Mutual Confidentiality Agreement

THIS MUTUAL CONFIDENTIALITY AGEREMENT ("Agreement") effective as of the date signed below ("Effective Date") between ____________ ("Company") and SGC Accelerator, LLC, a Michigan limited liability company ("SGC"). Company and SGC are sometimes referred to in this Agreement collectively as the "Parties" and individually as a "Party".

Background

  1. The Parties have expressed an interest in exploring a possible acquisition, investment or other strategic transaction ("Transaction");
  2. In connection with such Transaction, each Party may provide to the other Party, in its sole discretion, certain confidential information; and
  3. The Parties have agreed to enter into this Agreement with respect to such confidential information.

Accordingly, the Parties agree as follows:

  1. Definition of Confidential Information. The term "Confidential Information" means information provided by each Party to the other Party in connection with such other Party’s evaluation of a possible Transaction, including, without limitation, this Agreement, the identity of the Parties, and information relating to each Party’s financial condition, business strategies, client lists, employee lists, client financial or business information, client analyses, contracts, technology, computer programs, financial and other products, employee compensation, research, software, hardware, services, development, inventions, processes, forecasts, samples, designs, drawings, engineering, and trade secrets of every kind and nature. In addition, Confidential Information shall include any notes, analyses, compilations, studies, summaries, and other material prepared by a receiving Party that contain or are based on, in whole or in part, any of the foregoing information received by such Party from the other Party. However, Confidential Information of a Party does not include any information which: (a) is or becomes generally available to the public other than as a result of an unauthorized disclosure by the receiving Party or its Authorized Persons (defined below), (b) is or becomes available to the receiving Party from a source which is entitled to disclose such information to the receiving Party on a non-confidential basis or is independently developed by the receiving Party without access to the Confidential Information, or (c) is lawfully known to the receiving Party prior to receipt thereof by the receiving Party from the first Party. In the event a Party is required by law or court order to disclose any of the Confidential Information of the other Party, such Party will provide the other Party with prompt notice of such proposed disclosure so that the other Party may seek an appropriate protective order or other appropriate remedy. In the event that such protective order or other remedy is not obtained, such Party agrees to furnish that portion (and only that portion) of the Confidential Information, which in the opinion of such Party’s legal counsel, such Party is legally compelled to disclose and such Party will use its commercially reasonable efforts to obtain reliable assurance that confidential treatment will be accorded to any Confidential Information so disclosed.

  2. Use of Confidential Information. The Confidential Information of each Party will be used by the other Party solely in connection with the evaluation of a possible Transaction between the Parties, and for no other purpose. Each Party shall assure that such Party’s subsidiaries and affiliates makes no competitive or commercial use of the Confidential Information.

  3. Confidentiality of Information. Each Party will keep or cause to be kept in strict confidence and secrecy all Confidential Information and shall not disclose it to anyone, except on a "need to know" basis to its directors, officers, employees, financial advisors, attorneys, accountants, and any other representatives, each as required for purposes of evaluating a possible Transaction ("Authorized Persons"). Such disclosure shall occur only after the Authorized Persons are informed by such Party of the confidential nature of the Confidential Information and the restrictions and obligations of this Agreement. Without the prior written consent of the other Party, each Party will not, and will direct its Authorized Persons not to, disclose to any person or entity (other than the Parties’ Authorized Persons): (a) that the Confidential Information of the other Party has been made available to the Party, (b) that the Party has inspected any portion of such Confidential Information, or (c) any of the Confidential Information of the other Party. Each Party shall be responsible for any breach of the terms of this Agreement by its Authorized Persons.

  4. Confidentiality of Discussions. The Parties acknowledge that premature rumors and conjecture concerning a possible Transaction may have a detrimental effect on the Parties or the feasibility of the Transaction. To avoid any potential injury to any Party or the feasibility of a Transaction, each Party agrees that, from and after the date of this Agreement, such Party will not, and will direct its Authorized Persons not to, disclose to any person or entity (other than the Parties and Authorized Persons): (a) that discussions or negotiations are taking place concerning a possible Transaction between the Parties or any of the terms or conditions thereof, or (b) any other facts with respect to such a possible Transaction, including the status thereof.

