CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT

THIS AGREEMENT

made as of this 24 of March 24, 2004

BETWEEN:

VICTOR TETS and DMITRY GENKIN

(hereinafter referred to as “Discloser”)

- and -

ALEXANDER TULKO

(hereinafter referred to as “Recipient”)

WHEREAS:

A.	The parties to this Agreement are entering into discussions for the purpose of exploring potential business relationships that would enure to the mutual benefit of the parties hereto;

B.	During the said discussions between Recipient and Discloser, it is contemplated that certain Confidential Information (as hereinafter defined) may be disclosed by Discloser to Recipient;

C.	The parties wish that any such Confidential Information shall remain confidential on the terms and conditions hereinafter set forth;

IN CONSIDERATION of the premises, of the mutual promises contained herein, and of other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1.	DEFINITIONS.

	“Confidential Information” shall mean any and all information disclosed by Discloser to Recipient relating to the business or product(s) that Discloser designates as being confidential, whether or not such information is marked as being ‘confidential’, or which, under the circumstances surrounding disclosure, should be treated as confidential, regardless of whether Discloser provides such information to Recipient in tangible form or it is retained in the intangible memory of Recipient.  Confidential Information includes, for example and without limitation, Discloser’s confidential business or technical information, such as financial information or data, marketing techniques and material, business plans and strategies, business operation and systems, pricing policies, information concerning employees, customers, and/or suppliers, trade secrets, discoveries, inventions, improvements, research, development, know-how, designs, products, compositions, formulae, prototypes, biological or physical materials and manufacturing processes, whether patented or not.

	“Discloser” shall have the meaning ascribed above.
	
	“Derivatives” shall have the meaning ascribed thereto in Section 5.2.
	
	“Recipient” shall have the meaning ascribed above.

2.	DISCLOSURE AND USE RESTRICTIONS.

	2.1	Permitted Use and Disclosure.  Recipient may use Confidential Information solely for the purpose of evaluating the potential business relationship that would enure to the mutual benefit of the parties hereto.  Recipient may only disseminate Confidential Information to those employees or consultants of Recipient who:

	(i)	have a demonstrable need to know; and

	(ii)	have been informed of Recipient’s obligations hereunder; and

	(iii)	are bound by an obligation of confidentiality to Recipient at least as broad in scope as Recipient’s obligations hereunder.

A breach of this Section 2.1 shall be considered a material breach hereunder.

	2.2	Restrictions.  Except as expressly provided in Section 2.1 of this Agreement, Recipient shall not:

(i)	publish, disseminate or otherwise disclose or make available Confidential Information received hereunder to any individual, corporation, or other person without prior written consent of Discloser, which consent may be unreasonably withheld; or

(ii)	use Confidential Information for any purpose including, without limitation, selling, leasing, renting, licensing, marketing or otherwise distributing any Confidential Information or products or services embodying or derived from same.  Recipient agrees to hold Confidential Information in confidence, to use the same degree of care that it uses to protect its information of similar importance, and to prevent any unauthorized disclosure of Confidential Information, but in no event less than a reasonable degree of care; or

	(iii)	at any time after discussions for the purpose of exploring potential business relationships with Discloser have concluded:

		(A)	use any of the Confidential Information in furtherance of the business of Recipient or the business of any individual, corporation, or other person; or

		(B)	interfere in any way with any contractual or other business relationship of Discloser; or

		(C)	disclose, disseminate or otherwise communicate Confidential Information or any part thereof to any individual, corporation, or other person or utilize Confidential Information; or

		(D)	directly or indirectly solicit for employment any individual who is now employed by Discloser, unless Discloser otherwise agrees in writing prior to such solicitation for employment.

	2.3	No Reverse Engineering.  Recipient shall not alter, modify, break-down, disassemble, or reverse engineer materials or compositions containing or constituting Confidential Information without the express prior written consent of Discloser, which consent may be unreasonably withheld.

	2.4	Discussions.  Recipient shall not publicize or disclose beyond those persons to whom Confidential Information may be disclosed hereunder the existence and the terms of this Agreement or the discussions that give rise to this Agreement and all such information shall be deemed Confidential Information for all purposes hereof.

