Document:

EXHIBIT 10.78

 

 

SUBLICENSE AGREEMENT

 

 

 

BIODIESEL VENTURE, L.P.

AND

EARTH BIOFUELS, INC.

 

APRIL 1, 2006

 

 

SUBLICENSE
AGREEMENT

TABLE OF CONTENTS

	
  1.

  	
   

  	
  Sublicense Grant

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Representations
  and Warranties

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  No Assignment or
  Sublicensing

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Term and
  Termination

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Payments

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Statements and
  Payments

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Audit;
  Inspections

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Quality,
  Approvals; Samples; Right to Use; Sublicensee Restrictions

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Required
  Markings

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Ownership of
  Mark

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Trademark and
  Copyright Protection and Infringements

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Indemnification

  	
   

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Insurance

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Notices

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Relationship of
  the Parties

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Choice of Laws

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Waiver

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Severability

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Headings

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Revocation of
  Prior Agreements

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Third-Party
  Beneficiaries

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Counsel

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Incorporation

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  Counterparts

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  Binding Effect;
  Successors and Assigns

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Injunctive
  Relief

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  Defined Terms

  	
   

  	
  19

  	
   

  

 

 i

SUBLICENSE AGREEMENT

This SUBLICENSE AGREEMENT
(this “Agreement”), dated this 1st day of April, 2006 (the “Effective Date”), is entered into by and between BIODIESEL VENTURE, L.P.,
a Texas limited partnership (“Venture”),
and EARTH BIOFUELS,
INC., a Delaware corporation (“Sublicensee”).

R E C I T A L S:

WHEREAS, Venture is a
licensee of certain rights in the Mark (as defined below) pursuant to the
Master License (as defined below);

WHEREAS, Sublicensee has
experience in distributing for resale (i) agricultural based so-called “biodiesel”
fuel, and (ii) blends of petrochemical petroleum fuel (“Petroleum
Fuel”) with such agricultural based so-called “biodiesel fuel”; and

WHEREAS, Sublicensee desires
to obtain, and Venture is willing to grant to Sublicensee, the right to use the
Mark during the Term (as defined below) and within the Territory (as defined
below), pursuant to the terms and conditions of this Agreement, solely in order
to Distribute (as defined below) Biodiesel Fuel (as defined below).

NOW, THEREFORE, in
consideration of the mutual promises, covenants and conditions contained
herein, it is hereby agreed as follows:

1.             Sublicense Grant.

(a)           Grant.
Subject to the terms and conditions hereof, Venture hereby grants to
Sublicensee, and Sublicensee hereby accepts, for the Term and within the
Territory, the right and license to use the Mark for the sole, distinct and
limited purposes of Distributing Biodiesel Fuel (the “Sublicense”).

(b)           Promotional
Use of Mark. Subject to such restrictions (i) as may be set forth in
the Master License, or (ii) as may be provided to Sublicensee by Venture from
time to time during the Term, Sublicensee may use the Mark to advertise and
promote Biodiesel Fuel during the Term in electronic, print, broadcast or other
media throughout the Territory; provided,
however, Sublicensee shall have first obtained the prior written approval of
Venture, which shall be subject in all respects to the approval of Owner (as
defined below) under the Master License, with respect to each such use (the “Promotional Uses”).

(c)           Owner
Identification. Unless otherwise specifically approved in writing by
Venture (which approval may be given or withheld in its Sole Discretion and
which shall be subject in all respects to the approval of Owner under the Master
License) in advance and with respect to each particular use (and terms and
conditions thereof) on a case by case basis, Sublicensee shall have no right to
use, display, perform, sublicense, reproduce or otherwise exploit, in any
manner or in any media, the Owner Identification (as defined below).

(d)           No
Denigration. Sublicensee shall not denigrate, permit, allow or cause
the denigration of, the Mark or the Owner Identification, and shall not take
any other action not 

 

approved by Venture as provided herein (which
shall be subject in all respects to the approval of Owner under the Master
License) that is harmful or potentially harmful to or which disparages,
ridicules or demeans the goodwill, honor and reputation of Venture, Venture’s
Affiliates, Owner, Owner’s Affiliates, the Mark or the Owner Identification.

(e)           Exclusivity.
Notwithstanding anything contained herein to the contrary but subject
notwithstanding to Section 8(j) hereof, during the Term and within the
Territory, Venture covenants and agrees that it shall not grant to any other
Person, other than Sublicensee, the right to use the Mark in order to
Distribute biodiesel fuel (in pure form or blended in any concentration with
Petroleum Fuel).

2.             Representations
and Warranties.

(a)           Venture.
Venture represents, warrants and covenants to Sublicensee, as of the Effective
Date, that:

(i)            Venture is a licensee of the Mark
pursuant to the Master License;

(ii)           Subject to the provisions of this
Agreement, Venture has the right to grant the Sublicense when approved as
provided herein;

(iii)          to the best of Venture’s knowledge, no
registered United States intellectual property right of any third parties will
be infringed or otherwise violated by Sublicensee’s use of the Mark in strict
accordance with the terms of this Agreement;

(iv)          Venture has not granted to any third
parties any rights that would preclude Venture from granting the right to use
the Mark within the Territory as provided herein; and

(v)           this Agreement has been duly executed
and delivered by Venture.

(b)           Sublicensee.
Sublicensee represents, warrants and covenants to Venture and Owner that:

(i)            Sublicensee is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and is, and shall remain, duly qualified and in good standing in
each jurisdiction in which the nature of its business requires, or in the
future shall require it to be so qualified;

(ii)           Sublicensee has the power and
authority to own its property and assets, to conduct its business as it is now
being conducted and to execute and deliver this Agreement and to perform the
transactions contemplated hereby;

(iii)          no consent of or other action by, and
no notice to or filing with, any governmental agency is required for the
execution, delivery and performance by Sublicensee of this Agreement;

(iv)          this Agreement has been duly executed
and delivered on behalf of Sublicensee;

 2
 

 

 

(v)           this Agreement, and each provision
hereof, is the legal, valid and binding obligation of Sublicensee enforceable
against Sublicensee in accordance with its terms;

(vi)          Sublicensee shall comply with all
Applicable Laws (as defined below) governing the distribution, sale, promotion,
marketing and advertisement of Biodiesel Fuel;

(vii)         Sublicensee has obtained and shall
maintain at all times during the Term all licenses, permits, orders,
authorizations and approvals that are required under any governmental law or
regulation in connection with Sublicensee’s business activities and properties;
and

(viii)        the execution, delivery and performance
of this Agreement (A) have been duly authorized by all necessary action on the
part of Sublicensee; (B) do not contravene or cause Sublicensee to be in
default of any contractual or other restriction contained in any agreement or instrument
binding on, applicable to or affecting Sublicensee or its property or assets or
any law, rule, regulation, order, writ, judgment, award, injunction or decree
binding on, applicable to or affecting Sublicensee or its property or assets;
and (C) do not result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of
Sublicensee.

3.             No Assignment or
Sublicensing. Sublicensee shall not have the right to assign this
Agreement (by operation of law, change of control, merger or otherwise) or to
assign, dispose, mortgage transfer, pledge, encumber or sublicense (or permit
any of the foregoing, whether voluntarily or involuntarily) any of its rights
hereunder without the prior written approval of Venture (which approval shall
be subject in all respects to the approval of Owner under the Master License),
which Venture may withhold at its Sole Discretion.

