Form MOU

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CONFIDENTIAL MEMORANDUM OF UNDERSTANDING

THIS CONFIDENTIAL MEMORANDUM OF UNDERSTANDING (this “MOU”), dated as of


October __, 2020, sets forth the mutual understanding between [________] (“_____”), a [STATE]
[ENTITY], and [SELLER’S NAME] (the “Seller”), a [STATE] [ENTITY] relating to the proposed [sale
of [DESCRIPTION OF GOODS]]/[[and] provision of [DESCRIPTION OF SERVICES]] (the “Proposed
Transaction”). The Buyer and the Seller are sometimes referred to individually as a “Party” and
collectively as the “Parties”.

1. MOU Subject to Definitive Agreement. This MOU is for discussion purposes only, and is
not intended to constitute a legally binding or enforceable agreement or commitment on either Party,
except for 13. which shall be binding on the Parties in accordance with its terms.

2. Nonbinding Understandings. It is the present intention of the Parties that Buyer would
purchase and Seller would [sell/provide] the [products/services] on [the] terms and conditions
[[substantially] similar to those] set forth in this Section 2. These terms are based upon information
currently available. They do not reflect all of the material terms of the Proposed Transaction but provide a
basis for negotiating the Definitive Agreement (as defined below).

(a) Definitive Agreement. The Parties intend to negotiate a formal written agreement
that would govern the Proposed Transaction (“Definitive Agreement”). Binding obligations with
respect to the Proposed Transaction shall only arise upon the execution of the Definitive
Agreement by both Parties.

(b) [Price. The proposed price for the [goods/services] would be $[PRICE]].

(c) [Quantity. The proposed quantity of goods purchased would be [QUANTITY]].

(d) [Specifications. The proposed specifications for the goods would be


[SPECIFICATIONS]].

(e) Customary Provisions. The Definitive Agreement would contain such covenants,
conditions, indemnities, representations and warranties as are customary for this type of
transaction and as the Parties would mutually agree.

3. Binding Agreements. This Section 3 shall constitute a legally binding and enforceable
agreement between the Parties. In consideration of the significant expenses that the Parties will incur in
pursuing the Proposed Transaction and drafting and negotiating the Definitive Agreement, the Parties
agree as follows:

(a) [Good Faith Negotiations. The Parties shall negotiate in good faith and use their
[reasonable/best] efforts to bring about the execution and delivery of the Definitive Agreement at
the earliest practicable time.]

(b) [Due Diligence. Conclusion of the Proposed Transaction is subject to completion


of a due diligence investigation by the [Buyer/Parties]. [Seller/Each Party] agrees to provide
representatives of the [Buyer/other Party] with reasonable access to such information and such
individuals as the [Buyer/other Party] may reasonably request in order to carry out its due
diligence investigation. The [Buyer/Parties] shall complete [its/their] due diligence investigation
within [NUMBER] [months/days] of the date of this MOU.]
(c) Costs and Expenses. Each Party shall be responsible for all of its costs and
expenses associated with pursuing the Proposed Transaction, including without limitation (i) the
performance of its obligations under this MOU, [(ii) conducting its due diligence investigation,
and (iii)/ and (ii)] and drafting and negotiating the Definitive Agreement.

(d) [Confidentiality. All information, both written and oral, obtained by [the
Buyer/the Parties] in connection with the Proposed Transaction is subject to that certain
Confidentiality Agreement, dated as of [DATE], between the Parties.

OR

During the term of this MOU, [The Seller/Either Party] (as the “Disclosing
Party”) may disclose or make available to the [Buyer/other Party] (as the “Receiving Party”)
information about its business affairs, products/services, confidential intellectual property, trade
secrets, third-party confidential information and other sensitive or proprietary information,
whether orally or in written, electronic or other form or media, and whether or not marked,
designated or otherwise identified as “confidential” (collectively, “Confidential Information”).

Confidential Information shall not include information that, at the time of


disclosure [and as established by documentary evidence]: (i) is or becomes generally available to
and known by the public other than as a result of, directly or indirectly, any breach of this Section
3(d) by the Receiving Party or any of its representatives; (ii) is or becomes available to the
Receiving Party on a non-confidential basis from a third-party source, provided that such third
party is not and was not prohibited from disclosing such Confidential Information; (iii) was
known by, or in the possession of, the Receiving Party or its representatives before being
disclosed by or on behalf of the Disclosing Party; (iv) was or is independently developed by the
Receiving Party without reference to or use, in whole or in part, of any of the Disclosing Party’s
Confidential Information; or (v) is required to be disclosed under applicable federal, state or local
law, regulation or a valid order issued by a court or governmental agency of competent
jurisdiction.

The Receiving Party shall: (x) protect and safeguard the confidentiality of the
Disclosing Party’s Confidential Information with at least the same degree of care as the
Receiving Party would protect its own Confidential Information, but in no event with less than a
commercially reasonable degree of care; (y) not use the Disclosing Party’s Confidential
Information, or permit it to be accessed or used, for any purpose other than to exercise its rights
or perform its obligations under this MOU; and (z) not disclose any such Confidential
Information to any person or entity, except to the Receiving Party’s representatives who need to
know the Confidential Information to assist the Receiving Party, or act on its behalf, to exercise
its rights or perform its obligations under this MOU. The Receiving Party shall be responsible for
any breach of this Section 3(d) caused by any of its representatives.]

(e) Term and Termination. The rights and obligations of the Parties contained in this
MOU shall expire upon the execution of the Definitive Agreement. Either Party may terminate
this MOU after [NUMBER] [months/days] from the date of this MOU without any obligation or
liability to the other Party, provided however that Section 3(d), Section 3(f), and Section 3(g)
shall survive such termination.

(f) Governing Law. This MOU shall be governed by and construed in accordance
with the internal laws of the state of [STATE], without giving effect to any choice or conflict of

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law provision or rule (whether of the state of [STATE] or any other jurisdiction) that would cause
the application of laws of any jurisdiction other than those of the state of [STATE].

(g) No Third-Party Beneficiaries. Nothing herein is intended or shall be construed to


confer upon any person or entity other than the Parties and their successors or assigns, any rights
or remedies under or by reason of this MOU.

(h) No Assignment. Neither this MOU, nor any rights or obligations hereunder may
be assigned, delegated or conveyed by either Party without the prior written consent of the other
Party.

(i) Counterparts. This MOU may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one agreement.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties hereto have executed this MOU as of the date set forth above.
[PARTY NAME] [PARTY NAME]
By_________________ By_________________
Name: Name:
Title: Title:

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