Sample Business Contracts

Employee Proprietary Information and Inventions Agreement - Castelle and Donald L. Rich

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In  consideration  of my  employment  or continued  employment  by Castelle (the
"Company"), and the compensation now and hereafter paid to me, I hereby agree as


1.1  Recognition  of  Company's  Rights;  Nondisclosure.  At all times during my
employment  and  thereafter,  I will hold in strictest  confidence  and will not
disclose,  use,  lecture  upon  or  publish  any  of the  Company's  Proprietary
Information (defined below),  except as such disclosure,  use or publication may
be required in connection with my work for the Company,  or unless an officer of
the  Company  expressly  authorizes  such in writing.  I will  obtain  Company's
written  approval  before  publishing or submitting for publication any material
(written,  verbal,  or  otherwise)  that  relates to my work at  Company  and/or
incorporates  any  Proprietary  Information.  I hereby assign to the Company any
rights I may have or acquire in such Proprietary  Information and recognize that
all  Proprietary  Information  shall be the sole property of the Company and its

1.2 Proprietary Information.  The term "Proprietary  Information" shall mean any
and all confidential  and/or proprietary  knowledge,  data or information of the
Company.  By way of illustration but not limitation,  "Proprietary  Information"
includes (a) trade secrets, inventions, mask works, ideas, processes,  formulas,
source and object codes, data,  programs,  other works of authorship,  know-how,
improvements,  discoveries,  developments,  designs and techniques  (hereinafter
collectively  referred to as "Inventions");  and (b) information regarding plans
for research,  development, new products, marketing and selling, business plans,
budgets  and  unpublished  financial  statements,  licenses,  prices  and costs,
suppliers  and  customers;   and  (c)  information   regarding  the  skills  and
compensation of other employees of the Company.  Notwithstanding  the foregoing,
it is understood that, at all such times, I am free to use information  which is
generally  known in the trade or  industry,  which is not  gained as result of a
breach of this Agreement, and my own, skill, knowledge,  know-how and experience
to whatever extent and in whichever way I wish.

1.3 Third Party  Information.  I understand,  in addition,  that the Company has
received  and in the future will  receive  from third  parties  confidential  or
proprietary  information  ("Third Party  Information")  subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only  for  certain  limited  purposes.  During  the  term of my  employment  and
thereafter,  I will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than Company  personnel who need to know such
information  in  connection  with their work for the Company) or use,  except in
connection  with my  work  for  the  Company,  Third  Party  Information  unless
expressly authorized by an officer of the Company in writing.


1.4 No Improper Use of  Information  of Prior  Employers  and Others.  During my
employment by the Company I will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employer or any other person
to whom I have an obligation of  confidentiality,  and I will not bring onto the
premises of the Company any unpublished  documents or any property  belonging to
any  former  employer  or any  other  person  to  whom I have an  obligation  of
confidentiality  unless  consented  to in writing  by that  former  employer  or
person.  I will use in the  performance of my duties only  information  which is
generally  known and used by persons with training and experience  comparable to
my own,  which is common  knowledge in the industry or otherwise  legally in the
public domain, or which is otherwise provided or developed by the Company.


2.1  Proprietary  Rights.  The term  "Proprietary  Rights"  shall mean all trade
secret,  patent,  copyright,  mask work and other  intellectual  property rights
throughout the world.

