Receiving Party’s Employees/Representatives

NDA

Receiving Party’s Employees/Representatives

Representatives

An NDA will almost always permit a corporate party to share disclosed information with its employees and other authorized personnel, i.e., a party’s “representative(s)”. The following exemplars generally define the universe of such representatives:

Exemplar N22-1

The Recipient hereby also agrees that the Confidential Information of the Discloser will be used by it and its Representatives solely for the purpose of evaluating, negotiating, consummating or administering the Transaction. For purposes of this Agreement, the term “Representative” shall mean, with respect to a Party, its affiliates and its and its affiliates’ respective directors, officers, employees, agents, representatives and advisors; provided, however, that no such person shall be deemed to be a “Representative” of a Recipient for purposes of this Agreement unless such person has received Confidential Information of the Discloser from such Recipient or at its request.

Exemplar N22-2

As used herein, “Representatives” shall mean (i) employees of Receiving Party; (ii) attorneys, accountants, or other professional business advisors; and, additionally, (iii) employees of those entities directly or indirectly owned by Receiving Party.

Exemplar N22-3

The Evaluation Material will be used for the purpose of evaluating the Transaction and will be kept confidential by the Company, except that the Evaluation Material may be disclosed to the Company’s affiliates and the Company’s and its affiliates’ respective directors, officers, employees, attorneys, agents, professional advisors, potential funding sources, investors and other representatives (collectively, the “Representatives”), provided that, for the purposes of this Agreement, none of the Company’s affiliates shall be deemed a “Representative” unless such affiliate has been furnished with Evaluation Material hereunder.

Vicarious Liability

In each of the following exemplars, the receiving party is held vicariously liable for the acts and omissions of its employees and other representatives who breach the confidentiality obligations and/or use restrictions of the NDA.

Exemplar N22-4

It shall not be a breach of the obligations of the Recipient if the Recipient provides access to Confidential Information to, and authorizes the use and reproduction of the Confidential Information as is reasonably required to fulfill the Purpose by Recipient’s employees and/or Affiliates’ employees (“Employees”), provided that Recipient is vicariously liable for the failure of any Affiliates and/or Employees to whom Confidential Information is disclosed to comply with Recipient’s obligations hereunder.

Exemplar N22-5

The Receiving Party shall ensure and be fully responsible for compliance by such Employees, Agents and Representatives with the NDA and this Agreement, and shall be liable for and shall indemnify the Disclosing Party from any loss or damage incurred in relation to any breach thereof.

Exemplar N22-6

Recipient will be responsible for any acts of Recipient's Representatives which would constitute a breach of any terms of this Agreement.

Exemplar N22-7

Recipient shall be responsible for any breach of this Agreement by its employees.

Exemplar N22-8

The Recipient shall remain liable to the Discloser for actions of its Representatives in connection with their use and disclosure of the Confidential Information of the Discloser that would have constituted a violation of this Agreement had such actions been taken by the Recipient.

Exemplar N22-9

Receiving Party agrees not to disclose Confidential Information to any person except those of its employees, consultants or agents having a need to know it in order to accomplish the Purpose, and will require all recipients of the Confidential Information, before they receive access to Confidential Information, to be bound by a written agreement that gives the Confidential Information at least as much protection as is provided under the terms of this Agreement. Receiving Party shall be responsible for any acts or omissions of its Affiliates, employees, consultants or agents in conflict with this Agreement.

Cast in a different way, the following exemplars make a breach by the receiving party’s representative a breach by the receiving party itself:

Exemplar N22-10

Notwithstanding the foregoing, the Receiving Party may disclose the Confidential Information to such of the Receiving Party’s Affiliates or the employees, consultants, legal and tax advisers, and agents of the Receiving Party or its Affiliates (each a “Receiving Party Representative”) which the Receiving Party reasonably and in good faith believes are needed to be involved in the evaluation or performance of the Proposed Transaction, provided such Receiving Party Representative is informed of this Agreement and agrees in writing to be bound by the terms hereof, and the Receiving Party uses best efforts to cause the Receiving Party Representative to observe the terms of this Agreement. The Receiving Party agrees that a breach of this Agreement by a Receiving Party Representative shall constitute a breach of this Agreement by the Receiving Party.

Exemplar N22-11

Customer shall have the right to authorize its employees, contractors and consultants to evaluate the Solution on Customer’s behalf, provided that Customer shall be responsible for any breach of the terms of this Agreement by such contractors and consultants to the same extent as if the breach was by Customer.

Exemplar N22-12

Any employees or other persons, including independent contractors, who are to be provided Disclosing Party's Confidential Information by Recipient, will be bound by the terms and conditions of this Agreement as if they were a party hereto. A breach by any such person will also be considered a breach by Recipient.

Exemplar N22-13

The handling and treatment of such Confidential Information by the Representatives of the Receiving Party in accordance with this Agreement is the full responsibility of the Receiving Party. Any act or omission of any Representative which, if done (or not done) by the Receiving Party, would constitute a breach of this Agreement by the Receiving Party, shall constitute a breach by the Receiving Party.

Former Employees

In the following exemplar, the receiving party has indefinite potential liability for present and former employees:

Exemplar N22-14

The Receiving Party shall be liable for any unauthorized disclosure of Confidential Information by persons (including, but not limited to, present and former employees) or entities to whom the Receiving Party under this Agreement has the right to disclose Confidential Information.

By contrast, in the following exemplar, a party’s liability exposure expires after ten years from employment termination:

Exemplar N22-15

The obligation of a recipient of a disclosure of Confidential Information shall continue for a period of ten (10) years following the expiration date of this agreement and any extension thereafter. The parties agree that they shall not be liable to one another for disclosures or use of Confidential Information of the other party by any employee of a party who makes such disclosure or engages in such use more than ten (10) years after the employee terminates his or her employment with such party.

Conditions for Disclosing to Employees/Representatives

The following exemplars impose a general obligation on the receiving party to take all steps reasonably necessary to protect against unauthorized disclosure or misuse of disclosed information as a condition to sharing such information with its representatives:

Exemplar N22-16

The Receiving Party shall remain liable for any disclosure of Confidential Information by any Authorised Person of such Party as if it had made such disclosure itself. The Receiving Party shall, if requested by the Disclosing Party, do all acts and execute all documents as may be reasonably necessary to prevent any loss, misuse or unauthorised disclosure of the Confidential Information or any part of it by any of its Authorised Persons.

Exemplar N22-17

The receiving party shall limit the availability of the Confidential Information to its employees, officers, agents, or professional advisers or the receiving party (“Personnel”) who has an absolute need to know the Confidential Information in order to understand, assess, advise, consult on, decide, disclose or fulfill the purposes described in Section A of the Recitals. The receiving party undertakes to inform each of its Personnel who may have access to the Confidential Information and must take reasonable endeavors such as steps which it would take to protect its own confidential information to ensure that such Personnel comply with the terms of this Agreement as if he or she were a party to it. The receiving party shall, if requested by the disclosing party, supply to the disclosing party prior to disclosure a list of Personnel to whom the Confidential Information has to be disclosed.

Duty to Inform

At a minimum, a responsible receiving party should apprise its representatives who receive confidential information under an NDA of the obligations and restrictions imposed by the NDA prior to disclosure:

Exemplar N22-18

The Recipient agrees that prior to disclosure of any Confidential Information of the Discloser to any of its Representatives, the Recipient will advise such Representatives of the confidential nature of such information and the terms of this Agreement.

Exemplar N22-19

Recipient agrees to transmit the Confidential Information only to Recipient’s Representatives who need to know the Confidential Information for the purpose of assisting in evaluating or implementing the Proposed Transaction and who are informed by Recipient of the confidential nature of the Confidential Information and who are directed to abide by the applicable terms of this Agreement.

Exemplar N22-20

Recipient shall disclose or make available such Confidential Information only to those of its Representatives only on the basis of a clear understanding by said Representatives of their obligation to maintain the confidential status of such Confidential Information and restrict its use in accordance with this Agreement.

Exemplar N22-21

Before disclosing Confidential Information to its Representatives, the Receiving Party must ensure that all Representatives are aware of the obligations of this Agreement and make all such Representatives aware that the Receiving Party will take any necessary action against any Representatives who breach the obligations of this Agreement. The Representatives of the Disclosing Party shall be subject to the same restrictions regarding the Confidential Information as the Receiving Party. The Receiving Party shall be responsible for any breach of this Agreement by its Representatives.

Exemplar N22-22

The Recipient may disclose such Confidential Information to its (accountants, attorneys and other confidential advisors (collectively, “Representatives”), who have a need to know of such Confidential Information for the purpose of assisting or advising the Recipient in connection with the Transaction. The Recipient agrees that prior to disclosure of any Confidential Information to any Representative, the Recipient will advise such Representative of the confidential nature of such information and of the existence and terms of this Agreement. The Recipient shall remain liable to the Discloser for actions of its Representatives in connection with their use of the Confidential Information.

Need to Know

The following exemplars implement an additional condition that restricts disclosure only to employees who have a need to know the disclosed information:

Exemplar N22-23

The Receiving Party agrees to restrict the possession, knowledge and use of Confidential Information to its employees, agents or subcontractors who have a need to know Confidential Information in connection with the purpose stated above. The Receiving Party will ensure that its employees, agents or subcontractors comply with this Agreement and will promptly notify the Disclosing Party of any breach of this Agreement.

Exemplar N22-24

For purposes of this Agreement, a "need to know" means that the employee to whom the information is disclosed requires the Confidential Information in order to perform his or her responsibilities in connection with the Purpose.

Bound in Writing

In addition to limiting disclosure to personnel with a need to know, the following exemplars require such personnel to be contractually bound to protect the disclosed information:

Exemplar N22-25

Each party shall ensure that its employees who have access to the other party's Confidential Information have signed a non-use and non-disclosure agreement in content similar to the provisions of this Agreement or are otherwise legally obligated not to use or disclose such Confidential Information, prior to any disclosure of Confidential Information to such employees.

Exemplar N22-26

Each of the Parties, as Recipient, hereby agrees that it will not, and will cause its Representatives, Affiliates, and Subcontractors not to disclose Confidential Information of the other Party, during or after the Term of this Agreement, other than on a “need to know” basis and then only to: (a) Affiliates; (b) Representatives; and/or (c), Subcontractors provided that any third parties who receive Discloser’s Confidential Information from Recipient or on behalf of Recipient are subject to a written confidentiality agreement that shall be no less restrictive than the provisions of this Section; (d) as required by law or as otherwise expressly permitted by this Agreement.

Exemplar N22-27

A Receiving Party shall not disclose any Confidential Information to any third party, to any employee or agent, or to the employees or agents of the Receiving Party’s Affiliates, except to those of its and its Affiliates’ employees, agents and other representatives (“Employees, Agents and Representatives”) who need to know such Confidential Information in order to accomplish the Purpose; and advise (by formulating rules and regulations or otherwise) its Employees, Agents and Representatives who receive the Disclosing Party’s Confidential Information of the Receiving Party’s obligation of confidentiality under this Agreement and, prior to providing such Employees, Agents or Representatives access to Confidential Information, ensure that each Employee, Agent or Representative is bound by confidentiality obligations with respect to Disclosing Party’s Confidential Information no less onerous than those binding on Receiving Party under this Agreement.

Exemplar N22-28

The Recipient shall not, and shall cause its affiliates and its and their respective Representatives not to, disclose, divulge, use, exploit (whether for its own benefit or the benefit of anyone other than the Disclosing Party), provide or otherwise make available any Confidential Information to any employee, representative, advisor, consultant, or other individual (each, a “Person”) other than in accordance with this Agreement and on a need-to-know basis, provided such Persons are bound in writing by confidentiality obligations that are applicable to the Confidential Information and are substantially as restrictive as the terms of this Agreement (or, in the case of accountants and attorneys, are bound by professional obligations of confidentiality), in order to permit those Persons to assist the Recipient in connection with the evaluation or performance of the Business Relationship. It is understood that Recipient may disclose any of the Confidential Information to those of the Recipient’s Representatives who actually need such material for the purpose of evaluating the proposed Relationship on the condition that, prior to such disclosure, such Recipient’s Representatives have signed an agreement with confidentiality provisions no less stringent than those set forth herein; provided further, however, that, notwithstanding anything herein to the contrary, neither party may disclose the other party’s Confidential Information to any competitor of the other party, without such other party’s prior written consent.

Exemplar N22-29

Recipient shall disclose Confidential Information received under this Agreement only to persons within its organization who have both: (a) a “need to know” it, and (b) been advised of the obligations of confidentiality and agree to be bound thereto.

Exemplar N22-30

The Receiving Party shall restrict disclosure of the Information solely to its employees, contractors and agents with a need to know such Information, advise those persons of their confidentiality obligations hereunder with respect to such Information, and assure that such persons are bound by obligations of confidentiality no less than those imposed in this Agreement.

Exemplar N22-31

With respect to Information provided under this Agreement, the recipient of the Information shall disclose the Information only to those employees, consultants, parent, subsidiary or affiliate of recipient (“Representatives”) having a need to know in order to perform the Discussions, provided that the recipient advises the Representatives of the Information of the limitations on the use and disclosure and prohibition on making copies of the Information. The Parties shall maintain between themselves and their Representatives a written agreement by such persons as may be necessary that they will fulfill their obligations under this Agreement.

In the following exemplar, the requirement of a signed undertaking applies only to non-lawyer consultants and advisors:

Exemplar N22-32

COMPANY and CONTRACTOR will use the Evaluation Material received from the other party solely for the purpose of evaluating the Potential Venture and such information will be kept confidential by the receiving party, except that COMPANY and CONTRACTOR may disclose the other party's Evaluation Material or portions thereof to those of their directors, officers, controlling affiliates, employees, consultants, and advisors (the persons to whom such disclosure is permissible being collectively called "Representatives"); provided however that (a) such Representatives have a need to know such information for the purpose of evaluating the Potential Venture (it being understood that, before disclosing the Evaluation Material or any portion thereof to such Representatives, COMPANY and CONTRACTOR will inform their Representatives of the confidential nature of the Evaluation Material and their duty to treat such Evaluation Material in accordance with this Agreement, and in the case of consultants or advisors (other than counsel for the receiving party), will obtain such Representatives written agreement to be bound by such duty), (b) disclosure by or to a Representative of a party shall be deemed to be a disclosure by or to that party, as applicable, and (c) each party shall be responsible for the observance and proper performance by all of its Representatives of the terms and conditions of this Agreement.

As demonstrated in the following exemplar, requiring a representative’s compliance with the receiving party’s internal rules regarding the treatment of confidential information can serve as an alternative to the requirement for a written undertaking by the representative:

Exemplar N22-33

The receiving party will not disclose any of the disclosing party’s Confidential Information to any employees or to any third parties except to the receiving party’s employees who have a need to know and who agree, or who are obligated by company rules, to abide by nondisclosure terms at least as comprehensive as those set forth herein; provided that the receiving party will be liable for breach by any such employees. For the purposes of this AGREEMENT, the term "employees" shall include independent contractors of each party.

In the next exemplar, the receiving party is required to record and document all representatives who receive confidential information:

Exemplar N22-34

Neither Party, except as otherwise specifically provided herein, may disclose any Confidential Information to any third party, provided, however, that each Party agrees that the other may disclose Confidential Information it receives to its Affiliates, its current or potential suppliers, subcontractors, official distributors or dealers, consultants or agents who have a need to know for proceeding with the Purpose and have a written confidential agreement at least as restrictive as this Agreement (collectively, "Related Party(ies)"), subject to the terms of this Agreement, provided, however, that each Party shall provide the Party with a list of Related Parties prior to releasing Confidential Information subject to this Section 3(f) to any of Related Parties.

Bound by Professional Obligations

Certain employees may be exempt from having to sign an undertaking of an NDA by virtue of their professional obligations to protect confidential information, such as attorneys and accountants:

Exemplar N22-35

The parties will be responsible for compliance with the terms of this Agreement by their employees, agents, contractors, consultants and Affiliates (competitors of the Disclosing Party, however, are not deemed to be Affiliates of the Recipient and shall be treated as a third party under the terms of this Agreement). The parties represent and warrant that they have entered or will enter into agreements (e.g., confidentiality agreements) with any such employees, agents, contractors, consultants and Affiliates (collectively “Representatives”), or that such Representative is bound by professional obligations, as necessary to fulfill their obligations under this Agreement. The Recipient shall promptly notify the Disclosing Party if it discovers any loss or unauthorized disclosure of Confidential Information. Each Party shall be liable for any breach of this Agreement by their respective Representatives.

If the disclosing party is concerned that its information may be broadcast too widely within the receiving party’s universe of representatives, the disclosing party may limit the sharing of such disclosed information to only a few selected employees/representatives of the receiving party:

Exemplar N22-36

If the Provider delivers to the Recipient a written notice stating that certain Confidential Information of the Provider may be disclosed only to specified Representatives of the Recipient, then, notwithstanding anything to the contrary contained in the section above, the Recipient shall not thereafter disclose or permit the disclosure of any of such Confidential Information to any other Representative of the Recipient.

Duty to Enforce

The following exemplars impose an express obligation on the receiving party to enforce the NDA’s terms against its employees/representatives:

Exemplar N22-37

The Receiving Party (a) may make the Confidential Information available to only those of its or its Associates’ Personnel having a "need to know" in order to carry out the purposes of, or enable the Receiving Party to exercise its rights under, this Agreement; and (b) shall procure that each of the Personnel to whom Confidential Information is disclosed strictly comply with the terms of this Agreement as if the Personnel were each a party to this Agreement, and shall take all steps available to enforce such obligations of confidentiality.

