Legal Restrictions Agreement

LEGAL RESTRICTIONS AGREEMENT

This Legal Restrictions Agreement (the Agreement) is entered into as of by and between , a organized under the laws of , with principal place of business at (Party A), and , a organized under the laws of , with principal place of business at (Party B).

RECITALS

WHEREAS, Party A and Party B desire to define certain restrictions on the use, disclosure and transfer of information and on certain activities related to the business relationships between the parties;

WHEREAS, Party A and Party B recognize that the protection of proprietary information, trade secrets, customer relationships, and business opportunities is necessary to preserve the legitimate business interests of each party;

WHEREAS, the parties wish to set forth mutual and binding restrictions governing Confidential Information, Restricted Activities, remedies for breach, and related terms as set forth below;

NOW, THEREFORE, in consideration of the mutual covenants and the disclosure of Confidential Information, the parties agree as follows:

1. DEFINITIONS

1.1 "Confidential Information" means all technical, business, financial, customer and marketing information, trade secrets, proprietary processes, designs, drawings, specifications, software, formulas, business plans, pricing, and other information disclosed by a party (Disclosing Party) to the other party (Receiving Party), whether in written, oral, electronic or other form, that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure. Confidential Information includes, without limitation, the information described in the following summary:

1.2 "Restricted Activities" means those activities that are prohibited by this Agreement and include solicitation of employees or customers of the Disclosing Party, competition using Confidential Information, and any use or disclosure of Confidential Information outside the scope of the permitted uses set forth in Section 4.

2. RESTRICTIONS

2.1 Non-Disclosure. The Receiving Party shall not disclose Confidential Information to any third party except as expressly permitted by this Agreement or with the Disclosing Party's prior written consent. The Receiving Party shall protect Confidential Information with at least the same degree of care that it uses to protect its own confidential information, but in no event less than reasonable care.

2.2 Use Limitation. The Receiving Party shall use Confidential Information solely for the purpose of evaluating or performing the business relationship described in the recitals and shall not use Confidential Information to gain an unfair competitive advantage or to solicit customers or employees of the Disclosing Party.

2.3 Non-Solicitation. During the Restriction Period specified in Section 3 and for a period of after termination of this Agreement, neither party shall solicit for employment any employee of the other party whom the soliciting party had material contact with in connection with the business relationship.

2.4 No Reverse Engineering. The Receiving Party shall not reverse engineer, decompile, disassemble or otherwise attempt to derive source code, trade secrets, or underlying structure associated with any Confidential Information that constitutes software or product design.

3. DURATION AND SCOPE

3.1 Restriction Period. The restrictions in this Agreement shall commence on the Effective Date and shall continue for a period of , unless a longer period is required by applicable law for trade secrets, in which case such trade secret protection shall survive for as long as permitted.

3.2 Geographic Scope. The geographic scope of any non-competition obligation contained in this Agreement shall be limited to the following territory:

4. EXCEPTIONS AND PERMITTED DISCLOSURES

4.1 Exclusions. Confidential Information does not include information that: (a) is or becomes publicly known through no act or omission of the Receiving Party; (b) was known to the Receiving Party prior to disclosure by the Disclosing Party as shown by written records; (c) is rightfully received from a third party without breach of any obligation of confidentiality; or (d) is independently developed by employees who had no access to the Confidential Information.

4.2 Permitted Disclosures. The Receiving Party may disclose Confidential Information to its employees, contractors, legal counsel and accountants on a need-to-know basis provided that such persons are bound by confidentiality obligations no less protective than those set forth in this Agreement. The Receiving Party shall be responsible for any breach of this Agreement caused by its representatives.

5. REMEDIES

5.1 Injunctive Relief. The parties acknowledge that monetary damages may be an inadequate remedy for breach of this Agreement and that the Disclosing Party shall be entitled, in addition to any other remedies available at law or in equity, to seek injunctive relief to prevent or curtail any actual or threatened breach.

5.2 Damages and Fees. In the event of a breach of Sections 2 or 3, the breaching party shall be liable for all direct damages resulting from the breach. The prevailing party in any action to enforce this Agreement shall be entitled to recover reasonable attorneys' fees and costs.

6. CONFIDENTIALITY PROCEDURES

6.1 Marking and Identification. Confidential Information in tangible form should be marked "Confidential" or with a similar legend. Failure to mark shall not affect the confidential nature of information that ought reasonably to be treated as confidential.

6.2 Return or Destruction. Upon written request by the Disclosing Party within of termination or expiration of this Agreement, the Receiving Party shall return or destroy all Confidential Information and provide a written certification of destruction to the Disclosing Party.

7. ASSIGNMENT

Neither party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other party, except that either party may assign this Agreement without consent to a successor in interest in connection with a merger, sale of substantially all assets, or sale of capital stock, provided that such successor assumes all obligations under this Agreement.

8. NOTICES

Notices to Party A

Notices to Party B

9. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflict of laws principles.

10. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, understandings, and communications, whether written or oral, relating to the subject matter.

11. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired. The parties shall negotiate in good faith to replace any invalid provision with a valid provision that achieves, to the extent possible, the original intent.

12. AMENDMENTS AND WAIVER

No amendment or modification of this Agreement shall be effective unless made in writing and signed by authorized representatives of both parties. No waiver of any breach shall constitute a waiver of any other breach or a waiver of that provision.

13. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile or electronic signatures shall be deemed original signatures for all purposes.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date set forth above.

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