2.2 Prior Inventions.  Inventions, if any, patented or unpatented,  which I made
prior to the  commencement  of my employment  with the Company are excluded from
the scope of this Agreement.  To preclude any possible  uncertainty,  I have set
forth on Exhibit B (Previous  Inventions) attached hereto a complete list of all
Inventions that I have,  alone or jointly with others,  conceived,  developed or
reduced to practice or caused to be conceived,  developed or reduced to practice
prior to the commencement of my employment with the Company,  that I consider to
be my property or the property of third parties and that I wish to have excluded
from  the  scope  of  this  Agreement   (collectively   referred  to  as  "Prior
Inventions").  If  disclosure  of any such  Prior  Invention  would  cause me to
violate any prior confidentiality  agreement, I understand that I am not to list
such Prior  Inventions  in Exhibit B but am only to disclose a cursory  name for
each such invention, a listing of the party(ies) to whom it belongs and the fact
that full disclosure as to such inventions has not been made for that reason.  A
space is  provided  on  Exhibit B for such  purpose.  If no such  disclosure  is
attached,  I represent that there are no Prior Inventions.  If, in the course of
my employment  with the Company,  I incorporate a Prior Invention into a Company
product,  process or  machine,  the  Company is hereby  granted and shall have a
nonexclusive,  royalty-free,  irrevocable,  perpetual,  worldwide  license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made,
modify,  use and sell such Prior  Invention.  Notwithstanding  the foregoing,  I
agree  that  I  will  not  incorporate,  or  permit  to be  incorporated,  Prior
Inventions  in any  Company  Inventions  without  the  Company's  prior  written

2.3 Assignment of Inventions.  Subject to Sections 2.4, and 2.6, I hereby assign
and agree to assign in the  future  (when  any such  Inventions  or  Proprietary
Rights are first  reduced to practice or first  fixed in a tangible  medium,  as
applicable)  to the Company all my right,  title and  interest in and to any and
all Inventions (and all Proprietary  Rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made or conceived
or reduced to practice or learned by me,  either  alone or jointly  with others,
during the period of my employment with the Company.  Inventions assigned to the
Company, or to a third party as directed by the Company pursuant to this Section
2, are hereinafter referred to as "Company Inventions."

2.4  Nonassignable  Inventions.  This  Agreement  does not apply to an Invention
which  qualifies  fully as a  nonassignable  Invention under Section 2870 of the
California  Labor  Code  (hereinafter  "Section  2870").  I  have  reviewed  the
notification  on Exhibit A (Limited  Exclusion  Notification)  and agree that my
signature acknowledges receipt of the notification.


2.5 Obligation to Keep Company Informed.  During the period of my employment and
for six (6) months after  termination of my employment with the Company,  I will
promptly  disclose to the Company fully and in writing all Inventions  authored,
conceived or reduced to practice by me, either alone or jointly with others.  In
addition,  I will promptly disclose to the Company all patent applications filed
by me or on my behalf within a year after termination of employment. At the time
of each such disclosure,  I will advise the Company in writing of any Inventions
that I believe fully qualify for  protection  under Section 2870;  and I will at
that  time  provide  to  the  Company  in  writing  all  evidence  necessary  to
substantiate  that belief.  The Company will keep in confidence and will not use
for any purpose or disclose to third parties without my consent any confidential
information  disclosed  in writing to the  Company  pursuant  to this  Agreement
relating to Inventions that qualify fully for protection under the provisions of
Section 2870. I will preserve the confidentiality of any Invention that does not
fully qualify for protection under Section 2870.

2.6  Government or Third Party.  I also agree to assign all my right,  title and
interest in and to any particular Company Invention to a third party,  including
without limitation the United States, as directed by the Company.

2.7 Works for Hire. I acknowledge  that all original  works of authorship  which
are made by me (solely or jointly with others) within the scope of my employment
and which are  protectable  by copyright are "works made for hire,"  pursuant to
United States Copyright Act (17 U.S.C., Section 101).

2.8 Enforcement of Proprietary Rights. I will assist the Company in every proper
way to  obtain,  and  from  time to time  enforce,  United  States  and  foreign
Proprietary Rights relating to Company  Inventions in any and all countries.  To
that end I will  execute,  verify and deliver  such  documents  and perform such
other acts  (including  appearances  as a witness) as the Company may reasonably
request for use in applying for, obtaining, perfecting,  evidencing,  sustaining
and enforcing such Proprietary Rights and the assignment thereof. In addition, I
will execute,  verify and deliver  assignments of such Proprietary Rights to the
Company or its  designee.  My  obligation  to assist the Company with respect to
Proprietary  Rights relating to such Company Inventions in any and all countries
shall continue  beyond the  termination of my employment,  but the Company shall
compensate me at a reasonable  rate after my  termination  for the time actually
spent by me at the Company's request on such assistance.

