Attached files
Exhibit 10.1
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (this "Agreement") is entered into in accordance
with the laws of the Nevada and other relevant laws and regulations, by and
between PROJECT X, INC., a Nevada corporation ("PJTX") and its parent company
EARTH DRAGON RESOURCES, a Nevada corporation ("EARH") and DEEP MARINE SALVAGE
INC., a Nevis corporation ("DMS") (DMS, PJTX and EARH are collectively
hereinafter referred to as the "Parties"), in accordance with the principles of
equality and mutual benefit, and through friendly consultations, for the purpose
to jointly participate in a Joint Venture company (the "Joint Venture") for the
purpose of seeking, locating and obtaining cargo from shipwrecks located
globally. This agreement supersedes the Joint Venture Agreement dated January
13, 2012.
ARTICLE I
PARTIES OF THE JOINT VENTURE
SECTION 1.1 PARTIES
Parties to this Joint Venture are as follows:
PJTX, with its principal place of business located at 402 West Broadway, Suite
400, San Diego, California 92101.
Current Legal representative: Name: J. Michael Johnson
Position: Chief Executive Officer
Nationality: U.S.
DMS, registered in Nevis, West Indies, with its principal place of business
located at Hunkins Plaza, Charlestown, Nevis, West Indies.
Legal representative: Name: Nigel Smith
Position: President
Nationality: British
ARTICLE II
DEFINITIONS
SECTION 2.1 DEFINITIONS
"ALLOCATION" means the percentage of Recovered Materials received by each Party
in accordance with their respective ownership of the Joint Venture as set forth
in Article V hereof.
"INTELLECTUAL PROPERTY" includes but is not limited to historical research,
survey plans, technical concepts and patent rights to all technical developments
and/or equipment, hardware and software designs.
"NET REVENUE" is defined as all monies and\or cargo received by the Joint
Venture after repayment of all investment monies paid into the Joint Venture and
the government has taken its percentage pursuant to the licenses issued by the
UK government for the Targets.
"PRECIOUS METALS" means gold, silver and platinum group metals.
"COMMODITY METALS" means copper, tin, nickel, zinc, lead, molybdenum, antimony,
bismuth or other bulk metals used in commercial manufacturing processes.
"RECOVERED VALUABLES" means all items that are recovered from a shipwreck as a
result of this Agreement, including but not limited to coins and bullion of all
types of metals both precious and commodity; jewelry, precious and semi-precious
stones, religious items, navigation instruments, ships hardware, weapons, armor,
ammunition, dining utensils, porcelains, ceramics, pottery, personal effects,
general merchandise and miscellaneous items.
ARTICLE III
ESTABLISHMENT AND TERM OF THE JOINT VENTURE
SECTION 3.1 NAME AND JURISDICTION OF JOINT VENTURE
The name of the Joint Venture and its registered place of business shall be
determined by the Parties.
SECTION 3.2 TERMINATION OF THE JOINT VENTURE
The Joint Venture will stay in effect until all three intended salvage Targets
have been salvaged to the fullest extent operationally possible within the
project funding capabilities and the distribution of profits have occurred in
accordance with section 11.
ARTICLE IV
GENERAL PROVISIONS OF THE JOINT VENTURE
SECTION 4.1 PRIMARY OBJECTIVE
The goals of the Parties to the Joint Venture are to successfully locate and
recover the cargo from the three World War I era shipwrecks that DMS currently
hold asset recovery licenses from the UK governments Department for Transport.
These Targets are known to have carried precious metals. The business of the
Joint Venture shall be to search for, survey, excavate, preserve, catalog,
liquidate cargo and distribute profits from the Recovered Valuables from the
above-described shipwrecks.
SECTION 4.2 SCOPE
The initial scope of the Joint Venture shall be confined to a cluster of three
(3) wrecks located in close proximity in the same geographic area. These 3
Targets are defined by the three licenses from the British government currently
in the possession of DMS and have been disclosed by DMS to PJTX. Such three (3)
licenses, as disclosed by DMS to PJTX, shall be the scope of the Joint Venture
and are referred to herein as the "Targets".
SECTION 4.3 LOCATION AND TERM
The identity of the Targets and their locations have been determined by DMS. The
Joint Venture shall continue from the date that this Agreement is fully executed
by each Party and shall continue in existence until PJTX and any other
participants have received the stipulated returns on capital contributed from
the three Targets as stipulated in Section 11 hereof, unless earlier terminated,
liquidated or dissolved by law or as hereinafter provided.
