Mutual Non-Disclosure Agreement (North Dakota)

MUTUAL NON-DISCLOSURE AGREEMENT

(North Dakota)

Effective Date: [__/__/____] (the "Effective Date")

PARTIES

Party A (First Disclosing/Receiving Party):

Party B (Second Disclosing/Receiving Party):

Party A and Party B are each referred to individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, each Party possesses certain proprietary, confidential, and trade secret information relating to its business, operations, technology, products, services, customers, and finances;

WHEREAS, the Parties desire to explore and/or engage in a potential business relationship involving [________________________________] (the "Purpose");

WHEREAS, in connection with the Purpose, each Party may disclose to the other Party certain Confidential Information (as defined below) that the Disclosing Party considers proprietary and confidential;

WHEREAS, the Parties wish to protect Confidential Information by contract, while recognizing that some information may separately qualify for protection under N.D.C.C. ch. 47-25.1 or 18 U.S.C. §§ 1836 and 1839; and

WHEREAS, the Parties wish to establish contractual duties for Confidential Information while recognizing that statutory trade-secret protection and remedies depend on the facts and applicable law;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1. DEFINITIONS

1.1 "Affiliate" means any entity that, directly or indirectly, controls, is controlled by, or is under common control with a Party, where "control" means ownership of fifty percent (50%) or more of the voting securities or equivalent ownership interest.

1.2 "Confidential Information" means all non-public, proprietary, or confidential information disclosed by the Disclosing Party to the Receiving Party, whether in oral, written, electronic, visual, or tangible form, including without limitation:

(a) Trade secrets as defined under N.D. Cent. Code 47-25.1-01(4) and 18 U.S.C. 1839(3);

(b) Business plans, strategies, forecasts, projections, and financial information;

(c) Customer and supplier lists, pricing data, and sales information;

(d) Product designs, specifications, formulas, algorithms, and source code;

(e) Manufacturing processes, methods, techniques, and know-how;

(f) Research and development activities, inventions, and discoveries;

(g) Marketing plans, competitive analyses, and market studies;

(h) Personnel information, organizational structures, and compensation data;

(i) Contract terms, negotiation strategies, and legal matters;

(j) Technical data, engineering drawings, and prototypes; and

(k) Any information identified or marked as "Confidential," "Proprietary," or with a similar designation.

Confidential Information also includes the existence and terms of this Agreement, the fact that discussions or negotiations are taking place between the Parties, and any analyses, compilations, notes, studies, or other materials prepared by the Receiving Party that contain, reflect, or are derived from Confidential Information.

1.3 "Disclosing Party" means the Party (or its Affiliate) disclosing Confidential Information under this Agreement.

1.4 "Receiving Party" means the Party (or its Affiliate) receiving Confidential Information under this Agreement.

1.5 "Representatives" means a Party's and its Affiliates' directors, officers, employees, agents, attorneys, accountants, financial advisors, consultants, and other professional advisors who have a need to know Confidential Information for the Purpose and who are bound by confidentiality obligations no less restrictive than those set forth in this Agreement.

1.6 "Trade Secret" means information that independently satisfies the applicable statutory definition. Under N.D.C.C. § 47-25.1-01(4), this requires independent economic value from secrecy and reasonable efforts to maintain secrecy; a federal claim is governed separately by 18 U.S.C. § 1839(3). A Confidential Information label alone does not establish either status.

ARTICLE 2. PURPOSE

2.1 The Parties shall use Confidential Information solely for the Purpose described in the Recitals, which involves: [________________________________].

2.2 Neither Party shall use the other Party's Confidential Information for any purpose other than the Purpose without the prior written consent of the Disclosing Party.

ARTICLE 3. OBLIGATIONS OF THE RECEIVING PARTY

3.1 Standard of Care. The Receiving Party shall:

(a) Hold all Confidential Information in strict confidence;

(b) Protect the Confidential Information using at least the same degree of care it uses to protect its own confidential information of similar nature and importance, but in no event less than a commercially reasonable degree of care;

(c) Not disclose Confidential Information to any person or entity other than its Representatives who have a need to know such information for the Purpose;

(d) Ensure that all Representatives who receive Confidential Information are informed of its confidential nature and are bound by written confidentiality obligations no less restrictive than those contained in this Agreement;

(e) Not use Confidential Information for any purpose other than the Purpose;

(f) Not copy or reproduce Confidential Information except as reasonably necessary for the Purpose; and

(g) Not reverse engineer, decompile, or disassemble any Confidential Information, including any products, prototypes, software, or other tangible objects provided by the Disclosing Party.

3.2 Responsibility for Representatives. Each Party shall be responsible for any breach of this Agreement by any of its Representatives and shall, at its sole cost and expense, take all reasonable measures to restrain its Representatives from unauthorized disclosure or use of Confidential Information.

