Common use of Confidentiality; Non-Compete; Non-Solicitation; Non-Disparagement Clause in Contracts

Confidentiality; Non-Compete; Non-Solicitation; Non-Disparagement. In further consideration for the payment of the Purchase Price and in order to protect the value of the Purchased Assets purchased by the Buyer (including, without limitation, the goodwill inherent in the Company as of the Closing), upon the Closing of the transactions contemplated by this Agreement, the Company and each Shareholder, as applicable, agrees as follows: (a) As an employee, officer or director of the Company (as applicable), each Shareholder has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) of the Company. Each Seller agrees that except as otherwise contemplated by this Agreement, in connection with the enforcement of rights or performance of duties hereunder or in the course of employment by any Buyer Entity, unless such Seller first secures the written consent of an authorized representative of Parent or Buyer, such Seller shall not use for himself, herself, itself or anyone else, and shall not disclose to others, any Confidential Information, except to the extent such use or disclosure is required by Law or order of any Governmental or Regulatory Authority (in which event each Seller shall, to the extent practicable, inform Buyer in advance of any such required disclosure, shall cooperate with Buyer in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Seller shall use all reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. (b) Each Seller further agrees that promptly after the Closing, such Seller shall deliver to the Buyer or destroy, at the request and option of Buyer, all Confidential Information and other Intellectual Property of the Company in such Seller’s possession and control, in whatever form or medium. If the Buyer requests, each Seller shall promptly provide written confirmation and certification that such Seller has returned or destroyed all such materials. (c) The Company and each Shareholder agrees that during the period beginning on the Closing Date and ending on the five (5) year anniversary of the Closing Date (the “Noncompete Period”), it shall not (and shall not take any steps toward or preparations in respect of), directly or indirectly, either for itself or for any other Person, own, manage, control, participate in, consult with, render services for, permit his, her or its name to be used or in any other manner engage in any Competing Business. “Competing Business” is any person or entity that provides legal discovery-related services or products in competition with the Business. For purposes of this Agreement, the term “participate” includes any direct or indirect interest in any enterprise, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner; provided that the foregoing activities shall not include passive ownership of less than two percent (2%) of the stock of a publicly held corporation whose stock is traded on a national securities exchange or in the over the counter market. (d) During the Noncompete Period, each Seller shall not directly or indirectly through another entity (i) encourage, induce, solicit or attempt to encourage, induce or solicit any officer, director or employee of Buyer or Buyer’s subsidiaries parent and related entities (each of the foregoing, a “Buyer Entity” and collectively, the “Buyer Group”) to leave the employ of the Buyer Group; (ii) hire or employ any Person who was an officer, director or employee of the Company (other than any Employee listed on Schedule 4.3(b)), at any time during the six (6) month period immediately prior to the date of this Agreement; (iii) call on, solicit, or service any customer, supplier, licensee, licensor or other business relation of the Buyer Group with respect to products or services that have been provided by the Company Group, are currently being provided by the Buyer Group or which the Buyer Group is currently in the process of developing; or (iv) encourage, induce or solicit, or attempt to encourage, induce or solicit, any customer, supplier, licensee, licensor or other business relation of the Buyer Group to cease doing business with the Buyer Group. (e) Each Seller acknowledges and represents that: (i) sufficient consideration has been given by each party to this Agreement to the other as it relates hereto; (ii) such Seller has consulted with independent legal counsel regarding his or her rights and obligations under this Section 4.9; (iii) such Seller fully understands the terms and conditions contained herein; (iv) the scope of the business of the Company is independent of location (such that it is not practical to limit the restrictions contained in this Section 4.9 to a specified country, city or part thereof); (v) the restrictions and agreements in this Section 4.9 are reasonable in all respects and necessary for the protection of the Parent and Buyer and the other members of the Buyer Group and its Confidential Information and goodwill and that, without such protection, the Buyer Group customer and client relationship and competitive advantage would be materially adversely affected; (vi) the agreements in this Section 4.9 are an essential inducement to the Buyer to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants to which such Seller is party or by which it is bound; and (vii) such Seller is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any Person other than the Buyer. Each Shareholder that is an individual further acknowledges that the restrictions contained in this Section 4.9 do not impose an undue hardship on him, her or it and, since he, she or it has general business skills which may be used in industries other than that in which each Buyer Entity conducts its business and do not deprive Shareholder of his or her livelihood or its business. (f) If at any time a court or arbitrator’s award holds that the restrictions in this Section 4.9 are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area. The parties hereto agree that any breach of the provisions contained in this Section 4.9 will result in serious and irreparable injury and therefore money damages would not be an adequate remedy for any such breach. Therefore, in the event of a breach or threatened breach of any provisions of this Section 4.9 that is continuing, the Parent and Buyer, its successors and assigns and any third-party beneficiary to this Agreement, in addition to other rights and remedies existing in their favor, shall be entitled to specific performance or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security). In addition, in the event of a breach or violation by any Seller of this Section 4.9, the Noncompete Period shall be tolled until such breach or violation has been duly cured.