4.             Term and
Termination.

(a)           Term.
Unless terminated pursuant to Sections 4(b) or 4(c) hereof, the initial term of
this Agreement shall commence as of the Effective Date and shall continue for a
period of two (2) years therefrom (the “Initial Term”).
Thereafter, Sublicensee shall have the right to renew this Agreement upon
written notice given to Venture no later than ninety (90) days prior to the
expiration of the Initial Term (or any, if any, Renewal Terms, as applicable)
for a total of four (4) additional periods of two (2) years each (each, a “Renewal Term,” and together with the Initial
Term, collectively, the “Term”); provided, however,
any and all such renewals shall be subject to, as of the commencement of each
Renewal Term, (i) Sublicensee not then being in breach of this Agreement, and
(ii) all accrued but unpaid Agreement Payments (as defined in Section 7(a)
below) due or outstanding as of such renewal having been paid in full.

(b)           Termination.

(i)            Breach — No
Cure. Without limitation of any other rights or remedies available
at law or in equity, Venture shall have the right (but not the obligation) to
terminate this Agreement by written notice effective immediately upon the
giving of such notice, without the opportunity to cure provided in Section
4(b)(ii) below, in the event that:

(1)           Sublicensee is dissolved;

 3
 

 

 

(2)           Sublicensee files a petition in
bankruptcy, is adjudicated as bankrupt or insolvent, makes a general assignment
for the benefit of creditors, discontinues its business or if a receiver,
trustee or custodian is appointed for Sublicensee (or Sublicensee’s business)
which receiver, trustee or custodian is not discharged within thirty (30) days
of appointment;

(3)           Sublicensee sells, transfers, leases
or otherwise disposes of all or substantially all of its assets;

(4)           Sublicensee fails to pay its debts as
they become due;

(5)           A Change of Control of Sublicensee
occurs (for purposes hereof, the term “Change of
Control” shall mean that Apollo Resource Intl., Blue Wireless &
Data Inc. and Dennis McLaughlin shall fail at any time to collectively own,
directly or indirectly, less than 51% of each class of outstanding voting stock
of Sublicensee);

(6)           Sublicensee materially breaches any
of the terms or conditions of this Agreement (a “Material
Breach”). For avoidance of doubt, and without limitation of any
other potential breaches that may be deemed a Material Breach of this
Agreement, any breach by Sublicensee of any provision found in Sections 1, 3,
5, 6, 7, 8 and 13 hereof shall constitute a Material Breach of this Agreement;

(7)           the Biodiesel Fuel sold by
Sublicensee fails to meet the requirements of Section 8(h) hereof;

(8)           Sublicensee pledges or grants a
security interest in all or any part of this Agreement as collateral or
security for any liability or indebtedness of Sublicense or any other Person;
or

(9)           Sublicensee, either directly or
indirectly (including, without limitation, through its agents) engages, or
attempts to engage, in the sale or distribution of biodiesel fuel other than
the Biodiesel Fuel in contravention of Section 8(k) hereof.

(ii)           Breach — Seven
Day Cure. Without limitation of any other rights or remedies
available at law or in equity, in the circumstances set forth in this Section
4(b)(ii), Sublicensee must commence and complete the cure of the applicable
breach as soon as possible, but in no event later than seven (7) days after
Venture’s notice of breach, or Venture shall have the right (but not the
obligation) to terminate this Agreement, in the event that:

(1)           Sublicensee is subject to any
voluntary order of any government agency involving the safety, health or other
hazards or risks to the public;

(2)           Sublicensee breaches any provision of
this Agreement not constituting a Material Breach; or

(3)           Sublicensee distributes or sells
defective Biodiesel Fuel without taking steps reasonably to correct or repair
the defect immediately upon the earlier to occur of (a) 

 4
 

 

receipt of notice of the defect by Venture,
or (b) Sublicensee’s otherwise becoming aware of such defect.

(c)           Additional
Rights to Terminate.

(i)            Required to
Terminate. Sublicensee acknowledges and agrees that Venture may at
anytime during the Term terminate this Agreement in the event (A) Venture is
required to do so by law, or (B) the Master License terminates (for any
reason), and in either case, Sublicensee acknowledges that such termination
shall not constitute a breach of this Agreement.

(ii)           Owner Rights.
Without limitation of any other rights or remedies at law or in equity,
Sublicensee acknowledges and agrees that Owner shall have the right (but not
the obligation), acting on behalf of Venture, to directly terminate this
Agreement by written notice to Sublicensee effective immediately upon the
giving of such notice, in the event that Sublicensee breaches the terms of this
Agreement and Venture fails to exercise its rights to terminate this Agreement
in accordance with its terms.

(d)           Effect of
Termination. Upon termination or expiration of this Agreement, all
rights herein granted shall immediately and without further notice terminate
and revert to Venture. Not in limitation of the foregoing, Sublicensee shall
immediately discontinue all use of the Mark and any items confusingly similar
thereto, and destroy all printed materials bearing the Mark. Sublicensee
acknowledges all rights, title and interests in and to the Mark and the
goodwill associated therewith shall remain the sole and exclusive property of
Owner (subject to Venture’s express rights pursuant to the Master License) and
that Sublicensee shall have no right to use the Mark or any derivations
thereof, subsequent to the expiration or termination of this Agreement

5.             Payments.

(a)           Advance
Payments.

(i)            Advance
Payments Directly to Venture. For each Contract Year of the Term
hereof, Sublicensee agrees that it will pay directly to Venture, an amount
equal to One Hundred Fifty Thousand Dollars ($150,000), which amount shall be
payable in equal monthly payments of Twelve Thousand Five Hundred Dollars
($12,500.00) each (the “Venture Advance Payments”).
Venture Advance Payments shall be due and payable in full and in readily
available funds on the first day of each calendar month during the Term hereof.

(ii)           Advance
Payments Directly to Owner. For each Contract Year of the Term
hereof and in addition to the payments of the Venture Advance Payments,
Sublicensee agrees that it will pay directly to Owner, an amount equal to One
Hundred Fifty Thousand Dollars ($150,000), which amount shall be payable in
equal monthly installments of Twelve Thousand Five Hundred Dollars ($12,500.00)
each (the “Owner Advance Payments”). Owner
Advance Payments shall be due and payable in full and in readily available
funds on the first day of each calendar month during the Term hereof.

 5
 

 

 

(b)           Royalty
Payments.

(i)            Royalty
Payments to Venture. Throughout the Term hereof, Sublicensee agrees
that it will pay to Venture, without offset or deduction of any kind or nature
whatsoever, as royalty payments (collectively, the “Venture
Royalty Payments”), one cent ($.01) per gallon of Biodiesel Fuel
Distributed by Sublicensee or any of its Affiliates; provided,
however, that for each calendar month
during the Term hereof, the first Twelve Thousand Five Hundred Dollars
($12,500.00) of such Venture Royalty Payments for such month shall be offset
and reduced by that month’s Venture Advance Payment actually paid to Venture
for such month. Venture Royalty Payments shall be paid monthly as provided for
in Section 6(b) below.

