Non-Disclosure Agreement for Potential Sale of Inspection Business


This agreement includes clauses that you may not need.  Always consult qualified legal counsel before signing a legal document. 

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This is an agreement (“Agreement”) between ______________________ (Inspector) and _______________ (Potential Buyer), collectively referred to in this Agreement as “the parties.” The parties are exploring a possible Asset Purchase Agreement pursuant which Potential Buyer would purchase the Inspector's assets.  The parties may share Confidential Information with each other as part of that process for the purpose of enabling them to make informed decisions about the possible purchase of Inspector's assets.  The parties want to protect their confidential information on the terms set forth in this Agreement.

This Agreement refers to the party providing Confidential Information as the “disclosing party” and refers to the party receiving the Confidential Information as the “Recipient.”  

1.  Confidential Information.  

a. The Confidential Information that may be disclosed includes: ideas, trade secrets, existing and/or contemplated products and services, research and development, pricing, costs, profit and margin information, finances and financial projections, tax returns, accounting records, customers, potential customers, clients, marketing, and current or future business plans, information concerning future or proposed products or services, financial performance and projections, employees, contracts, strategic relationships, programs, inventions, discoveries, techniques, processes, any other information that might give any competitor of the parties a competitive advantage, and any information that would harm the parties’ business if disclosed to any third party.  Except as set forth in para. 1(b), information provided by one party to the other is Confidential Information even if not identified as such when provided.

b. Confidential Information does not include information, technical data or know-how which: 

(i) is in Recipient's possession at the time of disclosure as shown by Recipient's files and records immediately prior to the time of disclosure; 

(ii) before or after it has been disclosed to Recipient, becomes part of the public knowledge or literature, not as a result of any action or inaction of Recipient; 

(iii) is approved for disclosure in writing by the disclosing party; 

(iv) is disclosed to Recipient by a third party not in violation of any obligation of confidentiality;  

(v) is independently developed by Recipient without reference to Confidential Information; or 

(vi) is required by a valid order by a court of other governmental body or applicable law.      

2. Use Limitations. The recipient shall not use the Confidential Information for its own use or for any purposes except those purposes expressly set forth above.  The recipient shall not use the Confidential Information to compete with the disclosing party or for any illegal purpose.  The recipient agrees not to copy, alter, modify, disassemble, reverse engineer, or decompile any of the materials unless permitted in writing by the disclosing party.  

3. Non-Disclosure.   

a. Disclosure to Employees.  The parties shall not disclose Confidential Information to any employees or agents, except those who need to know it for the purpose stated above.  If Recipient provides Confidential Information to its employees or agents, Recipient shall notify those employees or agents in writing of the terms of this Agreement and require them to acknowledge in writing that this Agreement binds them.

b. Disclosure to Third Parties. The parties shall not disclose Confidential Information to any third party unless the law requires it.  If a subpoena to testify or produce concerning any Confidential Information is served on a party, that party shall immediately provide a copy of the subpoena to the other party.

c. Standard of Care. The parties shall use the reasonable care in safeguarding Confidential Information against loss, theft, or inadvertent disclosure, and take all steps reasonably necessary to ensure the maintenance of confidentiality, including taking such precautions that the recipient uses to protect its own trade secrets.

d. Duty to Notify. The Recipient agrees to promptly notify the disclosing party in writing of any misappropriation or misuse by any person of such Confidential Information when Recipient becomes aware of it.  

4. Third Party Information.  Neither party shall communicate any information to the other in violation of the proprietary rights of any third party.     

5. Return of Materials.  Upon written request of a disclosing party, the Recipient shall return all Confidential Information to the disclosing party or certify in writing that the Recipient has destroyed the Confidential Information.  

6. No License.  Confidential Information shall remain the sole property of the disclosing party.  Neither party grants the other a license to use the Confidential Information. 

7. Current or Future Development. Each party understands the other may currently or in the future be developing information internally, or receiving information from other parties that may be similar to Confidential Information disclosed pursuant to this Agreement.  Nothing in this Agreement is a representation that a party will not develop products or services, that without violation of this Agreement, compete with the other party’s products or services.

