Legal Question in Business Law in New York

Re: Disclosing a Confidential Agreement to the Buyer of my Business

Have the purchaser sign a confidentiality agreement that refers to your confidentiality agreement. Furthermore, make sure you comply with any notice provisions in your present agreement.

Mike.

Re: Disclosing a Confidential Agreement to the Buyer of my Business

Properly negotiated confidentiality agreements commonly contain exceptions or "carve-outs" (identifying categories of parties with whom you may share the confidential information) and limitation on term which may permit you to disclose the information to your buyer. Short of that, if practicable, you may want to consider going back to the original disclosing party for consent. Failing that, the least attractive option is to disclose the information to the buyer pursuant to a confidentiality agreement with you that would be substantially similar to the one you signed. Technically, however, that may not prevent you from being in breach of the original confidentiality agreement if it is completely inflexible. Contact your attorney for advice.

The above reply is in the nature of general information, is not legal advice and should not be relied on as such.

Re: Disclosing a Confidential Agreement to the Buyer of my Business

I agree with both Mr. Markowitz and Mr. Frenkel, to which I would add (i) is the confidentiality agreement singed by you or by the company you are selling and (ii) if there is no carve out for disclosure in this case, I would (a) seek a waiver from the party to the disclosure agreement (per Mr. Frenkel) and (b) explain to the potential purchaser that you are subject to disclosure agreements, the existence of which you are prohibited from disclosing, and whether or not such agreement is actually material to the proposed transaction. If the agreement is between the company and the counter-parter, rather than between yourself and the counter-party, the buyer upon closing the purchase will step into the shoes of the company, at which time the buyer will be able to know about the agreement and be subject to its terms. I would also recommend having an attorney review the purchase agreement, to review any potential post closing exposure you may have for contingent liabilities, and to have them properly qualified and limited both with respect to the length of the term and value of the exposure. If you need any further advice in connection with you transaction, I would recommend your getting into contact with Mr. Markowitz, Mr. Frenkel or myself. I can be reached at [email protected] and by phone in the US (see website: www.fieldisgroupco.com for more informaion)