement of the rights granted herein to Licensee.
      In the event that Licensor elects not to initiate and/or pursue any action
      against any third party relating to the rights granted herein to Licensee,
      Licensor shall so notify Licensee in writing within thirty (30) days (or ten
      (10) days in the event of receipt of a petition or other complaint) after the
      earlier of (a) receipt by Licensor from Licensee of actual notice of any alleged
      infringement or (b) actual knowledge by Licensor of any alleged or threatened
      infringement. After such notification by Licensor to Licensee, such right shall
      revert to Licensee and Licensee shall have thereafter the right to take, at
      the
      sole expense of Licensee, whatever action, in the sole and exclusive opinion
      of
      Licensee, is reasonably necessary to protect the use and practice by Licensee
      of
      the Technology in accordance with the provisions of this Agreement. Should
      Licensee, following such notice from Licensor, proceed to take any action,
      Licensee shall retain all monetary damages, awards and recoveries from such
      action and shall have the exclusive right to settle and/or compromise the
      relevant matter; provided,
      however,
      Licensee shall not be entitled to enter into any settlement or compromise which
      could, in the good-faith opinion of Licensor, create a precedent or implication
      that any Person other than Licensor owns the Technology or otherwise have a
      materially adverse effect on Licensor.

    

    3.6    Appointment
      of Licensor as Attorney-in-Fact.
      Licensee hereby appoints Licensor as its attorney-in-fact for the specific
      limited purpose of executing in the name of Licensee all documents and
      performing in the name of Licensee all other acts necessary, appropriate or
      desirable to protect, through filings with Governmental Authorities of the
      United States, any state thereof or any foreign country or legal proceedings
      before any court of other such Governmental Authority, the confidential and
      proprietary nature of the Technology or the ownership thereof by
      Licensor.

    

    
      
        
        

      

      
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    ARTICLE
      IV

    

    ACCESS
      TO PROJECTS AND INFORMATION

    

    Licensor
      and its Affiliates, directors, officers, employees, agents and contractors
      shall
      have the right to be present at any Project at any reasonable time during normal
      business hours during the Term upon no less than twenty-four (24) hours' advance
      telephonic notice, but such access shall be at the sole risk and expense of
      Licensor. Licensor and its shareholders, directors, officers, employees, agents
      and contractors shall also have reasonable access during normal business hours
      and upon no less than twenty-four (24) hours' advance telephonic notice to
      inspect, audit and review all applications of the Technology and all operating
      data, books, records, and other information of Licensee and the Project Entities
      relating to applications of the Technology, provided
      that
      such inspection and review does not interfere materially with the business
      of
      Licensee, or any Project Entity, as the case may be, and, provided further,
      that
      Licensor treats all such information which is Confidential Information (and
      which is not otherwise Licensor Confidential Information) in trust and
      confidence as provided in Section
      2.3.

    ARTICLE
      V

    

    REPRESENTATIONS
      AND WARRANTIES

    

    5.1    Licensor
      Representations.
      Licensor represents and warrants to Licensee (each of which representations
      and
      warranties shall survive the execution and delivery of this Agreement for a
      period of two (2) years after the expiration of the Term or the earlier
      termination of this Agreement), subject to the provisions of Section
      5.2,
      that
      (a) Licensor is a corporation duly organized, validly existing, and in good
      standing under the laws of the jurisdiction of its incorporation, (b) Licensor
      has clear title to the Technology, free of any judgments, liens or encumbrances,
      and has the right to grant the License under this Agreement, and the Technology
      does not infringe any issued United States or foreign patent rights of others
      or
      pending patent applications of which Licensor has notice, and Licensor has
      no
      notice of any claim that the Technology so infringes or that the use of the
      Technology by Licensee or its Affiliates or agents pursuant to this Agreement
      would so infringe, (c) the Technology includes patented technology which
      converts cellulosic materials into sugars through a concentrated acid
      hydrolysis, (d) Licensor has the power and all requisite authority to enter
      into
      this Agreement, (e) the execution and delivery of this Agreement by Licensor
      and
      the performance of its obligations hereunder do not conflict with or result
      in a
      default or imposition of any lien or encumbrance against any property of
      Licensor under any agreement to which Licensor is a party or by which any of
      its
      property is bound which, in any such case, could reasonably be expected to
      have
      a materially adverse effect on the business or financial performance of
      Licensor, and (f) this Agreement constitutes Licensor's legal, valid, and
      binding obligation. 

    

    
      
        
        

      

      
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    5.2    Negation
      of Certain Warranties.
      LICENSOR
      MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE
      ADEQUACY OF THE TECHNOLOGY, OR ITS SUFFICIENCY FOR ANY SPECIFIC PURPOSE OR
      FREEDOM FROM ANY DEFECT OF ANY KIND, INCLUDING FREEDOM FROM ANY PATENT OR TRADE
      SECRET INFRINGEMENT THAT MAY RESULT FROM THE USE BY LICENSEE OF THE TECHNOLOGY
      (BUT WITHOUT IN ANY MANNER INTENDING TO LIMIT THE INDEMNIFICATION BY LICENSOR
      PURSUANT TO SECTION
      7.1).
      FURTHER, LICENSOR MAKES NO REPRESENTATION, GUARANTY OR WARRANTY THAT THE
      TECHNOLOGY DESCRIBED IN ANY PATENT APPLICATIONS, ISSUED PATENTS OR TRADE SECRET
      DOCUMENTS IS SUITABLE FOR USE BY LICENSEE OR THAT ANY APPLICATION FOR A PATENT
      WILL RESULT IN THE GRANT OF A PATENT.

    

    5.3    Licensee
      Representations.
      Licensee represents and warrants to Licensor (each of which representations
      and
      warranties shall survive the execution and delivery of this Agreement for a
      period of two (2) years after the expiration of the Term or the earlier
      termination this Agreement) that (a) Licensee is a to be duly formed and validly
      existing under the laws of its jurisdiction of formation, (b) Licensee has
      the
      power and all requisite authority to enter into this Agreement, (c) the
      execution and delivery of this Agreement by Licensee and the performance of
      Licensee's obligations hereunder do not conflict with or result in a default
      or
      imposition of any lien or encumbrance under any other agreement to which
      Licensee is a party or by which any of its property is bound which could
      reasonably be expected to have a materially adverse effect on the business
      or
      financial performance of Licensee, and (d) this Agreement constitutes Licensee's
      legal, valid, and binding obligation.

     

    ARTICLE
      VI

    

    TERM
      AND TERMINATION

    

    6.1    Term.
      Subject
      to the further provisions of this Article
      VI,
      this
      Agreement shall remain in force and effect and the Parties shall remain
      obligated hereby and entitled to rights and benefits hereunder until the earlier
      of (the "Term")
      (a)
      termination of this Agreement by mutual agreement of the Parties, or (b) the
      expiration of thirty (30) years from the Effective Date; provided,
      however,
      that
      with respect to any Project for which the owners thereof have, as of the
      effective date of such termination or expiration, expended material funds in
      connection with the development thereof, Licensor shall grant a license to
      such
      Project under substantially the same terms and conditions as set forth herein,
      which license shall be for a term equal to twenty-five (25) years from the
      commencement of Commercial Operation of such Project. Notwithstanding the
      foregoing, if a project is not built and operating within the conditions set
      forth in Section
      2.7,
      Licensor has the right to revoke this License if substantial progress or
      financing has not been demonstrated or the company has not been formed within
      the first date shown on this agreement.

    

    
      
        
        

      

      
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    6.2    Event
      of Default.
      An
      event of default under this Agreement (an "Event
      of Default")
      shall
      be deemed to exist upon the occurrence of any one or more of the following
      events:

    

    (a)    failure
      by a Party to make payment of any amounts due under this Agreement, including
      the Royalty, which failure continues for a period of thirty (30) days after
      written notice of such nonpayment from the Party entitled to
      payment;

    

    (b)    failure
      by a Party to perform fully any material provision of this Agreement, other
      than
      the payment of any amounts due, and (i) such failure continues for a period
      of
      sixty (60) days after notice of such nonperformance from the other Party
      describing in reasonable detail the relevant nonperformance or (ii) if such
      nonperforming Party shall commence within such thirty (30) days and shall
      thereafter proceed with all due diligence to cure such failure, such failure
      is
      not cured within such longer period as shall be necessary for such nonperforming
      Party to cure the same with all due diligence, such longer period, in all
      events, not to exceed ninety (90) days; or

    

    (c)    either
      Party shall (i) file, or consent to the filing against it of or admit any
      allegations made against it in, a petition for relief or reorganization or
      arrangement or any other petition in bankruptcy, for liquidation or to take
      advantage of any bankruptcy or insolvency law of any jurisdiction; (ii) make
      an
      assignment for the benefit of its creditors; (iii) seek or consent to, or
      acquiesce in, the appointment of a custodian, receiver, trustee, or other
      officer with similar powers, for substantially all its property; (iv) be
      adjudicated bankrupt or insolvent, or (v) suffer the entry against such Party
      of
      an order for relief in any case or proceeding for liquidation or reorganization
      or otherwise to take advantage of any bankruptcy or insolvency law of any
      jurisdiction or ordering the dissolution, winding up or liquidation of all
      or
      any substantial part of the property of such Party or have filed against such
      Party any petition for any such relief and any such order or petition shall
      remain unvacated or pending and unstayed for an aggregate of ninety (90) days
      (whether or not consecutive).

