JOINT VENTURE AGREEMENT-ELCE

ELCE INTERNATIONAL CORP.

- AND -

FRESHWATER TECHNOLOGIES INC.

Joint Venture Agreement-ELCE

January 25, 2009

JOINT VENTURE AGREEMENT-ELCE

THIS JOINT VENTURE AGREEMENT (the “ Agreement ”) is made this 25th day of January, 2009.

B E T W E E N:

ELCE INTERNATIONAL CORP., a company duly incorporated under the laws of Panama and having its head office located at Edificio

Proconsa Piso once calle 51Este y Manuel Maria Icaza Campo Alegre Ciudad de Panama Republica de Panama

- and -

FRESHWATER TECHNOLOGIES INC., a company duly incorporated under the laws of the State of Nevada, and having its head office located at 30 Denver Crescent, Suite 200, Toronto, Ontario.

RECITALS:

NOW THEREFORE , in consideration of the mutual covenants set forth in this the Parties hereby agree as follows:

ARTICLE 1 DEFINITIONS AND INTERPRETATION

Wherever used in this Agreement, unless there is something in the subject matter or context inconsistent therewith, and unless otherwise defined in this Agreement, the following terms shall have the following meanings:

" Affiliate " means any business organization, present or future that controls, is controlled by, or is under common control with a Party. "Control" for this definition is defined as directly or indirectly holding or controlling at least a majority of voting power or operating control (at least fifty percent (50%) of the voting stock or other ownership interest of the corporation or entity), whether through ownership of voting securities, by contract or otherwise;

“ Applicable Laws ” means the laws, regulations, rules, notices, and other legislative, executive or judicial decisions or pronouncements binding on either Party or in relation to the subject matter of this Agreement;

" Business Day " means a day, other than a Saturday or Sunday, on which the principal commercial banks located in the City of Toronto, Canada are open for business during normal banking hours;

“C+F Destination ” stands for "Cartage & Freight" and means that for an order submitted to Company by Distributor, Company will pay shipping costs and remain responsible for the goods, including replacement of lost or damaged Products, until Distributor or other party designated by Distributor takes possession of the Products;

“ Closing ” means the closing of the Agreement, in accordance with Article 6 herein;

“ Closing Date ” means, subject to Articles 7 and 8 herein, January 1 ^st , 2009 or such earlier or later date as agreed to in writing by the Parties;

“ Company ” means Elce International Inc.;

“ Defaulting Party ” has the meaning ascribed to it in Section 10.2 herein;

" Dispute " has the meaning ascribed to it in Section 9.1(a);

“ Distributor ” means Freshwater Technologies Inc.;

“ Effective Date ” means the date of this Agreement first stated above;

“ Infringement Claim ” means any suit, claim, or proceeding brought against Distributor alleging that Distributor’s use of the Products, Names or Marks constitutes an infringement of any third party’s Intellectual Property Rights;

“ Marks ” means all trademarks worldwide registered in the name of Company or licensed to Company;

“ Names ” means all trade names worldwide used by Company;

“ Parties ” means collectively, Company and Distributor;

“ Party ” means individually, Company or Distributor;

" Person " means any natural person, sole proprietorship, partnership, corporation, trust, joint venture, any governmental authority or any incorporated or unincorporated entity or association of any nature;

" Products " means all products manufactured, offered or controlled by the Company or those products for which the Company has the right to manufacture, offer or control, on or after the Effective Date.

“ Purpose ” means the right to offer to sell, export or otherwise disposing of Products in the Licensed Territory for the Term;

“ Tax ” means all taxes imposed by the relevant tax authorities in accordance with Applicable Laws;

“ Territory ” means every region and territory approved in this Agreement and approved in writing by the Company at a later date;

" Term " has the meaning ascribed to it in Section 10.1 herein;

“ Terminating Party ” has the meaning ascribed to it in Section 10.2 herein; and

" Use " means any form of practice or utilization of Products, Names and Marks, other than the distribution or sale of the Products.

“ Year ” means any twelve-month period ending on each anniversary of the Closing Date for the duration of the Term.

In this Agreement:

(a)           When calculating the period of time within which or following which any act is to be done or step taken, the date which is the reference day in calculating such period will be excluded. If the last day of such period is not a Business Day, the period will end on the next Business Day;

(b)           A reference to any Applicable Laws or to any legislation or to any provision of Applicable Laws or of any legislation includes a reference to such Applicable Laws or legislation as amended or modified from time to time;

(c)           The division of this Agreement into separate articles, sections, subsections and schedules, the provision of a table of contents, the Agreement’s title and the insertion of headings are for convenience of reference only and will not affect the construction or interpretation of this Agreement;

(d)           Any reference to any government authority or department includes such authority or department at federal, state, provincial, municipal and other levels;

(e)           Any references in this Agreement to government ministries, bureaux, departments, commissions, agencies, etc. shall include all successor entities thereto;

(f)           In this Agreement, the masculine form includes the feminine form and the singular form includes the plural form, and vice versa;

(g)           Any reference to any Party to this Agreement or to any other party to any contract, agreement or document includes a reference to that party’s successors and permitted assigns;

(h)           Unless specified otherwise, all statements of or references to dollar amounts in this Agreement refer to United States dollars;

(i)            Words or abbreviations which have well known or trade meanings are used herein in accordance with their recognized meanings; and,

(j)            The words “includes” or “including” mean “includes without limitation” and “including without limitation” respectively.

Subject to the terms and conditions of this Agreement, Company hereby grants to Distributor the non-exclusive right to offer to sell, export or otherwise disposing of Products in the Named Countries for the Term (the “Purpose”).

Distributor may use other distributing companies and any other Person for the Term, excluding Company, to carry out the Purpose in accordance with the terms of this Agreement.

Subject to the terms and conditions of this Agreement, Distributor agrees:

(a) to purchase Products in such minimum quantities as needed to ensure the fulfillment of customer orders of the ELCE water activators and to minimize shipping costs. All orders must have a minimum quantity of 10 units for each type of ELCE equipment of models S-1, S-2 and S-3. For models S-4 and S-5 the minimum is 5 units. For models S-6, S-7 and S-8 the minimum is 3 units. Any other model of ELCE equipment from S-9 to S-15 the minimum is two units.

(b) to maintain a minimum inventory of ELCE products for each country to satisfy customer orders. This minimum inventory consists of: ten (10) units per model up to S-3; five (5) units per model up to S-5; three (3) units per model up to S-8.

Subject to the terms and conditions of this Agreement, Company agrees that in satisfaction of each order for Products from Distributor:

(a) Company shall deliver all Products to Distributor promptly to C+F Destination within 45 days from date of order acceptance;

All orders are considered valid only if they are submitted with the proper amount and transfer of funds.

As per attached sales and rental price lists-2009

ARTICLE 3 PAYMENTS

(a) Subject to the terms and conditions of this Agreement, the Parties agree that Distributor shall pay to Claudio Sgarbi Ten Million (10,000,000) restricted common shares (the “Shares”) upon Closing of this

Agreement. An additional Five Million (5,000,000) restricted common shares will be paid bi-annually for a term of two years from the signing date of the Agreement.

(b) The Distributor shall issue the shares from Treasury within ten days of the Closing and on the designated six month Dates described above in 3.1 (a). 

(c) Commencing on Closing Date, Distributor will pay a monthly consulting fee to Claudio Sgarbi of $4,500 for three months. After three months the consulting fee will be increased to $6,000 per month for three months. After the first six months the consulting fee will be increased to $7,500 per month for three months. After nine months the consulting fee will be increased to $9,000 per month.

(d) Distributor will pay all approved out of pocket expenses incurred by Claudio Sgarbi relating to costs incurred for this Agreement.

(e) Distributor will pay ELCE International Corp. 50% of the net profits relating to sales under this Agreement. Net profits will be calculated as gross sales less cost of products, delivery costs of products and all sales and marketing costs, administrative costs and professional fees incurred relating to this Agreement. Monthly statement shall be submitted to Company and a profit disbursement shall take place every three months.  

Company acknowledges and agrees that it is responsible for all Taxes imposed on it in respect of the signing or performance of this Agreement and the receipt of the Shares and other payments made by Distributor.

Company acknowledges and agrees that it has obtained legal advice from its own advisors with respect to the potential tax impact on it of in respect of the signing or performance of this Agreement and the receipt of the Shares.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

Company represents, warrants and covenants as follows and acknowledges and agrees that the representations and warranties herein shall survive for the a period of two years from the Effective Date hereof:

(a) Company is the lawful owner of all rights and interests in the Products, Names and Marks of ELCE water activator for the Countries named in this Agreement;

(b) Company has all rights necessary to enter into a Joint Venture with the Distributor in accordance with the terms and conditions of this Agreement;

Distributor acknowledges and agrees as follows:

(a) that it may describe itself as a Distributor of the Company’s products for the duration of the Term of this Agreement but that it shall not describe or characterize itself or enter into any transaction as an agent for the Company;

(b) it shall use its commercially reasonable best efforts to sell the Products for the duration of the Term of this Agreement;

(c) at the termination of this agreement inventories must be kept exclusively in the Country of Distribution or they may be returned to Company at cost price. Distributor cannot purchase through other sources similar or equal Products for a period of three years from termination of Agreement.

(d) it shall refrain from committing any act or pursuing any course of conduct that would tend to bring the Licensed Products, Names or Marks into disrepute;

(e) nothing in this Agreement may in any way give or be deemed to give Distributor or any of their Sub distributors any interest in the Names and Marks except for the right to Use the Names and Marks solely in connection with the Products and in accordance with the terms and condition of this Agreement;

(f) neither during the term of this Agreement nor at any time after termination hereof, shall Distributor attempt any registration of the Names and Marks anywhere in the world or attempt to dilute the value of any goodwill attaching to the Names and Marks. Any goodwill associated with