TRADE SECRET NON-DISCLOSURE, LIMITED USE, AND REMEDIES AGREEMENT

(Tennessee – Uniform Trade Secrets Act Compliant)

[// GUIDANCE: This template is drafted for Tennessee transactions and incorporates the Tennessee Uniform Trade Secrets Act (“TUTSA”), Tenn. Code Ann. §§ 47-25-1701–1709 (2023). Delete or modify statutory references if this Agreement will govern outside Tennessee.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Purpose; Scope of Disclosure
4. Non-Disclosure & Restricted Use Obligations
5. Exclusions from Obligation
6. Standard of Care; Security Measures
7. Ownership; No License
8. Return or Destruction of Materials
9. Representations & Warranties
10. Covenants & Compliance
11. Term and Termination
12. Default & Remedies
13. Risk Allocation
14. Dispute Resolution
15. General Provisions
16. Execution Block

[// GUIDANCE: Update section numbers automatically if you add or remove provisions.]

1. DOCUMENT HEADER

TRADE SECRET NON-DISCLOSURE, LIMITED USE, AND REMEDIES AGREEMENT (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

(a) [DISCLOSING PARTY LEGAL NAME], a [jurisdiction & entity type] with principal place of business at [ADDRESS] (“Discloser”); and

(b) [RECIPIENT LEGAL NAME], a [jurisdiction & entity type] with principal place of business at [ADDRESS] (“Recipient”).

Discloser possesses valuable Trade Secrets (as defined below) and other Confidential Information. Recipient desires to receive certain of those Trade Secrets solely for the Purpose (defined below) and agrees to protect them in strict accordance with this Agreement, applicable law, and specifically the Tennessee Uniform Trade Secrets Act, Tenn. Code Ann. §§ 47-25-1701 et seq. (the “TUTSA”).

Consideration. The mutual promises herein, including Recipient’s obligations of non-disclosure and limited use and Discloser’s provision of access to its Trade Secrets, constitute good and valuable consideration, the receipt and sufficiency of which are acknowledged.

2. DEFINITIONS

Capitalized terms have the meanings assigned below. Terms defined by statute (e.g., “Trade Secret,” “Misappropriation”) shall be construed consistently with the TUTSA unless expressly modified.

2.1 “Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with a party.

2.2 “Confidential Information” means any non-public information disclosed by Discloser to Recipient that is marked or identified as confidential or that a reasonable person would understand to be confidential given the nature of the information and the circumstances of disclosure. Confidential Information includes Trade Secrets but is broader in scope.

2.3 “Purpose” means [BRIEF DESCRIPTION OF PERMITTED BUSINESS PURPOSE].

2.4 “Representative” means, with respect to a party, that party’s and its Affiliates’ directors, officers, employees, agents, subcontractors, and professional advisers who have a strict need to know the Confidential Information for the Purpose and who are bound by written obligations at least as protective as those contained in this Agreement.

2.5 “Trade Secret” has the meaning set forth in Tenn. Code Ann. § 47-25-1702(4) (2023), namely: information, including but not limited to technical, financial, or business data, that (i) derives independent economic value from not being generally known or readily ascertainable by proper means by others who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

2.6 “Misappropriation” has the meaning set forth in Tenn. Code Ann. § 47-25-1702(2) (2023).

[// GUIDANCE: Insert any additional defined terms alphabetically.]

3. PURPOSE; SCOPE OF DISCLOSURE

3.1 Limited License. Discloser grants Recipient a non-exclusive, non-transferable, revocable, royalty-free license to use the Confidential Information solely for the Purpose and strictly in accordance with this Agreement. No other rights are granted by implication, estoppel, or otherwise.

3.2 Scope. Discloser may, at its sole discretion, disclose Confidential Information in written, oral, electronic, or any other form. Recipient acknowledges that Discloser is under no obligation to disclose any particular information.

4. NON-DISCLOSURE & RESTRICTED USE OBLIGATIONS

4.1 Non-Disclosure. Recipient shall hold all Confidential Information in strict confidence and shall not, without Discloser’s prior written consent, disclose any Confidential Information to any person other than its Representatives who: (a) have been informed of the confidential nature of the Confidential Information; and (b) are bound to maintain its confidentiality.

4.2 Restricted Use. Recipient shall use the Confidential Information solely for the Purpose and shall not (a) reverse-engineer, disassemble, or decompile any tangible embodiments, (b) create derivative works, or (c) use the Confidential Information to compete with or otherwise disadvantage Discloser.