    

    6.3    Force
      Majeure.
      In the
      event that either Party is rendered unable, by reason of an event of Force
      Majeure, to perform, wholly or in part, any obligation or commitment set forth
      in this Agreement, then, provided such Party gives prompt written notice
      describing the particulars of such event, including the nature of the occurrence
      and its expected duration, and continues to furnish monthly reports with respect
      thereto during the period of the Force Majeure, the obligations of both Parties
      (except for the obligation of Licensee to pay accrued Royalties pursuant to
      Section
      2.4)
      shall
      be suspended to the extent and for the period of such Force Majeure condition;
      provided,
      however,
      that
      (a) the suspension of performance is of no greater scope and of no longer
      duration than is required by the Force Majeure and (b) the Party whose
      performance is being excused shall use its reasonable efforts to perform its
      obligations hereunder and use its reasonable efforts to remedy its inability
      to
      perform. If a Force Majeure affects a material obligation or commitment and
      continues for more than six (6) consecutive months, either Party may terminate
      this Agreement upon thirty (30) days' prior written notice.

    

    
      
        
        

      

      
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    6.4    Default
      Remedies.
      Subject
      in each case to the provisions of Article
      VIII
      or
Section
      9.8
      to the
      contrary, immediately upon the occurrence of an Event of Default under
Section
      6.2
      on the
      part of either Party, the non-defaulting Party shall have the right, at its
      election, to terminate this Agreement and/or sue such defaulting Party for
      damages and/or injunctive or other equitable relief arising in connection with
      such Event of Default.

    

    6.5    Obligations
      of the Parties.
      Upon
      the expiration of the Term or the earlier termination of this Agreement,
      Licensee shall, and shall cause each Project Entity, which is not a party to
      a
      separate sublicense with Licensee, or eligible under the proviso set forth
      in
Section
      9.1
      to enter
      into a license with Licensor, to (a) immediately cease all uses of the
      Technology, (b) make no further use of any rights licensed to Licensee by this
      Agreement, except to the extent of rights granted in any other written agreement
      entered into after the Effective Date between Licensor and Licensee, and (c)
      return to Licensor promptly (i) all Improvements in the possession of Licensee
      and (ii) the originals and all copies of all Licensor Confidential Information.
      Upon any termination of this Agreement, Licensor shall promptly return upon
      request by Licensee the originals and all copies of all Confidential Information
      relating to Licensee's business.

    

    6.6    Survival
      of Claims.
      Any
      claims by either Party against the other Party existing under this Agreement
      at
      the expiration or any termination of this Agreement shall survive such
      termination or expiration.

    

    6.7    Survival
      of Certain Provisions.
      Any
      provisions, agreements, warranties or representations contained in this
      Agreement which expressly or by implication come into or remain in force
      following the termination or expiration of this Agreement shall survive such
      termination or expiration, including the provisions of Articles
      III, V, VII and VIII and Sections 2.3, 2.4, 9.1, 9.2, 9.7, 9.8, 9.16 and
      9.17.

     

    ARTICLE
      VII

    

    INDEMNIFICATION

    

    7.1    Indemnification
      by Licensor.
      Licensor, as indemnitor, agrees to indemnify, defend, and hold harmless Licensee
      and its Affiliates (except for those Affiliates which are also Affiliates of
      Licensor), and their respective officers, directors, managers, members,
      shareholders, agents, employees, successors and assigns, as indemnitees
      ("Licensee
      Indemnitees")
      from
      and against any and all claims, demands, liabilities, judgments, awards, liens,
      losses, damages, or costs (including reasonable attorneys' fees and expenses)
      of
      any kind or nature (unless caused by the conduct of or omission by any of the
      Licensee Indemnitees) arising from or in any manner related to (a) any
      allegation by any Person other than an Affiliate of Licensee that any portion
      of
      the Technology or the use or practice thereof by Licensee (or any permitted
      Sub
      licensee thereof) in accordance with this Agreement infringes upon prior rights
      of any other Person; (b) to the extent not covered by clause (a) immediately
      above, the failure by Licensor to observe or perform the covenants and
      agreements of Licensor under this Agreement or the inaccuracy of any
      representation or warranty made by Licensor in this Agreement.

    

    
      
        
        

      

      
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    7.2    Indemnification
      by Licensee.
      Licensee, as indemnitor, agrees to indemnify, defend, and hold harmless Licensor
      and its Affiliates (except for those Affiliates which are also Affiliates of
      Licensee), and their respective officers, directors, shareholders, agents,
      employees, successors and assigns, as indemnitees ("Licensor
      Indemnitees"),
      from
      and against any and all claims, demands, liabilities, judgments, awards, liens,
      losses, damages, or costs (including reasonable attorneys' fees and expenses)
      of
      any kind or nature (unless caused by the conduct of or omission by any of the
      Licensor Indemnitees) arising from or in any manner related to (a) the use
      or
      practice by Licensee of the Technology where such use and practice is not in
      compliance with the provisions of Section
      2.2,
      except
      to the extent arising from or related to any allegation by a Person other than
      an Affiliate of Licensee that any portion of the Technology or the use thereof
      by Licensee in accordance with this Agreement infringes upon prior rights of
      any
      other Person; (b) the operation of the business of Licensee and the Projects
      as
      they may relate to this Agreement or the Technology; or (c) to the extent not
      covered by clause (a) immediately above, the failure by Licensee to observe
      or
      perform the covenants and agreements of Licensee under this Agreement or the
      inaccuracy of any representation or warranty made by Licensee in this
      Agreement.

    

    7.3    Duty
      to Defend.
      Each
      indemnitor, at its sole cost and expense, shall defend, with counsel reasonably
      satisfactory to each indemnitee, any claim, demand, suit, cause of action or
      proceeding covered by the indemnities set forth in Section
      7.1
      or
Section
      7.2,
      as the
      case may be. Each indemnitor shall have the right to control the defense of
      any
      claim, demand, suit, cause of action, or proceeding without prejudice to its
      right to contest thereafter whether such was within the scope of the indemnities
      contained in Section
      7.1
      or
Section
      7.2,
      as the
      case may be. Each indemnitee shall have the right, but not the obligation,
      at
      its sole cost and expense, to participate in the defense of any such claim,
      demand, suit, cause of action or proceeding. Each indemnitee shall have the
      right at any time, by notice to each indemnitor, to assume exclusive control
      of
      the defense of any claim, demand, suit, cause of action or proceeding insofar
      as
      such indemnitee is concerned, at the sole cost and expense of the relevant
      indemnitor (subject to the right of the relevant indemnitor to contest whether
      such claim, demand, suit, cause of action or proceeding is within the scope
      of
      the indemnities contained in Section
      7.1
      or
Section
      7.2
      as the
      case may be), if (a) the relevant indemnitor fails to defend diligently such
      claim, demand, suit, cause of action or proceeding, (b) there is a conflict
      in
      the interests of the relevant indemnitor and such indemnitee with respect to
      such claim, demand, suit, cause of action or proceeding, or (c) at any time
      during the pendency of such claim, demand, suit, cause of action or proceeding
      the relevant indemnitor shall disaffirm its responsibility for the claim
      involved. Each indemnitor shall pay all reasonable costs that may be incurred
      by
      all indemnitees in such defense or in enforcing the indemnity set forth in
      Section
      7.1
      or
Section
      7.2,
      as the
      case may be, including reasonable attorneys' fees, within ten (10) days after
      request therefor.

    

    7.4    Settlement.
      Each
      indemnitor shall have the right to settle, at its sole cost and expense, any
      claim, demand, suit, cause of action, or proceeding within the scope of
Section
      7.1
      or
Section
      7.2,
      as the
      case may be, which results only in the payment of money. No indemnitor shall,
      however, have the right, without the prior written consent of the relevant
      indemnitee, to settle any claim, demand, suit, cause of action, or proceeding
      which claim, demand, suit, cause of action or proceeding or settlement thereof,
      involves nonmonetary obligations of any indemnitee; provided,
      however,
      any
      indemnitee not agreeing to any such settlement proposed by an indemnitor shall
      be responsible, without benefit of the indemnity contained in Section
      7.1
      or
Section
      7.2,
      as the
      case may be, for damages of such indemnitee incurred as a result of not agreeing
      to such settlement and neither Licensee nor any Affiliate of Licensee shall
      enter into any such settlement if, in the good-faith opinion of Licensor, such
      settlement could create a precedent or implication that any Person other than
      Licensor owns the Technology.

     

    
      
        
        

      

      
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    ARTICLE
      VIII

    

    DISPUTE
      RESOLUTION

    

    8.1    Agreement
      to Dispute Resolution.
      Subject
      to the provisions of Section
      9.8,
      in the
      event a dispute arises between Licensor and Licensee regarding the application
      or interpretation of this Agreement, such dispute shall be the subject of a
      dispute resolution process, as provided below in this Article, before either
      Licensor or Licensee may resort to litigation. Any such dispute resolution
      process shall be conducted in Orange County, California, or at such other
      location as may be mutually agreed upon by the Parties.