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ARTICLE V
CONTRIBUTIONS AND JOINT VENTURE
OWNERSHIP INTERESTS
SECTION 5.1 THIRD PARTY EXCLUSIVITY AND SALES
PJTX shall remain the only third party contracted by DMS for raising funds for
the deep water salvage venture of the Targets through an independent investment
structure. Any and all contacts, leads or potential investors that DMS would
like to introduce to the Joint Venture must be provided to PJTX. PJTX and DMS
through their collective fund raising efforts may engage other Parties to offer
the Joint Venture investment to their respective clients. Said commissions are
limited to 10% of the investment obtained by the Joint Venture. Engagement of
any third party to represent the Joint Venture on a commission basis must be
approved by PJTX.
SECTION 5.2 OPERATIONAL FUNDING
Throughout the term of this Venture PJTX shall have the right to a 50% interest
in the Joint Venture in exchange for the contribution of sufficient operational
funding required to bring the Joint Venture to profitable, self-funding status;
subject to the terms and conditions set forth below;
SECTION 5.2.1 CAPITALIZATION
PJTX and its parent company EARH shall provide initial capitalization to
the Joint Venture in the amount of US $10,000,000. The Parties to this
Agreement have determined that this level of capitalization is reasonably
sufficient to achieve profitability. Actual operating costs will be subject
to market prices at the time of operations. EARH has pledged 10 million
shares of its common stock to DMS which will remain outstanding until the
funds are raised, pursuant to a written Pledge Agreement dated April 27,
2012, entered into by and between PJTX, EARH and DMS.
SECTION 5.2.2 CAPITALIZATION THRESHOLD
PJTX and its parent company EARH will contribute up to US $25,000,000 if
said level of capitalization is required to attain profitable, self-funding
status of the Joint Venture, as mutually agreed to by the Parties.
SECTION 5.2.3 ADDITIONAL CAPITAL
In the event that the Joint Venture requires capital in excess of $25
million for its operational needs for the Targets, each party shall be
obligated to raise fifty percent (50%) of such additional capital through
the sale of ownership percentages in the Joint Venture.
SECTION 5.2.4 PJTX FUNDING STRUCTURE
PJTX may raise its investment contribution utilizing the fund raising
structure of its choice that conforms to regulatory requirements of
relevant jurisdictions.
SECTION 5.2.5 INVESTOR DISTRIBUTIONS
All distributions of Net Revenues to investors shall be paid from the 50%
project interest assigned to PJTX unless subject to Section 5.2.3.
SECTION 5.2.6 COMPETING STRUCTURES
The Parties acknowledge that all funding efforts shall be directed through
PJTX, it's parent company EARH and its duly designated agents.
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SECTION 5.2.7 MUTUAL INDEMNIFICATION
The Parties hereby agree to hold the other party harmless and fully and
completely indemnify said party against any and all civil or criminal
actions or judgments by any court that arise relating to that Parties
activities.
SECTION 5.2.8 BARTER FOR GOODS AND SERVICES
The Parties to the Joint Venture hereby recognize that necessary
operational assets such as a ship or other marine equipment may be
contributed to the Joint Venture on an "in kind" basis. Any decision to
engage the use of said assets shall be made by DMS and approved by PJTX.
SECTION 5.2.9 ACCOUNTING AND AUDITING
All investor funds, regardless of source, shall flow through the
accounting\auditing structure and designated bank accounts established by
EARH\PJTX for the purpose of maintaining a complete and accurate accounting
record and audit trail. All investor transaction shall be disclosed by EARH
in its periodic filings with the Securities Exchange Commission of the
United States and available for public review.
SECTION 5.2.10 FIDUCIARY DUTY
The Parties hereby acknowledge that as executive officers of their
respective companies they have, under the laws of their respective
jurisdictions, a fiduciary duty to represent the best interests of each
respective Party's shareholders or owners during all business decisions as
the Joint Venture moves forward.
SECTION 5.3 EXCLUSIVITY
PJTX, it's parent company EARH and its duly designated agents shall have
exclusive control of all fund raising efforts for the duration of the Joint
Venture.
SECTION 5.4 INDEPENDENT INVESTMENT
EARH/PJTX will raise the funds via the public company structure as well as
negotiating and allowing offers to sell directly to independent investors a
portion of their 50% ownership to fund the Joint Venture.
