Model Joint Venture Agreement

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1 MODEL JOINT VENTURE AGREEMENT JOINT VENTURE AGREEMENT BETWEEN INNOVATIVE TECHNOLOGIES, INC. OF CHARLOTTESVILLE, VIRGINIA UNITED STATES OF AMERICA

AND THE UNITED COMPUTER AND SOFTWARE ENTERPRISES OF MEXICO

JOINT VENTURE AGREEMENT Entered into this ______ day of ______________________, 1994, By and Between United Computer and Software Enterprises of Mexico on the one hand (hereinafter called "UNITED"); and Innovative Technologies, Inc., a corporation organized and existing under the laws of the State of Virginia, United States of America, with its principal office at Charlottesville, Virginia, U.S.A., and Innovative Technologies, Ltd. (Europe) Ltd., a corporation organized and existing under the laws of the United Kingdom ("IT (Europe)") on the other hand (hereinafter collectively called "IT").

W I T N E S S E T H WHEREAS, UNITED and IT (hereinafter collectively called the "parties") have entered into two memoranda of agreement dated June 18, 1994, for the procurement and transfer of computer technology; and

WHEREAS, UNITED and IT desire to create the basis for a close and long-term relationship and, therefore, wish to establish an Equity Joint Venture in the form of a Limited Liability Joint Ownership Company to be know as Mexico-United States Computer Systems (hereinafter called the "Joint Venture" or the "Company") in which both parties will have ownership interests and rights; and

WHEREAS, the purpose of the Joint Venture is to own and operate a facility in Mexico for the assembly and manufacture of certain electronic products as hereinafter defined; and

WHEREAS, it is the intention of the parties that financing for their agreed upon equity contributions to the Joint Venture will be guaranteed for each party by the Foreign Trade Bank of Mexico; and

WHEREAS, UNITED is prepared to provide land and construct a building or buildings appropriate for such a facility, as well as to provide other assistance and services necessary to accomplish the purpose of the Joint Venture; and

WHEREAS, in order to accomplish the foregoing IT is prepared to equip and assist in the construction, installation and erection of such a facility and to assist in the training of technicians, machine operators, supervisors and other management personnel for the operation and management of such a facility; and

WHEREAS, IT is prepared to furnish to the Joint Venture certain licenses, know-how and technical assistance, as well as machines and processes, to be used in the production of such products; and

WHEREAS, IT is willing to grant to the Joint Venture the right to assemble and manufacture such products under IT trademarks, which are the sole and exclusive property of IT; and 2

WHEREAS, it is the desire of the parties that IT (Europe) shall have the exclusive rights to market all of the products produced by the Joint Venture, both in the Mexico and in overseas markets, as set forth in the Marketing Agreement attached hereto as Annex A.

NOW, THEREFORE, in consideration of the mutual covenants and obligations hereinafter set forth, the parties agree as follows:

ARTICLE I–DEFINITIONS 1.1. Definitions: The following terms shall have the following meanings: 1.1.1. Agreement. This Joint Venture Agreement, together with the following Annexes hereto and any amendments as may later be adopted pursuant to Paragraph 11.7 hereof:

Annex A– Joint Venture Marketing Agreement Annex B– Joint Venture Articles of Association Annex C– Joint Venture By-laws Annex D– List of Trademarks, trade names, service names, devices and registration particulars of IT Products

1.1.2. Plant. The facility for the production of the Products as further described in Paragraph 1.1.3. hereof, together with related storage areas, utility areas, access routes and other structures, which are used by the Joint Venture Company in the activities contemplated hereunder. The Plant shall consist of at least three separate areas or buildings: one area or building where the HAL 69 Desk Top Computer and Video Scroller Terminal will be assembled, a second area or building where the multilayer printed circuit board process facility will be located, and a third area or building where floppy diskettes and Canterbury disk drives will be assembled or fabricated.

1.1.3. Products. The finished items to be assembled and manufactured by the Joint Venture consisting of:

(a) The HAL 69 Desk Top Computer (b) The Video Scroller Terminal (c) Multilayer Printed Circuit Boards (d) Canterbury Disk Drives (e) Floppy Diskettes 1.1.4. Know-how. The technical data, drawings, designs, instructions, specifications, trade secrets and manufacturing information (except Trademarks, as hereinafter defined) owned and used by IT or its subsidiaries in the manufacture, production and quality control of the Products. Know-how shall also mean improvements covering the manufacture, production and quality control of the Products, including advancements or extensions of the aforesaid which are developed in the normal course of business and which do not constitute essentially new technology which would require a substantial alteration in the practice of Know-how as it is then being followed by IT.