(ii)           Royalty
Payments to Owner. Throughout the Term hereof, in addition to the
Venture Royalty Payments, Sublicensee agrees that it will pay directly to
Owner, without offset or deduction of any kind or nature whatsoever, as royalty
payments (collectively, the “Owner Royalty Payments”),
one cent ($.01) per gallon of Biodiesel Fuel Distributed by Sublicensee or any
of its Affiliates; provided, however, that for each calendar month during the
Term hereof, the first Twelve Thousand Five Hundred Dollars ($12,500.00) of
such Owner Royalty Payments for such month shall be offset and reduced by that
month’s Owner Advance Payment actually paid to Owner for such month. Owner
Royalty Payments shall be paid monthly as provided for in Section 6(b) below.

(c)           Increase in
Payments. Simultaneously with the commencement of each and every
Renewal Term, if any, hereunder, each Agreement Payment set forth in this
Agreement shall be automatically adjusted (without any action or notice by
Venture) by an amount equal to the percentage increase in the CPI (as defined
below) during the preceding twenty-four (24) months. The “CPI” is defined as
the Consumer Price Index for all Urban Consumers, U.S. City Average, All Items
(1982-1984 = 100) for the United States published by the Bureau of Labor
Statistics of the U.S. Department of Labor, and if the CPI is discontinued, the
successor index most nearly comparable thereto.

(d)           Yearly True
Up.

(i)            True-Up Procedure/Venture.
If Sublicensee determines that for any given Contract Year during the Term, it
has actually paid, in the aggregate during such Contract Year, to Venture as
Venture Minimum Payments an amount in excess of the aggregate Venture Royalty
Payments that were due and payable and actually paid by Sublicensee to Venture
for the twelve calendar months during such Contract Year (any, if any purported
excess, the “Venture Excess Advance Amount”),
Sublicensee shall prepare and deliver to Venture a statement (each, a “Venture Statement”) setting forth the amount and
calculation of such Venture Excess Advance Amount and a description of the
basis for such Venture Excess Advance Amount. 
Venture shall have thirty (30) calendar days from its receipt of such Venture
Statement (the “Venture Objection Period”)
to review such Venture Statement.  Upon
the expiration of such Venture Objection Period, Venture shall be deemed to
have accepted, and shall be bound by, such Venture Statement and the amount of
such Venture Excess Advance Amount, unless Venture shall have informed
Sublicensee in writing of its disagreement with such Venture Excess Advance
Amount prior to the expiration of the applicable Venture Objection Period (the “Venture Objection”), setting forth in reasonable
detail the basis for each such dispute (each, a “Venture
Disputed Item”). 

 6
 

 

Sublicensee shall have ten (10) calendar days
from the date on which it receives the Venture Objection (the date on which
such ten (10) calendar day period ends, the “Venture
Response Date”) to review and respond to such Venture Objection. If
Venture and Sublicensee are able to negotiate a mutually agreeable resolution
of each Venture Disputed Item, and each signs a certificate to that effect, the
Venture Statement and the calculation therein of the Venture Excess Advance
Amount, as adjusted to reflect such resolution, shall be deemed final,
non-appealable and binding for purposes of this Agreement. Venture shall remit
to Sublicensee (a) the Venture Excess Advance Amount if no Venture Objection is
made by Venture during the Venture Objection Period, (b) the amount of the
mutually agreeable resolved Venture Excess Advance Amount if Venture submits a
Venture Objection within the Venture Objection Period, upon the mutually agreeable
resolution as described above. If, however,
within thirty (30) calendar days of the Venture Response Date any Venture
Disputed Items have not been resolved upon mutual agreement as provided herein,
such Venture Disputed Items shall be settled by final and binding arbitration
administered by the American Arbitration Association under its then in
existence Commercial Arbitration Rules. The arbitration shall take place in or
about Dallas, Texas. Judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The arbitrator(s) shall apply
Texas law, without regard to its rules of conflict of law. Each party shall
initially bear its own attorney’s fees, costs, and disbursements arising out of
the arbitration and shall pay an equal share of the up-front fees and costs of
the arbitration and the arbitrator(s); provided, however, the prevailing party shall be awarded, as part of
the arbitration, full reimbursement for its reasonable attorneys’ fees, costs
and disbursements (including, for example, expert witness fees and expenses,
photocopy charges, travel expenses, etc.), and the fees and costs of the
arbitration and the arbitrator(s).

(ii)           True-Up
Procedure/Owner. If Sublicensee determines that for any given
Contract Year during the Term, it has actually paid, in the aggregate during
such Contract Year, to Owner as Owner Minimum Payments an amount in excess of
the aggregate Owner Royalty Payments that were due and payable and actually
paid by Sublicensee to Owner for the twelve calendar months during such
Contract Year (any, if any purported excess, the “Owner
Excess Advance Amount”), Sublicensee shall prepare and deliver to
Owner a statement (each, an “Owner Statement”)
setting forth the amount and calculation of such Owner Excess Advance Amount
and a description of the basis for such Owner Excess Advance Amount. Owner
shall have thirty (30) calendar days from its receipt of such Owner Statement
(the “Owner Objection Period”) to review
such Owner Statement. Upon the expiration of such Owner Objection Period, Owner
shall be deemed to have accepted, and shall be bound by, such Owner Statement
and the amount of such Owner Excess Advance Amount, unless Owner shall have
informed Sublicensee in writing of its disagreement with such Owner Excess
Advance Amount prior to the expiration of the applicable Owner Objection Period
(the “Owner Objection”), setting forth in
reasonable detail the basis for each such dispute (each, an “Owner Disputed Item”). Sublicensee shall have ten
(10) calendar days from the date on which it receives the Owner Objection (the
date on which such ten (10) calendar day period ends, the “Owner Response Date”) to review and respond to
such Owner Objection. If Owner and Sublicensee are able to negotiate a mutually
agreeable resolution of each Owner Disputed Item, and each signs a certificate
to that effect, the Owner Statement and the calculation therein of the Owner
Excess Advance Amount, as adjusted to reflect such resolution, shall be deemed
final, non-appealable and binding for purposes of this Agreement.  Owner shall remit to Sublicensee (a) the
Owner Excess Advance Amount if no Owner Objection is made by Owner during the
Owner Objection Period, (b) the amount of the 

 7
 

 

mutually agreeable resolved Owner Excess
Advance Amount if Owner submits an Owner Objection within the Owner Objection
Period, upon the mutually agreeable resolution as described above. If, however, within thirty (30) calendar days of the
Owner Response Date any Owner Disputed Items have not been resolved upon mutual
agreement as provided herein, such Owner Disputed Items shall be settled by
final and binding arbitration administered by the American Arbitration
Association under its then in existence Commercial Arbitration Rules. The
arbitration shall take place in or about Dallas, Texas. Judgment on the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The arbitrator(s) shall apply Texas law, without regard to its rules
of conflict of law. Each party shall initially bear its own attorney’s fees,
costs, and disbursements arising out of the arbitration and shall pay an equal
share of the up-front fees and costs of the arbitration and the arbitrator(s); provided, however, the
prevailing party shall be awarded, as part of the arbitration, full
reimbursement for its reasonable attorneys’ fees, costs and disbursements
(including, for example, expert witness fees and expenses, photocopy charges,
travel expenses, etc.), and the fees and costs of the arbitration and the
arbitrator(s).

6.             Statements and
Payments.

(a)           Statements;
Payments. Within ten (10) days after the end of each calendar month
during the Term of this Agreement (each such month, an “Accounting
Period”), Sublicensee shall provide to each of Venture and Owner a
complete and accurate statement (individually, an “Accounting
Statement” and, collectively, the “Accounting
Statements”) for that month of all of Sublicensee’s sales of
Biodiesel Fuel during such Accounting Period, certified as accurate by Sublicensee
and accompanied by the payment of all Venture Royalty Payments and Owner
Royalty Payments (collectively, the “Royalty Payments”)
due with respect to such Accounting Period.

(b)           Accounting
Statements. Each Accounting Statement, which shall be in conformance
with the requirements of Venture and Owner, must be submitted whether or not
any Royalty Payments are due during the Accounting Period. Accounting
Statements and accompanying Royalty Payments; if any, Venture Minimum Payments
and Owner Minimum Payments shall be delivered to Venture and Owner c/o Mark
Rothbaum & Associates, 36 Mill Plain Road, Suite 406, Danbury, CT 06811,
Attn: Mark Rothbaum, via hand delivery or nationally recognized overnight
courier service that obtains acknowledgment of receipt by the addressee.

(c)           Acceptance.
Acceptance by Venture or Owner of any Accounting Statement furnished or Royalty
Payment made shall not preclude Venture or Owner from later questioning its
correctness and, in the event that any inconsistencies or mistakes are
discovered, they shall be rectified, or caused to be rectified, by Sublicensee
within seven (7) calendar days of receipt by Sublicensee of Venture’s or Owner’s
written notice of the inconsistency or mistake.

(d)           Time is of
the Essence. Time is of the essence with respect to all payments to
be made hereunder, and interest at a rate of one and one-half percent (1.5%)
per month, compounded monthly on the unpaid balance, or the maximum legal rate
of interest, whichever is lower, shall accrue on any amount due Venture or
Owner, as applicable, calculated from the date on which payment was initially
due. For avoidance of doubt, the parties agree that Sublicensee’s 

 8
 

 

only remedy in the event that the interest
rate specified in this Section 6(d) or Section 7(c) hereof is higher than the
maximum legal rate of interest is to have the interest rate specified in this
Section 6(d) or Section 7(c) hereof reduced to the maximum legal rate of
interest

(e)           Tax Returns.
Each year, a copy of all annual finalized federal tax returns as filed for
Sublicensee shall be forwarded to Venture and Owner at the address specified
herein no later than thirty (30) days following the filing of such returns with
the Internal Revenue Service.

7.             Audit;
Inspections.

(a)           Books and
Records. Sublicensee shall keep complete and accurate books of
account (in such reasonable detail as to allow Venture and Owner to determine
the correctness of any and all Royalty Payments, Venture Minimum Payments and
Owner Minimum Payments (collectively, the “Agreement
Payments” made hereunder) at its principal place of business
covering all transactions relating to this Agreement.

(b)           Maintenance.
All such books of account and records of Sublicensee relating to this Agreement
shall be retained for at least five (5) years after the end of each fiscal year
to which they pertain.

(c)           Audit Rights.
Venture, Owner and/or their respective duly authorized representative(s) shall
have the right, at reasonable hours of the day and upon reasonable, advance
notice, and, at Venture’s or Owner’s respective cost, to examine, audit and
copy such books of account, records and all other documents and material in
Sublicensee’s possession or control with respect to this Agreement and to make
summaries thereof. In the event that such an audit reveals an underpayment by
Sublicensee, Sublicensee shall, within seven (7) calendar days after Venture’s
or Owner’s notice of such underpayment, remit payment to Venture and/or Owner
in the amount of the underpayment plus interest calculated at the rate of one
and one-half percent (1.5%) per month, compounded monthly on the unpaid
balance, or the maximum legal rate of interest, whichever is lower, calculated
from the date such payment(s) were initially due. With respect to any
particular Accounting Statement, Venture or Owner must give written notice of
its intent to exercise the rights granted in this Section 7(c) no later than
the third anniversary of Venture’s or Owner’s actual receipt of such Accounting
Statement that is the subject of the examination. If Sublicensee’s payments in
the aggregate for any given period are incorrect by more than five percent
(5%), Sublicensee shall pay the costs and expenses of the audit.

8.             Quality,
Approvals; Samples; Right to Use; Sublicensee Restrictions.

(a)           Venture’s
Right of Approval. Sublicensee acknowledges that the loyalty of
Owner’s fans and customers is an asset of tremendous value to Owner, and that
meeting fans’ and customers’ expectations for high quality products is of
paramount importance to Owner. Subject to Section 8(i) below, Venture shall
have the right and opportunity to approve or disapprove in writing each and
every aspect of Sublicensee’s distribution and sale of Biodiesel Fuel,
including, without limitation, (1) the quality, constitution and blend
percentages of Biodiesel Fuel (the “BD Components”),
and (2) each particular use of the Mark, including (without limitation):

 9
 

 

(i)            each use of the Mark in connection
with all aspects of the Distribution and of the Biodiesel Fuel (the “Distribution Uses”);

(ii)           any other materials or articles of
any kind or nature whatsoever that are used in connection with the Mark or the
Biodiesel Fuel (“Other Materials”; such
Other Materials and together with the Promotional Uses, BD Components and the
Distribution Uses, referred to herein individually as a “Licensed
Item” and, collectively, as the “Licensed
Items”).

(b)           Submission
for Approval. Sublicensee shall, without failure and in strict
accordance with the terms hereof, submit to Venture for written approval, for
each and every Licensed Item (i) at least one (1) prototype (each, a “Prototype”) of each such Licensed Item prior to
its manufacture or production, and (2) at least one (I) post-manufacture,
pre-distribution sample (each, a “Sample”)
of such Licensed Item prior to sale or public distribution of such Licensed
Item. The Licensed Item shall be submitted with all of its proposed labeling,
if possible, but no Licensed Item shall be deemed approved unless and until its
corresponding labeling is also approved, in the event they are submitted
separately. If Sublicensee elects to first submit a design, which Venture
approves, Sublicensee must still thereafter submit both the Prototype and
Sample for Venture’s approval hereunder. With respect to matched print advertising,
Sublicensee must provide Venture with a copy of the advertisement as it
appeared in any and all media promptly upon the first appearance of the
advertisement in any medium. As an example, if the identical advertisement is
run for three (3) succeeding days in the same newspaper, Sublicensee need
provide only the first (1st) day’s advertisement, but Sublicensee shall
indicate the additional days on which the advertisement will appear in that
newspaper for Venture’s approval hereunder. Prototypes and Samples submitted by
Sublicensee shall not be required to be returned by Venture.

