1 This Non-disclosure Agreement (the Agreement ) is made and effective as of the date of last signature (Effective Date) by and between Advanced Photonix, Inc, a Delaware corporation, having a place of business at 2925 Boardwalk, Ann Arbor, MI and, a corporation organized, having an office at each may be referred to herein as a Party or together as the Parties. WHEREAS, API possesses certain valuable and proprietary information relating to InGaAs in imaging applications; WHEREAS, possesses certain valuable and proprietary information relating to military and commercial applications of viewing through a plastic film; WHEREAS, for their mutual benefit, the Parties may disclose their proprietary information to each other under this Agreement. NOW, THEREFORE, the Parties agree as follows: 1. DEFINITIONS The term "Proprietary Information" shall mean information disclosed by one Party hereto (the Disclosing Party ) to another Party (the Receiving Party ) under this Agreement and (1) if in tangible form is identified at the time of disclosure by a conspicuous written legend, marking, or stamp as being proprietary or confidential to the Disclosing Party; and (2) if in non-tangible (e.g., oral or visual) form, is identified as proprietary or confidential at the time of disclosure, is reduced to a tangible form and delivered to the Receiving Party within thirty (30) days after the original disclosure, and such tangible form is conspicuously identified with a written legend, marking or stamp as being proprietary or confidential to the Disclosing Party. Proprietary Information in magnetic or electronic form, whether human or machine readable, shall be considered to be in tangible form. Proprietary Information may include a combination of publicly known information provided the combination is not generally known to the public. 2. OBLIGATIONS TO PROTECT PROPRIETARY INFORMATION A. For a period of five (5) years after expiration or termination of this Agreement, the Receiving Party (1) may use such Proprietary Information only for the purpose set forth above, (2) shall limit access to such Proprietary Information to those of its employees (including contract employees, if any) having a need to know with respect to such purpose and provided that such employees (and contract employees) are bound by obligations of confidentiality consistent with this Agreement, (3) shall ensure that such employees (or contract employees) are aware that Proprietary Information is subject to confidentiality and nonuse obligations, (4) shall ensure that any complete or partial reproduction or excerpt of the Proprietary Information bears the restrictive markings on the original thereof, and (5) shall not disclose Proprietary Information to any company, organization or individual that is not a Party to this Agreement. The Receiving Party shall use the same degree of care to protect Proprietary Information as it uses to protect its own information of similar importance, which shall be no less than a reasonable standard of care. Without limiting the generality of the foregoing, the Receiving Party may not use Proprietary Information of the other Party for any purpose not expressly permitted, including, without
2 limitation, to design, manufacture, service or repair parts for any Party s products, to compare a part to other part(s) or to design(s) of other part(s), approval or other governmental or regulatory approval to manufacture, repair, or sell any part, product or service, or to decompile, disassemble, decode, reproduce or reverse engineer any information or software. The Disclosing Party agrees to mark clearly all Proprietary Information as PROPRIETARY, or with similar legend; and to confirm in writing, and mark with restrictive legend, within 30 days of the disclosure, and Proprietary Information that is orally or visually disclosed. B. The Receiving Party has no obligation to protect information that it can show by written records: (1) was in its possession with no restrictions on use or disclosure prior to its receipt from the Disclosing Party; or (2) is or becomes generally available to the public through no wrongful act of the Receiving Party; or (3) is or was independently developed by the Receiving Party; or (4) is rightfully received from a third party with no restrictions on use or disclosure. C. If the Receiving Party is requested or required to disclose Proprietary Information in order to comply with any legal requirement (such as a subpoena) or pursuant to a judicial action or government regulation, it shall promptly notify the Disclosing Party in writing. If requested by the Disclosing Party, the Receiving Party shall assist in obtaining a protective order or other similar remedy to limit or prevent such disclosure. Such assistance shall be provided at the Disclosing Party s sole expense. If such order or other remedy is not obtained through no fault of the Receiving Party by the time such Proprietary Information must be disclosed, the Receiving Party may make such disclosure without incurring any liability to the Disclosing Party. 3. EXPIRATION/TERMINATION This Agreement shall expire five (5) years following the effective date recited above, unless extended by the mutual written agreement of the Parties. Any Party may, however, terminate this Agreement earlier, by giving the other Parties thirty (30) days written notification. The Receiving Party s obligations with respect to Proprietary Information are not affected by the expiration or termination of this Agreement. 4. OWNERSHIP The Disclosing Party shall retain all right, title and interest in and to its Proprietary Information. This Agreement grants no rights or licenses to the Receiving Party, express, implied, or otherwise, under any invention, patent, copyright, know-how or trade secret of the Disclosing Party, except for those rights expressly set forth in this Agreement. If requested by the Disclosing Party upon the expiration or termination of this Agreement or at any time during the term of this Agreement, the Receiving Party shall return or destroy all Proprietary Information of the Disclosing Party and all copies thereof. If the Proprietary Information and all copies are destroyed, the Receiving Party, upon request of the Disclosing Party, shall provide a destruction certificate signed by an appropriate official of the Receiving Party. Notwithstanding the
