Non-Compete, Covenant
____________________,
referred to as SELLER and _________________________, referred to as BUYER,
agree: BUYER and SELLER have entered
into an agreement dated __________, 199___ for ____________________.
In consideration of the mutual covenants and payments to
be made pursuant to the agreement, and in further consideration of the sum of
$_________ (_______________&___/100 dollars) paid to by BUYER to SELLER,
receipt of which is acknowledged by the SELLER, SELLER agrees not to compete
with BUYER under the terms and conditions set forth herein.
During a period of
________ from the date of this agreement SELLER will not compete at any time,
directly or indirectly with BUYER in the fields of:
________________________________________________________________
in the following
geographic territory:
_________________________________________________________________
For the purposes of
this agreement “competition” shall be defined to the include, but not be
limited to, the following:
(a) Participating as a
director, stockholder, or partner of, or having any direct or indirect
financial interest (including a financial interest as a creditor) in any
enterprise engaged in the fields stated above;
(b) Participating as an
officer, employee, agent, representative, or consultant in, or rendering any
services to, any such enterprise within the fields stated above;
SELLER further agrees
that for a period extending _________ after the substantial consummation of the
sale, SELLER shall not solicit for employment or employ any of the employees as
of the date of substantial consummation of the same. However, in the event that
BUYER terminates any employee, SELLER may employ that individual, provided that
such employment is not limited by any valid non-competition agreement either assigned
by SELLER to BUYER or entered into to between BUYER and the employee.
SELLER acknowledges
that the restrictions contained herein are reasonable and necessary to protect
the business and interest, which BUYER is acquiring pursuant to the above-referenced
purchase and sale agreement. It is further agreed that BUYER would suffer
irreparable injury if the restriction is not obeyed, and that injunctive relief
is appropriate for any violation of the same.
Dated:
____________________________
__________________________________________________
____________________,
SELLER
__________________________________________________
____________________,
BUYER
Non-Compete, Covenant
Review List
This review list is provided to inform you about this
document in question and assist you in its preparation. This Non-Compete Covenant can be used with
other documents to prevent competition.
To preserve its legality and enforceability, it must be limited in terms
of scope, geography, and time. In
simple terms, you should draft it as narrowly as possible to improve the odds
of its enforceability—and usefulness in settlement negotiations should such an
occasion arise. Elsewhere in this disc
more complex non-competes exist. This
“covenant” is intended to be an “addition” to other agreements though it can
easily stand on its own. Sometimes
people desire to have this separate “covenant” so it can be prosecuted
separately, if need be.
- Make multiple copies. Keep one in the transaction file and another in the corporate file.
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