Let's break down the statement step by step, so it’s clear and easy to understand:
- Confidentiality Clause: The phrase "shall maintain the confidentiality of any proprietary or confidential information received" indicates that the company X is required to keep secret any sensitive information they obtain from Aztoys International or Azbookvarik Land LLC. This means they cannot share this information with others.
- Non-Disclosure: The next part, "shall neither disclose it to any individual or organization", reinforces that company X is strictly prohibited from telling anyone else about the confidential information. This extends to individuals and organizations alike.
- Usage Restriction: There’s also a clause stating "or use it for its own benefit", meaning that company X cannot utilize this confidential information to gain any advantage or profit for themselves. They must respect the information's proprietary nature.
- Breach of Agreement: If company X fails to adhere to these confidentiality obligations, the agreement states "in the event this agreement is breached". This addresses what happens if the rules are not followed.
- Compensation: If a breach occurs, company X must "compensate companies Aztoys International and Azbookvarik Land LLC the actual costs of developing the product". This compensation is not just an arbitrary sum; it includes the actual expenses incurred like "3D model and artwork creation, prototype and/or mold manufacturing". This means they are liable to pay back the costs incurred by the other company as a result of the breach, which could be substantial.
In summary, this clause emphasizes the importance of protecting confidential information, outlines the restrictions against sharing or misusing that information, and sets forth the consequences of failing to uphold these responsibilities.