MUTUAL NONDISCLOSURE AGREEMENT

2011 LightwaveLaw.com

Included:
* Overview * Dos & Donts Checklist * Mutual Nondisclosure Agreement Instructions * Sample Mutual Nondisclosure Agreement

1. Overview Nondisclosure agreements (also called NDAs or confidentiality agreements) have become increasingly important for businesses of all sizes, serving as the first line of defense in protecting inventions, trade secrets, and hard work. These agreements are critical not only when confidential information has been wrongly divulged, but also when no disclosures have yet been made. At their core, nondisclosure agreements build relationships of trust between parties. These agreements are used when at least one person is sharing confidential information with someone else, and protect the immediate and future privacy of that disclosed information. Once signed, a nondisclosure agreement allows for open dialogue between parties, creating an environment in which information can be discussed freely and the true objectives of the meeting or relationship can be achieved (for example, a company may be created or a strategic partnership may be established). There are two key types of nondisclosure agreements: unilateral and mutual. Mutual nondisclosure agreements (like the agreement contained in this packet) should be used when both parties will be sharing confidential information, as when the parties are considering the creation of a partnership, joint venture, or merger. Unilateral nondisclosure agreements should be used when only one side will be sharing confidential information, as when one party is seeking funding for or investment in a company.

Mutual Nondisclosure Agreement

2. Dos & Donts Checklist Creating a nondisclosure agreement is the first of many steps in maintaining and protecting your confidential information. The following tips will provide additional guidance about protecting your business or personal interests: Protecting confidential information should be the rule and not the exception. Get in the habit of using a nondisclosure agreement whenever there is a chance that sensitive information will be disclosed. Instruct all of your companys employees about the importance, security, and protection of confidential information. Wrongful disclosure can happen at any level of your organization. Some business owners hesitate to use nondisclosure agreements, fearing they imply suspicion of or doubt about the other party. This is a mistake. Nondisclosure agreements are common in modern business, and most people wont blink if asked to sign one. If someone does object, ask yourself if you truly want to be in business with that person. Sign at least two copies of the agreement, one each for you and the other party to the agreement. Make sure there are as many originals as there are parties to the contract. Keep the signed nondisclosure agreement in a safe place. An executed agreement is useless if it cant be found. Dont rely on oral promises of confidentiality. They are hard to prove and are harder to enforce. In addition to using a nondisclosure agreement, write CONFIDENTIAL in bold letters on any documents with confidential information. This will remind everyone of the nature of the information and of their obligation to protect it. Review the enclosed agreement carefully. One size does not fit all. If your agreement is complicated, do not use the enclosed form. Contact an attorney to help you draft a document that will meet your specific needs.

Mutual Nondisclosure Agreement

3. Mutual Nondisclosure Agreement Instructions The following provision-by-provision instructions will help you understand the terms of your mutual nondisclosure agreement. The numbers and letters below (for example, Section 1 or Section 2(d)) correspond to provisions in the agreement. Note that in the agreement, red is used to designate places where you need to make a selection among choices or to signal that the language in that color is optional (in other words, its your choice whether or not you include it, depending whether its useful for your arrangement). Blue is used to indicate that you will need to add your own information to the document. Purple is used to indicate that there is a drop-down menu of choices. Make sure you change all colors back to automatic or black before printing your document. Please review the entire agreement before starting the step-by-step process. Introduction of the Parties. Identifies the document as a mutual nondisclosure agreement. ADD INFORMATION: Provide the name of each party in capital letters. SELECT INFORMATION: Choose each partys business type from the purple drop-down list. If you dont see your organizational type listed, feel free to enter it in the space provided. If a party is an individual, choose individual and delete the space for state of organization. ADD INFORMATION: For companies, enter the state in which that organization was created. Recitals. The first sentences after the introduction paragraph, often referred to as recitals, define the world of the agreement and offer key information about the parties. NOTE: Because this is a mutual nondisclosure agreement, both parties are disclosing information. This means that either party can be a Disclosing Party or a Receiving Party, depending the occasion. Dont get hung up on labels; both parties are subject to the same rules. If Confidential Information will be provided only by one party, use a unilateral nondisclosure agreement and not the enclosed form. Section 1: Confidential Information. This is an essential part of the agreement, explaining what each partys Confidential Information is. Review this section very closely to ensure that it provides enough protection for each party and its confidential information. If there are specific types of