	2.5	Notification of Unauthorized Use or Disclosure.  Recipient shall notify Discloser in writing immediately upon discovery of any unauthorized use or disclosure of Confidential Information by Recipient, its employees or consultants, or other persons, and will actively cooperate with Discloser to regain possession or control of Confidential Information and prevent its further unauthorized use.

3.	NO EXPORT.  Recipient shall not export, directly or indirectly, including but not limited to export in the Internet or other network service, any Confidential Information or technical data acquired by Recipient from Discloser under this Agreement.

4.	EXCEPTIONS.  Recipient shall have no obligation under this Agreement to maintain in confidence any information which it can demonstrate:

(i)	is in the public domain at the time of disclosure; or

(ii)	though originally Confidential Information, subsequently becomes part of the public knowledge through no fault of Recipient, as of the date of its becoming part of the public knowledge; or

(iii)	that Recipient shall be entitled to disclose in response to a court order or as otherwise required by law; provided, however, that Recipient notified Discloser prior to such disclosure forthwith after receipt of such order to give Discloser time to contest such order; or

(iv)	is compelled by any governmental or regulatory body in Canada having jurisdiction over the operations of Discloser or any part thereof or over Recipient.  In the event that Recipient is required by law or governmental action to disclose any of the Confidential Information, Recipient will deliver to Discloser prompt prior notification of such requirement(s) so that Discloser may seek an appropriate protective order and/or waive compliance by Recipient with the provisions of this Agreement.  If, failing the obtaining of a protective order or the delivery of such a waiver, Recipient is, in the legal opinion of its counsel (acting reasonably), compelled to disclose, disseminate or otherwise communicate Confidential Information, Recipient may disclose, disseminate, or otherwise communicate Confidential Information, but only to the extent so compelled, without liability hereunder.

5.	OWNERSHIP OF CONFIDENTIAL INFORMATION.

	5.1	Ownership of Materials.  All materials furnished to Recipient by Discloser, including without limitation documents, drawings, apparatus, prototypes, sketches, designs, biological or physical materials, Confidential Information, and media upon which Confidential Information is stored or recorded shall remain the property of Discloser, and the ownership of, and all right, title and interest therein shall at all times remain exclusively vested in Discloser.  This Agreement does not give Recipient a licence, implied or express, or other rights, title or interest in the Confidential Information.  Recipient will return all such material, and all copies and notes thereof, in its possession or control to Discloser as soon as possible following Discloser’s request.  The return of such portion of Confidential Information which consists of written material shall in no event relieve Recipient of its obligations contained in this Agreement.

	5.2	Ownership of Derivative Works.  Any and all Derivatives of Confidential Information shall be the property of Discloser.  In this Agreement, “Derivatives” shall mean: 

	(i)	for copyrightable or copyrighted material, any translation, abridgement, revision, or other form in which an existing work may be recast, transformed or adapted; or

	(ii)	for patentable or patented material, any improvement thereon; or

	(iii)	for other material whether or not protected by trade secret, any new materials derived from such existing trade secret material, including new material which may be protectable by copyright, patent, and/or trade secret.

6.	DISCRETION.  Each party acknowledges that notwithstanding the execution of this Agreement, Discloser maintains the sole and absolute discretion to determine what, if any, Confidential Information it will release to Recipient.

7.	TERMINATION.  Upon written notice from one party to the other, this Agreement and the parties’ rights and obligations with respect hereto may be terminated solely as to yet undisclosed Confidential Information; provided, however, that this Agreement and the parties’ rights and obligations hereunder shall survive and remain in full force and effect with respect to Confidential Information disclosed prior to the receipt of such written notice.

8.	BREACH.  Recipient acknowledges that a breach of this Agreement would not be adequately compensated by monetary damages and that in the event of a breach, or threat of a breach of the terms of this Agreement, on its part, Discloser shall, in addition to other available legal or equitable remedies, be entitled to an injunction restraining Recipient, or any other parties about to commit any breach of this Agreement, or who have committed a breach thereof, from committing the same, without showing or providing actual damage sustained by Discloser.

9.	NO  WARRANTY.  All Confidential Information is provided “as is” and without any warranty, whether expressed or implied, regarding its efficacy, accuracy, completeness or performance; provided, however, Discloser shall use its best abilities to provide the appropriate Confidential Information to Recipient.  Discloser shall not be liable to Recipient for any damages arising out of the use of Confidential Information.  Any use of Confidential Information is therefore at Recipient’s own risk.