In the event the Company is unable for any reason,  after reasonable  effort, to
secure my  signature  on any  document  needed in  connection  with the  actions
specified in the preceding paragraph, I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact,  which  appointment  is coupled with an interest,  to act for and in my
behalf  to  execute,  verify  and file any such  documents  and to do all  other
lawfully permitted acts to further the purposes of the preceding  paragraph with
the same  legal  force  and  effect  as if  executed  by me. I hereby  waive and
quitclaim to the Company any and all claims, of any nature  whatsoever,  which I
now or may hereafter have for  infringement of any  Proprietary  Rights assigned
hereunder to the Company.


3. RECORDS.  I agree to keep and maintain  adequate and current  records (in the
form of notes, sketches,  drawings and in any other form that may be required by
the Company) of all Proprietary  Information  developed by me and all Inventions
made by me during the period of my  employment  at the  Company,  which  records
shall be available to and remain the sole property of the Company at all times.

4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the
Company I will not, without the Company's express written consent, engage in any
employment or business  activity which is competitive  with, or would  otherwise
conflict with, my employment by the Company. I agree further that for the period
of my  employment  by the  Company  and for  one  (l)  year  after  the  date of
termination  of my  employment  by the Company I will not induce any employee of
the Company to leave the employ of the Company.

5. NO CONFLICTING  OBLIGATION.  I represent that my performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence  information acquired by me in confidence or
in trust prior to my employment by the Company.  I have not entered into,  and I
agree I will not enter into,  any agreement  either  written or oral in conflict

6. RETURN OF COMPANY  DOCUMENTS.  When I leave the employ of the Company, I will
deliver to the Company any and all drawings,  notes, memoranda,  specifications,
devices,  formulas,  and documents,  together with all copies  thereof,  and any
other  material  containing or disclosing  any Company  Inventions,  Third Party
Information or Proprietary  Information of the Company. I further agree that any
property situated on the Company's premises and owned by the Company,  including
disks and other storage media,  filing  cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice.  Prior to
leaving,  I will  cooperate  with the  Company in  completing  and  signing  the
Company's termination statement.

7. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique and
because  I may  have  access  to and  become  acquainted  with  the  Proprietary
Information  of the  Company,  the Company  shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable  relief,  without  bond and without  prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

8. NOTICES.  Any notices  required or permitted  hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing.  Such notice shall be deemed given upon personal
delivery to the appropriate  address or if sent by certified or registered mail,
three (3) days after the date of mailing.

9.  NOTIFICATION  OF NEW  EMPLOYER.  In the event that I leave the employ of the
Company,  I hereby consent to the  notification  of my new employer of my rights
and obligations under this Agreement.



10.1 Governing  Law;  Consent to Personal  Jurisdiction.  This Agreement will be
governed by and construed  according to the laws of the State of California,  as
such laws are applied to  agreements  entered into and to be performed  entirely
within California  between California  residents.  I hereby expressly consent to
the personal jurisdiction of the state and federal courts located in Santa Clara
County,  California  for any lawsuit filed there  against me by Company  arising
from or related to this Agreement.

10.2 Severability.  In case any one or more of the provisions  contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement, and this Agreement shall be construed as
if such invalid,  illegal or  unenforceable  provision had never been  contained
herein.  If  moreover,  any  one or  more of the  provisions  contained  in this
Agreement  shall for any reason be held to be excessively  broad as to duration,
geographical  scope,  activity or subject, it shall be construed by limiting and
reducing  it,  so as  to be  enforceable  to  the  extent  compatible  with  the
applicable law as it shall then appear.

10.3  Successors  and  Assigns.  This  Agreement  will be binding upon my heirs,
executors,  administrators and other legal  representatives  and will be for the
benefit of the Company, its successors, and its assigns.