Appears in 1 contract

Samples: Asset Purchase Agreement (Dolan Co.)

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Confidentiality; Non-Compete; Non-Solicitation; Non-Disparagement. In further consideration for the payment (a) The parties agree that no amount of the Purchase Price is or will be allocated to or paid in respect of the restrictive covenants set out herein. The parties agree that the restrictive covenants set out herein are integral to this Agreement and are granted in order to protect the value of the Purchased Assets Company Shares purchased by the Buyer (including, without limitation, the goodwill inherent in the Company as of the Closing), upon the Closing of the transactions contemplated by this Agreement, the Company each Vendor, severally and each Shareholder, as applicablenot jointly, agrees as follows: (ai) As an owner of the Company Shares and/or an employee, officer or director of the Company (as applicable)or one of its Subsidiaries, each Shareholder such Vendor has had access to and contributed to confidential information and materials of a highly sensitive nature (including Confidential Information, as defined below) of the CompanyCompany or one or more of its Subsidiaries. Each Seller Vendor agrees that except as otherwise contemplated by this Agreement, in connection with the enforcement of rights or performance of duties hereunder or in the course of employment by any Buyer Entity, unless such Seller Vendor first secures the written consent of an authorized representative of Parent or Buyer, such Seller Vendor shall not use for himself, herself, itself or anyone elseelse (other than the Company or a Subsidiary in respect of any Vendor who is an employee or consultant of the Company or a Subsidiary), and shall not disclose to others, any Confidential Informationsuch information, except to the extent such use or disclosure is required by Law or order of any Governmental or Regulatory Authority (in which event each Seller Vendor shall, to the extent practicable, inform Buyer the Company in advance of any such required disclosure, shall cooperate with Buyer the Company in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Seller Vendor shall use all commercially reasonable care to safeguard Confidential Information such confidential information and to protect it against disclosure, misuse, espionage, loss and theft. Notwithstanding the foregoing, confidential information shall not include any information that now or hereafter becomes generally known in the trade or industry by means other than disclosure after the date hereof by any Vendor. (bii) Each Seller further agrees that promptly after the Closing, such Seller shall deliver to the Buyer or destroy, at the request and option of Buyer, all Confidential Information and other Intellectual Property In consideration of the Company in such Seller’s possession and control, in whatever form or medium. If completion of the Buyer requeststransactions contemplated herein, each Seller shall promptly provide written confirmation of Xxxx Xxxxxxxxxx, Xxxxxx Xxxxxx and certification that such Seller has returned or destroyed all such materials. (c) The Company and each Shareholder Xxxx Xxxxxx agrees that during the period beginning on the Closing Date and ending on the five (5) year second anniversary of the Closing Date (the “Noncompete Non-compete Period”), it he shall not (and shall not take any steps toward or preparations in respect of)not, directly or indirectly, either for itself or for any other Person, own, manage, control, participate in, consult with, render services for, permit his, her or its name to be used or in any other manner engage in any Competing Business. “Competing Business” is any person business or entity that provides legal discovery-related services or products in competition enterprise which competes with the Business. For purposes of this Agreement, the term “participate” includes any direct or indirect interest in any enterprisePerson, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner; provided that the foregoing activities shall not include passive ownership of less than two one percent (2%) of the capital stock of a publicly held corporation whose capital stock is traded on a national securities exchange or in the over the counter market. (diii) During the Noncompete Non-compete Period, each Seller of Xxxx Xxxxxxxxxx, Xxxxxx Xxxxxx and Xxxx Xxxxxx agrees that he shall not directly or indirectly through another entity (i) encourage, induce, solicit or attempt to encourage, induce or solicit any officer, director or employee of Buyer the Company or Buyer’s subsidiaries parent and related entities its Subsidiaries (each of the foregoing, a “Buyer Entity” and collectively, the “Buyer Company