3.3 Security Measures. The Receiving Party shall implement and maintain reasonable administrative, technical, and physical safeguards to protect the confidentiality of the Disclosing Party's Confidential Information, including measures to prevent unauthorized access, use, modification, or disclosure.

3.4 Notification of Breach. The Receiving Party shall promptly notify the Disclosing Party in writing upon discovery of any unauthorized use, disclosure, or loss of Confidential Information, and shall cooperate with the Disclosing Party to mitigate any damage resulting from such breach.

ARTICLE 4. EXCLUSIONS FROM CONFIDENTIAL INFORMATION

4.1 Confidential Information shall not include information that the Receiving Party can demonstrate by competent evidence:

(a) Was publicly available or in the public domain at the time of disclosure through no fault of the Receiving Party;

(b) Becomes publicly available or enters the public domain after disclosure through no breach of this Agreement by the Receiving Party or its Representatives;

(c) Was already in the Receiving Party's possession without restriction before disclosure by the Disclosing Party, as demonstrated by the Receiving Party's contemporaneous written records;

(d) Is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information, as demonstrated by the Receiving Party's contemporaneous written records;

(e) Is received by the Receiving Party from a third party who is not, to the Receiving Party's knowledge, under an obligation of confidentiality to the Disclosing Party with respect to such information; or

(f) Is approved for release or use in writing by an authorized representative of the Disclosing Party.

4.2 The burden of proving any exclusion rests with the Receiving Party. A specific item of Confidential Information shall not be deemed to fall within any exclusion merely because broader, more general information is in the public domain or in the Receiving Party's possession.

ARTICLE 5. PERMITTED DISCLOSURES (COMPELLED DISCLOSURE)

5.1 Legal Compulsion. If the Receiving Party or any of its Representatives becomes legally compelled (by deposition, interrogatories, subpoena, civil investigative demand, court order, regulatory request, or similar process) to disclose any Confidential Information, the Receiving Party shall:

(a) Provide the Disclosing Party with prompt written notice of such requirement (to the extent legally permissible) so that the Disclosing Party may seek a protective order, injunction, or other appropriate remedy, or waive compliance with the terms of this Agreement;

(b) Cooperate reasonably with the Disclosing Party in its efforts to obtain such protective order or other remedy;

(c) If such protective order or other remedy is not obtained, disclose only that portion of the Confidential Information that is legally required to be disclosed, as advised by the Receiving Party's legal counsel; and

(d) Use commercially reasonable efforts to obtain reliable assurance that confidential treatment will be afforded to the Confidential Information so disclosed.

5.2 Protected Disclosures. Nothing in this Agreement restricts a disclosure protected by 18 U.S.C. § 1833(b), including an individual's confidential disclosure to a government official or attorney solely to report or investigate suspected lawbreaking, a filing under seal, or the provision's conditional use in a retaliation lawsuit. Article 16 sets out the statutory immunity notice.

ARTICLE 6. TERM OF AGREEMENT AND SURVIVAL OF OBLIGATIONS

6.1 Term. This Agreement shall commence on the Effective Date and shall continue for a period of [________________________________] years (the "Term"), unless earlier terminated by either Party upon thirty (30) days' prior written notice to the other Party.

6.2 Survival of Obligations. The obligations of confidentiality and non-use set forth in this Agreement shall survive the expiration or termination of this Agreement for a period of [________________________________] years following such expiration or termination; provided, however, that obligations with respect to Trade Secrets (as defined by N.D. Cent. Code 47-25.1-01(4) and 18 U.S.C. 1839(3)) shall continue for so long as the information qualifies as a Trade Secret under applicable law.

ARTICLE 7. RETURN AND DESTRUCTION OF MATERIALS

7.1 Return or Destruction. Upon the earlier of (i) the Disclosing Party's written request, or (ii) the expiration or termination of this Agreement, the Receiving Party shall promptly:

(a) Return to the Disclosing Party all originals and copies of Confidential Information in any form; or

(b) Destroy all originals and copies of Confidential Information using methods appropriate to permanently eliminate the information.

7.2 Certification. Upon request, the Receiving Party shall provide the Disclosing Party with a written certification signed by an authorized officer confirming that all Confidential Information has been returned or destroyed in accordance with this Section.

7.3 Retained Copies. Notwithstanding the foregoing, the Receiving Party may retain (i) one archival copy of Confidential Information solely for compliance, legal, or regulatory purposes, and (ii) any Confidential Information contained in automated electronic backup systems, provided that all retained copies remain subject to the confidentiality obligations of this Agreement for the duration set forth in Article 6.

ARTICLE 8. NO LICENSE OR WARRANTY

8.1 No License. Nothing in this Agreement grants the Receiving Party any license, right, title, or interest in or to the Disclosing Party's Confidential Information, intellectual property, patents, copyrights, trademarks, trade secrets, or other proprietary rights, whether by implication, estoppel, or otherwise.

8.2 No Transaction Warranty. Disclosure under this Agreement does not itself warrant the accuracy, completeness, fitness, or commercial value of information. Any warranties or allocation of loss for a later sale, license, or service transaction must be stated in the agreement governing that transaction.

ARTICLE 9. REMEDIES

9.1 Separate Claims. A breach of this Agreement may support contract remedies under applicable law. It does not, by itself, establish that information is a statutory Trade Secret or that misappropriation occurred. The North Dakota Trade Secrets Act preserves contractual remedies. N.D.C.C. § 47-25.1-07(2)(a).

9.2 Equitable Relief. A Party may request temporary, preliminary, or permanent relief from a court with jurisdiction. The court determines whether the applicable requirements for relief, including any security, are met. Under N.D.C.C. § 47-25.1-02, actual or threatened misappropriation of a Trade Secret may be enjoined, and appropriate affirmative protective acts may be ordered. Under 18 U.S.C. § 1836(b)(3)(A), federal trade-secret injunctions are subject to statutory limits, including North Dakota law restricting restraints on lawful work.

9.3 Trade-Secret Damages. If the facts establish statutory misappropriation of a Trade Secret, N.D.C.C. § 47-25.1-03(1) and, where the federal claim's ownership and interstate-or-foreign-commerce conditions are met, 18 U.S.C. § 1836(b)(1), (3)(B), govern available actual-loss, nonduplicative unjust-enrichment, or reasonable-royalty measures. Damages for breach of this Agreement are separately determined under applicable contract law.

9.4 Exemplary Damages and Fees. A court may award up to twice the applicable statutory damages for willful and malicious trade-secret misappropriation under N.D.C.C. § 47-25.1-03(2) or 18 U.S.C. § 1836(b)(3)(C). Statutory attorney fees require the separate predicates in N.D.C.C. § 47-25.1-04 or 18 U.S.C. § 1836(b)(3)(D), and federal fees and exemplary damages against an employee are subject to the notice rule in 18 U.S.C. § 1833(b)(3)(C). No remedy in this Article is automatic.

9.5 Other Claims. The Parties preserve only claims and remedies available under applicable law. N.D.C.C. § 47-25.1-07 displaces conflicting state civil remedies for trade-secret misappropriation while preserving contractual remedies and other civil remedies not based on that misappropriation.

ARTICLE 10. NO OBLIGATION TO PROCEED

10.1 Nothing in this Agreement shall obligate either Party to: (a) enter into any further agreement; (b) proceed with any business transaction or relationship; (c) disclose any particular Confidential Information; or (d) purchase or license any products, services, or technology.

10.2 Each Party may terminate discussions relating to the Purpose at any time, subject to obligations already accrued under this Agreement or other applicable law.

ARTICLE 11. RESIDUAL KNOWLEDGE

11.1 This Agreement does not restrict information independently developed without use of the Disclosing Party's Confidential Information, as described in Section 4.1(d). General skill or experience retained in unaided memory does not grant permission to disclose or use Confidential Information or to misappropriate a Trade Secret.

11.2 Neither Party shall direct personnel to memorize the other Party's Confidential Information to avoid the duties in this Agreement.

ARTICLE 12. NO WORKER RESTRAINT

12.1 This Agreement protects information; it does not prohibit either Party from hiring or soliciting any employee or independent contractor, or from engaging in a lawful profession, trade, or business. Any proposed worker restraint requires a separate, current-law review under N.D.C.C. § 9-08-06.

ARTICLE 13. GOVERNING LAW

13.1 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of North Dakota, including the North Dakota Uniform Trade Secrets Act, N.D. Cent. Code 47-25.1-01 et seq., without regard to conflicts of law principles that would require application of the laws of another jurisdiction.

13.2 To the extent applicable, claims arising under the Defend Trade Secrets Act, 18 U.S.C. 1836 et seq., shall be governed by federal law.

ARTICLE 14. DISPUTE RESOLUTION

14.1 Discussion. Before filing suit, the Parties may discuss a dispute and may agree to mediation. Discussion or mediation is voluntary and is not a condition to seeking relief in a court with jurisdiction.

14.2 Court and Venue. A Party may bring a claim in a court with subject-matter and personal jurisdiction and proper venue under the law governing that claim. The Parties may identify a preferred North Dakota forum here: [COURT / COUNTY, IF LAWFUL]. This preference does not grant jurisdiction or override a mandatory venue rule.

14.3 Interim Relief. Either Party may seek interim relief from a court with jurisdiction, subject to applicable procedures and proof. This Agreement does not waive court-determined security or establish irreparable harm by declaration.

14.4 Jury Rights. This Agreement makes no advance waiver of jury-trial rights. Any later waiver must be evaluated under the law and procedure governing the particular claim and forum.