    

    8.2    Initiation
      of Dispute Resolution.
      The
      Party proposing that any dispute be submitted to dispute resolution shall do
      so
      by giving written notice to the other Party of its desire to submit the matter
      to dispute resolution. Promptly thereafter, but in any event within ten (10)
      days or such longer time as the Parties may agree upon, the Parties (each being
      represented by representatives with decision-making authority as to the relevant
      dispute) shall meet to attempt to resolve the relevant dispute. Each of the
      Parties shall bear its own expenses incurred in connection with any such
      meeting.

    

    8.3    Mediation.
      If the
      Parties shall fail for any reason, within thirty (30) days from the initial
      notice provided for in Section
      8.2,
      to
      resolve the relevant dispute, then, prior to resorting to litigation, the
      Parties shall submit the relevant dispute to mediation before a single
      disinterested mediator, who shall be agreed upon mutually from among those
      affiliated with Judicial Arbitration & Mediation Services, Inc., or any
      other mediation service mutually agreed to by the Parties.

    

    8.4    Expense
      of Mediation.
      The
      fees and expenses occasioned by a mediation, including reasonable attorneys'
      fees of the prevailing Party, shall be the obligation of the nonprevailing
      Party; provided,
      however,
      in the
      event that neither Party is the sole prevailing Party, unless otherwise agreed
      by the Parties, the fees and expenses of the mediation process shall be paid
      in
      equal proportions by the Parties and each of the Parties shall pay the fees
      and
      expenses of its counsel.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    ARTICLE
      IX

    

    MISCELLANEOUS
      PROVISIONS

    

    9.1    Assignment.
      Licensor may assign its rights under this Agreement, including in connection
      with any sale, transfer or other disposition of the Technology, to any other
      Person, without the consent of Licensee; provided,
      however,
      that
      any such Assignment shall be made expressly subject to this Agreement. Upon
      the
      prior written consent of Licensor, which consent shall not be unreasonably
      withheld, Licensee may assign all or any portion of its rights under this
      Agreement to a Project Entity, including any assignment or collateral assignment
      of this Agreement by Licensee to (a) any Project Lender, or a purchaser at
      a
      foreclosure sale who assumes the interests and obligations of Licensee
      hereunder, or (b) in connection with a sale, transfer or other disposition
      of a
      Project to a Project Entity in which the Project Entity assumes the interests
      and obligations of Licensee with respect to this Agreement. Any attempt by
      either Party to make any assignment, transfer or other disposition of this
      Agreement or any rights or obligations hereunder, other than in accordance
      with
      the provisions of this Section shall be null and void and of no
      effect.

    

    9.2    Successors
      and Assigns.
      All
      terms and provisions contained herein shall inure to the benefit of and shall
      be
      binding on each of the Parties and their respective successors and permitted
      assigns.

    

    9.3    Parties
      in Interest.
      Subject
      to the provisions of Sections
      2.3 and 9.2,
      and
      unless otherwise expressly provided herein, this Agreement and each and every
      provision hereof is for the exclusive benefit of the Parties and is not for
      the
      benefit of any third Person.

    

    9.4    Amendments;
      Waivers.
      Neither
      this Agreement nor any provision hereof may be amended, waived, discharged,
      or
      terminated orally, but only by an instrument in writing signed by the Party
      against whom enforcement of the amendment, waiver, discharge, or termination
      is
      sought.

    

    9.5    Non-Waiver.
      It is
      understood and agreed that any delay, waiver, or omission by any Party to
      exercise any right or power arising from any breach or default by the other
      Party with respect to any of the terms, provisions, or covenants of this
      Agreement shall not be construed to be a waiver by such Party of any subsequent
      breach or default of the same or other terms, provisions or covenants on the
      part of such other Party.

    

    9.6    Notices.
      Any
      notice, demand, offer, or other written instrument required or permitted to
      be
      given pursuant to this Agreement shall be in writing signed by the Party giving
      such notice and shall be hand delivered or sent by overnight courier, certified
      mail (return receipt requested), or telefax to the other Party at the relevant
      address set forth below:

    

    If
      delivered to Licensor:

    

    Arkenol,
      Inc.

    31
      Musick

    Irvine,
      California 92618 

    Attention: Arnold
      R.
      Klann

    Telephone: (949)
      588-3767

    Telefax: (949)
      588-3972

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    with
      copy
      to:

    

    Kathleen
      D. Klann

    Arkenol,
      Inc.

    31
      Musick

    Irvine,
      California 92618

    Telephone: (949)
      795-4716

    Telefax: (949)
      588-3972

    

    If
      delivered to Licensee:

    

    BlueFire
      Ethanol, Inc.

    

    Attention:  Necy
      Sumait 

    Telephone: 

    Telefax: 

    

    With
      a
      copy to:

    

    Corporate
      attorney (To Be Determined)

    BLUEFIRE
      ETHANOL, INC.

    

    Telephone: 

    Telefax: 

    

    Either
      Party shall have the right to change the address to which notice shall be sent
      or delivered by similar notice sent in like manner to the other Party. Without
      limiting any other means by which a Party may be able to provide that a notice
      has been received by the other Party, a notice shall be deemed to be duly
      received (a) if sent by hand, on the date when left with a responsible Person
      at
      the address of the recipient; (b) if sent by registered mail or overnight
      courier, on the date of receipt; or (c) if sent by telefax upon receipt by
      the
      sender of an acknowledgment or transmission report generated by the machine
      from
      which the telefax was sent indicating that the telefax was sent in its entirety
      to the recipient's facsimile number.

    

    9.7    Attorneys'
      Fees.
      In the
      event any dispute between the Parties to this Agreement should result in
      litigation or any other proceeding (including mediation), then, subject to
      the
      provisions of Section
      8.4
      to the
      contrary, the prevailing Party shall be reimbursed by the nonprevailing Party
      for all reasonable costs and expenses, including reasonable attorneys' fees,
      incurred by the prevailing Party in connection with such litigation or other
      proceeding and any appeal or enforcement thereof.

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    9.8    Injunctive
      Relief.
      It is
      understood and agreed that any breach by Licensee of any of its obligations
      or
      agreements under any of Sections
      2.1, 2.2, 2.3, 3.2, 3.3, 3.4, 3.5, 3.6, 6.5
      and
9.1,
      and
      under either of Articles
      IV
      and
VII
      would
      cause irreparable injury to Licensor for which money damages would not be a
      sufficient remedy. In addition, it is understood and agreed that any breach
      by
      Licensor of any of its obligations or agreements under any of Sections
      2.3, 6.5
      and
9.1
      and
      under Article
      VII
      would
      cause irreparable injury to Licensee for which money damages would not be a
      sufficient remedy. Accordingly, in addition to any remedies available at law,
      the Parties shall each, as the case may be, be entitled to seek equitable
      relief, including a restraining order, an injunction and an order of specific
      performance in the event of any breach or threatened breach by the other Party
      of any of its respective obligations or agreements under the Sections and
      Articles of this Agreement referenced above in this Section. Such remedies
      shall
      not be deemed to be the exclusive remedy for any such breach or threatened
      breach of this Agreement, but shall be in addition to all other remedies
      available to the Parties at law or in equity. The breach or threatened breach
      of
      the provisions of the Sections and Articles of this Agreement referenced above
      shall not be subject to the dispute resolution provisions of this Agreement
      and
      the Parties need not pursue dispute resolution prior to seeking relief pursuant
      to this Section.

    

    9.9    Remedies.
      Except
      as provided herein to the contrary, no remedy conferred by any specific
      provision of this Agreement is intended to be exclusive of any other remedy,
      and
      each and every remedy shall be cumulative and shall be in addition to every
      other remedy given hereunder, or now, or hereafter existing at law, in equity,
      by statute or otherwise. The election of one or more remedies by either Party
      shall not constitute a waiver of the right to pursue other available
      remedies.

    

    9.10        
      Further
      Assurances.
      Each of
      the Parties agrees to execute and deliver any and all additional papers and
      documents, and to do any and all acts reasonably necessary in connection with
      the performance of its obligations hereunder or to carry out the intent of
      the
      Parties reflected herein.

    

    9.11        
      No
      Agency, Joint Venture, Partnership.
      The
      Parties hereby agree that this Agreement merely constitutes a license agreement,
      and that no agency (except as expressly provided to the contrary in Section
      3.6),
      joint
      venture or partnership is created hereby, and that neither Party shall incur
      obligations in the name of the other or be obligated in respect of any
      obligation of the other Party without the prior written consent of such other
      Party or such Party, as the case may be.

    

    9.12       
      Severability.
      Should
      any part or provision of this Agreement be held unenforceable, the validity
      of
      the remaining parts or provisions shall not be affected by such holding so
      long
      as the primary purposes and intentions of the Parties can still be
      accomplished.

    

    9.13       
      Negotiated
      Transaction.
      Each
      Party affirms to the other that it has had the opportunity to consult and
      discuss the provisions of this Agreement with independent legal counsel and
      fully understands the legal effect of each provision. For all purposes, this
      Agreement shall be deemed to have been drafted jointly by both
      Parties.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    9.14        
      Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original instrument and which shall have the same force and effect
      as
      the original instrument, and all of which shall constitute one and the same
      agreement.

