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Unassociated Document

    

      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 12th
        day of
        February, 2007, by and between Gemini Environmental Corporation, a corporation
        organized under the laws of the State of Delaware ("Licensor"),
        and
        Full Circle Industries, Inc., a corporation organized under the laws of the
        State of Nevada ("Licensee").
        Licensor and Licensee are sometimes hereinafter referred to individually
        as a
        "Party"
        and
        collectively as the "Parties."

       

      RECITALS

      

      WHEREAS,
        Licensee is a company promoting, among other things, conversion of the cellulose
        fractions of municipal solid waste and other opportunistic feedstocks into
        fuels; 

      

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

      

      WHEREAS,
        Licensee wishes to license the Technology from Licensor for use in connection
        with Licensee’s desire to develop and commercialize the production of fuels 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 a license to use the Technology
        in the
        Territory, 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.

       

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

      

      "By-Products"
        shall
        mean salable materials, which result from operation of the Process, and which
        are not the intended final product.

      

      "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, 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 or employee 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.

      

      "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.

      

      "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.

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

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

      

      "Patents"
        shall
        mean, collectively, that certain U.S. Patent Application filed with United
        States Patent and Trademark Office on July 21, 2006, entitled “SOLID WASTE
        TREATMENT APPARATUS AND METHOD” and any patents that issue therefrom; 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 process for cellulosic and other 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.

      

      "Territory"
        shall
        mean all countries through out the world.

      

      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.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      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, a
        non-exclusive, non-transferable, non-sub-licensable license in the Territory
        during the Term to use the Technology solely for the purpose of producing
        fuels
        pursuant to the terms and conditions set forth herein (the "License").
        Due
        to the unique and proprietary nature of the Technology, Licensee agrees not
        to
        utilize a process, system or method that is competitive with, or an alternative
        to, the Technology in any Project during the Term. 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.

       

      2.2 Limitation
        on Use of Technology.
        Licensee 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. The License does not permit Licensee to, and Licensee
        shall
        not, (i) modify, disassemble, decompile or reverse engineer the Technology
        nor permit any third party to do so; (ii) use the Technology in any manner
        to provide service bureau, time-sharing or other outsourced services to third
        parties, or (iii) 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 directors, officers, managers, employees, agents,
        contractors and advisors , 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, 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 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. 

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      (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 directors, officers, managers, employees, agents,
        contractors, and advisors (including attorneys, accountants, and consultants)
        of
        the Parties, 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.

      

      (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 of all
        Products produced from any use of the Technology pursuant to the License.
        The
        Royalty shall be calculated on an accrual (rather than a cash) basis. The
        Royalty shall be payable quarterly on the 15th
        day of
        each of January, April, July and October (as to sales accrued during the
        preceding calendar quarter) 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 Annual
        Maintenance Payment.
        As
        additional consideration for the grant of the License in the Territory, Licensee
        shall pay Licensor a non-refundable annual payment of Fifty Thousand Dollars
        ($50,000), due and payable every November 30 during the Term. 

      

      2.6 [Reserved.]

      

      2.7 Commercial
        Operation.
        Licensee
        shall use its good faith best 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 One Million Dollars ($1,000,000) toward the commencement
        of development and Commercial Operation of the Project within eighteen (18)
        months after the Effective Date, (ii) the expenditure of an additional Two
        Million Dollars ($2,000,000.00) 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 fuels, 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).

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      2.8 Right
        to Manufacture.
        Due to
        the proprietary nature of the process design, the Licensee agrees that Licensor
        shall maintain the exclusive right of vessel manufacture, and the Licensee
        shall
        purchase all vessels exclusively from Licensor. All other equipment required
        for
        construction and operation of a Project utilizing the Technology may be
        purchased from other vendors. Licensee’s compliance with the provisions of this
Section
        2.8
        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
        2.8
        shall be
        the termination of this agreement pursuant to Section
        6.2(b).

      

      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 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 either party hereto 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.

       

      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.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      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.

      

      ARTICLE
        IV

      

      ACCESS
        TO PROJECTS AND INFORMATION

      

      Licensor
        and its 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.
        In the
        event that any such inspection, audit or review discloses an underpayment
        of
        Royalties or other amounts due hereunder, Licensee shall immediately pay
        to
        Licensor the amount of such underpayment.

      

      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 the right to grant the License under this Agreement, (c) Licensor has
        the
        power and all requisite authority to enter into this Agreement, (d) 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 (e) this Agreement
        constitutes Licensor's legal, valid, and binding obligation. 

       

      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.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      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 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 as determined in the sole discretion
        of
        Licensor.

       

      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 twenty (20) 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).

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      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 four (4) consecutive months, either Party may terminate
        this Agreement upon thirty (30) days' prior written notice.

       

      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 Licensor 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 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 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.

      

      7.2 Indemnification
        by Licensee.
        Licensee, as indemnitor, agrees to indemnify, defend, and hold harmless Licensor
        and its 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.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      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.

       

      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 Los Angeles 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.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      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. Licensee
        may not assign this Agreement, in whole or in part, by operation of law,
        merger,
        acquisition or otherwise, without the prior written consent of Licensor.
        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.
        Subject to the foregoing, this Agreement shall be binding upon, and inure
        to the
        benefit of, each Party’s permitted successors and assigns.