Group”) to leave the employ of the Buyer Company Group; (ii) hire or employ any Person who was an officer, director or employee of the Company (other than any Employee listed on Schedule 4.3(b)), Group at any time during the six (6) month period immediately prior to the date of this Agreement; (iii) call on, solicit, or service any customer, supplier, licensee, licensor or other business relation of the Buyer Company Group with respect to products or services that have been provided by the Company Group, are currently being provided by the Buyer Company Group or which the Buyer Company Group is currently in the process of developing; or (iv) encourage, induce or solicit, or attempt to encourage, induce or solicit, any customer, supplier, licensee, licensor or other business relation of the Buyer Company Group to cease doing business with the Buyer Company Group. Notwithstanding the foregoing, for purposes of this Agreement, the placement of general advertisements that may be targeted to a particular geographic or technical area but that are not specifically targeted toward any employee of the Company or its Subsidiaries shall not be deemed to be a breach of this Section. (eiv) Each Seller Vendor acknowledges and represents agrees that: (i) sufficient consideration has been given by each party to this Agreement to the other as it relates hereto; (ii) such Seller Vendor has consulted with (or has had the opportunity to consult with) independent legal counsel regarding his or her rights and obligations under this Section 4.96.4 (or has determined that such consultation is not necessary); (iii) such Seller Vendor fully understands the terms and conditions contained herein; (iv) the scope of the business of the Company is independent of location (such that it is not practical to limit the restrictions contained in this Section 4.9 to a specified country, city or part thereof); (v) the restrictions and agreements in this Section 4.9 6.4 are reasonable in all respects and necessary for the protection of the Parent and Buyer Company and the other members of the Buyer Company Group and its Confidential Information confidential information and goodwill and that, without such protection, the Buyer Company Group customer and client relationship and competitive advantage would be materially adversely affected; (viv) the agreements in this Section 4.9 6.4 are an essential inducement to the Buyer to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants to which such Seller Vendor is party or by which it is bound; and (viivi) such Seller Vendor who is employed by the Company or its Subsidiaries, is not a party to or bound by any employment agreement, noncompete non-compete agreement or confidentiality agreement with any Person other than the BuyerCompany or its Subsidiaries. Each Shareholder Vendor that is an individual further acknowledges that the restrictions contained in this Section 4.9 6.4 do not impose an undue hardship on him, him or her or it and, since he, he or she or it has general business skills which may be used in industries other than that in which each Buyer Entity conducts its business the Business, and do not deprive Shareholder Vendor of his or her livelihood or its business. (fv) If at any time a court or arbitrator’s award holds that the restrictions in this Section 4.9 6.4 are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area. The parties hereto agree that any breach of the provisions contained in this Section 4.9 6.4 will result in serious and irreparable injury and therefore money damages would not be an adequate remedy for any such breach. Therefore, in the event of a breach or threatened breach of any provisions of this Section 4.9 6.4 that is continuing, the Parent and BuyerCompany, its successors and assigns and any third-party beneficiary to this Agreement, in addition to other rights and remedies existing in their favor, shall be entitled to specific performance or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security). In addition, in the event of a breach or violation by any Seller a Vendor of this Section 4.96.4, the Noncompete Non-compete Period shall be tolled until such breach or violation has been duly cured. (vi) The obligations of a Vendor set forth in this Section 6.4 shall not derogate from and shall be in addition to the obligations set forth in any other confidentiality, non-compete and assignment of inventions agreement entered into by and between the Company or any of its Subsidiaries and the Vendor. For greater certainty, nothing in this Section 6.4 shall restrict any entity that is not controlled by a Vendor. (b) It is the intention of the parties that the conditions of subsections 56.4(7) of the Tax Act be met such that subsection 56.4(5) of the Tax Act