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CONFIDENTIALITY AND STANDSTILL AGREEMENT
This Confidentiality and Standstill Agreement ("Agreement") is made as of December 11, 2018 (the "Effective Date") by and between , an individual with an address at , , ("Party-1"), and , a company with an address at , , ("Party-2").
The parties are considering a Transaction with each other (the "Business Purpose"). In the course of discussions regarding the Business Purpose, Party-1 may disclose to Party-2 certain Confidential Information (as that term is later defined). By virtue of this Agreement, each party wishes to protect the confidentiality of such Confidential Information.
NOW THEREFORE, in consideration for the Business Purpose and the mutual promises and covenants contained in this Agreement, the parties hereby agree to the following terms and conditions:
(a) "Affiliate" means any person, firm or entity that, directly or indirectly, is controlled by or is under common control with a party to this Agreement.
(b) "Confidential Information" means private or confidential information, data or materials of Party-1, this Agreement, and the Transaction, and all such private or confidential information, data or materials must be marked as "confidential" or "proprietary" to the disclosing party, however, for oral disclosures of information, data or materials, the disclosing party may describe the disclosure within twenty (20) days thereafter in a written notice provided to Contractor, referencing the time, date, and receiving individuals for the disclosure, at which point such described information, data or materials become Confidential Information of the disclosing party on a going forward basis from the date of receiving party's receipt of such letter. [QR-12]
(c) "Government Authority" means any governmental authority or court, tribunal, agency, department, commission, arbitrator, board, bureau, or instrumentality of the United States of America or any other country or territory, or domestic or foreign state, prefecture, province, commonwealth, city, county, municipality, territory, protectorate or possession.
(d) "Law" means all Laws, statutes, ordinances, codes, regulations and other pronouncements having the effect of Law of any Government Authority.
(e) "Standstill Period" means the time period beginning on the Effective Date and ending on TEXTFIELD [QR-36].
(f) "Transaction" means a transaction or series of transactions involving Party-1 and/or its securityholders relating to (a) the purchase, sale, exchange or any other acquisition, direct or indirect of any of the assets (including any intellectual property rights) or shares of Party-1; (b) the issuance of any debt or equity securities of Party-1; or (c) any transaction in which the shares of Party-1 are or become subject to any amalgamation, arrangement, merger or similar transaction which directly or indirectly results in any business combination involving Party-1.
(a) Confidential Information Disclosures. In the performance of this Agreement Party-2 may receive the Confidential Information of Party-1. Disclosures of Confidential Information made by Party-1 (or the "disclosing party") to Party-2 (or the "receiving party"), are pursuant to all terms and conditions of this Agreement. All Confidential Information of the disclosing party will remain the exclusive property of the disclosing party. The terms and conditions of this Agreement are deemed to be Confidential Information of both parties.
(b) Exclusions. Confidential Information does not include information, data or materials that, as proved by written records:
(i) Public Domain. Are or become a part of the public domain through no act or omission on the part of the receiving party and no violation of any obligation of nondisclosure by any third party; or
(ii) Independently Developed. Are independently developed by the receiving party without reference to the disclosing party's Confidential Information, as evidenced through written records created in the normal course of the receiving party's business; or
(iii) Third Party Source. Are disclosed to the receiving party through a third party source or series of sources without any violation of nondisclosure with respect to such information, data or materials by any source(s) in the series (however, such information only becomes Confidential Information once the receiving party is aware of such breach).
(c) Duties. Without limiting any other obligations under this Agreement, the parties agree to the following specified duties:
(i) Nondisclosure and Uses. The receiving party must use commercially reasonable methods, at least as substantial as the methods it uses to protect its own confidential information, data and materials of a similar nature, to maintain and cause its employees to maintain the confidentiality of the Confidential Information by not copying, publishing, disclosing to third parties or using the Confidential Information; except employees of a receiving party may use the Confidential Information in order to perform the receiving party's obligations or engage in activities contemplated under the Business Purpose. A receiving party may not modify or delete any proprietary rights legend appearing in the disclosing party's Confidential Information.
(ii) Advise Employees. The receiving party must advise each employee before receiving direct or indirect access to the Confidential Information of the obligations of the receiving party regarding the Confidential Information under this Agreement.
