This Confidentiality and Non-Disclosure Agreement (this “Agreement”) is entered into as of the date set forth below by and between Business Brokers of America, LLC (“Broker”), acting solely as the authorized representative of , the business identified as Listing ID # (the “Company”), and the undersigned party (the “Recipient”).
The Company has engaged Broker to assist in evaluating a possible sale, merger, recapitalization, or other transaction involving the Company (a “Transaction”). In connection with the Recipient’s evaluation of a possible Transaction, the Company is willing to furnish certain confidential information to the Recipient on the terms and conditions set forth below. In consideration of the disclosure of such information, the Recipient agrees as follows:
- Definitions
“Confidential Information” means all non-public, confidential, or proprietary information relating to the Company, in any form or medium, whether disclosed orally, in writing, electronically, or by any other means, including without limitation: operations, financial statements and projections, personnel and compensation, customers, suppliers, vendors and referral sources, pricing, properties, products, services, technology, software, computer programs and source code, manuals, business and marketing plans, trade secrets, and the existence and content of any Confidential Information Memorandum (“CIM”) or similar offering materials. Confidential Information also includes the fact that the Company is exploring a Transaction and that discussions or negotiations are taking place.
“Representatives” means, with respect to the Recipient, its affiliates and its and their respective directors, officers, employees, partners, members, managers, attorneys, accountants, consultants, advisors, prospective financing sources, and prospective equity co-investors and syndication partners, together with the partners, members, employees, and advisors of such financing sources, and, in the case of a private equity, search, or investment fund, its limited partners, investment committee, and portfolio companies—in each case who have a need to know the Confidential Information for the purpose of evaluating a Transaction.
“Affiliate” means, with respect to any person, any other person that directly or indirectly controls, is controlled by, or is under common control with such person, where “control” means the power to direct or cause the direction of management and policies, whether through ownership of voting securities, by contract, or otherwise.
“Person” means any individual, corporation, limited liability company, partnership, trust, joint venture, governmental authority, or other entity.
- Use and Exclusions
The Recipient shall use the Confidential Information solely for the purpose of evaluating a possible Transaction and for no other purpose. The obligations of confidentiality set forth in this Agreement shall not apply to information that the Recipient can demonstrate:
- was already known to the Recipient, without obligation of confidentiality, prior to disclosure by the Company or Broker hereunder;
- is or becomes publicly available through no act or omission of the Recipient or its Representatives;
- is rightfully received by the Recipient from a third party without restriction and without breach of any obligation of confidentiality;
- is independently developed by the Recipient without use of or reference to the Confidential Information; or
- is approved for release by prior written authorization of the Company.
Nothing in this Agreement shall restrict the Recipient from pursuing, evaluating, or completing the acquisition of, or investment in, any other business, including businesses similar to or competitive with the Company, provided that the Recipient does not use or disclose any Confidential Information in connection therewith.
- Permitted Disclosure to Representatives
The Recipient may disclose Confidential Information only to those of its Representatives who have a bona fide need to know such information for the purpose of evaluating a Transaction, who have been informed of the confidential nature of the information, and who are bound by obligations of confidentiality at least as protective as those contained in this Agreement. The Recipient shall be responsible for any breach of this Agreement by any of its Representatives and agrees to take all reasonable measures to restrain its Representatives from any unauthorized use or disclosure of the Confidential Information.
- Non-Disclosure and Handling of Materials
The Recipient shall hold all Confidential Information in strict confidence and shall not disclose, publish, or otherwise reveal any Confidential Information except as expressly permitted herein. The Recipient shall not, and shall ensure that its Representatives do not, duplicate, reproduce, screenshot, photograph, scan, apply optical character recognition (OCR) to, forward, transmit, or otherwise copy any Confidential Information except as reasonably necessary for the permitted purpose. The Recipient shall protect electronic copies of Confidential Information with the same degree of care it uses to protect its own confidential information of similar importance, but in no event less than a reasonable degree of care. The Recipient shall promptly notify Broker in writing upon becoming aware of any loss, theft, unauthorized access to, or unauthorized use or disclosure of any Confidential Information, and shall cooperate with Broker and the Company in investigating and mitigating the same.
