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Appendix 2 B
Appendix 2 B
CONFIDENTIALITY AGREEMENT
CONFIDENTIALITY AGREEMENT
RECITALS
WHEREAS, the parties have been exchanging each other’s nonpublic and proprietary
information for the purposes of mutually determining whether to engage in a strategic transaction
between the Target and Acquirer (the “potential transaction”);
WHEREAS, the parties acknowledge and agree that the date of first disclosure of any
such nonpublic and proprietary information was _________________ (the “Effective Date”); and
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained in this Agreement and for other good and valuable consideration, the parties agree as
follows:
AGREEMENT
1. The parties hereby agree that any and all provisions of this Agreement shall be
effective, enforceable against each of the parties, and binding on the parties, as of the Effective
Date.
2. In order to allow the parties to evaluate nonpublic and proprietary information for
the purposes of mutually determining whether to engage in the potential transaction, each party
agrees to deliver to the other and permit the other to have access to and use of certain nonpublic
and proprietary business information related to the plans, prospects, products, properties
(including, without limitation, intellectual property), finances and operations of the disclosing
party.
4. The receiving party will use the disclosing party’s Proprietary Information solely
to evaluate the desirability of the potential transaction. Unless otherwise agreed to in writing by
the disclosing party, the receiving party agrees (a) except as required by law (including applicable
securities laws), to keep all Proprietary Information confidential and not to disclose or reveal any
Proprietary Information to any person other than those employed by the receiving party or acting
on the receiving party’s behalf and directly participating in the evaluation of the potential
transaction and who need to know the Proprietary Information for the purpose of evaluating the
potential transaction, (b) to cause the receiving party’s Representatives to observe confidentiality
terms at least as protective as those set forth in this Agreement and (c) not to use Proprietary
Information for any purpose other than in connection with the evaluation of the potential
transaction. Each party will make reasonable efforts to control and segregate Proprietary
Information received in writing from the other party to permit compliance with the obligations to
return copies of such information to the disclosing party. The receiving party acknowledges that
the receiving party is responsible for any breach of the terms hereof by the receiving party or the
receiving party’s Representatives from unauthorized disclosure or use of Proprietary Information.
In addition, each party agrees that, without the written consent of the other party, neither
it nor its Representatives will disclose to any other person the fact that the Proprietary
Information has been made available to it, that discussions or negotiations are taking place
concerning a possible transaction involving the parties or any terms, conditions or other facts with
respect thereto (including the status thereof); provided, that either party may make such
disclosure as is required by law or the rules of any securities exchange or market by which such
party is bound (in which event, to the extent practicable, the party proposing disclosure will
consult with, and exercise in good faith all reasonable efforts to mutually agree with, the other
party regarding the nature, extent and form of such disclosure).
In the event that the receiving party or any of its Representatives is requested or required
(by oral questions, interrogatories, requests for information or documents in legal proceedings,
subpoenas, civil investigative demands or other similar processes) to disclose any of the
Proprietary Information of the disclosing party, such receiving party shall provide the disclosing
party with prompt written notice of any such request or requirement so that the disclosing party
may seek a protective order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the disclosing party, a receiving party or any of its Representatives is
nonetheless legally compelled to disclose Proprietary Information of the disclosing party or else
stand liable for contempt or suffer other censure or penalty, such receiving party or
Representative may, without liability under this Agreement, disclose only that portion of such
Proprietary Information which the receiving party reasonably believes is legally required to be
disclosed, provided that such receiving party or Representative exercises, at the disclosing party’s
expense, its reasonable efforts to preserve the confidentiality of such Proprietary Information,
including, without limitation, by cooperating with the disclosing party, to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be accorded the
Proprietary Information by the persons seeking disclosure thereof.
5. If the receiving party determines that the receiving party does not wish to
proceed with the potential transaction, the receiving party will promptly notify the disclosing
party of that decision. In that case, or in the event that the potential transaction is not
consummated by the receiving party, or in the event that the disclosing party at any time prior to
the closing of the potential transaction so requests, then, within ten (10) business days of such
notice, event or request, (i) each receiving party will deliver to the disclosing party all Proprietary
Information (and all copies thereof) furnished to such receiving party or such receiving party’s
Representatives by or on behalf of the disclosing party pursuant to this Agreement; (ii) all other
Proprietary Information prepared by the receiving party or its Representatives shall be destroyed
and no copy thereof shall be retained; and (iii) a certificate of compliance with the foregoing shall
be provided to the disclosing party by an executive officer of the receiving party.
Notwithstanding the return or destruction of the Proprietary Information, each receiving party and
its Representatives (a) may keep one archival copy of such Proprietary Information (other than
software source code) for its records related to the proposed transaction, and (b) will continue to
be bound by its obligations of confidentiality and other obligations under this Agreement.
6. This Agreement does not grant a receiving party any license to use the disclosing
party’s Proprietary Information, by implication or otherwise, under any of the disclosing party’s
patents, trade secrets or any other intellectual property rights.
8. The parties each agree that unless and until a definitive agreement with respect to
the potential transaction has been executed and delivered, neither party will be under any legal
obligation of any kind with respect to such transaction by virtue of this Agreement or any other
written or oral expression with respect to the potential transaction, except for the matters
specifically agreed to in this Agreement, and in any other binding written agreement by or
between the parties. In the event that the parties do not enter into a definitive agreement, each
party will pay its own costs and expenses incurred in connection with the negotiations, including
all legal and accounting expenses.
9. Each party agrees that, without the prior written consent of the other party, it will
not for a period of one (1) year from the Effective Date directly or indirectly (including through
instruction to its agents) solicit for employment any person who is now employed by the other
party and who is identified for solicitation as a result of receipt of Proprietary Information of the
other party; provided, however, that neither party will be prohibited from making general public
solicitations for employment for any position or from employing any current employee of the
other party who contacts the party on his or her own initiative and without impermissible
solicitation by such party.
10. Without prejudice to the rights and remedies otherwise available to either party, a
party shall be entitled to equitable relief by way of injunction if the other party or any of such
other party’s Representatives breaches or threaten to breach any of the provisions of this
Agreement.
11. This Agreement contains the entire agreement between the parties concerning
confidentiality of the Proprietary Information and the matter described in paragraph 9, and
supersedes all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties pertaining to such matters. No modifications
of this Agreement or waiver of the terms and conditions hereof shall be binding upon the parties,
unless approved in writing by each of the parties.
12. This Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware.
13. If any provision of this Agreement is held to be unenforceable for any reason, it
shall be modified rather than voided, if possible, in order to achieve the intent of the parties to the
extent possible. In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the extent possible.
14. This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart.
[TARGET]
By: __________________________
Title:
[ACQUIRER]
By: __________________________
Title: