EXHIBIT 10.1

RESEARCH AGREEMENT

THIS AGREEMENT, effective as of September 17, 2007 (“Effective Date”), is made
and entered into by and between INTERNATIONAL ENERY CORPORATION, having an
address at Suite 216 - 1628 West 1st Avenue, Vancouver, British Columbia, V6J
1G1, Canada ("Sponsor") and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a
California Corporation, acting through its Industry Alliances Office at the
University of California, Berkeley, 2150 Shattuck Avenue, Suite 950, Berkeley,
CA 94704-6701 (“California”).

Recitals

WHEREAS, California has established a laboratory directed by Dr. Anastasios
Melis to conduct research in the field of algal biochemistry and photosynthesis;
and

WHEREAS, the Sponsor wishes to provide financial support for research at the
laboratory described in Article 1 and in order to obtain certain rights with
respect to the results of the research;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereby agree as follows:

1.

Statement of Work

California shall perform research in accordance with its proposal entitled
“Hydrocarbon generation technologies in green microalgae,” which is attached
hereto and incorporated herein as Exhibit A.

2.

Period of Performance

The period of performance of this agreement will be from the Effective Date
through September 16, 2009 unless extended by mutual agreement or terminated in
accordance with Article 14.

3.

Support for the Research

A.

Sponsor agrees to pay $238,680 to California for the support of Research,
payable to California quarterly in advance.  The first payment will be due
within thirty (30) days after execution of this agreement. Payment should be
mailed to:

Extramural Funds Accounting

ATTN: Cynthia Kane, Manager

2195 Hearst Avenue, Room 130

Mail Code 1103

University of California

Berkeley, California 94720-1103

California will invoice Sponsor when payment is due.

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B.

If, at any time, California has reason to believe that the cost of the work will
exceed the amount set forth in Paragraph A above, California will notify Sponsor
in writing, giving a revised budget for completion of the work. Sponsor will not
be obligated to reimburse California for any cost in excess of the amount set
forth in Paragraph A and California will not be obligated to continue the work
or incur costs in excess of that amount unless and until this Agreement is
amended in writing and duly executed on behalf of the parties.

C.

Upon expiration or termination of this Agreement California shall provide a
final report of expenditures to Sponsor and return any unexpended or uncommitted
funds, respectively.

4.  Project Management

A.

The work will be performed under the direction of Professor Anastasios Melis
(“Principal Investigator”).  No substitution may be made for Principal
Investigator without the prior written concurrence of Sponsor.

B.

California’s contact for technical matters relating to the work performed
hereunder is:

Anastasios Melis, Ph.D.
University of California at Berkeley
471A Koshland Hall
Berkeley, California 94720

Ph:  (510) 642-8166

Email:  melis@nature.berkeley.edu

California’s contact for administrative matters relating to the work performed
hereunder is:

Michael E. Katz, Ph.D.

Director

Industry Alliances Office
University of California

2150 Shattuck Avenue, Suite 950
Berkeley, California 94704-6701

C.

California agrees to permit Sponsor's representatives to confer as reasonably
necessary with Principal Investigator. It is understood and agreed that
Sponsor's representatives have no authority to supervise, direct or control the
work performed hereunder.

5.   Reporting Requirements

A.

Principal Investigator will promptly make an Invention Disclosure Report to the
Sponsor with respect to any new and useful process, machine, manufacture or
composition of matter conceived and reduced to practice, during the term of this
Agreement in the performance of Research hereunder ("Invention") reported to it
by Principal Investigator or an individual working under his/her direction.

B.

Principal Investigator will furnish the Sponsor monthly brief Emails and
biannual written reports, summarizing Research activity not previously reported
pursuant to Article 5(A) hereof (individually, a “Research Information Report”).
 Such Research Information Reports will document information and materials
(including any chemical compound or substances, biological cell, or component
thereof, whether derived from biological material or synthesized) developed in
the course of Research hereunder, but which does not constitute an Invention
("Research Information").  The final Research Information Report within ninety
(90) days of the term or termination of this Agreement, whichever occurs first.

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6.  Confidentiality

A.

The Sponsor will treat as confidential all Invention Disclosure Reports and
Research Information Reports, as well as any other reports, information and
materials furnished hereunder which California has designated as "Confidential.”
 Except to the extent permitted under a license agreement entered into pursuant
to Article 7 hereof, the Sponsor will not disclose or make available any
information disclosed in such Invention Disclosure Reports and Research
Information Reports and other confidential reports, information, and materials
to any third party without California's written permission and will use
Inventions and Research Information only for the purpose of evaluating its
interest in future research or possible commercial development of the results of
Research.

B.

California may, but is not obligated to, receive confidential information from
Sponsor. California will not disclose or make available confidential information
received from the Sponsor to third parties without Sponsor's written permission.
California's obligations under this paragraph apply only to information that the
Sponsor has designated in writing as "Confidential" and that the Sponsor submits
so marked to California.

C.

The obligations of confidentiality under this Article 6 do not apply to any
information that:

1.

was known to the party receiving the information prior to receipt thereof from
the other party;

2.

was or becomes a matter of public information or publicly available through no
act or failure to act on the part of the party receiving the information;

3.

is acquired by the party receiving the information from a third party entitled
to disclose the information to it; or

4.

is developed independently by the receiving party.

7.  Sponsor Licenses

A.

Subject to any limitations imposed by law or by the terms of a government grant,
the Sponsor will be entitled to negotiate a license in good faith from
California, at commercially reasonable royalty rates, license fees and other
material terms and conditions to be negotiated in good faith by the parties, and
with due consideration for the relative contributions of California and Sponsor
required to commercialize related products, for any Invention or Research
Information.  California is free to enter into a licensing agreement for any
Invention or Research Information with any other person if the Sponsor does not
give notice of commencement to negotiate a license with respect to any Invention
or Research Information within 90 days after receipt of an Invention Disclosure
Report or Research Information Report in accordance with Article 5, or if the
parties are unable to reach agreement on the terms of the license agreement
within 180 days after receipt of an Invention Disclosure  Report or Research
Information Report.

C.

Subject to Sponsor's license rights described in paragraph (A) of this Article
7, California will have sole right, title, and interest to any Invention and
Research Information.

D.

Except as expressly provided above, nothing contained in this Agreement shall be
deemed to grant either directly or by implication, estoppel, or otherwise any
license under any patents, patent applications or other proprietary interests of
any other invention, discovery or improvement of either party.

8.  Patent Prosecution

A.

Within 90 days of receiving an Invention Disclosure Report under Article 5(A),
Sponsor will advise California in writing whether it wishes a patent application
to be made with respect to such Invention.

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B.

If Sponsor determines that it wishes an application to be made for California
inventions, California, by counsel it selects to whom Sponsor has no reasonable
objection, in consultation with counsel appointed by Sponsor, will prepare, file
and prosecute such application in California ‘s name and in countries designated
by Sponsor.  Sponsor will reimburse California for reasonable expenses it has
incurred and will pay expenses incurred in the future in so filing and
prosecuting such applications, including attorneys' fees, taxes, annuities,
issue fees, working fees, maintenance fees and renewal charges.

C.

If Sponsor does not wish to have a patent application filed or prosecution
continued with respect to an Invention in a particular country or countries,
California may file such application or continue prosecution at its own expense,
and California will be free to enter into a licensing agreement for or otherwise
dispose of its patent rights in such Invention for the countries for which
California has filed such applications or continued such prosecution at its own
expense with any other person or persons on any terms.

9.  Publication

California will have the right to publish, disclose, disseminate and use, in
whole and in part, any data or information received or developed under this
agreement. Copies of any proposed publication will be provided to Sponsor thirty
(30) days prior to submission for Sponsor's review, comment, and identification
of any of Sponsor's proprietary data which has inadvertently been included and
which Sponsor wishes to have deleted. During this review period, Sponsor may
also identify patentable inventions for which it wishes California to file for
patent protection. In such case, California will delay publication up to an
additional sixty (60) days in order to file such patent application.

10.  Title to Equipment

In the event that California purchases equipment hereunder, title to such
equipment will vest in California upon acquisition.

11.  Record Retention

Financial records, supporting documents and other records pertaining to this
agreement shall be maintained and retained by California for a period of three
years from the termination date of this agreement.

12.  Use of Name

A.

Sponsor and California agree that neither shall use the name of the other in any
advertising or publicity material, or make any form of representation or
statement in relation to Research conducted under the terms of this Agreement
which would constitute an express or implied endorsement of any commercial
product or service, nor authorize others to do so, without first having obtained
written permission from the other.  

B.

Notwithstanding the foregoing, California acknowledges that Sponsor is a
wholly-owned subsidiary of a corporation having a reporting obligation under the
Securities Exchange Act of 1934, as amended, which has or may have certain
disclosure and filing obligations under applicable law, including but not
limited to the public announcement and disclosure of this Agreement and the
filing of the same with the United States Securities and Exchange Commission; it
is acknowledged and agreed that such disclosure and filing shall not be deemed a
violation of this Agreement.

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13.  Notices

Whenever any notice is to be given hereunder, it will be in writing and
transmitted by receipt-confirmed facsimile, overnight courier, registered or
certified mail (return receipt requested), or hand delivered as follows:

If to California:

  

The Regents of the University of California
Industry Alliances Office
2150 Shattuck Avenue, Suite 950
University of California at Berkeley
Berkeley, CA 94720-1610
Attention:  Director

 

 

 

If to Sponsor:

 

International Energy Corporation
Suite 216 – 1628 West 1st Avenue

Vancouver, BC, V6J 1G1
Attention:  Nicholas Cucinelli

14.  Term and Termination

A.

