COLLABORATION AND DEVELOPMENT
AGREEMENT
This Collaboration and
Development Agreement (the “Agreement”) is
between China Nuvo Solar Energy, Inc., a corporation
incorporated in the state of [Nevada] (“Nuvo”),
and Pioneer Materials, Inc., a corporation incorporated in
the state of Delaware (“PMI”). Nuvo
and PMI may be collectively referred to in this Agreement as
the “Parties” and each may be individually
referred to as a “Party” when referred to
generally.
WHEREAS, Nuvo owns or has
exclusive licenses or sublicenses to a patent that utilizes
certain solar energy technology relating to the design of
solar cells, which patent is identified in Schedule A hereof,
along with associated proprietary information, know-how,
patents and patent applications (the “Nuvo
Technology”); and
WHEREAS, PMI is the owner
of certain facilities locate in Chengdu, Sichuan, China with
a capacity for the development and manufacture of solar cell
materials and components;
WHEREAS, Nuvo would like
PMI to use the Nuvo Technology to develop prototype solar
cell products, to facilitate that development by creating a
pilot facility by building out and modifying its facilities
and acquiring additional equipment and
personnel,
and to subsequently commercially manufacture marketable solar
cells;
WHEREAS, PMI is willing to
create a pilot facility and to undertake the foregoing
development work under the terms and conditions set forth in
this Agreement;
NOW THEREFORE in
consideration of the foregoing (which is expressly
incorporated herein and made part of this Agreement) and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:
1. Product
Development
1.1
Product Development Facility . PMI will
build, equip, operate and manage for the benefit of Nuvo a
product development, testing and prototype manufacturing
facility to develop, test and manufacture prototypes of solar
energy products and equipment, utilizing the Nuvo Technology
(the “Products”). PMI will hire and
retain those competent and sufficiently talented technical,
engineering, development, testing and manufacturing employees
and support staff necessary to complete the work of
developing the Products according to a statement of work
agreed to by PMI and Nuvo or its designated representatives
after consultation by the Parties. PMI and the
employees hired by PMI for this project shall work
diligently
and
efficiently to develop the Products with an objective to meet
the Product Specifications referred to in Section
1.2.
1.2
Product Specifications; Final Product . The
Parties understand and agree that the objective of the Parties
under this Agreement is to develop a prototype Product that
meets the product specifications listed in Schedule B, as they
may be modified, adjusted or supplemented by the Parties (the
“Product Specifications” and a Product that meets
the Product Specifications, the “Final
Product”). The parties recognize and agree
that the Product Specifications are a goal only and that not
all initial or intervening test samples or prototypes of the
Products will meet the Product Specifications or be
marketable. THEREFORE, PMI MAKES NO
WARRANTY REGARDING ANY PRODUCT, WHETHER EXPLICIT OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
In addition, failure to meet the Product
Specifications alone shall not be a breach by PMI of its
obligations under this Agreement, but may result in the
failure by PMI to meet a milestone set forth in Schedule B and
to earn the corresponding equity compensation. The
Parties shall review the Statement of Work and the Product
Specifications every three month following the execution of
this Agreement to determine if any modifications or changes
are required in light of the
progress
or lack of progress towards the development of the Product and
shall make those changes needed to develop and produce a
commercially viable Final Product.
1.3
Employees . The employees hired and
retained by PMI for this project shall be employees of PMI
and shall not be employees of Nuvo. PMI shall pay
and provide for all wages, compensation, benefits, and any
and all taxes, employee withholding and other remuneration
necessary or proper with respect to the employees and shall
comply with all applicable laws, rules, regulations,
practices and procedures in the jurisdiction in which the
facility is located. PMI shall be fully and
exclusively responsible for all worker supervision, safety
and safety equipment, worker protection and security, and all
worker compensation for injuries or maladies allegedly
arising out of or related to the work or the employment of
any and all employees associated with or exposed to the
project which is the subject of this
Agreement. PMI shall be responsible for providing
the working conditions, management, labor relations, and
supervision so as to properly provide for the welfare and
safety of its employees in compliance with applicable laws,
rules, regulations, practices and standards of the
jurisdictions in which the facility is located.
1.4
Environmental Standards . PMI shall comply
with all applicable environmental laws, rules, regulations
and procedures of the jurisdiction[s] in which the Products
are to be developed, tested and manufactured. PMI
shall have the sole and exclusive responsibility, cost and
expense of properly disposing of any and all hazardous
materials used, generated, consumed or produced in connection
with the work undertaken pursuant to this
Agreement.
