M&A Boot Camp booklet 2023 - Flipbook - Page 34
2.
Confidentiality agreement may also be needed to protect non-trade secret
confidential information
D.
Definition of “confidential information” is very important – should cover “trade
secrets,” “know-how” and “other confidential information” concerning the
business and affairs of disclosing party and should set forth a detailed (but not
exclusive) list of trade secrets, know-how and other confidential information
being protected
E.
Restrictions on use and disclosure of confidential information
F.
1.
Use by recipient only to evaluate a negotiated acquisition transaction
2.
Disclosure by recipient to only those representatives of recipient (such as
directors, officers, employees, consultants, legal counsel, accountants and
financial advisors) and potential lenders who:
a.
have a need to know such information in evaluating the acquisition
transaction; and
b.
are informed by recipient of confidential nature of information (or,
better yet, who actually sign confidentiality agreement)
3.
Obligation of recipient to ensure (or at least use best efforts to ensure)
confidential treatment by representatives of recipient
4.
Some agreements will further restrict disclosure of particularly sensitive
materials (e.g., permit disclosure only to those representatives of recipient
who do not have operational responsibilities)
Exceptions to recipient’s confidential treatment obligations – confidential
information of disclosing party that:
1.
becomes generally available to the public other than as a result of
disclosure by recipient or its representatives
2.
becomes available to recipient on non-confidential basis prior to its
disclosure by disclosing party
3.
recipient receives from third party not bound by any confidentiality
obligation
4.
is independently developed by recipient (this exception entails difficult
proof problems for disclosing party)
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