CONFIDENTIALITY AND PROPRIETARY RIGHTS AGREEMENT
This Employee Confidentiality and Proprietary Rights Agreement (“Agreement”) is entered into by and between Crystal Tones, LLC, a Utah limited liability company, (the “Employer”) on behalf of itself, Healing Harmonics LLC and their respective corporate and limited liability company affiliates ( collectively with Employer referred to herein as the
“Employer Group”), and _ _ (the “Employee”) (Employer and Employee are collectively referred to herein as the “Parties”) as of __ (the “Effective Date”). In consideration of Employee’s employment by Employer, which Employee acknowledges to be good and valuable consideration for Employee’s obligations hereunder, Employer and Employee hereby agree as follows:
- Confidentiality and Security.
(a) Confidential Information. Employee agrees that while employed by Employer or another member of Employer Group, Employee will have access to and learn about
confidential, secret and proprietary documents, manufacturing processes and secrets, business plans and strategies, vendor identities, customer identities, pricing information, materials, know-how, other trade secrets, and other information, in tangible and intangible form, of and relating to Employer Group and its businesses and existing and prospective suppliers, products, customers, owners and other associated third parties (“Confidential Information”). Employee further understands and acknowledges that this Confidential Information and Employer’s ability to reserve it for the exclusive knowledge and use of Employer Group is of great competitive importance and commercial value to Employer, and that improper use or disclosure of the Confidential Information by Employee will cause irreparable harm to Employer Group, for which remedies at law will not be adequate and may also cause Employer to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties, civil damages and criminal penalties.
For purposes of this Agreement, Confidential Information includes, but is not limited to, all information not generally known to the public, in spoken, printed, electronic or any other form or medium, relating directly or indirectly to the business of Employer Group, including without limitation business plans and strategies, methods of manufacture and production, the identity of suppliers and terms of supply, pricing and profit margins, the identity and contact details of customers and prospective customers, pricing, the other terms of sale, preferences and historical purchase information of customers, , financial and legal information, marketing and advertising strategies and plans, product specifications, payroll and other personnel information, security procedures, formulae, inventions, unpublished patent applications, discoveries and experimental processes, of Employer Group or its businesses or any existing or prospective customer, supplier or other associated third party, or of any other person or entity that has entrusted information to Employer Group in confidence.
Employee understands and agrees that Confidential Information developed by Employee in the course of Employee’s employment by Employer Group shall be subject to the terms and conditions of this Agreement as if Employer furnished the same Confidential Information to Employee in the first instance. Confidential Information shall not include information that is generally available to and known by the public, provided that such disclosure to the public is through no direct or indirect fault of Employee or person(s) acting on Employee’s behalf or in concert with Employee.
(b) Disclosure and Use Restrictions. Employee agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or part, to any entity or
person whatsoever (including other employees of Employer Group) not having a need to know and specifically known to Employee to have authority to know and use the
Confidential Information in connection with the business of Employer Group and, in any event, not to anyone outside of the direct employ of Employer Group except as
specifically required in the performance of Employee’s authorized employment duties to Employer Group as specifically instructed by an authorized officer of Employer Group (and then, such disclosure shall be made only within the limits and to the extent of such duties); and (iii) not to access or use any Confidential Information, and not to copy or memorize any documents, records, files, media or other resources containing any Confidential Information, or remove any such documents, records, files, media or other resources from the premises or control of Employer Group, except as required in the performance of Employee’s authorized employment duties to Employer Group as
specifically instructed by an authorized officer of Employer Group or with the prior consent of an authorized officer acting on behalf of Employer Group in each instance
(and then, such disclosure shall be made only within the limits and to the extent of such duties or consent). Disclosure of trade secrets protected under this agreement includes the use of such trade secrets for the benefit of any person or entity other than Employer Group, including the Employee or any future employer of Employee. Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required or permitted by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order. Employee shall provide written notice of any law or regulation or such order to an authorized officer of Employer Group within one day of becoming aware of such, and in any event sufficiently in advance of making any disclosure to permit Employer Group to contest such or seek confidentiality protections, as determined in Employer Group’s sole discretion. In addition, this Section does not, in any way, restrict or impede Employee from discussing the terms and conditions of Employee’s employment with co-workers or union representatives exercising rights under Section 7 of the National Labor Relations Act to the extent that such rights cannot be waived by agreement.
