MACH 3 EYII DISTRIBUTORSHIP AGREEMENT FOR MACH 3 ECOLOGICAL PRODUCTS

THIS AGREEMENT (this "Agreement") is made and entered into as of July 20, 2007

by and between MACH 3 Manufacturing, LLC a limited liability company duly

registered in the State of Nevada, hereinafter called MACH 3 and Essentially

Yours Industries (International) Limited, hereinafter called DISTRIBUTOR.

R E C I T A L S:

WHEREAS, MACH 3 has acquired the authority and developed a certain

line of ecological products such as Mach 3 SEFS HD that has been specifically

formulated for fuel enhancement catalysts for heavy duty diesel internal

combustion engines, turbines, locomotives , open combustion furnaces and

boilers, power generating and marine diesel engines."MACH 3 SEFS HD"

hereinafter called the PRODUCT.

The PRODUCT is a fuel additive that has been registered with the US EPA

(#1927-0002) and is to be certified with fuel saving and emission test reports

in accordance with EPA 511 Test Protocol, FTP-75, SAE J1321, 40 CFR 86 and

California Title 13 by Automotive Testing and Development Services, Inc.

(ATDS),an independent testing laboratory recognized by the US EPA and the

California Air Resources Board (CARB)

Mach 3 shall assist the DISTRIBUTOR on all technical matters regarding

local certification and registration process of the product in any country

mentioned in this agreement. If there is a delay in registration or the

certification process, the DISTRIBUTOR will submit to Mach 3 a request for

an extension of the initial product purchase order and Mach 3 will not

unreasonably deny such request or extension.

MACH 3 has the exclusive worldwide rights under license from Dennis

Leung to manufacture and to distribute the PRODUCT and its future generation

of improvement from time to time, and desires the assistance of DISTRIBUTOR

in its efforts to market and distribute the PRODUCT.

1. RELATIONSHIP.

1.1 Appointment.

(a) Upon the terms, and subject to the terms and conditions, contained

herein, MACH 3 hereby appoints DISTRIBUTOR as a distributor of the PRODUCT in

The Philippines, Taiwan, Japan, Malaysia, Thailand, Indonesia, Singapore,

India,Pakistan, Vietnam, Australia, New Zealand, Norway, USA, Canada and

Mexico. The rights granted hereunder shall permit the DISTRIBUTOR to market

and to sell the PRODUCT anywhere within the countries listed above, provided

a minimum initial order of $500,000 of PRODUCT is made for a specific country

within 120 days of execution of this Agreement.

Mach 3 will not guarantee the availability of distribution rights to DISTRIBUTOR

in any one of the countries listed above where no minimum initial order has

been made. Refer to Item 6.3 for Non-Circumvention and Special Limited Time

Exclusive Rights to sell to specific customer(s) for details. DISTRIBUTOR shall

notify Mach 3 in writing of the full identity of any and all Sub-distributors.

1.2 Acceptance of Appointment. DISTRIBUTOR hereby accepts the

appointment as provided in Section 1.1 above, and hereby agrees fully and

faithfully to perform and discharge all of its duties, obligations and

responsibilities as set forth in this Agreement. It is understood and agreed

that the Authorized Distributor status is maintained with special privileges

to order the PRODUCT at the Special Authorized Distributor Prices as shown in

Schedule A, which may be revised from time to time with minimum 30 days written

notice. If the increase is more than 5%, then MACH 3 shall provide the

DISTRIBUTOR with 60 days written notice. DISTRIBUTOR hereby also acknowledges

the proprietary and intellectual property rights of MACH 3 in the PRODUCT as

well as the exclusive distribution rights of MACH 3 and Chinaoil (USA) Inc.

in the said PRODUCT. In order to obtain the concession of the exclusive

distribution rights from Chinaoil (USA) Inc. to sell the PRODUCT in countries

as listed above, DISTRIBUTOR hereby irrevocably agrees to pay 3.0% of the

DISTRIBUTOR wholesale purchase price as an override to CHINAOIL (USA) Inc.

at time of the order of the PRODUCT. This 3% overide shall be increased to

3 1/2% in year two and further adjusted to 4% from year three onwards.

1.3 Competing Products. During the term of this Agreement, DISTRIBUTOR

and all officers, directors, shareholders, employees, agents or representatives

of a company to be formed (collectively, "Agents"), and any entity in which

DISTRIBUTOR or any of its Agents has a direct or indirect controlling ownership

interest, shall not, directly or indirectly, promote, sell or distribute any

fuel additive or similar product(s) which are directly competitive with the

PRODUCT. Any such violation by the DISTRIBUTOR shall have the DISTRIBUTOR

immediately deemed to be in default of this Agreement.

1.4 Independent Contractor. The relationship of MACH 3 and

DISTRIBUTOR established by this Agreement is that of independent contractors.

Nothing contained in this Agreement shall be construed to (a) give either

party hereto the power to direct and control the day-to-day activities of

the other, or (b) constitute the parties as partners, joint ventures,

co-owners or otherwise as participants in a joint or common undertaking.

Neither party hereto nor any of its Agents is the representative of the

other party for any purpose except as MACH 3 has set forth in this

Agreement, and has no power or authority as agent, employee or in any

other capacity to represent, act for, bind, or otherwise create or

assume an obligation on behalf of the other for any purpose whatsoever.

All financial obligations associated with Distributor's business are the

sole responsibility of DISTRIBUTOR. All sales and other agreements between

DISTRIBUTOR and its customers are DISTRIBUTOR 's sole responsibility and

shall have no effect on MACH 3's obligations under this Agreement. MACH 3

shall substantiate and be responsible for any information and/or claims

provided to the DISTRIBUTOR.

1.5 Product Development. From time to time, DISTRIBUTOR may

recommend certain packaging modifications to the existing PRODUCT and MACH 3

shall work with DISTRIBUTOR to coordinate in developing the same into viable

commercial products to the extent that MACH 3 believes such recommendations

are viable. The use of the PRODUCT labels must comply with the provisions

of 8.4 and 8.5, as applicable. No representations regarding the PRODUCT

shall be made in any private label or branded marketing materials,

packaging etc. without the prior written approval of MACH 3, which

approval shall not be unreasonably withheld.

1.6 Promotional Duties.

(a) DISTRIBUTOR shall (i) exert its best efforts consistent with

sound business planning and projected profitability and sales potential

to introduce and diligently advertise, promote, sell, distribute, and

service (collectively, "Marketing") the PRODUCT, (ii) make use of, and

disseminate to its existing customers, and to potential purchasers, all

promotional materials, if any, supplied by MACH 3, and (iii) cooperate

with MACH 3 in activities directed toward the Marketing of the PRODUCT.

At MACH 3's request, DISTRIBUTOR shall make immediately available to

MACH 3 copies of all print and electronic Marketing materials used by

it for the PRODUCT.

(b) DISTRIBUTOR shall at all times demonstrate and otherwise

represent the PRODUCT fairly and accurately in comparison with

competitive products from other manufacturers, shall make no false

or misleading representations with regard to the PRODUCT, and shall

not make any representations with respect to the specifications,

features or capabilities of the PRODUCT which is not consistent

with those described in the product literature or other material

supplied by MACH 3.

(c) MACH 3 shall assist DISTRIBUTOR in its efforts by making

available reasonable quantities of such marketing materials as MACH 3

has developed and/or jointly developing such marketing materials with

DISTRIBUTOR as DISTRIBUTOR may recommend.

1.7 Technical Support. MACH 3 shall provide DISTRIBUTOR with

such technical support regarding the PRODUCTS as is reasonably

necessary for DISTRIBUTOR to assist MACH 3 under this Agreement,

including but not limited to copies of all applicable test results

of PRODUCT.

1.8 Reporting Obligations of DISTRIBUTOR. DISTRIBUTOR shall

provide to MACH 3, no later than the 30th day of each calendar month,

as to the following month, DISTRIBUTOR sales projection reports setting

forth the non binding projected sales of each size of the PRODUCT for

the next 2 months for MACH 3 to make reasonable preparations, as well

as such other information that MACH 3 may reasonably request from time

to time.

