Confidentiality Agreement Template for Business Sale

CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT

THIS CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT (the "Agreement") is entered into as of this ______ day of __________________, 20____ (the "Effective Date"), by and between:

DISCLOSING PARTY: ______________________________________, with its principal place of business located at ____________________________________________________________ ("Seller"),

AND

RECIPIENT PARTY: ______________________________________, with its principal place of business located at ____________________________________________________________ ("Prospective Buyer").

(Collectively referred to herein as the "Parties" and individually as a "Party").

---

1. PURPOSE

The Parties are exploring a potential business transaction involving the possible sale, merger, or acquisition of assets/shares of the business known as ______________________________________ (the "Target Business"). In connection with this evaluation (the "Purpose"), Seller may disclose certain proprietary and confidential information to Prospective Buyer.

2. DEFINITION OF CONFIDENTIAL INFORMATION

"Confidential Information" means all non-public, proprietary, or sensitive information disclosed by Seller to Prospective Buyer, whether orally, in writing, or electronically, including but not limited to: financial statements, tax records, customer lists, vendor agreements, trade secrets, business plans, intellectual property, marketing strategies, and any other data marked as "Confidential" or which reasonably should be understood to be confidential given the nature of the information.

3. OBLIGATIONS OF RECIPIENT

Prospective Buyer agrees to:

• (a) Maintain the Confidential Information in strict confidence and use the same degree of care as it uses to protect its own confidential information, but in no event less than a reasonable degree of care.
• (b) Use the Confidential Information solely for the Purpose of evaluating the potential transaction.
• (c) Restrict disclosure of Confidential Information to only those employees, officers, directors, and professional advisors (the "Representatives") who have a "need to know" and who are bound by confidentiality obligations at least as restrictive as those contained herein.
• (d) Assume full responsibility for any breach of this Agreement by its Representatives.

4. EXCLUSIONS

Confidential Information does not include information that:

• (a) Is or becomes generally available to the public other than as a result of a disclosure by Prospective Buyer;
• (b) Was within the possession of the Prospective Buyer prior to disclosure by Seller;
• (c) Becomes available on a non-confidential basis from a source other than the Seller, provided such source is not known by the Prospective Buyer to be bound by a confidentiality agreement with the Seller.

5. COMPELLED DISCLOSURE

If the Prospective Buyer is required by law, regulation, or legal process to disclose any Confidential Information, it shall provide the Seller with prompt written notice (to the extent permitted by law) so that the Seller may seek a protective order or other appropriate remedy.

6. RETURN OR DESTRUCTION OF MATERIALS

Upon the written request of the Seller or the termination of negotiations, the Prospective Buyer shall promptly return or certify the destruction of all Confidential Information, including all copies, summaries, or analyses thereof, except for archival copies retained for legal compliance as required by applicable law.

7. TERM

The obligations set forth in this Agreement shall remain in effect for a period of ______ (______) years from the Effective Date.

8. NO REPRESENTATION OR WARRANTY

Seller makes no representation or warranty, express or implied, as to the accuracy or completeness of the Confidential Information. The Prospective Buyer shall be entitled to rely only on such representations and warranties as may be expressly set forth in a final, signed definitive purchase agreement.

9. GOVERNING LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with the laws of the State/Province of ______________________. Any disputes arising hereunder shall be subject to the exclusive jurisdiction of the courts located in ______________________.

10. REMEDIES

Prospective Buyer acknowledges that a breach of this Agreement may cause irreparable harm to the Seller for which monetary damages may be inadequate, and therefore agrees that the Seller shall be entitled to seek injunctive relief in addition to any other remedies available at law.

---

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date first written above.

SELLER:

Signature: ______________________________ Print Name: ____________________________ Title: __________________________________

PROSPECTIVE BUYER:

Signature: ______________________________ Print Name: ____________________________ Title: __________________________________