apply to the covenants of each Vendor under this Agreement not to provide, directly or indirectly, property or services in completion with the property or services provided or to be provided by the Buyer (or by any person related to the Buyer) in the course of carrying on the Business and that no election is required to be made under paragraph 56.4(7)(g) of the Tax Act. However, for greater certainty, if requested by a Vendor who has granted such a covenant under this section 6.8, Buyer agrees to jointly elect with such Vendor in accordance with any applicable provision of section 56.4 of the Tax Act such that the provisions of section 56.4(2) of the Tax Act do not apply to such Vendor in respect of such covenant.

Appears in 1 contract

Samples: Share Purchase Agreement (Magal Security Systems LTD)

Confidentiality; Non-Compete; Non-Solicitation; Non-Disparagement. In further consideration for the payment of the Purchase Price hereunder and in order to protect the value of the Purchased Assets Securities purchased by the Buyer (including, without limitation, the goodwill inherent in the Company as of the ClosingClosing Date), upon the Closing of the transactions contemplated by this Agreement, the Company Major Seller Shareholder and each Seller Shareholder, as applicable, agrees as follows: (a) As an employee, officer or director owner of the Company (as applicable)Securities, each Shareholder has and/or an employee of the Company, the Seller Shareholders have had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) of the Company. Each of the Seller Shareholders agrees that except as otherwise contemplated by this Agreement, in connection with the enforcement of rights or performance of duties hereunder or in the course of employment by any Buyer Entity, unless such Seller Shareholder first secures the written consent of an authorized representative of Parent or the Company and Buyer, such Seller Shareholder shall not use for himself, herself, itself his or herself or anyone else, and shall not disclose to others, any Confidential Information, except as may be necessary for him or her to carry out his or her duties, except with respect to any claims arising out of any of the Transaction Documents or except to the extent such use or disclosure is required by Law law or order of any Governmental or Regulatory Authority Entity (in which event each such Seller Shareholder shall, to the extent practicable, inform the Company and Buyer in advance of any such required disclosure, shall cooperate with Buyer the Company and Buyer, at the Company’s and Buyer’s expense, in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Seller Shareholder shall use all reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. (bi) Each Seller Shareholder further agrees that promptly after the Closingthat, at any time requested, such Seller Shareholder shall promptly deliver to the Company and Buyer or destroy, at the request and option of Buyer, all Confidential Information and other Intellectual Property of the Company in such SellerSeller Shareholder’s possession and controlcontrol and all copies thereof, in whatever form or medium, including, without limitation, written records, optical and magnetic media, and all other materials containing or embodying any such Intellectual Property. If the Buyer Company requests, each Seller Shareholder shall promptly provide written confirmation and certification that such Seller Shareholder has returned or destroyed all such materials. (c) The Each Seller Shareholder agrees that the Company has received from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Each Seller Shareholder agrees that he or she owes the Company and each such third parties a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any Person (except as necessary in carrying out such Seller Shareholder’s future work for the Company consistent with the Company’s agreement with such third party) or to use it for the benefit of anyone other than for the Company or such third party (consistent with the Company’s agreement with such third party) without the express authorization of the Company. (d) With respect to the Major Seller Shareholder only, the Major Seller Shareholder acknowledges that he has and shall become familiar with Confidential Information concerning the Company and the Buyer and its Affiliates. Therefore, the Major Seller Shareholder agrees that during the period beginning on the Closing Date date hereof and ending on the five three (53) year anniversary of the Closing Date (the “Noncompete Non-compete Period”), it he shall not (and shall not take any steps toward or preparations in respect of), directly or indirectly, either for itself himself or for any other Person, own, manage, control, participate