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]") and [Orange], a Delaware corporation ("[Orange]"). In the course of dealing between Apple and Orange, [Apple/Orange/both Apple and Orange], may be disclosing Confidential Information (as defined herein) to the other party for the purpose of ______________________ (the "Transaction"). Apple and Orange desire to establish and set forth the obligations with Respect to Confidential Information. In consideration of the foregoing, Apple and Orange agree as follows: 1. Confidential Information. “Confidential Information” shall mean information or materials provided by one party to the other which are in tangible form and labeled “confidential” or the like, or, if disclosed orally, are identified as being confidential at the time of disclosure and are followed up within two (2) weeks in a tangible form that is appropriately labeled. Confidential Information shall not include information or materials that (1) were, on the effective date of this Agreement, generally known to the public; (2) become generally known to the public after the effective date of this Agreement other than as a result of the act or omission of the receiving party; (3) were rightfully known to the receiving party prior to that party receiving same from the disclosing party; (4) are or were disclosed by the disclosing party to a third party generally without restriction on disclosure; (5) the receiving party lawfully received from a third party without that third party’s breach of agreement or obligation of trust; or (6) are or were independently developed by the receiving party. 2. Restrictions on Disclosure and Use. The receiving party shall not (1) make Confidential Information available to any of its directors, officers, employees, consultants or representatives (collectively, the “Representatives”) who do not have a “need to know” in order to carry out the purposes of this Agreement; (2) otherwise disclose any Confidential Information to any third party; or (3) use Confidential Information for any purpose other than as contemplated by this Agreement. If applicable, the receiving party shall inform its Representatives of the confidential nature of the Confidential Information and the requirements regarding restrictions on disclosure and use as set forth in this Section 2. The receiving party shall be held to the same standard of care it applies to its own information and materials of a similar nature, but in no event less than a reasonable degree of care. Notwithstanding anything herein to the contrary, the restrictions on disclosure and use set forth in this Agreement shall not restrict the right of the receiving party to independently design, develop, acquire, market, service or otherwise deal in, directly or indirectly, products or services competitive with those of the disclosing party. [Notwithstanding anything herein to the contrary, either party may use Residuals (as defined herein) for any purpose, including without limitation, use in design, development, manufacture, promotion, sale and maintenance of its products and services; provided that this right to use Residuals does not represent a license under any patents, copyrights or other intellectual property rights of the other party. The term “Residuals” means any information retained in the unaided memories of a party’s employees who have had access to the other party’s Confidential Information pursuant to the terms of this Agreement. A party’s employee’s memory is unaided if a party’s employee has not intentionally memorized the Confidential Information for the purpose of retaining and subsequently using or disclosing it]. 3. Ownership and Relationship. All Confidential Information disclosed under this Agreement shall remain the property of the disclosing party. This Agreement does not create any agency, partnership or business relationship between the parties. Further, no license under any patent or other intellectual property right is granted or conveyed by this Agreement or by one party disclosing Confidential Information to the other. 4. Required Disclosure. In the event that a receiving party or its Representatives are requested or required by applicable law, regulation or legal process (including oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) to disclose any of the disclosing party's Confidential Information, the party requested or required to make the disclosure shall provide the disclosing party with prompt notice, unless notice is prohibited by law, 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
but all of which together shall constitute one and the same instrument. at the disclosing party’s option. the party requested or required to make the disclosure or its Representative may. 6. Upon the earlier of (i) termination of this Agreement or (ii) a request from the disclosing party. the party requested or required to make the disclosure or any of its Representatives are nonetheless. in the absence of a protective order or other remedy or the receipt of a waiver by such other party. (c) This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. Term and Termination. eahc of which when so executed and delivered shall be an original. The parties agree that neither they nor any of their Representatives will make any public announcement regarding this Agreement or the Transaction without the prior written consent of the other party. legally required to disclose the disclosing party's Confidential Information. 5. Confidential Information disclosed under this Agreement shall be promptly returned to the disclosing party or. The term of this Agreement shall be one (1) year from the effective date unless terminated earlier by written notice of either party. (d) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. However. (f) This Agreement shall be governed by the laws of the state of _______________ without regard to its conflicts of laws principles. The effective date of this Agreement shall be the date of the latter signature below if both parties are to be disclosing Confidential Information. AGREED AND ACCEPTED BY: [APPLE] By: ________________________ Name: _______________________ . in which case such party shall reasonably consult with the other party prior to the making of any such announcement. The parties agree that the existence and terms of this Agreement and the Transaction and all discussions and negotiations related thereto shall be maintained in confidence by the parties and their respective Representatives working on the Transaction. (b) Neither party shall assign any of its rights or obligations under this Agreement without the prior written consent of the other. termination of this Agreement shall not relieve a party of its obligations under Paragraph 2 above which shall continue for a period of two (2) years from the date of the disclosure under this Agreement. and it supersedes any prior or contemporaneous written or oral agreement. If.this Agreement. (e) This Agreement shall not be modified except by written agreement of the parties. Miscellaneous. (g) The headings of the paragraphs of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect in any way the meaning or interpretation of this Agreement. under the advice of counsel. (a) This Agreement shall not create any obligation on the part of either party to enter into the Transaction. except to the extent such announcement may be required by law. Public Announcements. (h) This agreement may be executed in two or more counterparts and by the different parties hereto on separate counterparts. without liability hereunder. Confidentiality. disclose only that portion of the disclosing party's Confidential Information which such counsel advises is legally required to be disclosed. 7. shall be destroyed. or shall be the date the receiving party signs if only one party is identified above as disclosing Confidential Information.
Its: __________________________ [ORANGE] By: ________________________ Name: _______________________ Its: __________________________ .
In order to drop this into the form. If you are a disclosing party and you are concerned about exposing key employees to a company that may try and poach them you may try to obtain a non-solicit. you are a receiving party and the disclosing party wants a non-solicit. If you are the company doing the diligence then remember that residuals only works if the information is unintentional and without the use of any written notes (so you should have your relevant staff destroy their notes after diligence is complete so there will be no doubt) and it is generally a limited protection so companies should avoid having engineers or product managers who are building an internal version of a product from being involved in diligence of external vendors. Section 7 is boilerplate. If you have a particular concern and you are the disclosing party you may wish to (a) insert some sort of reasonable or best efforts for the receiving party to cooperate with the disclosing party to obtain protective or confidential treatment and/or (b) have the advice of counsel exception to disclosure be "written advice of outside counsel" -which is a higher standard. Simply determine which parties will be disclosing and and select either Apple. Some NDAs will require officer certification -. If you are the only disclosing party you may wish to remove this sentence and the bracketed language. Orange or Apple/Orange in the 2nd sentence. a disclosing party friendly version of a non-solicit (hence more restrictive) and a receiving party version of a nonsolicit (it would be most favorable for a receiving party to not agree to one. change that accordingly. Set forth below are two version of an optional non-solicit clause. This section also contains the termination process. Section 1 simply describes the situations in which the information disclosed will not happen to be considered confidential. The final unbracketed sentence clarifies that the parties may engage in other similar discussions with other parties. If you are the disclosing party and you control the form. Section 6 simply limits public disclosure. Section 4 allows either party to disclose if required by law. If the entity is not a corporation. even if a residuals clause is obtained. on the other hand. Insert the two company's names instead of Apple and Orange.which does not really change things substantively but you should be cautious if your officers' time/attention is at a premium as its another thing for them to do. Also insert the reason for the conversation in the blank before the defined term Transaction. This version of the form states that oral information will not be considered confidential unless reduced to written form within 2 weeks of disclosure and sent to the other side. Some prefer to not have termination provisions which is also acceptable but harder to track and comply with for larger more sophisticated companies. The bracketed language contains a concept known as residuals -. Section 3 limits the obligations of one party to the other. The agreement may be unilateral or bilateral. but assuming you do agree to one. you may wish to omit this. Optional Non-Solicit. Set forth below are.this is a concept often used in technology NDAs when you wish to prevent your engineering or product teams from being tainted by mere exposure to another company.wherein if you do not intentionally remember something a receiving party has not breached the agreement if they unintentionally use remembered information -. add it as a numbered section somewhere prior to 7 and remember to renumber the remaining paragraphs accordingly. If you are the receiving party. you need to be concerned about not agreeing to something that will unreasonably limit your recruiting efforts.Annotations and Optional Non-Solicit Provision This is a non-disclosure agreement that can used between two entities. Section 5 contains a termination provision which specifies the two parties may share information that will be protected for only up to 1 year and the use restrictions lapse after 2 years. first. If. Also remember if you have removed the term provision that the term of the non-solicit needs to run from . Remember to choose a jurisdiction for choice of law. Section 2 is the operative paragraph of the section and specifies that Confidential Information can not be shared or used. this one has some good carveouts). this is a better position for you.
without prejudice to any other rights and remedies otherwise available to the parties. nor encourage any of such employees to terminate their employment or relationship with the other party for a period of _____________ after the [termination] date of this Agreement.if you are going to be enjoined having the enjoiner jump through some hoops is not unreasonable. Optional: Specific Performance. If you are the disclosing party or will be disclosing more than the other side. . The foregoing sentence will not prevent either party from hiring or retaining any person who (a) initiates contact with the other party without any direct or indirect solicitation by such party or (b) is no longer employed by a party on the date the other party first solicits such person. "the employees with whom the Receiving Party receives information from or about during the course of discussions relating to the Transaction" or "the employees or consultants listed on Appendix I to this Agreement"). solicitation shall not include general solicitations of employment (whether through nontargeted employment advertisements or any other form of general solicitation which is not specifically targeted at particular employees of such company) Variation -. and. the parties agree to the granting of specific performance and injunctive or other equitable relief in the disclosing party's favor without proof of actual damages and the parties further agree to waiveany requirement for the securing or posting of any bond in connection with any such remedy CAVEAT This is not meant to be legal advice -. For purposes of this paragraph. The blank is filled with whatever subgroup is appropriate (e. you would be well advised to consult with good legal counsel.Identified Employees -.the date of the agreement and should be appropriately lengthened.g. agreeing to the fact that specific performance is available is not unreasonable. If you are about to enter into a vital NDA or have you nuanced or specific issues.Occasionally it may be unreasonable for the provision to cover all employees of a very large company so you may want to limit the non-solicitation to the employees that the other party meets or becomes aware of through the due diligence process or to a particular division of group. Version 2 Non-solicitation Each party agrees not to directly or indirectly solicit to hire any of the employees or consultants of the other party. In that case the beginning sentence would read "Each party agrees not to directly or indirectly solicit to hire any of ____________________ (the "Identified Employees") and the defined term Identified Employees is used throughout the rest of the clause. Also note that this is bilateral. nor encourage any of such employees to terminate their employment or relationship with the other party for a period of _____________ after the [termination] date of this Agreement. though it is reasonable to push back on the waiver of the bond requirement or proof of damages -. minor tweaking is required. The parties acknowledge that remedies at law may be inadequate to protect us against any actual or threatened breach of this Agreement. Version 1 Non-solicitation Each party agrees not to directly or indirectly solicit to hire any of the employees or consultants of the other party. If you want it to run 1 way. If you are the receiving party.simply a form. you may want to consider adding a specific performance clause. The clause attached can be added as a letter to Section 7 or as a separate enumerated Section. Specific Performance.