(c)           Venture’s
Approval of Licensed Items. Venture shall use its good-faith
commercially reasonable efforts to send a written notice of approval or
disapproval of each submission as outlined in Section 8(b) within fifteen (15)
calendar days following Venture’s receipt of the submitted Prototype or Sample.
Written approval or disapproval shall be sent via facsimile or nationally
recognized overnight courier service that obtains acknowledgment of receipt by
the addressee. Notwithstanding anything contained herein to the contrary,
failure of Sublicensee to receive written approval of any such submitted item
within fifteen (15) calendar days following Venture’s receipt of Sublicensee’s
submission (which receipt can be verified by independent documentation produced
by Sublicensee) shall constitute disapproval of the proposed Licensed Item.
However, if Venture provides Sublicensee with written confirmation that
Sublicensee may use such submitted item, even after the expiration of the
fifteen (15) calendar day period, Sublicensee is authorized, subject to the
terms and conditions of this Agreement to use the submitted item. Sublicensee
shall not have the right to use the Licensed Item or any element thereof unless
and until the particular use by Sublicensee has been approved by Venture (which
approval shall be subject in all respects to the approval of Owner under the
Master License) as provided in this Section 8(c).

(d)           Conformity
of Licensed Item to Approved Samples. Once approved hereunder, all
Licensed Items shall conform in all respects, including blend, composition,
elements, materials, contents, workmanship and overall quality, to the Sample
that Venture has approved in writing.

 

 10

 

(i)            Approval Withdrawal for Failure to Conform. If
any Licensed Item later fails to conform to the approved Sample, then, within
seven (7) calendar days after Sublicensee’s receipt of written notice from
Venture, Venture shall have the right to withdraw its approval of such Licensed
Item by delivery of a further written notice if the failure identified in the
initial notice has not been cured. Sublicensee shall then, upon receipt of such
further notice, immediately cease use of the particular Licensed Item identified
in the notice.

(ii)           Continuing Samples. Upon Venture’s request from
time to time and at any time during the Term, Sublicensee will furnish to
Venture, without charge, a reasonable number of Samples of each Licensed Item
with its usual packaging and labeling, to permit Venture to confirm that
Venture’s standards are being observed. Additionally, Venture or its
representatives shall also have the right to inspect the Licensed Items and
take a reasonable number of Samples for purposes of quality inspection.

(e)           Withdrawal of Approval. Approval by Venture of a
Licensed Item can be withdrawn (which withdrawal shall be subject in all
respects to the agreement of Owner under the Master License) at any time at
Venture’s Sole Discretion upon seven (7) days’ advance, written notice to
Sublicensee at which time all withdrawn Licensed Items shall be destroyed,
unless Venture approves in writing to another manner of disposition.

(f)            Ownership of Artwork.

(i)            New Developments. All designs, logos and other
creative renderings incorporating any one or more elements of the Mark in any
and all media now known or hereafter invented (collectively, “Artwork”), and all rights, including all
copyrights and trademark rights in and to the Artwork, shall be solely and
exclusively owned by Owner. Without limiting the foregoing, Sublicensee
acknowledges and confirms that all of Sublicensee’s services in connection with
the creation of the Artwork are and shall be rendered for, at the instigation
and under the overall direction and supervision of Owner, and the Artwork is
and at all times shall be regarded as a “work made for hire” (as that term is
used in the U.S. Copyright Act, 17 U.S.C. § 101, et seq. (the “Act”)) by Sublicensee for Owner. Without limiting
the acknowledgment contained in the previous sentence, Sublicensee hereby
assigns, grants and delivers (and hereby further agrees to assign, grant and
deliver) exclusively unto Owner all rights, title and interests of every kind
and nature whatsoever in and to the Artwork and all copies and versions
thereof, including all copyrights therein and thereto and all renewals thereof.
Sublicensee further agrees to execute and deliver to Owner, its successors and
assigns, such other and further instruments and documents as Owner reasonably
may request for the purpose of establishing, evidencing and enforcing or
defending its complete, exclusive, perpetual and worldwide ownership of all
rights, title and interests of every kind and nature whatsoever, including all
copyrights, in and to the Artwork, and Sublicensee hereby constitutes and
appoints Owner as Sublicensee’s agent and attorney-in-fact, with full power of
substitution, to execute and deliver such documents or instruments as
Sublicensee may fail or refuse to execute and deliver within ten (10) days (or
such shorter period as designated by Owner if reasonably necessary), this power
and agency being coupled with an interest and being irrevocable. Sublicensee
covenants, warrants and represents that the Artwork will not violate or infringe
any copyright of any person, firm or corporation, and Sublicensee has not and
will not order, commission or otherwise obtain or receive from any other person
(other than an “employee” of 

 11
 

 

Sublicensee working “within the scope of employment” (as those terms
are understood under the Act)) any work on or contribution to the Artwork
without obtaining a valid and binding work-for-hire and/or assignment agreement
in a form approved in advance by Venture (which approval shall be subject in
all respects to the approval of Owner under the Master License).

(ii)           Delivery Upon Termination. Any and all Artwork
shall be sent to Owner at no cost and prepaid at Owner’s request not later than
thirty (30) days following the expiration or earlier termination of this Agreement.

(g)           Approval Not a Warranty. Venture’s approval of a
Licensed Item or item of Artwork does not mean that Venture has determined that
such Licensed Item conforms to Applicable Laws, that the Licensed Item is safe
or fit for its intended purpose or that the Licensed Item does not infringe the
intellectual property or contractual rights of others. Venture may also revoke
an approval if a Licensed Item subsequently proves to be deficient in quality,
to violate any law or to violate the rights of others that are subsequently
learned to have existed at the time approval was granted.

(h)           Biodiesel Minimum Standards. At all times during
the Term hereof and not in limitation of any of Venture’s approval rights
hereunder, Sublicensee shall only purchase for Distribution hereunder biodiesel
fuel that meets the then current highest industry standards for biodiesel fuel.

(i)            Owner Quality Control Rights. Notwithstanding
anything contained herein to the contrary, Owner shall have the right and the
authority (A) at any time to exercise, on behalf of and in the place of
Venture, any and all of Venture’s approval, consent and/or quality control
rights hereunder; and (B) to approve and ratify or disapprove (in his Sole
Discretion) any and all actions of Venture hereunder (including, without
limitation, the approval, consent and quality control rights of Venture
pursuant to this Section 8 and Section 9 hereof and Venture’s ability to
withdraw an approved Licensed Item pursuant to Section 8(e) above).

(j)            Right to Use. For avoidance of doubt, Venture
shall retain for itself the right to engage in the Distribution of Biodiesel
Fuel during the Term within the Territory.

(k)           No Other Biodiesel Fuel. As a material condition
of Venture in entering into this Agreement, Sublicensee expressly acknowledges
and agrees that it will not for itself or for any other Person sell, dispose
of, or in any manner distribute, any form, or blend, of agricultural based
so-called “biodiesel fuel” other than the Biodiesel Fuel at any time during the
Term.

9.             Required Markings. Sublicensee will
display on all applicable Licensed Items any legends, markings or notices that
are required by law or that Venture may reasonably request from time to time.
Notwithstanding the foregoing, Sublicensee shall not make any reference to a
Licensed Item without including the ® or TM symbol, as appropriate, and
including the notation “[mark] is used under license.” Sublicensee may only
eliminate any or all legends, markings, notices or references with the express
prior approval of Venture, in each case. Upon receipt of written notice from
Venture, Sublicensee shall have seven (7) days to cure or cause the cure of,
any omissions of such legends, markings or notices. Sublicensee shall not
display its own respective copyright or trademark notice(s) on any Licensed
Items.