in, consult with, render services for, permit his, her or its name to be used or in any other manner engage in any Competing Business. “Competing Business” business or enterprise (i) which is any person or entity that provides legal discovery-related services or products in competition competitive to the Business as conducted during the period of Major Seller Shareholder’s employment with the BusinessCompany or Buyer or its Subsidiaries or Affiliates or (ii) which provides global information technology services using an off-shore model where at least a majority of such Person’s (or in the case of a business unit, division or subsidiary, majority of its employees, as the case may be) employees are located in non-US locations (i.e., India, Sri Lanka, China etc.) or (iii) which provides any services that are competitive to the Business as conducted by the Company or Buyer or its Subsidiaries or Affiliates during the period of Major Seller Shareholder’s employment with the Company or Buyer or its Subsidiaries or Affiliates and whether on such Major Seller Shareholder’s own or on behalf of any Apparatus Competitor to any Person that was either a Company Customer or a Prospective Customer. For purposes of this Agreement, the term “participate” includes any direct or indirect interest in any enterprise, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner; provided that the foregoing activities shall not include passive ownership of less than two percent (2%) 3% of the stock of a publicly publicly-held corporation whose stock is traded on a national securities exchange or in the over over-the-counter market by the counter marketMajor Seller Shareholder. The Major Seller Shareholder agrees that this covenant is reasonable with respect to its duration, geographical area and scope. (di) During the Noncompete Non-compete Period, each Seller Shareholder (other than the Major Seller Shareholder) shall not directly or indirectly through another entity (iA) encourage, induce, solicit induce or attempt to encourage, induce or solicit any officer, director or employee of Buyer or Buyer’s subsidiaries parent and related entities (each of the foregoing, a “Buyer Entity” and collectively, the “Buyer Group”) Company to leave the employ of the Buyer Group; Company, (iiB) hire or employ any Person person who was an officer, director or employee of the Company (other than any Employee listed on Schedule 4.3(b)), at any time during the six (6) month period immediately prior to the date of this Agreement; (iii) call on, solicithereof, or service (C) induce or attempt to induce any customerCompany Customer, supplier, licensee, licensor or other business relation of the Buyer Group Company to cease doing business with respect to products or services that have been provided by the Company GroupCompany. This Section 4.3(e)(i) shall not prevent general advertising in publications of general circulation for employment not specifically directed at employees of the Company. (ii) During the Non-compete Period, are currently being provided by the Buyer Group or which the Buyer Group is currently in the process of developing; or Major Seller Shareholder shall not directly or, indirectly through another Person, (ivA) encourage, induce or solicit, or attempt to encourageinduce any employee of the Company or Buyer to leave the employ of the Company or Buyer, (B) hire or employ any person who was an employee of the Company or Buyer at any time during the six month period immediately prior to the date hereof, (C) induce or solicit, attempt to induce any customerCompany Customer or Buyer Customer, supplier, licensee, licensor or other business relation of the Company or Buyer Group and its subsidiaries, affiliates to cease doing business with the Company or Buyer Groupor its Subsidiaries or Affiliates, or (D) call on, solicit, or service any Company Customer, supplier, licensee, licensor or Prospective Customer with respect to provision of products and/or services that are provided by the Company or Buyer or its Subsidiaries or Affiliates during the period of Major Seller Shareholder’s employment with the Company or Buyer or its Subsidiaries or Affiliates for the purpose of diverting or attempting to divert or influence any business of such Person to any Apparatus Competitor or Person competitive to Buyer. (ef) Each of the Seller Shareholders acknowledges that, in the course of his employment with the Company, if applicable, or holding Securities thereof, he has become familiar with the Confidential Information of the Company, and represents that: (i) sufficient consideration has been given by each party with respect to this Agreement to Major Seller Shareholder, shall become familiar with the other as it relates hereto; (ii) such