(c) Duration of Confidentiality Obligations. This agreement is perpetual and survives the termination of employment and the expiration of any non-compete agreement. Employee understands and acknowledges that Employee’s obligations under this Agreement with regard to any particular Confidential Information commenced immediately upon Employee first having access to such Confidential Information (whether before or after Employee began employment by a member of Employer Group the Employer or a predecessor of a member of Employer Group) and shall continue during and after Employee’s employment by Employer Group until such time as such Confidential Information has become public knowledge other than as a result of Employee’s breach of this Agreement or breach by those acting on Employee’s behalf or in concert with Employee. Employee warrants that at no time since such disclosure has Employee made or allowed any disclosure of any Confidential Information in a manner which would have been considered to be a breach of this Agreement had Employee been a party to or bound by this Agreement at the relevant time. - Proprietary Rights.
(a) Work Product. Employee agrees that all writings, works of authorship, inventions, discoveries, ideas and other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived or reduced to practice by Employee individually or jointly with others during the period of Employee’s employment by Employer Group and relating in any way to the business or contemplated business, research or development of Employer Group (regardless of when or where such is prepared or whose equipment or other resources is used in preparing the same) and all printed, physical and electronic copies, all improvements, rights and claims related to the foregoing, and other tangible embodiments thereof ( collectively, “Work Product“), as well as any and all rights in and to copyrights, trade secrets, trademarks (and related goodwill), mask works, patents and other intellectual property rights therein arising in any jurisdiction throughout the world and all related rights of priority under international conventions with respect thereto, including all pending and future applications and registrations therefor, and continuations, divisions, continuations-in-part, reissues, extensions and renewals thereof ( collectively, “Intellectual Property Rights“), shall be the sole and exclusive property of Employer.
(b) Work Made for Hire; Assignment. Employee acknowledges that, by reason of being employed by Employer Group at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in the Copyright Act of 1976 (17 U.S.C. § 101 ), and such copyrights are therefore owned by Employer. To the extent that the foregoing does not apply, Employee hereby irrevocably assigns to a member of the Employer Group as designated by Employer, for no additional consideration, Employee’s entire right, title and interest in and to all Work Product and Intellectual Property Rights therein, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto throughout the world. Nothing contained in this Agreement shall be construed to reduce or limit Employer Group’s rights, title or interest in any Work Product or Intellectual Property Rights so as to be less in any respect than that Employer Group would have had in the absence of this Agreement.
(c) Further Assurances; Power of Attorney. During and after Employee’s employment, Employee agrees to reasonably cooperate with Employer Group at Employer’s expense to (i) apply for, obtain, perfect and transfer to the relevant member of the Group the Work Product and Intellectual Property Rights in the Work Product in any jurisdiction in the world; and (ii) maintain, protect and enforce the same, including, without limitation, executing and delivering to Employer Group any and all applications, oaths, declarations, affidavits, waivers, assignments and other documents and instruments as shall be requested. Employee hereby irrevocably grants Employer Group power of attorney to execute and deliver any such documents on Employee’s behalf in Employee’s name and to do all other lawfully permitted acts to transfer the Work Product to Employer Group and further the transfer, issuance, prosecution and maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if Employee does not promptly cooperate with Employer Group’s request (without limiting the rights Employer shall have in such circumstances by operation of law). The power of attorney is coupled with an interest and shall not be effected by Employee’s subsequent incapacity.
( d) Moral Rights. To the extent any copyrights are assigned under this Agreement, Employee hereby irrevocably waives, to the extent permitted by applicable law, any and
all claims Employee may now or hereafter have in any jurisdiction to all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as
“moral rights” with respect to all Work Product and all Intellectual Property Rights therein.
(e) No License. Employee understands that this Agreement does not, and shall not be construed to, grant Employee any license or right of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials, designs, software or other tools or equipment made available to Employee by Employer Group.
(f) Former Employers and Others. Employee agrees that, Employee will not, in connection with the provision of services to the Employer Group, disclose to any member
of Employer Group or any of their employees or contractors, or induce any member of Employer Group to use, any proprietary information or trade secrets of any former
employer or any other person or entity. Employer further agrees that it will not bring onto the premises of Employer any unpublished document, proprietary information or
trade secrets belonging to any such employer, person or entity unless consented to in writing by both Employer Group and such employer, person or entity. - Security.
(a) Security and Access. Employee agrees and covenants (i) to comply with all Employer Group security policies and procedures as in force from time to time including without limitation those regarding computer equipment and networks, internet, e-mail and social media and facilities access; (ii) not to access or use any of the foregoing except as authorized by an authorized officer of Employer Group; and (iii) not to access or use any the foregoing in any manner after the termination of Employee’s employment. Employee agrees to notify Employer promptly in the event Employee learns of any violation of the foregoing by others, or of any other misappropriation or unauthorized access, use, reproduction or reverse engineering of, or tampering with any of the foregoing or other Employer Group property or materials by others.
