Purchase, Distribution & Services Agreement

This Agreement (" Agreement ") is made as of the 24 ^th day of August, 2009 (the " Effective Date "), by and between: BluwoodUSA, INC. , a Delaware Corporation organized under the laws of Delaware and with its chief executive offices located at 4357 Cowing Rd., Lakewood, N.Y. 14750 (" BluwoodUSA ") and ECOBLU PRODUCTS, Inc., a Nevada corporation with its chief executive offices located at 909 West Vista Way, Vista California 92083 (" EcoBlu "). This agreement replaces all prior agreements related to the subject matter herein.

A. Bluwood USA is the assigned owner of valuable technical data and intellectual property for a protective coating (the " Product," as defined with greater particularity below) to be used primarily as a factory applied Covered Structure wood component products protective coating utilized within a covered structure when constructing residential or commercial buildings, and designed primarily for protecting covered structure wood component products from: (a) excessive moisture; (b) mold fungus growth; and (c) rot fungi decay; and (d) structural damage caused by common wood ingesting insects including termites.

B. Bluwood USA manufactures the Product and has use of (owner of trademarks and registered trademarks) related to the Product. Bluwood USA desires to enter into an agreement for sales, marketing and distribution rights for the Product to EcoBlu.

C . EcoBlu desires to obtain exclusively: (a) a supply of the Product, (b) use of the technical data, intellectual property and other information relating to the Product, and (c) use of the Marks, together with certain distribution, marketing and sales rights with respect to the Product and all modifications thereof as more fully set forth herein while this agreement is in effect. E . Bluwood USA is willing to grant the rights desired by EcoBlu on the terms and conditions set forth in this Agreement.

F. The Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns.

Now, therefore , in consideration of the covenants contained herein and other good and valuable consideration, Bluwood USA and EcoBlu (each a " Party " and together the " Parties ") hereby agree to the following:

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1.1. " Information " means knowledge and data of any kind, whether or not in tangible form. " Confidential & Privileged Information " means Information other than Trade Secrets disclosed by one Party (the " Disclosing Party ") to the other Party (the " Receiving Party "), which the Disclosing Party does not wish to be made public and which is not required by law to be publicized, provided that the Disclosing Party exercises reasonable efforts to designate the Information as Confidential & Privileged Information, including by marking any such Information disclosed in tangible form to the Receiving Party marked with the legend, “Confidential & Privileged” Information of [Name of Disclosing Party]” or words of substantially similar import, and the specific written designation of any such information disclosed orally as “Confidential & Privileged” in a writing delivered to the Receiving Party at the time of disclosure or within ten (10) days thereafter. For purposes hereof, the existence and terms of this Agreement are Confidential & Privileged Information.

1.2. "Intellectual Property" means any and all now known or hereafter known tangible and intangible: (a) rights associated with works of authorship throughout the universe, including but not limited to copyrights, moral rights, and mask works; (b) trademark and trade name rights and similar rights; (c) Trade Secret rights; (d) patents, designs, algorithms and other industrial property rights; (e) all other intellectual and industrial property rights (of every kind and nature throughout the universe and however designated) (including logos, "rental" rights and rights to remuneration), whether arising by operation of law, contract, license, or otherwise; and, (f) all registrations, initial applications, renewals, extensions, continuations, divisions or reissues hereof now or hereafter in force (including any rights in any of the foregoing).

1.3. "Technology" means all available Information and Intellectual Property (other than Marks) relating to the Product for protecting wood framing, roof and floor truss, roof and floor decking and wall sheathing and all other above-ground contact Covered Structure wood framing component products from reasonable moisture, mold fungus growth, rot fungi decay and structural damage by common wood ingesting insects including termites, together with all additions improvements or extensions thereof.

1.4. "Product" means the product or products more specifically identified on Exhibit A annexed hereto and any improvements or modifications thereof now or hereafter developed, manufactured or sold by Bluwood USA in commercial quantities for the protection of Covered Structure wood component products while this Agreement is in effect.

1.5. "Trade Marks" means all trade names, trademarks, service marks, logos and other designations relating to the Product, as listed on Exhibit B annexed hereto and any other such trade names trademarks, service marks, logos or other designations used by Bluwood USA during the term of this Agreement.

1.6. “Protected Manufacturing Territory/Locations” means:

Territories in the United States and Mexico are as follows:

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California, Oregon, Washington State, Idaho, Utah, Montana, Wyoming, Nevada, Arizona, Texas, New Mexico and Hawaii. The entire country of Mexico

Territories of British Columbia and Alberta Canada will be exclusive to EcoBlu as follows: If EcoBlu is successful with the execution and setup of a company owned, affiliate, subsidiary or customer owned coating facility in either territory within 120 days of the date of execution of this agreement, EcoBlu will be granted the exclusive manufacturing (application) rights for that territory not including OEM accounts. For the purposes of this Agreement the successful setup of a coating facility is defined by having application equipment in place, operational and coating activities underway. If EcoBlu is not successful in securing a coating facility within the specified period then the territories of British Columbia and Alberta Canada will be limited to the below group of identifiable customers only: Jager, Nascor, Weyerhaeuser, Ainsworth, Luxor, AcuJoist/Acutruss, Igloo building products, All Span, Zytek, All-Fab building Components, Tolko.

The following group of customers may be added after 9 months at the sole discretion of BluwoodUSA if the above exclusivity requirements have not been satisfied: Canfor, West Fraser LVL, Taiga.

Non-exclusive OEM accounts throughout Canada: EcoBlu is given the non-exclusive right to pursue OEM accounts throughout all provinces in Canada provided they are not being actively pursued by BluwoodUSA or any other party that BluwoodUSA has authorized or has knowledge of. Information regarding clients who are regarded as actively pursued will be provided upon request.

1.7. "Trade Secrets" means technical and non-technical Information disclosed to the EcoBlu by or on behalf of Bluwood USA during the term of this Agreement or prior thereto that derives economic value, actual or potential, from not being generally known to other persons who could obtain economic value from the disclosure or use thereof, and that is the subject of efforts that are reasonable under the circumstances to maintain its secrecy 1.8. " Person" means any individual, partnership, joint venture, corporation, limited liability company or other corporate entity, association, syndicate, pool, union, trust estate, or government or agency or subdivision thereof, but it shall not include either Party to this Agreement.

1.9. "Product Warranty" means Bluwood USA Perfect Barrier System, Residential and Commercial "CoveredStructure" Warranty attached as Exhibit F to this Agreement. 1.10. "Equipment Application Technology" means all available Information and Intellectual Property (other than Marks) relating to and necessary to the application of the Product through application equipment and apparatus, approved for use and which has been specifically developed by EcoBlu.

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1.11. “Covered Structure” means any wood, roof and floor truss, roof/floor/wall sheathing products, and other structural wood framing component products utilized when building a residential or commercial structure that are protected from exterior weather conditions.

1.1 2 . “Derivative Products” means any wood, roof and floor truss, roof/floor/wall sheathing products and all other structural wood framing component products in which the Products has been applied.

1.13. “CSO” means Coating Service Only for application of the Product to covered structure wood component products.

is the sole owner of the sales, marketing and distribution rights for the Technology and the Marks and that EcoBlu shall have no right, title, or interest therein or thereto other than the rights to such Technology and Marks in the manner and to the extent prescribed in this Agreement or otherwise approved by Bluwood USA .

2.2. No Implied Licenses . Each Party shall exclusively own its own Intellectual Property and neither Party will have any claim or right to the Intellectual Property of the other by virtue of this Agreement except as otherwise provided herein. Neither Party will take any action or make any claim to any Intellectual Property belonging to the other Party, whether during the term of this Agreement or thereafter, which is inconsistent with this Section 2. No right or license shall be implied by estoppel or otherwise, other than the rights and licenses expressly granted in this Section 2.

(a) Grant . Subject to the provisions of this Section 2.3, Bluwood USA hereby grants to EcoBlu, for the term of this Agreement, certain rights within the Manufacturing Territory/Locations, to (i) to make, use, and sell a treatment service only for the application of the Product to Covered Structure wood component products; (ii) to make, use, sell and have sold Covered Structure wood components that have been protected with Product (iii) use the Marks in connection with the foregoing and (iv) to ship treated product in accordance with (i), (ii) and (iii) above into another territory which is not within the Manufacturing Territory/Locations of EcoBlu. During the term of this Agreement, the foregoing rights shall be for factory applied application of Product to wood, roof and floor trusses, roof/floor/wall sheathing products and all other structural wood framing component products utilized within a Covered Structure used in building residential and commercial buildings to protect wood component products against moisture, mold fungus growth, rot fungi decay and common wood destroying insects including termites while the Agreement is in effect.

(b) Initial Disclosure . Bluwood USA will deliver and communicate the Technology