Confidential Information of Buyer and its Subsidiaries and Affiliates. The Major Seller has consulted with independent legal counsel regarding his or her rights and obligations under this Section 4.9; (iii) such Seller fully understands the terms and conditions contained herein; (iv) Shareholder further acknowledges that the scope of the business of the Company or Buyer and its subsidiaries or affiliates is independent of location (such that it is not practical to limit the restrictions contained in this Section 4.9 4.3(d) to a specified country, city city, or part thereof); (v) and, that the Major Seller Shareholder has had direct or indirect responsibility, oversight or duties with respect to all of the businesses of the Company and its current and prospective employees, vendors, customers, clients and other business relations, and Major Seller Shareholder shall become familiar with the business of Buyer and its Affiliates and Subsidiaries and that, accordingly, the restrictions and agreements contained in this Section 4.9 4.3 are reasonable in all respects and necessary for to protect the protection goodwill and Confidential Information of the Parent Company and Buyer and the other members of the Buyer Group and its Confidential Information and goodwill and that, without such protection, the Company and Buyer Group customer and client relationship and competitive advantage would be materially adversely affected; (vi) . It is specifically recognized by the agreements Major Seller Shareholder that his services to the Company and services to be performed to Buyer are special, unique, and of extraordinary value, that the Company and Buyer have a protectable interest in prohibiting the Major Seller Shareholder as provided in this Section 4.9 4.3, that the Major Seller Shareholder was significantly responsible for the creation and preservation of the Company and Buyer goodwill, and that money damages are an essential inducement insufficient to protect such interest, and that such prohibitions would be necessary and appropriate without regard to payments being made to the Buyer to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants to which such Major Seller is party or by which it is bound; and (vii) such Shareholder hereunder. The Major Seller is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any Person other than the Buyer. Each Shareholder that is an individual further acknowledges that the restrictions contained in this Section 4.9 4.3(d) do not impose an undue hardship on him, her or it him and, since he, she or it he has general business skills which may be used in industries other than that in which each the Company or Buyer Entity conducts its business and do not deprive the Major Seller Shareholder of his or her livelihood or its businesslivelihood. (fg) If If, at any the time of enforcement of this Agreement, a court or arbitrator’s award holds that the restrictions stated in this Section 4.9 4.3 are unreasonable under circumstances then existing, the parties Parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances as determined by such court shall be substituted for the stated period, scope or area. The parties Parties hereto agree that any breach of the provisions contained in this Section 4.9 will result in serious and irreparable injury and therefore money damages would not be an adequate remedy for any such breachbreach of this Agreement. Therefore, in the event of a breach or threatened breach of any provisions of this Section 4.9 4.3 that is continuing, the Parent Company, Buyer and Buyer, its their respective successors and permitted assigns and any third-third party beneficiary to this AgreementAgreement may, in addition to other rights and remedies existing in their favor, shall be entitled apply to any court of competent jurisdiction for specific performance or and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security). In addition, in the event of a breach or violation by any Seller Shareholder of this Section 4.94.3, the Noncompete Non-compete Period shall be tolled until such breach or violation has been duly cured. Each Seller Shareholder agrees that the restrictions contained in this Section 4.3 are reasonable. (h) Each Seller Shareholder acknowledges and represents that: (i) sufficient consideration has been given by each party to this Agreement to the other as it relates hereto; (ii) he has consulted with independent legal counsel regarding his or her rights and obligations under this Section 4.3, (iii) that he fully understands the terms and conditions contained herein, and (iv) that the agreements in this Section 4.3 are reasonable and necessary for the protection of the Company and Buyer and are an essential inducement to Buyer to enter into this Agreement.

