In order to induce Horizon Business Group, LLC (“HBG”) or seller (“Seller”) of a business (the “Business”) to furnish information regarding the Business (the “Information”) to Buyer for Buyer’s evaluation and possible purchase of said Business (“Transaction”) and in consideration for HBG’s or Seller’s furnishing such Information, Buyer understands, agrees, represents, and warrants to HBG and Seller as follows:
1. The word “Buyer”, as used herein, shall mean and include the undersigned.
2. Buyer understands and acknowledges that HBG is acting as the agent of the Seller and HBG’s primary duty is to represent the interests of the Seller. HBG does not provide any tax or legal advice on this, or any business.
3. The Information is of a proprietary and confidential nature, the disclosure of which to any other party may result in damage to the Seller and/or Business. Information does not include any information which: (i) is or becomes generally available to participants in the Business’s industry or to the public other than as a result of a disclosure by Buyer or its Representatives in violation of this agreement;
(ii) was within Buyer’s or its Representatives possession prior to its being furnished to Buyer or its Representatives by or on behalf of the Seller pursuant hereto;
(iii) becomes available to Buyer or its Representatives from a source other than the Seller or any of its representatives, provided that such source is not known by Buyer to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Seller or any other party with respect to such information; or
(iv) is independently developed by or for Buyer or its Representatives without use of the Information.
4. Buyer further represents and warrants as follows:
(A). Buyer will not disclose the Information, in whole or in part, to any party other than (a) Buyer’s directors, officers, employees, managers, affiliates, representatives, advisors (including, without limitation, accountants, attorneys, potential financing sources, and financial advisors), consultants and agents (limited in the case of all the foregoing to such parties that actually receive Information from the Buyer or at its direction, collectively “Representatives”), who have a need to know such Information for purposes of evaluating or structuring the possible purchase of the Business, or (b) in the event that Buyer or any of its Representatives are requested or required by law, regulatory authority, the rules of any national securities exchange or other applicable judicial or governmental order, or otherwise are legally compelled (e.g., by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process). Buyer accepts full responsibility for full compliance with all provisions of this Agreement by such Representatives, except Buyer shall not be liable for breaches by any Representative that (i) enters into a joinder to this Agreement, or (ii) executes a separate confidentiality agreement with Seller related to the Transaction. Nothing in this agreement shall be binding upon or in any way restrict the activities of any Buyer portfolio company or affiliate that does not receive any Information under this Agreement.
(B). Buyer will not disclose, except to the extent required by law, to any parties other than persons described in Paragraph 3(A) above, that the Business is available for purchase. Except as required by applicable law, regulation or legal process, without the Buyer’s written consent, the Seller and its representatives (including HBG) will not, directly or indirectly, identify the Buyer by name or identifiable description as being involved in discussions or negotiations concerning the Transaction, or disclose any of the terms, conditions, work product or analysis prepared or submitted in connection therewith, to any person other than an affiliate, advisor or similar representative of the Company (excluding another participant in the Transaction or a transaction similar to the Transaction who is acting in the same capacity as the Buyer) who reasonably requires access to such information in connection with the Transaction.
(C). Buyer will not utilize furnished Information for any purpose other than evaluating the possible purchase of the Business, and this Agreement, and all its obligations shall terminate two (2) years from the date hereof.
(D). Upon request by Seller or HBG, Buyer will promptly destroy all Information previously furnished by HBG or Seller, including any and all reproductions of same, and, further, shall destroy any and all analysis, compilations, or other material that incorporates any part of said Information, in its possession and shall instruct its Representatives to do the same. Notwithstanding the foregoing, Information may be retained for legal or regulatory purposes only and neither Buyer nor its Representatives are required to destroy any computer records or files containing Information that have been created pursuant to automatic archiving and back-up procedures.
5. Buyer will not contact the Seller or Seller’s employees, customers, suppliers, or agents other than HBG (nor will Buyer assist or promote in any way anyone else with any form of introduction) for any reason whatsoever, other than contact in the ordinary course of business, without the prior consent, in writing, of HBG. All contacts with the Seller or such other parties will be made through or by HBG.
6. The Information furnished by HBG has been prepared by or is based upon representations of the Seller and HBG has not made independent investigation or verification of said Information. Buyer hereby expressly releases, discharges and holds harmless HBG and its agents, employees, officers, directors, shareholders, co-brokers, and affiliates from any and all responsibility and/or liability in connection with the accuracy, completeness or any other aspects of the Information and accepts sole and final responsibility for the evaluation of the Information and all other factors relating to the Business, except as may otherwise be provided in a definitive agreement between the Seller and Buyer (or one of its affiliates), regarding the Transaction, executed and delivered by both parties.
7. The Information is subject to change or withdrawal without notice and the Business is being offered for sale subject to prior sale or the withdrawal of said offering without notice.
8. Buyer agrees to provide, upon request by HBG or Seller, financial statements, references and other pertinent information evidencing such financial sufficiency to complete a transaction of this magnitude,
at the time such information becomes relevant to the Seller in considering decision to continue Transaction with Buyer.
9. The Seller acknowledges that (i) Buyer and its affiliates are engaged in the business of private equity investing and may from time to time invest in entities that develop and utilize technologies, products or services that are similar to or competitive with those of the Business and Seller, and (ii) except insofar as this Agreement restricts the disclosure of the Confidential Information, this Agreement shall not prevent Buyer or its affiliates from (a) engaging in or operating any business, (b) entering into any agreement or business relationship with any third party, or (c) evaluating or engaging in investment discussions with, or investing in, any third party, whether or not competitive with the Seller, the Business or their affiliates. Seller acknowledges that Buyer’s review of Information will inevitably enhance Buyer’s knowledge and understanding of the Business in a way that cannot be separated from Buyer’s other knowledge and Seller agrees that this Agreement shall not restrict Buyer in connection with the purchase, sale, consideration of, and decisions related to other investments and serving on the boards of such investments in such industries. Seller acknowledges that Buyer or its affiliates’ directors, officers or employees may serve as directors of portfolio companies of investment funds managed by Buyer, and Seller agrees that such portfolio companies will not be deemed to have received Information solely because any such individual serves on the board of such portfolio company; provided, that (i) such individual has not provided such portfolio company or any other director, officer, employee or other representative of such portfolio company with Information and (ii) such portfolio company does not act at the direction of or with encouragement from Buyer.
10. It is understood that Buyer shall have three (3) business days from the date of disclosure of the name of Seller and the Business to perform an internal conflict check and, based on the result, inform HBG, via email, of whether or not Buyer wishes to receive Information. In the event that Buyer does not receive the Information and elects in writing not to receive the Information within three (3) business days from the date of disclosure of the name of Seller and the Business, Buyer shall have no further obligation under this Agreement, other than a duty to maintain as confidential the name of Company, any Information provided during this time and the nature of the proposed Transaction, in accordance with the terms of this Agreement.
11. The performance and construction of this Agreement shall be governed by the laws of the State of Texas.
12. This Agreement shall be binding upon the Buyer and Seller, Buyer’s and Seller’s heirs, executors, successors, assigns. Neither the Seller nor HBG shall assign this Agreement, except to a person that consummates a transaction with the Seller similar to the proposed Transaction. Buyer may assign this Agreement to any of its affiliates. If any provision of this agreement shall be held to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force.
13. In any litigation arising under the terms and conditions of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees and court costs in addition to any amount of the judgment.
14. Upon providing Information to the Buyer or its Representatives after the execution and effectiveness of this agreement, the Seller shall be deemed to have agreed to the terms herein.
