NDA business sale (long)
A comprehensive NDA, in agreement form, to use in a business sale transaction where the selling company will disclose confirmation information to a potential purchaser. It contains robust legal protections for the benefit of the seller as the disclosing party.
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When do I use this document?
- for a business sale transaction
- where confidential information about the target business will be disclosed to a potential buyer
- for a longer form NDA with strong legal protections for the seller
What are the key features?
- 17 clauses over 9 pages
- definitions of Confidential Information and Proposed Transaction
- confidentiality obligations
- authorised recipients of Confidential Information
- circumstances permitting compulsory disclosure
- procedure for returning Confidential Information to the seller
- prohibition on the buyer poaching the seller’s employees
- contractual remedies for breach of the NDA, including contractual indemnity in favour of the seller
- duration of agreement
What else do I need to know?
It’s quite common that some clauses of an NDA may be resisted by the buyer. The guidance notes which accompany this document explain how provisions, such as the following, might be negotiated to reach mutual agreement.
- non-solicitation covenants
- a contractual indemnity for breach of the confidentiality obligations
- the duration of the agreement
What other docs are available?
For a shorter form of confidentiality agreement for a business sale transaction, see
When do I use this document?
- as an advance subscription agreement between the company and a single investor
- where the conversion price will be calculated as a percentage discount to the issue price for shares in the qualified investment round
- if agreed, where there is an agreed valuation cap on the company’s valuation
What are the key features?
- advance subscription terms and payment
- conversion on the occurrence of defined events, including a qualifying financing round, the sale of the company or on a longstop date
- conversion price on a qualified financing round to be at an agreed percentage discount to the qualified financing round share price
- if agreed, a cap on the valuation of the company for the purpose of calculating the conversion price
- warranties regarding the investor’s compliance with Financial Services and Markets Act 2000 regime regarding financial promotions
What else do I need to know?
For detailed discussion regarding the purpose of advance subscription agreements and their benefits and disadvantages for investors and the company, click here.
Negotiating points
Prior to entering into this ASA, the parties will need to consider and agree:
- discount rate: the discounted price per share (expressed as a percentage) at which the ASA investor will receive shares in the qualified financing round
- valuation cap: if agreed, the cap on the valuation of the company for the purpose of calculating the price at which the advance subscription will convert into shares on a qualified investment round
- default valuation: the default valuation of the company which will be used to calculate the conversion price of the advance subscription in circumstances where conversion occurs on the agreed longstop date or the company’s insolvency
- longstop date: the longstop date on which (and in the absence of a prior qualifying financing round) the ASA will automatically convert into shares
- qualified financing round: the minimum amount of funding which the company must raise before that funding round will count as the qualified financing round under the ASA which results in the conversion of the advance subscription into shares
- subscription amount: the amount of the investor’s advance subscription
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Updated by a lawyer on 27/06/2025
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