The Company can impose certain limitations on the Investors ability to receive “material nonpublic technical information” that the Company has. Material nonpublic technical information is defined in the Defense Production Act (“DPA”).
Briefly from the DPA, material nonpublic technical information is defined as information that:
“(1) Provides knowledge, know-how, or understanding, in each case not available in the public domain, of the design, location, or operation of covered investment critical infrastructure, including vulnerability information such as that related to physical security or cybersecurity; or
(2) Is not available in the public domain and is necessary to design, fabricate, develop, test, produce, or manufacture a critical technology, including processes, techniques, or methods.”
Material nonpublic technical information is not financial information reports on how the business is performing. For information rights that are commonly negotiated by Investors, see the section above about Management and Information Rights.
Term Sheet Language: Notwithstanding anything to the contrary contained in the Stock Purchase Agreement, the Charter, the Investors’ Rights Agreement, the Right of First Refusal And Co-Sale Agreement, and the Voting Agreement (all of the agreements above together being the “Transaction Agreements”), Investors and the Company agree that as of and following [Closing/the initial Closing], Investors shall not obtain access to any material nonpublic technical information (as defined in Section 721 of the Defense Production Act, as amended, including all implementing regulations thereof (the “DPA”)) in the possession of the Company.]