4.3 Care Standard. Recipient shall protect the Confidential Information using at least the same degree of care it uses to protect its own information of like importance, but in no event less than a commercially reasonable standard of care.

5. EXCLUSIONS FROM OBLIGATION

The obligations in Article 4 do not apply to information that Recipient can demonstrate by contemporaneous documentary evidence:
a. is or becomes public through no breach of this Agreement;
b. is already lawfully known to Recipient without obligation of confidentiality at the time of disclosure;
c. is lawfully obtained by Recipient from a third party without breach of any obligation to Discloser; or
d. is independently developed by Recipient without reference to or use of Discloser’s Confidential Information.

6. STANDARD OF CARE; SECURITY MEASURES

6.1 Protective Measures. Recipient shall implement and maintain appropriate administrative, technical, and physical safeguards to protect Confidential Information, including but not limited to: (a) access controls limited to Representatives with a need to know; (b) encrypted storage and transmission; and (c) secure disposal methods.

6.2 Notification of Breach. Recipient shall notify Discloser in writing within [NUMBER] hours of discovering any actual or suspected unauthorized access, use, or disclosure of Confidential Information and shall cooperate fully with Discloser’s efforts to mitigate harm.

7. OWNERSHIP; NO LICENSE

All Confidential Information and all intellectual property rights therein remain the exclusive property of Discloser. Nothing herein shall be construed as granting Recipient any ownership interest or license under any patent, trademark, copyright, or other intellectual property right except the limited rights expressly set forth in Section 3.1.

8. RETURN OR DESTRUCTION OF MATERIALS

Upon the earlier of (a) Discloser’s written request, or (b) termination or expiration of this Agreement, Recipient shall promptly (i) return or, at Discloser’s written election, destroy all tangible and electronic embodiments of Confidential Information, and (ii) provide Discloser with a written certification of compliance signed by an authorized officer.

9. REPRESENTATIONS & WARRANTIES

9.1 Mutual Authority. Each party represents that it has full power and authority to enter into and perform this Agreement.

9.2 Disclaimer of Warranty. All Confidential Information is provided “AS IS.” Discloser makes no representations or warranties, express or implied, regarding the accuracy or completeness of the Confidential Information, or its fitness for a particular purpose, and expressly disclaims all implied warranties of merchantability, fitness, and non-infringement.

[// GUIDANCE: If industry-specific warranties are required (e.g., healthcare, defense), insert here.]

10. COVENANTS & COMPLIANCE

10.1 Compliance with Law. Recipient shall comply with all applicable federal, state, and local laws—including export control laws—when using or transferring the Confidential Information.

10.2 No Circumvention. Recipient shall not circumvent Discloser by directly or indirectly contacting any customer, supplier, or employee identified through the Confidential Information, except as expressly permitted in writing by Discloser.

11. TERM AND TERMINATION

11.1 Term. This Agreement commences on the Effective Date and continues for [TERM, e.g., THREE (3) YEARS] unless earlier terminated under Section 11.2. The confidentiality and use obligations with respect to Trade Secrets survive for so long as such information remains a Trade Secret under applicable law; obligations regarding other Confidential Information survive for [SURVIVAL PERIOD, e.g., FIVE (5) YEARS] from disclosure.

11.2 Termination for Convenience. Either party may terminate this Agreement upon [NUMBER] days’ prior written notice.

11.3 Continuing Obligations. Termination does not relieve Recipient of obligations accruing prior to termination, including return or destruction of Confidential Information.

12. DEFAULT & REMEDIES

12.1 Events of Default. Recipient is in default if it: (a) breaches Article 4 or 6; (b) fails to cure any other material breach within [30] days after receiving written notice; or (c) becomes insolvent or enters bankruptcy.

12.2 Injunctive Relief (Mandatory). Recipient acknowledges that Misappropriation or threatened Misappropriation would cause irreparable harm to Discloser for which monetary damages may be inadequate. Pursuant to Tenn. Code Ann. § 47-25-1703 (2023), Discloser is entitled to temporary, preliminary, and permanent injunctive relief without the necessity of posting bond (or, where bond is required, Recipient stipulates that $100 is a reasonable bond amount).

