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Dertek Joint Venture Collaboration Agreement
On February 20, 2015, our Board of Directors entered into that certain joint venture collaboration agreement dated February 20, 2015 (the
"Dertek Joint Venture Agreement") with Tecnologia y desarrollo de energias renovables S.de R/L. de C.V. ("Dertek"), for the manufacture,
distribution and marketing of Dertek's biofuel product. Dertek is a technology based company located in Mexico that has been developing a
catalyst technology to produce a biofuel that could be used as a substitute for diesel fuel (the "Biofuel Technology"). After obtaining highly
satisfactory pilot-test results, Dertek and the Company are moving forward into certified evaluations and scale up production of the Biofuel
Technology. Management of the Company believes that the Biofuel Technology has demonstrated remarkable new properties as a fuel source.
Therefore, the parties wish to establish a joint venture corporation (the "Joint Venture Corporation") called "Dertek International Technology
Corp. USA" for the purpose of manufacturing, distributing and marketing of the Biofuel Technology and associated products commencing in the
United States.
The general purpose of the Dertek Joint Venture Agreement is to: (i) address international market opportunities for products based on the Biofuel
Technology and provide fulfillment funding to manufacture and/or to license the Technology to third markets and to market the products; (ii)
establish the Joint Venture Corporation for operational and funding requirements of the project and commitment of the Biofuel Technology; and
(iii) establish a marketing and sales platform for the Biofuel Technology and associated products.
In accordance with the terms and provisions of the Dertek Joint Venture Agreement, the parties agreed that certain contracts in acceptable form
would be entered into as follows: (i) a distributorship agreement between Jonatan Hernandez Diaz ("Diaz") as the owner of the Biofule
Technology and the Joint Venture Corporation relating to the distribution of the Biofuel Technology and associated products; (ii) a technology or
patent rights transfer agreement between Diaz and the Joint Venture Corporation for the provision of the rights to the Biofuel Technology; (iii) a
manufacturing agreement between certain manufacturers and the Joint Venture Corporation for the exclusive manufacturing of products
associated with the Biofuel Technology; and (iv) a trademark license agreement between Diaz as the trademark owner and the Joint Venture
Corporation for the licensing of the use of the Biofuel Technology and associated trademarks.In further accordance with the terms and provisions of the Dertek Joint Venture Agreement, the parties agreed that the Joint Venture Corporation
would be established for a period of twenty years, Dertek and the Company would each hold a 50% equity interest, respectively, and a four
member board of directors shall be established with Dertek appointing two directors and the Company appointing two directors (and the removal
of any one director shall require the votes of three directors). Dertek has committed to license to the Joint Venture Corporation the Technology
and Dertek shall further assist the Joint Venture Corporation 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
stratgey and structure; (vii) manufacturing advice to produce samples and address initial purchase orders; (viii) building a marketing and sales
team; (ix) identify and develop novel products to introduce to the marketplace that may generate source revenue; and (x) handle management
and manufacturing personnel necessary to address sales and manufacturing.
We have committed to: (i) initiate a comprehensive process regarding the marketing, business development and sales of the Biofuel Technology
and associated products; (ii) lead the entire process from consultation and design to delivery of the final business development team; (iii) provide
fulfillment funding and marketing and sales platform; (iv) provide advance funding to execute fulfillment and all expenses related to contract,
sampling, laboratory quality control testing, availability for finished product and any and all staffing.
Both we and Dertek have agreed that the Joint Venture Corporation 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 50% of the audited after-tax net profit in relation to
each financial year.
