COVENANT NOT TO COMPETE

ThisCOVENANNTOTTOCOMPET(EthisIiCovenant"d),atedasof

enteredintobyandbetween ("Shareholder"a)ndcorporation("

Purchaser"w),ith referenceto thefollowingfacts:

A , corporation("Seller")a, ndPurchasearrepartiesto thatcertainAsset

PurchaseAgreement, datedasof , 2°- (asamended,supplementedor otherwise

modifiedfromtimeto time,the IiPurchasAegreementli)p,ursuanttowhichPurchasaegr reedto

purchasefromSellera, ndSelleragreedto sellto Purchasecr,ertainassetsof the

businessownedandoperatedbySellerlocatedat ("theBusinessli)U.nlessotherwise

noted,capitalizedtermsusedhereinshallhavethe meaningsascribedto themin the Purchase

Agreement.

B Shareholdeorwnsallof the issuedandoutstandingcapitalstockof Seller.

C Shareholdedr,uringthe courseof ownershipandoperationof the Businessh,asacquirednumerous

businesscontactsamongthe public,financialinstitutionsand industryemployees.

D Purchasesrhollexpenda considerablaemountof time,money,andcreditwith respectto the

purchaseandoperationof the Business.

E Purchaser doesnotdesireto expendsuchtime,money,andcreditandthensubsequentlycompete

with Shareholder in the businessof

F It is a conditionprecedentto the closingof the transactions contemplatedbythe PurchaseAgreement

("theClosingli)t,hatShareholdeerxecuteanddeliverthisCovenanatndthatPurchasepray

ShareholdecrertainamountsatClosinga, llasmorefullydescribedbelow.

THEREFORinE,consideratioonf the foregoingandfor othergoodandvaluableconsiderationth,e receipt

andsufficiencyofwhichareherebyacknowledgedth,e partiesheretoagreeasfollows:

1 Fora periodof yearsfromthe datehereof,Shareholdesrhallnot haveanycontrolling

ownershipinterest(of recordor beneficial)in,or haveanyinterestasa director,principalexecutive

officer,keyemployeea, gentor consultanitn,anyfirm,corporationp,artnershipp,roprietorshipo,rother

businessthatengagesinanyof the followingactivitieswithina mileradiusof the

Business'scurrentlocation[describe].

2 AdditionallyS,hareholdesrhall:

a not referprospectivepurchasersor lesseesof

Business; and

b subjecto anyobligationto complywithanylaw,rule,or regulationof anygovernmentaaluthority

Orotherlegalprocessto makeinformationavailableto the personentitledthereto,keep

confidentiaal ndshallnot useor permithisattorneysa,ccountantso,r representativetosuse,inany

manilerotherthanfor the purposeof evaluatingthetransactions contemplatedby the Purchase

Agreementa,nyconfidentiailnformationof PurchasewrhichShareholdearcquiredinthe courseof

fhe negotiationof the transactionscontemplatedbythe PurchaseAgreement. contJ

, 2°_, ismadeand

,a

In , other than the

Unit5 Contracts: contract formation

E

3 Asconsideratiofnor the agreementosf Shareholdesretforthin Sections1and2 above,Purchaser

shall,at theClosingd,eliverto Shareholde$r bywiretransferof immediatelyavailable

fundsin suchamountto a bankaccountdesignatedby Shareholder.

4 Thetermof thisAgreement shallbe months,commencingonthe datehereof.

5 In the eventthatanyprovisionor anypartof anyprovisionof thisAgreementshallbevoidor

unenforceablfeoranyreasonwhatsoevetrh, ensuchprovisionshoffbestrickenandof noforceand

effect.However, unlesssuchstrickenprovisiongoesto the essenceof the considerationbargainedfor

by a party,the remainingprovisionsof thisagreementshallcontinuein full forceandeffect,andto the

extentrequired,shallbemodifiedto preservetheirvalidity.

6 Inthe eventof anylitigationor legalproceedingsbetweenthe partieshereto,the non-prevailingparty

shallpaythe expensesin, cludingreasonablaettorneysf'eesandcourtcosts,of the prevailingpartyin

connectiontherewith.

Agreedto asof this- dayof ,2°_.