ARTICLE 15. GENERAL PROVISIONS

15.1 Assignment. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that either Party may assign this Agreement without consent to a successor in connection with a merger, acquisition, or sale of all or substantially all of its assets. Any attempted assignment in violation of this Section shall be void.

15.2 Severability. If a court holds a provision unenforceable, the remaining provisions remain effective to the extent they can operate independently and applicable law permits. The Parties may amend an invalid provision under Section 15.4; this clause does not direct a court to rewrite it.

15.3 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, relating to such subject matter.

15.4 Amendments. The Parties intend amendments and waivers to be written and signed by authorized representatives of both Parties, subject to N.D.C.C. § 9-09-06 concerning an executed oral agreement.

15.5 Waiver. No failure or delay by either Party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof.

15.6 Notices. All notices under this Agreement shall be in writing and shall be deemed duly given when: (a) delivered personally; (b) sent by certified mail, return receipt requested, postage prepaid; (c) sent by nationally recognized overnight courier; or (d) sent by email with confirmation of receipt, to the addresses set forth above or to such other address as a Party may designate in writing.

15.7 Counterparts and Electronic Signatures. The Parties may sign counterparts. If each Party agrees to conduct this transaction electronically, an electronic record or signature may be used under N.D.C.C. §§ 9-16-04 and 9-16-06, subject to other applicable law. An electronic signature is not denied legal effect solely because it is electronic.

15.8 Independent Contractors. The Parties are independent contractors. Nothing in this Agreement creates a partnership, joint venture, agency, employment, or fiduciary relationship between the Parties.

15.9 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their permitted successors and assigns. Nothing herein confers any rights upon any third party.

15.10 Construction. This Agreement shall be construed without regard to any presumption or rule requiring construction against the Party causing the document to be drafted. Headings are for convenience only and shall not affect interpretation.

ARTICLE 16. DTSA WHISTLEBLOWER NOTICE

IMMUNITY NOTICE UNDER 18 U.S.C. § 1833(b): An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

SIGNATURES

IN WITNESS WHEREOF, the Parties have executed this Mutual Non-Disclosure Agreement as of the Effective Date.

PARTY A:

PARTY B:

PRACTICE NOTES FOR NORTH DAKOTA COUNSEL

1. ND Uniform Trade Secrets Act (N.D. Cent. Code 47-25.1-01 et seq.). North Dakota adopted the Uniform Trade Secrets Act at N.D. Cent. Code Chapter 47-25.1. The definition of "trade secret" tracks the standard UTSA definition, covering formulas, patterns, compilations, programs, devices, methods, techniques, and processes.

2. Statute of Limitations. Under N.D. Cent. Code 47-25.1-06, a cause of action for misappropriation must be brought within three (3) years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.

3. Exemplary Damages. N.D.C.C. § 47-25.1-03(2) permits, but does not require, exemplary damages of up to twice the subsection 1 award, including its reasonable-royalty alternative, if misappropriation was willful and malicious.

4. Attorneys' Fees. N.D. Cent. Code 47-25.1-04 permits the court to award reasonable attorneys' fees if a claim is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists.

5. Worker Restraints. N.D.C.C. § 9-08-06 makes a contract restraining a lawful profession, trade, or business void to that extent, with specified goodwill-sale and ownership-transaction exceptions. This NDA contains no hiring or solicitation restraint; assess any proposed separate covenant against the actual statutory exception and current law.

6. DTSA Whistleblower Notice. Under 18 U.S.C. § 1833(b)(3), an employer must provide immunity notice in an agreement with an employee that governs trade-secret or other confidential-information use; an individual contractor or consultant is included. Noncompliance bars that employer's DTSA exemplary damages and attorney fees in an action against an employee who was not given notice. A business-to-business NDA alone does not trigger the employer notice duty.

7. Preservation of Secrecy. N.D. Cent. Code 47-25.1-05 allows courts to take protective measures to preserve the secrecy of trade secrets during litigation, including granting protective orders and conducting proceedings in camera.

8. Electronic Signatures. N.D.C.C. § 9-16-04(2) requires each party's agreement to transact electronically; § 9-16-06 prevents denial of effect solely because a record or signature is electronic.

SOURCES AND REFERENCES

• N.D. Cent. Code 47-25.1-01 through 47-25.1-08 (North Dakota Uniform Trade Secrets Act)
• N.D. Cent. Code 9-08-06 (Non-Compete Restrictions)
• N.D.C.C. § 9-09-06 (Written-Contract Alteration)
• 18 U.S.C. 1836 et seq. (Defend Trade Secrets Act of 2016)
• 18 U.S.C. 1833(b) (Whistleblower Immunity)
• 18 U.S.C. 1839 (Definitions)
• N.D.C.C. §§ 9-16-04 and 9-16-06 (Electronic Transactions)