SECTION 5.5 CONTRIBUTIONS FROM DMS
DMS has provided the Joint Venture with three (3) Targets, with UK government
Department for Transport licenses to recover their cargoes.
* The three Targets were carrying precious metals.
* DMS has obtained the necessary historical research related to the
salvage Targets as may be needed to complete the objectives of the
Joint Venture.
* DMS has and will continue to gather and provide all necessary
engineering blueprints, specifications, engineering, fabrication of
equipment, integration of equipment, use of equipment and other
knowledge as may be required to properly construct the recovery
equipment required to complete the objectives of the Joint Venture. In
the event that any recovery equipment fails or requires repair or
replacement due to DMS negligence, the costs thereof shall be deducted
from the DMS share of profits without contribution from the Joint
Venture or PJTX.
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* DMS will undertake, on a best effort basis, the survey of the Targets,
prioritize for salvage based upon survey results and undertake the
salvage operations.
* DMS warrants to have legal title to the licenses. The licenses are in
good standing and DMS is pledging the licenses to the JV as their
contribution.
SECTION 5.6 INTELLECTUAL PROPERTY
All Intellectual Property contributed to the Joint Venture by each Party shall
remain the sole exclusive property of that Party.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1
Each Party represents and warrants to the other Party that each of the
warranties it makes herein is accurate in all respects and not misleading as at
the date of this Agreement.
SECTION 6.2
Each Party undertakes to disclose in writing to the other Party anything which
is or may constitute a breach of or be inconsistent with any of the warranties
immediately upon the same coming to its notice at the time of and after the date
hereof.
SECTION 6.3
Each Party agrees that each of the warranties it makes shall be construed as a
separate and independent warranty and (except where expressly provided to the
contrary) shall not be limited or restricted by reference to or inference from
the terms of any other warranty or any other term of this Agreement.
SECTION 6.4
Each Party acknowledges that the restrictions contained in Section 16.3 (Public
Notices) and Section 16.4 (Confidentiality) shall continue to apply after the
execution of this Agreement without limit in time.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF DMS
SECTION 7.1 ORGANIZATION, STANDING AND AUTHORITY; FOREIGN QUALIFICATION
DMS is a corporation duly organized, validly existing and in good standing under
the laws of Nevis, West Indies, and has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as proposed to be conducted and is duly qualified or
licensed as a foreign corporation in good standing in each jurisdiction in which
the character of its properties or the nature of its business activities require
such qualification.
SECTION 7.2. CORPORATE AUTHORIZATION
The execution, delivery and performance by DMS of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of DMS, and this Agreement
constitutes a valid and binding agreement of DMS.
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SECTION 7.3. NO CONFLICT
The execution, delivery and performance of this Agreement and the completion of
the transactions contemplated herein will not:
(a) violate any provision of the Articles of Incorporation, Bylaws or other
charter or organizational document of DMS;
(b) violate, conflict with or result in the breach of any of the terms of,
result in any modification of the effect of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any contract or agreement to which
DMS is a party or by or to which either of its assets or properties, may be
bound or subject;
(c) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon, or any
agreement with, or condition imposed by, any governmental or regulatory body,
foreign or domestic, binding upon DMS or upon the securities, assets or business
of DMS;
(d) violate any statute, law or regulation of any jurisdiction as such
statute, law or regulation relates to DMS or to the securities, properties or
business of DMS; or
(e) result in the breach of any of the terms or conditions of, constitute a
default under, or otherwise cause an impairment of, any permit or license held
by DMS.
SECTION 7.4. LITIGATION
There is no litigation, suit, proceeding, action or claim at law or in equity,
pending or to DMS's best knowledge threatened against or affecting DMS or
involving any of DMS's property or assets, before any court, agency, authority
or arbitration tribunal, including, without limitation, any product liability,
workers' compensation or wrongful dismissal claims, or claims, actions, suits or
proceedings relating to toxic materials, hazardous substances, pollution or the
environment. DMS is not subject to or in default with respect to any notice,
order, writ, injunction or decree of any court, agency, authority or arbitration
tribunal.
SECTION 7.5. COMPLIANCE WITH LAWS
To the best knowledge of DMS, it has complied with all laws, municipal bylaws,
regulations, rules, orders, judgments, decrees and other requirements and
policies imposed by any governmental authority applicable to it, its properties
or the operation of its business, except where the failure to comply will not
have a material adverse effect on the business, properties, financial condition
or earnings of DMS.