    

    9.15        
      Entire
      Agreement.
      This
      Agreement constitutes the entire agreement of the Parties with respect to the
      subject matter hereof and supersedes all prior agreements and understandings,
      both written and oral, between the Parties with respect to the subject matter
      hereof, including the Original Agreement.

    

    9.16        
      Jurisdiction
      and Venue.
      Subject
      to the provisions of Article
      VIII,
      all
      actions or proceedings with respect to, arising directly or indirectly in
      connection with, out of, related to, or from this Agreement or any of the other
      documents or agreements contemplated herein to be executed by either of the
      Parties shall be litigated in courts having situs in Orange County, California,
      and each Party hereby submits to the jurisdiction of such courts in any such
      action and hereby waives any rights it may have to transfer or change the
      jurisdiction or venue of any litigation brought against it in accordance with
      this Section.

    

    9.17        
      Governing
      Law.
      This
      Agreement shall be governed and construed in accordance with the laws of the
      State of California without giving effect to the principles thereof relating
      to
      conflicts of laws.

    

    IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be executed,
      effective as of the day and year first set forth hereinabove.

     

    
      	 	
              LICENSOR: 

              ARKENOL,
                INC.

            
	 	 
	 	
              By:                      
                /s/ Arnold
                R. Klann                          

              Arnold
                R. Klann, President

            
	 	 
	 	
              LICENSEE:

              BLUEFIRE
                ETHANOL, INC. 

            
	 	 
	 	
              
                By:                      
                  /s/ Arnold
                  R. Klann                          

              

              It’s
                President 

            

    

    
       

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

     

    EXHIBIT
      A
      - Description of Process

    

    EXHIBIT
      B
      - Description of Testing - Ethanol Specifications

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    DESCRIPTION
      OF THE PROCESS

     

    The
      Process relates to a method of producing sugars and other end products using
      strong acid hydrolysis of cellulosic and hemicellulosic materials, as described
      in U.S. Patents Nos. 5,562,777 and 5,580,389, issued October 8, 1996 and
      December 3, 1996, respectively. The Process also includes all related know-how
      and Improvements to the Technology, whether described in said Patents or in
      additional patents issued to Licensor from time to time in the future, and
      whether such know-how or Improvements are protected as trade secrets or
      not.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
      B

    

    DESCRIPTION
      OF TESTING - ETHANOL SPECIFICATIONS

     

     

    
      	            ·  	
              Collection
                of target feedstock under Arkenol
                supervision;

            

    

    

    
      	            ·  	
              Characterization
                of feedstock;

            

    

    

    
      	            ·  	
              Conversion
                of feedstock to acid hydrolysis
                sugar;

            

    

    

    
      	            ·  	
              Analysis
                of sugar for trace contaminants;

            

    

    

    
      	            ·  	
              Conversion
                of acid hydrolysis sugar to
                Ethanol;

            

    

    

    
      	            ·  	
              Evaluation
                of optimum separation techniques for sugar-acid
                separation.Unassociated Document

    Exhibit
      10.4

    
ASSET
      TRANSFER AND ACQUISITION AGREEMENT

    

    This
      ASSET TRANSFER AND ACQUISITION AGREEMENT (this “Agreement”) dated as of the
      1st
      day of
      March, 2006 (“Execution Date”) is made and entered into by and between
ARK
      ENERGY, INC.,
      a
      Nevada corporation
      (“Transferor”) and BLUEFIRE
      ETHANOL, INC.,
      a
      Nevada Corporation (“Transferee”),
      (Transferee and Transferor being sometimes hereinafter referred to individually
      as a “Party” and collectively as the “Parties”). Capitalized terms not otherwise
      defined herein have the meaning set forth in Article
      I.

    

    WHEREAS,
      Transferee has an exclusive license from ARKENOL, INC. to develop, own and
      operate ethanol plants using the Arkenol Technology for the North American
      Market, and to sublicense the Technology to third parties to develop, own and
      operate ethanol plants using the Arkenol Technology for the North American
      Market;

    

    WHEREAS,
      Transferor owns certain rights, assets, Work-Product, intellectual property
      and
      other know-how on project opportunities that may be used for the deployment
      of
      the Arkenol Technology for the North American Market (all of the foregoing
      being
      hereafter referred to as the “Interests”) as described in Appendix I; and

    

    WHEREAS,
      Transferee may use the Interests in its and its sublicensees’ deployment of the
      Arkenol Technology in the North American Market; and

    

    WHEREAS,
      Transferor desires to transfer, and Transferee desires to receive all rights,
      title and interest held by Transferor in the Interests to Transferee, on the
      terms and subject to the conditions set forth in this Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      in
      this Agreement, and for other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, the Parties agree as
      follows:

    

    ARTICLE
      I.

     

    DEFINITIONS

    Section
      1.  Definitions.
      

     

    (a)  Defined
      Terms. As used in this Agreement, the following defined terms have the meanings
      indicated below:

     

    “Actions
      or Proceedings”
means
      any action, suit, proceeding, arbitration or Government or Regulatory Authority
      investigation.

     

    “Affiliate”
means
      any Person that directly, or indirectly through one of more intermediaries,
      controls or is controlled by or is under common control with the Person
      specified. For purposes of this definition, control of a Person means the power,
      direct or indirect, to direct or cause the direction of the management and
      policies of such Person whether by Contract or otherwise and, in any event
      and
      without limitation of the previous sentence, any Person owning ten percent
      (l0%)
      or more of the voting securities of another Person shall be deemed to control
      that Person.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

       

    

    “Agreement”
means
      this Asset Transfer and Acquisition Agreement and the Appendices and Exhibits
      herewith, as the same shall be amended from time to time.

     

    “Arkenol
      Technology”
      means
      Arkenol’s patented technology for the production of ethanol from cellulosic
      materials.

     

    “Arkenol
      License”
means
      the exclusive license that Transferee has received from Arkenol,
      Inc.

     

    “Assets
      and Properties”
of
      any
      Person means all assets and properties of every kind, nature, character and
      description (whether real, personal or mixed, whether tangible or intangible,
      and wherever situated), including the goodwill related thereto, operated, owned
      or leased by such Person.

     

    “Assignment
      of Interests”
means
      the Assignment of Interests substantially in the form of Exhibit A.

     

    “Business
      Day”
means
      a
      day other than Saturday, Sunday or any day on which banks located in the State
      of California and Nevada are authorized or obligated to close.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended, and the rules and regulations
      promulgated thereunder. 

     

    “Environmental
      Law”
means
      any Law or Order relating to the regulation or protection of human health,
      safety or the environment or to emissions, discharges, releases or threatened
      releases of pollutants, contaminants, chemicals or industrial, toxic or
      hazardous substances or wastes into the environment (including, without
      limitation, ambient air, soil, surface water, ground water, wetlands, land
      or
      subsurface strata), or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
      or wastes.

     

    “Execution
      Date”
means
      the date first written in the introductory paragraph of this
      Agreement.

     

    “Financial
      Closing”
shall
      mean the long term non-recourse financing of the Transferee’s Project(s).

     

    “GAAP”
means
      generally accepted accounting principles, consistently applied throughout the
      specified period and in the immediately prior comparable period.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    “Governmental
      Approval”
means
      any authorization, approval, consent, license, exception, variance, order,
      franchise, lease, ruling, permit, tariff, certification, exception, filing,
      notice to, declarations of, or registration by or with any Governmental or
      Regulatory Authority.

     

    “Governmental
      or Regulatory Authority”
means
      any court, tribunal, arbitrator, authority, agency, commission, official or
      other instrumentality of the United States or any state, county, city or other
      political subdivision.

     

    “Interests”
has
      the
      meaning ascribed to it in the forepart of this Agreement. “Interests” includes
      the Work Product and any and all other assets, interests or property owned
      or
      held by Transferor described in Appendix I hereto.

     

    “Knowledge
      of Transferor”
means
      the actual knowledge of the officers and employees of Transferor.

     

    “Laws”
means
      all laws, statutes, treaties, rules, codes, ordinances, regulations, permits,
      official guidelines, certificates, orders, interpretations, licenses, leases
      and
      permits of any Governmental or Regulatory Authority, Governmental Approvals,
      Environmental Laws, and judgments, decrees, injunctions, writs, orders or like
      action of any court, arbitrator or other judicial or quasi-judicial tribunal
      of
      competent jurisdiction and all requirements of law.

     

    “Liens”
means
      any mortgage, pledge, assessment, security interest, lease, lien, adverse claim,
      levy, charge or other encumbrance of any kind, or any conditional sale contract,
      title retention contract or other contract to give any of the
      foregoing.

     

    “North
      American Market”
shall
      mean potential ethanol markets in the United States and Canada.

     

    “Order”
means
      any writ, judgment, decree, injunction or similar order of any Governmental
      or
      Regulatory Authority (in each such case whether preliminary or
      final).

     

    “Party”
or
      “Parties”
shall
      have the meaning set forth in the introductory paragraph to this
      Agreement.