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information you want protected (for example, development plans or funding research), add those as part of the list. NOTE: Any documents that were created based on the Confidential Information are also Confidential Information. This means that even if a party makes its own charts or restates the data it receives, those charts and restatements are the other partys Confidential Information, and belong to the other party. ADD INFORMATION: Use the space to insert the number of days each party has to identify information that was spoken as Confidential Information covered by this agreement. OPTIONAL LANGUAGE: The optional sentence protects a Disclosing Party if it mistakenly gives the other party Confidential Information that is not labeled as confidential. Some parties may resist this sentence, since it doesnt give full notice of what is considered confidential. However, including this sentence ensures that neither party gives up rights to Confidential Information simply because it wasnt labeled correctly. Section 2: Obligation to Maintain Confidentiality. (a) Confidentiality. Explains how a party will treat the other partys Confidential Information once it is received. Note two important details: (1) a Receiving Party can use the information only for purposes intended by the Disclosing Party (for example, if the information was disclosed so that Receiving Party could determine whether or not to make an investment, the information can be used only for that purpose); and (2) a Receiving Party can give the information only to certain individuals in its own organization. OPTIONAL LANGUAGE: There is an optional provision that requires each person in each party to sign a confidentiality agreement before getting any Confidential Information. This may be unworkable if one or both parties are large corporations. You can decide if this is a useful or practical addition to your agreement.

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(b) No Reverse Engineering. Indicates that neither party can try to find out information underlying the other partys Confidential Information. For example, if the Confidential Information includes a software program, a Receiving Party cant just protect the program but find and disclose the code underlying it. Each element comprising the Confidential Information is protected. (c) Term. In most contracts, the term is how long the agreement will last and the parties will be required to act. In this agreement, the term is the length of time that a Receiving Party must keep the Disclosing Partys Confidential Information private. OPTIONAL SUBSECTION: The subsection called Term is optional, and puts a time limit on a Receiving Partys responsibility to keep information private. The obligation lasts until either (i) the information becomes public knowledge, without the Receiving Party doing anything (in other words, making it public) or (ii) three years from the date the agreement is signed. There is an exception made for a Disclosing Partys trade secrets, which are required to be kept confidential for as long as they are not public knowledge. Delete this clause if you dont want to set a time limit on the confidentiality obligations. WHY IS THIS OPTIONAL? There is some debate about whether a time limit on nondisclosure is required; after all, confidential information received by someone doesnt always become less confidential over time. You should review the laws in your area, and consider the specific person or company with which you are dealing, to determine whether or not you will need to set an absolute deadline. You can extend the time limit beyond three years, but many people will resist anything longer than five years.

Mutual Nondisclosure Agreement

Section 3: Exclusions. These are listed exceptions to the general rules of a nondisclosure agreement. OPTIONAL LANGUAGE: The optional phrase the Receiving Party demonstrates makes a Receiving Party responsible for proving that one of these exceptions exists. This section describes the situations in which a Receiving Partys disclosure of the Confidential Information does not violate the agreement: (a) if the Confidential Information was made public by someone other than the Receiving Party; OPTIONAL LANGUAGE: The optional word generally makes this exception harder for the Receiving Party. For information to be public is one thing. For information to be generally publically available, it means it has been distributed over a larger number of people. (b) if the Receiving Party had already received the Confidential Information in a non-confidential way. In other words, the information was provided to the Receiving Party before the agreement was signed and when the information either was not considered confidential or was provided in a way implying it wasnt; (c) if the Receiving Party is legally compelled to disclose the Confidential Information. If this is the case, the Receiving Party must tell the Disclosing Party immediately so the Disclosing Party can try to limit any damage; and (d) if the Confidential Information was independently developed by the Receiving Party without breaching the agreement. In other words, if the Receiving Party generated the same information without referencing what the Disclosing Party provided. This exception is included because many financiers, investors, and business owners require it.