SECTION 7.6. TRUE AND CORRECT COPIES
All documents furnished or caused to be furnished to PJTX by DMS are true and
correct copies, and there are no amendments or modifications thereto except as
set forth in such documents.
SECTION 7.7. MATERIAL INFORMATION
This Agreement and all other information provided, in writing, by DMS or its
representatives thereof to PJTX, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
any statement contained herein or therein not misleading. There are no facts or
conditions which have not been disclosed to PJTX in writing which, individually
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or in the aggregate, could have a material adverse effect on DMS or a material
adverse effect on the ability of DMS to perform any of its obligations pursuant
to this Agreement.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF PJTX
SECTION 8.1. ORGANIZATION, STANDING AND AUTHORITY; FOREIGN QUALIFICATION
PJTX is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as proposed to be conducted and is duly qualified or
licensed as a foreign corporation in good standing in each jurisdiction in which
the character of its properties or the nature of its business activities require
such qualification.
SECTION 8.2 CORPORATE AUTHORIZATION
The execution, delivery and performance by PJTX of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of PJTX, and this Agreement
constitutes a valid and binding agreement of PJTX.
SECTION 8.3 NO CONFLICT
The execution, delivery and performance of this Agreement and the completion of
the transactions contemplated herein will not:
(a) violate any provision of the Articles of Incorporation, Bylaws or other
charter or organizational document of PJTX;
(b) violate, conflict with or result in the breach of any of the terms of,
result in any modification of the effect of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any contract or agreement to which
PJTX is a party or by or to which either of its assets or properties, may be
bound or subject;
(c) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon, or any
agreement with, or condition imposed by, any governmental or regulatory body,
foreign or domestic, binding upon PJTX or upon the securities, assets or
business of PJTX;
(d) violate any statute, law or regulation of any jurisdiction as such
statute, law or regulation relates to PJTX or to the securities, properties or
business of PJTX; or
(e) result in the breach of any of the terms or conditions of, constitute a
default under, or otherwise cause an impairment of, any permit or license held
by PJTX.
SECTION 8.4. LITIGATION
There is no litigation, suit, proceeding, action or claim at law or in equity,
pending or to PJTX's best knowledge threatened against or affecting PJTX or
involving any of PJTX's property or assets, before any court, agency, authority
or arbitration tribunal, including, without limitation, any product liability,
workers' compensation or wrongful dismissal claims, or claims, actions, suits or
proceedings relating to toxic materials, hazardous substances, pollution or the
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environment. PJTX is not subject to or in default with respect to any notice,
order, writ, injunction or decree of any court, agency, authority or arbitration
tribunal.
SECTION 8.5. COMPLIANCE WITH LAWS
To the best knowledge of PJTX, it has complied with all laws, municipal bylaws,
regulations, rules, orders, judgments, decrees and other requirements and
policies imposed by any governmental authority applicable to it, its properties
or the operation of its business, except where the failure to comply will not
have a material adverse effect on the business, properties, financial condition
or earnings of PJTX.
SECTION 8.6. TRUE AND CORRECT COPIES
All documents furnished or caused to be furnished to DMS by PJTX are true and
correct copies, and there are no amendments or modifications thereto except as
set forth in such documents.
SECTION 8.7 MATERIAL INFORMATION
This Agreement and all other information provided, in writing, by PJTX or its
representatives thereof to DMS, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
any statement contained herein or therein not misleading. There are no facts or
conditions which have not been disclosed to DMS in writing which, individually
or in the aggregate, could have a material adverse effect on PJTX or a material
adverse effect on the ability of PJTX to perform any of its obligations pursuant
to this Agreement.
ARTICLE IX
DMS COVENANTS AND AGREEMENTS
SECTION 9.1 OPERATING THE JOINT VENTURE
DMS shall be responsible for conducting the Joint Venture's recovery operations
and in connection therewith DMS agrees to act with the utmost good faith and to
use its best efforts to competently and diligently carry out the salvage
operations of the Joint Venture, including but not limited to:
Obtain and maintain for the Term of the Joint Venture all such licenses as are
necessary to carry out the Project for the operations of the Joint Venture.
a) Survey the geographical area in which the three (3) Targets are known
to be located and manage subsequent salvage operations on the Targets
and manage, with PJTX's consent, the sale or distribution of all
recovered items after the UK government share has been taken according
to the license terms.
b) Provide as much historical research as possible without compromising
the security of the actual names of the Targets.
c) Create regular, detailed progress reports for distribution to PJTX.
