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Agreement of Seller Not to Compete

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Agreement of Seller Not to Compete Powered By Docstoc
					This agreement is entered into between a vendor and a purchaser whereby the vendor
agrees not to directly or indirectly compete with the business of the purchaser for a
certain period of time after the closing the transaction. In this agreement, the vendor
has completed the sale of all of his or her capital stock in a corporation pursuant to a
share purchase agreement. By this agreement, the vendor agrees not to engage in any
business that is of the same nature as the corporation for a period of time. This
document contains both standard clauses and opportunities for the use of optional
terms and conditions making it fully customizable to fit the needs of the contracting
parties.
               AGREEMENT OF SELLER NOT TO COMPETE

TO:               _____ [INSTRUCTION: INSERT PURCHASER NAME.]
                  (herein called the "Purchaser")

FROM:             _____ [INSTRUCTION: INSERT VENDOR NAME.]
                  (herein called the "Vendor")


        WHEREAS the Vendor has completed the sale of all of his shares in the capital stock of
the _________________ [Instruction: Insert Corporation name.] (the “Corporation”) pursuant
to a share purchase agreement made between the Purchaser and the Vendor dated the ___ day of
_______________, 2______ [Instruction: Insert share purchase agreement date.] (the
"Purchase Agreement");

       AND WHEREAS pursuant to the Purchase Agreement it is a condition of closing that
the Vendor enters into this instrument in favour of the Corporation and the Purchaser;

       NOW THEREFORE THIS INSTRUMENT WITNESSES that in consideration of the
completion of the transaction pursuant to the Purchase Agreement and other good and valuable
consideration and the sum of One Dollar ($1.00) (the receipt and adequacy of which is hereby
acknowledged by the Vendor), the Vendor hereby covenants and agrees with the Corporation
and the Purchaser as follows:

1.       "Business" means the ______ [Instruction: Enter nature of business.].

2.      The Vendor agrees that without the prior written consent of the Corporation, it/he/she will
not carry on or be engaged in any way whatsoever, either directly or indirectly, individually, in
partnership or otherwise, any business or undertaking which is the same as or which is competitive
with, the Business, anywhere in the world, for a period of ______________ (__) [Instruction and
Comment: Insert written number of years, followed by a numerical representation of same.
Length of time should be reasonable, and unless Corporation truly does business
throughout the world, geographical restriction may need to be lessened.] year(s) from the
date hereof. The foregoing shall not, however, preclude Vendor from purchasing stock, or
maintaining any stock currently held, in any entity which has as part of its operations or business
purpose, any business or undertaking which is the same as or which is competitive with the
Business, so long as Vendor does not own a majority share in any such entity. [Comment: If the
Vendor was not merely a stock holder, but also had day to day involvement with the
Corporation, parties may wish to consider including additional language regarding his future
use and disclosure of any intellectual property gained while working with the Corporation,
including any trade secrets.]




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3.     The Vendor shall not contact, solicit, contract with, invite or encourage in any manner
whatsoever, any customer or prospective customer of the Corporation, or any supplier of the
Corporation, for a period of ________ (___) [Instruction and Comment: Insert written number
of years, followed by a numerical representation of same. Length of time should be
reasonable.] year(s) from the date hereof, for any purpose relating to the Business.

The Vendor covenants not to directly or indirectly solicit or interfere with any current employees of
the Business for a period of ____ (__) [Instruction and Comment: Insert written number of
days, followed by a numerical representation of same. Length of time should be
reasonable.] days from the date hereof, for any purpose relating to the Business.

4.       The Vendor acknowledges that it/he/she is a sophisticated party and has reviewed the
provisions above and that it/he/she has turned its/his/her mind to the reasonableness of the scope
thereof and has had a chance to review such provisions with appropriate counsel, both as to
geographical area and time period, and that he fully understands the implications of such
restrictive covenants, and that it/he/she is satisfied that the provisions of such section are both
necessary and reasonable for the protection of the legitimate interests of the Corporation and the
Purchaser and that they reflect the mutual desire and intent of the Corporation, the Purchaser,
and the Vendor that such provisions should be upheld in their entirety and be given full force and
effect.

5.      Without intending to limit the remedies available to the Corporation or the Purchaser, the
Vendor acknowledges that damages at law will be an insufficient remedy to the Corporation or the
Purchaser in view of the irrevocable harm which will be suffered if the Vendor violates the terms
hereof and agrees that the Corporation and the Purchaser may apply for and have injunctive relief in
any court of competent jurisdiction specifically to enforce any such covenants upon the breach or
threatened breach of any such provisions, or otherwise specifically to enforce any such covenants
and hereby waives all defences to the strict enforcement thereof by the Corporation and/or the
Purchaser.

6.      In the event that any provision herein or part thereof shall be deemed void or invalid by a
court of competent jurisdiction, the remaining provisions or parts thereof shall be
				
DOCUMENT INFO
Description: This agreement is entered into between a vendor and a purchaser whereby the vendor agrees not to directly or indirectly compete with the business of the purchaser for a certain period of time after the closing the transaction. In this agreement, the vendor has completed the sale of all of his or her capital stock in a corporation pursuant to a share purchase agreement. By this agreement, the vendor agrees not to engage in any business that is of the same nature as the corporation for a period of time. This document contains both standard clauses and opportunities for the use of optional terms and conditions making it fully customizable to fit the needs of the contracting parties.
This document is also part of a package Selling Your Business 12 Documents Included