Massachusetts investor nda template

Massachusetts Investor Non-Disclosure Agreement

This Massachusetts Investor Non-Disclosure Agreement (the “Agreement”) is made and effective as of [Date], by and between:

• [Disclosing Party Full Legal Name], a [State of Incorporation/Formation] [Entity Type] with its principal place of business at [Disclosing Party Address] (“Discloser”); and
• [Receiving Party Full Legal Name], residing at [Receiving Party Address] or, if an entity, a [State of Incorporation/Formation] [Entity Type] with its principal place of business at [Receiving Party Address] (“Recipient”), acting individually or on behalf of [Name of Entity Receiving Party Represents, if applicable].

1. Definition of Confidential Information

• Confidential Information means any information disclosed by Discloser to Recipient, directly or indirectly, in writing, orally, electronically, visually, or by any other means, relating to Discloser’s business, including, but not limited to:
  • Business plans
  • Financial statements
  • Market analyses
  • Strategic projections
  • Business models
  • Patent applications
  • Trade secrets
  • Non-public intellectual property
  • Customer and supplier data
  • Investor presentations
  • Term sheets
  • Due diligence materials
  • Potential transaction documents
  • Any documentation, data, or discussions disclosed in written, oral, electronic, visual, or other formats during fundraising or negotiations.
• Option A: Include source code as confidential information.
• Option B: Exclude pricing information unless specifically marked as confidential.

2. Exclusions from Confidential Information

• Confidential Information does not include information that:
  • Is or becomes publicly available other than through a breach of this Agreement by Recipient.
  • Is lawfully received by Recipient from a third party without restriction and without breach of any obligation of confidentiality.
  • Is independently developed by Recipient without use of or reference to the Confidential Information.
  • Is required to be disclosed by law, regulation, subpoena, court order, or other legal process.
    • Recipient shall provide Discloser with prompt written notice of such requirement prior to disclosure to allow Discloser to seek a protective order or other appropriate remedy, and shall only disclose the minimum amount of Confidential Information necessary to comply with the requirement.
• Option A: Add "general skills and experience" to the exclusion list.
• Option B: Narrow the "independently developed" clause by requiring written documentation of independent development prior to disclosure.

3. Use of Confidential Information

• Recipient agrees to use the Confidential Information solely for the purpose of evaluating the investment opportunity, conducting due diligence, or deciding whether to enter into a business relationship or transaction with Discloser.
• Recipient shall not use the Confidential Information for any other purpose, including, but not limited to, competitive activities, personal gain, or disclosure to third parties, except as expressly permitted herein.
• Option A: Explicitly prohibit solicitation of Discloser's employees.
• Option B: Permit use of aggregated, anonymized data derived from Confidential Information.

4. Security Measures

• Recipient shall implement and maintain reasonable security measures appropriate for the protection of the Confidential Information, including administrative, technical, and physical safeguards, to prevent unauthorized access, use, or disclosure, and no less than those outlined in the Massachusetts Data Security Regulations (201 CMR 17.00) if such information includes “personal information” about Massachusetts residents.
  • Such measures shall include, but are not limited to, encryption of electronic records, access controls, secure destruction of physical materials, and regular security assessments.
• Option A: Specify minimum acceptable encryption standards (e.g., AES-256).
• Option B: Require annual third-party security audits.

5. Non-Disclosure and Limited Sharing

• Recipient shall not disclose the Confidential Information to any third party, including affiliates, advisors, employees, or representatives, unless such third party has a need to know the Confidential Information for the permitted purpose and is bound in writing by confidentiality obligations no more restrictive than those contained in this Agreement.
  • Recipient shall be responsible for any breach of this Agreement by any such third party.
• Option A: Require pre-approval from Discloser for any third-party disclosures.
• Option B: Limit the number of permitted third-party recipients.

6. Term

• This Agreement shall commence on the Effective Date and shall continue in full force and effect:
  • Throughout the period of due diligence and negotiation.
  • For a period of [Number] ([Years]) years following termination of investment discussions.
  • Indefinitely with respect to trade secrets and personal data subject to the Massachusetts Uniform Trade Secrets Act and data protection laws.
• Option A: Shorten or lengthen the post-termination period.
• Option B: Provide for automatic renewal of the Agreement after the initial term.

7. Return or Destruction of Confidential Information

• Upon Discloser's written request or upon termination of investment discussions, Recipient shall promptly return to Discloser all Confidential Information in its possession or control, including all copies, summaries, and notes, or, at Discloser's option, destroy such Confidential Information and certify such destruction in writing to Discloser.
  • Recipient may retain copies of Confidential Information solely to the extent required by law or regulation, provided that such retained information remains subject to the terms of this Agreement.
• Option A: Specify a timeframe for return or destruction (e.g., within 10 business days).
• Option B: Allow for continued access to Confidential Information stored in secure data rooms after termination.

8. Notification of Breach

• Recipient shall promptly notify Discloser in writing upon becoming aware of any actual, suspected, or threatened breach of this Agreement or any unauthorized access, use, or disclosure of the Confidential Information.
  • Recipient shall cooperate fully with Discloser in investigating any such breach and shall take all reasonable steps to mitigate the effects of the breach, in accordance with Massachusetts breach notification laws if “personal information” is involved.
• Option A: Specify a maximum timeframe for notification (e.g., within 24 hours).
• Option B: Require Recipient to bear the costs of data breach remediation.

9. Remedies for Breach

• Recipient acknowledges that unauthorized disclosure or use of the Confidential Information would cause irreparable harm to Discloser for which monetary damages may be inadequate.
  • Discloser shall be entitled to seek injunctive and other equitable relief to prevent or restrain any such unauthorized disclosure or use, in addition to any other remedies available at law or in equity, without the necessity of posting a bond.
  • In the event of a breach of this Agreement, Discloser shall be entitled to recover from Recipient all damages, including actual, consequential, and punitive damages, and reasonable attorneys' fees and costs incurred in enforcing this Agreement, and any specific Massachusetts law remedies for misappropriation under M.G.L. ch. 93, §42 (trade secrets) and 201 CMR 17.00 (data breaches).
• Option A: Include a liquidated damages clause.
• Option B: Specify a maximum liability cap for Recipient.

10. Dispute Resolution

• Any dispute arising out of or relating to this Agreement shall be resolved as follows:
  • The parties shall first attempt to resolve the dispute through good faith negotiation.
  • If the dispute cannot be resolved through negotiation, the parties shall submit the dispute to non-binding mediation in Suffolk County, Massachusetts.
  • If the dispute cannot be resolved through mediation, the parties may pursue litigation in the courts located in Suffolk County, Massachusetts.
• This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its conflict of laws principles.
• Option A: Require binding arbitration instead of litigation.
• Option B: Specify alternative dispute resolution providers (e.g., JAMS, AAA).

11. Enforceability

• If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.
  • The parties agree to negotiate in good faith to replace any invalid or unenforceable provision with a valid and enforceable provision that achieves the original intent of the parties to the maximum extent permitted by Massachusetts law.
• Option A: Add a severability clause specifically addressing geographic limitations on non-compete provisions (if any are included elsewhere).
• Option B: Include a clause requiring the court to reform the Agreement to achieve the intent of the parties if a provision is deemed invalid.

12. Securities Law Compliance

• Nothing in this Agreement shall restrict Recipient from disclosing Confidential Information to the extent required to comply with applicable securities laws, regulations, or filings with the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA), or to comply with its institutional reporting obligations.
  • However, Recipient shall provide Discloser with reasonable prior written notice of any such required disclosure and shall use commercially reasonable efforts to obtain confidential treatment for the disclosed information to the extent permitted by law.
• Option A: Require Recipient to obtain a legal opinion confirming the disclosure requirement.
• Option B: Exclude routine internal reporting obligations from this clause.

13. No Commitment to Invest

• This Agreement does not constitute a commitment or obligation by Recipient to invest in Discloser, nor does it confer any rights to Recipient beyond the right to review and evaluate the Confidential Information.
  • Recipient shall have no obligation to disclose to Discloser any information relating to Recipient's investment decision.
• Option A: Include a non-circumvention clause preventing Recipient from pursuing similar opportunities independently.
• Option B: Add a clause explicitly stating that Discloser is not obligated to provide Recipient with any specific information.

14. Representations and Warranties

• Each party represents and warrants to the other party that it has the full right, power, and authority to enter into and perform its obligations under this Agreement.
  • Recipient represents and warrants that its execution and performance of this Agreement does not violate any other agreement to which it is a party.
• Option A: Add a representation regarding compliance with anti-corruption laws.
• Option B: Include a representation regarding the accuracy and completeness of information provided (by Discloser only).

15. Signature

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

Discloser:

____________________________

[Disclosing Party Name]

[Disclosing Party Title]

Recipient:

____________________________

[Receiving Party Name]

[Receiving Party Title]

(Acknowledgement of electronic signature validity if applicable, as per Massachusetts law.)

16. Scope of Agreement

• Option A: This Agreement binds only the individual signatory, [Receiving Party Full Legal Name].
• Option B: This Agreement binds [Receiving Party Full Legal Name], and its partners, directors, officers, employees, advisors, and affiliates who have access to the Confidential Information. Recipient is solely responsible for the compliance of such persons and entities.

17. Industry Specific Compliance

• Option A: If this Agreement relates to health data, Recipient confirms it shall comply with M.G.L. ch. 93H and 201 CMR 17.00 concerning the protection of personal information and data security.
• Option B: If this Agreement involves professional services, Recipient will act in compliance with applicable Massachusetts regulations governing its field.
• Option C: If this Agreement relates to the handling of financial information, Recipient confirms compliance with relevant regulations under Massachusetts law.

18. Reverse Engineering Prohibition

Recipient agrees not to reverse engineer, decompile, or disassemble any tangible or intangible Confidential Information provided by Discloser.

19. Notices

• All notices and communications regarding this Agreement shall be in writing and shall be deemed given when:
  • Delivered personally;
  • Sent by certified mail, return receipt requested;
  • Sent by email (with confirmation of receipt).
  To:
  • Discloser: [Disclosing Party Contact Information]
  • Recipient: [Receiving Party Contact Information]

20. Entire Agreement and Amendments

• This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications and proposals, whether oral or written.
  • This Agreement may be amended only by a writing signed by both parties.

21. Waiver of Jury Trial

To the extent permitted by Massachusetts law, the parties hereby waive their respective rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement.

22. No Implied License

Nothing in this Agreement shall be construed as granting Recipient any license or ownership rights in or to the Confidential Information.

23. Assignment

Recipient may not assign its rights or obligations under this Agreement without the prior written consent of Discloser.

24. Massachusetts Law Considerations

• Non-waiver of default: No failure or delay by Discloser in exercising any right or remedy under this Agreement shall operate as a waiver thereof.
• Attorney's fees: In any action to enforce this Agreement, the prevailing party shall be entitled to recover its reasonable attorney's fees and costs.
• Massachusetts statutory interest: Damages for breach of this Agreement shall bear interest at the rate provided by Massachusetts law.