This Agreement shall be in effect as of the Effective Date and shall continue in
full force and effect, for a period of two (2) years, unless earlier terminated
as herein provided, for thereafter.

B.

Upon 30 days' prior written notice either party may terminate this Agreement for
a material breach of the Agreement by the other party if such breach has not
been cured within 30 days after written notice of the breach has been given.

C.

This Agreement shall automatically terminate if either party commits any act of
bankruptcy, becomes insolvent, files a petition under any bankruptcy or
insolvency act or has any such petition filed against it.

D.

The Sponsor's obligations under Articles 5,6, 9 and 12 and, except for
termination because of the Sponsor's default, the Sponsor's rights under Article
7 shall survive the termination of this Agreement.

E.

On termination of this Agreement because of the Sponsor's default, the Sponsor
will have no further rights hereunder, and all licenses granted pursuant to
Article 7 shall automatically terminate on the date of termination of this
Agreement.

15.  Assignment

This Agreement and all rights and obligations hereunder shall be binding upon
and inure to the benefit of the parties, their respective successors and assigns
of all of the business to which this Agreement relates.

16.  Governing Law; Miscellaneous

This agreement will be governed and construed by the laws of the State of
California.  Nothing in this Agreement shall be construed as a promise by
California to achieve any specific research result. In the event of a conflict
between this Agreement and any attachment hereto, the terms of this Agreement
will govern.

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17.  Entire Agreement; Amendment

This agreement states the entire contract between the parties with respect to
the subject matter of the agreement and supersedes any previous written or oral
representations, statements, negotiations, or agreements. This agreement may be
modified only by written amendment executed by the authorized representatives of
both parties.

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
by their duly authorized representatives.

INTERNATIONAL ENERGY

CORPORATION

 

THE REGENTS OF THE UNIVERSITY

OF CALIFORNIA

/s/ Nicholas Cucinelli

 

/s/ Michael E. Katz

(Signature)

Name: Nicholas Cucinelli

 

(Signature)

Name:  Michael E. Katz

Title:  President

 

Title: Director, IPIRA/Industry Alliances

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Confidential: Contains Proprietary Information

ARTICLE A

International Energy Corporation

Hydrocarbon generation technologies in green microalgae

Overview of Project

Goals

Project aims to develop protocols for the growth of microalgal cultures and for
the generation of long chain liquid hydrocarbons. These hydrocarbons are derived
directly from the photosynthesis of the green microalgae.

Approach

Employ microalgae that naturally photosynthesize carbon dioxide (CO2) and water
(H2O) to hydrocarbons, and accumulate up to 30% of their biomass in the form of
valuable biofuels.

Product Utility

·

Green algal hydrocarbons can be utilized as bio-diesel fuel in internal
combustion engines.

·

Green algal hydrocarbons can further serve as feedstock in the synthetic
chemistry and pharmaceutical industries.

·

The remaining green algal biomass can be divided into the elastic cell wall
material (feedstock in biodegradable polymers) and the protein meal of the cells
(serves as vitamin-rich animal feed).

Potential for industrial scale application

Method is easy to implement in industrial scale upon growth of the microalgae in
photo-bioreactors. Process has the potential to generate renewable energy and
biomass, while it sequesters carbon dioxide from the atmosphere. It is
environmentally friendly and helps prevent climate change.

Detailed Project Summary

The work seeks to convert water and carbon dioxide into useful long-chain liquid
hydrocarbons from the photosynthesis of unicellular microalgae. Hydrocarbons
offer advantages in production, storage and utilization of renewable biofuels,
as they can be harvested easily, stored in liquid form, are environmentally
safe, and do not require special containment systems. Such hydrocarbons can be
produced locally and be utilized as vehicular fuel, for heating, or electricity
generation.  The novel concept and approach of this proposed R&D constitutes
“thinking outside the box”, entails moderate risk, it has a high technical
feasibility, and the potential for a substantial pay-off in a relatively short
period of time.

Advantage of Unicellular microalgae: Factories of photosynthesis, seen by many
as the ultimate approach to environmentally friendly energy generation, can
potentially operate with a solar-to-product energy conversion efficiency of up
to about 10%.

The process: The photosynthesis of microorganisms is directed toward the
accumulation of hydrocarbon products, generated from carbon dioxide (CO2) and
water (H2O), with energy provided by sunlight.

Advantage of the approach: Non-toxic, non-polluting, offers a renewable energy
supply, carbon sequestration, and mitigation of climate change.