Shareholder

"PURCHASER"

By

Its

9 Find the verbs, italicised in the text, which match these definitions (1-7).

1 to follow

2 will be taken out

3 given to

4 beginning

5 has bought

6 envisaged in

7 will spend

1: h c

Toparaphrase meansto

phrases may help yoPto

This clause deals with

According to this clause, tfJe

This clause regulates

This is about whathappehs Wher]

Here it says..., whichmeEinsif)

This part basicallyjust says t!j6it

case, ...

10Workingwith a partner, take turns paraphrasing the contents of each of the

clauses(1-6) in the agreement on pages 67-68. Explain the contents of the

clauses as if you were speaking to a client with little knowledge of the law.

nin9 1: 9

Thecontractformation processtypically involvesnegotiatingthe terms and conditionsof

the agreement.Negotiatingcanbe carriedout face to face and/or in writing, with the use

of both contracttemplates,asseenin Reading2,and term sheets.

While a great deal of the negotiating processtakesplacetodayvia email, face-to-face

negotiating continuesto playan important role. Undoubtedly,the ability to negotiate

well in Englishdependsto a large extent on experience.However,negotiatingskills can

be improvedby learningabout hownegotiationsare generallyconductedand which

techniquesare employedby goodnegotiators.

11.. ~Listento the first part of an excerptfroma seminarheld at a law firm for

some of the firm's recently hired young lawyers and tick the topics that the

speaker will cover.

1 preparing for a negotiation

2 phrases and expressions for negotiators

3 using agreement templates and term sheets

4 classic 'tricks' used by negotiators

5 general negotiating techniques

6 dealing with objections from the other side

7 different types of agreements usually encountered

8 recognising a good deal

9 role-plays

DDDDDDDDD

12.. ~ Listen to the second part of the seminar and answer these questions.

1 What do you think the speaker means by horse-trading?

2 What does the speaker say about the purpose of a merger clause?

9 e 1: n9 e p

it's

This

a

listening text contains several other

examples of phrases that can be used to give emphasis to a

speaking as

13Look at the first two paragraphs of the transcript of the presentation (Part II)

on page 267 and underline the phrases used for giving emphasis to a point.

Which of them can be made stronger by adding the adverbs mentioned above?

Unit 5 Contracts: contract formation

E

ng: e

A memois a formal text type used,for example,to outline or clarify a point of law or to

providea brief opinionon a case.Memoscanbe external [e.g. to a client] or internal

[e.g. to anotherlawyerin the samefirm]. In either case,a memoservesto circulate

informationthat requiresthe attention of its readers.

14Match the halves of these sentences explaining the elements of a memo.

1 A heading a refers to any sentences providing background information about

the project in question (such as a reference to an event or to a

previous request for information).

b individual points should be organised in descending order of

importance, i.e. most important ones first, subordinate or

supporting points later.

c is a clear call to action - an explanation of what should be

done in what way, by whom and by what date.

d includes the components Date, To, From and Subject.

e states the main idea of the memo in less than ten words.

2 The subject line

3 The context

4 In the main message,

S The action close

15Identify the elements from Exercise 14 in this internal memo.

Memorandum

To: All members of the legal staff of the Mergers &

Acquisitions department

John Thornton

10 February 2006

In-company seminar on contract negotiations

From:

Date:

Subject:

As part of our in-company training programme focusing on professional

communication skills, we have arranged for the well-known communication trainer

and practising lawyer, Mr Tom Boland, to hold a half-day workshop on the topic of

Successful Contract Negotiations.

We would like to invite all members of the legal staff in the department to attend

this workshop, which will take place on 27 February, 9-11.30 a.m., Conference

Room 12.

The workshop consists of a theoretical part, followed by practical role-plays offering

an opportunity for negotiating skills training and personal feedback from the trainer.

Thus it is imperative that you arrange your schedules so that you can be present for

the entire workshop.

Please let me know by 9 a.m. on Monday, 13 February by email

Q.thornton@lawfirm.com) whether you can attend.

