EXHIBIT 10.1
JOINT VENTURE AGREEMENT
This Joint Venture Agreement ("Agreement") is made on January 17, 2006
("Effective date") between NU POW'R, a Nevada Limited Liability Company, with
it's principal offices at X.X. Xxx 000000, Xxxxxxxx, XX 00000 (hereinafter "NP")
and Armor Electric Inc., a Nevada Corporation, with its principal offices at 000
Xxxxx Xxxxx Xx #000 Xxxxxx Xxxxx, XX.,
00000 (hereinafter "Armor")
RECITALS
WHEREAS, The Joint Venturers have agreed to make and distribute Electric
Propulsion Systems that make use of a `modular' and `system approach' to propel
electric vehicles. The Joint Venturers have also agreed to produce two, three,
and four wheeled vehicles, Scooters and other products, ("Products");
hereinafter called the ("Business Interest").
The Joint Venturers consider it advisable to acquire and to hold their Business
Interest through a Joint Venture company (L.L.C.) so as to avoid the necessity
of numerous separate agreements, to maintain the legal title to the Business
Interest in a simple and practicable form, and facilitate the collection and
distribution of the profits accruing under the Business Interest.
IT IS THEREFORE AGREED
1. PURPOSE.
That the Joint Venturers form this joint venture to acquire and hold the
Business Interest in common and to provide the finances required for its
acquisition. To the extent set forth in this Agreement, each of the Joint
Venturers appoint as their agent ARMOR Electric, Inc., hereinafter referred
to as "Agent" whose duty it shall be to hold each of the undivided
fractional parts in the Business Interest for the benefit of, and as agent
for, the respective Joint Venturers.
2. DUTIES OF THE AGENT
a. The Agent will, on behalf of the Joint Venturers, form a new Limited
Liability Company, hereinafter referred to as "JVC", in either the
State of California or Nevada for the purpose of conducting the
business activities of the Business Interest. Ownership equity in the
JVC will be established as set forth in this Agreement.
b. The name, trademarks, logos, domains, and other identifying features
of the JVC will be agreed to by the Joint Venturers prior to formation
and/or acquisition by the Agent.
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c. The Agent shall be responsible for the administrative oversight of the
JVC and shall prepare and maintain, in accordance with generally
accepted accounting principles consistently applied, complete and
accurate books of account and records covering all transactions
arising out of or relating to this Agreement. Joint Venturers or their
duly authorized representatives have the right, during regular
business hours, for the duration of this Agreement and for a period of
three (3) years thereafter to audit said books of account and records
and examine all other documents and material in the possession or
under the control of the Agent with respect to the subject matter and
the terms of this Agreement, including without limitations, banking
records, payments, credits, debits, purchase orders, invoices, and
shipping documents. All such books of account, records, and documents
shall be kept available by Agent for at least three years after the
end of the calendar year to which they relate.
d. At such time as the Joint Venturers deem appropriate, and the JVC can
assume these functions internally, the Agent will cease its
activities, relinquish control and responsibility as Agent, and
facilitate the transition of its functions to the designee of the
Joint Venturers.
3. LIABILITY OF AGENT.
The Agent shall be liable only for its own willful misfeasance and bad
faith, and no one who is not a party to this Agreement shall have any
rights whatsoever under this agreement against the Agent for any action
taken or not taken by the Agent.
4. CONTRIBUTIONS
a. Armor shall be responsible for initial capitalization of the NC and
have the on-going responsibility for providing Operational as well as
Research and Development (R&D) capital necessary until such time as
the JVC can sustain itself from revenues derived from its business
activities.
b. NP will Vend-in to the NC its current EPS Technology, (including
technologies related to the associated vehicles) as well as all
existing contracts and/or prospective contracts, (related to the EPS
Technology and associated vehicles) in consideration of a Vend-in fee
for Technology of $10,000,000.00 (Ten Million U.S. dollars) in
accordance with the schedule below.
