Contract Review

Reviews a legal contract (NDA, employment agreement, SaaS terms, M&A document and others) from your position. It identifies unfavorable terms, compares them to market standards, suggests redlines, and lists negotiation priorities. Use it for contract analysis, due diligence, or negotiation prep. The review is for information only; have material terms reviewed by qualified legal counsel.

Made by KCUpdated on 14 Oct 2026

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Contract *

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NON-DISCLOSURE AGREEMENT

In connection with a potential transaction (“Proposed Transaction”) between 3M Company (“Interested Party” or “Receiving Party”), and Cogent, Inc., a Delaware corporation (“Company” or “Disclosing Party”), the parties wish to protect and preserve the confidential and/or proprietary nature of certain information and materials of the Company that may be disclosed or made available to the Interested Party or its Representatives (as defined below) in connection with certain discussions, negotiations or dealings between the parties relating to the Proposed Transaction.

In consideration of the foregoing and the rights and obligations set forth herein, both parties hereby agree as of July 31, 2008 (the “Effective Date”):

1.	PROPRIETARY INFORMATION AND OTHER DEFINITIONS.
1.1 “Proprietary Information” means any and all information and material disclosed by Disclosing Party or any of its Representatives to Receiving Party or any of its Representatives in connection with the Proposed Transaction or in the course of the parties’ evaluation and negotiation of the Proposed Transaction, together with all communications, data, reports, analyses, compilations, studies, interpretations, records, notes, lists, financial statements or other materials or information prepared by Receiving Party or any of its Representatives that contain or otherwise reflect or are based upon, in whole or in part, any Proprietary Information of Disclosing Party or that reflect the review of, interest in, or evaluation of all or any portion of the Proposed Transaction or Disclosing Party’s business (collectively, “Derived Information”), whether tangible or intangible, furnished or prepared in writing or in oral, graphic, electronic or any other form or manner. In addition, Proprietary Information shall include (x) the fact that discussions or negotiations are taking place concerning the Proposed Transaction or that Interested Party has made or may make an offer to acquire Company’s stock or assets or that any Proprietary Information has been shared between the parties and their respective Representatives in connection therewith, (y) the proposed terms and conditions of the Proposed Transaction (including any financial terms and conditions) and the status thereof, and (z) the existence, context, and scope of this Agreement.

Proprietary Information shall not include information that: (i) is or becomes generally available to the public other than as a result of any disclosure or other action or inaction by Receiving Party in breach of this Agreement (including any disclosure or other action or inaction by Representatives of Receiving Party that would constitute a breach of this Agreement if undertaken by Receiving Party itself); (ii) is or becomes known or available to Receiving Party or any of its Representatives on a non-confidential basis from a source (other than Disclosing Party or any of its subsidiaries, affiliates or Representatives) that, to the best of the knowledge of Receiving Party, is not prohibited from disclosing such Proprietary Information to Receiving Party by a contractual, legal or fiduciary obligation; or (iii) is or was independently developed by Receiving Party or any of its Representatives without violation of any obligation under this Agreement.

1.2 “Representatives” means as to any person, its directors, officers, employees, agents and advisors (including, without limitation, financial advisors, financing sources, attorneys, accountants and their respective Representatives).

1.3 “person” shall be broadly interpreted to include, without limitation, any corporation, company, partnership, other entity or individual.

2.	NON-DISCLOSURE AND LIMITED USE.
2.1 Non-Disclosure. Without the written consent of Disclosing Party and except as otherwise required by applicable law, Receiving Party shall keep, and shall cause its Representatives to keep, all Proprietary Information confidential and shall not disclose or reveal, and shall cause its Representatives not to disclose or reveal, in any manner whatsoever, in whole or in part, any Proprietary Information to any person, other than to its Representatives who are actively and directly participating in its evaluation of the Proposed Transaction or who otherwise need to know the Proprietary Information for the purpose of evaluating the Proposed Transaction and who are bound by restrictions regarding the disclosure and use of such Proprietary Information (either contractual, legal or fiduciary) owed to Company, Interested Party or any their respective Representatives that are comparable to and no less restrictive than those set forth in this Agreement. Each party shall inform all of its respective Representatives and shall cause its respective Representatives to inform their Representatives who receive Proprietary Information hereunder of the confidential nature of such information and the Proposed Transaction, as well as the terms of this Agreement. Receiving Party shall not, and shall cause its Representatives to not, use any Proprietary Information for any purpose other than to evaluate the Proposed Transaction or in connection with the consummation of the Proposed Transaction. Each party shall be responsible for any breach of the terms of this Agreement by it or its Representatives.

2.2 Degree of Care. Receiving Party shall take the same degree of care that it uses to protect its own confidential and proprietary information of similar nature and importance (but in no event less than reasonable care) to protect the confidentiality and avoid the use, disclosure, publication or dissemination of the Proprietary Information of Disclosing Party. Receiving Party shall not, and shall cause its Representatives to not, decompile, disassemble or otherwise reverse engineer (except to the extent expressly permitted by applicable law, notwithstanding a contractual obligation to the contrary) any Proprietary Information or any portion thereof, or determine or attempt to determine any source code, algorithms, methods or techniques embodied in any Proprietary Information or any portion thereof. Receiving Party shall not use Proprietary Information for any purpose or in any manner that would constitute a violation of any laws or regulations, including without limitation the export control laws of the United States.