Section 4: Return of Property. Explains that if a party asks, the other party will have to return Confidential Information, and must destroy any Derivative Materials it has created. ADD INFORMATION: Enter the amount of time a Receiving Party has to comply with a Disclosing Partys request to destroy Derivative Materials.

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ADD INFORMATION: Enter the amount of time a Receiving Party has to certify that it has destroyed the Derivative Materials after destroying them. Section 5: No Publicity. OPTIONAL SECTION: An optional section stating that neither party can make public announcements about their dealings, unless the other party consents in writing before an announcement. In a small industry, the fact that two parties are in discussions could have an immediate ripple effect on peers and competitors. Keeping dealings private (or at least limiting any disclosure to something the parties agree on) will eliminate this chain reaction. If this does not apply to your business or industry, feel free to delete this optional section. Section 6: Ownership Rights. Restates that the Confidential Information is being shared between the parties for a specific business purpose only. In other words, neither party receives ownership rights in the other partys information received through this agreement. Section 7: Future Products; Residuals. OPTIONAL SECTION: An optional section that gives each party the right to develop products and use information that it or its employees have learned in the course of dealings with the other party. This does not include the Confidential Information itself instead, it means ideas or other intangibles (i.e., things that arent written down and exist only in abstract) that have been suggested during the relationship. This provides more flexibility for future business, allowing individuals to draw on experience and knowledge gained over the course of a business relationship. However, some parties may not want to include this, since it may be a slippery slope from what someone thinks is independently developed knowledge to what is actually Confidential Information. Feel free to delete this optional section if it does not suit your arrangement. Section 8: No Obligation. States that this agreement doesnt oblige either party to enter any future agreement, to use any information provided, or to continue on in the agreement for any period of time. In other words, the agreement just allows the parties to reveal information without that

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information becoming public anything after that would need to be covered by a separate agreement. Section 9: No Warranty. Indicates that each partys information is being provided without any promise that its good, accurate, or useful. Note that this section is in ALL CAPS. In many areas, this is required by law. If you choose to modify this section, make your additions or revisions are in capital letters. Section 10: Governing Law; Attorneys Fees; Equitable Relief. (a) Choice of Law. This lets the parties to choose the state law that will be used to interpret the agreement. This is usually a state in which one or both parties live or do business. ADD INFORMATION: Choose the state whose laws will govern your agreement. NOTE: There should be some connection between the state you choose and the parties or their businesses. A court may be reluctant to uphold a choice-of-law provision that is random, or chosen to avoid a disadvantageous law. (b) Choice of Forum. The forum is the location where the parties disputes will be resolved. ADD INFORMATION: Write the name of the state and county in which you or the other party can bring a lawsuit. NOTE: This subsection is written so that the parties can bring suit in the county and state listed, but are not required to. The parties have agreed to the forum and so it may be easier for a party to sue there, but they can still choose a different location. NOTE: As with choice of law, the forum choice should be reasonable, and have some connection to the parties or their businesses. (c) Attorneys Fees. Explains that if the parties have to take legal action to resolve disagreements, the losing party must pay the prevailing partys attorney fees. (d) Equitable Relief. This subsection allows a party to seek equitable relief (in other words, a court order requiring a party to do or not so something) for any violation of the agreement. This is often included

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when monetary damages will not be enough to protect or repay a party, as when its Confidential Information has been made public knowledge. For example, if a former contractor of Coke distributed the secret formula, it would strike a serious blow against Coke and its business. In all likelihood, Coke would seek both damages and an injunction barring further distribution of their protected information. Section 11: Amendments. An amendment is a change to the terms of the agreement. This Section 11 states that the only way either party can change any terms is if that change is both (a) in writing and (b) signed by both parties. Without this provision, a party could argue that a conversation between the parties was an oral amendment of the document, or that unsigned emails also changed its terms. MAKE A SELECTION: The first option should be selected if the parties are individuals; the second should be selected if they are companies, and signing through representatives. Section 12: Assignment and Delegation. An assignment is the transfer of rights from one person or party to another. A delegation is the transfer of obligations from one person or party to another. The assignment and delegation section of a contract explains which parties can or cant assign and delegate their rights and obligations. In this agreement, neither party may assign or delegate unless the other party gives written consent before that assignment or delegation takes place. OPTIONAL LANGUAGE: The optional phrase states that a party cant unreasonably refuse to give its consent to an assignment or delegation. This prohibits one party from acting irrationally to restrict the other partys rights. This provision limits only voluntary assignments. Involuntary assignments (as when a company merges with another, or dissolves in bankruptcy) are allowed. If either party tries to assign or delegate without getting the other partys permission, that assignment or delegation will be void: in other words, there will be no assignment or delegation and the rights and obligations of the parties will be the same as they were before. Section 13: Successors and Assigns. A successor is a person or company who takes over the role and responsibilities of an original person or company. An assign is a person or company that has had rights transferred to it. This section explains that permitted successors and assigns will have the same rights and responsibilities as the original parties to the agreement.

Mutual Nondisclosure Agreement

For individuals, the equivalent of a successor or assign is someone like an heir or the executor of their will. MAKE A SELECTION: If at least one of the parties is an individual, include the optional language about heirs, executors, and the like. If at least one of the parties is a company, include the optional word successors. Section 14: Counterparts; Electronic Signatures. The title of this provision sounds complicated, but it is simple to explain: it says that even if the parties sign the agreement in different locations, or use electronic devices to transmit signatures (like fax machines or computers), all of the separate pieces will be considered part of the same agreement. In a modern world where signing parties are often not in the same city - much less the same room - this provision ensures that business can be transacted efficiently, without making the agreement invalid. Section 15: Severability. Protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law is passed prohibiting faxed copies of signature pages, it will not undo the entire agreement. Instead, only the references to faxed copies of signature pages would be deleted, leaving the rest of the agreement unchanged. There is an exception in this section. If an essential part of the agreement is invalidated, the agreement may terminate. For example, if a law is passed stating that the kind of information being exchanged cant be treated as confidential, the purpose of the agreement is lost. In such cases, the agreement will probably be invalidated. Section 16: Notices. Lists the addresses to which all official or legal correspondence relating to the agreement should be sent. ADD INFORMATION: Write in a mailing address and contact information for both the Disclosing Party and the Receiving Party. You can include a persons name or a reference to a position at your company (for example, General Counsel). This will keep you from having to amend your agreement any time someone changes jobs. Section 17: Waiver. A waiver occurs when one party does something that gives up a right that they have. This can take written form or can be some kind of action. For example, Section 4 states that a Receiving Party must destroy Derivative Material within a certain number of days after the Disclosing Party requests it. If that Receiving Party doesnt do this and the Disclosing Party doesnt insist on it, the Disclosing Party is said to have waived its right to require this deadline.

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This Section 17 states that the parties can only waive rights in writing. This means that in the example just provided, the Disclosing Party has not waived its rights. It did not make a written waiver the waiver was the action that the Disclosing Party took. If the parties want to change the time limits in Section 4, they will need to create a written, signed waiver or amend the agreement. Section 18: Entire Agreement. The parties agreement that the document theyre signing is the agreement about the issues involved. For example, if the parties had exchanged letters that contradicted provisions in the agreement, those documents wont be considered part of the agreement. Unfortunately, the inclusion of this provision will not prevent someone from arguing that they there are other agreements and promises that should be considered part of the agreement, but it will provide you some protection from these claims. Section 19: Headings. Notes that the headings at the beginning of each section and subsection are provided to organize the document. These labels are meant to help as youre skimming the document or searching for a specific section. However, these headings are not part of the substance of the agreement. Any interpretation of the clauses should not be based on the headings. Section 20: Effectiveness. Because the parties may be signing at different times and in different locations, a question may arise about when the agreement becomes effective. This section clarifies that the agreement will be effective when the last party has signed and dated it. Section 21: Necessary Acts; Further Assurances. This final clause is a catch-all, explaining that even if a party is not specifically required to sign a document or take some action by the agreement, the other party can insist on it if its needed to make the agreement effective. This allows the parties to make an agreement that doesnt list every possible act that will ever need to be taken. If an act becomes necessary to make the agreement effective, this section requires the parties to perform that action. Note that this applies only to reasonable acts: a party will not be required to anything and everything possible to make the agreement work. The optional word commercially takes this even further: an act will be required only if it is reasonable in the business word to expect that this will be done. OPTIONAL LANGUAGE: The language regarding officers and directors should be used only if at least one party is not an individual. Signature Page.

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ADD INFORMATION: Write in the name of each partys business in capital letters at the top of their signature block. If a party is an individual, delete this area. Write in the name of the person signing where it says Name. If this is a business, enter the name of the person signing on the companys behalf. Enter the title of the person signing only if they are signing on behalf of a business. Make sure each person signing enters the date on which they are signing. Remember: this is the date your agreement becomes effective. Although the protection of your business starts with a well-crafted nondisclosure agreement, it doesnt end there. Be vigilant in protecting your intellectual property and deal intelligently with your employees, business partners, and customers. It takes only one disclosure to alter the landscape of your business permanently.

Mutual Nondisclosure Agreement

MUTUAL NONDISCLOSURE AGREEMENT This mutual nondisclosure agreement is between PARTY ONE NAME, IN CAPITAL LETTERS, a[n] State of Organization, if not an individual Select your business type and PARTY TWO NAME, IN CAPITAL LETTERS, a[n] State of Organization, if not an individual Select your business type Each party has developed certain confidential information that it may disclose to the other party for the purpose of Explain why the parties are exchanging information. Each party agrees to review, examine, inspect, or obtain the other partys confidential information for the above-described purposes only, and to otherwise maintain the confidentiality of that information pursuant to the terms of this agreement. The parties therefore agree as follows: 1. CONFIDENTIAL INFORMATION. Each party (in such capacity, a Disclosing Party) may (but shall not be required to) disclose certain of its confidential and proprietary information to the other party (in such capacity, a Receiving Party). Confidential Information means: (a) information relating in any way to the Disclosing Party or its current or proposed business, including without limitation financial statements, budgets and projections, customer identifying information, potential and intended customers, employers, products, computer programs, specifications, manuals, software, analyses, strategies, marketing plans, business plans, and other confidential information, provided orally, in writing, or by any other media, that has been or may be: (i) provided or shown to the Receiving Party or its directors, officers, employees, agents, and representatives (each a Receiving Party Representative) by or on behalf of the Disclosing Party or any of its directors, officers, employees, agents, and representatives (each a Disclosing Party Representative); or obtained by the Receiving Party or a Receiving Party Representative from review of documents or property of, or communications with, the Disclosing Party or a Disclosing Party Representative; and

(ii)

(b) any and all notes, analyses, compilations, studies, summaries, and other material, whether provided orally, in writing, or by any other media, that contain or are based on all or part of the information described in subsection (a) (the Derivative Materials). Confidential Information disclosed orally shall be identified as such within Number of Days
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days of disclosure. The Disclosing Partys failure to identify information as Confidential Information is not an acknowledgment or admission by the Disclosing Party that that information is not confidential, and is not a waiver by the Disclosing Party of any of its rights with respect to that information. 2. OBLIGATION TO MAINTAIN CONFIDENTIALITY. (a) Confidentiality. The Receiving Party shall, and shall ensure that each Receiving Party Representative, keep the Confidential Information confidential. Except as otherwise required by law, the Receiving Party and Receiving Party Representatives shall not: (i) Disclose any Confidential Information to any person or entity other than: a. A Receiving Party Representative who needs to know the Confidential Information for the purposes of its business with the Disclosing Party; and b. A Receiving Party Representative who signs a confidentiality agreement; and c. With the Disclosing Partys prior written authorization; or (ii) Use the Confidential Information for any purposes other than those contemplated by this agreement.

