COMPANY: Shared Spirits, Inc., a Tennessee C-Corporation, doing business as Shared Spirits, Inc. (“Company”), located at 1804 Williamson Court, Suite 207, Brentwood, Tennessee, 37027
PARTICIPANT TWO: Signer Below, an individual or entity.
RECITALS
WHEREAS, the Parties desire to explore, develop, or execute a potential or existing business relationship relating to the delivery of technology and processing of data serving the alcohol beverage industry, as more specifically described herein (the “Purpose”); and
WHEREAS, in connection with the Purpose, each Party (in such capacity, a “Disclosing Party”) may disclose certain Confidential Information (as defined herein) to the other Party (in such capacity, the “Recipient”); and
WHEREAS, the Parties wish to establish mutual rights and obligations with respect to Confidential Information and competitive restrictions on terms that are fair, enforceable, and proportionate to their legitimate business interests;
NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. DEFINITION OF CONFIDENTIAL INFORMATION
“Confidential Information” means any information, in whatever form or medium, of the Disclosing Party or its Affiliates furnished or otherwise made available to Recipient before or after the Effective Date in connection with the Purpose, including without limitation:
trade secrets, know-how, proprietary processes, formulas, algorithms, source code, technical specifications, and data architectures;
business or financial information, product or marketing plans, pricing structures, customer or supplier data, and consumer behavioral data;
any analyses, compilations, reports, memoranda, notes, or other written or electronic materials that contain, reflect, or are based, in whole or in part, upon any of the foregoing.
Disclosure Designation. Information disclosed verbally or through demonstration shall be deemed Confidential Information if the Disclosing Party identifies it as confidential at the time of disclosure and confirms such designation in writing within thirty (30) days. All written or electronic disclosures marked “Confidential” or “Proprietary” are automatically deemed Confidential Information.
Trade Secrets. The Parties agree that any Confidential Information meeting the definition of a trade secret under the Tennessee Uniform Trade Secrets Act, Tenn. Code Ann. § 47-25-1702 et seq. (TUTSA), shall be afforded all protections available under TUTSA and applicable federal law, without limitation as to duration.
“Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with a Party, where “control” means ownership of more than fifty percent (50%) of the voting interests of such entity.
2. EXCLUSIONS FROM CONFIDENTIAL INFORMATION
Confidential Information does not include information that the Recipient can demonstrate by clear and convincing written evidence:
(a) was in the Recipient’s possession prior to disclosure by the Disclosing Party, as evidenced by written records predating such disclosure;
(b) was or becomes substantially and generally available to the public other than through a breach of this Agreement by Recipient, its employees, agents, or contractors;
(c) was acquired or received independently from a third party who was lawfully in possession of such information and under no obligation of confidentiality to the Disclosing Party; or
(d) was independently developed by the Recipient without reference to, use of, or reliance upon the Confidential Information, as demonstrated by contemporaneous written records.
The foregoing exclusions shall be construed narrowly. The burden of establishing any exclusion rests solely upon the Recipient. Partial public knowledge shall not dissolve protection with respect to any combination, synthesis, or application of information that remains non-public.
3. USE AND DISCLOSURE OBLIGATIONS
During and after the term of this Agreement, Recipient agrees that it shall:
(a) hold all Confidential Information in strict confidence and not disclose it to any third party except as expressly authorized by the Disclosing Party in advance and in writing;
(b) use Confidential Information only to the extent strictly necessary in connection with the Purpose, and not for its own commercial gain or any other purpose;
(c) restrict access to Confidential Information to those employees, contractors, or advisors of Recipient who (i) have a demonstrable need to know in connection with the Purpose and (ii) are bound by written confidentiality agreements affording protections no less stringent than those herein; and
(d) implement and maintain reasonable technical and organizational safeguards, including commercially reasonable cybersecurity measures, to protect Confidential Information from unauthorized access, disclosure, or use.
Compelled Disclosure. If Recipient is required to disclose Confidential Information pursuant to applicable law, regulation, or court order, Recipient shall: (i) provide Disclosing Party with prompt prior written notice, to the extent legally permissible; (ii) cooperate reasonably in seeking a protective order; and (iii) disclose only that portion strictly required to comply.
Audit Rights. Upon reasonable written notice of no less than five (5) business days, the Disclosing Party shall have the right (exercisable no more than once per twelve-month period) to audit the Recipient’s compliance with Section 3(c), including verification that required confidentiality agreements with employees and contractors are in place.
4. NON-COMPETE RESTRICTION
REDRAFT NOTE: STRATEGIC REDRAFT NOTE: The prior non-compete language (“blatantly similar technology”) did not meet Tennessee’s enforceability standard. This version defines the restricted activity with specificity, establishes geographic scope, sets a 2-year restriction period, and resolves the §4/§8 contradiction in the prior draft.