The Recipient shall not disclose the fact that discussions concerning a possible Transaction are taking place, except to its Representatives in accordance with Section 3, or as required by law in accordance with Section 7.
- Non-Circumvention and Broker Protection
The Recipient acknowledges that Broker acts solely as the authorized representative of the Company. For a period of eighteen (18) months from the date of this Agreement, the Recipient shall not, and shall cause its Representatives not to, directly or indirectly contact, solicit, or negotiate with the Company’s owners, officers, employees, customers, vendors, suppliers, landlords, lenders, or other business relationships in connection with a possible Transaction involving the Company, except through Broker or with Broker’s prior written consent. For the avoidance of doubt, this Section does not restrict the Recipient’s ordinary-course business dealings with any such person that are unrelated to a Transaction involving the Company.
The Recipient shall not circumvent, bypass, or attempt to circumvent or bypass Broker in connection with any Transaction, and shall not negotiate directly with the Company without Broker’s knowledge and involvement.
- Non-Solicitation of Employees
For a period of eighteen (18) months from the date of this Agreement, the Recipient shall not, directly or indirectly, solicit for employment or hire any officer, manager, or other employee of the Company with whom the Recipient became acquainted or about whom the Recipient learned through the Confidential Information, without the prior written consent of Broker or the Company. Notwithstanding the foregoing, this Section shall not restrict, and it shall not be a violation of this Section for the Recipient to make or act upon: (i) general solicitations or advertisements not specifically directed at employees of the Company, including any resulting hires; (ii) the engagement of a search firm or recruiter that is not directed to target employees of the Company, including any resulting hires; (iii) the hiring of any person who contacts the Recipient on his or her own initiative without any prior solicitation by the Recipient; or (iv) the solicitation or hiring of any person whose employment with the Company has been terminated by the Company prior to such solicitation.
- Compelled Disclosure
If the Recipient or any of its Representatives is requested or required by law, regulation, subpoena, or other legal or governmental process to disclose any Confidential Information, the Recipient shall, to the extent legally permitted, promptly notify Broker in writing, on behalf of the Company, so that the Company may seek a protective order or other appropriate remedy. The Recipient shall cooperate with the Company’s reasonable efforts to obtain such relief, at the Company’s sole cost and expense. If disclosure is ultimately required, the Recipient shall disclose only that portion of the Confidential Information that it is legally compelled to disclose and shall use reasonable efforts to obtain assurances that confidential treatment will be afforded to the disclosed information. Notwithstanding the foregoing, (a) the Recipient and its Representatives may disclose Confidential Information to bank, securities, or other governmental regulators or self-regulatory organizations having supervisory authority over them, in the course of routine examinations or supervisory oversight not specifically directed at the Confidential Information, without prior notice to Broker, provided that such regulators are advised of the confidential nature of the information; and (b) the Recipient may make such disclosures as are required by applicable securities laws or the rules of any securities exchange on which its securities are listed, in which case the Recipient shall use reasonable efforts to notify Broker in advance to the extent practicable.
- Return or Destruction of Materials
Upon the request of the Company or Broker made at any time during the term set forth in Section 13(i) (Term), and in any event upon termination of discussions regarding a Transaction, the Recipient shall promptly return to Broker or destroy all Confidential Information, together with all copies, reproductions, summaries, analyses, and other materials prepared by the Recipient that contain or are derived from Confidential Information, including all electronic copies, backups, and cloud-stored materials. Upon request, the Recipient shall provide written certification of such return or destruction within fourteen (14) days, given by an officer or authorized representative of the Recipient to the best of such person’s knowledge after reasonable inquiry. Notwithstanding the foregoing, the Recipient and its Representatives may retain (i) copies to the extent required by law or by bona fide internal document-retention policies, and (ii) electronic copies created and retained automatically by routine backup, archival, or disaster-recovery systems in the ordinary course and not readily accessible to ordinary users, in each case provided that such retained materials are not accessed or used for any purpose and remain subject to the confidentiality obligations of this Agreement for the remainder of the term set forth in Section 13(i) (Term) and, in the case of trade secrets, for so long as the applicable information remains a trade secret under applicable law.