(b) No Reverse Engineering. The Receiving Party shall not reverse engineer, disassemble, or decompile any prototypes, software or other tangible objects that embody the Disclosing Partys Confidential Information and that are provided to the Receiving Party hereunder. (c) Term. The Receiving Party shall, and shall require each Receiving Party Representative to, maintain the confidentiality and security of the Disclosing Partys Confidential Information until the earlier of: (i) such time as all Confidential Information of the Disclosing Party disclosed hereunder becomes publicly known and is made generally available through no action or inaction of the Receiving Party or (ii) the third anniversary of the disclosure; provided, however, to the extent that the Disclosing Party has disclosed information to the Receiving Party that constitutes a trade secret under law, the Receiving Party shall protect such trade secret(s) for as long as the information qualifies as a trade secret. 3. EXCLUSIONS. The obligations and restrictions of this agreement do not apply to that part of the Confidential Information that the Receiving Party demonstrates: (a) was or becomes generally publically available other than as a result of a disclosure by the Receiving Party in violation of this agreement;
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(b) was or becomes available to the Receiving Party on a non-confidential basis before its disclosure to the Receiving Party by the Disclosing Party or a Disclosing Party Representative, but only if: (i) the source of such information is not bound by a confidentiality agreement with the Disclosing Party or is not otherwise prohibited from transmitting the information to the Receiving Party or a Receiving Party Representative by a contractual, legal, fiduciary, or other obligation; and (ii) the Receiving Party provides the Disclosing Party with written notice of such prior possession either (I) before the execution and delivery of this agreement or (II) if the Receiving Party later becomes aware (through disclosure to the Receiving Party) of any aspect of the Confidential Information as to which the Receiving Party had prior possession, promptly on the Receiving Party so becoming aware; or (c) is requested or legally compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, or similar process), or is required by a regulatory body, to be disclosed; provided, however, that the Receiving Party shall: (i) provide the Disclosing Party with prompt written notice of any such request or requirement before disclosure so that the Disclosing Party may seek an appropriate protective order or other appropriate remedy; and provide reasonable assistance to the Disclosing Party in obtaining any such protective order.

(ii)

If a protective order or other remedy is not obtained or the Disclosing Party grants a waiver hereunder, then the Receiving Party may furnish that portion (and only that portion) of the Confidential Information that, in the written opinion of counsel reasonably acceptable to the Disclosing Party, the Receiving Party is legally compelled or otherwise required to disclose; provided, however, that the Receiving Party shall make reasonable efforts to obtain reliable assurance that confidential treatment will be accorded any part of the Confidential Information so disclosed; or (d) was developed by the Receiving Party independently without breach of this agreement. 4. RETURN OF PROPERTY. If a Disclosing Party requests, the Receiving Party shall, and shall cause each Receiving Party Representative to promptly (and no later than Number of Days days after the request):