(iii) Disclosures to Agents and Subcontractors. A receiving party may share Confidential Information with: (a) its attorneys under an obligation of confidentiality and nondisclosure no less protective of the disclosing party's Confidential Information than the terms and conditions of this Agreement; and (b) its subcontractors pursuant to a written confidentiality agreement no less protective of the disclosing party's Confidential Information than this Agreement (a "Subcontractor Confidentiality Agreement"), provided that in no event may an attorney or subcontractor of a receiving party disclose Confidential Information to any other third party, with the exception of a Government Authority to which a disclosure may be made (for subcontractors, only pursuant to a provision in the Subcontractor Confidentiality Agreement identical to Section 2.4 (Disclosures Required by Law) of this Agreement), except that the attorney or subcontractor must give the prior notice required therein to both the receiving party and the disclosing party. Receiving party agrees to assume all liability and responsibility for such attorneys'' and subcontractors' compliance with and breach of the terms and conditions of this Agreement as if such attorneys' and subcontractors' acts and omissions were receiving party's own.
(iv) Notice. Upon discovery, receiving party agrees to provide disclosing party immediate telephonic and written notice of a breach of: (a) any obligation of confidentiality and nondisclosure required hereunder prior to a disclosure; and (b) any Subcontractor Confidentiality Agreement.
(v) Return of Confidential Information. After a request by the disclosing party, and after termination or expiration of this Agreement, receiving party must within thirty (30) days return or destroy (and certify to such destruction in writing, such certification not to be unreasonably withheld or delayed) all Confidential Information of the disclosing party, including, without limitation: (a) all tangible and electronic documents, drawings, materials, hardware, disks, tapes; and (b) all copies, notes, summaries and excerpts of any of the foregoing; and (c) all Confidential Information in the possession of any third parties to whom receiving party disclosed Confidential Information pursuant to this Agreement. Notwithstanding the foregoing, receiving party may retain Confidential Information as required by applicable Laws or orders of a Government Authority with jurisdiction over receiving party (the "Retention Requirements"), and any such uses or disclosures of Confidential Information by the receiving party will be limited to only those uses and disclosures mandated by the Retention Requirements.
(d) Disclosures Required by Law. In the event any Confidential Information is required to be disclosed by Law or order of any Government Authority having jurisdiction over the receiving party (including as necessary for a party to assert a claim in a court of competent jurisdiction), before any such disclosure the receiving party will provide notice to the disclosing party reasonably sufficient to allow the disclosing party the opportunity to apply for a protective order or other restriction regarding such disclosure. In the event such Confidential Information is disclosed in such circumstances, such Confidential Information shall continue to constitute Confidential Information in all other circumstances pursuant to this Agreement.
3. TERM AND TERMINATION.
(a) Term. The term of this Agreement (together with any renewals, the "Term") begins on the Effective Date and expires one (1) year [QR-24] later. Immediately
upon expiration this Agreement automatically renews on the same terms
and conditions for additional successive periods of one (1) year on
each anniversary of the Effective Date, unless either party gives the
other party notice that the Agreement does not renew at least thirty
(30) days before the end of the then applicable Term. [QR-18]
(b) Survival. The following captioned sections
survive any termination, expiration or
non-renewal of this Agreement:
"Nondisclosure and Uses" (only for purposes of complying with the
"Return of Confidential Information" provision and only for thirty
days or such longer period as necessary to comply with the Retention
Requirements, also, if any personnel of a receiving party retains in
their memory any specific contents of a disclosing party's Confidential
Information, such specific contents may not ever be disclosed to any
third parties except under "Disclosures Required by Law"), "Return of
Confidential Information", "Disclosures Required by Law", "Survival"
(c) Termination for Insolvency.
If either party is adjudged insolvent or bankrupt, or upon the
institution of any proceedings by it seeking relief, reorganization or
arrangement under any Laws relating to insolvency, or if an involuntary
petition in bankruptcy is filed against a party and the petition is not
discharged within sixty (60) days after filing, or upon any assignment
for the benefit of a party's creditors, or upon the appointment of a
receiver, liquidator or trustee of any of a party's assets, or upon the
liquidation, dissolution or winding up of its business (each, an "Event of Bankruptcy"),
then the party affected by any Event of Bankruptcy must immediately
give notice of the Event of Bankruptcy to the other party, and the
other party may terminate this Agreement by notice to the affected
(d) Termination for Breach.
If either party breaches any provision contained in this Agreement, and
the breach is not cured within thirty (30) days after the breaching
party receives notice of the breach from the non-breaching party, the
non-breaching party may then deliver a second notice to the breaching
party immediately terminating this Agreement.
4. STANDSTILL. This provision only applies during the Standstill Period. Party-2 shall ensure that the Party-2 and its Affiliates will not solicit, initiate or encourage submissions of proposals or offers regarding a Transaction from any individual or entity other than Party-1 or its designated representatives. Party-1 shall ensure that Party-1 and its Affiliates will not solicit, initiate or encourage submissions of proposals or offers regarding a Transaction from any individual or entity other than Party-2 or its designated representatives. [QR-35]
5. NO DEFINITIVE AGREEMENT REGARDING TRANSACTION. Nothing in this term sheet shall be construed to require Party-1 or Party-2 to enter into a definitive agreement regarding the Transaction ("Definitive Agreement"). A Definitive Agreement would be binding on the parties only after all of its provisions are successfully negotiated between the parties and they have both executed the Definitive Agreement. It is expressly understood by the parties that this Agreement does not create any obligations: (a) for either party to enter into a Definitive Agreement; and (b) as to the provisions of a Definitive Agreement.
