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Orchard

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CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT

This CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT (this “Agreement”) is made as of ________, _____, 2013, between Merced Pathology Medical Group, Inc. 160 N. Riverview Drive, Suite 200, Merced, CA 92808 (hereinafter “Merced”) and Yosemite Pathology Medical Group, Inc, located at 2625 Coffee Road, Suite S. Modesto, CA. 95356 (hereinafter “Buyer”).

WHEREAS, Merced, an anatomical pathology laboratory company, has represented that it might be available for acquisition; and

WHEREAS, Merced desires to present to the Buyer certain confidential and proprietary information about said laboratory company (the “Potential Acquisition”) and that laboratory requires that its information (including the fact that it is willing to be acquired), remains confidential; and

WHEREAS, as a condition to furnishing such information (all of which is of a confidential and proprietary nature) Merced and the Buyer agree, as set forth below, to treat confidential all information furnished by Merced about the laboratory acquisition, whether before or after the date of this Agreement and whether or not in writing (together with all projections, financials, memoranda, notes, analyses, compilations, studies and other documents, including, without limitation, any copies or extracts thereof, whether prepared by Merced or its Agents (as defined herein), which contain or otherwise reflect any such information, collectively, the “Evaluation Materials”).

NOW, THEREFORE, for and in consideration of the disclosure of Evaluation Materials and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, Merced and Buyer hereby agrees as follows:

1. Buyer agrees that Merced has the right to rely on the Buyer’s representations, warranties and assurances that it will not disclose the fact that Merced is contemplating or being offered for acquisition or that it provided Evaluation Materials to Buyer and that the Evaluation Materials will remain confidential. The Buyer recognizes and acknowledges that the Evaluation Materials contain confidential and proprietary information and that the Buyer shall maintain the confidentiality of the Evaluation Materials and shall ensure that the Evaluation Materials shall not, without the prior written consent of Merced be disclosed in any manner whatsoever, in whole or in part, to any third party.

2. Subject to the foregoing, the Buyer may disclose the Evaluation Materials to such of its senior partners, directors, officers, confidential advisors and agents (collectively “Agents”) who the Buyer reasonably determines needs access to the Evaluation Materials for the purpose of evaluating purchasing Merced. The Buyer shall obtain in writing from all of its Agents who receive the Evaluation Materials an acknowledgment of the confidential and proprietary nature of the proposed acquisition and the Evaluation Materials and such acknowledgment shall require such Agents to treat the Evaluation Materials confidentially and not to disclose the Evaluation Materials to third parties or use the Evaluation Materials for any purpose other than the evaluation of purchasing Merced. Buyer shall be responsible to Merced for any breach of this Agreement by its Agents.

3. During the term of this Non-Disclosure, Merced and Buyer acknowledge, that a s a result of their due diligence, facts and circumstances discovered may cause Merced or Buyer to determine that completing the potential purchase is not economically or otherwise feasible or advantageous and may choose to terminate the negotiations.

3. Subject to Section 4 below, the Buyer shall not disclose to any third party (i) that the Potential Acquisition, directly or indirectly, has furnished any of the Evaluation Materials to the Meritage or the Buyer, (ii) that the Buyer is reviewing and evaluating the Evaluation Materials from the Potential Acquisition or Meritage, or (iii) the potential existence of, or the fact that the Buyer is evaluating the Potential Acquisition.

4. In the event that the Buyer becomes legally compelled to disclose any of the Evaluation Materials, the Buyer shall provide Meritage, to the extent permitted by law, with prompt notice so that the Meritage or the Potential Acquisition may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, or the Potential Acquisition, in writing, waives compliance with the provisions of this Agreement, the Buyer shall furnish only that portion of the Evaluation Materials which the Buyer is advised by counsel is legally required.

5. Buyer agrees that during the period in which Buyer, Meritage and the Potential Acquisition are discussing a possible transaction, and for a period of one year thereafter, Buyer shall not solicit the employment of any employee of the Potential Acquisition; provided, however, that the foregoing restriction shall not apply to any employees of the Potential Acquisition who approach Buyer in response to generally available public solicitations or with whom Buyer had begun discussions prior to the date of this Agreement.

6. It is understood and agreed that no failure or delay by Meritage or the Potential Acquisition in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof by Meritage or the Potential Acquisition preclude any other or further exercise thereof or the exercise of any other right, power and privilege hereunder. It is further understood and agreed that money damages alone would not constitute a sufficient remedy for any breach of this Agreement by the Buyer and that the Potential Acquisition or Meritage shall be entitled to specific performance and injunctive relief, without the necessity of posting a bond, cash or otherwise, as remedies for any such breach. Such remedies shall not be deemed to be the exclusive remedies available to the Potential Acquisition or Meritage for a breach of this Agreement by the Buyer, but shall be in addition to all other remedies available to the Potential Acquisition or Meritage at law or in equity.

7. The Buyer shall return the Evaluation Materials to Meritage or the Potential Acquisition promptly upon the Potential Acquisition’s or Meritage’s written request or automatically upon the Buyer’s determination not to pursue an Evaluation.

8. The Buyer understands that Meritage will endeavor in good faith to furnish Evaluation Materials which the Potential Acquisition believes to be relevant for the purpose of the Buyer’s evaluation of the Potential Acquisition. The Buyer agrees that neither Meritage, the Potential Acquisition, nor any of their respective Agents make any representations regarding the information contained in the Evaluation Materials and neither Meritage, the Potential Acquisition, nor any of their respective Agents shall have any liability to the Buyer or any of its Agents resulting from the use of the Evaluation Materials by the Buyer of its Agents. All representations and warranties relating to any transaction involving the Potential Acquisition shall be set forth in a separate definitive written agreement between Buyer and the Potential Acquisition.

8. This Agreement shall be binding upon and inure to the benefit of the parties hereto, the Potential Acquisition, and their respective legal representatives, Agents, successors and assigns.

9. This Agreement shall be governed and construed in accordance with the laws of the State of Nevada, without regard to principles of conflicts of laws.

10. The terms of this Agreement may be modified or waived only by a separate writing signed by the parties and the Potential Acquisition, expressly so modifying or waiving such terms.

11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Confidentiality and Non-Disclosure Agreement to be executed by their duly authorized representatives as of the date first above written.

Meritage Partners, Inc.
160 N. Riverview Drive, Suite 200
Anaheim Hills, CA 92808

Buyer:

Name Position

Potential Acquisition:

________________________________________________
Name Position

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