MUTUAL NON-DISCLOSURE AGREEMENT
In consideration of the parties’ discussions in connection with a proposed transaction between the parties (the “Transaction”) and any access the Receiving Party may have to Proprietary Information of the Disclosing Party, the Receiving Party hereby agrees as follows:
Each undersigned party understands that each party (the “Disclosing Party”) has disclosed or may disclose information to the other party (the “Receiving Party”) relating to the Disclosing Party’s business, including, without limitation, its properties, employees, finances, businesses and operations, which to the extent previously, presently, or subsequently disclosed to the Receiving Party, as well as the Receiving Party’s analyses, conclusions and evaluations thereof, is hereinafter referred to as “Proprietary Information” of the Disclosing Party.
1. All administrative, technical, financial, trade-secret, manufacturing, or other confidential information shall be deemed to be “Proprietary Information” for purposes of this Non-Disclosure Agreement (this “Agreement”). The fact that Proprietary Information does not carry a proprietary legend, or is transmitted verbally, shall not act as waiver to deprive such information from protection under this Agreement.
2. The Receiving Party agrees (i) to hold the Disclosing Party’s Proprietary Information delivered in accordance with paragraph 1 above (the “Confidential Information”) in strict confidence and to take all reasonable precautions to protect the Confidential Information, (ii) not to divulge any such Confidential Information or any information derived therefrom to any third person except to the Receiving Party’s attorneys or professional advisors on a “need-to-know” basis (iii) not to make any use whatsoever at any time of such Confidential Information except to evaluate internally, or to evaluate with the parties set forth in (ii) above, whether to enter into an agreement with the Disclosing Party relating to the Transaction, and (iv) not to copy or reverse engineer any such Confidential Information. Any third person given access to any Confidential Information by the Receiving Party must have a legitimate “need to know” such Confidential Information and shall be similarly bound in writing. Without granting any right or license, the Disclosing Party agrees that the foregoing clauses (i), (ii), (iii) and (iv) shall not apply with respect to any Confidential Information that the Receiving Party can document (a) is or, through no improper action or inaction by the Receiving Party or affiliate, agent, consultant or employee, is made generally available to the public, or (b) was in its possession or known by it prior to receipt from the Disclosing Party, or (c) was rightfully disclosed to it by a third party, provided, however, that the Receiving Party complies with any restrictions imposed by such third party, or (d) was independently developed without use of any Confidential Information of the Disclosing Party. The Receiving Party may make disclosures required by law or court order, provided, however, that the Receiving Party uses reasonable efforts to limit any such disclosure and to obtain confidential treatment or a protective order and has allowed the Disclosing Party to participate in attempting to limit such disclosure or to seek confidential treatment. Nothing contained in this Agreement shall be construed as granting or conferring any rights by license or otherwise in any Proprietary Information disclosed.
3. A Receiving Party’s obligations under this agreement with respect to each item of the Disclosing party’s Proprietary or Confidential Information expire two (2) years from the date of first disclosure of that item of Proprietary or Confidential Information to the Receiving Party.
4. Immediately upon (i) the decision by either party not to enter into the Transaction contemplated hereby, or (ii) a request by the Disclosing Party at any time, the Receiving Party will turn over to the Disclosing Party all Confidential Information of the Disclosing Party and all documents or media containing any such Confidential Information and all copies or extracts thereof. In addition, the Receiving Party shall provide the Disclosing Party with written notice that it has returned all of the Disclosing Party’s Confidential Information and all copies or extracts thereof. The Receiving Party understands that nothing herein (a) requires the disclosure of any Confidential Information of the Disclosing Party, which shall be disclosed if at all solely at the discretion of the Disclosing Party (in particular, but without limitation, any disclosure is subject to compliance with export control laws and regulations), or (b) requires the Disclosing Party to proceed with any proposed transaction or relationship in connection with which Confidential Information may be disclosed.
5. Except to the extent required by law, neither party shall disclose the existence or subject matter of negotiations or business relationship contemplated by this Agreement.
6. Notwithstanding anything in this Agreement to the contrary, the Disclosing Party hereby represents and warrants that such party may rightfully disclose or make available the Proprietary Information to the Receiving Party without the violation of any contractual, legal, fiduciary or other obligation to any person, and the Disclosing Party shall indemnify and hold harmless in full the Receiving Party against any and all damages, costs and expenses of any nature whatsoever (including, without limitation, reasonable attorney’s fees) incurred by Receiving Party in connection with the breach of such representation and warranty.
7. Subject to the terms and conditions of a definitive agreement regarding the Transaction and without prejudice thereto, the Receiving Party acknowledges that neither the Disclosing Party nor any of its officers, directors, employees or agents makes any express or implied representation or warranty as to the completeness of the Proprietary Information. The Receiving Party shall not be entitled to rely on the completeness of any Proprietary Information, but shall be entitled to rely solely on such representations and warranties regarding the completeness of the Proprietary Information as may be made to it in any definitive agreement relating to the Transaction, subject to the terms and conditions of such agreement.
8. The Receiving Party acknowledges that disclosure or use of Confidential Information in violation of this Agreement could cause irreparable harm to the Disclosing Party for which monetary damages may be difficult to ascertain or be an inadequate remedy. The Receiving Party therefore agrees that the Disclosing Party will have the right, in addition to its other rights and remedies, to seek and obtain injunctive relief for any violation of this Agreement.
9. Each party is aware, and will advise its representatives and agents who are informed of the matters that are the subject to this Agreement, of the restrictions imposed by applicable securities laws on the purchase or sale of securities by any person who has received material, non-public information from the issuer of such securities and on the communication of such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell such securities in reliance upon such information.
10. This Agreement will apply to disclosures made within the first thirty-six (36) months of the Effective Date of this Agreement. However, the obligations hereunder with respect to any disclosure made within that period will continue thereafter in accordance with the provisions of this Agreement.
11. The Receiving Party will notify the Disclosing Party in writing immediately upon the occurrence of any unauthorized release of Confidential Information or any other breach of this Agreement of which it is aware. In the event that any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable, such provisions shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect.
12. Non-Circumvention. For a period of thirty-six (36) months following the Effective Date of this Agreement, the Receiving Party and its officers and directors, separately and individually, will not make any effort to circumvent the terms of this Agreement in an attempt to gain the benefits or considerations granted to it under the Agreement by (a) taking any actions to indirectly gain the benefits of the Confidential Information, including but not limited to, contracting directly with any client of the Disclosing Party which has been identified as having access to the Confidential Information, or (b) hiring or contracting with any present or future employee or independent contractor of the Disclosing Party.
13. This Agreement shall be governed by the laws of California. This Agreement supersedes all prior discussions and writings and constitutes the entire agreement between the parties with respect to the subject matter hereof. The prevailing party in any action to enforce this Agreement shall be entitled to reasonable costs and attorney’s fees. No waiver or modification of this Agreement will be binding upon either party unless made in writing and signed by a duly authorized representative of such party and no failure or delay in enforcing any right will be deemed a waiver.
In witness whereof, the parties have executed this Agreement as of the day and year set forth below (the “Effective Date”).
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