12.3 Monetary Damages. Discloser may seek damages including actual loss and unjust enrichment or, in the alternative, a reasonable royalty, consistent with Tenn. Code Ann. § 47-25-1704 (2023). If the Misappropriation is willful and malicious, Discloser may recover exemplary damages up to twice the compensatory damages.

12.4 Attorney’s Fees. The prevailing party in any action to enforce this Agreement is entitled to recover its reasonable attorney’s fees and costs pursuant to Tenn. Code Ann. § 47-25-1705 (2023).

12.5 Accounting. Recipient shall account for and pay over to Discloser all profits realized as a result of any unauthorized use of the Confidential Information.

13. RISK ALLOCATION

13.1 Indemnification by Recipient. Recipient shall indemnify, defend, and hold harmless Discloser and its Affiliates, and their respective directors, officers, employees, and agents, from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorney’s fees) arising out of or relating to (a) any breach by Recipient or its Representatives of this Agreement, or (b) any Misappropriation or unauthorized use or disclosure of Confidential Information.

[// GUIDANCE: Parties have elected “no_cap” on liability; consequently, no limitation-of-liability clause appears. Insert insurance requirements here if desired.]

13.2 Insurance. Recipient shall maintain, at its own expense, commercially reasonable cyber liability and general liability insurance naming Discloser as an additional insured, with minimum limits of [AMOUNT] per occurrence and [AMOUNT] aggregate. Upon request, Recipient shall furnish certificates of insurance evidencing such coverage.

14. DISPUTE RESOLUTION

14.1 Governing Law. This Agreement and any non-arbitrable dispute are governed by, and construed in accordance with, the laws of the State of Tennessee, without regard to its conflict-of-laws rules.

14.2 Forum Selection. Subject to Section 14.3, the state courts located in [COUNTY], Tennessee (and, if jurisdiction exists, the federal courts located in the same county) shall have exclusive jurisdiction, and each party irrevocably submits to such courts.

14.3 Arbitration (Preferred). Any dispute, claim, or controversy arising out of or relating to this Agreement, other than a request for injunctive relief under Section 12.2, shall be resolved by binding arbitration administered by the [American Arbitration Association / JAMS] under its [Commercial Arbitration Rules]. The arbitration shall take place in [CITY, Tennessee], before a single arbitrator knowledgeable in trade secret law. Judgment on the award may be entered in any court of competent jurisdiction.

14.4 Jury Trial Waiver. TO THE EXTENT ANY DISPUTE IS NOT SUBJECT TO ARBITRATION, EACH PARTY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.

14.5 Equitable Relief Carve-Out. Notwithstanding Section 14.3, either party may seek injunctive or other equitable relief in the courts specified in Section 14.2 to prevent actual or threatened breach of this Agreement.

15. GENERAL PROVISIONS

15.1 Amendment; Waiver. No amendment or waiver of any provision is effective unless in writing signed by authorized representatives of both parties. Waiver of any breach does not constitute waiver of any other breach.

15.2 Assignment. Recipient may not assign or delegate any right or duty under this Agreement without Discloser’s prior written consent, except to a successor in connection with a merger or sale of substantially all assets, provided that the successor agrees in writing to be bound. Any assignment in violation of this Section is void.

15.3 Successors and Assigns. This Agreement binds and benefits the parties and their permitted successors and assigns.

15.4 Severability; Reformation. If any provision is held invalid or unenforceable, the remaining provisions remain in full force. The parties intend that any invalid provision be reformed to the minimum extent necessary to make it valid and enforceable.

15.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior or contemporaneous agreements, understandings, and communications.

15.6 Counterparts; Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically (e.g., PDF, DocuSign) are binding.

15.7 Headings. Headings are for reference only and do not affect interpretation.

15.8 No Publicity. Recipient shall not issue any press release or public announcement regarding the existence or content of this Agreement without Discloser’s prior written consent.

16. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

[Optional Notary Acknowledgment – Tennessee]
State of Tennessee, County of [__]
On this ___ day of _, 20_, before me, a Notary Public, personally appeared ___, known to me (or proved to me) to be the person(s) whose name(s) is/are subscribed to the foregoing instrument and acknowledged that he/she/they executed the same.
Notary Public __
My Commission Expires: ___

[// GUIDANCE:
1. Customize placeholders (e.g., Purpose, Term, Cure Periods, County).
2. Review insurance limits with risk management.
3. Consider export controls for cross-border disclosures.
4. Remove notary block if not required.
5. Verify AAA/JAMS rules selection and any institutional fee-shifting.]