  5. Return of Confidential Information. Upon written request, each Party will return to the other Party all Confidential Information of the other Party which is in tangible form, including any copies which the Party or its Authorized Persons may have made, and each Party will return, redact or destroy all abstracts, summaries thereof or references thereto in its documents, and certify to the other Party that it has done so. Such return shall not abrogate the Parties’ continuing obligations under this Agreement. If either Party specifically identifies any of the Confidential Information which it does not wish copied, the other Party will so comply and on such Party’s request certify such compliance to such Party in writing.

  6. Authority and Enforceability. Each Party hereby represents and warrants to the other Party that this Agreement constitutes the legal, valid, and binding obligation of such Party and is enforceable against such Party in accordance with its terms.

  7. Disclaimer. This Agreement does not constitute, create or imply any obligation on either Party or their Authorized Persons to provide any Confidential Information or other information to the other Party, but merely defines the duties and obligations of the Parties with respect to the Confidential Information. Nothing in this Agreement shall impose any obligation upon either Party to enter into a Transaction with the other Party, or impose upon either Party any obligation to continue any discussions or negotiations with respect thereto. Each Party acknowledges that no agreement relating to a Transaction shall be deemed to exist between the Parties unless and until a definitive agreement relating to such Transaction has been duly executed and delivered by each Party. The Parties understand that they have not made and do not make any representation or warranty as to the accuracy or completeness of the Confidential Information. Neither Party shall have any liability to the other Party resulting from the use of the Confidential Information in accordance with the terms of this Agreement. The Parties agree that neither Party has granted the other Party any license, copyright or similar right with respect to the Confidential Information.

  8. Remedies for Breach. The Parties recognize that irreparable injury may result to a Party if the other Party breaches any provision of this Agreement. Accordingly, if one Party should engage, or cause any other person or entity to engage, in any act in violation of any provision of this Agreement, the other Party shall be entitled, in addition to such other remedies, damages and relief as may be available to it under applicable law, without the requirement of posting a bond or other security, to seek equitable relief, including an injunction prohibiting the other Party from engaging in any such act, or specifically enforcing the terms of this Agreement, as the case may be. In the event that either Party institutes any legal or equitable proceeding against the other in connection with this Agreement or any matter arising out of or in connection with this Agreement, the prevailing Party in such proceeding shall be entitled to recover court costs and such reasonable attorneys’ fees as the court may deem proper, including all costs and expenses of any appellate court proceedings or bankruptcy court proceedings.

  9. Term. This Agreement will terminate one (1) year after the Effective Date, unless earlier terminated by either Party at any time upon thirty (30) days’ written notice to the other Party; provided, however, that each Party’s confidentiality obligations hereunder shall survive for three (3) years following such termination; provided however, that each Party’s confidentiality obligations with respect to trade secrets disclosed hereunder shall survive indefinitely or until such Confidential Information no longer constitutes a trade secret.

  10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.

  11. Governing Law; Jurisdiction. This agreement will be governed by the laws of the State of Michigan, without regard to conflicts of laws principles of the state. The Parties irrevocably: (a) submit to jurisdiction of any court of the State of Michigan or the United States District Court for the Western District of the State of Michigan for the purpose of any suit, action or other proceeding arising out of this Agreement or any of the agreements or transactions hereby (each a "Proceeding"), (b) agree that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waive, to the fullest extent permitted by law, any immunity acquired, or hereafter may acquire, from jurisdiction of any such court or from any legal process therein, and (d) agree not to commence any Proceeding other than in such court, and waive, to the fullest extent permitted by applicable law, any claim that any such Proceeding is brought in an inconvenient forum.

  12. Assignment.   This Agreement may not be assigned by either Party without the written consent of the other Party.

  13. Modification and Waiver. The agreements set forth in this Agreement may be modified or waived only by a separate writing signed by the Parties expressly modifying or waiving such agreements. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, no waiver that may be given by a Party will be applicable except in the specific instance for which it is given.

  14. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which provisions shall remain in full force and effect. If any of the covenants or provisions of this Agreement are determined to be unenforceable by reason of its extent, duration, scope or otherwise, then the Parties contemplate that the court making such determination shall reduce such extent, duration, scope or other provision and enforce them in their reduced form for all purposes contemplated by this Agreement.

The Parties have signed this Mutual Confidentiality Agreement as of the date chosen below.