J. Thornton

16Havingattended the in-company seminar on effective contract negotiations

(Listening 1), you have been asked by your superior to draft a memo for some

of the junior colleagues who were not present at the talk. Your superior is

particularly interested in the points made in connection with the careful use of

contract templates and term sheets. He would like you to write a memo

summarising the three most important points raised by the speaker. You

should include:

0 a subject line;

0 an introductory statement of the reason for writing;

0 a brief discussion of the context or relevant background information;

0 a short explanation of each of the three points;

0 a concluding remark pointing to the future;

0 and an offer to provide further information or assistance as needed.

Include some of the phrases for giving emphasis to points as discussed in

Language use 1. Read the transcript on pages 266-267 again before you

prepare the memo.

ning 2: n on

Lawyers are commonly requested to conduct contract negotiations on behalf of clients,

particularly in matters in which strong negotiating skills are required. In Listening 2, you

will hear Arthur Johansson, a junior lawyer who attended the in-company seminar on

negotiating techniques, negotiating the terms of an agreement for a client with the other

party's lawyer, Ms Orvatz.

17..::: Listen to the negotiation. What kind of agreement are they talking about?

Which clauses do they mention?

18..::: Listen again and decide whether these statements are true or false.

1 The clause they are discussing would not allow the franchisee to operate any

kind of restaurant within the prescribed area for a stipulated period of time.

2 The lawyer representing the franchisor argues that the purpose of the clause

is to guard her client's legitimate business interests.

3 The franchisee's lawyer believes that his client is in a strong position in the

negotiation.

4 The franchisee's lawyer offers to strike the arbitration clause in exchange for

a reduction in the number of years set forth in the non-competition clause.

19What do you think of the way Arthur Johansson negotiated the agreement?

Did he use any of the techniques presented at the negotiation seminar?

9 e 2: 0

In addition to learningabout techniquesemployedby experiencednegotiators,improving

your negotiatingability in Englishcanbeachievedby becomingfamiliar with and using

commonphrases.

In one of the initial phasesof a negotiation,the bidding phase,the two sidesput forth

proposalsor suggestions.Thephrasesin Exercise20 serve to introduce a proposalor

suggestion,or to respondto sucha proposalin a face-to-face negotiatingsession.(Note

that these phraseswould alsobe suitable for usein informal written communication,

suchas an email, betweenpartieswith an establishedand friendly working relationship.]

Unit5 Contracts:contract formation

(

2004;: Listen to the negotiation in Listening 2 again and tick the expressions you

hear the lawyers use.

1 I'm afraid we can't go along with ... D

2 I'm afraid that's out of the question. D

3 Our proposal is to ... D

4 That's certainly a step in the right direction. D

5 We suggest ... D

6 That would be difficult for us. D

21Decide whether the phrases in Exercise 20 are used to a) make a proposal,

b) respond favourably, or c) reject a proposal. Which phrase is the most forceful

for rejecting a proposal?

7 We'd like ... D

8 What we're looking for is ... D

9 I think we could live with that. D

10We're not entirely happy with that. D

11We'd be happy with that. D

n92: n9 e

22Role-play this situation with a partner. Use as many of the phrases for

negotiating from Exercise 20 as you can.

Student A: Turn to page 305.

Student B: Turn to page 306.

n93:

The text on pages 73-74 appears on the website of an American company whose stated

mission is 'to make legal information more accessible'. The text deals with electronic

contracts, or 'e-contracts'.

23What do you know about e-contracts? Are they used often in your jurisdiction?

What other words do you know that begin with e- (meaning electronic)?

24Read through the text quickly and complete the spaces (1-5) using these

sentences (a-e).

a Consumer advocates are concerned because the federal electronic signature

law does not define an electronic signature or stipulate what technologies

can or should be used to create an electronic signature.

b An electronic contract is an agreement created and "signed" in electronic

form.

e The law also benefits business-to-business websites who need enforceable

agreements for ordering supplies and services. For all of these companies,

the new law is essential legislation because it helps them conduct business

entirely on the Internet.

d Security experts currently favour the cryptographic signature method known

as Public Key Infrastructure (PKI) as the most secure and reliable method of

signing contracts online.

e The notice must also indicate whether your consent applies only to the

particular transaction at hand, or whether the ousiness has to get consent

to use e-documentsjsignatures for each transaction.

J

Date: 2015-12-11; view: 1325