PENNSYLVANIA TRADE SECRET AND CONFIDENTIALITY AGREEMENT
Template for Attorney Customization
[// GUIDANCE: This template is intentionally comprehensive. Omit or tailor provisions to suit the transaction size, industry, and bargaining leverage of the parties.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
Trade Secret and Confidentiality Agreement (this “Agreement”) made effective as of [EFFECTIVE DATE] (the “Effective Date”), by and between:
- [DISCLOSING PARTY LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE], with its principal place of business at [ADDRESS] (“Disclosing Party”); and
- [RECIPIENT PARTY LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE], with its principal place of business at [ADDRESS] (“Recipient”).
The Disclosing Party and Recipient are sometimes referred to individually as a “Party” and collectively as the “Parties.”
Recitals
A. Disclosing Party possesses certain proprietary information and trade secrets (as defined herein) and desires to protect such information from unauthorized disclosure or use.
B. Recipient desires to receive such information for the limited purpose of [DESCRIPTION OF TRANSACTION/PROJECT] and agrees to be bound by the terms and conditions set forth herein.
C. Adequate consideration for this Agreement includes the exchange of Confidential Information (defined below), access to business opportunities, and other valuable consideration, the receipt and sufficiency of which are acknowledged.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the Parties agree as follows:
2. DEFINITIONS
[// GUIDANCE: Insert or delete defined terms to match the facts of the deal.]
2.1 “Affiliate” means, with respect to a Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party.
2.2 “Confidential Information” means all non-public information disclosed by the Disclosing Party to Recipient, whether oral, visual, written, electronic, or in any other form, including but not limited to business plans, financial data, customer lists, product specifications, software, inventions, techniques, processes, and Trade Secrets, whether or not marked or designated as confidential at the time of disclosure.
2.3 “Improper Means” has the meaning set forth in 12 Pa. Cons. Stat. § 5302.
2.4 “Misappropriation” has the meaning set forth in 12 Pa. Cons. Stat. § 5302 and includes, without limitation, acquisition, disclosure, or use of a Trade Secret by Improper Means.
2.5 “Permitted Recipient” means Recipient’s directors, officers, employees, agents, advisors, and Affiliates who (a) have a legitimate need to know the Confidential Information for the Purpose, and (b) are bound by confidentiality obligations no less restrictive than those contained herein.
2.6 “Purpose” means Recipient’s evaluation of and participation in [DESCRIBE PURPOSE/TRANSACTION].
2.7 “Trade Secret” means information, including a formula, drawing, pattern, compilation, program, device, method, technique, or process, that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, consistent with 12 Pa. Cons. Stat. § 5302.
Additional capitalized terms are defined contextually herein.
3. OPERATIVE PROVISIONS
3.1 Grant of Access. Disclosing Party hereby grants Recipient and its Permitted Recipients access to Confidential Information solely for the Purpose and subject to the restrictions of this Agreement.
3.2 Use and Care. Recipient shall:
a. Use Confidential Information exclusively for the Purpose;
b. Protect Confidential Information with at least the same degree of care that Recipient uses to protect its own similar information, but in no event less than reasonable care;
c. Limit disclosure of Confidential Information to Permitted Recipients;
d. Ensure each Permitted Recipient complies with this Agreement; and
e. Promptly notify Disclosing Party of any actual or suspected Misappropriation or unauthorized disclosure.
3.3 Exclusions. Confidential Information does not include information that Recipient can demonstrate by contemporaneous written records:
a. Is or becomes publicly available through no breach of this Agreement;
b. Is lawfully obtained from a third party without breach of any obligation of confidentiality;
c. Is independently developed by Recipient without use of or reference to Confidential Information; or
d. Is approved in writing for release by Disclosing Party.
3.4 Compelled Disclosure. If Recipient is required by law or court order to disclose Confidential Information, Recipient shall (unless prohibited) provide Disclosing Party with prompt written notice to permit Disclosing Party to seek a protective order. Recipient shall disclose only that portion of Confidential Information legally required and shall exercise reasonable efforts to obtain confidential treatment of the disclosed information.
3.5 Return/Destruction. Upon the earlier of (a) completion of the Purpose, (b) termination of discussions, or (c) written request of Disclosing Party, Recipient shall promptly return or destroy all Confidential Information, including copies, and certify in writing such destruction, except that Recipient may retain one archival copy solely for compliance purposes.
3.6 Term. The confidentiality and non-use obligations under this Agreement shall continue for [____] years from the Effective Date, except that obligations with respect to Trade Secrets shall survive for so long as such information remains a Trade Secret under applicable law.
4. REPRESENTATIONS & WARRANTIES
4.1 Authority. Each Party represents that it has full power and authority to enter into and perform this Agreement.
4.2 No Conflicting Obligations. Recipient represents that its performance of this Agreement will not violate any other agreement to which it is a party.
4.3 Ownership. Disclosing Party represents that it has the right to disclose the Confidential Information for the Purpose.
4.4 Disclaimer. Confidential Information is provided “AS IS” without warranty of any kind, express or implied, including but not limited to warranties of accuracy, completeness, or fitness for a particular purpose.
4.5 Survival. The representations and warranties herein shall survive for the term of this Agreement and any extension thereof.
5. COVENANTS & RESTRICTIONS
5.1 Non-Circumvention. Recipient shall not, directly or indirectly, circumvent the Disclosing Party in connection with the Purpose and shall not exploit business opportunities learned solely from the Confidential Information without Disclosing Party’s prior written consent.
5.2 Compliance with Law. Each Party shall comply with all applicable laws, rules, and regulations, including U.S. export control laws, in connection with the receipt, use, or disclosure of Confidential Information.
5.3 Notice of Breach. Recipient shall promptly notify Disclosing Party of any breach or threatened breach of this Agreement and cooperate in any reasonable remedial action requested by Disclosing Party.
5.4 Audit Rights. Upon reasonable notice and during normal business hours, Disclosing Party may audit Recipient’s compliance with this Agreement; provided that such audit shall not unreasonably disrupt Recipient’s business operations.
6. DEFAULT & REMEDIES
6.1 Events of Default. Any Misappropriation, unauthorized disclosure, or material breach of this Agreement by Recipient constitutes an “Event of Default.”
6.2 Notice & Cure. Disclosing Party shall provide written notice of the Event of Default. Recipient shall have [10] days to cure any remediable breach; provided, however, that Misappropriation of a Trade Secret shall be deemed incurable.
6.3 Injunctive Relief. Recipient acknowledges that money damages would be an inadequate remedy for breach and agrees that Disclosing Party shall be entitled to immediate injunctive relief (temporary, preliminary, and/or permanent) and specific performance without the necessity of posting bond or proving actual damages.
6.4 Damages. In addition to injunctive relief, Disclosing Party may recover actual damages, unjust enrichment, exemplary damages in cases of willful and malicious Misappropriation, and reasonable attorneys’ fees pursuant to 12 Pa. Cons. Stat. § 5304 & § 5305.
6.5 Attorneys’ Fees & Costs. The prevailing Party in any action arising out of or relating to this Agreement shall be entitled to recover its reasonable attorneys’ fees and costs.
7. RISK ALLOCATION
7.1 Indemnification by Recipient. Recipient shall defend, indemnify, and hold harmless Disclosing Party and its Affiliates, and their respective directors, officers, employees, and agents (collectively, “Indemnitees”) from and against any and all losses, damages, liabilities, judgments, awards, penalties, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to Recipient’s (a) breach of this Agreement, (b) Misappropriation, or (c) violation of applicable law.
[// GUIDANCE: Consider supplemental insurance requirements where appropriate.]
7.2 No Limitation of Liability. The Parties agree that no limitation of liability (including caps, exclusions, or waivers of consequential damages) shall apply to claims arising under this Agreement.
7.3 Force Majeure. Neither Party shall be liable for failure to perform its non-monetary obligations under this Agreement to the extent such failure is caused by events beyond its reasonable control (e.g., natural disasters, war, terrorism, governmental action). The affected Party shall promptly notify the other and use commercially reasonable efforts to resume performance.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement, and any dispute arising hereunder, shall be governed by and construed in accordance with the internal laws of the Commonwealth of Pennsylvania, without regard to its conflict-of-law principles.
8.2 Forum Selection. Subject to Section 8.3 (Arbitration), the Parties consent to exclusive jurisdiction and venue in the Pennsylvania state courts sitting in [COUNTY], and waive any objection to such forum.
8.3 Arbitration. Except for equitable relief sought under Section 6.3, any controversy or claim arising out of or relating to this Agreement shall be resolved by binding arbitration administered by the [NAME OF ARBITRATION PROVIDER] in accordance with its commercial rules. The arbitration shall take place in [CITY, PA], before a single neutral arbitrator. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Trial Waiver. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
8.5 Interim Relief. Notwithstanding the foregoing, either Party may seek interim equitable relief (including restraining orders and injunctions) from any court of competent jurisdiction to prevent imminent, irreparable harm, without waiving its right to arbitrate.
9. GENERAL PROVISIONS
9.1 Amendment & Waiver. No amendment of this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties. No waiver shall be deemed a waiver of any subsequent breach.
9.2 Assignment. Recipient may not assign or delegate any of its rights or obligations under this Agreement without Disclosing Party’s prior written consent. Any attempted assignment in violation of the foregoing shall be null and void.
9.3 Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
9.4 Severability. If any provision of this Agreement is held invalid or unenforceable, such provision shall be construed to reflect the Parties’ original intent as nearly as possible, and the remaining provisions shall remain in full force and effect.
9.5 Entire Agreement. This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements, whether written or oral.
9.6 Counterparts. This Agreement may be executed in any number of counterparts (including via electronic signature or PDF), each of which shall be deemed an original and all of which together shall constitute one instrument.
9.7 Notice. All notices required or permitted under this Agreement shall be in writing and shall be deemed given (a) when delivered personally, (b) one business day after being sent by nationally recognized overnight courier, or (c) three business days after deposit in certified U.S. mail, return receipt requested, to the addresses set forth above (or such other address as a Party may designate by notice).
9.8 Construction. The headings used herein are for convenience only and shall not affect interpretation. The words “include,” “includes,” and “including” shall be deemed to be followed by “without limitation.”
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Trade Secret and Confidentiality Agreement as of the Effective Date.
| Disclosing Party | Recipient |
|---|---|
| [DISCLOSING PARTY NAME] | [RECIPIENT PARTY NAME] |
| By: _________ | By: _________ |
| Name: _______ | Name: _______ |
| Title: _______ | Title: _______ |
| Date: ________ | Date: ________ |
[Optional Notary Acknowledgments and/or Witness Blocks]
[// GUIDANCE: Verify whether notarization or witness signatures are required for enforceability under specific circumstances (e.g., when attached to real estate transactions or certain state-law requirements).]
END OF DOCUMENT