4.1 Restricted Activities. During the Restriction Period (Section 4.3) and within the Geographic Scope (Section 4.4), Participant Two agrees it shall not, directly or indirectly, without the prior written consent of the Company:
(a) develop, build, operate, market, license, or commercially deploy any platform, application, software system, or data-processing service that: (i) aggregates, processes, enriches, or redistributes sales, compliance, distribution, or retailer/supplier data for participants in the alcohol beverage industry (including brewers, distillers, importers, distributors, wholesalers, or retailers); or (ii) provides substantially equivalent technical functionality to the Company’s proprietary technology platform as described in any written disclosure made pursuant to this Agreement;
(b) solicit or accept engagement from any existing client, customer, or active prospect of the Company identified in writing to Participant Two as such during the term of this Agreement to provide any service or technology substantially similar to those described in subsection (a) above; or
(c) form, join as a founder or co-founder, or acquire a controlling interest in any entity whose primary business is the provision of services described in subsection (a) above.
4.2 Permitted Activities. Notwithstanding Section 4.1, the following activities are expressly permitted and shall not constitute a violation:
(a) employment by, consulting for, or partnership with any entity in the alcohol beverage industry generally, provided that Participant Two’s personal role does not directly involve the development, marketing, or deployment of services described in Section 4.1(a);
(b) development of general-purpose technology infrastructure, data engineering services, or analytics tools that are not targeted, branded, marketed, or sold specifically to the alcohol beverage industry; and
(c) any activity expressly approved in advance and in writing by the Company.
4.3 Restriction Period. The non-compete obligations in Section 4.1 shall commence on the Effective Date and expire two (2) years after the earlier of: (i) the termination of the business relationship between the Parties, or (ii) written notice of expiration of this Agreement (the “Restriction Period”). The Parties acknowledge this duration is a product of mutual negotiation and is reasonable given the interests at stake.
4.4 Geographic Scope. The non-compete obligations in Section 4.1 shall apply within the United States of America, including all fifty (50) states and the District of Columbia. The Parties acknowledge that the Company’s technology platform and client relationships are national in scope. If any court finds the geographic scope overbroad, the Parties request that the scope be reformed to the broadest area deemed enforceable under applicable law.
4.5 Protectable Interest. Participant Two expressly acknowledges that: (i) the Company has a legitimate protectable interest in its proprietary alcohol beverage data-processing platform, its client relationships, and its Confidential Information; (ii) the Company’s competitive advantage would be materially harmed by Participant Two engaging in the restricted activities; and (iii) the restrictions herein are reasonable and no broader than required to protect the Company’s legitimate interests.
4.6 Mutual Application. For clarity, Company is equally bound by Sections 4.1 through 4.5 with respect to Participant Two’s proprietary systems and client relationships disclosed under this Agreement. The obligations of Section 4 are mutual, bilateral, and enforceable by either Party against the other.
5. INDEPENDENT DEVELOPMENT — RECONCILIATION WITH SECTION 4
The Parties acknowledge an intentional and deliberate distinction between independent development rights and the non-compete restriction:
(a) Nothing in this Agreement limits either Party’s right to independently develop or acquire products or technologies including products that may compete generally with those of the other Party, provided that: (i) such development occurs without reference to, use of, or reliance upon the other Party’s Confidential Information; and (ii) such development does not constitute a Restricted Activity as defined in Section 4.1.
(b) If either Party wishes to commence an Independent Development project that could reasonably fall within the scope of Section 4.1, that Party shall provide written notice to the other Party prior to initiating such project. Such notice shall describe the nature of the project with sufficient specificity to allow the receiving Party to assess whether Section 4.1 is implicated. Failure to provide such notice shall be considered relevant evidence of bad faith in any subsequent enforcement proceeding.
(c) Sections 4 and 5 are to be read as a coherent whole: Section 5 preserves the right to compete lawfully and independently; Section 4 restricts direct exploitation of the other Party’s proprietary technology category, clients, and Confidential Information during the Restriction Period.
6. TERM AND SURVIVAL
This Agreement shall be effective as of the Effective Date and shall continue for a term of three (3) years, unless earlier terminated by mutual written consent of the Parties. Notwithstanding any expiration or termination, all use and non-disclosure obligations shall survive as follows:
(a) indefinitely, with respect to Confidential Information constituting trade secrets under TUTSA; and
(b) for a period of five (5) years from the date of each disclosure, with respect to all other Confidential Information.
The non-compete obligations in Section 4 shall survive expiration or termination for the full duration of the Restriction Period as defined in Section 4.3.
7. RETURN AND DESTRUCTION OF INFORMATION
Upon written request by the Disclosing Party at any time during the term of this Agreement or while survival obligations remain in effect:
(a) all Confidential Information in any tangible or electronic form in the Recipient’s possession, custody, or control, and any copies, extracts, or derivatives thereof, shall be promptly destroyed or, at the Disclosing Party’s written election, returned; and
(b) within ten (10) business days of completion, an authorized officer of the Recipient shall deliver to the Disclosing Party a written Certificate of Destruction or Return, confirming that all Confidential Information has been destroyed or returned and that no copies have been retained.
Automated backup systems that incidentally retain Confidential Information through routine archival processes shall remain subject to confidentiality obligations until such backups are overwritten in the normal course of business. The Recipient shall not actively restore or use such backups to retrieve Confidential Information.
8. INTELLECTUAL PROPERTY RIGHTS
Confidential Information is and shall remain the sole and exclusive property of the Disclosing Party. This Agreement does not grant, expressly or by implication, estoppel, or otherwise, any license, title, or interest in any patent, trademark, copyright, trade secret, or other intellectual property right of the Disclosing Party to the Recipient.
9. WARRANTIES
Each Party represents and warrants that it has full authority to enter into this Agreement and that doing so does not violate any applicable law, regulation, or legally enforceable obligation to which it is a party.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, CONFIDENTIAL INFORMATION IS PROVIDED “AS IS.” NEITHER PARTY NOR ITS AFFILIATES MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY CONFIDENTIAL INFORMATION.
10. REMEDIES — EQUITABLE RELIEF AND LIQUIDATED DAMAGES
Equitable Relief. Each Party acknowledges that any unauthorized disclosure or threatened violation of this Agreement may cause irreparable harm to the Disclosing Party for which monetary damages alone would be an inadequate remedy. Accordingly, the Disclosing Party shall be entitled, without proof of actual damages and without furnishing a bond or other security, to seek injunctive relief, specific performance, and other equitable remedies in any court of competent jurisdiction.
Liquidated Damages. In recognition of the difficulty of calculating damages arising from a breach of Section 4, and as a reasonable pre-estimate of harm rather than a penalty, the Parties agree that a material breach of Section 4.1 by either Party shall entitle the non-breaching Party to liquidated damages in the amount of fifty thousand dollars ($50,000.00), in addition to any injunctive relief and the recovery of reasonable attorneys’ fees and costs.
Attorneys’ Fees. In any action to enforce this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees and costs from the non-prevailing Party.
11. DISPUTE RESOLUTION
Negotiation. In the event of a dispute, the Parties shall first attempt to resolve it through good-faith negotiation for a period of fifteen (15) days following written notice of the dispute.
Arbitration. If the dispute is not resolved through negotiation, it shall be submitted to binding arbitration administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures then in effect. The arbitration shall be conducted by a single arbitrator in Nashville, Tennessee. The arbitration award shall be final and binding and may be entered as a judgment in any court of competent jurisdiction.
Exception for Equitable Relief. Notwithstanding the foregoing, either Party may seek emergency injunctive or other equitable relief in a court of competent jurisdiction without first engaging in negotiation or arbitration, and without waiving its right to arbitrate the underlying dispute.
12. NO AGENCY OR PARTNERSHIP
This Agreement does not create any agency, partnership, joint venture, or employment relationship between the Parties. Neither Party has authority to bind the other Party. No binding agreement with respect to a transaction between the Parties shall exist until a definitive written agreement is separately executed by duly authorized representatives of each Party.
13. ASSIGNMENT
Neither Party may assign, transfer, or delegate its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Any purported assignment without such consent shall be null and void. This Agreement shall be binding upon and inure to the benefit of the Parties and their permitted successors and assigns.
14. GOVERNING LAW AND VENUE
This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee, without regard to its conflict of law principles. Solely for the purpose of seeking emergency equitable relief under Section 11, the Parties consent to exclusive jurisdiction and venue in the state and federal courts located in Davidson County, Tennessee.
15. MISCELLANEOUS
Severability. If any provision is held void or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it enforceable, and the remaining provisions shall continue in full force and effect.
Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to its subject matter and supersedes all prior written or oral understandings. It may be amended only by a written instrument signed by authorized representatives of both Parties.
Waiver. No failure or delay by either Party in exercising any right under this Agreement shall operate as a waiver of such right. No single or partial exercise of any right shall preclude further exercise of that right.
Counterparts. This Agreement may be executed in counterparts, including electronically, each of which shall be deemed an original, and all of which together shall constitute one and the same agreement.
Notices. All notices under this Agreement shall be in writing and delivered by (i) certified mail, return receipt requested, (ii) nationally recognized overnight courier, or (iii) email with written confirmation of receipt, to the addresses set forth on the signature page below.
KEY PROVISIONS SUMMARY
Provision
Key Terms
Confidentiality Duration
5 years (general); indefinite (trade secrets under TUTSA)
Non-Compete Duration
2 years from relationship termination
Geographic Scope
United States — all 50 states + D.C.
Restricted Activity
Alcohol beverage data/tech platforms; client solicitation
Permitted Competition
General industry work; non-targeted tech services
Independent Development
Permitted; written notice required if §4.1 is implicated
Dispute Resolution
Negotiation (15 days) → JAMS Arbitration, Nashville TN
Equitable Relief
Available without bond or proof of actual damages
Liquidated Damages
Negotiated amount — fill in before execution
Governing Law
State of Tennessee; TUTSA for trade secrets
EXECUTION
IN WITNESS WHEREOF, the Party has executed this Mutual Non-Disclosure and Non-Compete Agreement as of the Effective Date first written below: