Qwoter Investment Advice

RSS Feed

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #

Confidentiality Agreement


A confidentiality agreement (CA) is a legally binding contract between the target and each prospective buyer that governs the sharing of confidential company information. The CA is typically drafted by the target's counsel and distributed to prospective buyers along with the teaser, with the understanding that the receipt of more detailed information is conditioned on execution of the CA. A typical CA includes provisions governing the following: Use of information - states that all information furnished by the seller, whether oral or written, is considered proprietary information and should be treated as confidential and used solely to make a decision regarding the proposed transaction Term - designates the time period during which the confidentiality restrictions remain in effect Permitted disclosures - outlines under what limited circumstances the prospective buyer is permitted to disclose the confidential information provided; also prohibits disclosure that the two parties are in negotiations Return of confidential information - mandates the return or destruction of all provided documents once the prospective buyer exits the process Non-solicitation/no hire - prevents prospective buyers from soliciting to hire (or hiring) target employees for a designated time period Standstill agreement - for public targets, precludes prospective buyers from making unsolicited offers or purchases of the target's shares, or seeking to control/influence the target's management, board of directors, or policies Restrictions on clubbing - prevents prospective buyers from collaborating with each other or with outside financial sponsors/equity providers without the prior consent of the target (in order to preserve a competitive environment)

Related Terms:
		Definitive Agreement The definitive agreement is a legally binding contract between a buyer and seller detailing the terms ... Regulation FD SEC regulation adopted in 2000 that eliminated the practice of selective disclosure. ... Inside Information Relevant information about a company that has not yet been made public. It is illegal for ...

« View the Stock Market Dictionary »

Latest Financial Advice

Free Investment Advice

Get free stock market tips and investing advice by subscribing to our newsletter:

* Your information will not be shared or sold.

Recommended Reading

Recommended Sites

All material is for informational purposes only and Qwoter is not responsible for any errors or omissions. The information is subject to change without notice and should
not be construed as definitive investment advice or recommendations. Please consult your tax or legal advisor(s) for questions concerning your personal or financial situation.