These reports will include details of sums expended and budgeted.
d) Apply all moneys received from PJTX pursuant to this Agreement towards
expenses incurred exclusively in performing or procuring its
obligations and in accordance of the current working budget as set
forth on Schedule A attached hereto.
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e) In performing the aforementioned obligations DMS shall use such
diligence and care as might reasonably be expected by a person having
a significant investment interest in the salvage operation.
f) Keep a full account of all sums expended for the Joint Venture and
will make records available for inspection to PJTX on reasonable
notice.
g) Inform PJTX without delay of any information which will significantly
affect the viability of the Joint Venture, its likely cost or the
likelihood of a commercial return from its operations.
h) DMS warrants that it will have in place appropriate and sufficient
liability insurance in respect of all risks and liabilities which may
be encountered during the course of the Joint Venture. DMS warrants
that it has used its expertise and experience in arrangement of such
insurance and will produce a copy of it upon request. DMS will
indemnify PJTX against any claims costs and liabilities of whatever
nature arising out of the Joint Venture operations.
i) DMS shall maintain total control of vessel choice management and
operational decisions.
SECTION 9.2 LITIGATION
During the term of the Joint Venture, DMS shall notify PJTX promptly of any
actions or proceedings of the type described in Section 7.4 that from the date
hereof are threatened or commenced against DMS or against any portion of the DMS
ownership interests in the Joint Venture and of any requests for information or
documentary materials by any governmental or regulatory body that could affect
PJTX's abilities to perform its obligations hereunder.
ARTICLE X
COVENANTS AND AGREEMENTS OF PJTX
SECTION 10.1 CAPITALIZATION
PJTX shall use its best efforts to raise and provide the Joint Venture with the
Capital Contributions set forth in Section 5 above
SECTION 10.2 LITIGATION
From the date of this Agreement to the Closing Date, PJTX shall notify DMS of
any actions or proceedings of the type described in Sections 8.4 that are
threatened or commenced against PJTX or against any officer, director, employee,
properties or assets of PJTX with respect to its affairs and of any requests for
information or documentary materials by any governmental or regulatory body that
could affect PJTX's abilities to perform its obligations hereunder.
SECTION 10.3 FORTNIGHTLY PROGRESS REPORTS
Create regular, detailed progress reports for distribution to DMS. These reports
will include details of sums raised to date and expected further funding prior
to the next progress report.
SECTION 10.4 PRESS RELEASES
The Parties hereby recognize the importance of reports and press releases to
inform investors during the course of the project. The Parties will collaborate
in good faith on all releases of information directly related to the progress of
operations.
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ARTICLE XI
LIQUIDATION OF RECOVERED VALUABLES
AND DISTRIBUTIONS OF NET REVENUES
SECTION 11.1 LIQUIDATION
Liquidation of Recovered Valuables shall occur in a timely, ongoing manner to
one or more companies that purchase bulk metals. The aforementioned companies
shall be chosen by mutual agreement of the Parties..
SECTION 11.2 REPAYMENT OF INVESTMENT CAPITAL
Prior to any profit distributions to Investors or other third parties, PJTX\EARH
and\or third
All investors that have provided capital to the Joint Venture under Section
5.2.2 hereof, shall be reimbursed 100% of such investment capital prior to the
payment of any kind of capital or cargo to any other person, entity or
government.
SECTION 11.3 DISTRIBUTION
Net Revenues shall be distributed as set forth below and in the order provided
below:
(a) Repayment of all investment capital pursuant to Section 11.2;
(b) Division and delivery of cargo to the UK government as required in the
licenses for the Targets;
(c) Thereafter, the Parties to this Agreement shall divide the next $1
billion in Net Revenue and\or Net Cargo on a 50%\50% basis.
SECTION 11.4 DMS PERFORMANCE BONUS
DMS will be paid an additional performance bonus based upon the following
conditions;
(a) If the average price of gold, over the 14 day period prior to any
distribution of asset should be above $1,750 per ounce then a commensurate
increase to the US$1 billion value of Section 11.3.b shall be applied for all
gold evaluations/contributions to the said $1 billion. Likewise should the value
of silver be above $35 per ounce a similar pro rata increase to the $1 billion
will also be made.
