WHEREAS, the Parties desire to engage in discussions for the purposes of exploring (including negotiating and consummating) a possible business transaction involving the Parties (the “Evaluation”);
WHEREAS, in connection with the Evaluation, the Parties will be given access to Confidential Information (as defined below) relating to each other’s businesses and affairs; and
WHEREAS, the Parties wish to set forth their understanding with respect to the provision, retention and return of such Confidential Information during and after the Evaluation.
NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
- Confidential Information.
(a) The Parties will (i) hold the Confidential Information in utmost trust and strictest confidence, (ii) not use the Confidential Information for their own benefit or for the benefit of any third party, and (iii) not disclose or otherwise disseminate the Confidential Information except as expressly authorized in this Agreement. The obligations under this Section 1(a) as it relates to the Confidential Information that is a trade secret under Applicable Law (defined below) will apply as long as the Confidential Information remains a trade secret in accordance with Applicable Law, and the obligations under this Section 1(a) as it relates to the Confidential Information that does not constitute a trade secret under the Act will survive until the second (2nd) anniversary of the Effective Date. All Confidential Information will be used solely for purposes of the Evaluation and subsequent discussions related to a transaction between the Parties and will not at any time, or in any manner, be utilized for any other purpose, unless the one of the Parties agrees otherwise in writing to the Company.
(b) The “Confidential Information” means (i) all non-public or proprietary information of the disclosing party (“Disclosing Party”), (ii) all tangible or electronic reproductions or embodiments of such information, (iii) includes, but is not limited to, business plans or strategies, vendor’s, names, lists, and information; industry knowledge; financial statements, and any other financial, sales, marketing, technical, strategic, or product information, customers and clients and names and lists related thereto, (iv) information which the Disclosing Party obtains from another party which the Disclosing Party treats as confidential, or which is protected from disclosure by an agreement between the Disclosing Party and the other party (the “Receiving Party”). Confidential Information does not include information that the Receiving Party can demonstrate by written or other documentary records: (a) was rightfully known to the Receiving Party without restriction on use or disclosure prior to such information's being disclosed to the Receiving Party in connection with this Agreement; (b) was or becomes generally known by the public other than by the Receiving Party or any Representative (defined below) in violation of this Agreement; (c) was or is received by the Receiving Party on a non-confidential basis from a third party that, to the Receiving Party’s knowledge, was not or is not, at the time of such receipt, under any obligation to maintain confidentiality, or (d) was independently developed without the use of or reliance upon any Confidential Information.
(c) Notwithstanding Section 1(a), the Receiving Party may disclose the Confidential Information to the Receiving Party’s employees, officers, directors, equityholders, agents and advisors (collectively, “Representatives”), in each case only on a “need to know” basis; provided each such Representative is first made aware of the existence of this Agreement and the Recipient causes each such Recipient to comply with the restrictions set forth in this Agreement. The Receiving Party will indemnify and hold harmless the Disclosing Party for any loss, damage, or expense, including costs and reasonable attorneys' fees and expert fees that the Disclosing Party suffers or incurs because of the breach of this Section 1 by the Receiving Party or by any Representative.
(d) If the Receiving Party or any Representative is compelled by Applicable Law to disclose any Confidential Information then, to the extent commercially reasonable and legally permissible, the Receiving Party shall promptly, and prior to such disclosure, notify the Disclosing Party in writing of such requirement so that the Disclosing Party can seek a protective order or other remedy at Disclosing Party’s sole cost and expense, or waive its rights under this Section. If the Disclosing Party waives compliance or remains required by law to disclose any Confidential Information, the Receiving Party shall disclose only that portion of the Confidential Information that it is legally required to disclose.
- Ownership.
The Receiving Party hereby acknowledges and agrees that all of the Confidential Information of the Disclosing Party that is proprietary to the Disclosing Party shall remain the exclusive proprietary property of the Disclosing Party, is being disclosed solely for the purpose of enabling the Parties to conduct the Evaluation, and is to be used by the Receiving Party only in such limited manner as is permitted by the provisions of this Agreement.
- Confidentiality of Discussions.
Except as provided in Sections 1(c) and 1(d), the Receiving Party will not disclose to, or discuss with, any person or entity (a) the contents of this Agreement, (b) the fact that information concerning the Disclosing Party has been provided to, or obtained by, the Receiving Party or any Representatives, or (c) the fact of discussions or negotiations related to the Evaluation.
- Return of Confidential Information.
Upon the request of Disclosing Party, the Receiving Party will immediately: (i) deliver all documents or other materials disclosed to the Receiving Party constituting Confidential Information, and (ii) destroy all notes, abstracts, memoranda, or other documents and electronically stored information prepared by Receiving Party which contain Confidential Information or any discussion thereof, without retaining a copy of any such material. The destruction pursuant to the foregoing must be certified by the Receiving Party in writing to the Disclosing Party (and such certification will include a list of the destroyed materials). No disclosure of any Confidential Information hereunder will be construed as a public disclosure of such Confidential Information for any purpose whatsoever. Time is of the essence of this Agreement. Notwithstanding anything in this Agreement to the contrary, the Receiving Party may retain one copy of the Confidential Information for regulatory compliance purposes.
- Non-Solicitation of Employees.
Without the Disclosing Party’s express written consent, for a period of eighteen (18) months following the Effective Date (the “Restricted Period”), neither the Receiving Party nor any of its Representatives will, either directly or indirectly, (a) engage in hiring efforts, solicit or induce any person who is an employee of the Disclosing Party to leave or cease his or her employment with the Disclosing Party or (b) hire or engage the services of such person to provide services that are of the type performed by such employee for the Disclosing Party; provided, however, that such restrictions shall not apply in the event of a general solicitation (including through the use of employment search agencies) not targeted at the Disclosing Party’s personnel or to Disclosing Party personnel whose employment with or engagement by Disclosing Party terminated more than six months prior to the solicitation.
- Company Representative as Third-Party Beneficiary.
Buyer acknowledges and agrees that Company has the right to protect the Confidential Information and to enforce the terms of this Agreement. Accordingly, and for such limited purposes only, Company’s Representative shall be considered an intended third-party beneficiary hereunder. The fact that the Company Representative is not a signatory to this Agreement shall not prohibit, alter, or limit Buyer’s or Company’s right to enforce the terms hereof.
- Non-Circumvention of Business.
During the Restricted Period, the Receiving Party will not and will not allow any of its Representatives to act in such a fashion that could reasonably be expected to affect the contractual relationship between the Receiving Party and any of the Disclosing Party’s clients, customers, vendors, or suppliers, or try to persuade any client, customer, vendor, or supplier of the Disclosing Party to cancel or not do business with the Disclosing Party in the future.
- Remedies.
The Receiving Party acknowledges that: (i) each of the covenants is reasonable and necessary to protect the business, interests and properties of the Disclosing Party and (ii) the Disclosing Party would suffer irreparable damage in the event of any breach of this Agreement. Accordingly, the Disclosing Party will be entitled to seek temporary, preliminary and final injunctive relief, as well as any other applicable remedies at law or in equity against the Receiving Party if the Receiving Party or a Representative breach, has breached, or threatens to breach this Agreement. In the event the Disclosing Party retains an attorney to enforce the terms of this Agreement, the Disclosing Party will be entitled to recover from the Receiving Party all costs and reasonable attorneys' fees and expert fees the Disclosing Party incurs. The existence of any claim will not constitute a defense to the enforcement by the Receiving Party of the covenants and agreements contained in this Agreement.
- Security.
The Receiving Party represents and warrants that it uses commercially reasonable efforts to secure its business facilities, paper files, servers, back-up systems, and computing equipment, including, but not limited to, all mobile devices and other equipment with information storage capability from security breach. The Receiving Party will notify the Disclosing Party of a security breach as soon as practicable, but no later than twelve (12) hours after the Receiving Party becomes aware of a security breach.
- Publicity.
The Receiving Party and its Representatives shall not (a) use the name of the Disclosing Party or otherwise identify or refer to the Disclosing Party or the managers, members, affiliates, officers, shareholders, or employees of the Disclosing Party in any marketing materials for any purpose, or (b) directly or indirectly, post or otherwise share on any social media outlet any pictures (digital, analog, moving or still), commentary, reviews, analysis or editorial content on the Disclosing Party, without the express prior written consent of the Disclosing Party.
- No Representation or Warranty.
The Receiving Party understands and acknowledges that the Disclosing Party nor any of its respective officers, directors, members, managers, employees, affiliates, stockholders, agents, or controlling persons: (i) is under any obligation to make any particular information available hereunder, or to supplement or update any Confidential Information previously furnished, or (ii) is making any representation or warranty, express or implied, as to the accuracy or completeness of the Confidential Information. The Receiving Party will be entitled to rely solely on those particular representations and warranties, if any, that are made in a definitive agreement relating to a transaction when, as, and if it is executed, and subject to such limitations and restrictions as may be specified in such definitive agreement.
- No Relationship.
Nothing in this Agreement, its provisions or the transactions, obligations and relationships created hereby shall, in and of itself, constitute any Party to this Agreement as the agent, employee or legal representative of the other Party hereto for any purpose whatsoever, nor shall any Party to this Agreement hold itself out as such. This Agreement does not create and shall not be deemed to create a relationship of partners, joint venturers, associates or principal and agent between the Parties hereto, and the Parties acknowledge that they are each acting as principals hereunder. Neither the holding of discussions between the Parties nor the disclosure to Buyer of Information will be construed as limiting the right of the Company to engage in similar discussions and to furnish like information to other potential purchasers of the Company or to begin or continue any discussions or negotiations with Buyer. The Company may, in their sole and absolute discretion, reject any and all proposals and terminate discussions with Buyer at any time and enter into discussions and negotiations with other parties at any time or simultaneously.
- Miscellaneous.
The laws of the state in which the Company is organized or incorporated (“Applicable Law”) will govern the validity of the Agreement, without regards to its or any other jurisdictions' conflict of laws principles, and the state and federal courts located in the state in which the Company is organized or incorporated, will be the sole and exclusive jurisdiction and venue for all disputes between the Parties. It is the desire and intent of the Parties that the provisions of this Agreement shall be enforced to the fullest extent permissible. Accordingly, if any portion(s) of this Agreement shall be adjudicated to be invalid or unenforceable as written, such portion(s) shall be modified to the extent necessary to be valid or enforceable. Such modification shall not affect the remaining provisions of this Agreement. To the extent any portion(s) of this Agreement found invalid or unenforceable cannot be modified to be made valid or enforceable, then the Agreement shall be construed as if that portion(s) was deleted, and all remaining terms and provisions shall be enforceable in law or equity in accordance with their terms. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute but one and the same instrument. Facsimile and electronic signatures will be recognized as original signatures for all purposes. This Agreement was negotiated fairly between the Parties at arm's length and the final terms of this Agreement are the product of the Parties' negotiations and therefore should not be construed against a Party because the Party drafted or was more responsible for drafting the provision(s). This Agreement constitutes the sole and entire understanding among the Parties with respect to the subject matter hereof and may not be altered or amended except in writing signed by all Parties. The benefits of this Agreement shall inure to the respective successors and assigns of the Parties.
IN WITNESS WHEREOF, the Buyer hereto has caused this Agreement to be executed by its duly authorized representative under seal as of the date first written above.
