This Confidentiality & Non-Disclosure Agreement (“Agreement”) is made and entered into by Brokerage and Buyer in relation to the disclosure of Confidential Information (as defined herein) and Buyer’s restrictions on dealing in respect of the Business/Property (as defined herein) and Transaction (as defined herein). In consideration of the premises, rights and obligations set forth below, the parties hereby agree as follows:
A. The Brokerage Agreement with the Seller requires that a signed “Confidentiality and Non-Disclosure Agreement” and evidence of financial ability of the Buyer be obtained before disclosing the name, location or financial details of the Business, and all information provided will be kept confidential;
B. Buyer has expressed an interest in the acquisition, merger and/or otherwise (the “Transaction”) in respect of the Business/Property;
C. Brokerage is engaged by and/or represents the seller of the Business/Property (“Seller”) in the Transaction;
D. Brokerage is authorized to disclose to Buyer certain information concerning the Business/Property to assist in Buyer’s due diligence related to the Transaction;
E. Buyer desires to receive certain information concerning the Business/Property to evaluate the Transaction;
F. Buyer and Brokerage understand that the Seller desires that the evaluation of the Transaction and Business/Property and all information disclosed related to the Transaction and Business/Propertyshall be treated as confidential;
NOW THEREFORE in consideration of the multiple covenants and agreements and for other good and valuable consideration as herein provided, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. BUYER’S OBLIGATIONS
1.1. “Confidential Information” in this agreement shall include
a. All communications between the Sellers and Brokerage and all other material supplied to Buyer by Brokerage or acquired by us during the inspections of the Business/Property;
b. All information concerning the P&L, assets and liabilities of the Business/Property;
c. All information concerning the operations of the Business/Property;
d. All information concerning the shareholders of the Business/Property;
e. All information concerningthelenders of the Business/Property;
f. All information concerning the transactions and financial arrangements of the Business/Property;
g. The fact that the business is for sale;but does not include information available to the public, published by the Seller or Brokerage, and/or already in Buyers’ possession and free from any obligation of confidentiality. All information disclosed by Brokerage or Seller shall be deemed Confidential Information unless expressly stated in writing to be non-confidential.
1.2. The Buyer confirms it is not an agent of the Canada Revenue Agency and none of the information herein obtained will be used for, or provided to the Canada Revenue Agency,
1.3. The Buyer, including all officers, employees and professional consultants, is strictlyprohibited from using Confidential Informationfor any other purposes save andexcept the evaluation of the Transaction and Business/Property. Further Buyer, including all officers, employees and professional consultants, is strictly prohibited from disclosing Confidential Information to any other person, firm or corporation without priorwritten consent of Brokerageor Seller.
1.4. Buyer shall take all reasonable steps to minimize the risk of disclosure of the Confidential Information by ensuring that:a.only persons whose duties require them to possess the Confidentialinformation will have access thereto, and they will be instructed to treat the Confidential Information as confidential; andb.proper and secure storage is provided for all written Confidential Information.
1.5. If no Transaction related to all or part of the Business/Propertyis concluded with Seller, it is agreed and acknowledged that Buyer, including all officers, employees and professional consultants will continue to bebound by this Agreement.
1.6. Confidential Information, together with any copies thereof, except that portion of Confidential Information which consists of analysis, compilations, studies or other documents preparedby Buyer, will be returned to Brokerageimmediately on request.
1.7. Buyer agrees that it will strictly refrain from contacting or engaging with any officers, directors, employees, representatives, agents or anyone else related to the Business/Propertyunless permission has been given to do so by Brokerage and/or Seller. Buyer acknowledges that it will remain legally liable arising from any and all breaches of this section to the full extent of the law.
2. ACKNOWLEDGEMENT OF BROKERAGE REPRESENTATION AND RESTRICTIONS ON DEALING
2.1. This Agreement is solely in respect of this Business/Propertyand Transaction and does not apply to any other business or transaction involving Brokerage, Buyer, Seller and/or any other third-party.
2.2. Subject to Sections 2.3 and 2.4, Buyer agrees and acknowledges that Brokerage is to be compensated for facilitating the Transaction by way of a commission payable by the Seller. The Buyer acknowledges and understands that the Brokerage and is associates represents the Seller and have a contract with the Seller for a commission payable on the sale, trade, lease or exchange of the Business and/or Property and agrees to not circumvent this agreement in any way. The Buyer agrees that if they purchase, lease or become connected in any way (other than in normal business as a customer or supplier) with a business represented by the Brokerage for sale, that they protect the Agents right to a commission. The Buyer understands that if they interfere in any way with the Agents right to a commission that they will be liable for payment of the commission.
2.3. The Brokerage hereby acknowledges that all commission fees are due from the Seller, and no fees will be levied to the Buyer unless specifically agreed to in writing by both parties in a separate agreement.
2.4. The Buyer acknowledges and agrees to respect and adhere to the Brokerage’s rules and procedures including but not limited to:
a) The Buyer and/or their agents or representatives will not introduce any other potential buyer to the business, except through the Brokerage, and the Buyer will not circumvent nor attempt to circumvent this agreement in anyway.
b) The Buyer will at no time contact the Seller directly without first obtaining permission from the Brokerage
c) The Buyer agrees to, and/or will cause their lawyers to deliver all correspondence, offers, documentation directly through Brokerage which in turn will review all materials with the Seller and their lawyer.
d) Deposit monies shall be held in the Brokerage’s Trust Account which is insured for the protection of the Buyer.
e) The Buyer may be subject to a credit check at time of offer acceptance.