1.5
Product Testing . Nuvo shall be responsible
for submitting the Products for testing by any appropriate
testing agency or institution (such as for example
Underwriters Laboratory or TUV) in order to obtain
appropriate certification of the Product[s] for sale in
markets where that Product is to be offered. PMI
shall cooperate reasonably to assist Nuvo in successfully
completing any testing or review, by providing any necessary
documentation or information in its possession or subject to
its control.
1.6
Ownership of Equipment, Tools, Dies and Patterns
. PMI and Nuvo will consult and agree upon any new
or specialized equipment, tools, dies, molds, patterns, jigs,
guides, assemblies and testing equipment that may be required
in order to develop, test and manufacture the Product (the
“Nuvo Equipment”), as well as any necessary
materials and supplies (the “Nuvo
Materials”). Upon approval by Nuvo, PMI
shall source
and
obtain all necessary Nuvo Equipment and Nuvo Material for the
work under this Agreement. Nuvo shall reimburse
Nuvo for all Nuvo Equipment and Nuvo Material at PMI’s
cost, without any additional markup or sourcing fee, no later
than fifteen (15) days after the date of PMI’s invoice
for reimbursement. Notwithstanding the foregoing,
PMI may delay the acquisition of Nuvo Equipment and/or Nuvo
Materials until it has received prepayment therefore from Nuvo
if in PMI’s reasonable judgment it has insufficient
funds to acquire the Nuvo Equipment or Nuvo Materials and pay
the supplier’s invoice according to the agreed terms
with the supplier. Nuvo may at Nuvo’s option
pay the supplier of the Nuvo Equipment or Nuvo Materials
directly. All reimbursements or
prepayments shall be in addition to PMI’s compensation
under Section 2 and Schedule C hereof. PMI
acknowledges and agrees that all Nuvo Equipment and Nuvo
Materials are the property of Nuvo and hereby assigns,
conveys, bargains and conveys title to all Nuvo Equipment and
Nuvo Materials to Nuvo, free and clear of all liens, claims
and interests. PMI shall not grant or suffer any
liens, claims or interests to attach to the Nuvo Equipment or
the Nuvo Materials.
1.7
Records and Inspection . PMI shall maintain
adequate and complete records of its development, testing,
prototype manufacturing, quality control, safety, product
compliance with standards and requirements and other related
operations so as to
properly
document the processes for the purposes of evaluation,
intellectual property protection and development of processes
for the manufacture of the Products. Nuvo shall be
entitled to inspect and obtain copies of these records at any
time at no additional cost. Nuvo or its designated
representatives may (but are not required to) visit and
inspect the facilities associated with this project and all
records associated with this project during normal business
hours.
2. Compensation.
2.1
Payment . Nuvo shall compensate PMI for the
work to be undertaken pursuant to this Agreement as is set
forth in the Payment Schedule, attached as Schedule C (the
“Payment Schedule”). The obligation of
Nuvo to compensate PMI for work performed shall be expressly
conditioned on PMI’s performance of the work pursuant
to the terms of this Agreement and Nuvo shall have no
obligation to compensate PMI for work during a particular
period or for a particular item if PMI has breached this
Agreement with respect to that work period or
item. Unless otherwise expressly agreed by Nuvo,
payments shall be made in United States Dollars delivered by
check to an address of PMI in the United States, which
initially shall be the address set forth in section 6.5
below.
2.2
Stock Related Compensation . A portion of
the compensation provided by Nuvo to PMI shall be in form of
common stock Nuvo or warrants or options to acquire the
common stock of Nuvo. Some or all of these
securities may contain restrictions on the trading of that
stock under the securities laws of the United
States. Prior to issuing the stock, warrants or
options, Nuvo may require PMI to satisfactorily complete,
execute and deliver to Nuvo those documents required by
securities counsel for Nuvo in order to comply in the opinion
of Nuvo’s counsel with the securities laws of the
United States and any other applicable jurisdictions
regarding qualifications of PMI as an investor in these
securities, PMI’s agreement to abide by the
restrictions on the sale of these securities and other
matters relating to the compliance with securities
laws. PMI will be issued 4,000,000 shares of
common stock in Nuvo based on satisfactory completion of the
milestone accomplishments set forth in Schedule
B.
3. Intellectual
Property and Confidentiality.