2. PURCHASE OF PRODUCT

2.1 Ordering Procedure. Purchase of PRODUCT shall be made by

DISTRIBUTOR by means of Purchase Orders submitted to MACH 3. Each such

Purchase Order shall specify the number of units of the PRODUCT ordered

by DISTRIBUTOR, the desired date and location of delivery, which shall

have a minimum time span of 60 days from the date of order. MACH 3 shall

use its best efforts to comply with the requirements of DISTRIBUTOR on

the terms and conditions of this Agreement. However, MACH 3 shall not be

responsible for any delay of delivery due to acts of God and/or any

situations beyond its reasonable control as more particularly described

in Item 17 herein.

2.2 Purchase Order The DISTRIBUTOR shall submit each Purchase

Order for the PRODUCT. No additional or conflicting terms or conditions

may be proposed by DISTRIBUTOR in or in connection with any Purchase

Order, and no such additional or conflicting terms or conditions shall

be binding upon MACH 3 without its prior written consent.

2.3 Productions, Supply and Delivery of PRODUCT. During the

term of this Agreement or thereafter, MACH 3 reserves the right,

without obligation or liability to MACH 3, to manufacture, produce,

warehouse or source the PRODUCT initially in California and later at

any worldwide location, including locations outside of the United States

of America. The PRODUCT ordered by DISTRIBUTOR shall be delivered F.O.B.

place of manufacturing. However, the freight for any products produced

outside the United States shall not exceed the freight from California.

MACH 3 further reserves the right, in its sole discretion with thirty

(30) days prior written notice to modify and/or improve the PRODUCT

and one hundred and twenty (120) days prior written notice to DISTRIBUTOR,

to discontinue the production of any superseded version of the PRODUCT.

2.4 Titles and Risk of Loss. Title to the PRODUCT thus ordered

and all risk of loss shall pass from MACH 3 to DISTRIBUTOR at the time

and place of MACH 3's delivery of the PRODUCT to a common carrier for

delivery to DISTRIBUTOR in accordance with the delivery terms prescribed

in each purchase order, notwithstanding that MACH 3 may retain rights of

possession or repossession to ensure collection of the purchase price

thereof. DISTRIBUTOR shall be solely responsible for insuring the PRODUCT

after delivery to a common carrier for delivery to DISTRIBUTOR. DISTRIBUTOR

shall designate the common carrier used for transportation of the PRODUCT.

MACH 3 shall not be responsible for any delay caused by the carrier.

2.5 Inspections and Rejection. Upon receipt of delivery of

PRODUCT on order is ready for delivery at the factory gate, the DISTRIBUTOR

or its authorized representative reserves the right within 3 business days

from day of notice to DISTRIBUTOR to inspect the PRODUCT for approval or

rejection for compliance with the specifications of the packaging for

quality control as specified in the Purchase Order.

 

3. PRICING STRUCTURE OF PRODUCT.

3.1 It is understood and agreed that confidentiality of the

Special Authorized Distributor Price structure of the PRODUCT is for the

mutual protection of DISTRIBUTOR and MACH 3. Violation of such confidential

information by any authorized, DISTRIBUTOR or any of its personnel shall be

deemed to be in default. DISTRIBUTOR shall be responsible to regulate such

violation(s). Failure by DISTRIBUTOR to regulate any such parties shall

have DISTRIBUTOR deemed to be in default of this Agreement. DISTRIBUTOR

will therefore be fully and solely responsible to all consequences and

remedies. The Special Authorized Distributor Price list of PRODUCT is

subject to change upon sixty (60)-calendar days notice.

3.2 UNIFORM RETAIL PRICE STRUCTURE. It is understood and agreed

that all parties hereto will maintain a Uniform Retail Price structure

set jointly by MACH 3 and DISTRIBUTOR in order to maintain a stable market

condition of the PRODUCTS for the protection of all parties. Violation to

sell the PRODUCTS by DISTRIBUTOR at discounts unauthorized by MACH 3 is

prohibited. Any repeated violation after written warning would constitute

the violating party in default of this Agreement. DISTRIBUTOR, however,

be allowed to market and sell product at prices that are more expensive

than the Uniform Retail Price structure.