2.3 Designated Representatives. Neither Interested Party nor its Representatives shall initiate or maintain contact with any officer, director, stockholder, employee or agent of Company or its subsidiaries regarding the Proposed Transaction, except with the express consent of Company. All (i) communications regarding the Proposed Transaction, (ii) requests for additional information, (iii) requests for on-site access or management meetings and (iv) discussions or questions regarding procedures, will be submitted or directed to the Representatives designated by the Company.

2.4 Compelled Disclosure of Proprietary Information. If Receiving Party or any of its Representatives are requested pursuant to, or required by, applicable law or regulation (including, without limitation, any rule, regulation or policy statement of any national securities exchange, market or automated quotation system on which any of Receiving Party’s securities are listed or quoted) or by legal process to disclose any Proprietary Information, or any other information concerning Disclosing Party, its subsidiaries or affiliates, Receiving Party shall provide Disclosing Party with prompt notice of such request or requirement, in order to enable Disclosing Party (a) to seek an appropriate protective order or other remedy, (b) to consult with Receiving Party with respect to Disclosing Party’s taking steps to resist or narrow the scope of such request or legal process or (c) to waive compliance, in whole or in part, with the terms of this Agreement. In the event that such protective order or other remedy is not obtained, or Disclosing Party waives compliance, in whole or in part, with the terms of this Agreement, Receiving Party or its Representatives, as the case may be, shall use commercially reasonable efforts to disclose only that portion of the Proprietary Information which Receiving Party is advised by legal counsel is legally required to be disclosed and exercise its commercially reasonable efforts to obtain reliable assurances that confidential treatment will be accorded to the Proprietary Information so disclosed.

2.5 Attorney-Client Privilege. To the extent that any Proprietary Information may include material subject to the attorney-client privilege, work product doctrine or any other applicable privilege concerning pending or threatened legal proceedings or governmental investigations, the parties understand and agree that they have a commonality of interest with respect to such matters and it is their desire, intention and mutual understanding that the disclosure of such material is not intended to, and shall not, waive or diminish in any way the confidentiality of such material or its continued protection under the attorney-client privilege, work product doctrine or other applicable privilege and any such Proprietary Information shall remain entitled to all protection under these privileges, this Agreement, and under the joint defense doctrine. Nothing in this Agreement obligates any party to reveal material subject to the attorney-client privilege, work product doctrine or any other applicable privilege.

2.6 Definitive Agreement. Until a definitive agreement regarding the Proposed Transaction has been executed by the parties hereto, neither party hereto shall be under any legal obligation or have any liability to the other party of any nature whatsoever with respect to the Proposed Transaction by virtue of this Agreement or otherwise (other than with respect to the confidentiality and other matters set forth herein). Each party hereto and its Representatives (i) may conduct the process that may or may not result in the Proposed Transaction in such manner as such party, in its sole discretion, may determine (including, without limitation, negotiating and entering into a definitive agreement with any third party without notice to the other party) and (ii) reserves the right to change (in its sole discretion, at any time and without notice to the other party) the procedures relating to the parties’ consideration of the Proposed Transaction (including, without limitation, terminating all further discussions with the other party). For purposes of this Agreement, the term “definitive agreement” does not include an executed letter of intent or any other preliminary written agreement in principle.

2.7 No Representations or Warranties Regarding Proprietary Information. Subject to the terms and conditions of a definitive agreement regarding the Proposed Transaction and without prejudice thereto, each party acknowledges that neither the other party nor its Representatives nor any of the officers, directors, employees, agents or controlling persons of such Representatives makes any express or implied representation or warranty as to the completeness of the Proprietary Information or any use thereof. Each party hereby expressly disclaims all such warranties, including any implied warranties of merchantability and fitness for a particular purpose, non-infringement and accuracy, and any warranties arising out of course of performance, course of dealing or usage of trade. Receiving Party shall not be entitled to rely on the completeness of any Proprietary Information, but shall be entitled to rely solely on such representations and warranties regarding the completeness of the Proprietary Information as may be made to it in a definitive agreement relating to the Proposed Transaction, subject to the terms and conditions of any such agreement, should the discussions between the parties progress to such a point.

3.	NO SOLICITATION.
3.1 No Solicitation of Employees. Interested Party agrees that neither it nor its affiliates will at any time until the one year anniversary of the Effective Date, directly or indirectly, employ or solicit for employment (i) any key technical or management personnel of the Company that has first been introduced by the Company to the Interested Party in connection with the Proposed Transaction or who was otherwise substantively involved in the discussions of the Proposed Transaction or (ii) any other person who is now employed as an officer of the other party or any of its affiliates; provided, that the foregoing restriction shall not be deemed to prohibit Interested Party or its Representatives from making general public solicitations for employment for any position or from employing any employee of the

Company who either responds to such a general solicitation for employment or otherwise contacts Interested Party on his or her own initiative and without solicitation by Interested Party in contravention of the above restriction. Additionally, the above restriction shall not be deemed to prohibit Interested Party from making offers of employment or offering retention packages to any employees of Company or any of its affiliates in connection with the Proposed Transaction, provided that such offers have been disclosed to the Board of Directors of the Company.

4.	SECURITIES ISSUES.
4.1 No Public Disclosure Required. Each party expressly confirms and agrees that, as of the date hereof, it is not required to make any public disclosure with respect to (a) the Proposed Transaction (or the terms or conditions or any other facts relating thereto), (b) any item of Proprietary Information (or the fact that Proprietary Information has been made available to such party), or (c) any discussions or negotiations taking place between the parties with respect to the Proposed Transaction, whether pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and regulations promulgated thereunder, or similar requirements related to general disclosure. If, after the date of this Agreement, either party determines that any such disclosure is required, no such disclosure shall be made unless and until such party consults with the other party regarding the necessity and form of any such disclosure, and provides the other party a reasonable opportunity to review the proposed disclosure and comment thereon.