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i. Vend-in fee will be paid as 50% ($5,000,000.00) U.S. dollars to
NP and 50% ($5,000,000.00) equity in the Joint Venture Company
(JVC)
ii. Payment 1: $50,000.00 payable on January 13, 2006; PAYMENT OF
WHICH IS HEREBY ACKNOWLEDGED.
iii. Payment 2: $50,000.00 payable upon the execution of this
agreement.
iv. Payment 3: $150,000.00 payable as needed for operations of the
Joint Venture between execution of this Agreement and April 1,
2006
v. When all payments through paragraph (iv) have been made, Armor
shall secure a Twenty-five percent (25%) equity interest in the
Joint Venture Company and retain an option to secure another 25%
for a total of 50% upon payment of an additional $250,000.00
vi. The balance of $4,750,000, (or $4,500,000 respectively) cash
component is to be paid as either a percentage of sales or
royalties equal to twenty five percent (25%) of the gross profit
from sales activities, (profits realized to the Joint Venture
after all cost related to producing product, including
manufacturing, freight, and all other costs relating to the
delivery of product to the client and any other reasonable
expense). All funds received by NP in accordance with this Joint
Venture Agreement will be credited towards the Vend-in fee until
satisfied.
c. The Joint Venturers will work together and expend their best efforts
toward the development, production, marketing, and sales of Products
to the benefit of the JVC.
5. BUSINESS PROCESS.
The business process of the Joint Venture is as follows:
a. Armor will, with technical support from NP, be responsible for
Marketing and Sales of the Products until such time as the NC can
assume this function internally and fund its business activities from
revenues derived sales.
b. Armor will, as Agent, provide administrative services to the JVC until
such time as the JVC can assume this function internally and fund its
business activities from revenues derived sales.
c. NP will negotiate most favorable pricing contracts for components from
its suppliers for the JVC. The JVC will purchase components directly
against the contracts from the suppliers.
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d. NP will sell the Energy Storage Systems, (ESS) and Battery Management
Systems, (BMS) to the JVC on a cost basis.
e. NP will be the sole source supplier for all Energy Storage Systems
used by the JV with its products.
f. All Products designed, developed, and intellectual property resulting
from the R&D efforts of the JVC will be the sole property of the NC.
6. ASSIGNMENT
a. Either Joint Venturer may, at its election, assign any or all of their
rights, equity, or delegate their obligations under this Agreement
i. To any Person or entity that acquires or otherwise succeeds
(whether by merger, acquisition of assets, or otherwise) all or
any portion of the Joint Venturers assets or business. In the
event that either or both Joint Venturer(s) assigns its rights,
equity, or delegates its obligations under this Agreement as
permitted by this Section 4.b.i., such Joint Venturer shall
automatically, (and without the necessity of any further action
on the part of the other Joint Venturer) be fully and
unconditionally released and discharged from all of its
obligations of this Agreement.
7. PINSTRIPE
It is agreed between the parties of this agreement that the initial
$250,000.00 will be raised by Armor in cooperation with Pinstripe Financial
LLC, hereinafter ("Pinstripe"). In consideration, Pinstripe shall secure a
33.3% share of the net profits realized by the JVC from the Contract
identified as "BIMO". The Net Profit distributions from the BIMO contract
will be as follows:
a. Pinstripe: 33.3%
b. Armor: 33.3%
c. NP 33.3%
8. CAPITAL DISTRIBUTIONS FROM THE JVC.
a. Net Profits" and "Net Losses" shall mean the income, gain, loss,
deductions, and credits of the JVC in the aggregate or separately
stated, as appropriate, determined in accordance with the method of
accounting at the close of each fiscal year employed on the JVC's
information tax return filed for federal income tax purposes.
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b. Net Profit and/or Net Loss shall be allocated to the Joint Venturers
in proportion to their Equity Interests in the P/C and pursuant to the
Operating Agreement of the JVC.
9. ADDITIONAL OPTIONS
Armor and/or the JVC shall have the option to purchase rights to other
technologies with reasonable and acceptable terms; developed by NP other
than Propulsions Systems.
10. TERM.
This Agreement shall terminate and the obligations of the Agent shall be
deemed completed on the happening of either of the following events:
a. The receipt and distribution by the Agent of the final net profits
accruing under the Business Interest, or:
b. Termination by mutual assent of all Joint Venturers.
11. COMPENSATION OF AGENT.
Unless otherwise agreed to in the future by a majority in interest of the
Joint Venturers, the Agent shall not receive any compensation for services
rendered under this Agreement.
12. ARBITRATION AND ATTORNEYS FEES.
The Joint Venturers agree that any dispute, claim or controversy concerning
this Agreement or the termination of this agreement, or any dispute, claim
or controversy arising out of or relating to any interpretation,
construction, performance or breach of this Agreement shall be settled by
arbitration to be held in San Diego, California in accordance with the
rules then in effect of the American Arbitration Association. The
arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction. The Joint Venturers
will pay the costs and expense of such arbitration in such proportions as
the arbitrator shall decide, and each Joint Venturer shall separately its
own counsel fees and expenses.
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13. GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION.
This agreement will be governed by the laws of the State of California
without regard for conflicts of laws principles. Each Joint Venturer hereby
expressly consents to the personal jurisdiction of the State and Federal
courts located in the State of California for any lawsuit filed there
against any party to this agreement by any other party to this agreement
concerning the Joint Venture or any matter arising from or relating to this
agreement.
14. COMPLETE UNDERSTANDING; MODIFICATION.
This Agreement constitutes the complete and exclusive understanding and
agreement of the Joint Venturers with respect to the subject matter hereof
and supersedes all prior understandings and agreements, whether written or
oral, with respect to the subject matter hereof. Any waiver, modification,
or amendment of any provisions of this Agreement will be effective only if
in writing and signed by the parties hereto. Failure of either Party at any
time to enforce any provisions of this Agreement shall in no way affect the
validity of this Agreement. The exercise by any Party of any of its rights
under this Agreement shall not preclude or prejudice such Party from
exercising the same or any other right it may have under this Agreement
irrespective of any previous action taken.
15. INTEGRATION.
This Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby. If any
representation, warranty, promise, or statement has not been written
specifically into this Agreement, then such representation, warranty,
promise, or statement shall not be binding upon the parties hereto.
16. CONFIDENTIALITY.
The parties agree to maintain complete confidentiality concerning the
business affairs of the other and all proprietary information which each
may receive from the other. The parties agree to assume that any
information, which is divulged to the other, is proprietary information and
each agrees not to divulge, disclose, or disseminate any such proprietary
information to third parties without the written consent of the other.
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17. NOTICES
All notices required or permitted under this Agreement will be in writing
and delivered by confirmed facsimile transmission, by courier or overnight
delivery service, or by certified mail, and in each instance will be deemed
given upon receipt. All notices will be sent to the addresses set forth
below or to such other address as may be specified by either Joint Venturer
to the other in accordance with this Section.
For: NP For: ARMOR
NU POW'R, LLC. Armor Electric, Inc.
P.O. Box: 130369 000 Xxxxx Xxxxx Xx, Xxxxx 000
Xxxxxxxx, XX 00000-0000 Xxxxxx Xxxxx, XX 00000
ATTN: Xxxxx X. Xxxxxx ATTN: Xxxxxxx X. Xxxxx
Managing Member President
Phone: 000-000-0000 Phone: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
e-mail: Xxxxx.Xxxxxx@XXXXXX.xxx e-mail: Xxxxxx@xxxxxxxxxxxxxx.xxx
18. WAIVER.
The waiver of any breach of any provision of this Agreement shall not
constitute a waiver of any subsequent breach of the same other provisions
hereof.
19. COUNTERPARTS.
This Agreement may be executed in counterparts.
In witness whereof the Agent and the Joint Venturers have signed and sealed this
Agreement as off the effective Date.
NP ARMOR
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NO POW'R, LLC. Armor Electric Systems, Inc.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxx
Managing Member President
Date: 20 Jan 2006 Date: January 20, 2006
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