THIS NON-DISCLOSURE AGREEMENT (this “Agreement”) is made as of
(the “Effective Date”), between VNB Business Brokers, LLC ("Broker"); and
IT IS AGREED as follows:
1) Interpretation. In this Agreement, unless the contrary intention appears, the following words and expressions shall have the following meanings:
a) “Business” means a business of a Seller represented for sale by Broker about which Purchaser has received Confidential Information.
b) "Business Purpose" means Purchaser’s confidential evaluation of a Business in connection with a potential purchase of a Business.
c) "Confidential Information" means any information provided by or on behalf of the Broker to Purchaser in connection with the Business Purpose whether before or after the Effective Date and whether or not such information is marked or otherwise designated as confidential or proprietary to the Broker or its representatives (including but not limited to information relating to trade secrets, industrial rights, know-how, inventions, discoveries, improvements, formulae, techniques, specifications, test methods, recipes, procedures, processes, drawings, manuals, computer systems or software, codes of practice, instructions, catalogues, ideas, facilities, plant and equipment, business methods, finances, prices, business plans, marketing plans, development plans, manpower plans, sales targets, sales statistics, customers and suppliers) and whether in oral, visual, electronic or any other medium, form or format.
d) “Seller” means any seller of a Business represented by Broker or introduced to Purchaser by Broker.
2) Conduct & Communication.
a) Broker as Exclusive Agent of Seller. Purchaser acknowledges and agrees that Broker is the full and exclusive agent representing a Seller in connection with the potential sale of a Business.
b) Purchaser’s Contact with Sellers. Purchaser acknowledges and agrees that all communications concerning the Business Purpose shall be conducted solely through the Broker.
3) Confidentiality. In consideration of receipt of Confidential Information, Purchaser agrees to the following:
a) Obligation of Confidentiality. Purchaser confirms that it understands that Confidential Information constitutes and is comprised of valuable confidential proprietary information belonging or licensed to the Broker, the disclosure of which could have damaging effects on the Broker's business or a Seller’s Business. Purchaser undertakes that it shall, unless specifically permitted by the Broker in writing or as expressly provided in this Agreement, keep secret and confidential any Confidential Information and not disclose (in whole or part) any such Confidential Information to any other person (except to employees directly involved in the sale and to those who will provide Purchaser with professional, legal, or financial advice on the sale (“Representatives”), in which case Purchaser agrees to obtain such Representatives’ agreement to maintain such confidentiality, for a period of two years from the date of disclosure. Purchaser shall ensure compliance of its Representatives with the terms of this Agreement.
b) Use. Purchaser shall use Confidential Information only for the Business Purpose and not for any other purpose whatever.
c) Exceptions. The restrictions and undertakings in this Agreement shall not apply in respect of any Confidential Information: (i) that is in the public domain at the Effective Date otherwise than as a result of a breach of a confidentiality obligation by any person; or (ii) that subsequently comes into the public domain, otherwise than as a result of a breach of this Agreement or other breach of a confidentiality obligation by any person, but only after it has come into the public domain. Purchaser shall be entitled to disclose Confidential Information where required to do so by law, regulation (whether governmental or of a regulatory body or authority) or order of a court of competent jurisdiction, but only to the extent necessary to comply with such law, regulation or order. Where a disclosure of Confidential Information is required by law, regulation, governmental or court order, Purchaser shall, so far as legally permitted, promptly notify the Broker in writing so that the Broker, at its sole discretion, may obtain any protective orders. If such notice does not permit reasonably adequate time to obtain such protective orders, then Purchaser shall notify the relevant person or entity to whom the Confidential Information is to be disclosed of the confidential nature of such information and request confidential treatment. Without prejudice to the foregoing Purchaser shall generally comply with all reasonable requests of the Broker relating to such disclosure.
d) Return and Destruction of Confidential Information. Purchaser agrees that on the Broker's written request, and in any event upon the completion or termination of the Business Purpose, it shall return or destroy (as the Broker may direct) all of the Confidential Information disclosed by or on behalf of the Broker in its possession and procure the return or destruction (as the Broker may direct) of any such Confidential Information in the possession of any person to whom such Confidential Information may have been disclosed. "Destruction" shall include permanently expunging any Confidential Information held on computer or other electronic systems.
e) Public Announcements. Purchaser shall not make nor permit others to make any reference to Confidential Information or use the Broker's or any Seller’s name in any public announcements, promotional material, marketing or sales material without the prior written consent of the Broker.
4) Purchaser’s Representations, Warranties and Acknowledgements.
a) Broker’s & Sellers’ Reliance. Purchaser warrants that the sole purpose of requesting and receiving Confidential Information is the Business Purpose, and Purchaser knows that the Sellers and Broker are relying upon such representation in disclosing the Confidential Information to Purchaser.
b) Authority; Guarantee of Performance. Purchaser represents and warrants to have the legal and express authority to enter into this agreement on behalf of any entity represented, and hereby guarantees the performance of this Agreement.
c) Advice. Purchaser understands, agrees and acknowledges that Purchaser has been advised to consult an attorney and/or certified public accountant for assistance in reviewing and verifying the Confidential Information. Purchaser further understands and agrees that Broker is merely acting as a conduit of information, and has not made any independent investigation of the accuracy of the Confidential Information. Purchaser agrees to independently verify all representations and warranties made by a Seller.
d) No Co-Brokerage. Purchaser represents and warrants that it is seeking to purchase a Business solely for its own account, and that it is not a broker, real estate, business agent or other intermediary.
e) Purchaser Not a Competitor. Purchaser represents and warrants that it does not represent any third-party competitor of any Business about which it has requested Confidential Information and is not an employee of such competitor business.
f) Financial Capability. Purchaser further warrants that it is financially capable of purchasing any Business about which it has requested Confidential Information, has not filed for an undisclosed bankruptcy, and has not been convicted of any felony or crime.
5) Furnishing of Purchaser Information. Should the Broker or any Seller deem it necessary, Purchaser grants the right to obtain a credit report through standard reporting agencies. If requested, Purchaser also agrees to provide a resume, financial statement, and proof of funds. Purchaser understands that this information will be held in confidence and will only be used for the purpose of any Seller evaluating any offer for a Business made by Purchaser.
6) Violation of Broker Exclusivity. Purchaser hereby recognizes Broker as the procuring cause of any purchase or other act set forth in this Agreement and agrees, during the Term, not to deal directly or indirectly with a Seller, its agents, representatives or assigns with respect to the Business Purpose, without the prior written consent of Broker. If, during the Term (as defined below), Purchaser, or an entity in which Purchaser has an interest, or person or entity introduced to a Business and/or a Seller by Purchaser, enters into a (A) sale and/or purchase agreement, or (B) management contract or other financial arrangement with a Seller with respect to a Business or part thereof, including leasing the Business premises from a Seller or a Seller’s landlord in violation of this Agreement, Purchaser shall be liable to Broker for any and all damages Broker may suffer, including but not limited to payment of full commission due Broker under a broker or marketing agreement between Broker and a Seller. To ensure the collection of its compensation, Purchaser hereby grants Broker the right to place a lien on the assets of any Business which may be acquired by Purchaser in violation of this Agreement, and Purchaser agrees and does hereby appoint Broker its attorney–in-fact to execute all documents necessary to perfect such lien, and this Agreement shall constitute Purchaser’s consent to do so
7) Seller as Third-Party Beneficiary. Purchaser acknowledges that an applicable Seller has the right to protect the Confidential Information and to obtain the benefits hereunder. Accordingly, and for such limited purposes only, any Seller shall be considered an intended third-party beneficiary hereunder. The fact that a Seller is not a signatory to this Agreement shall not prohibit, alter or limit such Seller’s or Broker’s right to enforce the terms hereof.
8) No Implied Waiver. Either party’s failure to insist in any one or more instances upon strict performance by the other party of any of the terms of this Agreement shall not be construed as a waiver of any continuing or subsequent failure to perform or delay in performance of any term hereof.
9) Indemnification of Broker.
a) Indemnification for Purchaser’s Breach. Purchaser shall be fully responsible and liable for breach of this Agreement, by it or by its representatives and/or sub-contractors and undertakes to indemnify the Broker in respect of such breach. If Purchaser discloses the availability of a Business to another party, and that party purchases or causes the purchase of that Business without the Broker, or if Purchaser interferes with Broker’s right to a commission from Seller in any manner, then Purchaser agrees to be responsible for payment of Broker’s commission as agreed with Seller.
b) Indemnity for Accuracy of Confidential Information. The Broker makes no representation or warranty, express or implied, concerning its Confidential Information, whether as to the accuracy, adequacy or completeness of such information or otherwise. The Broker may provide certain analysis of information provided by Seller and no representations or warranties are made by the Broker as to its accuracy or completeness. Purchaser agrees to indemnify and hold harmless from any claims or damages resulting from its use.
10) Choice of Law; Venue. This Agreement shall be governed by the laws of the State of New York without regard to choice of law rules that may result in the law of another jurisdiction being applied. The parties irrevocably agree that the courts of New York have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement (including non-contractual disputes or claims).
11) Attorney’s Fees. In the event of any dispute or litigation arising out of or relating to this Agreement, the prevailing party shall be entitled to an award of its reasonable attorneys’ fees, costs, and expenses incurred in both the trial court and appellate levels.
12) Term. The provisions of Sections 2 (Conduct) and 3 (Confidentiality) of this Agreement shall remain effective for two (2) years following the Effective Date (the “Term”). All other provisions shall remain effective in perpetuity.
13) Injunctive Relief. Purchaser agrees that Broker and each Seller, in the event of a breach of this Agreement, shall be entitled to seek equitable relief, including specific performance and immediate injunctive relief without the necessity of proving irreparable harm or posting a bond, and any other equitable relief deemed appropriate by Purchaser, restraining Purchaser, from disclosing or using, in whole or in part, any Confidential Information. Nothing in this Agreement shall be construed as prohibiting the Broker or any applicable Seller from pursuing any other available remedies either in law or in equity.
14) Definitive Agreement. Unless and until a definitive written agreement between them with respect to a transaction has been executed and delivered, neither party will be under any legal obligation of any kind to complete a transaction with the other.
WHEREAS, the parties have entered into this Agreement as of the date first written above.
Vishal Bharucha, President, VNB Business Brokers
845 Third Avenue, 6th Floor
New York, NY 10022
Toll Free: 877-264-SELL (7355)