      

      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:

      Gemini
        Environmental Corporation

      590
        Madison Avenue, 21st
        Floor

      New
        York,
        NY 10022

      Attn:
        Chris Walton

      

      If
        delivered to Licensee:

      Full
        Circle Industries, Inc.

      1800
        Century Park East, Suite 600

      Los
        Angeles, CA 90067

      Attn:
        Steve Racoosin

      

      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.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      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.

       

      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.

       

      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.

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      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 Delaware without giving effect to the principles thereof relating
        to
        conflicts of laws.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

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

       

      
        	
                GEMINI
                  ENVIRONMENTAL CORPORATION

              	 	
                FULL
                  CIRCLE INDUSTRIES, INC.

              
	 	 	 
	
                By:

              	 	
                By:

              
	 	 	 
	
                Name:
                  Christopher S. Walton

              	 	
                Name:
                  Steve Racoosin

              
	 	 	 
	
                Title:
                  President

              	 	
                Title:
                  CEO

              
	 	 	 
	
                Date:
                  February 12, 2007

              	 	
                Date:
                  February 12, 2007

              

      

       

      
        
          
          

        

        
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      EXHIBIT
        A

      

      DESCRIPTION
        OF THE PROCESS

       

      The
        Process relates to a method and apparatus for the treatment of municipal
        solid
        waste, as described in U.S. Patent Application filed with USPTO on July 21,
        2006, entitled “SOLID WASTE TREATMENT APPARATUS AND METHOD”. The Process also
        includes all related know-how and Improvements to the Technology, whether
        described in said patent applications or in additional patent applications
        filed
        by or 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.

      
        
          
          

        

        
          15FORM
      OF COMMON STOCK PURCHASE WARRANT

    

    CHINA
      PRECISION STEEL, INC.

     

    

      
        	
                CUSIP
                  No.                              
                  16941J
                  114            
                   

              	 	 
	
                Warrant
                  No.                             

              	 	 
	 	 	 
	
                Warrant
                  Shares:                       

              	 	
                Initial
                  Exercise Date: May 6, 2008

              
	 	 	
                Issue
                  Date: November 6, 2007

              

      

    

     

    THIS
      COMMON STOCK PURCHASE WARRANT (the “Warrant”)
      certifies that, for value received, _____________ (the “Holder”)
      is
      entitled, upon the terms and subject to the limitations on exercise and the
      conditions hereinafter set forth, at any time on or after May 6, 2008 (the
“Initial
      Exercise Date”)
      and on
      or prior to the close of business on the five year anniversary of the Initial
      Exercise Date (the “Termination
      Date”)
      but
      not thereafter, to subscribe for and purchase from China Precision Steel, Inc.,
      a corporation (the “Company”),
      up to
      ______ shares (the “Warrant
      Shares”)
      of
      Common Stock. The purchase price of one share of Common Stock under this Warrant
      shall be equal to the Exercise Price, as defined in Section 2(b).

     

    This
      Warrant is issued pursuant to that certain Warrant Agreement dated as of
      November 6, 2007 (the “Warrant Agreement”), between the Company and
      Corporate Stock Transfer, Inc. as Warrant Agent (together with any successors
      and assigns, the “Warrant Agent”).

     

    Section
      1. Definitions.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      set forth in that certain Subscription Agreement (the “Subscription
      Agreement”),
      dated
      November 1, 2007, among the Company and the purchaser signatory
      thereto.

     

    Section
      2. Exercise.

     

    a) Exercise
      of Warrant.
      Exercise of the purchase rights represented by this Warrant may be made, in
      whole or in part, at any time or times on or after the Initial Exercise Date
      and
      on or before the Termination Date by delivery to the Warrant Agent of a duly
      executed facsimile copy of the Notice of Exercise Form annexed hereto (or such
      other office or agency of the Company as it may designate by notice in writing
      to the registered Holder at the address of the Holder appearing on the books
      of
      the Company); and, within three (3) Trading Days of the date said Notice of
      Exercise is delivered to the Warrant Agent, the Warrant Agent, for the account
      of the Company, shall have received payment of the aggregate Exercise Price
      of
      the shares thereby purchased by wire transfer or cashier’s check drawn on a
      United States bank. Notwithstanding anything herein to the contrary, the Holder
      shall not be required to physically surrender this Warrant to the Warrant Agent
      until the Holder has purchased all of the Warrant Shares available hereunder
      and
      the Warrant has been exercised in full, in which case, the Holder shall
      surrender this Warrant to the Warrant Agent for cancellation within three (3)
      Trading Days of the date the final Notice of Exercise is delivered to the
      Warrant Agent. Partial exercises of this Warrant resulting in purchases of
      a
      portion of the total number of Warrant Shares available hereunder shall have
      the
      effect of lowering the outstanding number of Warrant Shares purchasable
      hereunder in an amount equal to the applicable number of Warrant Shares
      purchased. The Holder and the Warrant Agent shall maintain records showing
      the
      number of Warrant Shares purchased and the date of such purchases. The Company
      shall deliver any objection to any Notice of Exercise Form within two (2)
      Business Days of receipt of such notice. In the event of any dispute or
      discrepancy, the records of the Warrant Agent shall be controlling and
      determinative in the absence of manifest error. The
      Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
      that, by reason of the provisions of this paragraph, following the purchase
      of a
      portion of the Warrant Shares hereunder, the number of Warrant Shares available
      for purchase hereunder at any given time may be less than the amount stated
      on
      the face hereof.

     

    
      
        
          
          

        

        
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    b) Exercise
      Price.
      The
      exercise price per share of the Common Stock under this Warrant shall be
$8.45,
      such price representing the closing price of the Common Stock on The NASDAQ
      Capital Market on October 31, 2007, subject to adjustment hereunder (the
“Exercise
      Price”).

     

    c) Cashless
      Exercise.
      In lieu
      of tendering the Exercise Amount, the Warrants may be exercised by surrendering
      this Certificate together with irrevocable instructions to the Warrant Agent
      to
      issue in exchange for this Certificate the number of shares of Common Stock
      equal to the product of (i) the number of shares as to which the Warrants are
      being exercised multiplied by (ii) a fraction, the numerator of which is the
      Fair Market Value of a share of Common Stock on the last business day
      immediately preceding the exercise date less the Purchase Price therefore and
      the denominator of which is such Fair Market Value (a “Cashless
      Exercise”).
      Fair
      Market Value”
or
      “FMV”
of
      a
      share of Common Stock as of a particular date shall mean: (i) if traded on
      a
      securities exchange or if actively traded over-the-counter, the Fair Market
      Value shall be deemed to be the last reported sale price of the Common Stock
      on
      such exchange or over-the-counter on the last business day before the date
      in
      question; (ii) if actively traded over-the-counter, but no sale is made
      on such day, the mean of the closing bid and asked prices such day on such
      over-the-counter quotation; and (iii) if there is no active public market,
      the
      Fair Market Value shall be the value as determined in good faith by the
      Company’s Board of Directors upon a review of relevant factors, including due
      consideration of the Holders’ determination of the value of the
      Company.

     

    Notwithstanding
      anything herein to the contrary, on the Termination Date, this Warrant shall
      be
      automatically exercised via cashless exercise pursuant to this Section
      2(c).

     

    
      
        
          
          

        

        
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        d) Holder’s
        Restrictions.
        The
        Warrant Agent and the Company shall not effect any exercise of this Warrant,
        and
        a Holder shall not have the right to exercise any portion of this Warrant,
        pursuant to Section 2 or otherwise, to the extent that after giving effect
        to
        such issuance after exercise as set forth on the applicable Notice of Exercise,
        the Holder (together with the Holder’s Affiliates, and any other person or
        entity acting as a group together with the Holder or any of the Holder’s
        Affiliates), would beneficially own in excess of the Beneficial Ownership
        Limitation (as defined below). For purposes of the foregoing sentence, the
        number of shares of Common Stock beneficially owned by the Holder and its
        Affiliates shall include the number of shares of Common Stock issuable upon
        exercise of this Warrant with respect to which such determination is being
        made,
        but shall exclude the number of shares of Common Stock which would be issuable
        upon (A) exercise of the remaining, nonexercised portion of this Warrant
        beneficially owned by the Holder or any of its Affiliates and (B) exercise
        or
        conversion of the unexercised or nonconverted portion of any other securities
        of
        the Company (including, without limitation, any other Common Stock Equivalents)
        subject to a limitation on conversion or exercise analogous to the limitation
        contained herein beneficially owned by the Holder or any of its
        affiliates. Except
        as set forth in the preceding sentence, for purposes of this Section 2(d),
        beneficial ownership shall be calculated in accordance with Section 13(d)
        of the
        Exchange Act and the rules and regulations promulgated thereunder, it being
        acknowledged by the Holder that the Company is not representing to the Holder
        that such calculation is in compliance with Section 13(d) of the Exchange
        Act
        and the Holder is solely responsible for any schedules required to be filed
        in
        accordance therewith. To the extent that the limitation contained in this
        Section 2(d) applies, the determination of whether this Warrant is exercisable
        (in relation to other securities owned by the Holder together with any
        Affiliates) and of which portion of this Warrant is exercisable shall be
        in the
        sole discretion of the Holder, and the submission of a Notice of Exercise
        shall
        be deemed to be the Holder’s determination of whether this Warrant is
        exercisable (in relation to other securities owned by the Holder together
        with
        any Affiliates) and of which portion of this Warrant is exercisable, in each
        case subject to the Beneficial Ownership Limitation, and the Company shall
        have
        no obligation to verify or confirm the accuracy of such determination. In
        addition, a determination as to any group status as contemplated above shall
        be
        determined in accordance with Section 13(d) of the Exchange Act and the rules
        and regulations promulgated thereunder. For purposes of this Section 2(d),
        in
        determining the number of outstanding shares of Common Stock, a Holder may
        rely
        on the number of outstanding shares of Common Stock as reflected in (x) the
        Company’s most recent periodic or annual report, as the case may be, (y) a more
        recent public announcement by the Company or (z) any other notice by the
        Company
        or the Company’s Transfer Agent setting forth the number of shares of Common
        Stock outstanding.  Upon the written or oral request of a Holder, the
        Company shall within two Trading Days confirm orally and in writing to the
        Holder the number of shares of Common Stock then outstanding.  In any case,
        the number of outstanding shares of Common Stock shall be determined after
        giving effect to the conversion or exercise of securities of the Company,
        including this Warrant, by the Holder or its Affiliates since the date as
        of
        which such number of outstanding shares of Common Stock was reported. The
        “Beneficial
        Ownership Limitation”
shall
        be 4.99% of the number of shares of the Common Stock outstanding immediately
        after giving effect to the issuance of shares of Common Stock issuable upon
        exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice
        to the Company and the Warrant Agent, may increase or decrease the Beneficial
        Ownership Limitation provisions of this Section 2(d), provided that the
        Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
        shares of the Common Stock outstanding immediately after giving effect to
        the
        issuance of shares of Common Stock upon exercise of this Warrant held by
        the
        Holder and the provisions of this Section 2(d) shall continue to apply. Any
        such
        increase or decrease will not be effective until the 61st
        day
        after such notice is delivered to the Company and the Warrant Agent. The
        provisions of this paragraph shall be construed and implemented in a manner
        otherwise than in strict conformity with the terms of this Section 2(d) to
        correct this paragraph (or any portion hereof) which may be defective or
        inconsistent with the intended Beneficial Ownership Limitation herein contained
        or to make changes or supplements necessary or desirable to properly give
        effect
        to such limitation. The limitations contained in this paragraph shall apply
        to a
        successor holder of this Warrant.

