Development Agreement

EXHIBIT 10.17


CONFIDENTIAL TREATMENT DELETED (DENOTED BY "[CMD]") AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION TOGETHER
WITH CONFIDENTIAL TREATMENT REQUEST REGARDING DELETIONS.


DEVELOPMENT AGREEMENT
BETWEEN NEXAR TECHNOLOGIES, INC.
AND GDA TECHNOLOGIES, INC.


1. INTRODUCTION


1.1 This is an agreement for GDA Technologies, Inc. ("GDA"), a
California corporation, to perform engineering services in
connection with the development of certain computer
circuit boards and related technology for Nexar
Technologies, Inc. ("Nexar"), a Delaware corporation, in
accordance with an agreed-upon set of Specifications and a
Milestone and Payment Schedule. To the extent that GDA has
performed portions of the services described herein prior
to the date hereof, all such services shall be considered
for all purposes as performed under and pursuant to the
terms hereof.


2. DEFINITIONS


As used in this Agreement, the following definitions shall apply:


2.1 "Agreement" shall mean this Agreement between Nexar and
GDA, including the Schedules and Exhibits hereto.


2.2 "Boards" shall mean the integrated circuit boards to be
engineered by GDA hereunder based on the [CMD] described
in this Agreement, which shall consist of all Deliverables
as stated in the Specifications (Schedule A), and the
Milestone and Payment Schedule (Schedule B).


2.3 "Confidential Information" shall mean any information
relating to or disclosed in the course of this Agreement,
which is or should be reasonably understood to be
confidential or proprietary to the disclosing party.
"Confidential Information" shall not include information
(a) already lawfully known to the receiving party, (b)
disclosed in published materials, (c) generally known to
the public, or (d) lawfully obtained from any third party.


2.4 "Deliverables" are the items that are specified in the
Specifications and the Milestone and Payment Schedule as
items to be delivered to Nexar.


2.5 "Final Deliverables" are the items that are specified in
the Milestone and Payment Schedule as the last and final
delivery to Nexar.


2.6 "Milestone and Payment Schedule" shall mean the schedule
of time for delivery of and payment for the Deliverables,
as set forth in Schedule B.


2.7 "Specifications" shall mean requirements for the Boards'
required operation, functions, capabilities and
performance and the documentation to be delivered
therewith, as described in Schedule A attached hereto, or
as revised by the parties under procedures set forth in
this Agreement.


2.8 "Technical Manuals" shall mean a complete description of
the Boards, written in accordance with the requirements of
the Specifications.


2.9 "Technology" shall mean all of the technology, proprietary
information and/or intellectual property which has been or
is developed by GDA under this Agreement, as well as
apparatus, articles of manufacture, prototypes, and
documentation or other tangible media embodying such
technology, proprietary information and/or intellectual
property or in which they are expressed.


3. REPRESENTATIONS AND WARRANTIES


3.1 Nexar represents and warrants that it has the corporate
authority to enter into this Agreement and to perform its
obligations under this Agreement.


3.2 GDA represents and warrants that it has the corporate
authority to enter into this Agreement and to perform its
obligations under this Agreement.


4. DEVELOPMENT OF BOARDS


4.1 GDA shall complete the development of the Boards and other
Deliverables by the respective dates set forth in the
Milestone and Payment Schedule and shall apply such
resources and efforts as shall be reasonably necessary to
accomplish this task.


5. CHANGES IN SPECIFICATIONS AND MILESTONE AND PAYMENT SCHEDULE


5.1 Either Nexar or GDA may propose changes in the
Specifications or to the Milestone and Payment Schedule.
Nexar and GDA must agree, in writing, to the changes prior
to any such modifications, and to the effect, if any, on
payments due under this Agreement.


5.2 Nexar may not require work or features not set forth in
the Specifications unless agreed to in writing. GDA will
not be compensated, other than as stated in this
Agreement, unless such additional payments are agreed to
in advance in writing.


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6. RESOURCES TO BE PROVIDED TO GDA BY NEXAR


6.1 Nexar shall supply to GDA all information and resources
that GDA shall reasonably require to carry out the work
required by this Agreement, including:


(a) [CMD]
(b) [CMD]
(c) [CMD]
(d) [CMD]
(e) [CMD]
(f) [CMD]
(g) [CMD]
(h) [CMD]
(i) [CMD]
(j) [CMD]
(k) [CMD]


7. CONFIDENTIALITY


7.1 Each party acknowledges that it will receive Confidential
Information of the other party relating to technical,
marketing, product, and/or business affairs. Each party
agrees that all Confidential Information of the other
party shall be held in strict confidence and shall not be
disclosed or used without express written consent of the
other party, except as may be required by law.


7.2 Upon or prior to its execution of this Agreement GDA shall
have each of its employees, independent contractors and
any other individual or entity engaged by GDA who have
worked on and/or are working on the Technology sign a
confidentiality and assignment of technology agreement, in
the form of Exhibit A hereto, which includes a covenant to
maintain confidentiality as required by this Agreement and
which assigns to GDA any and all right, title and interest
of all such individuals and entities to any and all of the
Technology (which right, title and interest GDA, in turn,
assigns to Nexar under Section 11 hereof). GDA shall
deliver all such agreements to Nexar together with this
Agreement at the time of its execution hereof and GDA
hereby represents and warrants to Nexar that the
representations and warranties of each such individual or
entity set forth in such agreements are true and accurate.
Attached hereto as Exhibit B is a list of all GDA
employees, directors, independent contractors, and any
other individual or entity engaged by GDA who have worked
on and/or are working on the


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Technology and a copy of any other confidentiality and
assignment of technology agreements between all such
individuals or entities and GDA, all of which (including
Exhibit B) GDA represents and warrants is accurate and
complete as of the date hereof. GDA shall update Exhibit B
from time to time upon Nexar's request and shall have all
future employees, independent contractors and any other
individual or entity engaged by GDA who work on the
Technology sign confidentiality and assignment of
technology agreements, in substantially the form of
Exhibit A, prior to any such individuals or entities
receiving any Confidential Information relating to or
working on the Technology.


7.3 In addition to the foregoing provisions of this Section 7,
GDA agrees that from the date hereof none of the terms of
this Agreement shall be disclosed by GDA or any of its
officers, directors, independent contractors or employees,
to any other party, including any employee of Nexar unless
expressly authorized in writing by the Chief Executive
Officer of Nexar. A list of the only Nexar employees whom
the Chief Executive Officer of Nexar has authorized from
the date hereof to receive information with respect to
this Agreement is attached hereto as Exhibit C.


8. NON-COMPETITION


8.1 From the date hereof until the acceptance of the Final
Deliverables, and for a period of ten years thereafter,
GDA shall not supply or agree to supply to any party other
than Nexar technology with a form factor substantially
similar to the Boards or technology that will or is likely
to be directly competitive with the [CMD]. The provisions
of this paragraph shall survive termination of this
Agreement.


9. DELIVERY AND ACCEPTANCE OF DELIVERABLES


9.1 GDA shall deliver various Deliverables at the times and in
the manner specified in the Milestone and Payment
Schedule.


9.2 If GDA fails to make timely delivery of any Deliverable as
specified in the Milestone and Payment Schedule, Nexar may
give GDA notice of the failure. After such notice, GDA
shall have thirty (30) days to make the specified
delivery. Failure to submit the Deliverables within such
period shall be a material breach that shall entitle Nexar
to terminate this Agreement in accordance with the
provisions on Termination.


9.3 Nexar may inspect and test each of the Deliverables when
received to determine if it conforms to the requirements
of the Specifications. Any


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Deliverable not rejected by Nexar within thirty (30) days
shall be deemed accepted.


9.4 If any Deliverable is rejected, Nexar shall give GDA
notice of the rejection and the reasons for rejection. GDA
shall then have thirty (30) days to cure deficiencies.
After resubmission within such thirty (30) day period,
Nexar may again inspect the Deliverable to confirm that it
conforms to requirements of the Specifications. If the
resubmitted Deliverable does not conform to the
requirements of this Agreement, the failure will be a
material breach that shall entitle Nexar to terminate this
Agreement in accordance with the provisions on
Termination. If the resubmitted Deliverable is rejected,
Nexar shall give notice to GDA stating the reasons for
rejection.


9.5 Notice of failure to make timely delivery, rejection, or
subsequent resubmission shall not affect the due date for
subsequent Deliverables as required by this Agreement
unless otherwise agreed in writing.


9.6 If the Final Deliverables in any material respect do not
conform to the Specifications, and such non-conformity is
not cured as provided in this Agreement, the failure will
be a material breach that shall entitle Nexar to terminate
this Agreement in accordance with the provisions on
Termination. Alternatively, Nexar, at its option, may
accept the Final Deliverables as non- conforming. If it
does so, it shall give prompt notice to GDA stating the
known defects, and may withhold and deduct, from amounts
otherwise due and payable to GDA upon acceptance of the
Final Deliverables, the amount of reasonable out-of-pocket
costs to correct, modify, and/or complete the Boards in
accordance with the Specifications. From time to time, and
as soon as is practicable, Nexar shall provide GDA with
notice of all sums withheld and expended and shall turn
over to GDA all funds withheld that are not so applied
when such remedial work is completed.


9.7 GDA shall provide to Nexar or to such other person as
Nexar shall designate, from time to time, as reasonably
required before production of the Boards, all assistance
and information reasonably necessary to ensure that a
Technical Manual for each of the Boards is complete and
accurate. GDA shall review a draft of each such Technical
Manual upon Nexar's request and promptly provide all
corrections required to Nexar, for which review and
correction Nexar shall pay GDA at the rate of [CMD] per
hour.


10. PAYMENT


10.1 Nexar shall pay GDA the amounts due upon the execution of
this Agreement as specified in the Milestone and Payment
Schedule. Upon acceptance of each Deliverable, Nexar shall
pay GDA the amounts as specified in the


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Milestone and Payment Schedule. Payment shall be due
within twenty (20) days of acceptance of each Deliverable,
other than the deferred consideration component which
shall be paid as specified in the Milestone and Payment
Schedule. Payment by mail shall be deemed made when
mailed.


10.2 If any payment is not made as required, GDA may give
notice of the failure to pay. The failure to pay, if not
cured within thirty (30) days after notice, shall entitle
GDA to terminate this Agreement in accordance with the
provisions on Termination.


11. INTELLECTUAL PROPERTY RIGHTS IN THE TECHNOLOGY


11.1 GDA hereby irrevocably assigns and shall assign worldwide
the entirety of its right, title and interest in the
Technology to Nexar, its successors and assigns, such
assignment including by way of non-limiting example:


(a) all right, title and interest in any
invention, modification, or advance, whether or not
patentable, included in the Technology;


(b) all right, title and interest in any
invention, modification, or advance, whether or not
patentable, pertaining to the technology known as the
[CMD] and domestic or foreign patent applications
disclosing or claiming such invention, modification or
advance, any continuation, continuation-in- part or
division of such patent application and any patent issuing
thereon, and any reissue, re-examination or extension of
such patent;


(c) all right, title and interest in any
domestic or foreign patent application disclosing and/or
claiming the Technology, any continuation,
continuation-in-part, or divisional of such application,
and any patent issuing on any such application, and any
reissue, reexamination or extension of any such patent;


(d) all right, title and interest in any
invention based on the Technology and/or on any other
technology, proprietary information and/or intellectual
property of Nexar to which GDA had access in the course of
engagement by Nexar, which invention is conceived or
reduced to ...