10.4 Survival. The provisions of this Agreement shall survive the termination of
my  employment  and the  assignment  of this  Agreement  by the  Company  to any
successor in interest or other assignee.

10.5  Employment.  I agree and understand  that nothing in this Agreement  shall
confer any right with respect to continuation of employment by the Company,  nor
shall it interfere in any way with my right or the Company's  right to terminate
my employment at any time, with or without cause.

10.6 Waiver. No waiver by the Company of any breach of this Agreement shall be a
waiver of any  preceding or succeeding  breach.  No waiver by the Company of any
right under this  Agreement  shall be  construed as a waiver of any other right.
The Company shall not be required to give notice to enforce strict  adherence to
all terms of this Agreement.


10.7  Entire  Agreement.  The  obligations  pursuant to Sections 1 and 2 of this
Agreement shall apply to any time during which I was previously employed,  or am
in the future  employed,  by the Company as a consultant  if no other  agreement
governs  nondisclosure  and  assignment of inventions  during such period.  This
Agreement  is the final,  complete and  exclusive  agreement of the parties with
respect  to the  subject  matter  hereof  and  supersedes  and  merges all prior
discussions  between us. No modification of or amendment to this Agreement,  nor
any  waiver of any rights  under this  Agreement,  will be  effective  unless in
writing and signed by the party to be charged.  Any subsequent change or changes
in my duties,  salary or  compensation  will not affect the validity or scope of
this Agreement.

This Agreement  shall be effective as of the first day of my employment with the
Company, namely: 10 November, 1998.


Dated: 12 November, 1998                                                 

/s/ Donald L. Rich

Donald L. Rich
(Printed Name)



/s/ Jerry Bruke                                                      
By:Jerry Bruke                                                      

Title: President                                                   

3255-3 Scott Boulevard
Santa Clara, California  95054

Dated:   12 November, 1998                                               


                                   EXHIBIT A


         THIS IS TO NOTIFY you in accordance with Section 2872 of the California
Labor Code that the  foregoing  Agreement  between you and the Company  does not
require you to assign or offer to assign to the Company any  invention  that you
developed  entirely  on your own time  without  using the  Company's  equipment,
supplies,  facilities or trade secret  information  except for those  inventions
that either:

         1. Relate at the time of  conception  or  reduction  to practice of the
invention  to the  Company's  business,  or actual or  demonstrably  anticipated
research or development of the Company;

         2. Result from any work performed by you for the Company.

         To the  extent a  provision  in the  foregoing  Agreement  purports  to
require  you to  assign  an  invention  otherwise  excluded  from the  preceding
paragraph,  the  provision  is against  the  public  policy of this state and is

         This  limited  exclusion  does not  apply to any  patent  or  invention
covered by a contract  between the  Company and the United  States or any of its
agencies  requiring  full title to such patent or  invention to be in the United

         I ACKNOWLEDGE RECEIPT of a copy of this notification.

By:       /s/  DONALD L. RICH                
          DONALD L. RICH

Date:  12 November, 1998                                           


Jerome J. Burke


                                    EXHIBIT B

TO:            Castelle

FROM:          Donald Rich                     

DATE:          12 November, 1998                   

SUBJECT:       Previous Inventions

1. Except as listed in Section 2 below,  the following is a complete list of all
inventions or  improvements  relevant to the subject  matter of my employment by
Castelle  (the  "Company")  that have been made or conceived or first reduced to
practice  by me alone or  jointly  with  others  prior to my  engagement  by the

          |X|  No inventions or improvements.

          | |  See below:

| |      Additional sheets attached.

         2. Due to a prior  confidentiality  agreement,  I cannot  complete  the
disclosure  under  Section 1 above with respect to  inventions  or  improvements
generally listed below, the proprietary rights and duty of confidentiality  with
respect to which I owe to the following party(ies):

         Invention or Improvement        Party(ies)       Relationship

1.       ________________________        __________       _________________

2.       ________________________        __________       _________________

3.       ________________________        __________       _________________

| |      Additional sheets attached.