TRADE SECRET PROTECTION AGREEMENT

(Texas – TUTSA-Compliant)

[// GUIDANCE: This template is drafted as a unilateral disclosure agreement (the Recipient receives the Trade Secrets). If the arrangement is mutual, mirror-image provisions should be inserted for the Disclosing Party where marked.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

Article and section numbers appear in the body for convenient cross-reference.

1. DOCUMENT HEADER

1.1 Parties. This Trade Secret Protection Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [DISCLOSING PARTY LEGAL NAME], a [STATE] [ENTITY TYPE] having its principal place of business at [ADDRESS] (“Disclosing Party”); and
• [RECIPIENT LEGAL NAME], a [STATE] [ENTITY TYPE] having its principal place of business at [ADDRESS] (“Recipient”).

Disclosing Party and Recipient are each a “Party,” and together the “Parties.”

1.2 Recitals.
A. Disclosing Party possesses valuable trade secrets and related proprietary information concerning [HIGH-LEVEL SUBJECT MATTER] (collectively, the “Technology”).
B. Disclosing Party desires to disclose certain Trade Secrets (defined below) to Recipient solely for the purpose of [DESCRIBE PURPOSE — e.g., “evaluating a potential commercial relationship regarding the Technology”] (the “Purpose”).
C. Recipient acknowledges that unauthorized use or disclosure of Trade Secrets will cause irreparable harm to Disclosing Party and agrees to safeguard such information in accordance with this Agreement and the Texas Uniform Trade Secrets Act, Tex. Civ. Prac. & Rem. Code Ann. §§ 134A.001 et seq. (the “TUTSA”).

2. DEFINITIONS

For ease of reference, all defined terms appear in alphabetical order.

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 that Party. “Control” means the direct or indirect ownership of more than fifty percent (50%) of the voting interests of an entity or the ability to otherwise direct its management and policies.

2.2 “Authorized Representative” means an officer, director, employee, attorney, accountant, or consultant of Recipient (or its Affiliate) who (a) has a demonstrable need to know a Trade Secret for the Purpose and (b) is bound by written confidentiality obligations at least as protective as those contained herein.

2.3 “Confidential Information” means all non-public information disclosed by Disclosing Party to Recipient (whether oral, visual, in writing, electronically, or otherwise) that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of its disclosure, including all analyses, summaries, and derivatives thereof.

[// GUIDANCE: While the primary objective is Trade Secret protection, practitioners often retain a broader “Confidential Information” basket to catch information that may not meet the statutory definition of a Trade Secret.]

2.4 “Misappropriation” has the meaning assigned in TUTSA § 134A.002(3).

2.5 “Trade Secret.” As provided in TUTSA § 134A.002(6), information, including a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customers or suppliers, that:
i. 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
ii. is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

2.6 “Termination Date” means the earlier of (i) the date on which the Parties enter into a superseding definitive agreement covering the same subject matter; or (ii) [X] years after the Effective Date, unless earlier terminated pursuant to Section 5.3. Obligations relating to Trade Secrets survive indefinitely per Section 5.4.

3. OPERATIVE PROVISIONS

3.1 Grant of Limited Right. Subject to the terms of this Agreement, Disclosing Party may, in its sole discretion, disclose Trade Secrets to Recipient exclusively for the Purpose. No license or other rights, express or implied, are granted under any patent, copyright, trademark, or other intellectual-property right of Disclosing Party, except the limited, revocable right to evaluate the Trade Secrets for the Purpose.

3.2 Standard of Care. Recipient shall:
a. protect Trade Secrets with at least the same degree of care it uses to protect its own highly confidential information, and in no event less than a commercially reasonable degree of care;
b. restrict disclosure of Trade Secrets solely to Authorized Representatives;
c. advise all Authorized Representatives of the confidential nature of the Trade Secrets and the obligations set forth herein; and
d. be liable for any breach of this Agreement by its Authorized Representatives.

3.3 Use Restrictions. Recipient shall use Trade Secrets only to accomplish the Purpose and for no other purpose, including reverse engineering, de-compiling, or otherwise exploiting the Trade Secrets for Recipient’s own or any third party’s benefit.

3.4 Mandatory Notice of Misappropriation. Recipient shall promptly (and in any event within forty-eight (48) hours) notify Disclosing Party in writing of any actual or threatened Misappropriation or unauthorized disclosure of Trade Secrets.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each Party represents that it has full power and authority to enter into and perform its obligations under this Agreement.

4.2 Disclosing Party Warranty. Disclosing Party represents that it has the right to disclose the Trade Secrets to Recipient for the Purpose.

4.3 Recipient Warranty. Recipient represents that neither it nor any Authorized Representative is subject to any existing contractual or statutory obligation that conflicts with this Agreement.

4.4 Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, DISCLOSING PARTY MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR RESULTS OBTAINED FROM USE OF ANY TRADE SECRET.

4.5 Survival. The representations and warranties in this Article 4 survive for the longer of (a) three (3) years after the Effective Date or (b) the statutory limitation period for claims arising from their breach.

5. COVENANTS & RESTRICTIONS

5.1 Return or Destruction. Upon the earlier of (i) Disclosing Party’s written request or (ii) the Termination Date, Recipient shall, at Disclosing Party’s option, promptly return or destroy all tangible embodiments of the Trade Secrets, including all copies, notes, summaries, and derivatives. Recipient shall certify compliance in writing within ten (10) days.

5.2 Equitable Marking; Password Protection. Recipient shall not remove or obscure any proprietary, confidential, or copyright notices and shall implement and enforce password protection and physical access controls commensurate with the sensitivity of the Trade Secrets.

5.3 Early Termination. Disclosing Party may terminate this Agreement immediately upon written notice if Recipient breaches any material term; otherwise either Party may terminate on thirty (30) days’ written notice.

5.4 Survival of Protection Obligations. Recipient’s obligations with respect to Trade Secrets survive termination of this Agreement for so long as such information meets the definition of a Trade Secret under applicable law or until such information enters the public domain through no fault of Recipient, whichever is later.

6. DEFAULT & REMEDIES

6.1 Events of Default. Each of the following constitutes a default:
a. Misappropriation or threatened Misappropriation of any Trade Secret;
b. Unauthorized disclosure in violation of Section 3.2 or 3.3;
c. Failure to comply with any obligation in Section 5 within the specified cure period (if any).

6.2 Notice & Cure. Upon written notice of default, Recipient has five (5) calendar days to cure, except no cure period applies to deliberate Misappropriation.

6.3 Injunctive Relief. The Parties stipulate that a breach of this Agreement will cause irreparable harm not fully compensable in money damages, and that Disclosing Party is entitled to immediate injunctive relief under TUTSA § 134A.003 without posting bond to restrain any actual or threatened breach, in addition to all other remedies available at law or equity.

6.4 Monetary Damages. Disclosing Party may recover:
a. actual damages and disgorgement of unjust enrichment under TUTSA § 134A.004; and
b. exemplary damages up to two (2) times actual damages for willful and malicious Misappropriation, as permitted by TUTSA § 134A.004(b).

6.5 Attorney’s Fees. The prevailing Party in any action to enforce this Agreement is entitled to recover reasonable attorney’s fees and costs, consistent with TUTSA § 134A.005.

7. RISK ALLOCATION

7.1 Indemnification by Recipient. Recipient shall defend, indemnify, and hold harmless Disclosing Party, its Affiliates, and their respective officers, directors, employees, and agents (collectively, “Indemnitees”) from and against any losses, damages, liabilities, claims, fines, penalties, or expenses (including reasonable attorney’s fees and expert fees) arising out of or relating to (a) Recipient’s breach of this Agreement, or (b) any Misappropriation or unauthorized use of Trade Secrets by Recipient or its Authorized Representatives.

[// GUIDANCE: Recipient’s indemnity duty can be expanded or narrowed depending on deal leverage.]

7.2 No Limitation of Liability. The Parties acknowledge and agree that no cap or limitation of liability applies to Recipient’s breach of this Agreement or to claims for Misappropriation.

7.3 Insurance. Recipient shall maintain commercially reasonable cyber-liability and general liability insurance covering claims contemplated in Section 7.1, with minimum limits of [AMOUNT] per occurrence and aggregate, and shall furnish certificates upon request.

7.4 Force Majeure. Neither Party is liable for delays or failure in performance (other than payment or confidentiality obligations) caused by acts beyond its reasonable control, including acts of God, epidemic, war, or governmental action, provided that the affected Party provides prompt written notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement and any dispute arising hereunder are governed by and construed in accordance with the domestic laws of the State of Texas, without regard to its conflict-of-laws rules.

8.2 Forum Selection. Subject to Section 8.3, the state courts located in [COUNTY], Texas shall have exclusive jurisdiction and venue over any suit, action, or proceeding arising out of or relating to this Agreement.

8.3 Arbitration. Except for actions seeking injunctive relief under Section 6.3, any dispute, claim, or controversy arising out of or relating to this Agreement shall be finally resolved by confidential arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules in effect at the time the claim is filed. The arbitration shall take place in [CITY], Texas, before a single arbitrator with at least ten (10) years of experience in trade-secret matters. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Jury Trial Waiver. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.

8.5 Specific Performance Reserved. Nothing in this Article 8 limits Disclosing Party’s right to seek injunctive relief or other equitable remedies in accordance with Article 6.

9. GENERAL PROVISIONS

9.1 Amendment & Waiver. No amendment or waiver of any provision of this Agreement is effective unless it is in writing and signed by both Parties. A failure to enforce any provision is not a waiver of future enforcement.

9.2 Assignment. Recipient may not assign or delegate any of its rights or obligations under this Agreement, whether by operation of law or otherwise, without Disclosing Party’s prior written consent. Any unauthorized assignment is void. This Agreement binds and inures to the benefit of the Parties and their permitted successors and assigns.

9.3 Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of the Agreement remains in full force, and the invalid provision is deemed modified to the limited extent necessary to make it enforceable while preserving the Parties’ intent.

9.4 Entire Agreement. This Agreement constitutes the entire agreement between the Parties concerning its subject matter and supersedes all prior and contemporaneous oral or written understandings relating thereto.

9.5 Counterparts & Electronic Signatures. This Agreement may be executed in counterparts (including via electronic signature and PDF), each of which is deemed an original, and all of which together constitute one and the same instrument.

9.6 Notice. All notices under this Agreement must be in writing and delivered by (i) personal delivery; (ii) nationally recognized overnight courier; or (iii) certified U.S. mail, return receipt requested, to the addresses first set forth above (or such other address a Party may designate by notice). Notice is deemed given on actual receipt.

10. EXECUTION BLOCK

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

[// GUIDANCE: Notarization is not generally required for a trade secret agreement under Texas law, but include if company policy demands. If the Parties are entities, attach a secretary’s certificate or board resolution if corporate authority needs to be evidenced.]