     

    “Person”
means
      any natural person, corporation, limited liability company, general partnership,
      limited partnership, proprietorship, other business organizations, trust, union,
      association or Governmental or Regulatory Authority. 

     

    “Performance
      Bonus”
has
      the
      meaning ascribed to it in Article II, Section 2.

     

    “Start
      of Construction”
means
      either the first placement of permanent construction of a building on site,
      such
      as the pouring of a slab or footing, the installation of piles, the construction
      of columns, or any work beyond the stage of excavation; or the placement of
      a
      manufactured (mobile) home on a foundation.

     

    “Transferee”
has
      the
      meaning ascribed to it in the forepart of this Agreement, and includes any
      successors and assigns.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    “Transferee’s
      Project(s)”
      shall
      mean project(s) owned or controlled by the Transferee or by its sublicensees
      utilizing the Arkenol Technology in the North American Market.

     

    “Transferor”
has
      the
      meaning ascribed to it in the forepart of this Agreement and includes its
      successors and assigns.

     

    “Termination
      Date”
shall
      mean the date that is three (3) years after the Execution Date unless otherwise
      amended by both parties in writing if significant progress has not been made
      by
      Transferee to develop, design, and finance its first project

     

    “Work
      Product”
shall
      mean all rights appurtenant to the development of projects related to the
      Arkenol Technology, data, all reports of consultants, all know-how and
      information based or obtained in connection with the development of projects
      related to the Arkenol Technology and all of the other rights (including, but
      not limited to, development rights and other work products) comprising or
      relative to the Arkenol Technology.

     

    (b)  Construction
      of Certain Terms and Phrases.
      Unless
      context of this Agreement otherwise requires, (i) words of any gender include
      each other gender, (ii) words using the singular of plural number also include
      the plural or singular number, respectively; (iii) the terms “hereof,”
      “herein,”
      “hereby”
and
      derivative or similar words refer to this entire Agreement; and (iv) the terms
      “Article”
or
      “Section”
refer
      to the specified Article or Section of this Agreement. Whenever this Agreement
      refers to a number of days, such number shall refer to calendar days unless
      Business Days are specified. All accounting terms used herein and not expressly
      defined herein shall have the meanings given to them under GAAP. Any
      representation or warranty contained herein as to the enforceability of a
      Contract shall be subject to the effect of any bankruptcy, insolvency,
      reorganization, moratorium or other similar law affecting the enforcement of
      creditors’ rights generally and to general equitable principles (regardless of
      whether such enforceability is considered in a proceeding in equity or at
      law).

     

    ARTICLE
      II.   

     

    TRANSFER
      OF INTERESTS AND EXECUTION

    

    Section
      1.  Transfer
      and Receipt.
      Transferor agrees to transfer to Transferee, and Transferee agrees to receive
      from Transferor at the Execution Date, all of the rights, title and interests
      of
      Transferor in and to the Interests on the terms and subject to the conditions
      set forth in this Agreement.

     

    Section
      2.  Performance
      Bonus.
      In
      consideration of the receipt and transfer described above and in the event
      that
      the Interests are used by Transferee in Transferee’s Project(s), Transferee
      shall pay to Transferor an aggregate sum (the “Performance Bonus”) of up to a
      maximum of SIXTEEN MILLION DOLLARS ($16,000,000). The payment of the Performance
      Bonus is based on one hundred percent (100%) of the “at-cost” transfer basis of
      the Interests at the time of that specific Transferee’s Project’s implementation
      (as described on Table 1) as demonstrated by Start of Construction or Financial
      Closing, whichever is earlier, and subject to the limitations in Section 3
      of
      this Article II.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

       

    

    Section
      3.   Payment
      of Performance Bonus.

     

    (a)  The
      Performance Bonus shall be due and payable as follows:

     

    (i)  The
      Performance Bonus shall be paid in whole or in increments, based upon the value
      of the use of the Interests, or a portion thereof, by Transferee in Transferee’s
      Project(s). Such payment(s) shall be paid no later than thirty (30) days after
      the Financial Closing or Start of Construction of Transferee’s Project(s)
      utilizing the Interests, or a portion thereof, and receipt of an Invoice from
      Transferor of the amount due. All payments to Transferor under this Agreement
      will be solely by bank wire transfer in U.S. dollars. 

     

    Section
      4.  Conversion
      Requirements.
      The
      Performance Bonus will be converted to preferred shares in the event BlueFire
      becomes or is reorganized into a publicly traded company. Such preferred shares
      issued will have a right of conversion to common stock at a ratio that will
      be
      limited to a maximum face value of sixteen million dollars ($ 16,000,000) as
      determined by the price of the common stock at the time of conversion to common
      shares which shall occur five years from the date of first trading of
      shares.

     

    ARTICLE
      III.

     

    REPRESENTATIONS
      AND WARRANTIES OF TRANSFEROR

     

    Except
      as
      otherwise provided herein, Transferor hereby represents and warrants to
      Transferee as follows:

     

    Section
      1.  Existence.
      Transferor is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Nevada. Transferor has full corporate
      power and authority to execute and deliver this Agreement and to perform its
      obligations hereunder and to consummate the sale of the Interests contemplated
      hereby.

     

    Section
      2.  Authority.
      The
      execution and delivery by Transferor of this Agreement, and the performance
      by
      Transferor of its obligations hereunder, have been duly and validly authorized
      by its board of directors, no other corporate action on the part of Transferor,
      its stockholders or any other person being necessary. This Agreement has been
      duly and validly executed and delivered by Transferor and constitutes a legal,
      valid and binding obligation of Transferor enforceable against Transferor in
      accordance with its terms. 

     

    Section
      3.  Title
      to Properties.
      Transferor has good, valid and marketable title to the Interests, subject to
      no
      encumbrance, Lien, charge or other restriction of any kind or
      character.

     

    Section
      4.  Interests.
      At the
      Execution Date, the delivery of an Assignment of Interests provided in Section
      4
      of Article II will transfer to Transferee good and valid title to the Interests,
      free and clear of all Liens, other than Liens created or suffered to exist
      by
      Transferee.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    Section
      5.  Legal
      Proceedings.
      There
      are no Actions or Proceedings pending or, to the Knowledge of Transferor,
      threatened against, relating to or affecting Transferor or any of its Assets
      and
      Properties which could reasonably be expected to result in the issuance of
      an
      Order restraining, enjoining or otherwise prohibiting or making illegal the
      consummation of the sale of the Interests contemplated by this
      Agreement.

     

    Section
      6.  Consents;
      No Violation of Agreements.
      No
      consent of any person is necessary for the consummation by Transferor of the
      transactions set forth herein, including, without limitation, consents from
      governmental agencies, whether federal, state or local, and neither the
      execution and delivery of this Agreement by Transferor nor the consummation
      or
      performance by Transferor of any of the transactions set forth herein, will
      directly or indirectly (with or without notice or lapse of time) contravene,
      conflict with, or result in a violation or breach of any provision of, or give
      any person the right to declare a default or exercise any remedy under, or
      to
      accelerate the maturity or performance of, or to cancel, terminate, or modify,
      any of the Interests.

     

    Section
      7.  Taxes.
      

     

    (a)  Transferor
      is not a “foreign person” within the meaning of Section 1445(b)(2) of the
      Code;

     

    (b)  There
      are
      no liens for Taxes upon any of the Interests;

     

    (c)  None
      of
      the assets of Transferor is “tax-exempt use property” within the meaning of
      Section 168(h) of the Code or tax-exempt bond financed property within the
      meaning of Section 168(g)(5) of the Code and none of the assets of Transferor
      is
      subject to any lease made pursuant to Section 168(f)(8) of the Code (as in
      effect from time to time prior to the date hereof); and

     

    Section
      8.  Bankruptcy.
      Transferor has not filed any voluntary petition in bankruptcy or been
      adjudicated as bankrupt or insolvent, filed any petition or answer seeking
      any
      reorganization, liquidation, dissolution or similar relief under any federal
      or
      state bankruptcy act, insolvency, or other debtor relief law, nor sought or
      consented to or acquiesced in the appointment of any trustee, receiver,
      conservator or liquidator of all or any substantial part of its
      properties.

     

    Section
      9.  Brokers.
      All
      negotiations relative to this Agreement and the transactions contemplated hereby
      have been carried out by Transferor directly with Transferee without the
      intervention of any Person on behalf of Transferor in such manner as to give
      rise to any valid claim by any Person against Transferee for a finder’s fee,
      brokerage commission or similar payment.

     

    Section
      10.  Disclosure.
      Transferor has made available to Transferee copies of all books and records
      in
      its possession relating to the Interests, including, but not limited to, all
      governmental communications, reviews, audits, investigations or inspections,
      whether pending, completed or, to Transferor’s knowledge, threatened, relating
      to the Projects or the Interests, which contain any material data or information
      with respect to the ownership or development of the Projects. The
      representations and warranties of Transferor, when taken as a whole, do not
      contain any untrue statement of a material fact nor do they omit to state a
      material fact which is or should have been known to Transferor or its Affiliates
      to be necessary in order to make the representations and warranties made, in
      light of the circumstances under which they were made, not
      misleading.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    ARTICLE
      IV.