- No Representations or Warranties
The Confidential Information has been prepared or compiled from information supplied by the Company and has not been independently verified by Broker. It is furnished without any representation or warranty of any kind, whether express or implied, as to its accuracy or completeness. Neither the Company nor Broker shall have any liability to the Recipient or its Representatives resulting from the use of, or reliance upon, the Confidential Information, except in the case of fraud or intentional misrepresentation. The Recipient shall be solely responsible for conducting its own independent investigation and due diligence.
The Recipient acknowledges and agrees that it is not entitled to rely, and shall not rely, upon any Confidential Information, including any CIM, financial information, projections, or oral statements, except to the extent expressly set forth in the representations and warranties of a definitive written purchase agreement, if any, executed and delivered by the parties thereto, or in the case of fraud or intentional misrepresentation. Only such a definitive agreement, when and if executed, will give rise to any legal obligation between the parties with respect to a Transaction.
- No Obligation to Proceed
Nothing in this Agreement obligates the Company to furnish any particular information, to proceed with any Transaction, or to negotiate with the Recipient. The Company reserves the right, in its sole discretion, to conduct or terminate discussions, to reject any and all proposals, to negotiate with any other party, and to modify or terminate any process relating to a possible Transaction, at any time and for any reason or no reason, without liability to the Recipient.
- Remedies
The Recipient acknowledges that any breach of this Agreement may cause the Company and Broker irreparable harm for which monetary damages would be an inadequate remedy. Accordingly, in the event of any actual or threatened breach, the Company and Broker shall be entitled to seek equitable relief, including a temporary restraining order, preliminary and permanent injunctive relief, and specific performance, without the necessity of posting a bond or proving actual damages, in addition to all other remedies available at law or in equity.
- Recipient Representations
The Recipient represents and warrants to the Company and to Broker, as of the date of this Agreement, that:
- the Recipient is evaluating a possible Transaction as a principal for its own account, and not as a business broker, finder, agent, intermediary, or representative for or on behalf of any undisclosed principal or other third party, and has disclosed to Broker in writing the identity of any party on whose behalf it is acting; and
- the individual executing this Agreement is duly authorized to bind the Recipient.
The Recipient shall promptly notify Broker in writing if any of the foregoing representations ceases to be true and accurate in any material respect, or if the identity of the entity expected to acquire the Company changes.
- General Provisions
- Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Utah, without regard to its conflict-of-laws principles.
- Venue. The parties irrevocably consent to the exclusive jurisdiction and venue of the state and federal courts located in Salt Lake County, Utah, for any action arising out of or relating to this Agreement, and waive any objection to such venue. Notwithstanding the foregoing, either party may seek injunctive or other equitable relief in any court of competent jurisdiction in which such relief may be effectively obtained or enforced, and each party waives any objection to jurisdiction or venue in such court for that purpose.
- Assignment. The Recipient may not assign or transfer this Agreement or any of its rights or obligations hereunder, by operation of law or otherwise, without the prior written consent of Broker or the Company; provided, however, that the Recipient may assign this Agreement to an affiliate of the Recipient formed or designated to effect a Transaction, upon written notice to Broker and delivery to Broker of such affiliate’s written agreement to be bound by the terms of this Agreement, in which case the Recipient shall remain responsible for compliance with this Agreement. Any purported assignment in violation of this provision shall be void.
