NONDISCLOSURE AND CONFIDENTIALITY AGREEMENT
AGREEMENT made this ____ day of ________, 20__, by and between THE SELLER INSURANCE AGENCY, INC., a Massachusetts corporation having its principal place of business at 250 Summer Street, Boston, Massachusetts 02210 (hereinafter the 'Seller'), and THE BUYER INSURANCE AGENCY, INC., a Massachusetts corporation having its principal place of business at 92 State Street, Boston, Massachusetts 02109 (hereinafter the 'Buyer').
In consideration of the mutual covenants herein contained, the parties hereto covenant and agree as follows:
W I T N E S S E T H :
1. Circumstances.
1.01 The Seller is engaged in the property and casualty insurance agency and brokerage business from a single office in Boston, Massachusetts. The parties currently are interested in exploring whether an acquisition of the Seller assets or its stock by the Buyer may be feasible and desirable. In the context of such exploration, both the Buyer and the Seller will be required to disclose to each other certain information regarding the property and casualty insurance expirations owned by the Seller, the business and financial information of the Seller as well as the business and financial information relative to the Buyer (all information provided hereinafter referred to as the 'Information'). The foregoing shall be referred to hereinafter as the 'Transaction.'
1.02 Each party to this Agreement wishes to access this highly confidential business Information to assist in determining the feasibility and terms of the Transaction.
1.03 Each party is willing to disclose the Information if the other party agrees to certain restrictions that are necessary to protect the confidentiality and to limit the use of the Information and otherwise to protect each party should the Transaction not be consummated.
1.04 HENRY J. LEE is the Chief Executive Officer of the Seller and is the principal negotiator for the Seller with respect to the Transaction. This Agreement and the restrictions contained herein are intended to, and shall, apply to the Seller and to Henry J. Lee, to all other officers, directors, employees and agents of the Seller and to all present and future affiliates and subsidiaries thereof.
1.05 DANIEL T. FREEMAN is the Chief Executive Officer of the Buyer and is the principal negotiator for the Buyer with respect to the Transaction. This Agreement and the restrictions contained herein are intended to, and shall, apply to the Buyer and to Daniel T. Freeman and to all other officers, directors, employees and agents of the Buyer and all present and to future affiliates and subsidiaries thereof.
2. Access to Information, etc.
2.01 While negotiations continue hereunder, the Seller shall provide the Buyer with reasonable access to such files, records and data as shall be requested in order to permit the Buyer to assess the value of the Seller and/or its assets and its financial and business condition; provided, however, the Seller shall have the right to decline to release the names of all or some of its customers and all or some of the information relative to insurance serviced by the Seller for its customers.
2.02 While negotiations continue hereunder, the Buyer shall provide the Seller with reasonable access to such files, records and data as shall be requested in order to permit the Seller to assess the business and financial condition of the Buyer including, but not limited to, the ability of the Buyer to service insurance business for customers of the Seller and to pay the purchase price for the assets or stock of the Seller.
2.03 All files, records and data disclosed by either party to the other hereunder, whether written or oral, shall be included in, and deemed part of, the Information.
3. Nondisclosure.
3.01 Except as provided in section 3.02 and unless otherwise required by law, the parties agree that they will not disclose any Information to any other person or entity prior to the closing of the Transaction. In the event the Transaction is not consummated, then the Parties agree not to disclose the same at any time subsequent hereto.
3.02 As the sole exception to section 3.01, the parties may, in connection with the Transaction, disclose the Information to its attorneys, accountants and financial advisors in connection with the Transaction, provided they shall be instructed in writing that such Information is confidential and may not be further disclosed by them. Should the parties choose to disclose the Information to those persons as permitted hereby, the party making such disclosure shall be responsible for its compliance with the terms of this Agreement.
3.03 Should the Transaction not close or should the parties agree not to proceed further with the Transaction, each party shall return promptly to the other all of the Information pertaining to the other party obtained hereunder along with all copies or abstracts of the Information, if any, in its possession.
3.04 The provisions of this section 3 shall apply whether or not the Information delivered is deemed to be confidential or proprietary or otherwise is in the public domain.
4. Restrictive Covenant.
4.01 The parties agree that the Buyer's access to the Information will provide it with a significant competitive advantage should it abandon the Transaction and choose to compete with the Seller, and that the right to use the Information must be restricted in order to protect the Seller's business and good will.
4.02 From the date hereof until closing of the Transaction (or in the event the Transaction does not close, then for a period of three years subsequent to the termination of this Agreement), the Buyer agrees that it will not, directly or indirectly, (a) solicit, attempt to obtain or accept as a customer of the Buyer any of the current customers of the Seller or customers of the Seller acquired hereafter that are disclosed to the Buyer during the course of negotiations hereunder and (b) take any action which will cause any customer serviced by the Seller to cease to transact business with the Seller or materially adversely curtail its business relationship with the Seller.
4.03 From the date hereof until the closing of the Transaction and in the event the Transaction does not close, each party hereby covenants and agrees that it will not state, disclose, divulge or in any manner disseminate in any fashion, whether publicly or privately, any Information disclosed to the other nor will the Buyer disclose that the Seller is in any manner discussing or negotiating the possibility of a sale of its business.
4.04 From and after the date hereof until the closing of the Transaction (or in the event the Transaction does not close, then for a period of three years subsequent to the date of termination of this Agreement), the Buyer does hereby covenant and agree that it will (a) take no action that will cause any insurance company or agent thereof currently transacting business with the Seller to materially adversely modify its business relationship with the Seller, (b) take no action to cause any employee of the Seller to terminate his or her employment with the Seller, nor (c) hire any person currently employed by the Seller.
5. Injunctive and Other Relief.
5.01 The parties agree that, in the event of any breach or threatened breach hereof, the remedy at law may be inadequate and that (without limiting other forms of relief available to each party) the issuance of a temporary restraining order and/or an injunction would be appropriate.
5.02 In the event of a breach of the provisions of this Agreement by a party, if the other party shall retain an attorney to enforce the provisions hereof or to obtain damages as a result of such breach, then the prevailing party in any action brought to enforce this Agreement shall be entitled to an award of reasonable attorneys' fees and costs in addition to such other damages as may be awarded.
6. Termination.
6.01 Either party may terminate this Agreement at any time by written notice to the other party, whereupon neither party shall have any further obligation to the other party except for the obligations to return Information and such other provisions which, by their terms, are intended to survive termination hereof and apply in the event the Transaction does not close. Any notices given hereunder shall be addressed to Henry J. Lee on behalf of the Seller and to Daniel T. Freeman on behalf of the Buyer at the party's principal office address set forth herein above.
7. Miscellaneous.
7.01 The Seller and the Buyer acknowledge that the anticipated conversations and discussions with the other are exploratory in nature and do not reflect any decision by either party to enter into any purchase and sale agreement, joint venture, or other transaction agreement.
7.02 Each provision of this Agreement is severable from, and may be enforced despite the invalidity of, the other provisions herein. If any provision hereof is determined by a court to be unenforceable, it shall, nonetheless, be enforced on such modified terms as the court finds reasonable.
7.03 This Agreement shall be governed by the laws of the Commonwealth of Massachusetts.
7.04 This Agreement may be executed in multiple counterpart copies, all of which together shall form a single, integrated instrument.
7.05 This Agreement shall be binding upon the parties, their successors, affiliates, subsidiaries, officers, employees, directors, agents and servants.
IN WITNESS WHEREOF, the said THE SELLER INSURANCE AGENCY, INC. and THE BUYER INSURANCE AGENCY, INC. have each caused this instrument to be executed in its name and on its behalf by a duly authorized officer, all as of the date first above written.
The Seller Insurance Agency, Inc. The Buyer Insurance Agency, Inc.
By:___________________________ By:__________________________
Henry J. Lee Daniel T. Freeman
Chief Executive Officer Chief Executive Officer
FOR VALUE RECEIVED and as a material inducement for each party to enter into this Agreement, the undersigned, principals of the Seller and the Buyer respectively, do hereby unconditionally agree that they shall be personally and individually liable and responsible for any and all loss, cost, damages or expense incurred by the other party arising out of a breach of this Agreement by the party of which the guarantor is a principal.
Henry J. Lee
for the Seller Insurance Agency, Inc.
Daniel T. Freeman
for The Buyer Insurance Agency, Inc.