SayPro: Confidentiality Agreement
A Confidentiality Agreement (also known as a Non-Disclosure Agreement, or NDA) is a critical document to ensure that sensitive business information remains protected throughout the buying and selling process. This agreement creates a legally binding commitment between both parties—typically the seller and potential buyer—that all confidential information shared during the negotiation and due diligence process will not be disclosed to third parties or used for purposes outside the scope of the transaction.
Below is a sample Confidentiality Agreement template tailored for the sale of an electrical manufacturing business.
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (“Agreement”) is made and entered into as of the [Effective Date], by and between:
[Seller’s Name/Company] (“Disclosing Party”)
[Buyer’s Name/Company] (“Receiving Party”)
Collectively referred to as the “Parties” for the purposes of the transaction related to the sale of the business operations of [Business Name] (“Business”).
1. Purpose
The Disclosing Party intends to disclose certain confidential and proprietary information (“Confidential Information”) to the Receiving Party to evaluate and consider the potential sale or acquisition of the Business. The purpose of this Agreement is to prevent the unauthorized disclosure of this Confidential Information during the negotiation, due diligence, and any subsequent processes related to the transaction.
2. Definition of Confidential Information
For purposes of this Agreement, Confidential Information includes but is not limited to:
- Financial statements, tax returns, profit and loss statements, and balance sheets.
- Business plans, marketing strategies, and customer lists.
- Operational processes, intellectual property, trade secrets, and manufacturing techniques.
- Proprietary software, designs, technical specifications, and other product-related information.
- Contracts, agreements, and other legal documents associated with the Business.
- Any other business-related data, communications, or information disclosed by the Disclosing Party to the Receiving Party, whether in writing, orally, or electronically.
3. Obligations of the Receiving Party
The Receiving Party agrees to:
- Maintain Confidentiality: Keep all Confidential Information in strict confidence and not disclose it to any third parties without the prior written consent of the Disclosing Party.
- Use of Information: Use the Confidential Information solely for the purpose of evaluating the potential sale or acquisition of the Business.
- Restricted Access: Limit access to the Confidential Information only to employees, agents, or advisors who need to know the information for the purpose of evaluating the transaction, and who are bound by confidentiality obligations no less restrictive than those contained in this Agreement.
- Safeguard Information: Take all reasonable measures to safeguard the Confidential Information and prevent any unauthorized disclosure or use.
4. Exclusions from Confidential Information
Confidential Information shall not include information that:
- Is or becomes publicly available through no fault of the Receiving Party.
- Was already in the Receiving Party’s possession prior to disclosure by the Disclosing Party and was not subject to any confidentiality obligation.
- Was independently developed by the Receiving Party without use of or reference to the Confidential Information.
- Is rightfully received by the Receiving Party from a third party without breach of any confidentiality obligations.
- Is required to be disclosed by law, court order, or regulatory authority, provided the Receiving Party notifies the Disclosing Party promptly and cooperates in seeking a protective order or other remedy.
5. Return or Destruction of Confidential Information
Upon completion of the transaction or upon request by the Disclosing Party, the Receiving Party agrees to return or destroy all Confidential Information, including any copies, notes, or summaries of the Confidential Information, within a reasonable time period.
6. No License or Ownership Rights
Nothing in this Agreement grants the Receiving Party any rights or licenses to the Confidential Information or to the intellectual property of the Disclosing Party, except for the limited right to use the information for the purpose outlined in this Agreement.
7. Term of Agreement
This Agreement shall remain in effect for a period of [insert number of years] years from the date of disclosure of the Confidential Information or until the Confidential Information no longer qualifies as confidential under this Agreement, whichever is sooner.
8. No Obligation to Complete Transaction
Nothing in this Agreement obligates the Receiving Party to proceed with the purchase of the Business, nor does it bind the Disclosing Party to sell the Business. Either Party may terminate discussions at any time without any obligation to the other.
9. Governing Law and Dispute Resolution
This Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflicts of law principles.
Any dispute arising from this Agreement shall be resolved through [arbitration/mediation] in [Location].
10. Miscellaneous
- Entire Agreement: This Agreement constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior discussions or agreements.
- Amendments: Any amendments to this Agreement must be made in writing and signed by both Parties.
- Severability: If any provision of this Agreement is found to be invalid or unenforceable, the remainder of the Agreement will remain in full force and effect.
11. Acknowledgment
By signing this Agreement, the Parties acknowledge that they have read and understand the terms and conditions set forth, and agree to comply with them.
IN WITNESS WHEREOF, the Parties have executed this Confidentiality Agreement as of the Effective Date.
[Seller’s Name]
By: _______________________________
Name:
Title:
Date:
[Buyer’s Name]
By: _______________________________
Name:
Title:
Date:
Conclusion
A Confidentiality Agreement is essential to ensure that both parties in the sale or acquisition process of an electrical manufacturing business can exchange sensitive information with confidence. This legally binding document ensures that trade secrets, financial details, and operational information are kept secure and are only used for the purpose of evaluating the transaction. Both parties are protected by agreeing to respect the confidentiality of the disclosed information, fostering trust and ensuring the integrity of the negotiation process.
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