2.5. In the event that Buyer contravenes Section 2.4, Buyer acknowledges and agrees that if Buyer buys, leases, manages negotiates an option to buy or otherwise comes into possession of the Business/Property or share and/or assets of the Business/Property directly or indirectly within three (3) years from the Effective Date that Buyer shall be solely responsible and liable for the commissions otherwise payable to Brokerage.
2.6. The Buyer acknowledges and agrees that neither Brokerage and/or Seller shall be responsible for any expenses, fees, commissions or other payment whatsoever of any of Buyer’s representative(s).
2.7. All information provided to Buyer by Brokerage has been received from the Seller or Seller’s representatives or service providers and has not been verified by Brokerage or any of Brokerage’s officers, directors, employees, and/or representatives or agents. Brokerage makes no representations, either expressed or implied, concerning the accuracy of the information provided.
2.8. Seller, including its officers, directors, shareholders, and all other representatives, reserve the right, in their sole discretion, to reject any and all proposals made by Buyer with regard to the Transaction, to terminate discussions and negotiations with Buyer, to terminate Buyer's participation in the sale process and to modify or terminate the sale process at any time.
2.9. Buyer warrants, by their signature below that they either:
a) are NOT in an active Buyer Agency Agreement with a Registered Real Estate Brokerage in Ontario for the purchase of a business or investment; or
b) undertake to advise any and all representatives that pursuant to this Agreement, (1) said representative(s) is not entitled to any fees or commission from Brokerage and/or Seller; and (2) Buyer’s obligation to pay any fees or commission related to Buyer’s representation in respect of any Transactions relating to the Business/Property
3. AGENCY DISCLOSURE
3.1. The Buyer acknowledges that the Brokeragere presents the interests of the Seller and is providing customer service to the Buyer. All fees due are, and will be, the responsibility of the Seller. The Brokerage, as an agent to the Seller, acts under a listing agreement with the Seller and has affirmative obligations to the Seller including the fiduciary duties of loyalty, obedience, disclosure, confidentiality, reasonable care and diligence, and accounting in dealing with the Seller. In addition, the Brokerage has affirmative obligations to the Buyer and Seller of honest dealing and disclosure. Nothing in this agreement shall prevent the undersigned from retaining their own independent business broker to represent the Buyer. However, the undersigned acknowledges that the Brokerage when it does not use the MLS system, is not obliged to share its commission with any broker retained by the undersigned.
3.2.Buyer is solely responsible disclosing to any and all of its representatives that any fees payable in respect of any Transaction in relation to the Business/Property shall be the sole responsibility of Buyer and not the responsibility of either Brokerage and/or Seller.
4. INFORMATION DISCLOSURE
4.1. The Buyer acknowledges that all information on each business opportunity provided by the Brokerage has been provided to the Brokerage by the Seller of the business for confidential use by the Buyer for the sole purpose of evaluating a business opportunity as a potential Buyer. The Seller believes that information to be true and accurate; however, accuracy is not guaranteed and all information should not be considered complete. While statements may be presented concerning a matter of opinion, whether or not so identified, these are only statements of opinion. The Brokerage makes no representations or warranties, expressed or implied, regarding information provided to Buyer. It is the Buyer’s responsibility to make an independent verification of all information and The Buyer understands that the Brokerage is not responsible for the accuracy of any information received and agrees to indemnify and hold the Brokerage harmless from any claims or damages resulting from its use. Under no circumstances can the Brokerage be liable if confidential information is found to be incomplete, inaccurate, misleading or false.
4.2. The Buyer confirms its interest in the Confidential Information is limited to the potential purchase and is in no way a Canada Revenue Agency employee or affiliated the Canada Revenue Agency or with any governing body who may have an alternate motive for obtaining such Confidential Information.
5. RISK DISCLOSURE
5.1. Business opportunities by their very nature carry risk including obsolescence or reduced demand for service or product, regulatory laws, ineffective management, changes in the local or national economic condition, and many others. Due to the risks inherent in business opportunities, a Buyer could incur a loss, including but not limited to their entire investment. Buyer acknowledges that they understand these risks and the Brokeragecannot and does not in any way warrant or guaranty the future vitality or prospects of any business.
6. COUNSEL DISCLOSURE
6.1. The Buyer is advised to seek counsel from a Lawyer, Chartered Professional Accountant and any other parties necessary to make an informed decision regarding the purchase of any business opportunity bought or sold through the Brokerage
7. TERM AND TERMINATION
7.1. This Agreement shall begin on the Effective Date and run for the longer period of time between:
a) the closing of any Transaction in relation to the Business/Property; or
b) one (1) year (“Term”) unless terminated earlier as set forth in this Agreement.
7.2. Subject to section 3.1, this Agreement shall be automatically renewed for one (1) year (“Renewal Term”) upon expiry of the Term or all Renewal Terms.
7.3. Buyer agrees that Brokerage may terminate this Agreement at any time without notice or any further payment if Buyer is in breach of any of the terms of this Agreement.
7.4. Buyer agrees to give thirty (30) days’ notice to Brokerage to terminate this contract.
Sections 1, 2, 3and 4 shall survive termination of this Agreement.
8. CANADIAN ANTISPAM COMPLIANCE
8.1. The government of Canada has initiated a new anti-spam legislation which regulates the distribution of electronic messages. To comply with this new law, the Brokerage is required to obtain your express consent in order to send you e-communications about new businesses that we list that may interest you. If you want to be notified by email when we take new business listings, please give your express consent.
9.1. The parties agree to accept facsimile or electronic scanned transmissions of this document as originals and the undersigned hereby acknowledges this date having received a copy of this agreement.
Signature (Brokerage Signature)