MEMORANDUM OF UNDERSTANDING JOINT VENTURE AGREEMENT
MEMORANDUM
OF UNDERSTANDING
This
MOU
/ Joint Venture Agreement (the “Agreement”) is effective September 24,
2007.
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BETWEEN:
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Axial
Vector Engine Corporation (the “First Joint Venture”), a corporation
organized and existing under the laws of the Nevada, with its head
office
located at: 000 XX Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx,
Xxxxxx 00000 XXX
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AND:
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Eastcom
LTD (the “Second Joint Venture”), a corporation organized and existing
under the laws of the United Kingdom, with its head office located
at: Suite No. 00,00 Xxxxxx Xxxxxx, Xxxxxx X0X 0XX Xxxxxx
Xxxxxxx.
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This
Agreement is entered by First Joint Venturer and Second Joint Venturer, herein
after collectively referred to as the “Joint Venture”, for the purposes of
performing Engine manufacturing and distribution.
WITNESSETH:
WHEREAS,
the parties are desirous of forming a Joint Venture (the “Venture),
under the laws of the United Kingdom by execution of this Agreement for the
purposes set forth herein and are desirous of fixing and defining between
themselves their respective responsibilities, interests, and liabilities in
connection with the performance of the before mentioned project;
and
NOW,
THEREFORE, in consideration of the mutual covenants and promises herein
contained, the Parties herein agree to constitute themselves as Joint Venturers,
henceforth, “Venturers” for the purposes before mentioned, and intending to be
legally bound hereby, the parties hereto, after first being duly sworn, do
covenant, agree and certify as follows:
1.
DEFINITIONS
“Affiliate”
shall refer to (i) any person directly or indirectly controlling, controlled
by
or under common control with another person, (ii) any person owning or
controlling 10% or more of the outstanding voting securities of such other
person, (iii) any officer, director or other partner of such person and (iv)
if
such other person is an officer, director, joint Venturer or partner, any
businesses or entity for which such person acts in any such
capacity.
“Venturers”
shall refer to [VENTURE NAME] Inc., and any successor(s) as may be designated
and admitted to the Venture.
“Internal
Revenue Codes” “Code” or “I.R.C.” shall refer to the current and applicable
Internal Revenue Code.
“Net
Profits and Net Losses” means the taxable income and loss of the
Venture.
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The
“Book” value of an asset shall be substituted for its adjusted tax basis if the
two differ, but otherwise Net Profits and Net Losses shall be determined in
accordance with federal income tax principles.
“Project”
shall refer to that certain engine development program project known as AVEC
Engines.
“Treasury
Regulations” shall refer to those regulations promulgated by the Department of
the Treasury with respect to certain provision of Internal Revenue
Code.
2. PURPOSE
OF THE JOINT VENTURE
The
purpose of the Venture shall be to perform AVEC engine manufacturing and sales
in Europe and the Middle East.
3. TERM
The
term
of the Venture shall be twenty years.
4.
ACCOUNTING
AND AUDITING
4.1 Books
Eastcom
Ltd will keep books of accounts which may be audited at any time by Axial to
verify sales and royalties. Axial will agree to pay the cost of said
audit.
RESOLUTION
OF DISPUTES
At
disputes arising out of this Agreement between the Venturers that is not
resolvable by good faith negotiations by the same, shall be filed with the
International Arbitration Association in Paris, France and there judgment shall
be final.
5.
OTHER
PROVISIONS
5.1
Eastcom
shall pay to AVEC $500,000 USD as an advance royalty and shall pay per unit
royalty of 20% per engine gross sales. These payments are to be
within ten days of each manufactured engine being completed.
5.2 Eastcom
must begin final assembly engines no later than 120 days from date of signing
unless a written waiver of such date is given by AVEC.
5.3
Eastcom
shall have the right to select two countries which it shall have exclusive
rights to sales, service and market all AVEC projects to for the duration of
this agreement. This selection must be made not later than 30 days
after the first of the initial 200 engines has been produced and delivered
to
the customer.
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6. ENTIRE
AGREEMENT
This
agreement constitutes the entire agreement of the parties and may not be
altered, unless the same is agreed upon in writing signed and acknowledged
by
the parties.
This
agreement is binding upon the heirs, court appointed representatives, assigns,
and successors of the parties.
7. GOVERNING
LAW
This
agreement shall be governed by the laws of the United Kingdom.
IN
WITNESS WHEREOF, each party to this agreement has caused it to be
executed at [place of execution] on the date indicated below.
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FIRST
PARTY
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SECOND
PARTY
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Authorized
Signature
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Authorized
Signature
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/s/
Xxxxxx
Xxxxxxx
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/s/
Behzed
Khakbuei
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Xxxxxx
Xxxxxxx
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Behzed
Khakbuei
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Chairman
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Managing
Director
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