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ET3M Group Joint Venture Collaboration Agreement
On February 28, 2015, our Board of Directors authorized the execution of that certain joint venture collaboration agreement dated February 28,
2015 for a term of ten years (the "ET3M Joint Venture Agreement") with The ET3M Group ("ET3M"), for the manufacture, distribution and
commercialization of ET3M's technology consisting of an electronic circuit capable of multiplying, through a process of electronic resonance,
the output of any existing standard electric power source (the "Technology"). ET3M is a technology based company presently located in Mexico
which has researched and developed the Technology, which further consists of the harvesting of energy already present in the subatomic
quantum fields of all matter and which is always present in infinite quantity in all of the surrounding environment, and with its addition to the
Technology will harvest and generate such energy. Our management had entered into discussions with ET3M regarding application of the
Technology to electronic circuits capable of generating remarkable power-savings when connected to industrial electric induction motors, owned
and used at industrial plants by large international corporations (the "Power Multiplication Circuits"). Management believes that in the event
ET3M develops the Power Multiplication Circuits, which would be specifically and exclusively applied to distributed power multiplication with
the centralized power generation systems market, would present great business potential in the commercialization of such Power Multiplication
Circuits and/of the excess energy obtained through their use.
Therefore, the parties entered into the ET3M Joint Venture Agreement. The general purpose of the ET3M Joint Venture Agreement is to: (i)
design, develop, testing, manufacture and commercialize exclusively for the U.S. and Canadian markets the Power Multiplication Circuits in the
application for distributed power multiplication within the centralized power generation systems market; (ii) exploit market opportunities based
on the Technology and the Power Multiplication Circuits; (iii) to provide fulfillment funding through us to design, scale-up, test, obtain
certifications, construct, assemble, produce and market the Power Multiplication Circuits for the harvest and use of energy in the environment
and specifically in its application within the centralized power generation systems market; and (iv) to establish a joint venture entity (the "Joint
Venture Company" between us and ET3M called "B3 Labs" for operational and funding requirements pertaining to the purposes above.
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In accordance with the terms and provisions of the ET3M Joint Venture Agreement, the parties agreed that certain contracts in acceptable form
would be entered into as follows: (i) a technology or license agreement regarding the Technology; (ii) a manufacturing contract between
manufacturers and the Joint Venture Company for the exclusive manufacturing and assembly of parts; (iii) a trademark license agreement
between ET3M and the Joint Venture Company for licensing of the use of the products and trademarks associated with the Technology; and (iv)
assignment agreements between ET3M and us regarding the Technology.
In further accordance with the terms and provisions of the ET3M Joint Venture Agreement, the parties agreed that the Joint Venture Company
would be established for a period of ten years, we and ET3M would each hold a 50% equity interest, respectively, and a four member board of
directors shall be established with ET3M appointing two directors and us appointing two directors (and the removal of any one director shall
require the votes of three directors). ET3M has committed to license to the Joint Venture Company the Technology and ET3M shall further
assist the Joint Venture Company with: (i) product registration; (ii) efficacy UL and ASTM testing and qualifications; (iii) product summary
descriptions and details; (iv) competitive industry and product review; (v) product pricing structure; (vi) market and sales strategy and structure;
(vii) manufacturing advice to produce/connect samples; (viii) sampling and testing relating to product certification; (ix) laboratory quality
control testing; and (x) any and all relevant staffing and hiring of consultants. Both we and ET3M have agreed that the Joint Venture Company
shall reinvest at least during the first two years of existence all profits and subsequent thereto shall distribute on an equal basis by way of
distributions not less than 20% of the audited after-tax net profit in relation to each financial year.
