Document:

exhibit_10-2.htm

Exhibit 10.2

SECOND AMENDMENT TO LICENSE AGREEMENT

This Second Amendment to License Agreement (this “Second Amendment”) is made and entered into as of the 23rd day of November, 2010, by and between AlphaKat - Global Energy GmbH, a company organized and existing under the laws of Germany (“Licensor”), and American Renewable Diesel, LLC, a limited liability company organized and existing under the laws of the State of Delaware (“American”).

 

WHEREAS, Licensor and American entered into a License Agreement dated as of February 6, 2008, as amended by the First Amendment to License Agreement dated as of July 8, 2008 (the “Agreement”);

WHEREAS, Covanta Energy Corporation, a corporation organized and existing under the laws of Delaware (“Covanta”), and AlphaKat GmbH, a company organized and existing under the laws of Germany (“AK”), entered into a License and Manufacturing Agreement dated March 11, 2010 (the “Manufacturing Agreement”) which agreement authorizes Covanta, among other things, to make, have made and sell Systems (as defined herein) and Parts (as defined herein) and Covanta has notified Licensor of its decision to make and have made Systems and Parts as provided in the Manufacturing Agreement;

WHEREAS, Licensor and Covanta are entering into a Second Amendment to License Agreement of even date herewith (the “Covanta Second Amendment”) providing certain additional license rights to Covanta, including rights that Licensor had provided previously to American;

WHEREAS, the terms of the Covanta Second Amendment and the Manufacturing Agreement require that certain modifications be made to the terms of the Agreement; and

WHEREAS, Licensor and American want to implement those modifications and certain other modifications to the terms of the Agreement;

 

NOW, THEREFORE, in light of the mutual premises set forth herein and other good and valuable consideration, the receipt and the sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows.

 

	
1.

	
Capitalized Terms.  All of the capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Agreement.

 

  

  

  

 

	
2.

	
Amendments to the Agreement.  The following amendments to the Agreement are made:

 

	
  

	
a.

	
The following new capitalized terms are added to Section 1.1 of the Agreement:

““Approved Supplier” means any Person securing rights from AlphaKat to make or have made Systems and Parts and/or to sell Systems and Parts.”

““Approved Supplier Purchase Order” means any purchase order to sell one or more Systems entered into by and between an Approved Supplier (other than Covanta or an Affiliate of Covanta), as the seller, and any Person as the purchaser.”

““Base Price” means the price being charged for the purchase of a System pursuant to a Covanta Purchase Order which shall include Covanta’s direct costs, indirect costs, applied overhead, manufacturer’s profit and the cost of providing a one-year warranty, but shall not include, for the avoidance of doubt, (i) the amount of the Commission that is payable by Covanta to Licensor (or, in certain cases, American), under the Covanta License Agreement, (ii) the royalties payable by Covanta to AK pursuant to the Manufacturing Agreement, (iii) any sales taxes, use taxes, value added taxes or any other type of taxes whatsoever, (iv) any import duties or other similar charges or fees on the importation or delivery of equipment, (v) fees separately charged to provide an extended warranty on, or perform operation and maintenance services for, the Systems being sold and (vi) any other types of charges not typically included in the sale price of a product.”

““Commission” has the meaning set forth in Section 3.3.”

““Covanta Full Rights” means the full rights granted to Covanta pursuant to the Covanta License Agreement as in effect on the effective date of the Second Amendment to License Agreement entered into by and between Covanta and Licensor.”

““Covanta Purchase Order” means any purchase order to sell one or more Systems entered into by and between any Customer (including Covanta or any Affiliate of Covanta for a Project and American or an Affiliate of American for its own project) as the Purchaser and Covanta, any Affiliate of Covanta or any supplier to Covanta or any Affiliate of Covanta, as the seller.”

““Licensor Purchase Order” means any purchase order to sell one or more Systems entered into by and between Licensor or AK as the seller and (i) Covanta or any other Person for a Project, (ii) American, any Affiliate of American or any other Person in which American or an Affiliate of American owns an ownership interest or (iii) any other Customer whose order was secured by or with the assistance of American, as the Purchaser.”

 

  

2

  

 

““Manufacturing Agreement” means the License and Manufacturing Agreement dated March 11, 2010, entered into by and between AK and Covanta.”

““Parts” means any subsystem, component, item of equipment (including the KDV Turbine), part, spare part and any other items which are used in the operation of the System.”

 

““Project” means any project which is owned, in whole or in part, by Covanta, any Affiliate of Covanta or any Governmental Organization (as defined in the Covanta License Agreement), to convert any Feedstock to diesel oil or any other fuel using the Technology.”

	
  

	
b.

	
The following capitalized terms are deleted in their entirety from Section 1.1 of the Agreement:  “Commercial Waste;” “Contracted Waste;” “Extended Period;” “Household Waste;” “Initial Period;” “Interim Period;” and “Radial Biomass.”

	
  

	
c.

	
The definition of the following capitalized terms are modified to read as follows:

““Covanta License Agreement” means the License Agreement made and entered into between Licensor and Covanta as of February 6, 2008, a copy of which is attached hereto as Exhibit 1, as amended by the First Amendment to License Agreement dated as of July 8, 2008 and the Second Amendment to License Agreement of even date herewith.”

““Customer” means any Person that wants to purchase a System for its own account that is not wholly owned or controlled by American.”

““Feedstock” means any material capable of being processed by the Technology.”

““Improvements” means all the techniques, enhancements, modifications, changes, experience, methods, information, data or knowledge that will be created or acquired in the future relating to the Technology and/or the manufacturing of the Systems and Parts (whether or not patentable, useful or workable) through the implementation, development, re-design, testing, operation, maintenance, monitoring, control, modeling, fabrication and improvement of the Technology and/or the manufacturing of the Systems and Parts and/or the operation of Systems.”

 

  

3

  

 

““KDV 500” means a System capable of producing a minimum of 500 liters of diesel oil per hour.”

““Patents” means any existing or future patent applications, patents, registrations, utility models and utility model applications relating to the Technology which are necessary or useful to manufacture or to sell, offer for sale, use or otherwise make available Systems or the Parts, including those set forth in Exhibit 3 attached hereto.”

““Purchase Order” means a Covanta Purchase Order, a Licensor Purchase Order or an Approved Supplier Purchase Order.”

““Purchaser” means the original purchaser of one or more Systems pursuant to a Purchase Order.”

““System” means any system of components (consisting primarily of the required KDV Turbines, the feed preparation system, the ash handling system, any system control hardware and software, structural steel, piping and electrical wiring), including all Parts, whether it is in existence today or developed hereafter by AK, Covanta or any other Person, and any future system of components to convert any hydrocarbon feedstock into diesel oil using the Technology.”

	
  

	
d.

	
The following new provision is added to Section 1.2:

“(g)           All the references herein to the terms “diesel oil” or “diesel fuel” or any similar term shall include kerosene, jet fuel and any other fuel that Feedstock can be converted into using the Technology.”

	
  

	
e.

	
The first paragraph of Section 2.1 is hereby deleted and replaced in its entirety by the following:

“Section 2.1 Grant of License Rights.  Subject to the Covanta Full Rights and the terms of this Agreement, Licensor hereby grants to American as of the date hereof:  (i) the Full Right to market and offer for sale Systems to any Customer for use in the Territory; (ii) the Qualified Right to market and offer for sale Systems to any Customer for use outside the Territory as provided for in Section 2.4; (iii) the Full Right to use, practice and make Improvements to the Technology (including Systems and Parts) inside the Territory; (iv) the Full Right to offer for sale Systems required for all Projects regardless of where they are located; and (v) the Qualified Right to use, practice and make Improvements to the Technology (including Systems and Parts) anywhere in the United States and Canada.  As of the Effective Date, the territory (the “Territory”) shall be the states of California, New York, Florida, New Jersey and Texas.  For the avoidance of doubt, American shall be entitled to exercise any or all of the license rights that are granted to it herein itself or through any of its Affiliates, but  American shall not have the right to issue sublicenses to any Person other than an Affiliate.  The Parties further agree as follows:”

 

  

4

  

 

	
  

	
f.

	
Section 2.1(a) is hereby deleted and replaced in its entirety by the following:

“(a)           American shall be credited as having secured the sale of, for all purposes of this Agreement, all Systems that are (i) sold by Covanta, Licensor, AK or any Approved Supplier to any Customer in the Territory, (ii) sold by Covanta, Licensor, AK or any Approved Supplier to any Customer outside the Territory as provided for in Section 2.4, (iii) purchased by American, any Affiliate of American or any Person in which American or an Affiliate of American owns an ownership interest for a project, (iv) supplied by Covanta, Licensor, AK or any Approved Supplier for Projects regardless of the location of the Projects, (v) purchased by American, any Affiliate of American or any Person in which American or an Affiliate of American owns an ownership interest for any project located outside the Territory and (vi) deemed purchased by Covanta as a result of it having paid the royalties due to AK and the Commissions due to Licensor and American on one or more Systems.”

	
  

	
g.

	
Section 2.1(b) is hereby deleted and replaced in its entirety by the following:

“(b)           Notwithstanding anything contained herein to the contrary:  (i) American expressly acknowledges and agrees that so long as Covanta is in compliance with the requirements of Sections 2.1(a) and 2.3 of the Covanta License Agreement (or is deemed to be in compliance with such sections by Licensor waiving any failure by Covanta to be in compliance with either or both such Sections), American shall not be entitled to exercise the rights granted under clauses (iii) and (v) of the first paragraph of Section 2.1 unless otherwise agreed to by Covanta; and (ii) Licensor expressly acknowledges and agrees that (a) if Covanta fails to comply with the requirements of Sections 2.1(a) and 2.3 of the Covanta License Agreement and such failure is not excused by Licensor or (b) if the Covanta License Agreement is terminated for any reason, American shall be entitled to exercise all the rights granted to it in clauses (iii) and (v) of the first paragraph of Section 2.1.  Licensor further acknowledges and agrees that American’s right to receive commissions shall not be affected by the granting of the Covanta Full Rights.  Except as expressly provided for in the Covanta License Agreement as in effect on November __, 2010, Licensor further agrees that it shall not grant any rights to any person that are in violation of the rights granted to American hereunder.”

 

  

5

  

 

	
  

	
h.

	
Sections 2.1(c), 2.1(d), 2.1(e), 2.1(f) and 2.1(g) are hereby deleted in their entirety.

	
  

	
i.

	
The following words shall be added at the end of Section 2.2:  “and Covanta.”

	
  

	
j.

	
Section 2.3 is hereby deleted and replaced in its entirety by the following:

“Section 2.3 Sale of Systems.  The sale of all Systems for Projects wherever they are located, including the Demonstration Plant, shall be pursuant to Purchase Orders, and American shall derive its share of the Commission on all such sales (other than the Demonstration Plant) as provided for in Section 3.3.”

	
  

	
k.

	
Section 2.4 is hereby deleted and replaced in its entirety by the following:

“Section 2.4 Commission on Sales to Other Customers.  American shall be entitled to its share of the Commission on all Systems that are sold for use in the Territory as provided for in Section 3.3. If American identifies a Customer that is interested in purchasing one or more Systems for use in an area that is outside the Territory, American shall refer such Customer to Covanta or Licensor, as the case may be, to complete the sale (the party to be given such referral to depend on the Customer identified and/or where the System is to be delivered) to complete the sale and, if such sale is completed, (the decision to complete such sale to be made by Covanta or Licensor, as the case may be, in its sole discretion), American shall be entitled to its share of the Commission on such sale as provided for in Section 3.3.  For the avoidance of doubt, in connection with Customers that are identified by American that are interested in purchasing one or more Systems for use outside the Territory, Licensor or Covanta, as the case may be, shall be obligated to pay American its share of the commission if any Systems are sold to any such Customer within two (2) years after American identified such Customer to Licensor or Covanta.”

	
  

	
l.

	
Section 2.5 is hereby deleted and replaced in its entirety by the following Section 2.5 and Section 2.6:

“Section 2.5 Purchase Orders.  All Systems shall be sold pursuant to Purchase Orders.  Except in the case of the sale of Systems for Projects and the sale of Systems to a Customer in the United States (in which case Covanta shall decide with whom the Purchase Orders are to be placed), American shall have the right to decide, for each sale of a System secured by it, whether such System will be sold pursuant to a Covanta Purchase Order, a Licensor Purchase Order or an Approved Supplier Purchase Order.  All Licensor Purchase Orders and Approved Supplier Purchase Orders shall include a set of representations and warranties to the Purchaser which is consistent with those made by Licensor to American in Article 8.

 

  

6

  

 

Section 2.6 Use License.  Each Purchase Order shall include a non-exclusive, irrevocable and perpetual royalty free right and license (a “Use License”) for the Purchaser to (i) use, practice, operate, maintain, repair and make Improvements to the System(s), (ii) purchase the catalyst that is required for the operation of the System(s) from AK and/or any other Person that is authorized to manufacture and/or sell such catalyst by AK, (iii) purchase Parts from Covanta, AK and/or any Approved Supplier that is authorized to make, have made and sell Parts and (iv) reproduce, modify and distribute, in whole or in part, solely for internal purposes copies of any and all materials and information received from Licensor, AK and/or any other Person relating to Systems.  Covanta and any Affiliate of Covanta shall have the authority to and shall be entitled to grant a Use License to each Purchaser under a Covanta Purchase Order and none of Licensor, AK or any Affiliate of Licensor or AK shall challenge the issuance, validity or enforceability of any Use License.  The Parties agree that if any Purchaser sells or transfers any of the System(s) which it has purchased pursuant to a Purchase Order to any other Person (a “Third Party Purchaser”), the Purchaser shall be entitled to freely transfer its Use License to such Third Party Purchaser and each Third Party Purchaser shall be entitled to transfer such Use License to any other Third Party Purchaser.  Notwithstanding anything to the contrary contained herein, all Purchasers and Third Party Purchasers shall be entitled to procure Parts and catalysts that are commercially available from any Person.  Further, if Covanta, AK and any Approved Supplier that is authorized to make, have made and sell Parts that are not commercially available are unable to timely supply the Parts ordered by a Purchaser or a Third Party Purchaser, such Purchaser or Third Party Purchaser shall be authorized to make or have made such Parts that are not supplied.”

	
  

	
m.

	
Section 3.1 is hereby deleted in its entirety and replaced with the following:

“Section 3.1 Annual Pricing.  Licensor, American, Covanta and AK shall agree on a procedure to establish the price, at the end of each November, for the following year, (i) of Systems manufactured pursuant to a Licensor Purchase Order, (ii) of the catalyst that is used with the Technology, (iii) of Parts and (iv) for AK or Licensor to provide services on Systems or other engineering services in order to (a) ensure that such prices are not increased inappropriately from year to year and (b) to provide price certainty to American for the upcoming year in connection with projects it has under development and its sales and marketing efforts.  Licensor shall provide American, prior to the end of each November, with the updated pricing for the following year.  Licensor further agrees (and AK, by its execution of this Agreement in the space provided below, agrees) that American and its customers will not be charged more under a Licensor Purchase Order during any year for a purchase of a System than the lowest price that is paid by any other licensee of Licensor or customer of AK for a comparable System in such year in the United States.”

 

  

7

  

 

	
  

	
n.

	
Section 3.2 is hereby deleted in its entirety and replaced with the following:

“Section 3.2 Intentionally Omitted.”

	
  

	
o.

	
The following new Section 3.3 shall be added to the Agreement:

“Section 3.3 Commissions.  Each Purchaser shall be required to pay a sales commission (a “Commission”) on each System for which American is credited as having secured the sale pursuant to Section 2.1(a) as follows:

(a)           The amount of the Commission shall be ten percent (10%) of the Base Price of each System.  American shall be entitled to one half (1/2) of each Commission.

(b)           In the case of a Licensor Purchase Order, the Commission shall be separately stated in the Purchase Order and paid by the Purchaser to Licensor as provided for in such Purchase Order and Licensor shall pay American its one-half share of the Commission as further provided in this Section 3.3; provided, however, that if the Systems that are the subject of any Licensor Purchase Order are being sold to Covanta or to any other Customer for a Project, then the Commission shall be paid by Covanta to Licensor and American as is further provided for in this Section 3.3.

(c)           In the case of a Covanta Purchase Order, for confidentiality reasons, such Purchase Order shall not separately state the Base Price, the amount of the Commission or the amount of the royalty payable to AK under the Manufacturing Agreement.  The Base Price and Commission shall only be set forth in the statement that is to be delivered to American as is provided for in Section 3.3(e).  Licensor or Covanta, as the case may be, shall pay American the Commission on all such Systems as further provided in this Section 3.3.

(d)           The Commission for all Systems sold to Projects under a Covanta Purchase Order shall accrue when each such System has been delivered to the site of the Project.  Except as expressly provided in the previous sentence, the obligation to pay a Commission on all Systems that are sold under a Purchase Order shall accrue on a pro rata basis as the payments are received under such Purchase Order for each such System.  Thus, if a System is paid for in six (6) installments, the obligation to pay the Commission will accrue pro rata as each of the installments are received under the Purchase Order.

 

  

8

  

 

(e)           Commissions shall be payable to American by Licensor or by Covanta, as the case may be, on a quarterly basis, each payment to be made within forty-five (45) days following the end of the quarter.  The payment to American of its share of the Commission will be accompanied by a statement from Covanta or Licensor, as the case may be, that will set forth (i) the total number of new Systems sold in the quarter and the type of Systems, (ii) the name of the purchaser of each System and where each such System is to be delivered, (iii) the Base Price of each System, (iv) the payments received during such quarter for each new and existing Purchase Order, (v) the remaining amount payable under each outstanding Purchase Order, (vi) the amount of Commission due under each Purchase Order and (vii) any other information which is relevant to the calculation of the total amount of the Commission that is payable for such quarter to American.

(f)           For each System sold under a Covanta Purchase Order for a Project, Covanta shall pay half of the Commission to Licensor and half of the Commission to American.

(g)           For each System sold under a Covanta Purchase Order that is not for a Project, Covanta shall pay the full amount of the Commission to Licensor unless (i) such System is for use within the Territory or (ii) such System was sold based on a referral by American as provided for in Section 2.4, in which case half of such Commission shall be paid to Licensor and half shall be paid to American.  Licensor has given Covanta a copy of the license agreement entered into with American, as amended through the date hereof, and shall notify Covanta from time to time of any changes in the Territory.  American shall notify Covanta of all referrals it makes to Licensor for Systems outside the Territory so that Covanta knows that American is entitled to one-half share of the Commission if a Covanta Purchase Order is entered into for the sale of such Systems.

