A. Recipient and AuSIM are engaged in discussions in contemplation of a business relationship. In the course of dealings between Recipient and AuSIM, Recipient will have access to or have disclosed to it information relating to AuSIM which is of a confidential nature as that term is later defined in this Agreement.

B. AuSIM desires to establish and set forth Recipient’s obligations with respect to AuSIM’s confidential information.

In consideration of the foregoing, Recipient and AuSIM mutually agree as follows:

1. "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, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulae related to the current, future, and proposed products and services of AuSIM and includes, without limitation, its respective information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, customer lists, business forecasts, sales and merchandising, and marketing plans and information.

2. Recipient agrees it will not make use of, disseminate, or in any way circulate within its own organization any Confidential Information of AuSIM, which is supplied to or obtained by it in writing, orally or by observation, except to the extent necessary for negotiations, discussions and consultations with personnel or authorized representatives of AuSIM; and any purpose AuSIM may hereafter authorize in writing.

3. Recipient agrees that it shall disclose Confidential Information of AuSIM only to those of its employees or consultants who need to know such information and certifies that such employees or consultants have previously agreed, either as a condition of employment or in order to obtain the Confidential Information, to be bound by the terms and conditions of this Agreement.

4. Recipient agrees that it shall treat all Confidential Information of AuSIM with the same degree of care as it accords to its own confidential information of the same or similar nature, and Recipient represents that it exercises reasonable care to protect its own confidential information. Recipient will immediately give notice to AuSIM of any unauthorized use of disclosure of Confidential Information and Recipient will assist AuSIM in remedying such unauthorized use of disclosure.

5. Recipient further agrees that it shall not publish, copy or disclose any Confidential Information of AuSIM to any third party and that it shall prevent inadvertent disclosure of such Confidential Information to any third party.

6. Recipient's obligations under paragraphs 2, 3, 4, and 5 with respect to any portion of AuSIM's Confidential Information shall terminate when Recipient can document that (a) it was in the public domain at the time it was communicated to the Recipient by AuSIM; or entered the public domain subsequent to the time it was communicated to Recipient by AuSIM through no fault of Recipient: (b) it was communicated by AuSIM to an unaffiliated third party free of any obligation of confidence: or (c) the communication was in response to a valid unaffiliated third party free of any obligation of confidence; (d) the communication was in response to a valid order by a court or other governmental body, was otherwise required by law, or was necessary to establish the rights of either party under this Agreement; (e) can document or demonstrate that it was already known by recipient at the time of disclosure; or (f) can document that it was independently developed by recipient without access to Confidential Information through reverse engineering or otherwise.

7. This Agreement does not grant Recipient any license to use Confidential Information except as provided in Paragraph 2.

8. All materials (including, without limitation, documents, drawings, models, apparatus, sketches, designs and lists) furnished to Recipient by AuSIM, after the date of this agreement and which are designated in writing to be the property of AuSIM, shall remain the property of AuSIM and shall be returned to it promptly at its request, together with any copies thereof.

9. Recipient will not communicate any information to AuSIM in violation of the proprietary rights of any third party.

10. Recipient will not export, directly or indirectly, any technical data acquired from AuSIM pursuant to this Agreement or any product utilizing any such data to any country for which the U. S. Government or any agency thereof at the time of export requires an export license or other government approval without first obtaining such license or approval.

11. Since unauthorized disclosure of Confidential Information will diminish the value to AuSIM of the proprietary interests that are the subject of this Agreement, if Recipient breaches any of its obligations hereunder, AuSIM shall be entitled to equitable relief to protect its interests therein, including but not limited to injunctive relief, as well as monetary damages.

12. This Agreement shall govern all communications between the parties that are made during the period from the effective date of this Agreement to the date on which either party receives from the other written notice that subsequent communications shall not be so governed. Parties obligations under this agreement shall terminate three years from date hereof.

13. This Agreement shall be construed in accordance with the laws of the State of California, without giving effect to principles of conflict of laws.

14. This Agreement is the complete and exclusive statement of the agreement between the parties, supersedes all prior written and oral communications and agreements relating to the subject matter hereof and may be amended or supplemented only by a writing that is signed by duly authorized representatives of both parties.

15. Any notice required to be given under this Agreement shall be deemed received upon personal delivery or three (3) days after mailing if sent by registered or certified mail to the addresses of the parties set forth below, or to such other address as either of the parties shall have furnished to the other in writing.

16. Recipient may not assign its rights under this Agreement.

17. In the event of invalidity of any provision of this Agreement, the parties agree that such invalidity shall not affect the validity of the remaining portions of this Agreement, and further agree to substitute for the invalid provision a valid provision which most closely approximates the intent and economic effect of the invalid provision.

In witness whereof, the parties have executed this Agreement in duplicate as of the date first written above.