On July 3, 2014, Eco Building Products, Inc. and Eco Red Shield Canada, Ltd. (ERSC) (together, Parties) entered into a Memorandum of Understanding. The parties wish to enter into an exclusive Eco Red Shield affiliate production, sales and distribution agreement. ERSC set up coating facilities in three territories across Canada and distribute the company's Eco Red Shield coated lumber products to Big-Box retailers and other lumbers companies.

ERSC is willing to invest the capital necessary to market the Products and to set up the three facilities necessary to create the company's Products. The company is willing to give ERSC the exclusive right to produce the Products in the Territories for a total of $1,511,030 with payments due in four installments over the course of 360 days. Definitive agreements are expected to be executed within 30 days.

ERSC has paid a non-refundable deposit of $10,000 to the company pursuant to the terms of the LOI.