Exemplar N22-38

Without limiting any rights each party may have against the other in respect of the Agreement, each party shall be responsible for any breach of this Agreement by any of its Representatives, and, shall at its sole expense, take all reasonable measures to restrain its Representatives from prohibited and unauthorized disclosure or use of Confidential Information.

Exemplar N22-39

The Receiving Party shall treat any Disclosing Party’s Confidential Information as proprietary property of Disclosing Party and maintain such Confidential Information in confidence, taking measures at least as protective as those taken to protect its own Confidential Information of a similar nature (but no event less than reasonable measures). Receiving Party shall neither disclose any of Disclosing Party’s Confidential Information to any third party or person except to its own officers, employees and agents who have a legitimate need to know such Disclosing Party’s Confidential Information for the Purpose. The Receiving Party shall cause such officers, employees and agents who are permitted access to Disclosing Party’s Confidential Information to observe the obligation hereunder.

Exemplar N22-40

The receiving party shall restrict disclosure of INFORMATION to its employees with a need to know, shall advise such employees of the obligations assumed herein, shall cause such employees to comply with the terms of this Agreement.

Exemplar N22-41

Each Party undertakes to the other to make all of its Authorised Persons aware of the confidential nature of the Confidential Information disclosed by the Disclosing Party and the provisions of this Agreement and to take all such steps as shall from time to time be necessary to ensure compliance by its Authorised Persons with the provisions of this Agreement.

Exemplar N22-42

Receiving Party shall not disclose any of Disclosing Party's Confidential Information to any third party or person except the officers and employees of Receiving Party or its Subsidiaries who have a legitimate need to know such Confidential Information for the Purpose. Receiving Party shall cause its officers and employees and its Subsidiaries who are permitted access to Disclosing Party's Confidential Information to observe the obligations under this Agreement.

Exemplar N22-43

Recipient shall require all its employees, directors, agents, or third party staff engaged in the Project to comply with the obligations stated in this Agreement.

Warranty

In addition to the standard warranties typically found in NDAs (see the sections entitled “Warranties: AS IS (no warranties)”, “Warranties: Right to Disclose”, and “Warranties: Right to Rely” for exemplars), the parties may wish to require the receiving party to warrant compliance with the NDA by its employees who receive disclosed information:

Exemplar N22-44

Each Discloser warrants that it has the right to make the disclosures under this Agreement. Each Recipient warrants that its participating Associates and Employees will protect Confidential Information in accordance with the terms of this Agreement. The parties make no other warranties. Any disclosed information is provided "AS IS".

Integrated Exemplars

The following exemplars integrate the issues discussed above, including shared liability, need to know, and written agreement to be bound:

Exemplar N22-45

Furthermore, the Recipient shall limit access to the Protected Information to only those Representatives of the Recipient as may need to have access to the Protected Information in connection with the Transaction. Prior to providing any such access, the Recipient shall inform each such Representative of the proprietary and confidential nature of the Protected Information and of the Recipient's obligations under this Agreement. Each such Representative shall also be informed that by accepting such access, the Representative thereby agrees to be bound by the provisions of this Agreement. Furthermore, by allowing any such access, the Recipient agrees to be and remain jointly and severally liable for any disclosure by any such Representative that is not in accordance with this Agreement.

Exemplar N22-46

Recipient agrees to use Information solely in connection with the Project and for no other purpose. Recipient may provide Information only to Recipient’s employees who: (a) have a substantive need to know such Information in connection with the Project; (b) have been advised of the confidential and proprietary nature of such Information; and (c) have personally agreed with Recipient in writing to protect from unauthorized disclosure all confidential and proprietary information, of whatever source, to which they have access in the course of their employment. Recipient may provide Discloser’s Information to Recipients Affiliates, consultants, contractors and agents, subject to (a) through (c) above.

Exemplar N22-47

A Receiving Party may disclose the Disclosing Party’s Confidential Information to its employees, agents and contractors (collectively, “Representatives”) who have a need to know the information to effect the Purpose, and have signed an agreement that contains provisions in substance similar to those included in this Agreement or are otherwise obligated to keep such information confidential. The Receiving Party shall be liable for breach of this Agreement if a Representative or a person to whom the Receiving Party (or a Representative) has disclosed the Disclosing Party’s Confidential Information, in turn makes a disclosure or use, which if committed by the Receiving Party would have constituted a breach of this Agreement.

CC

Receiving Party’s Employees/Representatives

NDA

Table of Contents: