SOURCE: Axial Vector Engine Corp.

February 01, 2010 06:23 ET

Kirloskar Oil Engines Enters Binding MOU for Joint Venture Mass Production of Axial Vector Engines

DUBAI, UNITED ARAB EMIRATES--(Marketwire - February 1, 2010) - Axial Vector Energy Corporation ("AVEC") (PINKSHEETS: AXVC) (FRANKFURT: BAE1) announced today the signing of a binding MOU with Kirloskar Oil Engines (KOEL) (http://kirloskarapps.kirloskar.com/kirloskar/web/home.html) to make ready for mass production of its multi fuel engines and the building of mass production lines for its engines in a Joint Venture which will be held 76% by KOEL and 24% by Axial Vector.

Agreement components include:

Technology development payment to Axial Vector by KOEL of $250,000 USD.

KOEL initially shall bear 100% of costs relating to Joint development of Engines for up to a limit of $2,000,000 USD of costs for making the engines ready for mass production.

The intention of both parties is to form the Joint Venture in India for mass production of internal combustion engines using the opposed cylinder with unique crankshaft technology of Axial Vector and the engineering, marketing and manufacturing expertise of KOEL.

Axial Vector to enter into a patent license agreement to the JV on its technology.

Axial Vector to receive a five-year Royalty payment in addition to its JV ownership starting with 5% of product sales value.

The marketing rights of the Joint Venture Company shall extend to all SAARC countries (India, Sri Lanka, Nepal, Bhutan, Maldives, Bangladesh and Pakistan).

Mr. Rahul Kirloskar, Director, Kirloskar Oil Engines Limited, commented, "Our association with the company (AVEC) has been for over five years during which we have monitored various stages of development of Axial Vector Engines. We believe this engine is a major breakthrough, which will improve various efficiencies involved in a typical Internal Combustion Engine. We see good potential once it gets successfully developed and will benefit both industry and our company's shareholders."

Mr. Sanjai Chhaunker, President and CEO of Axial Vector, stated, "KOEL has already assembled a top team of its engineers and will begin work immediately to make 'mass production ready' our multi fuel engines. As one of the most highly respected companies in India and with a global following, we believe they will quickly bring these engines to market which shall be the first of many license and royalty agreements we will now be able to negotiate with others. The world badly needs our cleaner, lighter and economical engines capable of much better fuel consumption using hydrocarbon fuels, as well as the ability to run on non fossil fuels such as straight palm oil."

The Axial Vector website has posted a photo of the contract signing and a link to learn more about Kirloskar. Visit us at www.axialvectorenergy.com

About Kirloskar Oil Engines

Kirloskar Oil Engines is one of the many companies of the Kirloskar Group (http://kirloskarapps.kirloskar.com/kirloskar/web/home.html). Founded in 1888, Kirloskar Group today is a multi-product, multi-location Engineering Conglomerate with annual sales exceeding $1.0 billion. We are the leader of the Indian power generation, construction, material handling & agriculture sectors.

With annual sales exceeding $320 million, engine quantity exceeding 200,000 engines and rapidly growing exports to European Union, North America & China, we are India's largest manufacturer of diesel engines, both air-cooled and liquid cooled, covering a power range of 3hp to 11,000hp. Kirloskar engines conform to US as well as European Tier II emission norms. Tier-III designs are in progress. These power 80 different applications in nine distinct segments such as: agriculture, power generation, construction, material handling, earth moving, mining, offshore, fluid handling, agro industrial and defense automotive retrofits. We also manufacture over 35,000 AC generators in 5kVA to 300 kVA range.

About Axial Vector Energy Corporation

Axial Vector Energy Corporation (AVEC) is a global solutions provider that owns, develops, invests in and licenses revolutionary technologies including internal combustion engine and electric power generator technologies that have unlimited potential in military, industrial and commercial applications. AVEC and its partners are positioned to become unrivalled leaders in international engine and energy markets with technologies that produce more efficient, cost effective, environmentally sensitive and versatile solutions for use in a wide variety of important applications around the world.

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