(h)           The Commission payments to American shall be made by a wire transfer, in U.S. Dollars, to the bank account and in accordance with the wire transfer instructions provided by American to Licensor and Covanta from time to time.  Licensor shall use the exchange rate applicable on the last business day of the calendar quarter to calculate the amount payable to American in U.S. Dollars.”

	
  

	
p.

	
The date set forth in Section 5.2 shall be changed to July 28, 2030.

	
  

	
q.

	
The last sentence of Section 10.3 shall be deleted in its entirety.

 

  

9

  

 

	
  

	
r.

	
In Section 11.2, the words “Interim Period” shall be deleted and shall be replaced by the words “first two (2) years of the Agreement.”

	
  

	
s.

	
The following new Section 11.13 shall be added:

“Section 11.13 Survival.  Upon the termination or the expiration of this Agreement, the following Articles and Sections will survive:  Sections 2.3, 2.6, 4.1, 4.3 and 10.3 and Articles 7, 9 and 11.”

	
3.

	
Updated List of Patents.  The current list of Patents is attached hereto as Exhibit A and shall replace Exhibit 3 attached to the Agreement.

	
4.

	
Miscellaneous Provisions to Apply.  The provisions of Article 11 of the Agreement shall apply mutatis mutandis to this Second Amendment as fully as if it was expressly set forth herein.

	
5.

	
Full Agreement of the Parties.  The Agreement, as amended by this Second Amendment, embodies the entire understanding of Licensor and American and supersedes all prior negotiations, understandings and agreements between them with respect to the subject matter thereof and hereof.

 

 [Signature page follows]

 

  

10

  

 

IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the date first above written.

	 	
ALPHAKAT - GLOBAL ENERGY GMBH

	 	 	  
	 	By: 	
/s/ Christian Koch

	 	 	
Dr. Christian Koch

	 	 	
Chief Executive Officer

	 	 	  
	 	 	  
	 	
AMERICAN RENEWABLE DIESEL, LLC

	 	 	  
	 	By: 	
/s/ Bruce I. Drucker

	 	 	
Bruce I. Drucker

	 	 	
Chief Executive Officer

Acknowledgment and Agreement:

 

Dr. Christian Koch, in his capacity as the President of AK and in his individual capacity, hereby, as signed below, acknowledges that he has reviewed this Second Amendment to License Agreement in its entirety and agrees to all of the terms hereof.

All capitalized terms herein have the meanings given in the License Agreement.

 

By: /s/ Christian Koch

       Dr. Christian Koch

 

  

11

  

 

EXHIBIT A – PATENTS

 

	
Docket Number

	
Title

	
Country

	
Date

	
Application / 

Publication / 

Registration 

Number

	
ALP6004WO

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
WO

	
04/04/07

	
PCT/DE2007/000623

	
ALP7001BR

	
Diesel Oil from Waste by Catalytic ...

	
BR (Brazil)

	
03/31/04

	
PI0400912-6

	
ALP7001CA

	
Diesel Oil from Waste by Catalytic ...

	
CA (Canada)

	
07/15/04

	
2,474,523

	
ALP7001CN

	
Diesel Oil from Waste by Catalytic ...

	
CN (China)

	
03/23/04

	
200410030270.3

	
ALP7001IN

	
Diesel Oil from Waste by Catalytic ...

	
IN (India)

	
08/02/04

	
747/CHE/2004

	
ALP7001JP

	
Diesel Oil from Waste by Catalytic ...

	
JP (Japan)

	
10/08/04

	
2004-295764

	
ALP7001MX

	
Diesel Oil from Waste by Catalytic ...

	
MX (Mexico)

	
03/15/04

	
274130

	
ALP7001RU

	
Diesel Oil from Waste by Catalytic ...

	
RU (Russia)

	
03/30/04

	
2360946

	
ALP7001US

	
Diesel Oil from Waste by Catalytic ...

	
US (US)

	
07/15/04

	
7,473,348

	
ALP7002BR

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
BR (Brazil)

	
02/02/06

	
PI0601891-2

	
ALP7002CA

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
CA (Canada)

	
09/01/06

	
2,558,401

	
ALP7002CN

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
CN (China)

	
02/14/06

	
200610004445.2

	
ALP7002IN

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
IN (India)

	
07/25/06

	
1290/CHE/2006

	
ALP7002JP

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
JP (Japan)

	
04/27/06

	
2006-123066

	
ALP7002MX

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
MX (Mexico)

	
04/07/06

	
PA/a/2006/003947

	
ALP7002RU

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
RU (Russia)

	
04/19/06

	
2006113270

	
ALP7002US

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
US (US)

	
08/23/06

	
11/508,760

	
ALP7004BR

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
BR (Brazil)

	
01/24/07

	
PI0701999-8

	
ALP7004CN

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
CN (China)

	
04/24/07

	
200710101237.9

	
ALP7004IN

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
IN (India)

	
11/20/07

	
2691/CHE/2007

	
ALP7004JP

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
JP (Japan)

	
11/19/07

	
2007-299152

	
ALP7004KR

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
KR (Korea)

	
11/20/07

	
10-2007-0118672

	
ALP7004MX

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
MX (Mexico)

	
05/25/07

	
MX/a/2007/006278

	
ALP7004RU

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
RU (Russia)

	
11/19/07

	
200714659

	
ALP7004US

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
US (US)

	
11/14/07

	
11/939,817

	
ALP8001EP

	
Diesel Oil from Waste by Catalytic ...

	
EP

	
02/26/04

	
04090070.6

	
ALP8002EP

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
EP

	
03/08/06

	
06075573.3

	
ALP8004EP

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
EP

	
04/04/07

	
07722181

	  	  	  	  	  
	
ALP1001DE

	
Diesel Oil from Waste by Catalytic ...

	
DE (Germany)

	
12/02/03

	
10356245.1

	
ALP1002DE

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
DE (Germany)

	
11/29/05

	
102005056735.5

	
ALP1003DE

	
Method and Device for Catalytic Oxidation...

	
DE (Germany)

	
10/04/06

	
102006046884.8

	
ALP1004DE

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
DE (Germany)

	
11/17/06

	
102006054506.0

 

  

12

  

 

	Docket Number	Title	Country	

Date

	 Application / 

Publication / 

Registration 

Number

	
ALP1005DE

	
Catalytic Active Coating...

	
DE (Germany)

	
01/07/08

	
102008003375.8

	
ALP1006DE

	
Combustion Accelerator...

	
DE (Germany)

	
01/16/08

	
102008004499.7

	
ALP1007DE

	
Mud Reactor Pump...

	
DE (Germany)

	
02/18/08

	
102008009647.4

	
ALP1008DE

	
Oil Reactor Vacuum Pump...

	
DE (Germany)

	
12/05/08

	
102008060718.5

	
ALP6003WO

	
Method and Device for Catalytic Oxidation...

	
WO

	
04/18/07

	
PCT/DE2007/000713

	
ALP6005WO

	
Catalytic Active Coating...

	
WO

	
05/30/08

	
PCT/DE2008/000909

	
ALP6006N-WO

	
Combustion Accelerator...

	
WO

	
01/14/09

	
PCT/DE2009/000040

	
ALP6007N-WO

	
Mud Reactor Pump...

	
WO

	
01/14/09

	
PCT/DE2009/000039

	
ALP6008WO

	
Oil Reactor Vacuum Pump...

	
WO

	
02/20/09

	
PCT/DE2009/000246

	
ALP7003BR

	
Method and Device for Catalytic Oxidation...

	
BR (Brazil)

	
04/10/07

	
PI07.00119-9

	
ALP7003CA

	
Method and Device for Catalytic Oxidation...

	
CA (Canada)

	
10/02/07

	
2,605,097

	
ALP7003CN

	
Method and Device for Catalytic Oxidation...

	
CN (China)

	
12/29/06

	
200610172477.3

	
ALP7003ID

	
Nano-Cutting of Plastic-Containing Residues...

	
ID (Indonesia)

	
04/18/07

	
W00200900855

	
ALP7003IN

	
Nano-Cutting of Plastic-Containing Residues...

	
IN (India)

	
10/04/07

	
2241/CHE/2007

	
ALP7003JP

	
Method and Device for Catalytic Oxidation...

	
JP (Japan)

	
03/05/07

	
2007-053938

	
ALP7003KR

	
Method and Device for Catalytic Oxidation...

	
KR (Korea)

	
10/04/07

	
10-2007-0099723

	
ALP7003LA

	
Nano-Cutting of Plastic-Containing Residues...

	
LA (Laos)

	  	  
	
ALP7003MX

	
Method and Device for Catalytic Oxidation...

	
MX (Mexico)

	
01/17/07

	
MX/a/2007/000657

	
ALP7003MY

	
Nano-Cutting of Plastic-Containing Residues...

	
MY (Malaysia)

	  	
PI 20091356

	
ALP7003RU

	
Method and Device for Catalytic Oxidation...

	
RU (Russia)

	
02/13/07

	
2362625

	
ALP7003US

	
Method and Device for Catalytic Oxidation...

	
US (US)

	
10/02/07

	
7,732,369

	
ALP7003VN

	
Nano-Cutting of Plastic-Containing Residues...

	
VN (Vietnam)

	
03/18/09

	
1-2009-00530

	
ALP7004CA

	
Preparation of Diesel Oil...High-Speed Mixing Chambers

	
CA (Canada)

	
11/15/07

	
2,610,624

	
ALP7005KH

	
Catalytic Active Coating...

	
KH (Cambodia)

	
01/08/09

	
KH/P/09/00053

	
ALP7005TH

	
Catalytic Active Coating...

	
TH (Thailand)

	
01/07/09

	
0901000033

	
ALP7006KH

	
[Verbrennungsbeschleuniger für Motoren und Bren...]

	
KH (Cambodia)

	
01/14/09

	
KH/P/09/00054

	
ALP7006TH

	
[Verbrennungsbeschleuniger für Motoren und Bren...]

	
TH (Thailand)

	
01/16/09

	
0901000183

	
ALP7007KH

	
[Schlammreaktorpumpe zur gleichzeitigen...]

	
KH (Cambodia)

	
02/10/09

	
KH/P/09/00056

	
ALP7007TH

	
[Schlammreaktorpumpe zur gleichzeitigen...]

	
TH (Thailand)

	
01/16/09

	
0901000184

	
ALP8003EP

	
Method and Device for Catalytic Oxidation...

	
EP

	
01/31/07

	
07090014.7

	
ALP8005EP

	
Catalytic Active Coating...

	
EP

	
06/12/08

	
08010655.2

	
ALP8006EP

	
Combustion Accelerator...

	
EP

	
06/12/08

	
08010658.6

	
ALP8007EP

	
Mud Reactor Pump...

	
EP

	
06/12/08

	
08010657.8

	
ALP8008EP

	
Oil Reactor Vacuum Pump...

	
EP

	
02/20/09

	
09002394.6

	  	
Nano-Cutting of Plastic-Containing Residues

	
DE

	
09/20/07

	
102007046820

 

 

13exhibit_10-3.htm

Exhibit 10.3

FIRST AMENDMENT TO

BUSINESS AND ROYALTY AGREEMENT

 

This First Amendment to Business and Royalty Agreement (this “First Amendment”) is made and entered into as of the 23rd day of November, 2010, by and between Global Energy, Inc., a corporation organized and existing under the laws of the State of Nevada (“Global”), and Covanta Energy Corporation, a corporation organized and existing under the laws of the State of Delaware (“Covanta”).

 

WHEREAS, AlphaKat GmbH, a company organized and existing under the laws of Germany (“AK”), and Covanta entered into a License and Manufacturing Agreement dated March 11, 2010 (the “LMA”) which authorizes Covanta, among other things, to manufacture and have manufactured Systems;

WHEREAS, AlphaKat – Global Energy GmbH, a company organized and existing under the laws of Germany (“Licensor”), and Covanta entered into a License Agreement dated February 6, 2008 (as amended through the date hereof, the “License Agreement”);

WHEREAS, Global and Covanta entered into the Business and Royalty Agreement dated as of February 6, 2008 (the “Agreement”);

WHEREAS, the terms of the LMA requires that certain modifications be made to the terms of the Agreement and the License Agreement; and

WHEREAS, Global and Covanta want to implement those modifications and certain other modifications to the terms of the Agreement;

 

NOW, THEREFORE, in light of the mutual premises set forth herein and other good and valuable consideration, the receipt and the sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows.