    

     

    
      
        
          
          

        

        
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    e) Mechanics
      of Exercise.
      

     

    i. Delivery
      of Certificates Upon Exercise.
      Certificates for shares purchased hereunder shall be transmitted by the Warrant
      Agent to the Holder by crediting the account of the Holder’s prime broker with
      the Depository Trust Company through its Deposit Withdrawal Agent Commission
      (“DWAC”)
      system
      if the Company is a participant in such system and there is an effective
      Registration Statement permitting the resale of the Warrant Shares by the
      Holder, and otherwise by physical delivery to the address specified by the
      Holder in the Notice of Exercise within three (3) Trading Days from the delivery
      to the Warrant Agent of the Notice of Exercise Form, surrender of this Warrant
      (if required) and payment of the aggregate Exercise Price as set forth above
      (“Warrant
      Share Delivery Date”).
      This
      Warrant shall be deemed to have been exercised on the date the Exercise Price
      is
      received by the Warrant Agent, for the account of the Company. The Warrant
      Shares shall be deemed to have been issued, and Holder or any other person
      so
      designated to be named therein shall be deemed to have become a holder of record
      of such shares for all purposes, as of the date the Warrant has been exercised
      by payment to the Warrant Agent, for the account of the Company of the Exercise
      Price (or by cashless exercise, if permitted) and all taxes required to be
      paid
      by the Holder, if any, pursuant to Section 2(e)(vi) prior to the issuance of
      such shares, have been paid. 

     

    ii. Delivery
      of New Warrants Upon Exercise.
      If this
      Warrant shall have been exercised in part, the Warrant Agent shall, at the
      request of a Holder and upon surrender of this Warrant certificate, at the
      time
      of delivery of the certificate or certificates representing Warrant Shares,
      deliver to Holder a new Warrant evidencing the rights of Holder to purchase
      the
      unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
      in all other respects be identical with this Warrant.

     

    iii. Rescission
      Rights.
      If the
      Company fails to cause its transfer agent to transmit to the Holder a
      certificate or certificates representing the Warrant Shares pursuant to this
      Section 2(e)(i) by the Warrant Share Delivery Date, then the Holder will have
      the right to rescind such exercise.

     

    
      
        
          
          

        

        
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    iv. Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause the Warrant Agent to transmit to the Holder a certificate or certificates
      representing the Warrant Shares pursuant to an exercise on or before the Warrant
      Share Delivery Date, and if after such date the Holder is required by its broker
      to purchase (in an open market transaction or otherwise) or the Holder’s
      brokerage firm otherwise purchases, shares of Common Stock to deliver in
      satisfaction of a sale by the Holder of the Warrant Shares which the Holder
      anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of Warrant Shares that the Company was required
      to
      deliver to the Holder in connection with the exercise at issue times (B) the
      price at which the sell order giving rise to such purchase obligation was
      executed, and (2) at the option of the Holder, either reinstate the portion
      of
      the Warrant and equivalent number of Warrant Shares for which such exercise
      was
      not honored or deliver to the Holder the number of shares of Common Stock that
      would have been issued had the Company timely complied with its exercise and
      delivery obligations hereunder. For example, if the Holder purchases Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted exercise of shares of Common Stock with an aggregate sale price
      giving rise to such purchase obligation of $10,000, under clause (1) of the
      immediately preceding sentence the Company shall be required to pay the Holder
      $1,000. The Holder shall provide the Company written notice indicating the
      amounts payable to the Holder in respect of the Buy-In and, upon request of
      the
      Company, evidence of the amount of such loss. Nothing herein shall limit a
      Holder’s right to pursue any other remedies available to it hereunder, at law or
      in equity including, without limitation, a decree of specific performance and/or
      injunctive relief with respect to the Company’s failure to timely deliver
      certificates representing shares of Common Stock upon exercise of the Warrant
      as
      required pursuant to the terms hereof.

     

    v. No
      Fractional Shares or Scrip.
      No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. As to any fraction of a share which Holder would
      otherwise be entitled to purchase upon such exercise, the Company shall at
      its
      election, either pay a cash adjustment in respect of such final fraction in
      an
      amount equal to such fraction multiplied by the Exercise Price or round up
      to
      the next whole share.