(b) Upon each Party receiving a distribution of 50% of the $1 billion in
Net Revenue and/or Net Cargo as provided section 11.3.(c), DMS will then be
entitled to a performance bonus of 40% of each additional net US $100,000,000 or
portion thereof recovered by the Joint Venture. The remainder of the
aforementioned amounts shall then be divided on a 50\50 basis between the
Parties.
SECTION 11.5 APPRAISAL OF CARGO
The Parties to this Agreement mutually agree to appoint a panel of experts to
perform an independent appraisal of all recovered cargo to determine which items
have marketable intrinsic or numismatic value. Said panel of experts shall
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determine those values. The Parties agree to abide by the panels valuations for
the purposes of division as defined by Article 11 of this Agreement.
SECTION 11.6 CARGO CATEGORY DECLARATION
The Parties hereby acknowledge the following Cargo Categories;
(a) Gold coins having a numismatic value over and above the melt value of
the gold
(b) Gold coins having no additional value and will be sold for melt value
(c) Silver and gold bullion
SECTION 11.7 CARGO CATEGORY DISTRIBUTION
For the purposes of equitable distribution under the structure defined in
Article 11 of this Agreement the distribution of cargo categories shall occur
under the following structure;
(a) All cargo will be valued at melt value at all times for distribution
(b) All gold coins determined to have significant numismatic value as
defined by Section 11.5 shall be given priority and divided by the
Parties before all other categories. Said distribution shall be
applied across all coin nationalities, issues, denominations, dates,
mints and grades.
(c) Upon complete distribution of all gold coins with numismatic value,
all gold and silver having only melt value shall then be divided among
the Parties.
ARTICLE XII
BUSINESS MANAGEMENT
SECTION 12.1 BUSINESS MANAGEMENT OF THE JOINT VENTURE
a) All funds collected by PJTX for Venture funding shall come exclusively
through PJTX and the trust account established by Lawler & Associates
or other Trustee account as determined by Investment Banking partners.
b) The use and distribution of funds for payment of operational expenses,
billing, invoicing, maintaining of receipts, depreciable assets or
other financial matters shall be done in a manner acceptable to the
Joint Venture's accountants and auditors.
ARTICLE XIII
TAXES, FINANCE AND AUDIT
SECTION 13.1 TAXES
The Joint Venture shall pay taxes in accordance with the provisions of all
applicable laws and regulations. Staff members and workers of the Joint Venture
shall pay individual income tax according to the all applicable laws.
SECTION 13.2 FISCAL YEAR
The fiscal year of the Joint Venture shall be set by the Parties hereafter.
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ARTICLE XIV
THE DISPOSAL OF ASSETS AFTER THE EXPIRATION OF THE DURATION
SECTION 14.1 DISPOSAL OF EQUIPMENT ASSETS
All equipment assets designed, built and acquired by the Joint Venture will
revert to full ownership of DMS once full repayment of principal investment is
made to the investor group.
ARTICLE XV
INSURANCE
SECTION 15.1 INSURANCE
Insurance policies of the Joint Venture on various kinds of risks shall be
underwritten with a qualified insurer operating in the U.S. - U.K. or other
jurisdiction reasonably approved by both Parties.
ARTICLE XVI
MISCELLANEOUS
SECTION 16.1 ALTERATIONS, AMENDMENTS AND MODIFICATIONS
Any amendment of this Agreement shall come into force only after a written
amendment agreement has been signed by each Party.
SECTION 16.2 APPLICABLE LAW
The formation, validity, interpretation, execution and settlement of disputes in
respect to this Agreement shall be governed by the relevant laws of England.
SECTION 16.3 PUBLIC NOTICES
The Parties agree that all notices to third Parties and all other publicity
concerning the Joint Venture or anything else pertaining to this Agreement shall
be jointly planned and coordinated and no Party shall act unilaterally in this
regard without the prior approval of the others, such approval not to be
unreasonably withheld.