4.2 Restrictions on Sales of Securities. Each party is aware, and will advise its Representatives who are informed of the matters that are the subject of this Agreement, of the restrictions imposed by the United States securities laws on the purchase or sale of securities by any person who has received material, non-public information from the issuer of such securities and on the communication of such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell such securities in reliance upon such information. However, this will not prevent Receiving Party from purchasing stock through its benefit plans in the ordinary course of business.

5.	OWNERSHIP.
All Proprietary Information (including, without limitation, all copies, extracts and portions thereof) is and shall remain the sole property of Disclosing Party, provided, that all Derived Information shall be the sole property of Receiving Party. Receiving Party does not acquire (by license or otherwise, whether express or implied) any intellectual property rights or other rights under this Agreement or any disclosure hereunder, except the limited right to use such Proprietary Information in accordance with the express provisions of this Agreement. All rights relating to the Proprietary Information that are not expressly granted hereunder to Interested Party are reserved and retained by Disclosing Party.

6.	TERM.
Except as otherwise provided herein, the obligations of this Agreement, including the restrictions on disclosure and use, shall terminate on the second anniversary of the Effective Date; provided that Sections 2.5, 2.6, and 2.7 and Articles 4, 5, 6, 7, 8 and 9 shall survive any termination of this Agreement.

7.	REMEDIES.
Receiving Party agrees that, due to the unique nature of the Proprietary Information, the unauthorized disclosure or use of the Proprietary Information may cause injury to Disclosing Party, the extent of which will be difficult to ascertain and for which there may be no adequate remedy at law. Accordingly, Receiving Party agrees that Disclosing Company, in addition to any other available

remedies, may have the right to seek an immediate injunction and other equitable relief enjoining any breach or threatened breach of this Agreement as ordered by the court. Receiving Party shall notify Disclosing Party immediately if Receiving Party has reason to believe that any person who has had access to the Proprietary Information (including Receiving Party or any of its Representatives) has violated or intends to violate the terms of this Agreement or otherwise disclose any Proprietary Information in violation of the terms hereof. Any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

8.	RETURN OF MATERIALS.
If either party hereto shall determine that it does not wish to proceed with the Proposed Transaction, such party shall promptly advise the other party of that decision. In that case, or if the Proposed Transaction otherwise is not consummated for any reason, Receiving Party shall, upon Disclosing Party’s written request, promptly deliver to Disclosing Party all Proprietary Information, and, at Disclosing Party’s sole election, return or destroy (provided that any such destruction shall be certified by a duly authorized Representative of Receiving Party) all copies, reproductions, summaries, analyses or extracts thereof or based thereon (whether in hard-copy form or on intangible media, such as electronic mail or computer files) in Receiving Party’s or any of its Representatives’ possession; provided, that if a legal proceeding has been instituted to seek disclosure of the Proprietary Information, such material shall not be destroyed until the proceeding is settled or a final judgment with respect thereto has been rendered. However, Receiving Party may retain in the office of its legal counsel, one copy of Proprietary Information for record purposes only. Notwithstanding the return or destruction of any Proprietary Information, or documents or material containing or reflecting any Proprietary Information, the parties will continue to be bound by their obligations of confidentiality and other obligations hereunder for the term of this Agreement (or such other term as may be applicable to the specific obligation), except as otherwise specifically provided herein.

9.	MISCELLANEOUS.
9.1 Entire Agreement. This Agreement constitutes the entire agreement between the parties concerning the confidentiality of the Proprietary Information in connection with the Proposed Transaction and related matters and supersedes all prior or contemporaneous representations, discussions, proposals, negotiations, conditions, communications and agreements, whether oral or written, between the parties relating to the same and all past courses of dealing or industry custom.

9.2 Beneficiaries. This Agreement shall inure to the benefit of and be binding upon Interested Party and Company and their respective successors and permitted assigns.

9.3 Amendments and Waivers. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by duly authorized signatories of both parties. The waiver by either party of a breach of or a default under any provision of this Agreement shall not be construed as a waiver of any subsequent breach of or default under the same or any other provision of this Agreement, nor shall any delay or omission on the part of either party to exercise or avail itself of any right, power, privilege or remedy that it has or may have hereunder operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other further exercise of any such right, power, privilege or remedy hereunder.

9.4 Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to conflicts of laws principles.

9.5 Jurisdiction; Waiver of Jury Trial. The parties hereto agree that any and all actions or proceedings seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought in the courts of the State of California, County of Los Angeles, including Federal Courts located therein, should Federal jurisdiction requirements exist. Each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. The parties hereto specifically waive any right to a jury trial with respect to any matter arising under this Agreement.

9.6 Expenses. In the event of litigation relating to this Agreement, if a court of competent jurisdiction determines in a final, non-appealable order that a party has breached this Agreement, then such party shall be liable and pay to the non-breaching party the reasonable costs and expenses (including reasonable legal fees and expenses) such non-breaching party has incurred in connection with the enforcement of this Agreement, including any appeal therefrom.

9.7 Severability. In the event that any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be invalid or unenforceable, the remaining portions hereof shall remain in full force and effect and such provision shall be enforced to the maximum extent possible so as to effect the intent of the parties, and shall in no way be affected, impaired or invalidated.

9.8 Notices. Any notice or other communication required or permitted to be delivered under this Agreement shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (iii) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, to the address or facsimile number set forth beneath the name of each party below (or to such other address or facsimile number as such party may designate by five (5) days advance written notice to the other party hereto).

9.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same instrument.

[SIGNATURES FOLLOW ON THE NEXT PAGE]

IN WITNESS WHEREOF, the parties have duly authorized and caused this Non-Disclosure Agreement to be executed as follows:

COMPANY
Cogent, Inc.
By:	 	
/s/ Paul Kim

(signature)
Name:	 	
Paul Kim

(print)
Title:	 	
Chief Financial Officer

INTERESTED PARTY
3M Company

By:	 	
/s/ David G. Fellner

(signature)
Name:	 	
David G. Fellner

(print)
Title:	 	
Manager, Corporate Development

AMENDMENT NO. 1 TO NON-DISCLOSURE AGREEMENT

This Amendment No. 1 to Non-Disclosure Agreement (this “Amendment”) dated as of May 31st, 2010 (the “Amendment Date”), is entered into between Cogent, Inc., a Delaware corporation (“Company” or “Disclosing Party”) and 3M Company, a Delaware corporation (“Interested Party” or “Receiving Party”) (collectively the “Parties”).

WHEREAS, the Parties previously entered into a Non-Disclosure Agreement dated as of July 31, 2008 (the “Non-Disclosure Agreement”);

WHEREAS, the Parties wish to amend the Non-Disclosure Agreement in certain respects on the terms and conditions set forth herein.

NOW THEREFORE, the Parties hereby agree as follows:

1. Section 3.1 of the Non-Disclosure Agreement is hereby amended by replacing “one year anniversary of the Effective Date” in the second line of such section with “three year anniversary of the Effective Date.”

2. Section 6 of the Non-Disclosure Agreement is hereby amended by replacing “second anniversary of the Effective Date” in the second line of such section with “fourth anniversary of the Effective Date.”

3. This Amendment shall be effective for all purposes as of the Amendment Date. The terms and conditions set forth in this Amendment are in addition to the terms of the Non-Disclosure Agreement which, except as amended in this Amendment, shall continue to remain in full force and effect in accordance with its terms. Any capitalized terms not otherwise defined herein shall have the meanings given such terms in the Non-Disclosure Agreement.

4. This Amendment may be executed in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same document.

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

3M Company	 		 	Cogent, Inc.
By:	 	
/s/ David G. Fellner

By:	 	
/s/ Paul Kim

Name:	 	
David G. Fellner

Name:	 	Paul Kim
Title:	 	
Manager, 3M Corporate Development

Title:	 	Chief Financial Officer

Your position *

The party you represent in this contract.

Output

Contract Review Report

Contract Review: Non-Disclosure Agreement between 3M Company and Cogent, Inc. (dated as of July 31, 2008), as amended by Amendment No. 1 (dated as of May 31, 2010)

Document Type: Transaction NDA for a potential M&A deal (the "Proposed Transaction"). It is primarily one-way, with 3M receiving and Cogent disclosing, plus some mutual provisions (§§2.1, 2.6, 2.7, 4, 8).

Your Position: Disclosing Party / "Company" (Cogent, Inc., a Delaware corporation)

Counterparty: 3M Company ("Interested Party" / "Receiving Party"; described as a Delaware corporation only in Amendment No. 1)

Risk Level: 🟡 Medium

Document Status: Executed. The NDA is dated as of July 31, 2008 and bears conformed signatures (/s/) of Paul Kim (Cogent, CFO) and David G. Fellner (3M, Manager, Corporate Development). Amendment No. 1 is dated as of May 31, 2010 and bears conformed signatures of the same individuals. Because the document is executed, this review is informational, and any redline would need a signed amendment or would apply to future NDAs.

Blank Fields / Missing Items: Notice addresses and fax numbers referenced in §9.8 are not in the text provided. There are no "$X"/"TBD"-style placeholders and no referenced exhibits or schedules.

⚠️ Pre-Signing Alerts

(The document is already executed, so these are informational.)

Missing information: §9.8 directs notices to "the address or facsimile number set forth beneath the name of each party below." No addresses or fax numbers appear beneath either signature block, so the notice mechanics cannot be applied from this text.
Blank fields: None found.
Missing exhibits/schedules: None referenced. The document is internally complete (NDA, signature page, and Amendment No. 1 with signature page). No truncation was found.
Expired periods (calculated from the text):
- The employee non-solicit (§3.1 as amended) ran until the third anniversary of the Effective Date, July 31, 2011.
- The confidentiality term (§6 as amended) ends on the fourth anniversary, July 31, 2012.
- The text shows no further extension. If today is after those dates, the corresponding obligations have lapsed by their terms.
Drafting error: §7 uses the undefined term "Disclosing Company."

Executive Summary

This is a negotiated, fairly protective NDA for a disclosing party. The main risks, in order of priority, are:

Fixed expiry with no trade-secret tail. All use and disclosure restrictions lapse on July 31, 2012 (§6 as amended), with no carve-out for trade secrets.
Derived Information ownership. Article 5 gives 3M "sole property" of analyses that embed your confidential information. This conflicts with §1.1 and Article 8, and it survives termination.
No standstill and no no-teaming or financing-source limits. The document contemplates an offer for your "stock or assets" (§1.1(x)) but does not restrict hostile steps.
Narrow no-contact and non-solicit protection. There are loose carve-outs, and the non-solicit has expired.
Governing law and forum mismatch. Minnesota law applies, but disputes go to Los Angeles County, California courts.
Weak injunctive-relief language.

