MEMORANDUM OF UNDERSTANDING
This
Memorandum of Understanding (hereinafter referred to as “MoU-A”) is made this
10th
day of
September, 2005 by and between:
Kirloskar
Oil Engines Limited, a company incorporated under the Companies Xxx 0000 and
having its registered office at Pune, hereinafter referred to as KOEL (which
expression shall mean and include its successors and representatives) as the
party of the FIRST PART;
Axial
Vector Engine Corporation (Previously known as Aero Marine Engine Inc Name
change effective May 31, 2005), a company incorporated in Nevada, USA and having
its registered office at Portland Oregon USA, hereinafter referred to as AVEC
(which expression shall mean and include its successors and representatives)
as
the party of the SECOND PART; WHEREAS:
KOEL
is
an established company in India and is involved in the Research, Development
and
Manufacturing of Diesel Engines for various applications, bearings, valves
and
catering to markets in India and a few Overseas markets as well.
AVEC
is a
company possesses a unique technology in the field of internal combustion engine
and generator sets (Gen Sets) which have potential use in a wide range of
applications such as the military, automotive, power generation, fluid handling,
aviation, boats and ships, etc. Hereinafter, this unique technology is referred
to as Axial Vector Engine (AVE).
Both
the parties wish to work together for mutual benefit on the following
understanding:
| 1. |
KOEL
is keen to obtain manufacturing license to manufacture AVE in India
and
AVEC is agreeable to grant such a license on terms and conditions
to be
agreed to.
|
| 2. |
On
execution of this MoU, KOEL will deposit one (1) million United States
Dollars (USD) in a separate bank account in India solely controlled
by
KOEL. And, KOEL will formally instruct the bank to promptly advise
AVEC of
the creation of the account and all activities that occurs in the
account.
|
| 3. |
As
result of depositing the amount as above, KOEL will have the following
rights:
|
3.1 First
right of refusal for stationary use of AVE and Gen Sets such
as generating
sets and pumping sets amongst other such applications, and non-automotive
mobile use
such as tractor engines, excavator engines, loader
engines, fork life truck engines, farm and forestry applications.
3.2 AVEC
will
provide enough opportunities to KOEL to conduct.
3.21 Detailed
Technical Due Diligence. The estimated time to complete due diligence
is January 2006.
3.2.2 Commercial
Feasibility Study for the manufacture of AVE in India under license.
The estimated time to complete the study is April 2006.
3.3 AVEC
will
deal exclusively with KOEL concerning the manufacture of AVE
under
license in India as identified in Item 3.1 and AVEC will not entertain,
solicit or discuss
with any third party the subject matter of this MoU
as
defined in Item 3.1
4. The
one
million dollars referred in Item 2 above shall be kept in the bank account
until
one
or more of the following events occur:
4.1 The
final
agreement for manufacture of AVE in India under license is executed
after all the due diligences, commercial feasibility and trials
and negotiations
are complete.
The money from the bank account will then be used
as
license fees to AVEC.
4.2 If
the
final agreement for manufacture of AVE in India under license
is not
executed by June 2006 for any reason KOEL will be free to deal
with the
bank
account in
whatever way it deems proper.
5. In
response to the KOEL desire described above, AVEC is agreeable to exclusive
negotiation
a license for the said products identified in Item 3.1 during the validity
of
this
MoU.
6.
The
parties will share their proprietary information to each other. Such proprietary
information
shall be confidential and shall be kept secret as per the terms and conditions
agreed
between the parties in confidential agreement dated May 12, 2005,
a
copy of which appears as Annexure to this MoU.
7.
All
disputes, proceedings, claims by either Party and suits in relation to this
MoU
shall
be
referred to Arbitration. The arbitration proceeding shall be governed by
the
Arbitration and Conciliation Xxx 0000 and the Place of such Arbitration shall
be
Singapore.
8.
This
MoU
shall remain in force till June 2006. The MoU may be extended by the
written
and mutual consent of KOEL and AVEC.
IN
WITNESS WHEREOF the parties hereto have set and subscribed their hands to the
writing (in duplicate) on the day and year mentioned above.
| For: Kirloskar Oil Engines Limited |
For: Axial Vector Engine
Corporation
|
|
/s/ Atul
Kirloskar
_____________________
|
/s/
Xxxxxxx Xxxxxxx
_____________________
|
| Authorized Signatory | Authorized Signatory |
| Date: 10 September 2005 | Date: 09 September 2005 |
| Place: Pune India | Place: Montreal |