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(a) Return all Confidential Information to such Disclosing Party; and (b) Destroy all Derivative Material and within Number of Days days of this destruction, provide a written certificate to such Disclosing Party confirming this destruction. 5. NO PUBLICITY. The parties shall keep the existence of this agreement, and the transactions or discussions contemplated by this agreement, strictly confidential, except as required by law and except as the parties otherwise may agree in writing before a disclosure. 6. OWNERSHIP RIGHTS. Each party acknowledges that the Confidential Information is, and at all times will be, the Disclosing Partys sole property, even if any suggestions made by a Receiving Party are incorporated into the Confidential Information. Neither party obtains any rights under this agreement, by license or otherwise, in the other partys Confidential Information. Each party understands and agrees that neither party solicits any change in the organization, business practice, service, or products of the other party, and that the disclosure of the Confidential Information shall not be construed as evidencing any intent by a party to purchase any products or services of the other party or as an encouragement to expend funds in development or research efforts. The Confidential Information may pertain to prospective or unannounced products. Each party agrees not to use the other partys Confidential Information as a basis on which to develop or have a third party develop a competing or similar plan or undertaking. 7. FUTURE PRODUCTS; RESIDUALS. The terms of confidentiality under this agreement shall not limit either partys right to develop or acquire products independently without use of the other partys Confidential Information. Further, each party shall be free to use for any purpose the residuals resulting from access to or work with the other partys Confidential Information; provided, however, that neither party shall disclose the other partys Confidential Information except as expressly permitted pursuant to the terms of this agreement. The term residuals means information in intangible form that is retained in memory by people who have had access to the Confidential Information, including ideas, concepts, know-how, or techniques contained therein. Neither party is required to limit or restrict the assignment of such persons or to pay royalties for any work resulting from the use of residuals. This Section 5 does not give either party a license under the other partys copyrights or patents. 8. NO OBLIGATION. Nothing herein shall obligate either party to proceed with any transaction between them, and each party reserves the right, in its sole discretion, to terminate the discussions contemplated by this agreement concerning the business opportunity, if any, and to also cease further disclosures, communications, or other activities under this agreement on
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written notice to the other party. Any commitment to proceed with a transaction shall be set forth in a separate agreement signed by the parties. 9. NO WARRANTY. ALL CONFIDENTIAL INFORMATION IS PROVIDED AS IS. NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS, IMPLIED, OR OTHERWISE, REGARDING THE ACCURACY, COMPLETENESS, OR PERFORMANCE OF ANY SUCH INFORMATION. 10. GOVERNING LAW; ATTORNEYS FEES; EQUITABLE RELIEF. (a) Choice of Law. The laws of the state of State govern this note (without giving effect to its conflicts of law principles). (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, State. (c) Attorneys Fees. If either party employs attorneys to enforce any rights arising out of or relating to this agreement, the losing party shall reimburse the prevailing party for its reasonable attorneys fees. (d) Equitable Relief. Each party agrees that a breach of this agreement will cause irreparable harm to the Disclosing Party and that monetary damages may not be a sufficient remedy for an unauthorized disclosure of the Confidential Information. If a Receiving Party discloses Confidential Information in violation of this agreement, a Disclosing Party may, without waiving any other rights or remedies and without posting a bond or other security, seek an injunction, specific performance, or other equitable remedy to prevent competition or further disclosure, and may pursue other legal remedies. 11. AMENDMENTS. No amendment to this agreement will be effective unless it is in writing and signed [by both parties] [by the parties respective authorized representatives] [by a party or its authorized representative]. 12. ASSIGNMENT AND DELEGATION. (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party, which consent shall not be unreasonably withheld. All voluntary assignments of rights are limited by this subsection. (b) No Delegation. Neither party may delegate any performance under this agreement. (c) Enforceability of an Assignment or Delegation. If a purported assignment or
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purported delegation is made, or if both are made, in violation of this Section 12, it is void and they are void. 13. SUCCESSORS AND ASSIGNS. This agreement binds, and inures to the benefit of, the parties and their respective heirs, executors, administrators, legal representatives and permitted successors and assigns. This Section 13 does not address, directly or indirectly, whether a party may assign its rights or delegate its performance under this agreement. Section 12 above addresses these matters. 14. COUNTERPARTS; ELECTRONIC SIGNATURES. (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument. (b) Electronic Signatures. The parties agree that this agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement is signed when a partys signature is delivered by facsimile, e-mail, or other electronic medium. Such signatures must be treated in all respects as having the same force and effect as an original signature. 15. SEVERABILITY. If any one or more of the provisions contained in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this agreement, but this agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein, unless the deletion of such provision or provisions would result in such a material change so as to cause completion of the transactions contemplated herein to be unreasonable. 16. NOTICES. (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email. (b) Addresses. A party shall address notices under this Section 16 to a party at the following addresses:

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If to Party One Name: Contact Name/Position Mailing Address City, State Zip Code Fax Number Email Address If to Party Two Name: Contact Name/Position Mailing Address City, State Zip Code Fax Number Email Address (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice. 17. WAIVER. No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies. 18. ENTIRE AGREEMENT. This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties agreement with respect to the subject matter of this agreement. All prior and contemporaneous communications negotiations and agreements between the parties relating to the subject matter hereof are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreements effectiveness. 19. HEADINGS. The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreements construction or interpretation.

Mutual Nondisclosure Agreement

20. EFFECTIVENESS. This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that partys signature) will be deemed the date of this agreement. 21. NECESSARY ACTS; FURTHER ASSURANCES. Each party and its officers and directors shall use all commercially reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.

[SIGNATURE PAGE FOLLOWS]

Mutual Nondisclosure Agreement

Each party is signing this agreement on the date stated opposite that partys signature. PARTY ONE NAME, if not an individual

Date: ___________________

By: Name: Name of Person Signing Title: Title of Person Signing PARTY TWO NAME, if not an individual

Date: ___________________

By: Name: Name of Person Signing Title: Title of Person Signing

Mutual Nondisclosure Agreement