Business Sale Non-Disclosure Agreement Template

This Business Sale Non-Disclosure Agreement (NDA) can be used when sellers want to disclose confidential business information to potential buyers in the course of negotiating the terms of a sale or acquisition of ‌a business․ This document is often used in business due diligence procedures․

Our Business NDA sample follows terms and conditions in merger and acquisition (M&A) confidentiality agreements, which allow both parties to ‌evaluate the proposed transaction while protecting confidential business information․

Key highlights of this template:

• Designed specifically for transacting business sales and acquisitions.
• Optional standstill clause preventing buyer from making any unsolicited acquisition attempts for 12 months.
• Non-solicitation of employees clause, preventing either side from hiring employees identified during evaluation.
• The term of the agreement runs either until 12 months from the Effective Date or the signing of a definitive transaction agreement, whichever is first․
• Confidentiality: obligations continue for 2 years after negotiations cease.
• Force majeure protection against events including natural disasters, pandemics, government action, cyberattacks, and ‌failure of infrastructure.

This template for Business Sale NDA is available for download, ‌edit, and use as a Word, PDF, or online fillable form․

When to Use this Sample Business Sale NDA

A Business Sale Non-Disclosure Agreement is used to protect the confidentiality of information when a seller needs to disclose sensitive business information for a possible sale․ Common situations include:

• Selling the company or business division
• Selling its assets or intellectual property
• Giving potential buyers access to financial statements
• Enabling buyers to perform ‌due diligence
• Discussions about ‌mergers, acquisitions, or investments
• Sharing data, contracts, ‌or processes with potential investors

An exclusivity agreement allows potential buyers to undertake due diligence without revealing sensitive information to competitors or other parties․

What’s Included in the Business Sale NDA

This Business Sale NDA template includes the key clauses used in business sale and M&A confidentiality agreements:

• Identification of the seller and buyer
• Purpose of disclosure tied to the business sale
• Definitions
• Exclusions for public or independently obtained information
• Non-disclosure and limited use obligations
• Permitted disclosures required by law
• Optional standstill clause
• Non-solicitation of employees
• Return or destruction of confidential materials
• Term and survival of confidentiality obligations
• Legal remedies for breach of the agreement
• Compliance with data protection and regulatory laws
• Notice procedures
• Assignment and transfer rules
• Force majeure clause
• Governing law and jurisdiction

How to Write Your Business Sale Confidentiality Agreement

To customize your Business Sale Non-Disclosure Agreement template, please follow these steps․

1. Confirm the Parties and Authorized Signatories

The contract should mention the parties in the agreement, that is the seller and buyer companies and their official representatives authorized to sign the agreement on their behalf․

Authorized signatories in business sale negotiations include executives, founders, and corporate officers․

2. Define the Purpose of Disclosure

The purpose clause makes clear that the confidential information is only used for assessing the possible business sale․ When personalizing this section, keep in mind whether the transaction is:

• an asset purchase
• an equity purchase
• a merger or acquisition

A purpose which is clearly defined limits the way the buyer can use the information․

3. Review the Definition of Confidential Information

Confidential information includes business, financial, project, technical and other operational information that is confidential․

You can expand this list to include financial statements and projections, customer and vendor contracts, internal reports and analytics, and anything related to intellectual property to include all items created as part of the due diligence process․

4. Identify Permitted Representatives

Disclosure is also permitted to professional advisors for the consideration of the transaction․

These might include attorneys, accountants or financial advisors, so be sure that any representative is also bound by similar confidentiality obligations․

5. Decide Whether Your Need a Standstill Clause

An optional standstill provision is included in some templates in order to prevent the buyer from acquiring shares, exercising rights of control, or making a takeover offer outside the bid process for a period (usually 12 months)․

Sellers may include such a clause to defeat hostile acquisition attempts․

6. Review the Non-Solicitation Clause

To prevent either party from hiring someone they met during the evaluation, a non-solicitation clause may apply․

You can also limit how long you impose the restriction, and whether you want it to affect all employees or only certain key employees․

7. Customize the Return or Destruction of Materials

The contract also requires the buyer to return or destroy all confidential information if the transaction does not go ahead, preventing confidential information from being retained․

8. Confirm the Governing Law and Venue

The agreement must specify a governing state and legal jurisdiction for disputes․ Choose a jurisdiction of one party or a jurisdiction where the transaction will be governed by law․