PARTIES

Non-disclosure and restricted use agreement by and between2

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…………………………………………………………………………………………………………………………………………………. and

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…………………………………………………………………………………………………………………………………………………………

hereinafter referredto as “Party” or “Parties” respectively.

PREAMBLE

  1. The Parties [______________________________]3 (the “Purpose”);
  2. In relation to the Purpose, information has been or will be disclosed by either or both Parties;
  3. The Parties want to ensure that such information, which each may disclose to the other, is used only for the Purpose and protected from further disclosure.

The Parties enter into the following agreement (“Agreement”):

ARTICLE 1 – DEFINITIONS

In this Agreement unless the context otherwise requires:

“Disclosing Party” means the Party disclosing Confidential Information to the Receiving Party.

“Permitted Recipients” means any director, officer, employee, adviser or auditor4of the Receiving Party or any of its Related Companies who reasonably needs to know Confidential Information for the Purpose.

“Receiving Party” means the Party receiving Confidential Information from the Disclosing Party.

“Related Company” means any corporation, company or other entity that controls, or is controlled by, one Party or by another Related Company of that Party, where control means ownership or control, direct or indirect, of more than fifty (50) per cent of that corporation’s, company’s or other entity’s voting capital.

ARTICLE 2 – DEFINITION OF CONFIDENTIAL INFORMATION5

Option A

“Confidential Information” means any information or data, or both, communicated by or on behalf of the Disclosing Party to the Receiving Party, including, but not limited to, any kind of business, commercial or technical information and data in connection with the Purpose, except for information that is demonstrably non-confidential in nature. The information shall be Confidential Information, irrespective of the medium in which that information or data is embedded, and whether the Confidential Information is disclosed orally, visually or otherwise.

Option B

“Confidential Information” means any information or data, or both, communicated by or on behalf of the Disclosing Party to the Receiving Party, including, but not limited to, any kind of business, commercial or technical information and data disclosed between the Parties in connection with the Purpose, provided that:

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  1. when disclosed in tangible form or via electronic communication it is marked or otherwise identified as “Confidential” by the Disclosing Party; or
  2. when disclosed orally or visually it is identified as “Confidential” prior to disclosure and subsequently summarized in writing by the Disclosing Party, and that summary is given to the Receiving Party marked or otherwise identified as “Confidential” within thirty (30) days after that disclosure. In case of disagreement relating to the summary, the Receiving Party must present its objections to the summary in writing within thirty (30) days of receipt.

Confidential Information shall include any copies or abstracts made of it as well as any products, apparatus, modules, samples, prototypes or parts that may contain or reveal the Confidential Information.

Confidential Information is limited to information disclosed on or after the date of signature of this Agreement.6

ARTICLE 3 – OBLIGATION TO KEEP CONFIDENTIAL AND RESTRICTIVE USE

The Receiving Party shall:

  1. not disclose any Confidential Information to anyone except to the Permitted Recipients, who are bound to the same level of confidentiality obligations as set forth by this Agreement;
  2. use any Confidential Information exclusively for the Purpose; and
  3. keep confidential and hold all Confidential Information with no less a degree of care as is used for the Receiving Party’s own confidential information and at least with reasonable care.

ARTICLE 4 – EXCLUSIONS FROM OBLIGATION TO KEEP CONFIDENTIAL AND RESTRICTIVE USE

The obligations under Article 3 to keep confidential all Confidential Information shall not apply to the extent that the Receiving Party can prove that any of that information:

  1. was in the Receiving Party’s possession without an obligation of confidentiality prior to receipt from the Disclosing Party;
  2. is at the time of disclosure, or subsequently becomes, generally available to the public through no breach of this Agreement by the Receiving Party or any Permitted Recipient;
  3. is lawfully obtained by the Receiving Party from a third party without an obligation of confidentiality, provided that third party is not, to the Receiving Party’s best knowledge, in breach of any obligation of confidentiality to the Disclosing Party relating to that information; or
  4. is developed by the Receiving Party or its Related Companies independent of any Confidential Information.

