[Date]
[Insert name of disclosing party]
PRIVATE AND CONFIDENTIAL
Dear Sirs
Re:
Disclosure of information to [insert name of recipient party] for the [insert name / details of
the proposed transaction]
We understand that you, [insert name of recipient party] may have an interest in pursuing an
[acquisition of the entire / [•] % issued share capital]1 of [insert name of target company]
(“Company”), either by yourself or through one or more of your Affiliates (“Proposed Transaction”).
For the purpose of further evaluating the Proposed Transaction, you have requested access to certain
information concerning the Company. The Company agrees to provide you with access to such
information as the Company deems appropriate in its sole discretion, in consideration for and
conditional upon you agreeing to the terms set out in this Confidentiality Agreement (“Agreement”).
1.
Definitions
As used in this Agreement, the following capitalised terms have the meanings indicated:
1.1
“Affiliate” means, in respect of a person2, any other person controlling, controlled by or under
common control with that person and, in relation to the Company [and includes [•] and any
funds or entities managed and/or advised by [•] or an Affiliate of [•]].3
1.2
“Confidential Information” means any and all information (however documented and
whether prepared by us, our Representatives or otherwise) concerning the Company and the
Company's shareholders (which for the purposes of this Agreement shall mean both indirect
and direct shareholders) and Affiliates that has been or may hereafter be furnished to you or
your Representatives by or on behalf of the Company or is otherwise obtained by you or your
Representatives through our disclosure of information concerning the Company or
discussions with our Representatives, irrespective of whether the communication is made
orally, in writing or in any other form, and all notes, reports, analyses, compilations, forecasts,
studies, summaries and other materials prepared by you or your Representatives containing
or otherwise reflecting any of the foregoing information. The term “Confidential Information”
does not include information that you demonstrate was or becomes (a) generally available to
the public other than as a result of a disclosure by you or your Representatives; or (b) available
to you on a non-confidential basis, but only if the source of such information is not bound by
a confidentiality agreement with the Company or is not otherwise prohibited from
transmitting the information to you or your Representatives by a contractual, legal, fiduciary
or other obligation; or (c) was independently developed by you or your Representatives
without access to or the benefit of the Confidential Information.
1
Practice Note: Please provide details of transaction.
Practice Note: It is assumed that parties executing this agreement will be corporate entities. In case of any individuals
executing this agreement, ‘affiliates’ may be defined to include specific relatives (preferably not the broad definition
applicable under the Indian Companies Act).
3 Practice Note: Retain only if there is an existing private equity investor in the target.
2
1.3
“Representatives” means any Affiliates and professional advisers and, in respect of any such
person, its directors, officers, partners and employees.
2.
Obligation of Confidentiality
2.1
You and your Representatives will use the Confidential Information solely for the purpose of
evaluating and/or implementing the Proposed Transaction. You and your Representatives will
use reasonable endeavors as undertaken for safety of your own confidential information to
ensure that the Confidential Information is kept confidential and that all documentation,
papers, discs, tapes and other media storing the Confidential Information are kept in safe
custody.
2.2
You and your Representatives will not disclose any of the Confidential Information to any
person or company except: (a) those of your Representatives who (i) require such material for
the purpose of evaluating the Proposed Transaction (but, to the extent practicable, only such
part that is so required); and (ii) are first informed by you of the confidential nature of the
Confidential Information, are provided with a copy of this Agreement and agree to be bound
by the terms of this Agreement to the same extent as if they were parties hereto. You will be
responsible for any breach of the terms of this Agreement by any of your Representatives as
if they were a party hereto; or (b) with our specific prior written consent or as otherwise
expressly permitted by the terms of this Agreement
2.3
If you or any of your Representatives are required by law, regulation, court order of a court of
competent jurisdiction, or the requirements of any relevant recognized exchange to make any
disclosure that is not permitted by this Agreement, you or such Representative, as the case
may be, may do so, provided that your or your Representatives will, to the extent lawful: (a)
promptly first provide us with notice of such requirement so that we may seek a protective
order or other appropriate remedy; (b) disclose only that portion of the Confidential
Information that you are legally required to disclose; and (c) use your best efforts to obtain
reliable assurance that confidential treatment will be accorded any Confidential Information
so disclosed.
2.4
Except with our specific prior written consent or as otherwise expressly permitted by this
Agreement or a definitive agreement, if any, entered into by you in respect of the Proposed
Transaction, you will not disclose to any person the fact that the Confidential Information has
been made available to you or your Representatives or that discussions or negotiations are
taking place or have taken place concerning the Proposed Transaction, including the status of
such discussions or negotiations.
3.
No Contact/Solicitation
3.1
You hereby agree that: (a) no contact, direct or indirect, will be made, in connection with the
Proposed Transaction, by you or any of your Representatives with any executive or member
of staff of the Company or any member of the Group nor will any attempt be made to solicit
information regarding the Company or any member of the Group from such persons unless
expressly authorised by us [or by [•]]4; and (b) you will not and your Representatives that
receive Confidential Information will not make any contact whatsoever with any person, firm
or company which you or your advisers know to be a customer, client, supplier or agent of the
Company or know to be a body corporate, partnership or unincorporated association which is
interested directly or indirectly in any such customer, client, supplier or agent for any purpose
4
Practice Note: Retain only if a legal / commercial advisor has been appointed for this purpose
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whatsoever connected with the Confidential Information or the Proposed Transaction, in each
case save with our prior written approval or that of the Company.
3.2
You agree that for a period of 12 months from the date hereof you and your Affiliates that
receive Confidential Information will not, without our prior written consent, directly or
indirectly solicit for employment or employ any person who is now employed or otherwise
engaged by the Company and in respect of whom information is included in the Confidential
Information (or with whom you come into contact in connection with the Proposed
Transaction), save that you shall not be prevented from employing any such person who
responds to a bona fide general advertisement not targeted at any such person.
4.
Return of Confidential Information
4.1
If you decide that you do not wish to proceed with the Proposed Transaction, you will
promptly notify us of such decision. In such event, or at any time upon our request for any
reason, you will promptly (a) deliver to us all documents or other materials furnished by us or
our Representatives to you or your Representatives constituting Confidential Information,
together with all copies and summaries thereof in the possession or under the control of you
or your Representatives; and (b) destroy all notes, reports, analyses, compilations, forecasts,
studies, summaries and other materials generated by you or your Representatives that include
or refer to any part of the Confidential Information, without retaining a copy of any such
materials. Any such destruction pursuant to the foregoing must be confirmed by you in writing
to the Company.
4.2
The requirement for the destruction or return of Confidential Information does not apply to
any Confidential Information: (a) stored electronically pursuant to an existing routine data
back-up exercise on servers or back-up sources so long as it is deleted from local hard drives
and no attempt is made to recover it from such servers or back-up sources; or (b) which is
required to be retained for the purposes of complying with regulation, law or bona fide and
existing internal compliance procedures, so long as, in each case, it continues to be treated
confidentially and in accordance with the terms of this Agreement, even after the expiry of
the other terms of this Agreement.
5.
[No Obligation to Negotiate a Definitive Agreement]5
You agree that until a binding acquisition agreement regarding the Proposed Transaction has
been executed by you, none of the Company’s Affiliates or any of our Representatives are
under any legal obligation, or shall have any liability, to you or your Representatives of any
nature whatsoever with respect to the Proposed Transaction by virtue of this Agreement or
otherwise. [You also acknowledge and agree that (a) the Company’s Affiliates, the Company,
and our Representatives may conduct the process that may or may not result in a transaction
being concluded in such manner as we, in our sole discretion, may determine; and (b) we
reserve the right to change (in our sole discretion, at any time and without notice to you) the
procedures relating to our and your consideration of the Proposed Transaction (including,
without limitation, terminating all further discussions with you and requesting that you return
or destroy all Confidential Information to us).]6
6.
5
6
No Representations or Warranties by the Company
Practice Note: This clause is ‘good-to-have’ and not ‘must-have’.
Practice Note: To be retained only in case the transaction is being run by a bid process.
2 |4
You acknowledge that neither the Company nor its Affiliates (which for the purposes of this
Agreement shall mean both direct and indirect shareholders), their Representatives or their
respective officers, directors, employees, agents or advisers makes any express or implied
representation or warranty as to the accuracy, truth, reasonableness or completeness of any
Confidential Information, and you agree that, save as to fraud, none of them shall have any
liability to you, your Representatives or any other party relating to or arising from your or their
use of any Confidential Information or for any errors in it or omissions from it. You also agree
that you are not entitled to rely on the accuracy or completeness of any Confidential
Information. Nothing in this Agreement shall oblige us to provide any Confidential Information
to you or your Representatives, nor are we obliged to update any Confidential Information or
to correct any inaccuracies in any Confidential Information.
7.
Warranties and Covenants of the Recipient
7.1
[You warrant to us that you are acting as principal on your own account and not in
combination with any other company or entity (not being your Affiliate) and not as agent or
broker for any other person. You undertake that, unless you obtain our prior written consent,
you will continue to act as principal on your own account and not in combination with any
other company or entity and not as agent or broker for any other person.
7.2
You warrant to us that you have not (either directly or indirectly through any other person)
entered into any form of exclusivity arrangement, consortium arrangement or similar
arrangement of any kind with any other person in connection with the Proposed Transaction.
You undertake that, unless you obtain our prior written consent, you will not (either directly
or indirectly through any other person) enter into any form of exclusivity arrangement,
consortium arrangement or similar arrangement of any kind with any other person in
connection with the Proposed Transaction.]7
7.3
You will use reasonable endeavors to ensure that your Representatives comply with the terms
of this Agreement, and you will take all necessary action, legal or otherwise (including court
proceedings), to ensure such compliance.
8.
Remedies
You agree to indemnify us and our Affiliates and hold us and our Affiliates harmless from any
damages, loss, cost or liability (including attorneys' fees and the cost of enforcing this
indemnity) arising out of, or resulting from, any breach of your obligations hereunder. Without
prejudice to any other rights or remedies that we may have, you acknowledge and agree that
damages may not be an appropriate remedy for any breach by you of the provisions of this
Agreement and that accordingly we shall be entitled, without proof of special damage, to seek
the remedies of injunction and other equitable relief for any threatened or actual breach by
you of the provisions of this Agreement.
9.
Miscellaneous
9.1
You will bear any costs incurred by you or your Representatives in connection with your
evaluation of the Proposed Transaction and with any related discussions or negotiations.
7
Practice Note: These clauses are ‘good-to-have’ and not ‘must-have’.
3 |4
9.2
This Agreement may not be amended or modified except by an instrument in writing signed
by you and the Company.
9.3
The section headings herein are for convenience only and will not affect the construction or
interpretation of this Agreement. The word "including" does not limit the preceding words or
terms.
9.4
No failure or delay by either party in exercising any right hereunder will operate as a waiver
thereof, and no waiver by either party of any right hereunder will be valid unless in writing
and signed by such party.
9.5
The invalidity or unenforceability of any provision hereof will not affect the validity or
enforceability of any other provisions, which will remain in full force and effect. If any
provision hereof is determined by a court of competent jurisdiction to be unenforceable by
reason of its extent, duration, scope or otherwise, then the parties contemplate that the court
will reduce such extent, duration, scope or other provision and enforce such provision in its
reduced form for all purposes contemplated by this Agreement.
9.6
We reserve the right to assign our rights (including the right to enforce all of its terms) and
delegate our duties hereunder. You may not assign your rights or delegate your duties
hereunder.
9.7
Your obligations hereunder will continue (notwithstanding the return or destruction of the
Confidential Information pursuant to Section 4 above) for a period of 12 months from the date
hereof.
9.8
This Agreement contains the entire understanding between the Company and you concerning
the treatment of the Confidential Information.
9.9
This Agreement and all matters (including, without limitation, any contractual or noncontractual obligation) arising from or in connection with it shall be governed by, and
construed in accordance with, the laws of [India]. Each of the parties irrevocably submits to
the exclusive jurisdiction of the courts at [•] in connection with the subject matter hereof.
Please confirm your agreement with the foregoing by signing and returning the enclosed copy of this
Agreement to the undersigned, whereupon this agreement will become a binding agreement between
you and the Company.
Yours faithfully,
_______________________
For [Insert name of disclosing party]
By:
Title:
Authorised by resolution of the board of directors dated __________________
ACCEPTED AND AGREED BY [insert name of recipient party]
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