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EXHIBIT 10.20
BOARD OBSERVER CONFIDENTIALITY AGREEMENT
This Board Observer Confidentiality Agreement (the "Agreement") is made
on December 6, 1998 (the "Effective Date"), by and between Jaycor Networks,
Inc., a Delaware corporation, (the "Company") having a place of business at 0000
Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000 and Xxx Xxxxxx, an individual
(the "Board Observer") having an address at 000 Xxxxx Xxxxxxxx Xxxx., Xxxxxxxx,
XX 00000.
RECITALS
WHEREAS The Company and Adaptec, Inc. ("Investor") have entered into
that certain Investor's Rights Agreement dated November 12, 1998; and
WHEREAS pursuant to Section 2.7 of the Investor's Rights Agreement,
Investor has designated the above named Board Observer to attend the Company's
Board of Director meetings on behalf of the Investor as an observer; and
WHEREAS In the course of such observation, the Board Observer will have
access to, or will have disclosed to it, certain information relating to the
Company which is Confidential Information, as that term is defined in this
Agreement; and
WHEREAS the Company desires to establish and set forth the Board
Observer's obligations with respect to the Company's confidential information;
NOW, THEREFORE Company and the Board Observer hereby agrees as follows:
AGREEMENT
1. Confidential Information. "Confidential Information" as used in this
Agreement shall mean any and all technical and non-technical information
including patent, copyright, trade secret, and proprietary information,
know-how, materials and other information related to the current, future and
proposed products and services of Company, and includes, without limitation, its
respective information concerning research, development, financial information,
procurement requirements, purchasing manufacturing, customer lists, business
forecasts, sales and merchandising and marketing plans and information.
"Confidential Information" also includes proprietary or confidential information
of any third party who may disclose such information to Company or Board
Observer in the course of Company's business.
2. Nondisclosure and Nonuse Obligations. Board Observer agrees that it
will not make use of, disseminate, or in any way disclose Confidential
Information of the Company which is supplied to or obtained by it in writing,
orally or by observation, and specifically agrees not to communicate in any
form, including in discussions or in written form, any Confidential Information
to Investor without Company's prior written consent. Should Board Observer
desire a non-confidential version of any Confidential Information presented at a
board meeting, Board Observer shall request such version from Company, who will
promptly prepare and deliver such
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non-confidential version to Board Observer for further dissemination to
Investor. Board Observer will immediately give notice to Company of any
unauthorized use or disclosure of the Confidential Information. Board Observer
agrees to assist Company in remedying any such unauthorized use or disclosure of
the Confidential Information.
3. Exclusions from Nondisclosure and Nonuse Obligations. Board
Observer's obligations under Paragraph 2 ("Nondisclosure and Nonuse
Obligations") with respect to any portion of Confidential Information shall not
apply to information that Board Observer can document: (a) was in the public
domain at or subsequent to the time it was communicated to Board Observer by
Company through no fault of Board Observer; or (b) was rightfully in Board
Observer's possession free of any obligation of confidence at or subsequent to
the time it was communicated to Board Observer by Company. A disclosure of
Confidential Information (i) in response to a valid order by a court or other
governmental body, (ii) otherwise required by law or (iii) necessary to
establish the rights of either party under this Agreement, shall not be
considered to be a breach of this Agreement or a waiver of confidentiality for
other purposes; provided, however, that the Board Observer shall provide prompt
written notice thereof to Company to enable it to seek a protective order or
otherwise prevent such disclosure.
4. Disclosure to Third Parties. Board Observer agrees that it shall not
publish, copy or disclose any Confidential Information of the Company to any
third party and that it shall use diligent efforts to prevent inadvertent
disclosure of such Confidential Information.
5. Exclusion From Board Meetings. Company shall have the right to
exclude Board Observer from all or any part of a board meeting if in its sole
discretion (i) such exclusion is necessary to preserve the attorney-client
privilege or (ii) the board will be discussing matters which the Company deems
in good faith to be of a competitive business nature.
6. Disclosure of Third Party Information. Neither party shall
communicate any information to the other in violation of the proprietary rights
of any third party.
7. Term. This Agreement shall govern all communications between the
parties that are made during the period from the Effective Date of this
Agreement until the earlier of (i) written notice from Board Observer to Company
that Board Observer is no longer Investor's designee to attend the Company's
Board of Directors Meetings, (ii) the date ten (10) days after notice from
Company to Board Observer of its intent to terminate this Agreement, or (iii)
automatically three (3) years after the Effective Date, provided, however, that
Board Observer's obligations under Paragraph 2 ("Nondisclosure and Nonuse
Obligations") with respect to Confidential Information of Company which it has
previously received shall survive such termination unless terminated pursuant to
Paragraph 3 ("Exclusions from Nondisclosure and Nonuse Obligations"). With
regard to Section 7(i) above, Board Observer shall provide Company prompt
written notice of Investor's determination to revoke Board Observer's status as
its Board Observer.
8. Notices. Any notice required or permitted by this Agreement shall be
in writing and shall be delivered as follows with notice deemed given as
indicated: (i) by personal delivery
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when delivered personally; (ii) by overnight courier upon written verification
of receipt; (iii) by telecopy or facsimile transmission upon acknowledgment of
receipt of electronic transmission; or (iv) by certified or registered mail,
return receipt requested, upon verification of receipt. Notice shall be sent to
the addresses set forth above or such other address as either party may specify
in writing.
9. Governing Law. This Agreement shall be governed in all respects by
the laws of the United States of America and by the laws of the State of
California, without application of its conflicts of laws principles. The parties
irrevocably consent to the non-exclusive personal jurisdiction of the federal
and state courts located in California.
10. Severability. Should any provisions of this Agreement be held by a
court of law to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby.
11. Waiver. The waiver by Company of a breach of any provision of this
Agreement by Board Observer shall not operate or be construed as a waiver of any
other or subsequent breach by Board Observer.
12. Injunctive Relief. A breach of any of the promises or agreements
contained herein will result in irreparable and continuing damage to Company for
which there will be no adequate remedy at law, and Company shall be entitled to
injunctive relief and/or a decree for specific performance, and such other
relief as may be proper (including monetary damages if appropriate).
13. Entire Agreement. This Agreement constitutes the entire agreement
with respect to the Confidential Information disclosed herein and supersedes all
prior or contemporaneous oral or written agreements concerning such Confidential
Information.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
JAYCOR NETWORKS, INC. BOARD OBSERVER
By: /s/ XXXXX X. XXXXXXXX By: /s/ XXXXXX XXXXXX
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Name: Xxxxx X. Xxxxxxxx Name: Xxxxxx Xxxxxx
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Title: President & CEO
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