3 foregoing, copies of Proprietary Information disclosed electronically and stored on external backup media in accordance with Receiving Party s standard archive procedures need not be returned or destroyed as provided in this Section, provided that Receiving Party makes no attempt to use or restore such Proprietary Information after expiration of the Protection Period or receipt of Disclosing Party s written request. For the avoidance of doubt, any Proprietary or Confidential Information that is stored on routine back-up media solely for the purpose of disaster recovery will be subject to destruction in due course, provided that, employees are precluded from accessing such Proprietary or Confidential Information in the ordinary course of business prior to destruction. Notwithstanding the foregoing, latent data such as deleted files, and other non-logical data types, such as memory dumps, swap files, temporary files, printer spool files, and metadata that can only be retrieved by computer forensics experts and is generally considered inaccessible without the use of specialized tools and techniques, will not be within the requirements for return or destruction of Proprietary or Confidential Information as set forth by this provision. 5. NO OBLIGATIONS No Party is under any obligation to disclose any Proprietary Information to any other Party, or to enter into any additional agreements or contracts with any other Party. 6. WARRANTIES Each Party warrants that it has the right to enter into this Agreement and disclose its Proprietary Information. No Party makes any other warranty of any kind with respect to Proprietary Information disclosed to the other. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL OR SPECIAL (INCLUDING MULTIPLE OR PUNITIVE) DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT. 7. POINTS OF CONTACT; NOTICES The respective points of contact with respect to the disclosure and receipt of Proprietary Information and notices hereunder shall be as follows: API: Name: Jean-Pierre Maufras Name: Address 1240 Avenida Acaso Address: Phone: (805) Camarillo CA Phone: Fax: (805) Fax: Either Party may change its point of contact at any time by providing written notice to the other
4 Party. Mutual Disclosure Agreement 8. AMENDMENTS Amendments to this Agreement may be made, but only by a written document that expressly refers to this Agreement and is signed by duly authorized representatives of both Parties. 9. DISPUTE RESOLUTION Each Party shall have the right to apply to a court to enjoin any breach of this Agreement in accordance with the Applicable Law provisions hereof. Except for the right of a Party to seek such relief, the Parties shall refer any dispute under this Agreement to the Parties senior management for resolution through good faith negotiations. If the Parties fail to timely resolve such dispute through negotiations, all disputes under this Agreement, whether based in contract, tort or otherwise, shall be resolved by binding arbitration pursuant to the Federal Arbitration Act. The arbitration shall be administered by the American Arbitration Association ( AAA ) and shall be held in Ann Arbor, Michigan. 10. APPLICABLE LAW This Agreement shall be construed in accordance with the laws of the state of Michigan, without regard to its conflict of laws provisions. The Parties agree that any action or claim relating to or arising out of this Agreement shall be brought in a state or federal court sitting in the State of Michigan, and the Parties hereby irrevocably consent to personal jurisdiction and venue of, and agree to bound by any judgment and orders rendered by, such courts. 11. COMPLIANCE WITH EXPORT REGULATIONS The Receiving Party represents and warrants that no technical data delivered to it by the Disclosing Party shall be provided to a foreign person or foreign entity, whether in the US or abroad, exported or re-exported from the United States without first complying with all requirements of the International Traffic In Arms Regulations ( ITAR ) and the Export Administration Act, including the requirement for obtaining any export license, if applicable. The Receiving Party shall first obtain the written consent of the Disclosing Party prior to submitting any request for authority to export any such technical data. 12. ASSIGNMENT Neither Party may assign its rights or delegate its duties or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Notwithstanding the above, either Party may assign the Agreement, without consent, in whole or in part, to (a) any parent, affiliate, or subsidiary or (b) a third party in the event of merger, recapitalization, conversion, consolidation, other business combination or sale of all or substantially all of the assets of the Party connected with this Agreement to such third party.
5 13. ENTIRE AGREEMENT Mutual Disclosure Agreement This document contains the entire agreement between the Parties with regard to Proprietary Information disclosed for the purpose described above, and supersedes any previous understandings, commitments or agreements pertaining thereto, whether written or oral. If any provision of this Agreement is held illegal, invalid or otherwise unenforceable, the remaining provisions of this Agreement shall not be so affected, and the Parties shall work in good faith to replace such illegal, invalid or unenforceable provision with one that, to the extent possible, is consistent with the Parties original intent. 14. EXECUTION IN COUNTERPARTS This agreement may be executed by facsimile or scanned copied and in counterparts, each of which shall, when executed, be deemed as original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the effective date written above when signed below by their duly authorized representatives: Advanced Photonix Inc. By: Typed Name: Jean Pierre Maufras By: Typed Name: Title: General Manager Title: Date: Date: