Non-Circumvention/Non-Disclosure agreements (NCND)

Not unless is specifically in the language that you will not disclose anything to anyone either. Usually two way ND is done by a ND you provide that the other person signs and they have you sign a ND that they provide.

Thanks, that's helpful. I'll have to go back and re-read the agreement then to be sure. To your point, in this case I sent out a NCND and it came back signed...so only 1 agreement originating from me...no additional one from the investor.

Matt

Do you have a Non-Circumvention/Nondisclosure Agreement that you can post for us? Thanks.

Liz Eastlake
The Eastlake Group LLC

Here's a decent generic one I found online. You just need to read through it and fill in appropriate blanks for your situation. Copy/paste into a text program and format as you like. Keep in mind, you may want to run this (and any sort of contract) by a real-estate lawyer to make sure it does what you want.

Enjoy!
Matt

Non-Circumvention, Non-Disclosure and Confidentiality Agreement

THIS AGREEMENT entered into on this _________ day of _________________, 2010 is for the Professional Association and arrangement of Non-Circumvention, Non-Disclosure and Confidentiality between ______________________________ whose office is at ______________________________ and __________________________________ whose principal place of business is at ______________________________ hereinafter, called the "The Parties." The Parties with this agree to respect the integrity and tangible value of this agreement between them. THIS AGREEMENT is a perpetuating guarantee for five (5) years from the date of execution and is to be applied to any and all transactions present and future, of the introducing party, including subsequent follow-up, repeat, extended, renegotiated, and new transactions regardless of the success of the project.

Because of THIS AGREEMENT, the Parties involved in this transaction may learn from one another, or from principals, the names and telephone numbers of investors, borrowers, lenders, agents, brokers, banks, lending corporations, individuals and/or trusts, or buyers and sellers hereinafter called contacts. The Parties with this acknowledge, accept and agree that the identities of the contacts will be recognized by the other Party as exclusive and valuable contacts of the introducing Party and will remain so for the duration of this agreement.

The Parties agree to keep confidential the names of any contacts introduced or revealed to the other party, and that their firm, company, associates, corporations, joint ventures, partnerships, divisions, subsidiaries, employees, agents, heirs, assigns, designees, or consultants will not contact, deal with, negotiate or participate in any transactions with any of the contacts without first entering a written agreement with the Party who provided such contact unless that Party gives prior written permission.

Such confidentiality will include any names, addresses, telephone, telex, facsimile numbers, and/or other pertinent information disclosed or revealed to either Party.
The Parties agree not to disclose, reveal or make use of any information during discussion or observation regarding methods, concepts, ideas, product/services, or proposed new products or services, nor to do business with any of the revealed contacts without the written consent of the introducing party or parties.

The Parties agree that due to the many variables surrounding each Business Financial Transaction that will occur because of this agreement, the commission to be paid and/or the fee structure between the Parties can vary. A separate fee/commission agreement will outline compensation for each Business/Financial Transaction. The fee or commission agreement must be drafted and acknowledged by signature before all Business/Financial Transactions.

In case of circumvention, the Parties agree and guarantee that they will pay a legal monetary penalty that is equal to the value of the transaction, including properties, and royalties, and/or commission or fee the circumvented Party should have realized in such transactions, by the person(s) engaged on the circumvention for each occurrence. If either party commences legal proceedings to interpret or enforce the terms of THIS AGREEMENT, the prevailing Party will be entitled to recover court costs and attorney fees, not to exceed $10,000.00 USD.

The parties will construe THIS AGREEMENT in accordance with the laws of the State of ____________________. If any provision of this agreement is found to be void by any court of competent jurisdiction, the remaining provisions will remain in force and effect.

THIS AGREEMENT contains the entire understanding between the Parties and any waiver, amendment or modification to THIS AGREEMENT will be subject to the above conditions and must be attached hereto.

Upon execution of THIS AGREEMENT by signature below, the Parties agree that any individual, firm company, associates, corporations, joint ventures, partnerships, divisions, subsidiaries, employees, agents, heirs, assigns, designees or consultants of which the signee is an agent, officer, heir, successor, assign or designee is bound by the terms of THIS AGREEMENT.

A facsimile copy of this Non-Circumvention, Non-Disclosure and Confidentiality Agreement shall constitute a legal and binding instrument. By setting forth my hand below I warrant that I have complete authority to enter into THIS AGREEMENT.

For: ____________________________________________

________________________________________________ ____________________________
(Signature) (date)

For: ­____________________________________________

________________________________________________ ____________________________
(Signature) (date)

Hi Matt, that is a good form, thanks for providing it. One method of dealing with your initial question of sharing info on the property with other investors is to disclose it sequentially. Tell the investor they have a specified number of hours exclusive access to the info, if they haven't acted in that time, you reserve the right to take it to the next investor. Most investors should be able to determine whether the deal will work for them or not. If it looks promising they could pay the finder's fee and retain exclusive use of the lead that you provided.

Great advice boconnor, thanks!

Thanks Matt!

I have a few questions about the NCND. I am a buyer rep (source deals for all cash buyers.) I connect my buyer with a seller rep that has direct contact to a few banks.

1. Since I know that this seller rep will continue to use my seller once he has direct contact because that allows them to do transactions counting my compensation, Is there any way that I can prevent them from working directly with each other on future deals exclusively without me, or pretty much after this deal is done, I'm done?

2. My buyer requested that buyer rep include specific bank names that we are going to working with, this NCND only states with banks. Is that fishy?

3. I am a sourcing agent for all cash buyers, my buyer instructed that I sign the NCND and get the information over to him, do I need a corporation or where I'm suppose to complete by and for: do I put my name and seller or just put my name?

4. My buyer also ask that seller rep include how everyone would be getting compensated if it describes how Intermediaries will get paid, does that still cover me if I sign as a buyer or is there a loop hole? / "Each intermediary group shall submit their own sub-fee agreements into escrow, to declare the disbursements’ of funds to the member of their individual groups." Can you explain?

NON-CIRCUMVENTION /
NON-DISCLOSURE AGREEMENT

THIS NON-CIRCUMVENTION / NON-DISCLOSURE AGREEMENT (“Agreement”) is made effective this October 27, 2010.

Under penalty of perjury, I attest that I am the actual Buyer with full corporate, partnership, or entity authorization and authority, and have the proven funds sufficient to complete this transaction, subject to verification and acceptance of the REO/NPN Portfolios.

WHEREAS, the Intermediaries have agreed to work with the Buyer’s Rep and/or Intermediaries, to facilitate the purchase and sale of REO/NPN from one or several Banks to the Buyer, and

WHEREAS, the Parties (including their associates, agents, affiliates and/or representatives collectively or individually referred to as “Affiliates” herein) contemplate entering into or participating in one or more transactions (“Transaction” or “Transactions”) concurrently herewith and/or hereafter during the term of this Agreement, and

WHEREAS, the Parties mutually recognize that in the course of consummating Transactions, each may learn from the other (including from their Affiliates) the identity, address, and/or telephone/facsimile numbers of clients, brokers, buyers, sellers, financiers, intellectual property (hereinafter referred to as “Confidential Sources”) and/or information relating to bank accounts, transaction codes, participating bank and or entities (hereinafter referred to as “Confidential Information”) which the other Party possesses and may have acquired at substantial cost or effort, and

WHEREAS, the Parties desire to work with, and not circumvent, improperly disclose and keep confidential one another respecting each other’s Confidential Sources and Confidential Information,

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

Article 1

Agreement

1. Agreement. The Buyer agrees to work with the Intermediaries listed above, to present a single or several REO portfolios to the Buyer that meets the Buyer’s acquisition criteria. Intermediaries’ services shall include offering input if desired on purchase agreements. Buyer acknowledges that Intermediaries are not acting as an attorney, tax advisor, surveyor, and/or appraiser in this matter and the Buyer has been advised to seek separate legal counsel, tax advisors, surveyors, appraisers and/or other third parties for advice on these matters. Intermediaries will not obtain or order products or services from outside sources (e.g. surveys, soil tests, title reports, inspections) without the prior written consent of Buyer. Buyer agrees to pay for all costs for products or services so approved and obtained by both Parties.

Article 2

Non-Circumvention / Confidentiality / Non-Disclosure

2. Non-Circumvention. Neither Party (including Affiliates of such Party) will attempt, directly or indirectly, to contact the other Parties’ Confidential Sources, transaction banks on matters of and to the Transaction, or contact or negotiate with a Confidential Source or make use of any Confidential Information of the other Party, except through such other Party or with the express written consent

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of such other Party as to each such contact. The Parties or their Affiliates shall not contact, deal with, or otherwise become involved in any Transaction with any corporation, partnership, individual, any banks, trust or lending institutions which have been introduced by the other Party without the permission of the introducing Party. Any violation of this covenant shall be deemed an attempt to circumvent such other Party, and the Party so violating this covenant shall be liable for damages in favor of the circumvented Party.

