ÊÊÊÊÊ 2.ÊÊÊÊÊ company Materials.Ê The Receiving Party understands and acknowledges that (i) the company possesses or will possess company Materials (as defined below) which are important and valuable to the companyâs business and (ii) the disclosure of company Materials to third parties without the companyâs consent could have an adverse effect on the companyâs business and prospects.Ê For purposes of this Agreement, ãcompany Materialsä are documents or other media or tangible items that contain or embody Proprietary Information or any other information concerning the business, operations or plans of the company, whether such documents have been prepared by the company or by others.Ê company Materials include, but are not limited to, (i) price list, blueprints, drawings, photographs, charts, graphs, notebooks, customer lists, computer disks, tapes or printouts, and other printed, typewritten or handwritten documents, (ii) samples, prototypes, models, products and the like, and (iii) copies, summaries and notes of the contents or parts of such materials described in clauses (i) and (ii) immediately above.

ÊÊÊÊÊ 3.ÊÊÊÊÊ Agreements and Covenants.Ê In connection with the discussions regarding the Transaction between the Receiving Party and the company, the Receiving Party hereby agrees as follows:

ÊÊÊÊÊ ÊÊÊÊÊ a.ÊÊÊÊ All Proprietary Information is and shall be the sole property of the company.Ê At all times, both during discussions regarding the Transaction and thereafter (including if the Transaction is not consummated), the Receiving Party will keep in utmost confidence and trust, and will neither use or disclose nor permit to be used or disclosed, any Proprietary Information (or anything relating thereto).Ê Notwithstanding the foregoing, Proprietary Information may be used by the Receiving Party solely for the purpose of evaluating the Transaction and may be disclosed only to each representative of the Receiving Party who (i) needs to know such information for the sole purpose of evaluating the Transaction and (ii) agrees in writing to keep such information confidential to the same extent as if such representative was a ãReceiving Partyä under this Agreement.

ÊÊÊÊÊ ÊÊÊÊÊ b.ÊÊÊÊ All company Materials are and shall be the sole property of the company.Ê Without the prior written consent of the President of the company, the Receiving Party will not remove any company Materials from the business premises of the company or deliver any company Materials to any person or entity outside the company.Ê Immediately upon the termination of discussions regarding the Transaction between the Receiving Party and the company, or at any time if so requested by the company, the Receiving Party will return to the company all company Materials, and any reproduction thereof, the Receiving Party may have in its possession.

ÊÊÊÊÊ ÊÊÊÊÊ c. ÊÊÊÊWithout the prior written consent of the President of the company, the Receiving Party will not disclose to any third party either (i) the existence of the Transaction or any discussions related thereto or (ii) any of the terms, conditions or other facts with respect to the Transaction.

ÊÊÊÊÊ ÊÊÊÊÊ d.ÊÊÊÊ Without the prior written consent of the President of the company, for a period of at least five (5) years from the date hereof, the Receiving Party will not encourage or solicit any employee or consultant of the company to leave the employ (or cease providing any services to the company) for any reason.

ÊÊÊÊÊ ÊÊÊÊÊ e.ÊÊÊÊ Without the prior written consent of the President of the company, the Receiving Party will not contact any sponsor, shareholder, supplier, customer or creditor of the company, or any of their affiliates.Ê The Receiving Party will not, after the date hereof, assist any other person, organization or business in competing with the company or in preparing to engage in competition with the business or proposed business of the company.

ÊÊÊÊÊ 4.ÊÊÊÊÊ Disputes. The Receiving Party agrees that any dispute in the meaning, effect or validity of this Agreement shall be resolved in Pennsylvania, in accordance with the laws of the State of Pennsylvania without regard to the conflict of laws provisions thereof, and, further agrees that if one or more provisions of this Agreement are held to be illegal or unenforceable under applicable Pennsylvania law, such illegal or unenforceable portion(s) shall be limited or excluded from this Agreement to the minimum extent required so that this Agreement shall otherwise remain in full force and effect and enforceable in accordance with its terms.Ê The Receiving Party and the company consent to jurisdiction in Pennsylvania, and irrevocably agree that all actions or proceedings related to this Agreement shall be heard in such jurisdiction, and each party waives any objection which it may have based on improper venue or forum non conveniences to the conduct of any such action or proceeding, and waives personal service of any and all process upon it, and consents to service of process by mail or in any other manner permitted by law.

ÊÊÊÊÊ 5.ÊÊÊÊÊ Successors and Assigns.Ê This Agreement shall be effective as of the date the Receiving Party executes this Agreement and shall be binding upon the Receiving Party and its affiliates, successors and assigns and shall inure to the benefit of the company and its affiliates, successors and assigns.

ÊÊÊÊÊ 6.ÊÊÊÊÊ Modifications. This Agreement can only be modified by a subsequent written agreement executed by the President of the company specifically referencing the intent to modify this Agreement.

ÊÊÊÊÊÊ7.ÊÊÊÊÊ Attorneysâ Fees.Ê In the event that either party resorts to legal action to enforce the terms and provisions of this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party the costs of such action so incurred, including, without limitation, reasonable attorneysâ fees.

ÊÊÊÊÊ 8.ÊÊÊÊÊ Waivers.Ê Any waiver by any party of any violation of, breach of or default under any provision of this Agreement, by the other party shall not be construed as, or constitute, a continuing waiver of such provisions, or waiver of any other violation of, breach of or default under any other provision of this Agreement.

ÊÊÊÊÊ 9.ÊÊÊÊÊ Equitable Relief.Ê The Receiving Party acknowledges and agrees that the companyâs remedies at law for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and, in recognition of this fact, the Receiving Party agrees that in the event of such a breach or threatened breach, in addition to any remedies at law, the company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

THE RECEIVING PARTY HAS READ THIS AGREEMENT CAREFULLY AND ACCEPTS THE OBLIGATIONS WHICH THIS AGREEMENT IMPOSES UPON THE RECEIVING PARTY WITHOUT RESERVATION.Ê RECEIVING PARTY ACKNOWLEDGES THAT NO PROMISES OR REPRESENTATIONS HAVE BEEN MADE TO THE RECEIVING PARTY TO INDUCE THE RECEIVING PARTY TO SIGN THIS AGREEMENT.Ê THE RECEIVING PARTY SIGNS THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING THAT ONE COUNTERPART WILL BE RETAINED BY THE COMPANY AND THE OTHER COUNTERPART WILL BE RETAINED BY THE RECEIVING PARTY.

COMPANY: Novastar Technologies, Inc.ÊÊÊÊÊ ÊÊÊÊ
RECEIVING PARTY

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