Appears in 1 contract

Samples: Stock Purchase Agreement (Virtusa Corp)

Confidentiality; Non-Compete; Non-Solicitation; Non-Disparagement. In further consideration for the payment of the Purchase Price and in order to protect the value of the Purchased Assets purchased by the Buyer (including, without limitation, the goodwill inherent in the Company as of the Closing), upon the Closing of the transactions contemplated by this Agreement, the Company and each Shareholder, as applicable, agrees as follows: (a) As an employee, officer or director Each of the Company (as applicable)Seller, each Shareholder the Parent and the Owner hereby acknowledges that it is familiar with the Business’ trade secrets and that has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) of the CompanyBusiness. Each of the Seller and the Owner agrees that except as otherwise contemplated by this Agreement, in connection with from and after the enforcement of rights or performance of duties hereunder or in the course of employment by any Buyer Entity, unless such Seller first secures the written consent of an authorized representative of Parent or Buyer, such Seller Closing Date it shall not use for himself, herself, itself or anyone else, and shall not disclose to others, any Confidential Information, except to the extent such use or disclosure is required by Law or order of any Governmental or Regulatory Authority governmental authority (in which event each such Seller shall, to the extent practicable, inform Buyer the Purchaser in advance of any such required disclosure, shall cooperate with Buyer the Purchaser in all reasonable ways at Purchaser’s expense in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Seller of the Seller, the Parent and the Owner shall use all use, and shall cause each Business Entity controlled by it to use, and shall endeavor to cause its and their respective employees, officers, directors and representatives to use, reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. Notwithstanding the foregoing, Owner may share Confidential Information with any Governmental Entity regulating Owner. (b) Each Seller further agrees that promptly after In consideration of the Closing, such Seller shall deliver consideration provided by the Purchaser herein to the Buyer or destroySeller, at and the request and option benefits accruing to the Owner from such consideration in its capacity as the owner of Buyer, all Confidential Information and other Intellectual Property of the Company in such outstanding capital stock of the Seller’s possession and control, in whatever form or medium. If the Buyer requests, each Seller shall promptly provide written confirmation and certification that such Seller has returned or destroyed all such materials. (c) The Company and each Shareholder agrees that during the period beginning on the Closing Date and ending on the five fourth (54th) year anniversary of the Closing Date (the “Noncompete Period”), it each of the Seller, the Parent and the Owner shall not (and shall not take any steps toward or preparations in respect of)cause each Business Entity controlled by it to not, directly or indirectly, either for itself or for any other Person, partnership, corporation or company, own, manage, control, participate in, consult with, render services for, permit his, her or its name to be used or in any other manner engage in any Competing Business. “Competing Business” is any person business or entity that provides legal discovery-related services enterprise for purposes of, or products in competition a manner which, competes, or plans to compete, with the Business. For purposes of this Agreement, the term “participate” includes any direct or indirect interest in any enterprise, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner; provided that the foregoing activities shall not include passive ownership of less than two percent (2%) 5% of the stock of a publicly publicly-held corporation whose stock is traded on a national securities exchange or in the over the over-the-counter market. Seller agrees that this covenant is reasonable with respect to its duration, geographical area and scope. (dc) During the Noncompete Period, each Seller of the Seller, the Parent and the Owner shall not (and shall cause each Business Entity controlled by it to not) directly or indirectly through another entity (i) encourage, induce, solicit induce or attempt to encourage, induce or solicit any officer, director or employee of Buyer or Buyer’s subsidiaries parent and related entities (each of the foregoing, a “Buyer Entity” and collectively, the “Buyer Group”) Hired Employees to leave the employ of the Buyer Group; Purchaser or any of its Affiliates or (ii) hire induce or employ any Person who was an officer, director or employee of the Company (other than any Employee listed on Schedule 4.3(b)), at any time during the