MUTUAL CONFIDENTIALITY AND
This Agreement is made and entered into on the 10th day of September,
(1) Creative Labs, Inc. having the principal offices at 1901 McCarthy
Boulevard, Milpitas, CA 95085 ("Creative").
(2) Pacific Magtron, Inc. a California corporation having its principal offices
at 1800 California Circle, Milpitas, CA 95085 (" ")
1. Creative and Pacific Magtron are engaged in discussions with respect to a
possible business or financial arrangement or venture between them relating
to multimedia technology.
2. In connection therewith disclosure of certain information which is
proprietary/confidential to the parties may become necessary or desirable.
3. Each party is willing to disclose such Proprietary/Confidential Information
to the other parties upon the terms and conditions herein set forth and
each party is willing to maintain the confidentiality of such information
disclosed to it by the other parties in accordance with the terms and
NOW THEREFORE, in consideration of the disclosure of such
Proprietary/Confidential Information and the mutual covenants and promises
herein contained, it is agreed as follows:
For the purposes of this Agreement, "Proprietary/Confidential Information"
shall mean any and all proprietary, secret information, technical data or
know-how related to any aspect of other party's business or technology
including, without limitation, data, know- how, formulas, designs,
photographs, drawings, specification, software programs and samples and any
other material bearing or incorporating any such information which is
disclosed by one party to the other, which information, data or know-how is
marked or stipulated as being "Proprietary", "Confidential", "Strictly
Private" or otherwise, using words of similar significance. Such disclosure
may be made either directly or indirectly, in writing, orally or by
drawings, plans or inspection of products, materials, parts or equipment.
2. UNDERTAKING OF THE PARTIES
Each party hereby undertakes to treat and maintain all
Proprietary/Confidential Information received from any of the other parties
in confidence. With respect thereto, each party hereby undertakes and
agrees as follows:
i. For a period of 5 years from the date of this Agreement, the receiving
party shall not publish, disseminate nor disclose any
Proprietary/Confidential Information received from any of the other
parties to any third party accept to those of its own employment
having valid need to know the information in the course of employment
and such disclosure shall be on terms not less restrictive than those
ii. The receiving party shall use the same degree of care to avoid
disclosure or use of the Proprietary/Confidential Information as it
uses in respect of its own information of like importance but in no
case less than a reasonable degree of care.
iii. The receiving party shall in accordance with the request of the other
parties, either return all copies, recording and tangible
manifestations of Proprietary/Confidential Information or destroy the
same following a determination by any of the parties not to enter into
any arrangement or venture with each other of the kind contemplated
herein or upon termination of any related memorandum of understanding
or agreement entered into between the parties or upon the written
request of the disclosing party.
The aforesaid restrictions on the parties shall not apply to any
Proprietary/Confidential Information which
i. Can be proved by documentary evidence to be such
Proprietary/Confidential Information that was already in the
possession of the receiving party and at its free disposal before the
disclosure hereunder to it;
ii. Is received by the receiving party from third parties without
accompanying secrecy or confidentiality obligations and not in
violation of any duty of confidence under this agreement;
iii. Is independently developed by the receiving party;
iv. Is or becomes generally available to the public in printed
publications in general discussion through no act or default on the
part of the receiving party or its agents or employees;
v. Is furnished to a third party by a party hereunto who owns such
Proprietary/Confidential Information without similar restriction on
the third party's rights;
vi. Is approved for release by written authorization of the other party;
or vii. Is disclosed pursuant to any requirement or request by
operation of law provided that the involving party shall prior to
disclosure notify the disclosing party of any such requirement or
All Proprietary/Confidential Information disclosed pursuant to this
Agreement shall be and remain the property of the disclosing party. Nothing
in this Agreement shall be construed as granting or confirming any rights
by license or otherwise expressly impliedly or otherwise, for any of the
Proprietary/Confidential Information disclosed by the disclosing party
hereunder. All Proprietary/Confidential Information, existing in written
form or recorded in any other tangible medium, shall be returned to the
disclosing party upon its request, together with any reproductions or
copies thereof. Further, upon the disclosing party's request, notes,
memoranda and reports which incorporate the Proprietary/Confidential
Information shall, without exception, be destroyed.
5. ORAL DISCLOSURE
In the event the disclosing party of such Proprietary/Confidential
Information orally discloses the information to the receiving party, the
disclosing party agrees to promptly notify the receiving party of the
confidentiality of such oral disclosure and reduces to writing such
Proprietary/Confidential Information and submit the same to the receiving
party within 15 days of such oral disclosure, upon which the receiving
party shall not be bound by the confidentiality obligations as herein
provided as regards the said Proprietary/Confidential Information disclosed
Each party agrees that necessary authorizations, permits or licenses
including expert licenses as may be required will be obtained prior to the
exportation/disclosure of any Proprietary/Confidential Information relating
to the technology of the other party. The disclosing party shall notify the
receiving party of the need to obtain any required authorizations, permits
and licenses and/or the need to comply with any relevant laws or
regulations relating to the disclosure. The disclosing party shall obtain
the required authorizations, permits and licenses.
The aforesaid obligations of the receiving party shall survive the
termination of this Agreement.
8. LIMITED WARRANTY
Each party hereto warrants that it has the right to disclose the
Proprietary/Confidential Information which it discloses to the other
parties and that the Proprietary/Confidential Information disclosed is to
the best of its knowledge, correct. Nothing contained in this agreement
shall be construed to obligate any party to disclose any information to the
9. REMEDY FOR BREACH
It is understood and agreed between the parties that any breach of the
obligations of confidentiality contained in this Agreement may cause the
disclosing party irreparable loss. Accordingly, and in addition to any
other remedies a party may have in law or equity, the disclosing party
shall be entitled to obtain injunctive relief against the receiving party
to prevent any further or continuing breach of the receiving party's
obligations or additional damage to the disclosing party in the event such
loss is in fact incurred by the disclosing party as a result of the breach
or is imminent.
If, for any reason, a court of competent jurisdiction finds any provision
of this Agreement, or any portion thereof, to be unenforceable, such
decision shall not affect the validity of the remaining portion, which
remaining portion shall continue in full force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated
In the event that a portion of this Agreement shall be declared to be
invalid, then the parties agree, that they shall, in good faith, negotiate
with one another to replace such invalid provision with a valid provision
as similar as possible to that which had been said to be invalid.
This Agreement shall govern all matters referred to herein until terminated
by either party upon thirty days written notice to the other or in
accordance with this Agreement. Upon termination, all information and
materials shall be returned to the respective parties. Notwithstanding the
termination, each party shall continue to fulfill its obligations hereunder
for a period of five (5) years thereafter.
Any notice or communication to be given under this Agreement shall be given
if delivered in writing to the intended recipient at the address and marked
for the attention of the person set out in this Agreement or as may be
notified from time to time by the party concerned.
This Agreement shall be fully binding upon inure to the benefit of and be
enforceable by the parties herein, their legal representatives and other
respective successors and assigns. Each party shall not make any assignment
of the Agreement or any interest therein without the prior written consent
of the other party.
The failure of any party to insist upon or enforce strict performance of
any of the provisions of this Agreement or to exercise any rights or
remedies under the Agreement shall not be construed as a waiver or
relinquishment to any extent of such party's rights to assert or rely upon
any such provisions, rights or remedies in that or any other instance;
rather the same shall remain in full force and affect.
The terms of this Agreement are confidential and shall not be disclosed to
third parties without the written consent of all parties, accept to the
extent required by a court or regulatory agency of competent jurisdiction.
13. GOVERNING LAW
This Agreement shall be governed by, construed and enforced in accordance
with California Law.
IN WITNESS WHEREOF, the parties have hereunto set their hands the day and
year first written above.
CREATIVE LABS, INC PACIFIC MAGTRON, INC.
Signature: /s/ Joseph R. Bowsky Signature: /s/ Ted Li
Name: Joseph R. Bowsky Name: Ted Li
Designation: National Sales Manager Designation: President