3. Pre-Existing Relationship. Both the Intermediaries and the Buyer recognize and acknowledge that the Buyer may have had, currently has, or will have, a relationship, business or personal, formal or informal, of whatever nature, with the Banks involved in a Transaction. Notwithstanding that prior, existing or future relationship, the Buyer agrees that it shall strictly adhere to and abide by all of the terms and conditions of this Agreement, particularly but not exclusively, those pertaining to the non-circumvention, non-usurpation, confidentiality, non-disclosure and compensation. For any Transaction that is the subject of the business between the Parties and pertains to this Agreement, the Buyer shall work through the Intermediaries and, should a Transaction be successfully consummated, the Buyer shall be obligated to pay the compensation detailed in this Agreement. Furthermore, the Buyer agrees that any similar transaction that it undertakes with a Bank that is involved in a Transaction shall be covered under this Agreement for any future transaction with the same intermediaries as stated in this Agreement in the event of a successful Transaction. For purposes of this Agreement, a transaction that is similar to a Transaction covered under this Agreement shall include, but is not limited to, the purchase of a REO portfolio.

4. Confidentiality. Any information (“Evaluation Materials”) with respect to any Transaction provided to the Parties and/or its representatives (“Accepting Parties”) will be used solely for the purpose of evaluating the Transaction by the Parties. The Evaluation Materials will not be used or duplicated for any other purpose.

Accepting Parties shall keep all Evaluation Materials strictly confidential; provided, however, that such Evaluation Materials may be delivered to such persons or entities who because of their involvement with the Transaction need to know such information for the purpose of giving advice with respect to, or consummating, the Transaction (all of whom are collectively referred to as “Related Parties”); provided further, that any such Related Parties shall be informed by Accepting Parties of the confidential nature of such information and shall be directed by Accepting Parties (and Accepting Parties shall cause such Related Parties) to keep all such information in the strictest confidence and to use such information only in connection with the Transaction and in accordance with the terms of this Agreement.

5. No Usurpation. The Transaction and the Evaluation Materials that the Intermediaries will present, or has presented, to the Accepting Parties is a product of extensive research, cost, time and money, and is the substance of the Intermediaries’ business. The Buyer, its representatives, Affiliates and its Affiliated Parties shall not usurp the Transaction and information contained in the Evaluation Materials to the detriment of the Intermediaries. Such usurpation shall materially, substantially and irreparably damage the Intermediaries. Consequently, the Buyer, it representatives, its Affiliates and the Accepting Parties agree that they will not use any information contained in the Evaluation Materials or any other information learned from its engagement or involvement with the Intermediaries. Buyer agrees that during the term of this Agreement any and all inquires and/or negotiations on behalf of Buyer relating to the acquisition of any assets introduced to Buyer by Intermediaries shall be negotiated and handled by and through the introducing Intermediaries.

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Buyer agrees that any specific orders placed with Intermediaries will not be duplicated and placed with any other Party.

6. Return of Evaluation Materials. If, at any time, the Parties elect not to proceed with the Transaction, or, upon request of Intermediaries, Accepting Parties will promptly return to the Intermediaries all Evaluation Materials received by Accepting Parties, whether received before or after the date of this Agreement, without retaining copies thereof.

7. No Disclosure. Accepting Parties shall not (i) disclose the fact that discussions or negotiations are taking place concerning the Transaction by the Parties or any of the terms thereof, or (ii) conduct any discussions, negotiations or make any inquiries concerning the Transaction with any other person or entity (including tenants) except for Intermediaries and the Intermediaries’ Parties, except as may be expressly permitted elsewhere in this Agreement and, in such case, only in strict accordance with the provisions hereof. In the event that any Accepting Parties or Related Parties become legally compelled to disclose all or any part of the Evaluation Materials, Accepting Parties will provide the Intermediaries prompt written notice, so that Intermediaries and Buyer may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement.

All Accepting Parties acknowledge that damages may be inadequate to protect against breach of any of these provisions and therefore agree in advance to the granting of injunctive relief as described above. In the event that such protective order or other remedy is not obtained, or that any party to this agreement waives compliance with the provisions of the Agreement, in such instance, Accepting Parties will furnish only that portion of the Evaluation Materials which is legally required and will exercise best efforts to obtain reliable assurance that confidential treatment will be accorded the Evaluation Materials..

8. Contact Strictly Limited. The Parties, the Accepting Parties, and any or all of persons, parties or entities associated with and/or working with or for the Buyer and Intermediaries shall communicate only to and exclusively with the representing Parties.

9. No Representations by Intermediary Parties. The Intermediaries do not make any representations or warranties as to the accuracy or completeness of the Evaluation Materials or that the actual results will conform to any projections contained therein. Intermediaries expressly disclaim any and all liability for representations or warranties, express or implied, contained in the Evaluation Materials, or in any other written, oral or other communications transmitted or made available to Accepting Party by the Intermediaries or the Intermediaries’ Parties.

10. No Obligation. Intermediaries and/or Buyer is under no legal obligation of any kind whatsoever with respect to the Transaction by virtue of this Agreement, other than their own fiduciary duties of non-competition, non-circumvention, and non-disclosure as between themselves and as such in the effort to consummate this transaction, the delivery of any Evaluation Materials, any discussions concerning the Transaction or otherwise, unless and until a binding written agreement is executed and delivered by all parties thereto.

11. Indemnity; Enforcement. Parties agree to indemnify and hold harmless the buyer and the Intermediaries from any damage, loss, cost or liability (including, without limitation, actual damages, consequential damages, legal fees and the costs of enforcing this indemnity) arising out of or resulting from any unauthorized use or disclosure by the Parties and the Accepting Parties of any Evaluation Material. The Parties also acknowledge that monetary damages would be both

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NON-DISCLOSURE AGREEMENT

incalculable and an insufficient remedy for any breach of this Agreement and that any such breach would cause either side irreparable harm.

Accordingly, the Parties agree that, in the event of any breach, threatened breach or other violation of this Agreement by the Parties and the Accepting Parties, in addition to any other remedies at law or in equity they may have, shall each be entitled, without the requirement of posting a bond or other security, to equitable relief, including injunctive relief and specific performance. All rights and remedies of the buyer and Intermediaries herein and at law or in equity for any breach of this Agreement by the Parties and/or the Accepting Parties shall be cumulative and may be exercised singly or concurrently and from time to at either party’s discretion.

Article III

Compensation

12. Compensation Payment. The Parties shall sign escrow instructions directing the seller escrow holder or title company to pay all sides. Each party shall assign a paymaster for their group and shall not interfere in any other group’s payments. The Buyer shall instruct escrow as to the identity of its paymaster. Each party shall be solely responsible for the payments to the members of their group.

Intermediary Group: The intermediary groups, as listed below, shall share equally in the total commissions paid to the intermediary side in a equal and proportional split based upon the total number of intermediary group/ facilitators listed herein. These percentages of the total commission shall be split again equally in equal portions to each intermediary group. Each intermediary group shall submit their own sub-fee agreements into escrow, to declare the disbursements’ of funds to the member of their individual groups.

Article III

Miscellaneous

13. Term. This Agreement shall be in effect on a case by case basis, renewing every time that the same buyer purchases any product from the same seller and or with the same intermediary groups.

14. Conflicts of Interest. Buyer acknowledges that Intermediaries may represent other clients desirous of purchasing any and all REO portfolios. Intermediaries shall preserve any confidential information disclosed by any buyer, and shall not disclose the existence of, or the terms of, any offer prepared on behalf of one client to another client.

15. Disclaimer. Intermediaries are not guaranteeing the suitability of any asset for the Buyer’s purposes. Buyer is not relying on Intermediaries to determine the environmental or other physical condition of the assets. Intermediaries shall not be liable for inaccuracy of any information/data provided by third parties in connection with the assets. Intermediaries makes no representations or warranties of any nature whatsoever, and Buyer is not relying on anything presented by or through the Intermediaries, regarding any aspect of the REO portfolio including but not limited to the merchantability of title, suitability for any purpose, transferability of title and physical condition of any part of the REO portfolio. Buyer acknowledges that it is its responsibility to perform any and all due diligence on the REO portfolio and is making the decision to buy or not to buy based on its sole and unfettered discretion. Finally, the Buyer and Intermediaries agree to indemnify and hold each other harmless against any and all claims made by any person, corporation, association or entity claiming any ownership interest or any matter whatsoever in all or part of the REO portfolio

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16. Taxes. Neither Party makes any representations or warranties regarding the tax consequences of the proposed investments, if any, in any jurisdiction covered by this Agreement. The parties agree that each accepts its liability for taxes, imposts, levies or charges that may arise.

17. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile transmission, telexed or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the addresses noted above.

18. Entire Agreement. This Agreement represents the entire agreement between the Parties and supersedes all existing contracts and agreements previously executed between the Parties, and any representations, either written or oral, by one Party to another with respect to the subject matter hereof. This Agreement shall be modifiable only in writing, duly executed by all Parties.

19. Binding. This Agreement shall be for the benefit of, and be binding upon, the signatories hereof, their agents, directors, officers, representatives, heirs, personal representatives, successors and assigns.

20. Governing Law. This Agreement shall be construed and governed by the laws of a court of competent jurisdiction, in the State of Texas.

21. Severability. The provisions of this Agreement are severable, and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions and any partially enforceable provisions, to the extent enforceable, shall nevertheless be binding and enforceable.

22. Assignment. Neither Party may assign this Agreement without the prior written consent of all the other Parties.

23. Informed, Voluntary Execution of the Agreement. The undersigned signatories to this Agreement acknowledge and affirm that they fully understand their obligations with respect to this Agreement and the obligations undertaken hereto; that they have had adequate time and opportunity to consult with legal counsel of their choice prior to the execution of this Agreement; that they are fully informed; and that each has executed this Agreement freely and voluntarily, without reservation or exception.

24. Authorization. The undersigned signatories to this Agreement acknowledge and affirm that they are duly authorized signatories and have full legal capacity to initiate and execute all legal obligations arising from this Agreement. The signatories whose endorsements appear herein hereby represent that they each are acting with full corporate authority, and with full knowledge and at the direction of the officers and/or Board of Directors of their respective companies, if any.

25. Counterparts. The signatures of the parties duly authorized representatives shall be affixed as indicated below. The parties stipulate and agree that this Agreement may be signed in counterparts and executed by each Party as set forth above. When each counterpart, duly executed, and delivery thereof has been made to each Party respectively, this Agreement shall then be considered to be an original, binding agreement between the parties, whether received in hand, delivered by mail or courier, or transmitted via electronic facsimile transmission. The parties further stipulate and agree that duly executed electronic facsimile transmission copies shall be acceptable and shall be considered to be as valid, legal and binding upon the parties as the originals

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NON-DISCLOSURE AGREEMENT

IN WITNESS WHEREOF, the parties irrevocably agree to all of the terms and conditions of the Agreement and in formal acknowledgement thereof have set their hands and seals, as signified by their respective signatures which appear below.

Buyer / Buyer’s Mandate acknowledge this agreement in its entirety.

Sign: Date: ___________

Name:

By and for:

All great questions mrsclintongrant....none of which I'm really qualified to answer. Anyone else? Otherwise, I'd suggest running this by a real estate based lawyer.

Good luck!
Matt

That's very helpful everyone, Okay let's we go!!!

This post thanks for sharing everyone

While the NCND has its place in the business world, don't delude yourself into thinking a NCND will provide you security for a little wholesale deal. A NCND is evidence of someone who is not in control of a deal. There is nothing to prevent the other party from gaining your information and passing it on to an associate. Then it's up to you to prove the relationship existed. Trust me, I speak from experience. Just get control of the deal with an escape strategy and save yourself a lot of headaches and wasted time.

Why can't both be done?

Lock up the property with a P A and a NCND ?

If you have a PA, there is no need for a NCND. With a PA, you are in control of the deal.

Major relief to know this

Even if it must be verified with a real estate lawyer

with...NON REFUNDABLE FEE/Down

No performance ..they LOSE $$$$

Very good point and this is a good way of seeing the commitment level of a buyer

I agree 100% with both of your statements. An NCND isn't worth much more that the paper it is written on for a wholesale deal (like Tom says). Time and court costs to try and pursue the offender usually are not worth the trouble. I have never used one. I lock up the property and then wholesale to a REAL CASH buyer using a non refundable earnest (like Mike suggests) and a non refundable wholesale fee up front.
If someone, for whatever reason is determined to go around you, they will. If they would try to jack up the relationship over one deal you have made a poor judgement of this persons character. If the buyer thinks you are a great source of discounted properties they will want to work with you, not go around you. (hint) If they think you are some one time wanna be they might take advantage of you. (hint) Present yourself as a professional!!

Michael