- Successors and Affiliates. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. The Recipient shall be responsible for ensuring that each of its affiliates, parent and subsidiary entities, related investment funds and portfolio companies, and Representatives that receives Confidential Information complies with the terms of this Agreement, and any act or omission by any such person that would constitute a breach of this Agreement if committed by the Recipient shall be deemed a breach by the Recipient.
- Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous understandings, whether written or oral, relating thereto.
- Amendment and Waiver. No amendment, modification, or waiver of any provision of this Agreement shall be effective unless made in writing and signed by the party against whom enforcement is sought. No failure or delay in exercising any right shall operate as a waiver thereof.
- Electronic Signatures. This Agreement may be executed in counterparts and delivered by electronic means, including via a recognized electronic-signature platform, and electronic signatures shall be deemed original signatures for all purposes and shall have the same force and effect as manually executed signatures.
- Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect, and the invalid provision shall be modified to the minimum extent necessary to make it enforceable while preserving the parties’ intent.
- Term. The confidentiality obligations of this Agreement shall remain in effect for a period of two (2) years from the date hereof, except that obligations relating to trade secrets shall continue for so long as the applicable information remains a trade secret under applicable law.
- Third-Party Beneficiaries. Broker is a party to this Agreement and may enforce its terms directly in its own name. The Company, although not a signatory, is an express and intended third-party beneficiary of this Agreement and shall be entitled to enforce each of its terms directly against the Recipient in the Company’s own name, and to exercise all rights and remedies available under this Agreement, in each case as fully as if the Company were a signatory party hereto. The rights of Broker and the Company are independent and cumulative, and neither the exercise nor the waiver of such rights by one shall limit or impair the rights of the other. Except as expressly set forth in this subsection, this Agreement confers no rights or remedies upon any other person.
- Survival. Notwithstanding any other provision of this Agreement, no obligation of the Recipient under this Agreement shall continue beyond the second anniversary of the date of this Agreement, except that: (i) Section 5 (Non-Circumvention and Broker Protection) and Section 6 (Non-Solicitation of Employees) shall each remain in effect for their respective stated periods; (ii) obligations with respect to trade secrets shall continue for so long as the applicable information remains a trade secret under applicable law, as provided in Section 13(i) (Term); and (iii) Section 9 (No Representations or Warranties), Section 11 (Remedies), and the provisions of this Section 13 other than Section 13(i) shall survive indefinitely.
- Attorneys’ Fees. In any action, arbitration, or other proceeding brought to enforce or interpret this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party its reasonable attorneys’ fees, expert witness fees, and costs, including those incurred in any appeal and in enforcing any judgment or award.
- Notices. All notices under this Agreement shall be in writing and shall be deemed duly given: (i) when delivered personally; (ii) one (1) business day after deposit with a nationally recognized overnight courier, charges prepaid; (iii) three (3) business days after deposit in the United States mail, certified or registered, return receipt requested; or (iv) when transmitted by email with confirmation of transmission. Notices to the Recipient shall be sent to the address and email set forth in the Recipient Information block below. Notices to Broker shall be sent to Business Brokers of America, LLC, 1895 E. Rodeo Walk Dr., Suite B200, Holladay, UT 84117, Attention: Managing Broker. Notices to Broker shall be given only by the methods described in clauses (i) through (iii) above. Notices to the Company may be given to and through Broker.
- No License. Nothing in this Agreement grants the Recipient any license or right, by implication, estoppel, or otherwise, in or to any patent, copyright, trademark, trade secret, or other intellectual property of the Company or Broker. All Confidential Information remains the property of the Company.
- Construction and Headings. Headings are for convenience only and do not affect the interpretation of this Agreement. “Including” and “include” mean including without limitation; the singular includes the plural and vice versa; and “or” is not exclusive. This Agreement shall not be construed against either party as the drafter.
By signing below, the Recipient acknowledges that it has read, understands, and agrees to be bound by the terms of this Agreement.
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