Accounting and Profit Distribution. The Parties will evenly split the profits generated by the Joint Venture. Profits shall be further defined in the below outlined JV Procedures, but will generally be understood to mean revenues, less sales taxes, less direct cost of goods, less direct shipping costs, less admin & warehousing costs, pre-approved by the Parties. Neither Party shall add general corporate overhead expenses to the Joint Venture. The Parties agree that the spirit of this Joint Venture is for each Party to charge only direct and easily provable, easily documentable expenses to the Joint Venture and not to change the Joint Venture for general overhead or corporate personnel related expenses. Within ten (10) of the Effective Date, each Party will present to the other Party a full list of expenses it expects to incur in support of the Joint Venture. The Parties shall agree on this list within Five (5) business days of presentation. These agreed to expenses will become the basis for tracking, accounting, payment processing, banking and reporting procedures (the “JV Procedures”) to be implemented by the Parties in support of the Joint Venture. It is understood there may be some non-significant direct costs not thought of at beginning of relationship or that change over time. MCTC shall be responsible for finalizing JV Procedures in conjunction with RxLeaf. Both Parties shall approve the finalized JV Procedures and will agree to be bound by such procedures, which shall serve as the basis for successful operations. These procedures will include certificates of analysis and how often provided to RxLeaf, third party testing, the extraction process by product and how to handle any product changes
