NDA: investment (long)
Investment NDA Long form confidentiality agreement for use where a company will disclose confidential information to a potential investor
Why use Confidentiality Agreements?
Confidentiality Agreements (also known as NDAs) are used in corporate and commercial transactions as a preliminary agreement to enable parties to disclose confidential information prior to them discussing the main transaction.
By first entering into an NDA, the parties can exchange confidential information with each other with the assurance that, if the negotiations on the main transaction break down, the confidential information which has been disclosed will be protected by a legally enforceable agreement.
About this Confidentiality Agreement
This Confidentiality Agreement is for the one-way exchange of confidential information by a company to a potential investor. Protections are generally for the benefit only of the company only as the discloser of confidential information. The document is a long form agreement and contains relatively strong legal protections for the benefit of the disclosing company.
Which provisions of this NDA might require negotiation?
There are several provisions of this NDA which the potential investor may find difficult to accept. These include:
- non-solicitation covenants restricting the recipient from soliciting the company’s employees
- a contractual indemnity for breach of the confidentiality obligations
- the duration of the agreement
- 17 clauses over 9 pages
- Definition of Confidential Information
- Confidentiality obligations
- Permitted recipients to whom Confidential Information may be disclosed by the investor
- Circumstances in which compulsory disclosure may be made by the investor
- Return of Confidential Information to the company
- Restriction on soliciting (poaching) the company’s employees
- Rights and remedies for breach of confidentiality obligations, including contractual indemnity in favour of the company
- Duration of agreement
The explanatory guidance notes which accompany the document explain how these provisions might be negotiated between the parties to achieve a more balanced position between them
Alternative Confidentiality Agreements
For a shorter form of one way confidentiality agreement for an investment transaction, see NDA: investment (short).
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