 12
 

 

10.           Ownership of Mark.

(a)           Owner.
Sublicensee acknowledges that Owner is the sole and exclusive owner of all
rights in and to the Mark and the goodwill associated therewith throughout the
world.

(b)           No Challenge.
Sublicensee agrees, during the Term of this Agreement and thereafter, never to
challenge or attack the rights of Owner in and to the Mark or the validity of
the Sublicense being granted herein by Venture.

(c)           Benefit.
Sublicensee agrees, during the Term of this Agreement and thereafter, that its
use of the Mark inures to the sole benefit of Owner and that Sublicensee shall
not acquire any rights whatsoever in or to the Mark, other than the rights
expressly provided in this Agreement.

(d)           Reservation.
All rights of Owner and Venture not expressly granted to Sublicensee herein are
expressly reserved to Owner and Venture, respectively.

(e)           No Use.
Sublicensee agrees and acknowledges that following the expiration or earlier
termination of this Agreement for any reason, Sublicensee shall have no right
to use for itself in any manner, or sublicense, the Mark to any third party for
any purpose.

11.           Trademark and
Copyright Protection and Infringements.

(a)           No
Registration. Sublicensee agrees that it shall not at any time,
anywhere in the world, apply for any registration of the Mark or any copyright,
trademark or other designation which would affect the ownership of the Mark by
Owner or file any document with any governmental authority to take any action
which would affect the sole and absolute ownership of the Mark by Owner.

(b)           No Confusion.
Sublicensee agrees that it shall, at no time during the Term or thereafter, use
or authorize the use of any trademark, trade name or other designation
identical with or confusingly or substantially similar to the Mark or any mark
uniquely associated with Venture or Owner.

(c)           Cooperation.
Sublicensee agrees to cooperate with Venture (and his Affiliates) in protecting
the Mark and, for that purpose, Sublicensee will supply to Venture or its
representatives from time to time and at no charge such Samples and information
regarding sales of the Biodiesel Fuel sold or distributed by Sublicensee as
reasonably may be requested.

(d)           Sublicensee
Assistance/Claims. When requested by Venture, Sublicensee agrees to
assist Venture in connection with any intellectual property claims dealing with
the enforcement of Owner’s rights in the Mark. Venture agrees to reimburse
Sublicensee’s reasonable out-of-pocket expenses incurred in providing such
assistance. With respect to any intellectual property actions not caused by any
breach of this Agreement by Sublicensee that Venture may choose to bring
(subject to the terms of the Master License), Venture shall, at Venture’s cost
and expense, employ counsel of its own choice to direct the handling of such
claims and any settlement thereof. Subject to the terms of the Master License
and the approval of 

 13
 

 

Owner, Venture shall be entitled to receive
and retain all amounts awarded as damages, profits or otherwise awarded to
Venture in connection with such suits.

(e)           Territory
Expansion. Sublicensee acknowledges and agrees that the Mark is
currently only registered with the United States Patent and Trademark Office.
At any time during the Term hereof when Sublicensee has the authority to
Distribute Biodiesel Fuel outside of the United States and Sublicensee desires
to Distribute Biodiesel Fuel outside of the United States (a “Non-US Jurisdiction”), then Sublicensee must,
prior to undertaking any activity with respect to such Non-US Jurisdiction,
provide Venture with advance prior written notice of such proposed activity
(the “Expansion Notice”). Upon Venture’s
receipt of the Expansion Notice, Venture shall notify Owner of Sublicensee’s
intent and Venture will cause Owner to use commercially reasonable efforts to
apply to register the Mark in such Non-US Jurisdiction. In the event that
Venture is unable to cause Owner to obtain a registration in such Non-US
Jurisdiction, Sublicensee shall not have, notwithstanding anything contained
herein to the contrary, the right or authority to Distribute Biodiesel Fuel in
such Non-US Jurisdiction.

12.           Indemnification.

(a)           Indemnification
by Sublicensee. Sublicensee will defend, indemnify, and hold
Venture, Owner and Venture’s and Owner’s respective Affiliates, employees,
agents, attorneys, heirs, successors, and assigns, harmless against and in
respect of: (i) any and all loss, damage, or liability resulting from any
breach or claim of breach of any representation or warranty or the
non-fulfillment of any covenant, agreement or obligation on the part of
Sublicensee hereunder; and (ii) any and all claims, actions, suits,
proceedings, demands, assessments, judgments, costs and expenses (including
reasonable attorneys’ fees and expenses) (collectively, “Claims”)
arising out of or relating to the foregoing, or resulting from tort claims or
other claims arising out of Sublicensee’s use of the Mark, including (A)
product liability claims arising out of or related to the sale, promotion
and/or distribution of the Licensed Items produced by, or at the order of,
Sublicensee, and (B) injury, wrongful death or negligence arising out of or
related to the sale, promotion, advertisement, marketing and distribution of
the Licensed Items.

(b)           Indemnification
by Venture. Venture will defend, indemnify and hold Sublicensee and
Sublicensee’s officers, directors, employees, agents, managers, attorneys,
members, successors and assigns harmless against and in respect of: (i) any and
all loss, damage, or liability resulting from any breach of any representation
or warranty or the non-fulfillment of any covenant, agreement or obligation on
the part of Venture hereunder, and (ii) any and all Claims arising out of or
relating to the foregoing.

(c)           Notification.
If any demand, claim or suit is asserted or instituted with respect to which a
party may be entitled to indemnification under Sections 12(a) and (b) hereof,
such party will give prompt notice thereof to the party who or which may be
liable for indemnification, including full details to the extent known.

(d)           Third-Party
Intellectual Property Claims. With respect to infringement claims by
third parties against Sublicensee asserting that Sublicensee’s use of the Mark
infringes their rights, Sublicensee will give prompt notice thereof to Venture
and Owner. Subject to the Master License and the approval of Owner, Venture
shall have the right to control, defend, and settle the 

 14
 

 

claim at its option, and the reasonable costs
thereof (including attorneys’ fees, costs, disbursements and the cost of
settlement), if any, shall be divided evenly between Venture and Sublicensee,
unless such claims are based on the breach of this Agreement by Sublicensee, in
which case such costs shall be borne exclusively by Sublicensee. If Venture
declines to exercise this option, it shall not be liable or responsible for any
of the costs arising from the defense and settlement of the claim, unless the
claim arises from Venture’s breach of its representations and/or warranties
pursuant to this Agreement

(e)           Limitation
of Liability. EXCEPT AS PROVIDED IN SECTIONS 4(d), 12(a), 12(b) AND
26 HEREOF, EACH PARTY’S SOLE REMEDY AGAINST THE OTHER FOR LOSS OR DAMAGE
ARISING OUT OF THE PERFORMANCE OR NON-PERFORMANCE UNDER THIS AGREEMENT WILL BE
PROVEN DIRECT, ACTUAL DAMAGES AND NEITHER PARTY WILL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, RELIANCE, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
ITS PERFORMANCE OR NON-PERFORMANCE UNDER THIS AGREEMENT, WHETHER OR NOT THAT
PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE CUMULATIVE
AMOUNTS PAID BY VENTURE IN CONNECTION WITH ANY OR ALL LOSSES, DAMAGES OR
LIABILITIES PURSUANT TO THIS AGREEMENT EXCEED THE TOTAL OF ALL AGREEMENT
PAYMENTS THAT VENTURE HAS THEN RECEIVED TO DATE PURSUANT TO THIS AGREEMENT.

