January 5, 2022

Waypoint for M&Aadding acquisition-specific terms to the standard business NDA

This post is part of a series, The Waypoint NDA.

I’m working on a new version of The Waypoint NDA that includes the special terms lawyers add when two companies discuss acquisition, rather than a sale or other more routine business. Instead of publishing a whole new NDA form just for M&A, I’m looking at adding a section to Waypoint that applies only if the purpose the parties fill in involves M&A.

Fellow lawyers, I’d appreciate a quick e-mail letting me know if you’d recommend Waypoint 3.0.0 with the following new section ahead of M&A discussions. Here’s a Word Track Changes redline if you prefer.

Mergers and Acquisitions

These terms apply only if the Purpose relates to a proposed or potential merger or acquisition of one of the parties, their Affiliate, or a line of business (a Potential Transaction):

No Unauthorized Market Due Diligence

Neither party shall directly or indirectly communicate about a Potential Transaction with any executive, employee, customer, or supplier of the other party, or seek any information in connection with the Potential Transaction from them, without the prior, signed, written consent of the other party.

No Disclosure to Funding Sources

Permitted Disclosure [reference to section above] does not permit disclosure of Confidential Information to any source of debt or equity financing, Affiliate, limited partner, member, stockholder, or other investor, unless and until:

Nonsolicitation

Targeted Solicitation

Except as described in Former Personnel or General Solicitation, until one year after the date this agreement terminates, neither party shall solicit to hire or actually hire any of the following without the prior, signed, written consent of the other party:

Former Personnel

A party may solicit or hire personnel after their working relationships with the other party or its Affiliate have ended.

General Solicitation

This agreement does not restrict either party from hiring anyone who responds to an advertisement or announcement that was not specifically directed at personnel of the other party, or any individual introduced by a recruitment firm that did not specifically target personnel of the other party.

Purpose of Nonsolicitation

Nonsolicitation gives each party protection against misuse of Confidential Information that couldn’t be accomplished in any less restrictive way.

No Exclusive Financing

Neither party shall, directly or through others, discuss or enter into any oral or written agreement, arrangement, or understanding for debt or equity financing of a Transaction:

Definition of Affiliate

Affiliate means any legal entity that has control over, is under the control of, or is under common control of another entity, where control means ownership of substantially all the assets of an entity or the power to direct its management and policies by vote, contract, or otherwise. Control can be direct or indirect.

Right to Assign

Either party may assign this agreement as a whole, without the other party’s consent, in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets.

Otherwise, standard Waypoint prohibits assignment without prior consent.

Your thoughts and feedback are always welcome by e-mail.

back to topedit on GitHubrevision history