Strengths:

A broad definition of Proprietary Information that includes the fact and terms of the deal.
No residuals clause.
Need-to-know flow-down, with 3M responsible for its Representatives' breaches.
Compelled-disclosure notice.
Privilege protection.
A mutual no-reliance/no-warranty clause that favors you.
Return/destroy at your sole election.
Fee-shifting for a breaching party.

Power dynamic: The document is not a plain standard form. It has deal-specific terms (Board disclosure of offers, privilege language) and was amended in 2010 to extend both the non-solicit and the term, which shows 3M was willing to extend. The text does not say anything about the parties' relative size or whether the industry is regulated. Securities-law provisions in Article 4 suggest at least one party is subject to the Exchange Act.

Key Terms

Term	Value	Location
Effective Date	July 31, 2008	Preamble
Parties	Cogent, Inc. (Company/Disclosing Party); 3M Company (Interested Party/Receiving Party)	Preamble; Amendment No. 1 preamble
Direction	Primarily one-way (3M receives), with some mutual clauses	Preamble; §§2.1, 2.6, 2.7, 4, 8
Permitted Purpose	Evaluate, or in connection with consummation of, the Proposed Transaction	§2.1
Confidentiality Term	Terminates on the 4th anniversary of the Effective Date (July 31, 2012). Originally 2nd anniversary.	§6; Amendment No. 1 ¶2
Survival	§§2.5, 2.6, 2.7 and Articles 4–9 survive	§6
Employee Non-Solicit / No-Hire	Until the 3rd anniversary of the Effective Date (July 31, 2011). Originally 1st anniversary. Binds 3M and affiliates.	§3.1; Amendment No. 1 ¶1
Degree of Care	Same as own confidential information, never less than reasonable care	§2.2
Compelled Disclosure	Prompt notice; opportunity to seek a protective order; disclose only what counsel advises is legally required	§2.4
Residuals Clause	None	—
Ownership	Proprietary Information belongs to Disclosing Party. Derived Information belongs to Receiving Party.	Art. 5
Return/Destruction	On Disclosing Party's written request, at its sole election; destruction certified; one copy may be retained by legal counsel	Art. 8
Injunctive Relief	Disclosing Party "may have the right to seek" injunction	Art. 7
Governing Law	Minnesota	§9.4
Forum	State and federal courts in Los Angeles County, California	§9.5
Jury Trial	Mutual waiver	§9.5
Fee-Shifting	Reasonable costs and legal fees to non-breaching party after final, non-appealable order	§9.6
Amendments	Written and signed by both parties	§9.3
Assignment	No assignment clause; agreement binds "successors and permitted assigns"	§9.2
Standstill	None	—
Amendment No. 1	Dated May 31, 2010; extends §3.1 and §6 only	Amendment ¶¶1–3

Red Flags (Quick Scan)

Flag	Found	Location
Liability cap < 6 months	No (no liability cap in document)	—
Uncapped indemnification	No (no indemnity clause)	—
"As-is" with no warranty	⚠️ Yes, mutual disclaimer; protects you as Disclosing Party	§2.7
Unilateral suspension without notice	No	—
Unilateral amendment rights	No (§9.3 requires both parties)	§9.3
No termination for convenience	N/A (no termination right; fixed term; either party may end deal discussions)	§§2.6, 6, 8
Perpetual obligations (tails, non-competes)	⚠️ Partial. Surviving Articles 4–9 have no end date, including consult-before-disclosure (§4.1) and the Receiving Party's reporting duty (Art. 7). Core confidentiality is time-limited.	§6; Arts. 4–9
Offshore jurisdiction	No	§§9.4, 9.5
Pre-signed conflict waivers	No	—
"Sole discretion" language favoring counterparty	⚠️ Yes, but mutual (process control). §8 "sole election" favors you.	§2.6; Art. 8
Class action waiver + mandatory arbitration	No (litigation; jury waiver only)	§9.5
Asymmetric assignment rights	No assignment clause; "permitted assigns" undefined	§9.2

Risk Analysis

🔴 Critical

1. Term / Duration of Confidentiality (Section 6, as amended by Amendment No. 1 ¶2)

"…the obligations of this Agreement, including the restrictions on disclosure and use, shall terminate on the second anniversary of the Effective Date; provided that Sections 2.5, 2.6, and 2.7 and Articles 4, 5, 6, 7, 8 and 9 shall survive any termination of this Agreement." ("second" replaced by "fourth" per Amendment No. 1.)

Issue: All confidentiality and use restrictions (§§2.1–2.4) end on July 31, 2012, with no carve-out for trade secrets or other highly sensitive information. §2.2 itself contemplates disclosure of "source code, algorithms, methods or techniques." Article 1 (definitions) and §§2.1–2.4 are not in the survival list. Article 8 also ties continuing obligations to "the term of this Agreement."
Risk: After expiry, 3M and its Representatives (including financing sources) would be contractually free to use or disclose your information, including trade secrets. Expiry of the NDA could also be raised against you in a later trade-secret claim on whether "reasonable measures" were taken. Independent statutory or common-law protection may still apply, but how it interacts with this clause is uncertain and a question for counsel.
Market Standard: About 3 years for general information (4 years is above standard, which is positive). Indefinite protection for trade secrets.
Negotiability: Medium. 3M already agreed to double the term in 2010.
Redline: Add to §6: "…provided, however, that with respect to any Proprietary Information that constitutes a trade secret under applicable law, Receiving Party's obligations shall continue for so long as such information remains a trade secret other than as a result of a breach of this Agreement." Also add Article 1 and Sections 2.1–2.4 to the survival list for that purpose.
Fallback: A longer fixed term (e.g., 5–7 years) for technical or source-code materials, with an obligation to return or destroy such materials before expiry.
Note: Because the NDA is executed and the term has run on its own terms, any fix would require a signed amendment while any obligations remain, or would serve as a template for future NDAs.

2. Ownership of Derived Information (Article 5, with §1.1 and Article 8)

"All Proprietary Information (including, without limitation, all copies, extracts and portions thereof) is and shall remain the sole property of Disclosing Party, provided, that all Derived Information shall be the sole property of Receiving Party."

Issue: §1.1 defines Derived Information as materials that "contain or otherwise reflect or are based upon, in whole or in part, any Proprietary Information of Disclosing Party," and includes them within "Proprietary Information." Article 5 then makes them 3M's "sole property." Article 8 requires return or destruction of "summaries, analyses or extracts thereof or based thereon." The three provisions point in different directions. Article 5 survives termination, while the confidentiality restrictions do not.
Risk: 3M could argue it owns, and after expiry may freely use, analyses and compilations that embed your confidential data. The conflict also invites a dispute over whether Derived Information must be returned or destroyed.
Market Standard: The receiving party may own its own evaluative work product, but not the disclosing party's information embedded in it. That embedded information stays confidential and returnable or destroyable.
Negotiability: High. This is a clarification, not a business concession.
Redline: Change the proviso to: "provided, that Derived Information shall be the property of Receiving Party solely to the extent it does not contain, reflect or disclose Proprietary Information of Disclosing Party; to the extent it does, such Derived Information shall remain subject to the confidentiality, use and return/destruction obligations of this Agreement."
Fallback: Accept 3M's ownership of its own analyses, but state expressly that all Proprietary Information contained in them remains yours and subject to Articles 2 and 8.

🟡 Important

3. Employee Non-Solicitation / No-Hire (Section 3.1, as amended)

"…provided that such offers have been disclosed to the Board of Directors of the Company." "…the foregoing restriction shall not be deemed to prohibit Interested Party or its Representatives from making general public solicitations for employment for any position or from employing any employee of the Company who either responds to such a general solicitation…"

Issue:
- The carve-out lets 3M make offers or retention packages to any Company employee "in connection with the Proposed Transaction," with only disclosure to your Board required (no consent, no timing, no limit to post-signing).
- Hiring of responders to general solicitations is allowed.
- Clause (ii) refers to "the other party," which is ambiguous.
- The restriction ended July 31, 2011.
- Customers and suppliers are not covered.
Risk: Disclosure to the Board after the fact does not stop 3M from approaching your employees.
Jurisdiction Note: With a California forum (§9.5), no-hire and non-solicit covenants may face enforceability challenges under California's restrictive-covenant policy. Minnesota law is also selected. How a court would treat this is uncertain; counsel should confirm.
Market Standard: 12–24 months, with deal-related approaches allowed only with the target's consent.
Negotiability: Medium.
Redline: Replace the Board-disclosure proviso with "provided that such offers are made only with the prior written consent of the Company." Change "the other party" to "the Company."
Fallback: Require disclosure to the Board before any offer is made, and permit offers only after a definitive agreement is signed.

4. Non-Contact Scope (Section 2.3)

"Neither Interested Party nor its Representatives shall initiate or maintain contact with any officer, director, stockholder, employee or agent of Company or its subsidiaries regarding the Proposed Transaction, except with the express consent of Company."

Issue: Does not cover customers, suppliers, distributors, licensors, lenders, landlords or other business relations.
Risk: 3M could approach your commercial counterparties about the deal or to gather diligence outside your control.
Market Standard: The no-contact covenant extends to customers, suppliers and other business relations.
Negotiability: High.
Redline: After "agent of Company or its subsidiaries" add "or any customer, supplier, distributor, licensor, lender, landlord or other business relation of Company or its subsidiaries."

5. Representatives / Financing Sources / No-Teaming (Sections 1.2 and 2.1)

"'Representatives' means as to any person, its directors, officers, employees, agents and advisors (including, without limitation, financing sources, attorneys, accountants and their respective Representatives)."

Issue:
- "Financing sources" and "their respective Representatives" may receive Proprietary Information without your consent.
- Flow-down restrictions may be "contractual, legal or fiduciary" and need not run to you.
- There is no restriction on 3M teaming with or sharing information with other bidders or financing sources.
Mitigant: §2.1 makes 3M "responsible for any breach of the terms of this Agreement by it or its Representatives." This is a good protection.
Market Standard: Financing sources need target consent, with no exclusive financing arrangements or teaming.
Negotiability: Medium.
Redline: Add "provided that financing sources and consortium members shall be Representatives only with Company's prior written consent, and Interested Party shall not enter into any exclusive arrangement with, or share Proprietary Information with, any other potential acquirer or financing source of the Proposed Transaction."
Fallback: Notice and a right to object, instead of consent.

6. Governing Law / Forum / Jury Waiver (Sections 9.4 and 9.5)

"…governed by and construed in accordance with the laws of the State of Minnesota…" (§9.4) "…shall be brought in the courts of the State of California, County of Los Angeles…" and "The parties hereto specifically waive any right to a jury trial…" (§9.5)

Issue: The governing law (Minnesota) differs from the forum (California). Neither is stated to be a party's state of incorporation, and Amendment No. 1 describes both parties as Delaware corporations. A California court must apply Minnesota law, adding cost and uncertainty.
Risk: Enforcement uncertainty. Pre-dispute jury waivers are generally viewed as unenforceable in California state courts, though federal courts may differ. How this plays out is uncertain and counsel should confirm. Section 9.5 lacks the word "exclusive," although "shall be brought" suggests it is mandatory.
Market Standard: Law and forum in the same neutral commercial jurisdiction (e.g., Delaware or New York).
Negotiability: Medium.
Redline: Replace "Minnesota" with "Delaware" in §9.4. In §9.5, replace the California courts with "the state or federal courts located in the State of Delaware," and state that jurisdiction is exclusive.
Fallback: Keep the current forum but align governing law with it, and add a contractual fallback if the jury waiver is held unenforceable.

7. Injunctive Relief (Article 7)

"…the unauthorized disclosure or use of the Proprietary Information may cause injury to Disclosing Party… Disclosing Company, in addition to any other available remedies, may have the right to seek an immediate injunction and other equitable relief enjoining any breach or threatened breach of this Agreement as ordered by the court."

Issue: The language is hedged ("may cause injury," "may have the right to seek"). It has no acknowledgment of irreparable harm and no waiver of a bond or proof of actual damages. It uses the undefined term "Disclosing Company."
Risk: A court may require a bond or a showing of irreparable harm; the weak language gives you little leverage in that argument.
Mitigants: Fee-shifting (§9.6), and 3M's duty to notify you "immediately" of suspected violations.
Market Standard: The receiving party acknowledges irreparable harm and agrees to injunctive relief without a bond.
Negotiability: High.
Redline: See suggested language below.

8. Exceptions to Proprietary Information (Section 1.1(ii) and (iii))

"(iii) is or was independently developed by Receiving Party or any of its Representatives without violation of any obligation under this Agreement."

Issue: The independent-development exception does not require that development be without use of or reference to your Proprietary Information. There is no documentary-evidence standard. Exception (ii) turns on 3M's own "knowledge" with no duty of inquiry.
Risk: A broad escape route, since it extends to "any of its Representatives."
Market Standard: Independent development "without use of or reference to" Proprietary Information, shown by written records.
Negotiability: High.
Redline: "…independently developed… without use of, reference to, or reliance upon any Proprietary Information, as demonstrated by contemporaneous written records." In (ii), replace "to the best of the knowledge of Receiving Party" with "after reasonable inquiry."

9. Securities Carve-Out (Section 4.2)

"However, this will not prevent Receiving Party from purchasing stock through its benefit plans in the ordinary course of business."

Issue: It is unclear whose stock is meant. As drafted it could be read to allow 3M's benefit plans to buy Company stock while 3M holds non-public information about the deal.
Risk: Securities-law and signalling exposure, with no standstill to counter it.
Negotiability: High.
Redline: "…purchasing Receiving Party's own securities through its benefit plans in the ordinary course of business, and for the avoidance of doubt does not permit purchases of Company securities."

🟢 Reviewed & Acceptable

Category	Status	Notes
Definition of Proprietary Information (§1.1)	✓	Broad (any form, written or oral). Covers Derived Information and the fact, terms and status of the deal. See Item 2 on the ownership conflict.
Residuals Clause	✓	None, so no right to use information retained in memory.
Permitted Disclosure / Flow-down (§2.1)	✓	Need-to-know only, with comparable restrictions. 3M must inform Representatives and is liable for their breaches. See Item 5 on financing sources.
Use Restriction / Reverse Engineering (§2.2)	✓	Use only to evaluate or consummate the deal. Reverse engineering and legal or export-control violations are prohibited.
Degree of Care (§2.2)	✓	Same care as own information, never less than reasonable.
Compelled Disclosure (§2.4)	✓	Prompt notice; time to seek a protective order; disclose only what counsel says is required. §2.1 refers separately to disclosure "required by applicable law" without notice language, but §2.4 governs.
Attorney-Client Privilege (§2.5)	✓	Common-interest and non-waiver language protects you. Enforceability of common-interest protection varies by jurisdiction, and there is no separate common-interest agreement.
No Obligation / Process Freedom (§2.6)	✓	Mutual. Preserves your freedom to run the process and says an LOI is not a definitive agreement. It also lets 3M negotiate with third parties without notice.
No Representations or Warranties (§2.7)	✓	Mutual disclaimer protects you as Disclosing Party. 3M may rely only on a definitive agreement.
Public Announcement / Securities Compliance (§§1.1(x)–(z), 4.1, 4.2 first sentence)	✓	Deal discussions are confidential. Disclosure requires consultation and a chance to review. See Item 9.
Ownership of Proprietary Information (Art. 5, first clause)	✓	You retain ownership and all IP; no license is implied.
Return / Destruction (Art. 8)	✓	Your sole election to return or destroy; destruction certified; litigation hold. One legal-counsel archive copy is standard, but should stay subject to confidentiality.
Fee-Shifting (§9.6)	✓	Mutual, tied to a final non-appealable breach finding.
Amendments / Waivers (§9.3)	✓	Signed writing required; no waiver by delay.
Entire Agreement (§9.1)	✓	Limited to confidentiality of the Proposed Transaction.
Severability (§9.7)	✓	Enforced to the maximum extent possible.
Execution Formalities	✓	NDA and Amendment have signature blocks with name and title for both parties. Authority of signatories cannot be verified from the document.

Missing Provisions

Provision	Priority	Why It Matters
Trade-secret / indefinite protection	Critical	All restrictions lapse on a fixed date (§6).
Standstill	Important	The document contemplates an offer for your "stock or assets" (§1.1(x)) but nothing stops 3M from hostile steps (tender offer, proxy contest, open-market purchases).
Irreparable-harm acknowledgment and bond waiver	Important	Article 7 is hedged.
Customer/supplier no-contact and non-solicit	Important	§2.3 and §3.1 cover only employees and insiders.
No-teaming / financing-source limits	Important	Information can flow to financing sources and, indirectly, to other bidders.
Assignment / change-of-control clause	Important	§9.2 refers to "permitted assigns" with no assignment provision; unclear if 3M could assign or if an acquirer of 3M inherits access.
Definition of "Proposed Transaction"	Moderate	The preamble says only "a potential transaction"; the permitted-use limit in §2.1 depends on this term.
Coverage of Company affiliates' information	Moderate	§1.1 covers information disclosed by "Disclosing Party or any of its Representatives"; Representatives do not include affiliates.
Clean-team / competitively sensitive information protocol	Moderate	The document does not say whether the parties compete. If they do, antitrust-sensitive information may need restricted access.

Suggested language: Trade secrets (add to §6)

"Notwithstanding the foregoing, with respect to any Proprietary Information that constitutes a trade secret under applicable law, Receiving Party's obligations under Article 2 and the definitions in Article 1 shall continue for so long as such information remains a trade secret, other than as a result of a breach of this Agreement."

Suggested language: Standstill

"For a period of [twelve (12)] months from the Effective Date, Interested Party shall not, and shall cause its affiliates and Representatives acting on its behalf not to, without the prior written consent of Company's Board of Directors: (a) acquire or offer to acquire beneficial ownership of any securities or material assets of Company; (b) make or participate in any tender offer, exchange offer, merger proposal, or proxy solicitation relating to Company; (c) seek to control or influence the management, Board or policies of Company; or (d) request any waiver of this Section."

Suggested language: Injunctive relief (replace relevant sentence of Art. 7)

"Receiving Party acknowledges that any breach or threatened breach of this Agreement would cause Disclosing Party irreparable harm for which monetary damages would be an inadequate remedy. Accordingly, Disclosing Party shall be entitled to specific performance and injunctive relief, without proof of actual damages and without the posting of any bond or other security, in addition to all other remedies available at law or in equity."

Suggested language: Customer/supplier contact (add to §2.3)

"…or any customer, supplier, distributor, licensor, lender, landlord or other business relation of Company or its subsidiaries."

Internal Consistency Issues

⚠️ Derived Information: §1.1 treats it as Proprietary Information, Article 5 makes it Receiving Party's sole property, and Article 8 requires return or destruction of materials "based thereon." (See Item 2.)
⚠️ Undefined term: Article 7 uses "Disclosing Company" (the defined term is "Disclosing Party").
⚠️ Ambiguous reference: §3.1(ii) refers to "the other party" (presumably Company, since only Interested Party is bound).
⚠️ Survival gaps:
- §6 preserves Articles 4–9 but not Article 1 or §§2.1–2.4, although surviving provisions (e.g., Articles 4, 5, 8) rely on the defined terms.
- Article 8 binds the parties "for the term of this Agreement."
- Article 3 is not in the survival list but carries its own end date (as amended).
⚠️ Assignment: §9.2 refers to "permitted assigns," but no clause defines what is permitted. Its heading ("Beneficiaries") does not match its content.
⚠️ Notice details missing: §9.8 relies on addresses and fax numbers "set forth beneath the name of each party below," but none appear.
⚠️ Party labels: The document uses "Interested Party/Receiving Party" and "Company/Disclosing Party" interchangeably. Some clauses say "each party" or "either party" (§§2.1, 2.6, 2.7, 4, 8) while others bind only the Receiving Party, so the degree of mutuality is unclear. Cogent bears some obligations of its own (e.g., §§2.1 informing Representatives and responsibility for their breaches, 4.1 consultation).
⚠️ Typographical error: §2.1 refers to "Company, Interested Party or any their respective Representatives."
⚠️ Entity description: The NDA does not state 3M's jurisdiction of incorporation. Amendment No. 1 states Delaware.
⚠️ Signatory title: 3M's signatory is "Manager, Corporate Development" in the NDA and "Manager, 3M Corporate Development" in the Amendment. Authority cannot be verified from the document.

Negotiation Priority

(Because the NDA is executed, these asks would require a signed amendment or would be applied to future NDAs.)

#	Issue	Ask	Negotiability
1	Trade-secret tail / survival	Indefinite protection for trade secrets; add Art. 1 and §§2.1–2.4 to survival	Medium
2	Derived Information ownership	Carve out Proprietary Information contained in Derived Information; keep it confidential and returnable	High
3	Standstill	Add 12–24 month standstill	Medium
4	Non-solicit carve-outs	Require Company's prior written consent for deal-related offers	Medium
5	Injunctive relief	Irreparable-harm acknowledgment and bond waiver	High
6	No-contact scope	Add customers, suppliers and other business relations	High
7	Financing sources / no-teaming	Consent for financing sources; no exclusive arrangements	Medium
8	Governing law / forum	Align law and forum (e.g., Delaware); make forum exclusive	Medium
9	Independent development exception	"Without use of or reference to" Proprietary Information, shown by written records	High
10	Securities carve-out (§4.2)	Limit to 3M's own securities	High
11	Assignment / notices / drafting fixes	Add assignment clause; add notice addresses; correct "Disclosing Company," "the other party," and "any their"	High

This review is for informational purposes only. Material terms should be reviewed by qualified legal counsel.

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