13.           Insurance.

(a)           Liability. Sublicensee shall throughout the Term
of this Agreement and for a period of two (2) years thereafter, obtain and
maintain at its own cost and expense, from a qualified insurance company,
general liability and product liability insurance, the form of which must be
acceptable to Owner and Venture, naming, with respect to such policy, Venture
and Owner as additional named insureds. The amount of coverage for such policy
shall be a minimum of Ten Million Dollars ($10,000,000) combined single limit,
with a commercially reasonable deductible amount, for each single occurrence
for bodily injury and/or for property damage. Such policy shall provide for
twenty (20) days notice to Venture and Owner from the insurer by registered or
certified mail, return receipt requested, in the event of any modification,
cancellation or termination of such insurance. Sublicensee agrees to furnish to
each of Venture and Owner certificates of insurance evidencing same within
thirty (30) days after execution of this Agreement and, in no event, shall
Sublicensee use the Mark prior to receipt by Owner and Venture of such evidence
of insurance.

(b)           Errors and Omissions. Sublicensee shall
throughout the Term of this Agreement, obtain and maintain at its own cost and
expense, from a qualified insurance company, errors and omissions insurance,
the form of which must be acceptable to Owner and Venture, naming with respect
to such policy, Owner and Venture as additional named insureds. The amount of
coverage for such policy shall be a minimum of Five Million Dollars
($5,000,000), with a commercially reasonable deductible amount, and shall cover
any and all loss, damage, or liability resulting from Sublicensee’s use of the
Mark pursuant to this Agreement. Such policy shall provide for twenty (20) days
notice to Owner and Venture from the insurer by registered or certified mail,
return receipt requested, in the event of any modification, cancellation or
termination of such 

 15
 

 

insurance. Sublicensee agrees to furnish Owner and Venture certificates
of insurance evidencing same within thirty (30) days after execution of this
Agreement and, in no event, shall Sublicensee use the Mark prior to receipt by
Owner and Venture of such evidence of insurance.

14.           Notices.
Except as provided in Section 6(b) of this Agreement with respect to Agreement
Payments and Accounting Statements, all notices required to be sent to a party
shall be in writing to the following addresses unless notification of a new
address is properly provided in accordance herewith. All notices shall be
delivered by facsimile and simultaneously sent for next day delivery via a
nationally recognized overnight courier service that obtains written
acknowledgment of receipt by the addressee (“Receipt
Acknowledgement”). Notice shall be deemed given upon receipt, as
established by the Receipt Acknowledgement.

	
  To Venture:

  	
   

  	
  Biodiesel Venture, L.P.

  
	
   

  	
   

  	
  c/o Mark
  Rothbaum & Associates

  
	
   

  	
   

  	
  36 Mill Plain
  Road

  
	
   

  	
   

  	
  Room 406

  
	
   

  	
   

  	
  Danbury,
  Connecticut 06811

  
	
   

  	
   

  	
  Attn: Mark
  Rothbaum

  
	
   

  	
   

  	
  (f) (203)
  791-9014

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
  Haynes and Boone, LLP

  
	
   

  	
   

  	
  901 Main Street

  
	
   

  	
   

  	
  Suite 3100

  
	
   

  	
   

  	
  Dallas, Texas
  75202

  
	
   

  	
   

  	
  Attn: William C.
  Wilshusen, Esq.

  
	
   

  	
   

  	
  (f) (214)
  200-0635

  
	
   

  	
   

  	
   

  
	
  To Sublicensee:

  	
   

  	
  Earth Biofuels, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f)

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f)

  	
   

  
	
   

  	
   

  	
   

  
	
  To Owner:

  	
   

  	
  Willie Nelson

  
	
   

  	
   

  	
  c/o Mark
  Rothbaum

  
	
   

  	
   

  	
  36 Mill Plain
  Road

  
	
   

  	
   

  	
  Room 406

  
	
   

  	
   

  	
  Danbury,
  Connecticut 06811

  
	
   

  	
   

  	
  (f) (203)
  791-9014

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 16
 

 

 

	
  and

  	
   

  	
  Greenberg Traurig LLP

  
	
   

  	
   

  	
  3290 Northside
  Pkwy

  
	
   

  	
   

  	
  Suite 400

  
	
   

  	
   

  	
  Atlanta, Georgia
  30327

  
	
   

  	
   

  	
  Attn: Robert A.
  Rosenbloum. Esq.

  
	
   

  	
   

  	
  (f) (678)
  553-2212

  

 

15.           Relationship of
the Parties.
This Agreement does not constitute and will not be construed as constituting a
partnership or joint venture between Venture and Sublicensee, and neither
Venture nor Sublicensee shall hold itself out to third parties to the contrary.
It is expressly acknowledged and agreed to by Sublicensee that Sublicensee
shall have no authority to bind Venture.

16.           Choice of Laws. THIS AGREEMENT
HAS BEEN ENTERED INTO IN THE STATE OF TEXAS, AND THE VALIDITY, INTERPRETATION
AND LEGAL EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF TEXAS APPLICABLE TO CONTRACTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE
STATE OF TEXAS (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES UNDER
TEXAS LAW). THE TEXAS COURTS (STATE AND FEDERAL), SHALL HAVE SOLE AND EXCLUSIVE
JURISDICTION OF ANY CONTROVERSIES REGARDING THIS AGREEMENT; ANY ACTION OR OTHER
PROCEEDING WHICH INVOLVES SUCH A CONTROVERSY SHALL BE BROUGHT IN THOSE COURTS
IN                           
COUNTY, TEXAS AND NOT ELSEWHERE. THE PARTIES WAIVE ANY AND ALL OBJECTIONS TO
VENUE IN THOSE COURTS AND HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THOSE
COURTS. ANY PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY, AMONG OTHER METHODS,
BE SERVED UPON A PARTY BY DELIVERING IT OR MAILING IT, BY REGISTERED OR
CERTIFIED MAIL OR BY OVERNIGHT COURIER OBTAINING PROOF OF DELIVERY, DIRECTED TO
THE ADDRESS SET FORTH IN SECTION 14 OR SUCH OTHER ADDRESS AS A PARTY MAY
DESIGNATE PURSUANT TO SECTION 14. ANY SUCH DELIVERY OR MAIL SERVICE SHALL BE
DEEMED TO HAVE THE SAME FORCE AND EFFECT AS PERSONAL SERVICE WITHIN THE STATE
OF TEXAS. THE NON-PREVAILING PARTY IN ANY LEGAL ACTION BETWEEN THE PARTIES
ARISING FROM OR RELATED TO THIS AGREEMENT, WHETHER INSTITUTED BY VENTURE OR BY
SUBLICENSEE, SHALL PROMPTLY REIMBURSE THE PREVAILING PARTY FOR ALL COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) INCURRED IN CONNECTION
THEREWITH.

17.           Waiver. No waiver by any
party of a breach or a default hereunder shall be deemed a waiver by such party
of a subsequent breach or default of a similar nature.

18.           Severability. In the event
that any term or provision of this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other term or provision and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent, but only to the extent, the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein.

 17
 

 

19.           Headings. The headings in
this Agreement are solely for convenience only and shall not be used to
interpret or construe this Agreement.

20.           Revocation of
Prior Agreements. This Agreement represents the entire understanding between
the parties hereto, or their respective Affiliates, with respect to the subject
matter hereof and supersedes all previous representations, understandings or
agreements, oral or written, between the parties with respect to the subject
matter hereof and cannot be modified except by a written instrument signed by
all of the parties hereto. Accordingly, any and all prior understandings and
agreements relative to the licensing of all or part of the Mark and to any
other matters discussed herein, are hereby revoked, and the provisions of this
Agreement alone shall be determinative of the conditions pursuant to which
Sublicensee shall be licensed to use the Mark and the resolution of such other
described matters. Each party hereto expressly disclaims reliance upon any
facts, promises, undertakings or representations made by any other party, or
its agents, representatives or attorneys, prior to the execution of this
Agreement.

21.           Third-Party
Beneficiaries. Venture and Sublicensee acknowledge and agree that Owner
is intended as and hereby constitutes a third party beneficiary of this
Agreement and as such shall be fully entitled and authorized to enforce any of
the covenants, obligations or commitments made or undertaken by Venture
hereunder against such party as full as if Owner were a party hereto
(including, without limitation, Section 26 hereof). Except as expressly set
forth in the immediately preceding sentence with respect to Owner, no other
Person shall be a direct or indirect beneficiary of, or shall have any direct
or indirect cause of action or claim in connection with, this Agreement.

22.           Counsel. Each of Venture
and Sublicensee acknowledges and agrees that it has been represented by
independent counsel of its own choice for purposes of advising it in connection
with the negotiation and execution of this Agreement.  Additionally, each of Venture and Sublicensee
acknowledges and agrees that either it or its independent legal counsel has had
the opportunity to investigate and inquire about all of the relevant facts,
circumstances and effects in connection with its entering into and executing
this Agreement.  The parties acknowledge
to each other that each party and its respective counsel have participated in
drafting and have edited this Agreement. Accordingly, the normal rule of
construction to the effect that any ambiguities are resolved against the
drafting party will not be employed in the interpretation of this Agreement.

23.           Incorporation. All exhibits
mentioned in this Agreement are hereby incorporated by reference into this
Agreement as fully as if copied herein verbatim.

24.           Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall constitute
an original and all of which together shall constitute one and the same
agreement. The signature of a party obtained via facsimile shall be valid and
binding for all purposes.

25.           Binding Effect;
Successors and Assigns. Except as otherwise provided in this Agreement, this
Agreement, and the rights and obligations of the parties hereunder, will be
binding upon and inure to the benefit of their respective successors and
permitted assigns.

 18
 

 

26.           Injunctive Relief. Sublicensee
agrees that a breach of any of the covenants contained in this Agreement may
cause irreparable injury to Owner and Venture for which the remedy at law may
be inadequate and would be difficult to ascertain. Therefore, in the event of
the breach or threatened breach of any such covenants, Venture shall be
entitled, in addition to any other rights and remedies it may have at law or in
equity, to seek an injunction to restrain Sublicensee from any threatened or
actual activities in violation of any such covenants. Sublicensee hereby
consents and agrees that temporary and permanent injunctive relief may be
granted in any proceedings which might be brought to enforce any such covenants
without the necessity of proving of actual damages or posting a bond, and in
the event Venture does apply for such an injunction, Sublicensee shall not
raise as a defense thereto that Venture has an adequate remedy at law.

27.           Defined Terms.

“Affiliate” of a
person shall mean any person, directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with, such
person, as applicable. The term “control,”
as used in the immediately preceding sentence, shall mean with respect to a
corporation or limited liability company the right to exercise, directly or
indirectly, more than fifty percent (50%) of the voting rights attributable to
the controlled corporation or limited liability company, and, with respect to
any individual, partnership, trust, other entity or association, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled entity.

“Applicable Law”
shall mean any law, rule, statute, regulation, order, judgment, decree, treaty,
directive or other requirement in force at any time during the Term which
applies to or is otherwise intended to govern or regulate any activity
(including, without limitation, the blending or Distribution of biodiesel fuel
or Petroleum Fuel) or Person.

“Biodiesel Fuel”
shall mean biodiesel fuel, whether or not blended with Petroleum Fuel,
Distributed hereunder bearing the Mark, which notwithstanding anything
contained herein, shall meet the then current highest industry standards for
biodiesel fuel.

“Contract Year”
means each successive period of twelve (12) months occurring during the Term
commencing upon the Effective Date.

“Distribute” or “Distribution” or “Distributing”
shall mean the sale and/or distribution of Biodiesel Fuel to retail sellers,
distributors, users and/or consumers of Biodiesel Fuel.

“Mark” shall mean
the trademark BIOWILLIE, including U.S. Application Serial No. 78/569432
therefor.

“Master License”
shall mean that certain Master License Agreement, by and between Owner and
Venture, as amended from time to time.

“Owner” shall mean
Willie Nelson.

“Owner Identification”
shall mean (a) the name, image and likeness of Owner, and (b) any and all
copyrights, marks, trade names, trademarks, design marks, logos or other items
of 

 19
 

 

intellectual property
owned or controlled by, or in any way affiliated or associated with, Owner or
his Affiliates, other than the Mark.

“Person” shall
mean any natural person or any corporation, association, partnership, limited
liability company, joint venture, company, business trust, organization,
business, other incorporated or unincorporated legal entity or form, or
government or any governmental agency or political subdivision of any
government.

“Sole Discretion”
shall mean Venture’s right, in its sole and absolute discretion (subject to and
in accordance with the Master License and Owner’s Sole Discretion rights
contained therein), to take or refrain from taking a particular action.

“Territory” shall
mean the world.

[Signatures are on the
Next Page.]

 

 20
 

 

IN WITNESS WHEREOF,
by their execution below, the parties hereto have agreed to all of the terms
and conditions of this Agreement as of the Effective Date.

	
  

  	
   

  	
   

  	
  VENTURE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BIODIESEL
  VENTURE, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Biodiesel Venture GP, LLC,

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Willie Nelson

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Willie Nelson

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Manager

  	
   

  

 

	
  

  	
   

  	
   

  	
  SUBLICENSEE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  EARTH
  BIOFUELS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Dennis McLaughlin, III

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Dennis McLaughlin, III

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  

 

 21Viscorp, Inc. Exhibit 10.1 8/14/06

CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use of our report dated June 8, 2006 on the financial statements of VisCorp, LLC as of December 31, 2005 and 2004, and the related statements of operations, members’ equity and cash flows for the year then ended, and the inclusion of our name under the heading “Experts” in the Form SB-1 Registration Statement filed with the Securities & Exchange Commission.

SIGNATURE

/s/  The Hall Group

The Hall Group, CPAs

Dallas, Texas

August 14, 2006

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