10.	NO LIABILITY FOR INFORMATION.  At the times(s) any of the Confidential Information is delivered to Recipient, Discloser will attempt to include in such Confidential Information such materials which Discloser considers to be reliable and relevant for the purposes hereof, however, Discloser shall not have or incur any, and Recipient hereby waives any right to claim any, liability to Recipient in connection with or arising from Confidential Information and the use thereof by Recipient or its representatives.

	Recipient acknowledges and agrees for itself and its representatives that neither Discloser nor any of its representatives in providing Confidential Information have or will be taken to have made either expressly or impliedly any representations or warranties as to the accuracy or completeness of Confidential Information and Recipient confirms that it is not relying on any representations or warranties of Discloser or its representatives in making use of Confidential Information.

11.	GENERAL.

	11.1	Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto regarding Confidential Information disclosed thereunder and supersedes all oral or written agreements, either entered prior to or contemporaneously with this Agreement, concerning Confidential Information.  This Agreement may not be modified except by written agreement dated subsequent to the date of this Agreement and signed by both parties.

	11.2	Assignment; Enurement.  Recipient shall not assign or transfer any rights or obligations under this Agreement without the prior written consent of Discloser, which consent may be unreasonably withheld.  Subject to the limitations set forth in this Agreement, this Agreement will enure to the benefit of and be binding upon the parties, their personal or legal representatives, heirs, executors, administrators, successors and assigns as the case may be.

	11.3	Presumptions; Headings.  In construing the terms of this Agreement, no presumption shall operate in either party’s favour as a result of its counsel’s role in drafting the terms or provisions hereof.  The Section headings in this Agreement are for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

	11.4	Time of the Essence.  Time shall be of the essence of this Agreement and of every part hereof and no extension or variation of this Agreement shall operate as a waiver of this provision.

	11.5	Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.  Each of the parties hereto agrees irrevocably to conform to the non-exclusive jurisdiction of the Courts of such Province.

	11.6	Severability; Waiver.  If any provision of this Agreement shall be held by a court of competent jurisdiction to be unenforceable, the remaining provisions shall remain in full force and effect.  A waiver by either of the parties hereto of any of the covenants to be performed by the other party or any breach thereof shall not be construed to be a waiver of any succeeding breach thereof or of any covenant hereof contained.
 
	11.7	Notices.  Any notice provided for under this Agreement shall be in writing and shall be sufficiently given if delivered personally, or if transmitted by facsimile with an original signed copy sent by prepaid registered mail within forty-eight (48) hours thereafter, or if mailed by prepaid registered mail to the parties, as follows:

	(i)	if to Discloser, at:

			Apt. 95, 27 Lengoveta Street, 
			Saint-Petersburg 196066, Russia
			Facsimile: 812-319-4667

			Attention: Victor Tets

(ii)	if to Recipient, at:
			Apt. 821, 77 Huntley St.
			Toronto, ON M4Y 2P3
			Canada
	Attention: Alexander Tulko

or at such other address or facsimile number as the party to whom such notice is to be given otherwise directs in writing.  Any notice delivered aforesaid shall be effective on the date of personal delivery, or on the date of facsimile transmission, and any notice mailed as aforesaid shall be effective three (3) days after the mailing thereof, provided that where interruption of mail services is likely by reason of any strike or other labour dispute, notice shall be given by personal delivery only.

	11.8	Counterparts.  This Agreement may be executed in several counterparts, each of which so executed shall be deemed to be an original and such counterparts together shall be but one and the same instrument.

	11.9	Transmission by Facsimile.  The parties hereto agree that this Agreement may be transmitted by facsimile or such similar device and that the reproduction of signatures by facsimile or such similar device will be treated as binding as if originals and each party hereto undertakes to provide each and every other party hereto with a copy of the Agreement bearing original signatures forthwith upon demand.

	11.10	Language.  The parties confirm that it is their wish that this Agreement as well as all other documents relating to this Agreement, including notices, be drawn up in English only.  

	IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date first above written.

		____________________________	
		Victor Tets

		____________________________	
		Dmitry Genkin

				
		_______________________________
		Alexander Tulko