6. PUBLICITY. Each party agrees to not make, publish or distribute (whether in print, electronically or otherwise) any public announcements, press releases, advertising, marketing materials or promotional materials regarding the Transaction or the execution or performance of this Agreement without the prior written consent of the other party.
7. DISCLAIMER. Except as expressly stated in this Agreement (if at all), each make no representations and extend no warranties of any kind, either express or implied, including, without limitation, any warranties of merchantability or fitness for a particular purpose. Party-2 acknowledges that Party-1 makes no representation or warranty, expressed or implied, as to the accuracy or completeness of the Confidential Information provided by it or fitness for Party-2's purposes, nor shall Party-1 be deemed to have made such representation or warranty. Party-2 agrees that it will rely upon its own investigations, due diligence and analysis in evaluating whether to proceed with a Transaction.
8. LIMITATION OF LIABILITY. THIS LIMITATION OF LIABILITY PROVISION APPLIES IN THE AGGREGATE AND NOT ON A PER CLAIM BASIS, WHETHER ANY DAMAGES ARE CHARACTERIZED IN TORT, NEGLIGENCE, CONTRACT, OR OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF OR COULD HAVE FORESEEN ANY DAMAGES, AND IRRESPECTIVE OF ANY FAILURE OF ESSENTIAL PURPOSE OF A LIMITED REMEDY. THIS LIMITATION OF LIABILITY PROVISION DOES NOT LIMIT A PARTY'S LIABILITY FOR GROSS NEGLIGENCE, INDEMNIFICATION OBLIGATIONS, BREACH OF CONFIDENTIALITY REQUIREMENTS, INTENTIONAL MISCONDUCT, INTENTIONAL TORTS AND INTENTIONAL VIOLATIONS OF LAW. NEITHER PARTY IS LIABLE TO THE OTHER OR ANY THIRD PARTY UNDER THIS AGREEMENT FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RESULTING FROM THIS AGREEMENT. [QR-33] EACH PARTY'S LIABILITY SHALL NOT EXCEED THE AMOUNTS PAID UNDER THIS AGREEMENT IN THE ONE (1) YEAR PERIOD BEFORE THE CLAIM. [QR-34]
9. GENERAL. Entire Agreement and Amendments. This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter, including, without limitation, any invoices, business forms, purchase orders, proposals or quotations. This Agreement may be amended only in a written document, signed by both parties. Independent Contractors, Third Party Beneficiaries, and Subcontractors. The parties acknowledge that they are independent contractors under this Agreement, and except if expressly stated otherwise, none of the parties, nor any of their employees or agents, has the power or authority to bind or obligate another party. Except if expressly stated, no third party is a beneficiary of this Agreement. The parties may not subcontract any of their obligations under this Agreement. [QR-63] Governing Law and Forum. All claims regarding this Agreement are governed by and construed in accordance with the Laws of TEXTFIELD [QR-27], applicable to contracts wholly made and performed in such jurisdiction, except for any choice or conflict of Law principles, and must be litigated in TEXTFIELD [QR-28], regardless of the inconvenience of the forum, except that a party may seek temporary injunctive relief in any venue of its choosing. The parties acknowledge and agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. Assignment. This Agreement binds and inures to the benefit of the parties' successors and assigns. Either party may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party. [QR-46] No Waivers, Cumulative Remedies. A party's failure to insist upon strict performance of any provision of this Agreement is not a waiver of any of its rights under this Agreement. Except if expressly stated otherwise, all remedies under this Agreement, at Law or in equity, are cumulative and nonexclusive. Severability. If any portion of this Agreement is held to be unenforceable, the unenforceable portion must be construed as nearly as possible to reflect the original intent of the parties, the remaining portions remain in full force and effect, and the unenforceable portion remains enforceable in all other contexts and jurisdictions. Notices. All notices, including notices of address changes, under this Agreement must be sent by registered or certified mail or by overnight commercial delivery to the address set forth in this Agreement by each party. Captions and Plural Terms. All captions are for purposes of convenience only and are not to be used in interpretation or enforcement of this Agreement. Terms defined in the singular have the same meaning in the plural and vice versa.
IN WITNESS WHEREOF, the parties execute this Agreement as of the Effective Date. Each person who signs this Agreement below represents that such person is fully authorized to sign this Agreement on behalf of the applicable party.
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