     

    
      
        
          
          

        

        
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    vi. Charges,
      Taxes and Expenses.
      Issuance of certificates for Warrant Shares shall be made without charge to
      the
      Holder for any issue or transfer tax or other incidental expense in respect
      of
      the issuance of such certificate, all of which taxes and expenses shall be
      paid
      by the Company, and such certificates shall be issued in the name of the Holder
      or in such name or names as may be directed by the Holder; provided,
      however,
      that in
      the event certificates for Warrant Shares are to be issued in a name other
      than
      the name of the Holder, this Warrant when surrendered for exercise shall be
      accompanied by the Assignment Form attached hereto duly executed by the Holder;
      and the Company may require, as a condition thereto, the payment of a sum
      sufficient to reimburse it for any transfer tax incidental thereto.

     

    vii. Closing
      of Books.
      The
      Company will not close its stockholder books or records in any manner designed
      to prevent the timely exercise of this Warrant, pursuant to the terms hereof.
      The Company may close its books as it deems necessary and appropriate from
      time
      to time in accordance with its business and its disclosure and reporting
      requirements.

     

    Section
      3. Certain
      Adjustments.

     

    (a) Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding: (A) pays a stock
      dividend or otherwise make a distribution or distributions on shares of its
      Common Stock or any other equity or equity equivalent securities payable in
      shares of Common Stock (which, for avoidance of doubt, shall not include any
      shares of Common Stock issued by the Company upon exercise of this Warrant),
      (B)
      subdivides outstanding shares of Common Stock into a larger number of shares,
      (C) combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (D) issues by reclassification
      of shares of the Common Stock any shares of capital stock of the Company, then
      in each case the Exercise Price shall be multiplied by a fraction of which
      the
      numerator shall be the number of shares of Common Stock (excluding treasury
      shares, if any) outstanding immediately before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding
      immediately after such event and the number of shares issuable upon exercise
      of
      this Warrant shall be proportionately adjusted such that the aggregate Exercise
      Price of this Warrant shall remain unchanged. Any adjustment made pursuant
      to
      this Section 3(a) shall become effective immediately after the record date
      for
      the determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective date
      in
      the case of a subdivision, combination or re-classification.

     

    (b) Subsequent
      Rights Offerings.
      If the
      Company, at any time while the Warrant is outstanding, shall issue rights,
      options or warrants to all holders of Common Stock (and not to Holders)
      entitling them to subscribe for or purchase shares of Common Stock at a price
      per share less than the FMV at the record date mentioned below, then the
      Exercise Price shall be multiplied by a fraction, of which the denominator
      shall
      be the number of shares of the Common Stock outstanding on the date of issuance
      of such rights or warrants plus the number of additional shares of Common Stock
      offered for subscription or purchase, and of which the numerator shall be the
      number of shares of the Common Stock outstanding on the date of issuance of
      such
      rights or warrants plus the number of shares which the aggregate offering price
      of the total number of shares so offered (assuming receipt by the Company in
      full of all consideration payable upon exercise of such rights, options or
      warrants) would purchase at such FMV. Such adjustment shall be made whenever
      such rights or warrants are issued, and shall become effective immediately
      after
      the record date for the determination of stockholders entitled to receive such
      rights, options or warrants. 

     

    
      
        
          
          

        

        
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    (c) Pro
      Rata Distributions.
      If the
      Company, at any time while this Warrant is outstanding, shall distribute to
      all
      holders of Common Stock (and not to Holders of the Warrants) evidences of its
      indebtedness or assets (including cash and cash dividends) or rights or warrants
      to subscribe for or purchase any security other than the Common Stock), then
      in
      each such case the Exercise Price shall be adjusted by multiplying the Exercise
      Price in effect immediately prior to the record date fixed for determination
      of
      stockholders entitled to receive such distribution by a fraction of which the
      denominator shall be the FMV determined as of the record date mentioned above,
      and of which the numerator shall be such FMV on such record date less the then
      per share fair market value at such record date of the portion of such assets
      or
      evidence of indebtedness so distributed applicable to one outstanding share
      of
      the Common Stock as determined by the Board of Directors in good faith. In
      either case the adjustments shall be described in a statement provided to the
      Holder of the portion of assets or evidences of indebtedness so distributed
      or
      such subscription rights applicable to one share of Common Stock. Such
      adjustment shall be made whenever any such distribution is made and shall become
      effective immediately after the record date mentioned above.

     

    (d) Fundamental
      Transaction.
      If, at
      any time while this Warrant is outstanding, (A) the Company effects any merger
      or consolidation of the Company with or into another Person, (B) the Company
      effects any sale of all or substantially all of its assets in one or a series
      of
      related transactions, (C) any tender offer or exchange offer (whether by the
      Company or another Person) is completed pursuant to which holders of Common
      Stock are permitted to tender or exchange their shares for other securities,
      cash or property, or (D) the Company effects any reclassification of the Common
      Stock or any compulsory share exchange pursuant to which the Common Stock is
      effectively converted into or exchanged for other securities, cash or property
      (each “Fundamental
      Transaction”),
      then,
      upon any subsequent exercise of this Warrant, the Holder shall have the right
      to
      receive, for each Warrant Share that would have been issuable upon such exercise
      immediately prior to the occurrence of such Fundamental Transaction, the number
      of shares of Common Stock of the successor or acquiring corporation or of the
      Company, if it is the surviving corporation, and any additional consideration
      (the “Alternate
      Consideration”)
      receivable as a result of such merger, consolidation or disposition of assets
      by
      a holder of the number of shares of Common Stock for which this Warrant is
      exercisable immediately prior to such event. For purposes of any such exercise,
      the determination of the Exercise Price shall be appropriately adjusted to
      apply
      to such Alternate Consideration based on the amount of Alternate Consideration
      issuable in respect of one share of Common Stock in such Fundamental
      Transaction, and the Company shall apportion the Exercise Price among the
      Alternate Consideration in a reasonable manner reflecting the relative value
      of
      any different components of the Alternate Consideration. If holders of Common
      Stock are given any choice as to the securities, cash or property to be received
      in a Fundamental Transaction, then the Holder shall be given the same choice
      as
      to the Alternate Consideration it receives upon any exercise of this Warrant
      following such Fundamental Transaction. To the extent necessary to effectuate
      the foregoing provisions, any successor to the Company or surviving entity
      in
      such Fundamental Transaction shall issue to the Holder a new warrant consistent
      with the foregoing provisions and evidencing the Holder’s right to exercise such
      warrant into Alternate Consideration. The terms of any agreement pursuant to
      which a Fundamental Transaction is effected shall include terms requiring any
      such successor or surviving entity to comply with the provisions of this Section
      3(e) and insuring that this Warrant (or any such replacement security) will
      be
      similarly adjusted upon any subsequent transaction analogous to a Fundamental
      Transaction. Notwithstanding anything to the contrary, in the event of a
      Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3
      transaction” as defined in Rule 13e-3 under the Securities Exchange Act of 1934,
      as amended, or (3) a Fundamental Transaction involving a person or entity not
      traded on a national securities exchange, the Nasdaq Global Select Market,
      the
      Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any successor
      entity shall pay at the Holder’s option, exercisable at any time concurrently
      with or within 30 days after the consummation of the Fundamental Transaction,
      an
      amount of cash equal to the value of this Warrant as determined in accordance
      with the Black Scholes Option Pricing Model obtained from the “OV” function on
      Bloomberg L.P. using (i) a price per share of Common Stock equal to the FMV
      of
      the Common Stock for the Trading Day immediately preceding the date of
      consummation of the applicable Fundamental Transaction, (ii) a risk-free
      interest rate corresponding to the U.S. Treasury rate for a period equal to
      the
      remaining term of this Warrant as of the date of consummation of the applicable
      Fundamental Transaction and (iii) an expected volatility equal to the 100 day
      volatility obtained from the “HVT” function on Bloomberg L.P. determined as of
      the Trading Day immediately following the public announcement of the applicable
      Fundamental Transaction. 

     

    
      
        
          
          

        

        
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    (e) Calculations.
      All
      calculations under this Section 3 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      3,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      treasury shares, if any) issued and outstanding.

     

    (d) Notice
      to Holder; 

     

    (i) Adjustment
      to Exercise Price.
      Whenever the Exercise Price is adjusted pursuant to any provision of this
      Section 3, the Company shall promptly mail to the Holder a notice setting forth
      the Exercise Price after such adjustment and setting forth a brief statement
      of
      the facts requiring such adjustment.

     

    (ii) Notice
      to Allow Exercise by Holder.
      The
      Company shall give the Holder prompt notice if (A) the Company shall declare
      a
      dividend (or any other distribution in whatever form) on the Common Stock;
      (B)
      the Company shall declare a special nonrecurring cash dividend on or a
      redemption of the Common Stock; (C) the Company shall authorize the granting
      to
      all holders of the Common Stock rights or warrants to subscribe for or purchase
      any shares of capital stock of any class or of any rights; (D) the approval
      of
      any stockholders of the Company shall be required in connection with any
      reclassification of the Common Stock, any consolidation or merger to which
      the
      Company is a party, any sale or transfer of all or substantially all of the
      assets of the Company, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property; and
      (E) the Company shall authorize the voluntary or involuntary dissolution,
      liquidation or winding up of the affairs of the Company. For purposes of this
      subsection, any filing with the Securities and Exchange Commission disclosing
      such event shall
      satisfy the Company’s notice requirement pursuant to this subsection.
      The
      Holder is entitled to exercise this Warrant during the period commencing on
      the
      date of such notice to the effective date of the event triggering such notice;
      provided such period is after the Initial Exercise Date.

     

    
      
        
          
          

        

        
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    Section
      4. Transfer
      of Warrant.

     

    a) Transferability.
      This
      Warrant and all rights hereunder (including, without limitation, any
      registration rights) are transferable, in whole or in part, upon surrender
      of
      this Warrant at the principal office of the Warrant Agent or the Company’s other
      designated agent, together with a written assignment of this Warrant
      substantially in the form attached hereto duly executed by the Holder or its
      agent or attorney and funds sufficient to pay any transfer taxes payable upon
      the making of such transfer. Upon such surrender and, if required, such payment,
      the Warrant Agent shall execute and deliver a new Warrant or Warrants in the
      name of the assignee or assignees and in the denomination or denominations
      specified in such instrument of assignment, and shall issue to the assignor
      a
      new Warrant evidencing the portion of this Warrant not so assigned, and this
      Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
      exercised by a new holder for the purchase of Warrant Shares without having
      a
      new Warrant issued. 

