MASTER JOINT VENTURE AGREEMENT

MASTER JOINT VENTURE AGREEMENT

THIS MASTER JOINT VENTURE AGREEMENT (“Agreement”) is made by and between Geotec, Inc. (“Geotec”), a Florida corporation maintaining its principal business address at 110 E. Atlantic Ave., Suite 200, Delray Beach, Florida 33444 and GreenCoal, LLC (“GreenCoal”), an Illinois limited liability company that maintains its principal place of business at 257 West Lincoln Avenue, Lewistown, Illinois 61542, and is effective as of the last date of execution set forth below.  Geotec and GreenCoal may hereinafter be referred to collectively as the “Parties.”

WHEREAS, Geotec is engaged in the business of the development and exploitation of proprietary enzyme/protein technology (the “Technology ” );

WHEREAS, it is intended that, among other applications, the Technology will utilize bio-refinery units (each, a “Facility”) for the recovery of saleable coal or any other substance recovered from a Site that creates Revenue or otherwise generates cash, or cash equivalents from the sale or assignment (the “ Product”) from gob, culm, lignite, or other lower grade or dirty coals or carbon fly ash and for the remediation of soils (the “Process”);

WHEREAS, Geotec anticipates further development of the Process by commercial producers of Product, whether by Geotec, Green Energy Management, LLC, a Florida limited liability company (“GEM”) or GEM controlled limited liability companies, Ecotec Coal, LLC, a Florida limited liability company (“Ecotec”), or through joint venture or a sale or supply arrangement, or otherwise, with other Persons, as defined herein, or otherwise (each such user, a “Project Company”);

WHEREAS, Geotec and GreenCoal desire to enter into a joint business venture to facilitate the acquisition, washing, processing and sale of coal hydrocarbons located in Illinois and elsewhere (the “Joint Venture”), whereby they will each commit certain of their respective corporate resources to the initiation and management of the Joint Venture; and

WHEREAS, the Parties also desire to enter into this Agreement to facilitate procurement of additional ancillary agreements with other entities, including, but not limited to, Ecotec and GEM in furtherance of the business of the Joint Venture; and

WHEREAS, Geotec and GreenCoal desire to set forth herein their respective understandings and agreements regarding the prospective Joint Venture.

NOW, THEREFORE, in exchange for the mutual promises, agreements and consideration identified herein, the sufficiency of which is acknowledged and agreed, Geotec and GreenCoal agree as follows:

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DEFINITIONS.

a.

As used herein, the terms “Agreement”, “Facility”,  “Geotec”, “GreenCoal” “Parties”, “Party”, “Process”, “Product”, “Project Company”, and “Technology” shall have the meanings ascribed to such terms above, and the following terms shall have the following meanings:

“Affiliate” means with respect to a particular Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.

“Business Day” means a day on which commercial banks are open for normal business in New York.

 “Claims” has the meaning specified in Section 14 hereof.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor law, and regulations issued by the IRS pursuant to the Code, or any successor law.

“Confidential Information” has the meaning specified in Section 10 hereof.

“Control” (including, with correlative meanings, the terms, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 “Dispute” has the meaning specified in Section 14 hereof.

“Expenses” means, for any period, all accounts payable and liabilities accrued as of the end of such period and all disbursements of cash by or on behalf of a Party, GEM or Ecotec during such period, in respect to the costs and expenses incurred during such period in managing, permitting, insuring, siting, owning, operating, enhancing, maintaining and repairing a Facility, including without limitation the fees and disbursements paid by or on behalf of the Project Company under the Project Contracts, the general and administrative expenses of the Project Company, including franchise or similar taxes payable to any Governmental Body and fees for qualifying as a foreign entity in any other jurisdiction, and costs of Quarterly and Year-end reviews and audits of the operations of the Facility and the financial statements of the Project Company and the preparation of income tax returns of same, all as computed and determined in accordance with GAAP.  Expenses for a period shall not include (a) payments of or in respect to the purchase price for Project assets, (b) any uninsured damages, costs or expenses arising from a breach by the Project Company of any of the Project Contracts, unless such a breach is caused by the wrongful acts or omissions of Operator, (c) principal and interest as they become due and payable on indebtedness of the Project Company that has been incurred for purposes other than the installation, operation, maintenance or repair of the Facility or the ownership of other Project assets, and (d) any costs or expenses incurred which are expressly excluded from this category by the Operating Agreement.

“Feedstock” means gob, culm, lignite, or other lower grade or dirty coals, or high carbon fly ash, any other substance recovered from a Site that creates Revenue or otherwise generates cash, or cash equivalents from sale or assignment and is processed by the Facility in order to make Product.

“Feedstock Supply Agreement” means any agreements or arrangements for the supply of Feedstock to a Facility.

“Fuel Sales Agreement” means any agreements or arrangements for the sale of Product produced at a Facility during the Term.

“GAAP” means generally accepted accounting principles.

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“Governmental Body” means any of the following: (a) nation, state, county, city, town, village, district, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (d) multi-national organization or body; or (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

“IRS” means the Internal Revenue Service or its successor.

“Legal Requirement” means any applicable administrative (or quasi-administrative) order, constitution, law, ordinance, principle of common law, regulation, statute or treaty of any Governmental Body.

“Monetizer” means a Person other than the Parties or their Affiliates who purchases a Facility or an interest in the entity owning or operating a Facility with the agreement that Section 45 Tax Credits arising from the operation of a Facility will be allocated to such Person.

“Month” means a calendar month and “Monthly” means each calendar month.

“Net Profits” means, in respect to a Project, Revenues less Project Operating Expenses of the Project.

 “Operating Agreement” means, as to each Project the standard form operating and management agreement in substantially the same form as set forth on Exhibit “A” attached hereto, to be entered into between each Project Company and the Operator for management and operating services for the Project, and any amendments thereto and any successor or replacement agreements thereof.

“Operator” means, as to each Project, Ecotec, or such subcontractor as designated by Ecotec, as the Operator under an Operating Agreement.

“Payment Date” means the 20 ^th day of the following Month; provided that if such day is not a Business Day, then the next Business Day occurring after such 20 ^th day.

“Person” means a natural person, partnership (whether general or limited and whether domestic or foreign), limited liability company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity.

“Project” means the business of operation of one or more Facilities by a Project Company for the production of up to 20 million tons of Product utilizing the Process.

“Project Contracts” means any Fuel Sales Agreement, any Feedstock Supply Agreement, any Services Agreement and any Site Lease for a Project.

“Project Operating Expenses” means, in respect to a Project, all Expenses incurred in the operation of the Project.

“Quarterly” means each calendar quarter.

“Refined Coal” means solid synthetic fuel produced by utilization of the Process.

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“Revenues” means, for any period, all cash received by or on behalf of a Project Company or its Affiliates due to operation of the Project or the sale of Refined Fuel and any associated Product during such period, and all accounts receivable as of the end of such period in respect to the operation of the Project or the sale of Refined Fuel and any associated Product from the Facility during such period, including without limitation sale proceeds for Product, whether received by or due to the Project Company or affiliated marketing agents or principals, and capital contributions due to the Project Company or affiliated principals incident to the generation of Section 45 Tax Credits (excluding benefits to Monetizers) or emissions credits.

“Section 45 Tax Credits” means the tax credits provided by Section 45 of the Code for solid synthetic fuel produced from Feedstock and constituting Refined Coal.

“Services Agreement” means any agreement or arrangement, other than an Operating Agreement or this Agreement, for the provision of services with relation to operations of a Facility, and any amendments thereto and any successor or replacement agreements thereof.

“Site” means the premises owned, leased or licensed by a Project Company for the location and operation of one or more Projects.

“Site Lease” means any lease or license for a Site.

“Supply Agreement” means, as to each Project, the standard form agreement as set forth on Exhibit “B” attached hereto, to be entered into between Ecotec and Geotec for the supply by Geotec of its proprietary enzyme/protein materials constituting the Technology to such Project.

“Term” has the meaning specified in Section 2.04 hereof.

“Year” means a calendar year.

b.

References; Gender; Number; Certain Phrases .  All references in this Agreement to a “Section”, “Exhibit” or “Schedule” are to a Section, Exhibit or Schedule of this Agreement, unless the context requires otherwise.  Unless the context requires otherwise, the words “this Agreement”, “hereof”, “hereunder”, “herein”, “hereby”, “thereof”, “thereunder” or words of similar import refer to this Agreement as a whole and not to a particular Section, subsection, clause, or other subdivision hereof.  Whenever the context requires, the words used herein include the masculine, feminine, and neuter gender, and the singular and the plural.  The words “include” and “including” shall mean “include, without limitation,” and “including, without limitation,” respectively.  The word “or” is not exclusive.

§ 2.  PURPOSE OF THE JOINT VENTURE

§ 2.01(a).   Exploitation of Coal, Including Illinois Coal .  The Parties agree that the purpose of the Joint Venture is to facilitate the acquisition and processing of Feedstock including, but not limited to, Illinois coal at one or more various Sites as hereinafter identified by GreenCoal and the generation of Revenues and Net Profits from the sale of Refined Coal and Product.  The Parties acknowledge that the Sites identified by GreenCoal will include mined Feedstock that will be subject to the Ecotec Process at a Facility designed to generate Revenue, Product and Tax Credits pursuant to Section 45 of the Internal Revenue Code.  The Parties agree

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that this Agreement shall be applicable to the various Sites and Facilities as they mutually agree upon from time to time during the term of this Agreement.

§ 2.01(b).   Structure of Transaction and Role of Entities.  The Parties contemplate that various other Persons will be involved in the transactions necessary to generate Revenue and Net Profits for the Joint Venture and that the Parties will enter into other Project Contracts with other Persons to facilitate the goals of the Joint Venture. Various elements of the contemplated structure include the following items that may also be identified elsewhere in this Agreement under specific headings:

1.

The Parties agree that GreenCoal, Geotec or a third party may provide all initial funding/operating capital for acquisition of the Sites, Feedstock, the equipment necessary for the construction of each Facility and operation of each Facility by a Project Company, as well as funding for the acquisition of all necessary equipment and working capital for the Joint Venture (the “Initial Operating Capital”). In the alternative,    

2.

The Parties agree that the Initial Operating Capital shall be recovered by GreenCoal, Geotec or a third party through its receipt of seventy-five percent (75%) of the Net Profits from Joint Venture.  Upon recovery by GreenCoal, Geotec or a third party of the Initial Operating Capital relative to a Site, Net Profits from Joint Venture operations at such Site shall be equally divided between GreenCoal, Geotec and/or a third party. Net Profits shall be payable to each Party hereto on the Payment Date.  The funding and repayment terms set forth in this paragraph and paragraph 2.01(b)1 above shall apply regarding each Site, the acquisition of Feedstock and construction and operation of each Facility, unless otherwise agreed upon in writing by the Parties.

3.

Geotec agrees to provide its Technology to the Joint Venture to facilitate processing of Feedstock and the generation of Revenue and Net Profits upon resale of the Refined Coal and Products generated from operations of the Facility.  

4.

The Parties further agree that they both will be vendors of Ecotec, which must own the Facility in order to generate the Tax Credits.  

5.

As a vendor of Ecotec, the Parties contemplate that unless otherwise agreed to the contrary, GreenCoal or a third party will operate the initial Facility and may also possibly operate other Facilities elsewhere as agreed upon by the Parties pursuant to an Operating Agreement in a form substantially the same as Exhibit A attached hereto.  

6.

The Refined Coal and Product will be sold by Ecotec for a fixed price to Geotec, which will sell the Refined Coal and Product to end users.    

7.

All Expenses incurred by a Project Company, including GreenCoal, Ecotec, GEM, Geotec and any third party will be paid from Revenue.  The Parties agree that the Joint Venture shall maintain operational cash balances in Ecotec in an amount of no less than $1,000,000.00  to facilitate continued operation of the Joint Venture.

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8.

Administrative .  The Operator will provide such office space, equipment, facilities and supplies, and the services of such secretarial, clerical and other personnel of the Operator at its headquarters, as may be required for the reasonable conduct of the business of the Project by Operator personnel.

9.

On-Site Operations .  The Operator will operate the Facility or Facilities at the Project, from and including the recovery of available Feedstock at the Project, through the Process and including the loading of the Refined Coal and/or Product onto the Project’s mode of transportation adjacent to the Facility together with the repositioning of residual soil and rock from the Process onto the Project site or for sale as top soil, fill or capping material, if appropriate.  Any Feedstock shipped in to a Project will be delivered to a suitable delivery site on the Project designated by the Operator at no cost to the Operator.  In the performance of such duties, the Operator shall, among other things, develop business, operating and management plans and programs, formulate policies and objectives and assist the Project Company in carrying out such plans, programs and policies.

10.

Entity Management.  The Operator will, in cooperation with and as directed by Geotec and/or GEM, make such arrangements with and employ and retain, at the expense and for the benefit of the Project Company, such accountants, attorneys, banks, transfer agents, custodians, underwriters, engineers, insurance companies and other Persons as may from time to time reasonably be necessary to manage the business operations of the Project Company.  The Operator may require a deposit equal to one Month’s Expenses for the Project and will administer the Project Contracts and collect all Revenues on behalf of Ecotec and pay all Expenses on behalf of the Project Company as directed by Ecotec; provided that in no event will the Operator be required to pay any Expenses with its own funds.  All Project Contracts will be entered into by the Project Company and not the Operator unless such Persons are one and the same.

11.

Accounting .  The Operator will maintain in good order the books of account, ledgers, and records of the Project Company and shall perform all day-to-day accounting functions of the Project necessary for the conduct of its business including, without limitation, matters related to paying and receiving, billing, reserve estimates, payroll and tax return preparation, contract coordination and administration of employee benefit plans.  Without limiting the generality of the foregoing, the Operator shall prepare all requisite accounting reports and interim financial statements of the Project Company, including balance sheets, income statements and statements of cash flows, and shall assist the Project Company in selecting an independent public accounting firm for the purpose of conducting annual financial audit reviews of the Project Company and shall aid in coordinating such audits.  All books and records shall be available upon demand to Geotec, GEM, Ecotec, GreenCoal and any third parties to this agreement.

12.

Compliance .  The Operator shall timely oversee the preparation and filing on behalf of the Project Company of all reports, forms, documents, certificates and other instruments required by Governmental Bodies in order to lawfully conduct the business and affairs of the Project Company and to comply with Legal Requirements.

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§ 2.02.   Non-existence of Partnership.  The Parties agree that they shall conduct the commercial activities contemplated by this Agreement as co-ventures and not as general or limited partners or otherwise in the context of any partnership, as such term is construed under applicable law.  Accordingly, neither Party shall have any right or obligation to control the activities of any other Party to this Agreement nor any conduct of any other Party, including such Party’s agents, in furtherance of the Joint Venture.

§ 2.03.   Expenses of Joint Venture .  The Parties agree that Geotec and Ecotec, or its Manager, GEM, shall ultimately determine the reasonable and necessary expenses generated in connection with any Project Company utilizing the Ecotec Process at a Facility and such expenses shall be paid by the Project Company for each Facility from Revenue prior to reimbursement of any capital contributions to the Joint Venture by either Party hereto.  Both GreenCoal, Geotec and any third parties shall be responsible for payment of their own expenses, but will be reimbursed for all pre-approved travel expenses and necessary and reasonable, documented costs related to the Joint Venture.

§ 2.04.   Term of the Agreement .  The term of this Agreement shall be for a period of ten (10) years from the date of execution below and shall be renewable for successive one-year periods at the election of the Parties.  The Parties may mutually agree to terminate this Agreement at any time or otherwise in accordance with Section 8 herein.

§2.05.   Name of Joint Venture .  The Parties agree to refer to the Joint Venture as “Ecotec Illini Ventures, Ltd.”

§ 3.  GEOTEC CONTRIBUTION TO JOINT VENTURE.

§ 3.01.   Coal Processing Technology .  In furtherance of the Joint Venture and subject to the terms and conditions of this Agreement, Geotec agrees to provide the Technology to Ecotec to faci