(b) Exit Obligations. Upon (i) voluntary or involuntary termination of Employee’s employment or (ii) Employer’s request at any time during Employee’s employment,
Employee shall (a) provide or return to Employer any and all Employer Group property, including keys, access cards, identification cards, computers and data storage devices,
cell phones, e-mail and voicemail messages, and other forms of data and all Employer Group documents and materials, including but not limited to those that constitute or
contain any Confidential Information or Work Product, that are in the possession or control of Employee, whether they were provided to Employee by Employer Group or
any of its business associates or created by Employee in connection with Employee’s employment by Employer and (b) after offering to provide a copy of such to Employer,
permanently delete or destroy all copies of any such documents and materials not returned to Employer that remain in Employee’s possession or control, including those
stored on any non-Employer Group devices, networks, storage locations and media in Employee’s possession or control. Employee may not memorize or utilize such
confidential information in Employee’s memory except as explicitly authorized in this agreement. - Publicity. Employee hereby consents to any and all uses and displays, by Employer Group and its agents, without any right to further compensation, of Employee’s name, voice, likeness, image, appearance and biographical information in, on or in connection with Employer Group advertising, sale and marketing materials, photographs, audio and video recordings, images, websites, television and radio broadcasts, videos, books, magazines and other publications, and all other printed and electronic forms and media throughout the world, at any time during or after the period of Employee’s employment by Employer, for all business purposes of Employer Group (“Permitted Uses”).
Employee hereby forever releases Employer Group and its directors, officers, employees and agents from any and all claims, actions, damages, losses, costs, expenses and liability of any kind, arising under any legal or equitable theory whatsoever at any time during or after the period of Employee’s employment by Employer, in connection with any Permitted Use. - Non-disparagement. Employee agrees and covenants that Employee will not at any time make, publish or communicate to any person or entity or in any public forum any
defamatory or disparaging remarks, comments or statements concerning Employer Group or its businesses, or any of its employees, officers, and existing and prospective
customers, suppliers, investors and other associated third parties. This does not, in any way, restrict or impede Employee from exercising rights under Section 7 of the National Labor Relations Act to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation or order. Employee shall promptly provide written notice of any such law, regulation or order to an authorized officer of Employer Group within one day of receiving such, but in any event sufficiently in advance of making any disclosure to permit Employer to contest such or seek confidentiality protections, as determined in Employer’s sole discretion. - Acknowledgement. Employee acknowledges and agrees that the services to be rendered by Employee to Employer are of a special and unique character; that Employee will obtain knowledge and skill relevant to Employer’s industry, methods of production, methods of doing business and marketing strategies and sales techniques by virtue of Employee’s employment; and that the terms and conditions of this Agreement are reasonable under these circumstances. Employee further acknowledges that the amount of Employee’s compensation reflects, in part, Employee’s obligations and Employer’s rights under this Agreement; that Employer has no expectation of any additional compensation, royalties or other payment of any kind not otherwise referenced herein in connection herewith; that Employee will not be subject to undue hardship by reason of Employee’s full compliance with the terms and conditions of this Agreement or Employer’s enforcement thereof; and that this Agreement is not a contract of employment and shall not be construed as a commitment by either of the Parties to continue an employment relationship for any certain period of time. Employee acknowledges and agrees that the “Term” of employment of Employee under any prior agreement of employment between Employee and any member of Employer Group or any such members predecessor has come to an end without having been continued or extended and no promise regarding the possibility of such having been made. Nothing in this Agreement shall be construed to in any way terminate, supersede, undermine or otherwise modify the at-will status of the employment relationship between Employer and Employee, pursuant to which either Employer or Employee may terminate the employment relationship at any time, with or without cause, with or without notice.
- Restrictive Covenants.
(a) Suppliers. Employee understands and acknowledges that Employer Group’s relationship with certain of its suppliers and vendors is sensitive, special and unique, their capacity to supply Employer Group’s needs is limited is limited and that any loss or impairment of those relationships or related goodwill will cause significant and irreparable harm. Employee agrees and covenants that the identities and contact information of vendors, and price and other contract terms, shall be protected trade secrets.
(b) Customers. Employee agrees that Employer Group’s relationship with its distributors and other customers is sensitive, special and unique and that any loss or impairment of those relationships or related goodwill will cause significant and irreparable harm. Employee agrees and covenants, while employed by Employer Group and during a term of three years, to run consecutively, beginning on the last day of Employee’s employment with Employer Group, not to directly or indirectly solicit, contact in any way, attempt to solicit or contact in any way or meet with any of Employer Group’s current, former or prospective customers following the termination of Employee’s employment for the purpose of soliciting the purchase of any products or services similar to or competitive with those offered by Employer Group.
(c) Employees. Employee agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any
employee of Employer Group during a term of two years, to run consecutively, beginning on the last day of Employee’s employment with Employer Group. This two year
limitation applies only to this paragraph and not to the remainder of the agreement.
( d) Preparation for Competitive Activity. During the term of the Employee’s employment, Employee agrees not to undertake preparations for competitive activity
prohibited by this Agreement.
(e) Non-competition. Because of Employer Group’s legitimate business interest as described herein and the good and valuable consideration offered to Employee, during the
term of Employee’s employment and for a term of two years, to run consecutively, beginning on the last day of the Employee’s employment with Employer Group, for any
reason or no reason and whether employment is terminated at the option of Employee or Employer Group, the Employee agrees and covenants not to engage in Prohibited
Activity anywhere in the world. For purposes of this non-compete clause, “Prohibited Activity” is activity in which the Employee contributes Employee’s knowledge or
experience, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, partner, director, stockholder, officer,
volunteer, intern or any other similar capacity to an entity engaged in the same or similar business as Employer Group. Prohibited Activity also includes activity that may require or inevitably require disclosure of trade secrets, proprietary information or Confidential Information. PROVIDED that this two year limitation applies only to this noncompetition clause and does not apply to the protection of trade secrets under this agreement, which is perpetual.
Nothing herein shall prohibit Employee from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that Employee is not a controlling person of, or a member of a group that controls, such corporation. This Section 7(e) does not, in any way, restrict or impede Employee from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation or order. Employee shall provide written notice of any law or regulation or such order to an authorized officer of Employer Group within one day of becoming aware of such, and in any event sufficiently in advance of making any disclosure to permit Employer Group to contest such or seek confidentiality protections, as determined in Employer Group’s sole discretion.
(f) Future Employers. If and when Employee’s employment with Employer Group terminates, whether voluntarily or involuntarily, Employee agrees to provide to any
subsequent employer a copy of this Agreement. In addition, Employee authorizes Employer Group to provide a copy of this Agreement to third parties, including but not
limited to, any of Employee’s subsequent, anticipated or possible future employers.
(g) Remedies. In the event of a breach or threatened breach by Employee of any of the terms of the restrictive covenant obligations articulated herein, Employee hereby
consents and agrees that Employer Group shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.
(h) Attorney Fees. Should Employee breach any of the terms of the restrictive covenant obligations articulated herein, to the extent authorized by state law, Employee
will be responsible for payment of all reasonable attorneys’ fees and costs that Employer Group incurred in the course of enforcing the terms of the Agreement, including
demonstrating the existence of a breach and any other contract enforcement efforts. - Remedies. Employee agrees that Employer’s Confidential Information and Employer’s ability to reserve it for the exclusive knowledge and use of Employer Group is of great
competitive importance and commercial value to Employer, and that improper use or disclosure of the Confidential Information by Employee will cause irreparable harm to
Employer Group, for which remedies at law will not be adequate. In the event of a breach or threatened breach by Employee of any of the provisions of this Agreement,
Employee hereby consents and agrees that Employer shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that monetary damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief. Employee further acknowledges that each member of Employer Group is an intended third-party beneficiary of this Agreement. - Successors and Assigns.
(a) Assignment by Employer. Employer may assign this Agreement to any subsidiary or corporate affiliate in Employer Group or otherwise, or to any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Employer. This Agreement shall inure to the benefit of Employer Group and permitted successors and assigns.
(b) No Assignment by Employee. Employee may not assign this Agreement or any part hereof. Any purported assignment by Employee shall be null and void from the
initial date of purported assignment. - Governing Law: Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of Utah without regard to conflicts-of-law principles. Any action or proceeding by either Party to enforce this Agreement shall be brought only in any state or federal court located in the state of Utah, county of Salt Lake. The Parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or
proceeding in such venue. - Entire Agreement. Unless specifically provided herein, this Agreement contains all the understandings and representations between Employee and Employer pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
- Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by Employee and by an authorized officer of Employer ( other than Employee). No waiver by either of the Parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the Parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.
- Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall
be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the Parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement. The Parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement or by making such other modifications as it deems warranted to carry out the intent and agreement of the Parties as embodied herein to the maximum extent permitted by law. The Parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been set forth herein. - Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed or limited by reference to the caption or heading of any section or paragraph.
- Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same
instrument.
THIS AGREEMENT WAS DISCLOSED AS A CONDITION OF EMPLOYMENT AT THE OUTSET OF EMPLOYMENT, REGARDLESS OF WHEN IT WAS FORMALLY
EXECUTED BY THE EMPLOYEE.