ARTICLE 5 – COPIES

Unless otherwise specified by the Disclosing Party at the time of disclosure, the Receiving Party may make copies of the Confidential Information to the extent necessary for the Purpose.

ARTICLE 6 – REFUSAL

Nothing in this Agreement shall obligate either Party to disclose any information.

Each Party has the right to refuse to accept any information under this Agreement prior to any disclosure. Confidential Information disclosed despite an express prior refusal is not covered by the obligations under this Agreement.

ARTICLE 7 – NO LICENCE OR OWNERSHIP

Nothing in this Agreement shall affect any rights the Disclosing Party may have in relation to the Confidential Information, neither shall this Agreement provide the Receiving Party with any right or licence under any patents, copyrights, trade secrets, or the like in relation to the Confidential Information, except for the use of Confidential Information in connection with the Purpose and in accordance with this Agreement.

ARTICLE 8 – NO WARRANTY7

The Disclosing Party makes available the Confidential Information as is and does not warrant that any of this information that it discloses is complete, accurate, free from defects or third party rights, or useful for the Purpose or other purposes of the Receiving Party.

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ARTICLE 9 – NO FURTHER OBLIGATIONS

This agreement does not:

  1. create any other relationship;
  2. oblige a Party to enter into any other contract; or
  3. require consideration for any information received.

ARTICLE 10 – TERM AND TERMINATION

This Agreement enters into force by signing of all Parties and can be terminated by either Party with immediate effect by giving a written notice to the other Party.

ARTICLE 11 – SURVIVAL OF OBLIGATIONS8

Option A

Upon termination, the Receiving Party shall stop making use of the Confidential Information. The obligations of the Parties under this Agreement shall survive indefinitely or to the extent permitted by the applicable mandatory law.

Option B

Upon termination, the Receiving Party shall stop making use of the Confidential Information. The obligations of the Parties under this Agreement shall survive its termination for ________ years.

ARTICLE 12 – BREACH AND REMEDIES

In addition to any remedies under the applicable law,9the Parties recognize that any breach or violation of any provision of this Agreement may cause irreparable harm to the other Party, which money damages may not necessarily remedy. Therefore, upon any actual or impending violation of any provision of this Agreement, either Party may obtain from any court of competent jurisdiction a preliminary, temporary or permanent injunction, restraining or enjoining such violation by the other Party or any entity or person acting in concert with that Party.

ARTICLE 13 – DISPOSAL

Within ninety (90) days of termination of this Agreement, the Disclosing Party may request the disposal of the Confidential Information. Disposal means execution of reasonable measures to return or destroy all copies including electronic data. Destruction shall be confirmed in writing. Disposal shall be effected within thirty (30) days of the request being made.10

The provisions for disposal shall not apply to copies of electronically communicated Confidential Information made as a matter of routine information technology back-up, and to Confidential Information or copies of it that must be stored by the Receiving Party or its advisers according to provisions of mandatory law, provided that this Confidential Information or copies of it shall be subject to continuing obligations of confidentiality under this Agreement; but no further use shall be permitted as from the date of the request.

ARTICLE 14 – PROTECTIVE ORDER

Neither Party shall be in breach of this Agreement to the extent that it can show that any disclosure of Confidential Information was made solely and to the extent necessary to comply with a statutory, judicial or other obligation of a mandatory nature, afterwards referred to as “Mandatory Obligation”. Where a disclosure is made for these reasons, the Party making the disclosure shall ensure that the recipient of the Confidential Information is made aware of and asked to respect its confidentiality. This disclosure shall in no way diminish the obligations of the parties under this Agreement except to the extent that a Party is compelled by any Mandatory Obligation to disclose Confidential Information without restriction.

To the extent permitted by any Mandatory Obligation, the Receiving Party shall notify the other Party without delay in writing as soon as it becomes aware of an enquiry or any process of any description that is likely to require disclosure of the other Party’s Confidential Information in order to comply with any Mandatory Obligation.

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ARTICLE 15 – GOOD FAITH AND FAIR DEALING

In carrying out their obligations under this Agreement, the Parties will act in accordance with the principles of good faith and fair dealing. The provisions of this Agreement, as well as any statements made by the Parties in connection with this Agreement, shall be interpreted in accordance with the principles of good faith and fair dealing.

ARTICLE 16 – DISPUTE RESOLUTION

Any party to this contract shall have the right to have recourse to and shall be bound by the pre-arbitral referee procedure of the International Chamber of Commerce in accordance with its Rules for a Pre-Arbitral Referee Procedure.

All disputes arising out of or in connection with the present Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.

ARTICLE 17 – APPLICABLE LAW11

Option A

Any questions relating to this Agreement that are not expressly or implicitly settled by the provisions contained in this Agreement shall be governed by, in the following order:

  1. the principles of law generally recognized in international trade as applicable to international confidentiality agreements;
  2. the relevant trade usages; and
  3. the 2010 Unidroit Principles for International Commercial Contracts.

Option B

This Agreement is governed by the substantive laws of [__________] (name of the country whose law is to apply).

ARTICLE 18 – NO ASSIGNMENT

This Agreement may not be assigned by either Party without the prior written consent of the other Party, which shall not unreasonably be withheld. No assignment shall relieve a Party of its obligations under this Agreement with respect to Confidential Information disclosed to that Party prior to the agreed assignment.

ARTICLE 19 – WRITTEN FORM

This Agreement may not be modified or amended except in writing, signed by authorized representatives of the Parties.

ARTICLE 20 – DEFAULT RULES

Where no clear preference is indicated by the Parties between the options provided for in this Agreement, option A shall apply.

In witness whereof the duly authorized representatives of the Parties have executed this Agreement on the day and year written below.

...........................................
(Day/Month/Year)

...........................................
(Signature)

...........................................
(Signature)

1
The word “confidential” can be problematic for certain industries in some countries where it has connotations with national security classifications – which need to be kept distinct from commercially sensitive materials. In those cases, the Parties may wish to consider designating the information as, for example, “proprietary”.

2
To the extent possible, this Agreement has been drafted to apply in a mutual way.

3
For example: “intend to engage in discussions and/or possible business relationships concerning” the “Purpose”. The Parties should consider whether they prefer a precise description of the “Purpose” or whether it should be kept broad. The definition of the Purpose is a key issue, and it is highly recommended to pay proper attention to the drafting of this part of the Agreement.

4
The Parties may wish to consider whether contractors, sub-contractors and other third parties should be within the scope of the Permitted Recipients.

5
Article 2 has been drafted to provide the Parties with two options. If no clear preference is indicated by the Parties, Article 20 of this Agreement states that option A will be the default choice.

6
The Parties may also specify any other effective date and/or extend the scope of the definition to include information disclosed in the past.

7
Depending on the nature of the transaction, the Parties may wish to consider revising this clause to reflect situations where the correctness of the data or the existence of third party rights is important to the project or relationship between the Parties, or both.

8
Depending on the nature of the data, the Parties may wish to specify the time period for confidentiality (option B) or even extend it indefinitely (option A). If no clear preference is indicated by the Parties, Article 20 of this Agreement states that option A will be the default choice.

9
The Parties may consider also inserting a penalty or liquidated damages clause. Any clause of this type should be checked with local counsel to verify its validity and compliance with applicable laws and regulations.

10
In most cases it is not practical to return electronic communication. All copies of electronic data that with reasonable efforts can be expunged from storage, should be (this will involve more than removing the file from the File Allocation Table to ensure that the file is irretrievable). However, in some cases, as a matter of company policy, back-up copies are kept for disaster recovery purposes only and it would not be practical to identify the specific data and delete it. In such cases, deletion is not required.

11
Article 17 has been drafted to provide the Parties with two options. If no clear preference is indicated by the Parties, Article 20 of this Agreement states that option A will be the default choice.