SECTION 16.4 CONFIDENTIALITY
a) All aspects and terms of this Agreement and all information and data
in whatever form (including written, oral or electronic) related to
this Agreement and/or the Joint Venture (collectively, "Confidential
Information") shall be held in strict confidence by the Parties, and
not disclosed to any third Parties except as otherwise set forth in
this Section 16.4. The Parties agree to treat all information
furnished by or on behalf of any Party hereto in accordance with the
provisions of this Section 16.4 and to take, or abstain from taking,
the other actions set forth herein. The Parties agree that the
Confidential Information shall be used solely for the purpose of
operating the Joint Venture and will be kept confidential by such
Party, its officers, directors, employees, representatives, agents and
advisors, provided that either Party may, without such approval,
disclose Confidential Information: (i) to the receiving Party's
officers, directors, employees, representatives, agents and advisors,
including outside professional advisors, who need to know the
Confidential Information for the purpose of meeting its obligations
hereunder and agree in writing to be bound by the terms of
confidentiality set forth in this Section 16.4, (ii) to any bank or
financial institution from whom the Joint Venture is seeking or
obtaining finance, upon obtaining a similar undertaking of
confidentiality (but excluding this proviso) from such bank or
institution, (iii) as required by applicable law or the requirements
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of any recognized stock exchange in compliance with its rules and
regulations, (iv) to any government agency or tax authority lawfully
requiring such information, or (v) to any court of competent
jurisdiction acting in pursuance of its powers.
b) The Parties agree that, without the prior written consent of the other
Party, which may be withheld in such Party's sole discretion, none of
the Parties shall disclose any provision of this Agreement, or its
existence, to any third party except as otherwise set forth in this
Section 16.4.
SECTION 16.5 SCIENTIFIC DATA
Any and all data collected during field operations shall remain the common
property of the Parties until the Primary objective of the JOINT VENTURE stated
in section 4.1 has been met and the JOINT VENTURE dissolved. Upon the
dissolution of the JOINT VENTURE all such data becomes the exclusive property of
DMS. This data may include, but not be limited to, magnetometer data, side scan
sonar records, sub-bottom profiling records, laser generated optical data,
photography, GPS positioning data, GIS information, archaeological information,
wreck site stratification, material distribution, bathymetric, sedimentary and
hydrographic data.
SECTION 16.6 NON-WAIVER
No waiver of any breach, or failure to enforce any provision, of this Agreement
at any time by a party shall in any way limit or waive the right of that party
to subsequently enforce and compel strict compliance with this Agreement.
SECTION 16.7 PARTIAL INVALIDITY
If any provision of this Agreement is or becomes invalid or unenforceable, that
provision shall be deemed deleted from this Agreement and such invalidity or
un-enforceability shall not affect the other provisions of this Agreement, all
of which shall remain in full force and effect to the extent permitted by law,
subject to any modifications made necessary by the deletion of the invalid or
unenforceable provisions.
SECTION 16.8 LIABILITY
Each Party acknowledges that it shall be responsible for any loss, cost, damage,
claim, or other charge owing to a third party that arises out of or is caused by
the actions of that Party or its employees or agents. No Party shall be liable
for any loss, cost, damage, claim, or other charge that arises out of or is
caused by the actions of any other Party or its employees or agents. Joint and
several liabilities will not attach to the Parties; no Party is responsible for
the actions of any other Party, but is only responsible for those tasks assigned
to it. The Parties agree that in no event will consequential or punitive damages
are applicable or awarded with respect to any dispute that may arise between or
among the Parties in connection with this Agreement.
SECTION 16.9 INDEMNIFICATION
Each Party shall indemnify and save harmless the other Party, and each of their
respective shareholders, directors, officers, employees and agents from and
against all actual or threatened liabilities described above in Section 16.8.
SECTION 16.10 ARBITRATION
The Parties 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 London, England. The arbitrator may grant injunctions or other relief in
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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
Parties will pay the costs and expenses of such arbitration in such proportions
as the arbitrator shall decide, and each Party shall separately pay its own
counsel fees and expenses.
SECTION 16.11 CONTINUATION
The Joint Venture may be extended, reconstituted or otherwise continued under
terms and conditions mutually agreed upon, in writing, by the Parties to this
Joint Venture Agreement.
SECTION 16.12 GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by the laws of the United Kingdom.
IN WITNESS WHEREOF the Parties hereto have executed this Joint Venture Agreement
in the Cities of ___________________________ and ____________, by the authorized
representatives of the Parties on the ________ day of _________________ 2012.
PROJECT X, INC.,
a Nevada corporation
By: /s/ J. Michael Johnson
-----------------------------------------
Name: J. Michael Johnson
Title: Chief Executive Officer
DEEP MARINE SALVAGE, INC.,
a Nevis IBC
By: /s/ Nigel Smith
-----------------------------------------
Name: Nigel Smith
Title: President
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