	
1.

	
Capitalized Terms.  All of the capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Agreement.

 

  

  

  

  

	
2.

	
Amendments to the Agreement.  The following amendments to the Agreement are made:

	
  

	
a.

	
The following new capitalized terms are added to Section 1.1 of the Agreement:

 

““American” means American Renewable Diesel, LLC, a Delaware limited liability company, and its successors and assigns.”

““Approved Supplier” means any Person securing rights from AlphaKat to make or have made Systems and Parts and/or to sell Systems and Parts.”

““Approved Supplier Purchase Order” means any purchase order to sell one or more Systems entered into by and between an Approved Supplier (other than Covanta or an Affiliate of Covanta), as the seller, and any Person as the purchaser.”

 

“Base Price” means the price being charged for the purchase of a System pursuant to a Covanta Purchase Order which shall include Covanta’s direct costs, indirect costs, applied overhead, manufacturer’s profit and the cost of providing a one-year warranty, but shall not include, for the avoidance of doubt, (i) the amount of the Commission that is payable hereunder, (ii) the royalties payable by Covanta to AK pursuant to the Manufacturing Agreement, (iii) any sales taxes, use taxes, value added taxes or any other type of taxes whatsoever, (iv) any import duties or other similar charges or fees on the importation or delivery of equipment, (v) fees separately charged to provide an extended warranty on, or perform operation and maintenance services for, the Systems being sold and (vi) any other types of charges not typically included in the sale price of a product.”

““Covanta Purchase Order” means any purchase order to sell one or more Systems entered into by and between any Person (including Covanta or any Affiliate of Covanta) as the purchaser and Covanta, any Affiliate of Covanta or any supplier to Covanta or any Affiliate of Covanta, as the seller.”

““Fuel Royalty” has the meaning set forth in Section 5.1.”

““Licensor Purchase Order” means any purchase order to sell one or more Systems entered into by and between Covanta or any Affiliate of Covanta as the purchaser and Licensor or AK as the seller.”

““Manufacturing Agreement” means the License and Manufacturing Agreement dated March 11, 2010, entered into by and between AK and Covanta.”

  

2

  

 

““Parts” means any subsystem, component, item of equipment (including the KDV Turbine), part, spare part and any other items which are used in the operation of the System.”

““Renewable” means Renewable Diesel, LLC, a limited liability company formed under the laws of Delaware, and its successors and assigns.”

	
  

	
b.

	
The following capitalized terms are deleted in their entirety from Section 1.1 of the Agreement:  (i) Commercial Waste; (ii) Contracted Waste; (iii) Election Notice; (iv) Radial Biomass; (v) Royalty; and (vi) Trianon.

	
  

	
c.

	
The definitions of the following capitalized terms are modified to read as follows:

““Competitor” means a Competitor of Covanta or a Competitor of Global, as the context requires, it being agreed for all purposes of this Agreement that none of (i) Global and its Affiliates, (ii) Covanta and its Affiliates or (iii) Renewable and its Affiliates shall be treated as Competitors,”

““Competitor of Covanta” means a Person, directly or through Affiliates, engaged primarily in the business of (i) waste disposal, including the energy from waste business and/or (ii) the processing or conversion, or the selling of equipment or development of technology for the processing or conversion, of waste or organic feedstock(s) containing hydrocarbon materials, including Feedstock, into diesel fuel.”

““Competitor of Global” means a Person, directly or through Affiliates, engaged primarily in the business of the processing or conversion, or the selling of equipment or development of technology for the processing or conversion, of waste or organic feedstock(s) containing hydrocarbon materials, including Feedstock into diesel fuel.”

““DP Site” means the site on which the Demonstration Plant is installed.”

““DP System” means the System purchased by Covanta for the Demonstration Plant.”

““Feedstock” means any material capable of being processed by the Technology, including Household Waste.”

““Household Waste” means all non-hazardous, post-recycled municipal solid waste which is collected from residences, which waste is of the type normally accepted for processing at waste to energy facilities in the United States.”

  

3

  

 

““Improvements” means all the techniques, enhancements, modifications, changes, experience, methods, information, data or knowledge that will be created or acquired in the future relating to the Technology and/or the manufacturing of the Systems and Parts (whether or not patentable, useful or workable) through the implementation, development, re-design, testing, operation, maintenance, monitoring, control, modeling, fabrication and improvement of the Technology and/or the manufacturing of the Systems and Parts and/or the operation of Systems.”

““KDV 500” means a System capable of producing a minimum of 500 liters of diesel oil per hour.”

““License Agreement” means the License Agreement entered into by Covanta and Licensor dated as of February 6, 2008, as amended by the First Amendment to License Agreement dated as of July 8, 2008 and the Second Amendment to License Agreement dated as of November 23, 2010, a copy of each of which has been provided to Global.”

““Project” means a project to convert Feedstock to diesel using the Technology (i) for use in Territory A or Territory B which is initiated, developed and owned (in whole or in part) by Covanta or a Covanta Affiliate or (ii) for use in Territory A which is owned by a Governmental Organization where and for so long as the System(s) which comprise the project are being operated by Covanta.  For the avoidance of any doubt, a project which is identified by Covanta, is developed by Renewable or by any other Person on behalf of Covanta and is owned (in whole or in part) by Covanta or a Covanta Affiliate shall be a Project for all purposes of this Agreement, including the payment of a Fuel Royalty.”

““Purchase Order” means a Covanta Purchase Order or a Licensor Purchase Order.”

 

““System” means any system of components (consisting primarily of the required KDV Turbines, the feed preparation system, the ash handling system, any system control hardware and software, structural steel, piping and electrical wiring), including all Parts, whether it is in existence today or developed hereafter by AK, Covanta or any other Person, and any future system of components to convert Feedstock into diesel oil using the Technology.”

  

4

  

 

““Territory B” means China, the United Kingdom, the Republic of Ireland and Canada.”

	
  

	
d.

	
All the capitalized terms defined herein by a reference to the definition of such term in the License Agreement shall mean, for the avoidance of any doubt, the License Agreement as it has been amended through the date of this First Amendment.  Future amendments to the License Agreement that modify any such capitalized term shall not be applicable unless the Parties agree to such modification by a further amendment of the Agreement.

	
  

	
e.

	
All of the references in the Agreement to the term “Royalty” are changed to “Fuel Royalty” and all of the references in the Agreement to the term “Royalties” are changed to “Fuel Royalties.”

	
  

	
f.

	
The word “and” at the end of Section 1.2(f) is deleted, the period at the end of Section 1.2(g) is changed to a semicolon and the following new provisions are added to Section 1.2:

“(h)           All the references herein to the terms “diesel,” “diesel oil” or “diesel fuel” or any similar term shall include kerosene, jet fuel and any other fuel that Feedstock can be converted into using the Technology; and

(i)              All references to Covanta in its capacity as a manufacturer of Systems shall include any Affiliate of Covanta, any Person (that is not an Affiliate of Covanta) that is manufacturing Systems in which Covanta or an Affiliate of Covanta has an ownership interest and any contractor or supplier manufacturing systems under an agreement with Covanta or any Affiliate of Covanta.”

	
  

	
g.

	
Section 2.1 is hereby deleted and replaced in its entirety by the following:

“Section 2.1            Rights of Covanta.  Subject to the terms of this Agreement, and intending to be consistent with the terms and conditions of the License Agreement, during the Interim Period, the Initial Period and the Extended Period, Global hereby grants the following rights to Covanta to the extent now or hereafter held by Global during the term of this Agreement (the “Covanta Rights”):  (i) the exclusive right to market, offer for sale and sell Systems for use in Territory A, the exclusive right to market, offer for sale and sell Systems to Governmental Organizations for use outside Territory A and the right to sell Systems to Global or any of its Affiliates for projects outside of the Territory owned by Global, any of its Affiliates or any entity in which Global or any of its Affiliates holds an ownership interest; (ii) the exclusive right to use, practice and make improvements to the Technology (including the Systems and Parts) in Territory A (subject to the right of Global to develop Carve-Out Projects in Territory A as provided for in Section 2.2 and the rights granted to Renewable by Covanta to develop projects in Territory A); (iii) the non-exclusive right in Territory B to use, practice and make Improvements to the Technology (including the Systems and Parts) in connection with Projects using Feedstock; and (iv) the right to manufacture or have manufactured and sell Systems as contemplated by the terms of the Manufacturing Agreement.  Global expressly agrees that it shall not do anything in connection with the Technology, during the term of the License Agreement or the term of the Manufacturing Agreement, as the case may be, which is inconsistent with (i) any of the exclusive rights granted by Licensor to Covanta as part of the Covanta Rights pursuant to the License Agreement regardless of whether such rights have been or will be granted to Global by Licensor or (ii) the manufacturing rights granted by AK to Covanta pursuant to the Manufacturing Agreement regardless of whether such rights have been or will be granted to Global by AK.  For the avoidance of doubt, Covanta shall be entitled to exercise any or all of the license rights and manufacturing rights granted to it in the Technology itself or through any of its Affiliates, but  Covanta shall not have the right to issue sublicenses to any Person other than an Affiliate or American, Global or their respective Affiliates.”

  

5

  

 

	
  

	
h.

	
In the second line of the opening paragraph of Section 2.2, the following words are inserted after the word “Technology:”

 

“with Household Waste as the Feedstock”

	
  

	
i.

	
In the third line of Section 2.3(a), the words “that Covanta has the right to purchase through Licensor” which follow the word “Systems” are deleted.

	
  

	
j.

	
The word “Renewable” shall be substituted for the word “Trianon” in the tenth line of Section 2.3(g).

	
  

	
k.

	
In the seventh line of Section 2.3(h), the following words are inserted after the word “effect” and before the period which follows such word:

“; provided, however, that  the foregoing restrictions shall not apply to the sale or transfer by Covanta of any wholly owned subsidiary that has a direct or an indirect interest in one or more Projects if such subsidiary has material assets other than just its direct or indirect interests in such Projects”

	
  

	
l.

	
Section 2.4 is hereby deleted and replaced in its entirety by the following:

“Section 2.4 EPA Registration.  Covanta will use commercially reasonable efforts during the term hereof to register the diesel oil produced by the Demonstration Plant as a motor fuel with the United States Environmental Protection Agency.  Covanta shall take the lead with respect to the necessary activities for securing such registration, including preparing and submitting applications to the United States Environmental Protection Agency, and Global shall reasonably cooperate with such efforts to be undertaken by Covanta.”

  

6

  

 

	
  

	
m.

	
Sections 2.5 and 2.6 are hereby deleted in their entirety.

	
  

	
n.

	
As all of the obligations set forth in Article 3 have been fully performed, Article 3 is hereby deleted in its entirety and replaced with the following:

“ARTICLE 3 – COMMITMENT TO PROVIDE SYSTEMS

Section 3.1               Availability of Systems.  Covanta acknowledges (i) the role played by Global in assisting Covanta in securing the manufacturing rights under the Manufacturing Agreement and the expansion of the Covanta Rights under the License Agreement and (ii) the disadvantages to Global if Global is not able to purchase from Covanta for the Systems required by Global for its projects and its customers.  In partial consideration thereof, Covanta agrees that it shall (a) taking into account at the time that Global seeks to put in place a Covanta Purchase Order for itself or a customer (I) the limits of Covanta’s manufacturing capabilities, (II) Covanta’s existing Purchase Orders (including those for Projects) and (iii) the requirements of Global or its customer, including the delivery schedule for the Systems, supply all the Systems required for Global’s projects and customers and (b) not delay the negotiation or execution of Covanta Purchase Orders for, or the delivery of Systems to, Global or its clients to favor the Systems required by Covanta or Renewable for Projects.

Section 3.2               Purchase Price of Systems.  The Parties acknowledge that (i) Covanta wants to maintain as confidential its costs of manufacturing Systems and that it prefers to not have Global audit such costs and (ii) Covanta has a built in incentive to set the Base Price of Systems at the lowest level possible in order to limit the Commissions (as defined in the License Agreement) that are payable by Covanta to Licensor or American, as the case may be, under the License Agreement and the Royalties (as defined in the Manufacturing Agreement) that are payable to AK under the Manufacturing Agreement  In partial consideration thereof, the Parties agree that within sixty (60) days after Covanta places one or more purchase orders to secure some or all of the Parts that are required to manufacture the initial KDV 500 which is to be manufactured by Covanta, Covanta and Global shall agree on the mark-up (the “Mark-Up”) over the Base Price that Covanta will charge for all Systems sold to the Persons specified in this Section 3.2, which is intended to be a standard mark-up for the preferred purchasers of original equipment manufactured products.  The purchase price of all the Systems manufactured by Covanta for the following Persons shall equal the Base Price plus the Mark-Up:  (i) all Systems for Projects (regardless of whether Global or Renewable is an investor in such Projects); (ii) all Systems for projects that are owned by Global, an Affiliate of Global or any other Person in which Global owns at least a ten percent (10%) interest; and (iii) all Systems for projects that are owned by Renewable, an Affiliate of Renewable or any other Person in which Renewable owns at least a ten percent (10%) interest.  Covanta shall provide a written certification each year regarding the Base Price established for such year.

  

7

  

 

Section 3.3               Terms of Covanta Purchase Order.  The Parties agree that they will cooperate with each other and with American, in good faith, to develop a standard form of Covanta Purchase Order for all Systems to be sold for any project or to any customer (other than a Project that is wholly owned by Covanta or a Covanta Affiliate).  While the final form of the standard Covanta Purchase Order must be acceptable to Covanta in its sole discretion, Covanta agrees that the terms of the standard Covanta Purchase Order will not disadvantage Global or American in using their respective rights to exploit the Technology in their respective territories (it being assumed for this purpose that Global’s territory is the same as that of Licensor).

Section 3.4              Annual Pricing.  The Parties shall meet each November (and shall invite American to participate in such meeting) for the purpose of (i) establishing the Base Price for the coming year, (ii) establishing the price of spare parts and any consumables being supplied by Covanta, (iii) approving changes in the form of the standard Covanta Purchase Order to provide predictability in marketing and selling the Systems, (iv) discussing issues of concern regarding pricing or undue priority to any of the Parties or American and (v) for any other purpose that is relevant to the successful exploitation of the Technology.  Subject to the express provisions hereof, the final determination of the Base Price, the price of spare parts and any consumables and the provisions of the standard Covanta Purchase Order shall be made by Covanta.

Section 3.5               Limited Right of Audit.  If Global believes, in good faith, that the Base Price of Systems is significantly higher than Covanta’s cost of manufacturing Systems or that Covanta is not meeting any of the other obligations set forth in this Article 3, Global shall have the right to treat it as a Dispute and require it be resolved in accordance with the procedures set forth in Article 9, it being expressly agreed that the costs of the Party that prevails in any such Dispute (the amount of which shall be determined by the arbitrator) shall be reimbursed by the other Party.  The obligation to reimburse such costs shall be reflected in the decision of the arbitrator.”

	
  

	
o.

	
Section 4.2 is deleted in its entirety.

 

	
  

	
p.

	
Section 4.3 is renumbered as Section 4.2.

  

8

  

 

	
  

	
q.

	
Section 4.4 is renumbered as Section 4.3 and the reference to “this Section 4.4” in eighth line is changed to “this Section 4.3.”

	
  

	
r.

	
Sections 5.1(b) and 5.1(c) are hereby deleted and replaced in their entirety by the following:

“(b)                            Following the termination of the License Agreement, Covanta shall not be obligated to pay a Fuel Royalty on any future Projects developed by Covanta (excluding any Projects that have placed a Purchase Order for one or more Systems prior to the date of termination or loss);

“(c)                           Notwithstanding anything contained herein to the contrary, Covanta shall not be obligated to pay the Fuel Royalty with respect to (i) the Demonstration Plant, (ii) any project initiated and developed by Renewable (even if Covanta invests in such project), (iii) any project that is initiated and developed by Global with the consent of Covanta (even if Covanta invests in such project) and (iv) any Systems which are sold to a Governmental Organization for use outside of Territory A or for use in Territory A after Covanta ceases to operate such Systems on behalf of the Governmental Organization, it being agreed that the Fuel Royalty shall be paid on all of the Carve-Out Projects in which Covanta invests;”

	
  

	
s.

	
Section 5.4 is hereby deleted and replaced in its entirety by the following:

“Section 5.4             Sale of Systems to Governmental Organizations.  If Covanta sells one or more Systems to a Governmental Organization for use in Territory A, Covanta shall be obligated to pay Global the Fuel Royalty in connection with the operation of such Project for so long as Covanta operates such System(s) for such Governmental Organization and Covanta shall price such obligation into the cost of operating such Project for the Governmental Organization.  If the Governmental Organization wants to retain the diesel fuel produced by the Project for its own use, then the Parties shall agree on a method of valuing the diesel for purposes of determining the Fuel Royalty or adopt an alternative way of calculating the Fuel Royalty for such Project.”

	
  

	
t.

	
The notice address for Global in Section 11.3 is hereby deleted and replaced in its entirety by the following:

“Global Energy, Inc.

Gama Building, 5th Floor

Ramat Gan 52681, Israel

Attention:  Asi Shalgi

Facsimile:  +972-77-228-5678”

  

9

  

 

	
  

	
u.

	
Section 11.13 is hereby renumbered as Section 11.14 and the following new Section 11.13 is added:

“Section 11.13         Survival.  Upon the termination or the expiration of this Agreement, the following Articles will survive:  5, 8, 9 and 11.”

	
3.

	
Miscellaneous Provisions to Apply.  The provisions of Article 11 of the Agreement shall apply mutatis mutandis to this First Amendment as fully as if it was expressly set forth herein.

	
4.

	
Full Agreement of the Parties.  The Agreement, as amended by this First Amendment, embodies the entire understanding of Global and Covanta and supersedes all prior negotiations, understandings and agreements between them with respect to the subject matter thereof and hereof.

 

[Signature page follows]

  

10

  

IN WITNESS WHEREOF, the parties have executed this First Amendment to Business and Royalty Agreement as of the date first above written.

	 	
GLOBAL ENERGY, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Asi Shalgi	 
	 	 	
Asi Shalgi, Chief Executive Officer

	 
	 	 	 	 
	 	COVANTA ENERGY CORPORATION	 
	 	 	 	 
	 	By: 	/s/ Timothy J. Simpson	 
	 	 	Timothy J. Simpson, Executive Vice President and General Counsel

 

11

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