3.3 SCHEDULE A herewith attached and known as "The Special

Distributor Price List of Mach 3 SEFS HD" and SCHEDULE B "Descriptions

and MSRP for the PRODUCT" their subsequent revisions, if any, shall be

an integral part of this Agreement.

 

4. PAYMENT FOR PRODUCTS.

4.1 Payment Terms.

i) DISTRIBUTOR shall pay by cash or cashier's check or wire transfer

directly into MACH 3 appointed bank account for the full amount of the

purchase up to the amount of $100,000 upon submitting the Purchase Order,

exclusive of shipping costs.

ii) For orders exceeding $100,000, exclusive of shipping costs, DISTRIBUTOR

shall elect to pay in full of the Purchase Order by wire transfer or to

pay a deposit equal to FIFTY PERCENT (50%) of the Purchase Order together

with an irrevocable letter of credit ("ILOC") for the balance FIFTY PERCENT

(50%) acceptable to the bank or banking agent of MACH 3 plus shipping costs,

if any. MACH 3 may assign such ILOC to any party and upon commencement of

manufacturing of the PRODUCT so ordered by DISTRIBUTOR and to collect the

balance 50% of the total purchase order guaranteeing payment by such ILOC

upon delivery of the PRODUCT to the common carrier F.O.B. of MACH 3's

premises of manufacturing or warehousing. The ILOC shall be directly

cashable. The irrevocable letter of credit provisions as described above

may be substituted by cash and/or cashier's checks and or wire transfer or

other means acceptable to MACH 3.

 

5. REPRESENTATIONS AND WARRANTIES. DISTRIBUTOR represents and warrants

to MACH 3 that it: (a) has full and unrestricted authority to enter into

this Agreement and, by executing, delivering or performing under this

Agreement, it will not breach any agreement to which it is currently a

party; (b) has the legal right, free of any right or interest of any

third party, to perform its obligations hereunder; and (c) currently is

in material compliance with all applicable Laws and has received all

applicable product safety certifications and registrations from

appropriate governmental entities necessary to perform its obligations

under this Agreement. MACH 3 represents and warrants to DISTRIBUTOR

that it: (a) has full and unrestricted authority to enter into this

Agreement and, by executing, delivering or performing under this Agreement,

it will not breach any agreement to which it is currently a party;

(b) has the legal right, free of any right or interest of any third party,

to perform its obligations hereunder; (c) currently is in material

compliance with all applicable Laws and has received all applicable

product safety certifications and registrations from appropriate

governmental entities necessary to perform its obligations under this

Agreement, and, (d) has legal ownership of the Products, free and clear

of any right or interest of any third party whatsoever.

5.1 AUTHORITY TO EXECUTE CONTRACT:

It is represented herein that Dennis Leung has the full and complete

authority to bind MACH 3 in executing the Distributorship Agreement and

any other related agreements with DISTRIBUTOR.

It is also represented herein that Dori James O'Neill has the full and

complete authority to bind DISTRIBUTOR in executing this Distributorship

Agreement and any other related agreements with MACH 3.

 

6. CONFIDENTIAL INFORMATION.

6.1 Definition. The Parties recognize that the relationship

created by this Agreement may involve access by the parties to

information of substantial value to each other, including, but not

limited to, designs, drawings, plans, software, programs, material

and manufacturing specifications, devices, trade secrets, applications,

formulae, know-how, methods, techniques, and processes (whether related

to product Patents (as such term is hereinafter defined), or otherwise),

as well as financial, business, marketing and product development

information, and customer lists including contact lists provided to

MACH 3 relating to the Products (collectively, "Confidential Information"),

provided that Confidential Information shall not include information:

(a) In the public domain or which subsequently falls into the

public domain;

(b) Specifically intended by MACH 3 for disclosure to

customers of DISTRIBUTOR;

(c) Which the recipient can prove was known through a source

independent of the disclosing party prior to any communication by the

disclosing party; or

(d) Disclosed to the recipient in good faith by a third party

having a legal right to do so.

