For Co-development of Laser-on-line Products And Technology

AGREEMENT
FOR CO-DEVELOPMENT OF LASER-ON-LINE PRODUCTS AND TECHNOLOGY


This Agreement is made the ___ day of ________, 19__, (the "Effective Date") by and among THE PRIMA GROUP INTERNATIONAL, INC., a Delaware corporation with its principal place of business at 447 S. Sharon Amity Road, Suite 250, Charlotte, North Carolina 28211 ("PRIMA"), PRIMA INDUSTRIE S.P.A., organized under the laws of Italy with its principal place of business at Via Antonelli, 32, 10097 Regina Margherita Di Collegno, Torino, Italy ("Industrie"), and PRIMA ELECTRONICS, S.P.A., organized under the laws of Italy with its principal place of business in Moncalieri, Torino, Italy, ("Electronics"). (PRIMA, Industrie and Electronics shall be referred to from time to time collectively as "Developers" and individually as "Developer"); (the "Agreement").


WHEREAS, PRIMA, Industrie and Electronics desire to assist each other in areas of mutual business interest including development of a new series of products to be known as the "Laser On Line" series, Technology, and associated intellectual property, and


WHEREAS, all of the parties hereto will benefit financially from further Products and Technology development,


NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the parties agree as follows:


ARTICLE I
GENERAL PROVISIONS


1.01 Agreement of Joint Development. The Developers hereby agree, subject only to the condition subsequent specified in Section 8.11, to the joint development of the Products (the "Project") under the terms and provisions of this Agreement and the rights and liabilities of the Developers shall be as provided in this Agreement. The Developers do not hereby intend to form a separate legal entity for the conduct of the development.


1.02 Name of the Project. The name of the Products shall be "Laser on Line" and the Project shall be known as the "Laser on Line Project", or such other name as the Developers from time to time may designate. The Developers shall not cause to be filed an assumed or fictitious name certificate or certificates for the Project but may seek registration of the name "Laser on Line" as a trademark or servicemark.


1.03 Purpose of the Project. The purpose of the Project is to research and develop, experiment with, manufacture and market the Products based upon the Technology.


1.04 Duration of the Project. The Project shall commence upon the date of execution of this Agreement, and shall continue until its termination in accordance with the provisions of this Agreement.


1.05 Definitions.


(a) "Affiliate" means a Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Person specified.


(b) "Development Program" shall mean the design, development and implementation efforts undertaken by the Developers to develop the Products and Technology under the terms and conditions of this Agreement.


(c) "Development Project" shall mean the efforts undertaken by the Developers to integrate their services and to develop the Products under the terms and conditions of this Agreement.


(d) "Patents" means all United States patents, patent applications, all reissue and renewal applications, all divisional applications, all continuation applications, all continuation-in-part applications, and all corresponding foreign patents and patent applications which in the absence of a valid license agreement would be infringed by the use, sale or manufacture or other disposition of the Products or Technology.


(e) "Pre-existing Technology" shall means hardware, software, know-how, or designs owned by or licensed to Electronics and Industrie existing prior to the Effective Date, necessary for the development, implementation and use of the Product and Technology.


(f) "Products" shall mean any and all tangible and intangible products, including but not limited to hardware and software, to be known as the "Laser on Line" series developed under this Agreement by the Developers and Technology incorporated therein.


(g) "Technology" shall mean all inventions, know-how, developments, improvements, technical data, results, data, designs, hardware, software and other information in any form, patentable or unpatentable, which are conceived, created, written, developed, reduced to practice, and acquired by the Developers during the Duration of the Project and which relate to the Development Project.


(h) "United States" means the United States of America, its possessions and its territories.


(i) "GAAP" means generally accepted accounting principles.


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ARTICLE II


2.01 Contributions.


(a) PRIMA will provide funding for all Project activities which shall be accounted for by the parties in accordance with United States GAAP. PRIMA undertakes to use its best efforts to make available to Industrie and Electronics such funds for research and development of the Products and Technology as is reasonably necessary, in order for Industrie and Electronics to pursue their obligations hereunder.


(b) Industrie and Electronics shall provide to the Project any necessary rights in existing Technology, personnel, facilities, and daily management.


ARTICLE III
PROJECT MANAGEMENT


3.01 Management of the Project. Strategic management of the Project shall be provided by PRIMA; on site management and daily control of the business and affairs of the Project shall be vested in Industrie, except as may be otherwise provided in this Agreement.


3.02 Limitations on Authority. Notwithstanding any other provision of this Agreement, no one Developer shall have the power, without the written consent of the other Developers, to grant, encumber, license, transfer or otherwise create any rights in any of the Technology in favor of any party other than the Developers.


3.03 Products Liability or Infringement Claims. Each Developer shall notify the other Developers of any infringement or products liability claim, suit, action or proceeding against it arising from the development, sale, assignment, licensing or other distribution of the Products. PRIMA shall have the right, but not the obligation, to defend on behalf of itself and the other Developers any such claim, suit, action or proceeding. The expenses (including attorneys' fees) incurred in connection with the defense of any such claim, suit, action or proceeding shall be allocated among the Developers in accordance with US GAAP.


3.04 No Compensation. The Developers shall receive no compensation for performing their duties as Developers under this Agreement.


3.05 Contracts with the Developers or their Affiliates.


(a) Industrie and Electronics may enter into contracts for goods or services between themselves and/or any other Developer or any Affiliates of any Developer. The validity of any transaction, agreement or payment involving the Developer and the Project, or any Affiliate of a Developer and the Project, otherwise permitted by the terms of this Agreement shall not be affected by reason of (i) the relationship between the Project and Developer or any Affiliate of any Developer or (ii) the approval of the transaction, agreement ...