     

    b) New
      Warrants.
      This
      Warrant may be divided or combined with other Warrants upon presentation hereof
      at the aforesaid office of the Warrant Agent, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. Subject to compliance with
      Section 4(a), as to any transfer which may be involved in such division or
      combination, the Warrant Agent shall execute and deliver a new Warrant or
      Warrants in exchange for the Warrant or Warrants to be divided or combined
      in
      accordance with such notice. All Warrants issued on transfers or exchanges
      shall
      be dated the original Issue Date and shall be identical with this Warrant except
      as to the number of Warrant Shares issuable pursuant thereto. 

     

    c) Warrant
      Register.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in
      the name of the record Holder hereof from time to time. The Company may deem
      and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    

    Section
      5. Miscellaneous.

     

    a) No
      Rights as Shareholder Until Exercise.
      This
      Warrant does not entitle the Holder to any voting rights or other rights as
      a
      shareholder of the Company prior to the exercise hereof as set forth in Section
      2(e)(i). 

     

    b) Loss,
      Theft, Destruction or Mutilation of Warrant.
      The
      Warrant Agent covenants that upon receipt by the Warrant Agent of evidence
      reasonably satisfactory to it of the loss, theft, destruction or mutilation
      of
      this Warrant or any stock certificate relating to the Warrant Shares, and in
      case of loss, theft or destruction, of indemnity or security reasonably
      satisfactory to it (which, in the case of the Warrant, shall not include the
      posting of any bond), and upon surrender and cancellation of such Warrant or
      stock certificate, if mutilated, the Warrant Agent will make and deliver a
      new
      Warrant or stock certificate of like tenor and dated as of such cancellation,
      in
      lieu of such Warrant or stock certificate.

     

    c) Saturdays,
      Sundays, Holidays, etc.
      If the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall not be a Business Day, then such action
      may be taken or such right may be exercised on the next succeeding Business
      Day.

     

    d) Authorized
      Shares.
      

     

    The
      Company covenants that during the period the Warrant is outstanding, it will
      reserve from its authorized and unissued Common Stock a sufficient number of
      shares to provide for the issuance of the Warrant Shares upon the exercise
      of
      any purchase rights under this Warrant. The Company further covenants that
      its
      issuance of this Warrant shall constitute full authority to its officers who
      are
      charged with the duty of executing stock certificates to execute and issue
      the
      necessary certificates for the Warrant Shares upon the exercise of the purchase
      rights under this Warrant. The Company will take all such reasonable action
      as
      may be necessary to assure that such Warrant Shares may be issued as provided
      herein without violation of any applicable law or regulation, or of any
      requirements of the Trading Market upon which the Common Stock may be listed.
      The Company covenants that all Warrant Shares which may be issued upon the
      exercise of the purchase rights represented by this Warrant will, upon exercise
      of the purchase rights represented by this Warrant, be duly authorized, validly
      issued, fully paid and nonassessable and free from all taxes, liens and charges
      created by the Company in respect of the issue thereof (other than taxes in
      respect of any transfer occurring contemporaneously with such issue).

     

    Except
      and to the extent as waived or consented to by the Holder, the Company shall
      not
      by any action, including, without limitation, amending its certificate of
      incorporation or through any reorganization, transfer of assets, consolidation,
      merger, dissolution, issue or sale of securities or any other voluntary action,
      avoid or seek to avoid the observance or performance of any of the terms of
      this
      Warrant, but will at all times in good faith assist in the carrying out of
      all
      such terms and in the taking of all such actions as may be necessary or
      appropriate to protect the rights of Holder as set forth in this Warrant against
      impairment. Without limiting the generality of the foregoing, the Company will
      (a) not increase the par value of any Warrant Shares above the amount payable
      therefor upon such exercise immediately prior to such increase in par value,
      (b)
      take all such action as may be necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable Warrant
      Shares upon the exercise of this Warrant, and (c) use commercially reasonable
      efforts to obtain all such authorizations, exemptions or consents from any
      public regulatory body having jurisdiction thereof as may be necessary to enable
      the Company to perform its obligations under this Warrant.

     

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    Before
      taking any action which would result in an adjustment in the number of Warrant
      Shares for which this Warrant is exercisable or in the Exercise Price, the
      Company shall obtain all such authorizations or exemptions thereof, or consents
      thereto, as may be necessary from any public regulatory body or bodies having
      jurisdiction thereof.

     

    The
      Company shall provide prompt notice to the Holder in
      the event that the Registration Statement on Form S-3 relating to the shares
      of
      Common Stock underlying the Warrants (or
      any
      other registration statement registering such shares, if applicable)
become deregistered with the Securities and Exchange Commission. If
      the
      Holder exercises its rights under this Warrant via
      cash
      exercise with
      respect to any Warrant Shares during to time such Registration Statement is
      no
      longer effective, and
      prior
      to such exercise the Holder was not notified in writing that such registration
      statement was no longer available, then
      the Holder will have the right to rescind such cash
      exercise and either hold the Warrant for future exercise or resubmit the
      exercise via cashless exercise assuming for such purposes the FMV on the date
      of
      the initial exercise.

     

    e) Jurisdiction.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be determined in accordance with the provisions of the
      Subscription Agreement.

