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Contracting parties are, as a rule, defined in a simple description established at the beginning of the contract. If this is an agreement in which only one page provides confidential information, the revealing party may be designated as a party to the publication and the recipient of the information may simply be designated as the recipient. Although more common in private equity transactions, the seller may include anti-clubbing regulations to prohibit the practice of consortium or club contracts. The consortium`s offer, often referred to as clubbing, is the acquisition strategy to form a group of bidders to participate together in an acquisition. Clubbing gives some private equity sponsors the advantage of participating in an agreement that would otherwise have been expensive. However, club agreements can have a negative effect on the seller by reducing competition for offers and reducing the price that might otherwise be paid for the target company. The two orders at issue are BlueLinx Holdings Inc., Exchange Act Release No. 78528 (August 10, 2016) and Health Net Inc., Exchange Release No. 78590 (August 16, 2016). The regulations are based on the SEC`s Rule 21F-17 (a), which “prohibits any act preventing a person from communicating directly with Commission officers.” including the application or threat of a confidentiality agreement . . . .

these communications. 17 CFR 240.21F-17 (a) (2011). Indeed, in the regulations, the SEC considers that the company`s intention to create confidentiality agreements and release agreements is not relevant to a violation of the rule. It appears that the SEC also failed to respond to a real threat to impose a confidentiality agreement. Similarly, the SEC expressly states that it does not require any evidence that a person was in fact prevented or deterred from contacting the SEC. These regulations are based solely on the existence of the agreements. In Britain, NDAs are not only used to protect trade secrets, but are also often used as a condition of a financial settlement to prevent whistleblowers from making public the wrongdoings of their former employers. There is a law that allows for protected disclosure despite an NOA, although employers sometimes silence the former employee at the same time. [3] [9] Each NOA has certain exceptions to the beneficiary`s obligations.

These exclusions are intended to remedy situations in which it would be unfair or too cumbersome for the recipient to keep the information confidential or where confidentiality is simply inappropriate. Many recipients object to their representatives being required to sign confidentiality documents and prefer to be directly responsible for their actions. The requirement for lawyers, financial advisors, accounting experts and other experts to enter into separate written agreements can take time and delay the due diligence process. However, more and more buyers prefer that their sources of financing be received directly by the seller, so that the buyer is not responsible for a violation of these sources of financing.