6.2 Non-Disclosure. The Parties acknowledge and agree that

they own all rights, title and interest in and to their Confidential

Information. The Parties further agree that they shall (i) maintain the

secrecy and confidentiality of all Confidential Information which comes

to its attention, (ii) take all necessary precautions to prevent any

disclosure of Confidential Information by any of its Agents, and (iii)

during the term of this Agreement and for so long as Confidential

Information does not enter into the public domain through no act or

omission of DISTRIBUTOR, neither publish, disclose nor disseminate

any part of such Confidential Information, which shall include but

not limited to the Supply Price List of PRODUCT supplied by MACH 3

to DISTRIBUTOR,in any manner, or use the same, without the prior

written consent of MACH 3. Failure in strictly observing the obligation

of non-disclosure of any secret and confidential information without

the written consent of the other party shall result the disclosing

party deemed in default of this Agreement. The disclosing party

shall then be fully responsible for all consequences.

6.3 Non-Circumvention and Special Limited Time Exclusive

Rights to sell to specific customer(s).

a) The Parties wish to execute this Agreement to protect them within the

specific countries against the circumvention of one by the other through

unauthorized contacts with a party's business sources during the period

covered by the Agreement, provided that the claiming party is not in

default or bankruptcy.

b) The Parties wish to execute this Agreement for their joint protection

against the communication of information that is proprietary in nature,

and or that is intrinsically valuable or is potentially harmful to the

business of either of the parties, if divulged to another.

c) Mach 3 understands and agrees that they are prohibited from selling

products to any customer independently established by the DISTRIBUTOR,

provided that DISTRIBUTOR is not in default or bankrupt and no minimum

orders from or sales to that specific customer per year is made.

DISTRIBUTOR shall have 60 days to cure such default.

NOW THEREFORE THIS AGREEMENT witnesses that in consideration for good

and valuable consideration, the receipt and sufficiency of which is

hereby acknowledged, the Parties agree as follows:

1. The Parties agree to refrain from soliciting business and contacts

from sources not their own or which have been made available to them

via this Agreement, without first obtaining the express permission of

the party who made the original introduction, provided that the original

party is not in default or bankrupt.

2. The Parties agree to keep confidential the names of any banks,

corporations, organizations, individuals, licensors, licensees, or

agents of any of the above, introduced by either of the Parties or

by the agent of a Party, to the other. The identities of these

individuals shall remain confidential during the term specified

in this Agreement. Information such as telephone, telex, or

computer databases and technical/commercial/financial data, as

well as any matter which could reasonably be expected to cause

technical/commercial/financial damages, directly or indirectly,

to either of the parties, shall be accorded confidentiality under

this Agreement.

3. This Agreement shall apply to all transactions executed or

initiated during the period of this Agreement. It shall apply to

principals and agents and shall include follow-up contacts, repeats,

roll-overs, extensions and renegotiated contracts or the equivalent.

4. Any violation of this Agreement shall entitle the wronged

party to compensation for such damage as may be reasonably shown

to have resulted from the violation.

5. This instrument contains the entire Agreement of parties.

This Agreement shall be construed under the laws of the state of

Las Vegas, Nevada, without reference to its conflict of laws rules,

and controversies and claims arising from this agreement shall

be brought only in the courts of Las Vegas, Nevada.

6.4 Injunctive Relief. The Parties understand and

agree that the Confidential Information has special value, the loss

of which cannot be reasonably or adequately compensated in damages

or in an action at law, and therefore, in the event of any breach

or violation of the provisions of this Section 6 by any party

to this Agreement, the other party shall be entitled to equitable

relief by way of injunction without bond and without the necessity

of proving actual damages, in addition to, and not in limitation of,

any other relief or rights to which they may be entitled. The terms

and provisions of this Section 6 shall survive any termination or

expiration of this Agreement.

 

7. PRODUCT WARRANTY. MACH 3 warrants and guarantees that all

products supplied to DISTRIBUTOR to be free of any design and or

manufacturing defects. Products that have been paid for and

delivered to DISTRIBUTOR, and found to be defective shall be

replaced to DISTRIBUTOR by MACH 3 at no extra charge to DISTRIBUTOR.

8. TRADEMARKS.

8.