     

    f) Nonwaiver.
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of Holder shall operate as a waiver of such right or otherwise prejudice
      Holder’s rights, powers or remedies, notwithstanding the fact that all rights
      hereunder terminate on the Termination Date. 

     

    g) Notices.
      Any
      notice, request or other document required or permitted to be given or delivered
      to the Holder by the Company shall be delivered in accordance with the notice
      provisions of the Subscription Agreement. Notices to the Warrant Agent shall
      be
      sent to the following address or to such other address, as the Warrant Agent
      shall indicate in a notice to the Company and the holder:

     

    
      	
              Corporate
                Stock Transfer, Inc.

            
	
              3200
                Cherry Creek Drive South

            
	
              Denver,
                Colorado 80209

            

    

    

    h) Limitation
      of Liability.
      No
      provision hereof, in the absence of any affirmative action by Holder to exercise
      this Warrant to purchase Warrant Shares, and no enumeration herein of the rights
      or privileges of Holder, shall give rise to any liability of Holder for the
      purchase price of any Common Stock or as a stockholder of the Company, whether
      such liability is asserted by the Company or by creditors of the
      Company.

     

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

     

    i) Remedies.
      Holder
      and the Company, in addition to being entitled to exercise all rights granted
      by
      law, including recovery of damages, will be entitled to specific performance
      of
      its rights under this Warrant. The parties hereto agree that monetary damages
      would not be adequate compensation for any loss incurred by reason of a breach
      by either party of the provisions of this Warrant and hereby agree to waive
      and
      not to assert the defense in any action for specific performance that a remedy
      at law would be adequate.

     

    j) Successors
      and Assigns.
      Subject
      to applicable securities laws, this Warrant and the rights and obligations
      evidenced hereby shall inure to the benefit of and be binding upon the
      successors of the Company and the successors and permitted assigns of Holder.
      The provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant and shall be enforceable by the Holder or
      holder of Warrant Shares.

     

    k) Amendment.
      This
      Warrant may be modified or amended or the provisions hereof waived with the
      written consent of the Company and the Holder.

     

    l) Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provisions or the remaining
      provisions of this Warrant.

     

    m) Headings.
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.

     

    n) Warrant
      Agreement.
      This
      Warrant is governed by and subject to the terms and conditions contained in
      the
      Warrant Agreement. In the event of a conflict between the provisions of the
      Warrant Agreement and this Warrant, the provisions of the Warrant Agreement
      shall govern. A copy of the Warrant Agreement may be obtained at no cost upon
      request from the Company at its principal office or from the Warrant Agent.
      

     

    

    ********************

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESS WHEREOF, the Company and the Warrant Agent have caused this Warrant
      to
      be executed by their respective officer thereunto duly authorized as of the
      date
      first above indicated.

     

    
      	 	 	 
	 	CHINA
              PRECISION STEEL, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	
              Title:

            

    

     

    
      	 	 	 
	 	
              CORPORATE
                STOCK TRANSFER, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Print
              Name: 
	 	Title;

    

    

    
      
        
          
          

          
          

        

        
          13

          
            

          

        

        
          
          

          
          

        

      

    

     

    NOTICE
      OF EXERCISE

    

    TO: [_______________________

    

    (1) The
      undersigned hereby elects to purchase ________ Warrant Shares of the Company
      pursuant to the terms of the attached Warrant (only if exercised in full),
      and
      tenders herewith payment of the exercise price in full, together with all
      applicable transfer taxes, if any.

     

    (2) Payment
      shall take the form of (check applicable box):

     

    o
      in lawful money of the
      United States; or

     

    o
      [if permitted] the cancellation of such
      number of Warrant Shares as is necessary, in accordance with the formula set
      forth in subsection 2(c), to exercise this Warrant with respect to the maximum
      number of Warrant Shares purchasable pursuant to the cashless exercise procedure
      set forth in subsection 2(c).

     

    (3) Please
      issue a certificate or certificates representing said Warrant Shares in the
      name
      of the undersigned or in such other name as is specified below:

     

    _______________________________

     

    

    The
      Warrant Shares shall be delivered to the following DWAC Account Number or by
      physical delivery of a certificate to:

    

    _______________________________

     

    _______________________________

     

    _______________________________

    

     

    

    [SIGNATURE
      OF HOLDER]

     

    Name
      of
      Investing Entity:
      ________________________________________________________________________

    Signature
      of Authorized Signatory of Investing Entity:
      _________________________________________________

    Name
      of
      Authorized Signatory:
      ___________________________________________________________________

    Title
      of
      Authorized Signatory:
      ____________________________________________________________________

    Date:
      ________________________________________________________________________________________

    

     

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

     

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information. 

    Do
      not
      use this form to exercise the warrant.)

     

    FOR
      VALUE
      RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
      rights evidenced thereby are hereby assigned to

     

    

    _______________________________________________
      whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:
      ______________, _______

    

     

    
      	Holder’s Signature:	                    
	
            	 
	Holder’s Address:	                    
	
            	 
	
            	                     

    

         

     

    

    Signature
      Guaranteed: ___________________________________________

    

    

    NOTE:
      The
      signature to this Assignment Form must correspond with the name as it appears
      on
      the face of the Warrant, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust company. Officers of
      corporations and those acting in a fiduciary or other representative capacity
      should file proper evidence of authority to assign the foregoing
      Warrant.

    

    
      
        
        

      

      
        15

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