8. Remedies.  Each party shall be liable for any harm caused to the other party because of any breach of this Agreement by the Recipient or its officers, directors, employees, agents, or affiliates.  The parties acknowledge that a breach of this Agreement will result in irreparable injury to the disclosing party for which there will be no adequate remedy at law, and the disclosing party shall be entitled to apply for equitable relief, including injunction and specific performance, in the event of any breach or threatened breach or intended breach of this Agreement by the Recipient, without posting bond. Such remedies, however, shall not be the exclusive remedies for any breach of this Agreement, but shall be in addition to all other remedies available at law or in equity.

9. Termination / Survival.  This Agreement shall govern all communications between the parties made from the execution of this Agreement to the date on which either party receives from the other written notice that subsequent communications shall not be so governed.  A Recipient’s obligations under this Agreement with respect to Confidential Information previously received shall continue for a period of two (2) years after termination of this Agreement.

10. No Obligation to Purchase.  Neither party has an obligation to enter into an agreement for the sale of the Inspector's assets.  The parties agree that the exchange of information under this Agreement shall not commit either party to any present or future contractual relationship other than this Agreement.

11. Binding on Successors.  This Agreement binds the parties and their successors, assigns, and representatives.

12. Severability.  The invalidity of any provision of this Agreement shall not affect the validity of any other provision.

13. Not Assignable. Neither party may assign this Agreement without the written consent of the other party.

14. Waiver.  Failure to invoke any right in this Agreement by either parity shall not be deemed a waiver of any such right.

15. Disputes.        

a. Except where a party chooses to seek solely injunctive relief, if a party has a dispute with the other party, the aggrieved party shall notify the other party in writing of the dispute in sufficient detail to allow the other party to intelligently evaluate it.

b. If the parties are unable to resolve the dispute within fourteen days after notice, they agree to participate in non-binding mediation, with each party to pay one-half the mediation costs. Neither party may sue the other for damages until they have participated in mediation.

16. Litigation / Venue / Attorney’s Fees / Waiver of Jury.  The exclusive venue for any legal action arising out of this Agreement shall be in the County where Inspector has its principal place of business.  The parties waive any right to remove any such action to federal court, except where federal jurisdiction is mandatory.  In any legal action arising out of this Agreement, the losing party shall pay the prevailing party’s reasonable attorney’s fees, expenses, and court costs.  The parties waive trial by jury.

17.  Governing Law. The law of the State of _____________ governs this Agreement.

18. Reading; Review of Counsel.  The parties represent that they have carefully read every provision of this Agreement.  The parties further represent that each has had the opportunity to have qualified counsel review this Agreement.

19. Voluntary Agreement.  The parties represent that each party enters into this Agreement of their own free will, free of any coercion or duress.

20. Construction.  Both parties had an opportunity to have counsel review this Agreement.  Therefore, if a court finds any provision ambiguous, the court shall not apply the rule of construction that ambiguities are construed against the drafter of the document.

21. Notice.  Where this Agreement permits or requires that a party give notice to the other party, a party may give notice in by certified mail or by email.  If notice is sent by certified mail, notice is effective three days after mailing.  If a party sends notice by email, it is effective immediately if it was sent to the correct email address of the other party. A party shall promptly notify the other in writing of any change in the party’s preferred mailing address or email address.   Where this Agreement requires something to be in writing, a writing may include a paper document or an email.

22. Entire Agreement / Modification.  This Agreement contains all the representations by each party to the other and expresses the entire understanding between the parties with respect to the transaction at issue.  The parties agree that all prior communications are merged into this Agreement, and that there are no terms or conditions other than those set forth herein.  No statement or promise of a party or its agents shall be binding unless reduced to writing and signed by an authorized officer that party.  No modifications of this Agreement shall be binding unless they are in writing and signed by the parties.

23. Signatures / Duplicates.  A party may sign this Agreement electronically.  The parties may execute duplicate originals of this Agreement.  

Inspector:  ____________________________________________ 

By: Printed Name                                         

DATE  ___________________________ 

Mailing address  ________________________________________ 

Email address  

Potential Buyer:  ________________________________________ 

By: Printed Name                                         

DATE  ____________________________

Mailing address  _________________________________________ 

Email address


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