     

    REPRESENTATIONS
      AND WARRANTIES OF TRANSFEREE

     

    Transferee
      hereby represents and warrants to Transferor as follows:

     

    Section
      1.  Corporate
      Existence.
      Transferee is a to be formed corporation that would be duly organized, validly
      existing and in good standing under the Laws of the State of Nevada. Transferee
      has full corporate power and authority to execute and deliver this Agreement,
      to
      perform its obligations hereunder and to consummate the receipt of the Interests
      contemplated hereby. If the corporation is not formed within one (1) year of
      the
      Execution Date, then this Agreement is voided.

     

    Section
      2.  Authority.
      The
      execution and delivery by Transferee of this Agreement, and the performance
      by
      Transferee of its obligations hereunder, have been duly and validly authorized
      by the President of Transferee, no other action on the part of Transferee being
      necessary. This Agreement has been duly and validly executed and delivered
      by
      Transferee and constitutes a legal, valid and binding obligation of Transferee
      enforceable against Transferee in accordance with its terms.

     

    Section
      3.  Legal
      Proceedings.
      There
      are no Actions or Proceedings pending or, to the knowledge of Transferee,
      threatened against, relating to or affecting Transferee or any of its Assets
      and
      Properties which could reasonably be expected to result in the issuance of
      an
      Order restraining, enjoining or otherwise prohibiting or making illegal the
      consummation of the receive of the Interests contemplated by this
      Agreement.

     

    Section
      4.  Brokers.
      All
      negotiations relative to this Agreement and the transactions contemplated hereby
      have been carried out by Transferee directly with Transferor without the
      intervention of any Person on behalf of Transferee in such manner as to give
      rise to any valid claim by any Person against Transferor or any Subsidiary
      for a
      finder’s fee, brokerage commission or similar payment.

     

    ARTICLE
      V.

     

    COVENANTS
      OF TRANSFEROR

     

    Transferor
      covenants and agrees with Transferee that, at all times from and after the
      date
      hereof until the Termination Date, Transferor will comply with all covenants
      and
      provisions of this Article
      V,
      except
      to the extent Transferee may otherwise consent in writing.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

       

    

    Section
      1.  Fulfillment
      of Conditions.
      Transferor will proceed diligently and in good faith and will take all
      commercially reasonable steps necessary or desirable to satisfy each condition
      to the obligations of Transferee contained in this Agreement and will not take
      or fail to take any action that could reasonably be expected to result in the
      nonfulfillment of any such condition.

     

    Section
      2.  Duty
      to Notify.
      Transferor shall promptly notify Transferee of any actions or events that might
      have a material adverse effect or which may result in a breach of covenants
      in
      this Article
      V,
      may
      result in a breach of the representations and warranties in Article III, or
      may
      otherwise impede the use of the Interests by Transferee.

     

    Section
      3.  Duty
      to Cooperate.
      Transferor shall use its best reasonable efforts to cooperate with Transferee
      to
      facilitate the use of the Interests by Transferee.

     

    Section
      4.  Non-Competition.
      Transferor shall not engage in any activity that is in any way competitive
      with
      Transferee’s interest in the use of the Interests, and shall not assist any
      other person or organization in competing with or in preparing to compete with
      Transferee’s interest in the Interests. 

     

    ARTICLE
      VI.

     

    COVENANTS
      OF TRANSFEREE

     

    Transferee
      covenants and agrees with Transferor that, at all times from and after the
      date
      hereof until the Termination Date, Transferee will comply with all covenants
      and
      provisions of this Article
      VI,
      except
      to the extent Transferor may otherwise consent in writing.

     

    Section
      1.  Fulfillment
      of Conditions.
      Transferee will take all commercially reasonable steps necessary or desirable
      to
      satisfy each condition to the obligations of Transferor contained in this
      Agreement and will not take or fail to take any action that could reasonably
      be
      expected to result in the nonfulfillment of any such condition.

     

    ARTICLE
      VII.

     

    CONDITIONS
      TO OBLIGATIONS OF TRANSFEREE

     

    The
      obligations of Transferee hereunder to receive the Interests are subject to
      the
      fulfillment, at or before the Execution Date, of each of the following
      conditions (all or any of which may be waived in whole or in part by Transferee
      in its sole discretion). 

     

    Section
      1.  Performance.
      Transferor shall have performed and complied with, in all material respects,
      the
      agreements, covenants and obligations required by this Agreement to be so
      performed or complied with by Transferor at or before the Execution
      Date.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

       

    

    Section
      2.  Accuracy
      of Representations and Warranties.
      The
      representations and warranties of the Transferors herein contained shall be
      true
      at the Execution Date in all material respects.

     

    Section
      3.  Assignment
      of Interests.
      Transferor shall have delivered the Assignment of Interests, substantially
      in
      the form of Exhibit
      A.
      

     

    ARTICLE
      VIII.

     

    CONDITIONS
      TO OBLIGATIONS OF TRANSFEROR

     

    The
      obligations of Transferor hereunder to transfer the Interests are subjected
      to
      the fulfillment, at or before the Execution Date, of each of the following
      conditions (all or any of which may be waived in whole or in part by Transferor
      in its sole discretion).

     

    Section
      1.  Performance.
      Transferee shall have performed and complied with, in all material respects,
      the
      agreements, covenants and obligations required by this Agreement to be so
      performed or complied with by the Transferee at or before the Execution
      Date.

     

    ARTICLE
      IX.

     

    TERMINATION

     

    Section
      1.  Termination.
      This
      Agreement may be terminated by Transferee, and the transactions contemplated
      hereby may be abandoned, at any time before the Termination Date, at the sole
      discretion of Transferee with or without cause, by giving written notice to
      Transferor. Upon termination, Transferee shall relinquish all rights to the
      Interests. 

     

    Section
      2.  Effect
      of Termination.
      If this
      Agreement is validly terminated pursuant to Section 1 of this Article IX, this
      Agreement will forthwith become null and void, and there shall be no liability
      or obligation on the part of Transferor or Transferee (or any of their
      respective officers, directors, employees, agents or other representatives
      or
      Affiliates), subject to the following exceptions:

     

    (a)  Article
      X
      and Sections 3, 4, 5, 14, 15 and 16 of Article XI shall continue to apply
      following any such termination; and

     

    ARTICLE
      X.

     

    INDEMNIFICATION

     

    Section
      1.  Indemnification
      of Transferee by Transferor.
      Transferor hereby agrees to indemnify and hold harmless Transferee, its
      Affiliates and their respective shareholders, managers, officers, directors,
      members, employees, partners, agents, and their respective heirs, personal
      representatives, successors and assigns (the “Transferee Indemnified Parties”)
      from and against any and all claims, demands, actions, proceedings,
      investigations and rights of action asserted by any third party against any
      of
      the Transferee Indemnified Parties, including reasonable attorneys’ fees and
      costs, whether or not action is instituted and, if instituted, whether at any
      trial or appellate level, whether raised by the Transferee Indemnified Parties
      or a third party, which
      shall
      or may
      arise
      by virtue of or in connection with (i) anything done or omitted to be done
      by
      Transferor in connection with this Agreement, (ii) any breach by Transferor
      of a
      covenant, warranty or representation contained herein, or (iii) anything done
      or
      omitted to be done by Transferor in connection with the Interests prior to
      the
      Execution Date or after the termination of this Agreement pursuant to Article
      IX. Indemnity claims shall be payable when incurred by the Transferee
      Indemnified Parties.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

       

    

    Section
      2.  Indemnification
      of Transferor by Transferee.
      Transferee hereby agrees to indemnify and hold Transferor, its Affiliates,
      officers, directors, managers, members, employees, partners, shareholders,
      agents and their respective heirs, personal representatives, successors and
      assigns (the “Transferor Indemnified Parties”) harmless from and against any and
      all claims, demands, actions, proceedings, investigations and rights of action
      asserted by any third party against any of the Transferor Indemnified Parties,
      including reasonable attorneys’ fees and costs, whether action is instituted or
      not and, if instituted, whether at any trial or appellate level, whether raised
      by the Transferor Indemnified Parties or a third party, which shall or may
      arise
      by virtue of or in connection with (i) anything done or omitted to be done
      by
      Transferee with respect to the obligations of Transferee pursuant to this
      Agreement, or (ii) any breach by Transferee of a covenant; warranty or
      representation contained herein. Indemnity claims shall be payable when incurred
      by the Transferor Indemnified Parties.

     

    Section
      3.  Limitation
      on Indemnification.
      The
      maximum amount of losses that either Party will be responsible to bear under
      Sections 1 and 2, respectively, of this Article X is One Million Dollars
      ($1,000,000). This maximum amount shall not apply to losses resulting from
      either Party’s fraud, intentional misrepresentation, intentional breaches of
      covenants, or intentional violations of any Law.

     

    ARTICLE
      XI.

     

    MISCELLANEOUS

     

    Section
      1.  Notices.
      All
      notices, requests and other communications hereunder must be in writing and
      will
      be deemed to have been duly given only if delivered personally or by messenger
      (including by air courier) or by facsimile transmission or mailed (first class
      postage prepaid) to the Parties at the following addresses or facsimile
      numbers:

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    If
      to
      Transferee, to:

     

    BLUEFIRE
      ETHANOL, INC.

    31
      Musick

    Irvine,
      California 92618

    Attn:
      Arnold Klann

    Tel:
      (949) 588-3767 ext. 310

    Fax:
      (949) 580-6935 

     

    If
      to
      Transferor, to:

     

    ARK
      ENERGY, INC.

    31
      Musick

    Irvine,
      California 92618

    Attn:
      Necy Sumait

    Tel:
      (949) 588-3767, ext. 304

    Fax:
      (949) 588-3972

     

    All
      such
      notices, requests and other communications will (i) if delivered personally
      or
      by messenger (including by air courier) to the address as provided in this
      Section, be deemed given upon delivery, (ii) if delivered by facsimile
      transmission to the facsimile number as provided in this Section, be deemed
      given upon receipt, and (iii) if delivered by mail in the manner described
      above
      to the address as provided in this Section, be deemed given upon receipt (in
      each case regardless of whether such notice, request or other communication
      is
      received by any other Person to whom a copy of such notice, request or other
      communication is to be delivered pursuant to this Section). Any Party from
      time
      to time may change its address, facsimile number or other information for the
      purpose of notices to that Party by giving notice specifying such change to
      the
      other Party.

     

    Section
      2.  Entire
      Agreement.
      Each
      appendix and exhibit delivered pursuant to this Agreement will be in writing
      and
      will constitute a part of this Agreement. This Agreement, together with those
      appendices and exhibits, constitutes the entire agreement among the Parties
      pertaining to the subject matter of this Agreement and supersedes all the
      Parties’ prior agreements and understandings in connection
      therewith.

     

    Section
      3.  Expenses.
      Except
      as otherwise expressly provided in this Agreement, whether or not the sale
      of
      the Interests contemplated hereby are consummated, each Party will pay its
      own
      costs and expenses incurred in connection with the negotiation, execution and
      Execution of this Agreement and the transactions contemplated
      hereby.

     

    Section
      4.  Public
      Announcements.
      Any
      public announcement reporting the transfer hereunder or concerning the
      transactions contemplated hereby shall be made at the sole discretion of
      Transferee. Transferor will not issue or make any reports, statements or
      releases to the public with respect to this Agreement or the transactions
      contemplated hereby without the prior written consent of Transferee.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

       

    

    Section
      5.  Waiver.
      Any
      term or condition of this Agreement may be waived at any time by the Party
      that
      is entitled to the benefit thereof, but no such waiver shall be effective unless
      set forth in a written instrument duly executed by or on behalf of the Party
      waiving such term or condition. No waiver by any Party of any term or condition
      of this Agreement, in any one or more instances, shall deemed to be or construed
      as a waiver of the same or any other term or condition of this Agreement on
      any
      future occasion. All remedies, either under this Agreement or by Law or
      otherwise afforded, will be cumulative and not alternative.

     

    Section
      6.  Further
      Assurances.
      Subject
      to the terms and conditions of this Agreement, at any time or from time to
      time
      after the Execution, each of the Parties shall execute and deliver such other
      documents and instruments, provide such materials and information and take
      such
      other actions as may reasonably be necessary, proper or advisable, to the extent
      permitted by Law, to fulfill its obligations under this Agreement.

     

    Section
      7.  Amendment.
      This
      Agreement may be amended, supplemented or modified only by a written instrument
      duly executed by or on behalf of each Party.

     

    Section
      8.  No
      Third Party Beneficiary.
      The
      terms and provisions of this Agreement are intended solely for the benefit
      of
      each Party and their respective successors or permitted assigns, and it is
      not
      the intention of the Parties to confer third-party beneficiary rights upon
      any
      other Person.

     

    Section
      9.  No
      Assignment; Binding Effect.
      Transferee may assign this Agreement in whole or in part at any time, or from
      time to time, in its sole discretion; provided, however, any such assignee
      shall
      assume Transferee’s obligations hereunder (in whole or in part, as appropriate).
      Neither this Agreement nor any right, interest or obligation hereunder may
      be
      assigned by Transferor without the prior written consent of Transferee and
      any
      attempt to do so will be void. Subject to the preceding sentences, this
      Agreement is binding upon, inures to the benefit of and is enforceable by the
      Parties and their respective successors and assigns.

     

    Section
      10.  Headings.
      The
      headings used in this Agreement have been inserted for convenience of reference
      only and do not define or limit the provisions hereof.

     

    Section
      11.  Invalid
      Provisions.
      If any
      provision of this Agreement is held to be illegal, invalid or unenforceable
      under any present or future Law, and if the rights or obligations of any Party
      under this Agreement will not be materially and adversely affected thereby,
      (a)
      such provision will be fully severable, (b) this Agreement will be construed
      and
      enforced as if such illegal, invalid or unenforceable provision had never
      comprised a part hereof, and (c) the remaining provisions of this Agreement
      will
      remain in full force and effect and will not be affected by the illegal, invalid
      or unenforceable provision or by its severance herefrom.

     

    Section
      12.  Governing
      Law.
      This
      Agreement shall be governed in all respects by and construed in accordance
      with
      the laws of the State of Nevada without regard to principles of conflicts of
      laws.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

       

    

    Section
      13.  Arbitration.
      Any
      controversy or claim arising out of or relating to this Agreement, its
      enforcement or interpretation, or because of an alleged breach, default, or
      misrepresentation in connection with any of its provisions, shall be submitted
      to final and binding arbitration, to be held in Clark County, Nevada in
      accordance with the Commercial Arbitration Rules or then existing rules for
      commercial arbitration of the American Arbitration Association. The arbitrator
      shall be selected by mutual agreement of the parties; if none, then by striking
      from a panel of arbitrators from the American Arbitration
      Association.

     

    Section
      14.  Attorneys’
      Fees.
      In the
      event of any arbitration or other proceeding between any of the Parties with
      respect to any of the transactions contemplated hereby or subject matter hereof,
      the prevailing Party shall, in addition to such other relief as the arbitrator
      may award, be entitled to recover reasonable attorneys’ fees, all costs of the
      arbitration, including but not limited to, the arbitration fees, court reporter
      fees, etc. (and including, if applicable, any costs at the trial and appellate
      levels and in any bankruptcy proceeding), and expenses of
      investigation.

     

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

     

    Section
      17. Conflict.
      In the
      event of any conflict between the terms of this Asset Transfer and Acquisition
      Agreement and the terms of the Assignment of Interests, the terms of the Asset
      Transfer and Acquisition Agreement shall prevail.

     

    

     

    [Remainder
      of page intentionally left blank]

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    IN
      WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
      duly
      authorized officer of each Party as of the date first above written (“Execution
      Date”).

    
      	 	 	 
	 	BLUEFIRE
              ETHANOL,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Arnold
              Klann
	 	
              
Name:
              Arnold Klann 
	 	Title:
              President 

    

     

    
      	 	 	 
	 	
              ARK
                ENERGY, INC., A
                Nevada corporation

            
	 
 	 
 	 
 
	 	By:  	/s/ Necy
              Sumait
	 	
              
Name:
              Necy Sumait
	 	Title:
              Vice President 

    

     

           

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

     APPENDIX
      I

     

    DESCRIPTION
      OF INTERESTS

     

    	·   
             	
            Process
              Design Package for the Sacramento Biorefinery Project prepared by Bateman
              Engineers;

          

     

    	·   
             	
            Permits,
              Work Product, reports, data and any and all information obtained in
              connection with the project opportunities listed on Table
              1
              in
              connection with the Arkenol Technology in the North American
              Market;

          

     

    	·   
             	
            Any
              and all data collected regarding the geographical location of potential
              sites, environmental conditions, infrastructure, regulatory requirements;
              

          

     

    	·   
             	
            Any
              and all correspondences regarding meetings or telephone calls with
              utilities, governmental or regulatory agencies, vendors, or potential
              clients for facility outputs; 

          

     

    	·   
             	
            Any
              and all draft or completed business plans for potential
              facilities;

          

     

    	·   
             	
            Any
              and all engineering design or data developed for potential projects;
              

          

     

    	·   
             	
            Any
              and all research, data or reports on market information for facility
              outputs;

          

     

    	·   
             	
            All
              documents, studies, reports, material, data, files, contact lists or
              other
              information or know-how developed, owned, held or obtained by Transferor
              in connection with project opportunities;
              and

          

     

    	·   
             	
            All
              other rights of the Transferor (including, but not limited to, development
              rights, work product and other intellectual, tangible and intangible
              property) comprising or relative to project
              opportunities.

          

     

    	·   
             	
            All
              rights (including all intellectual property rights), title and interest
              in
              and to all assets, contract rights, products, reports, studies, drawings,
              tracings, schedules, photographs, slides, estimates, specifications,
              diagrams, models, calculations and other results of work by Transferor,
              including any and all development rights and assets that are part of
              or
              relate in any way to project opportunities.

          

     

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    Table
      1

    
      	 	
              Project
                Name

            	 	
              Location

            	
              Pilot
                Analysis

            	
              Engineering

            	
              Site
                Development

            	
              Feedstock

            	
              Benefit
                to 

              BlueFire

            
	
              1

            	
              California
                #1

            	 	
              El
                Sobrante, Simi, Bradley, Meccca, Orange County

            	 	 	
              $700

            	
              Urban
                wood & green waste

            	
              1,2,3,4,5

            
	
              2

            	
              California
                #2

            	 	
              Colusa,
                CA

            	 	 	
              $200

            	
              Ag
                waste

            	 
	
              3

            	
              California
                #3

            	 	
              Rio
                Linda, CA

            	
              $1,500

            	
              $2,000

            	
              $5,000

            	
              Ag
                waste

            	
              1,2,3,4,5,6

            
	
              4

            	
              California
                #4

            	 	
              City
                of Industry

            	
              $10

            	 	 	
              Post
                sorted MSW

            	
              2

            
	
              5

            	
              California
                #5

            	 	
              Alameda
                Corridor

            	 	 	
              $35

            	
              Urban
                green waste

            	
              1

            
	
              6

            	
              California
                #6

            	 	
              Thermo
                Fibergen

            	
              $32

            	 	 	 	 
	
              7

            	
              Canada

            	 	
              Suncor

            	 	 	
              $20

            	 	 
	
              8

            	
              Florida
                # 1

            	 	
              Bartow,
                FL

            	
              $40

            	 	
              $100

            	
              Sorghum

            	
              1,2,3,4

            
	
              9

            	
              Florida
                # 2

            	 	
              Ft.
                Myers, FL

            	 	 	
              $50

            	
              Urban
                green waste

            	
              1,2,5

            
	
              10

            	
              Fort
                Worth

            	 	
              Euless,
                TX

            	
              $400

            	
              $2,000

            	
              $2,000

            	
              Urban
                green waste

            	
              1,2,3,4,5,6

            
	
              11

            	
              Hawaii

            	 	
              Various

            	
              $30

            	 	
              $800

            	
              Ag
                waste

            	
              1,2,3,5

            
	
              12

            	
              Illinois
                

            	 	
              Robbins,
                IL

            	
              $30

            	 	
              $300

            	
              Post
                sorted MSW

            	
              1,2

            
	
              13

            	
              Minnesota
                #1

            	 	
              Becker,
                MN

            	
              $60

            	
              $50

            	
              $150

            	
              MSW/RDF

            	
              1,2,3

            
	
              14

            	
              Minnesota
                #2

            	 	
              Mankato,
                MN

            	
              $60

            	
              $100

            	
              $150

            	
              MSW/RDF

            	
              1,2,3

            
	
              15

            	
              Minnesota
                #3

            	 	
              Dakota
                County, MN

            	
              $30

            	
              $50

            	
              $200

            	
              MSW/RDF

            	
              1,2,3

            
	
              16

            	
              Minnesota
                #4

            	 	
              Hibbing,
                MN

            	
              $30

            	
              $50

            	
              $200

            	
              Forest
                Waste

            	
              1,2

            
	
              17

            	
              New
                Jersey

            	 	
              Plumstead

            	 	 	
              $50

            	
              Urban
                green waste

            	
              3

            
	
              18

            	
              Pensylvania
                #1

            	 	
              Philadephia,
                PA

            	 	 	
              $300

            	
              Urban
                green waste

            	
              1,3

            
	
              19

            	
              Pensylvania
                #2

            	 	 	 	 	 	
              Urban
                green waste

            	
              1,3

            
	 	 	 	 	 	 	 	 	 
	 	
              Subtotal
                ($1000s)

            	 	 	
              $2,222

            	
              $4,250

            	
              $10,255

            	 	 
	 	
              Grand
                Total ($1000s)

            	 	
              $16,727

            	 	 	 	 	 

    

     

    
      
        	 	
                 Benefits
                  Legend:

              
	
                1 

              	
                 Siting
                  and location 

              
	
                2 

              	
                 Feedstock
                  definition

              
	
                3 

              	
                 Product
                  off-take 

                options

              
	
                4 

              	
                 Site
                  use/ permitting 

              
	
                5 

              	
                 Infrstructure
                  requirements

              
	
                6 

              	
                 Co-location
                  with 

                another
                  facility

              

      

    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    ASSIGNMENT
      OF INTERESTS

     

    THIS
      ASSIGNMENT OF INTERESTS, dated as of the 1st
      day of March, 2006 by and between ARK ENERGY, INC., a Nevada corporation (the
      “Transferor”), and BLUEFIRE ETHANOL, INC., a to be formed Nevada corporation
      (the “Transferee”),

     

    W
      I T N E
      S S E T H

     

    WHEREAS,
      pursuant to that certain Asset Transfer and Acquisition Agreement dated as
      of
      March 1, 2006 (as amended, supplemented or otherwise modified from time to
      time,
      the “Asset Transfer and Acquisition Agreement”), by and between Transferor and
      Transferee, Transferor has agreed to transfer, assign, convey, transfer and
      deliver all of its respective rights, title and interest in and to the Interests
      (as defined in the Asset Transfer and Acquisition Agreement) to Transferee
      and
      Transferee has agreed to receive and acquire such Interests from Transferor,
      all
      as more fully described in the Asset Transfer and Acquisition Agreement;
      and

     

    WHEREAS,
      pursuant to the Asset Transfer and Acquisition Agreement, Transferor and
      Transferee have agreed to enter into this Assignment of Interests pursuant
      to
      which the Interests will be conveyed to Transferee.

     

    NOW,
      THEREFORE, in consideration of the foregoing premises and for other good and
      valuable consideration, the receipt and adequacy of which is hereby
      acknowledged, the parties hereto agree as follows:

     

    1.    Defined
      Terms.
      Capitalized terms which are used but not defined in this Assignment of Interests
      shall have the meaning ascribed to such terms in the Asset Transfer and
      Acquisition Agreement.

     

    2.    Assignment.
      Subject
      to the terms and conditions of the Asset Transfer and Acquisition Agreement,
      Transferor does hereby transfer, assign, convey, transfer and deliver to
      Transferee all of Transferor’s right, title and interest in and to all of the
      Interests. Transferor agrees to execute and deliver such other documents and
      instruments requested from time to time by Transferee, including assignments
      in
      recordable form, and take such other actions as may reasonably be necessary,
      proper or advisable, to evidence the assignment of the Interests described
      herein.

     

    3.    Appointment.
      Transferor hereby constitutes and appoints Transferee and its successors and
      assigns as Transferor’s true and lawful attorney, with full power of
      substitution, in Transferor’s name and stead, by, on behalf of and for the
      benefit of Transferee, and its successors and assigns, to demand and receive
      any
      and all of the Interests transferred hereunder and to give receipts and releases
      for and in respect of the same, and any part thereof, and from time to time
      to
      institute and prosecute, at the expense and for the benefit of Transferee,
      and
      its successors and assigns, any and all proceedings at law, in equity or
      otherwise, which Transferee, and its successors or assigns, may deem proper
      for
      the collection or reduction to possession of any of the Interests transferred
      hereunder or for the collection and enforcement of any claim or right of any
      kind herby sold, assigned, conveyed, transferred and delivered, and to do all
      acts and things in relation to the Interests transferred hereunder which
      Transferee, and its successors or assigns, shall deem desirable.

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

       

    

    4.    No
      Third Party Beneficiaries.
      Nothing
      in this instrument, express or implied, is intended or shall be construed to
      confer upon, or give to, any person other than Transferee any remedy or claim
      under or by reason of this instrument or any agreements, terms, covenants or
      conditions hereof, and all the agreements, terms, covenants and conditions
      in
      this instrument contained shall be for the sole and exclusive benefit of
      Transferee and its successors and permitted assigns.

     

    5.    Binding
      Effect, Assignment.
      This
      Assignment of Interests and all of the provisions hereof shall be binding upon
      and shall inure to the benefit of the parties hereto and their respective
      successors and permitted assigns.

     

    6.    Governing
      Law.
      This
      Assignment of Interests shall be governed in all respects by and construed
      in
      accordance with the laws of the State of California without regard to principles
      of conflicts of laws.

     

    7.    Construction.
      This
      Assignment of Interests is delivered pursuant to and is subject to the Asset
      Transfer and Acquisition Agreement. In the event of any conflict between the
      terms of the Asset Transfer and Acquisition Agreement and the terms of this
      Assignment of Interests, the terms of the Asset Transfer and Acquisition
      Agreement shall prevail.

     

    [Remainder
      of page intentionally left blank]

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, this Assignment of Interests has been duly executed and
      delivered by the duly authorized officers of the parties hereto as of the date
      first above written.

    
      
        	 	 	 
	 	
                ARK
                  ENERGY, INC., a
                  Nevada corporation

              
	 
 	 
 	 
 
	 	By:  	/s/ Necy
                Sumait
	 	
                
Name:
                Necy Sumait 
	 	Title:
                Vice President

      

       

      
        	 	 	 
	 	
                BLUEFIRE
                  ETHANOL, INC.

                a
                  to-be formed Nevada Corporation

              
	 
 	 
 	 
 
	 	By:  	/s/ Arnold
                Klann 
	 	
                
Name:
                Arnold Klann 
	 	Title:
                President  

      

    

    
      
           

    A-3

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