3.1
Confidential Information . The term
“Confidential Information” shall mean, with
respect to each Party, all data, information and materials of
that Party or any parent, subsidiary, affiliate or division
thereof which is not generally known or readily available to
competitors or the public
including,
but not limited to the following: (a) concepts, ideas,
proposals, text, illustrations, designs, characters, trade
secrets, proposed trademarks and trade names; (b) information
or data including, but not limited to, technical or
non-technical data, software, specifications,
designs, plans, drawings, techniques, devices,
research, development, manufacturing process and methods, know
how, techniques or operating procedures; (c) computer codes of
that Party or embodying the Party’s website, any
customizations thereof, and any information pertaining to the
operation or use of the Party’s website by clients, or
any other person or entity; (d) matters of the Party’s
business, or any parent, subsidiary, affiliate, or division
thereof including, but not limited to, financial data or
plans, business plans and strategies, product plans, marketing
plans, techniques and materials, proprietary information
relating to products, processes and know-how, information
concerning employees, clients, suppliers and/or vendors, lists
of actual or potential clients, suppliers and/or vendors,
price lists, pricing policies, and any information about such
business, clients, client lists, shareholders, partners,
contracts, assets, liabilities, or other financial
information, past, present or proposed business operations, or
projects or business opportunities for new or developing
business, and, any other financial or business information
about
that
Party or any of its parent, subsidiaries, affiliates or
divisions thereof; and (e) any other proprietary information
relating to the business of that Party, whether oral, graphic,
written, electronic or in machine readable
form. “Confidential Information” shall
not include information that is:
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(a)
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already
public knowledge or becomes public knowledge through no fault or
negligence of the receiving Party;
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(b)
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shown
by the written records of the receiving Party to have been
possessed or known to the receiving Party prior to its receipt from
the disclosing Party, or to have been developed independently by
the receiving Party’s personnel acting without access to the
Confidential Information; or
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(c)
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received
by the receiving Party from an independent third party that has no
obligation of confidentiality to the disclosing Party.
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3.2
Confidentiality . Each Party that receives
Confidential Information of the other Party agrees at all
times during the term of this Agreement and thereafter, to
hold in strictest confidence, and not to use, except for the
benefit of the Parties as intended under this Agreement, or
to disclose to any person, firm or corporation without
written authorization of
from
the disclosing Party, any Confidential Information of the
disclosing Party.
3.3
Use and Protection of Confidential Information
. Each Party shall use the Confidential
Information solely in the course of the business relationship
between the Parties and shall not in any way use the
Confidential Information to the detriment of the disclosing
Party. Each party receiving Confidential
Information shall at its sole expense, take all reasonable
measures to restrain its officers, directors, employees,
representatives and affiliates from making prohibited
disclosure or use of the Confidential
Information.
3.4
Permitted Disclosure . Each Party may
disclose the Confidential Information of the other Party only
to the receiving Party's officers and employees with a bona
fide need to know that Confidential Information in order to
carry out the terms of this Agreement, but only to the extent
necessary to evaluate or carry out the receiving Party's
obligations under this Agreement and only if each of the
officer and employees are advised of the confidential nature
of that Confidential Information and the terms of this
Agreement and are bound by a written agreement or by a
legally enforceable code of professional responsibility to
protect the confidentiality of the Confidential Information;
or to the extent required by applicable state or federal
laws. In the event that the
receiving
Party, or any attorney, agent, successor or assign thereof
receives a notice, subpoena or order requesting or requiring
that any of the Confidential Information be disclosed, or the
receiving Party, or any attorney, agent, successor or assign
thereof, decides to disclose any of the Confidential
Information for any reason, the person or entity receiving the
notice, subpoena or order, or deciding to disclose the
Confidential Information, shall immediately notify the
disclosing Party of that notice, subpoena or order, or intent
to disclose the Confidential Information so that the
disclosing Party can appropriately contest the disclosure of
the Confidential Information.
3.5
Return of Records and Documents . At any
time upon the request of the disclosing Party for any reason
or upon termination of this Agreement for any reason, the
receiving Party shall immediately return or destroy any
Confidential Information of the disclosing Party in its
possession to the disclosing Party, including any and all
records, notes, and other written, printed or other tangible
materials in its possession pertaining to the Confidential
Information; provided that the receiving Party shall be
entitled to maintain an archival copy of those materials
necessary to comply with generally accepted accounting
principles or as may otherwise be required by applicable law,
regulation or order. The returning
of
materials shall not relieve either Party from
complian