six (6) month period immediately prior attempt to the date of this Agreement; (iii) call on, solicit, or service induce any customer, supplier, licensee, licensor or other business relation of the Buyer Group with respect to products or services that have been provided by the Company Group, are currently being provided by the Buyer Group or which the Buyer Group is currently in the process of developing; or (iv) encourage, induce or solicit, or attempt to encourage, induce or solicit, any customer, supplier, licensee, licensor or other business relation of the Buyer Group Business to cease doing business with the Buyer GroupBusiness and/or the Purchaser or any of its Affiliates. (ed) Each Seller acknowledges and represents that: (i) sufficient consideration has been given by each party to If, at the time of enforcement of this Agreement to the other as it relates hereto; (ii) such Seller has consulted with independent legal counsel regarding his or her rights and obligations under this Section 4.9; (iii) such Seller fully understands the terms and conditions contained herein; (iv) the scope of the business of the Company is independent of location (such that it is not practical to limit the restrictions contained in this Section 4.9 to a specified countryAgreement, city or part thereof); (v) the restrictions and agreements in this Section 4.9 are reasonable in all respects and necessary for the protection of the Parent and Buyer and the other members of the Buyer Group and its Confidential Information and goodwill and that, without such protection, the Buyer Group customer and client relationship and competitive advantage would be materially adversely affected; (vi) the agreements in this Section 4.9 are an essential inducement to the Buyer to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants to which such Seller is party or by which it is bound; and (vii) such Seller is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any Person other than the Buyer. Each Shareholder that is an individual further acknowledges that the restrictions contained in this Section 4.9 do not impose an undue hardship on him, her or it and, since he, she or it has general business skills which may be used in industries other than that in which each Buyer Entity conducts its business and do not deprive Shareholder of his or her livelihood or its business. (f) If at any time a court or arbitrator’s award holds that the restrictions stated in this Section 4.9 5.11 are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area. The parties hereto agree that any breach of the provisions contained in this Section 4.9 will result in serious and irreparable injury and therefore money damages would not be an adequate remedy for any such breachbreach of this Agreement. Therefore, in the event of a breach or threatened breach of any provisions of this Section 4.9 5.11 that is continuing, the Parent and BuyerPurchaser, its successors and assigns and any third-party beneficiary to this Agreementmay, in addition to other rights and remedies existing in their favor, shall be entitled apply to any court of competent jurisdiction for specific performance or and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security). In addition, in the event of a breach or of violation by any either Seller or the Owner of this Section 4.95.11, the Noncompete Period shall be tolled until such breach or violation has been duly cured. Each of the Seller and the Owner agrees that the restrictions contained in this Section 5.11 are reasonable. (e) Each of the Seller and the Owner acknowledges and represents that: (i) sufficient consideration has been given by each party to this Agreement to the other as it relates hereto; (ii) it has consulted with independent legal counsel regarding its rights and obligations under this Section 5.11, (iii) that the agreements in this Section 5.11 are reasonable and necessary for the protection of the Purchaser and its Affiliates and are an essential inducement to the Purchaser to enter into this Agreement and (iv) that that the agreements in this Section 5.11 are in addition to, rather than in lieu of, any similar or related covenants to which either Seller or the Owner is party or by which it is bound.

Appears in 1 contract

Samples: Asset Purchase Agreement (Netbank Inc)

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Confidentiality; Non-Compete; Non-Solicitation; Non-Disparagement. In further consideration for the payment of the Purchase Price purchase price hereunder and in order to protect the value of the Purchased Assets Securities purchased by the Buyer (including, without limitation, the goodwill inherent in the Company as of the ClosingClosing Date), upon the Closing of the transactions contemplated by this Agreement, the Company and each Shareholder, as applicable, Seller Shareholder agrees as follows: (a) As an employeeowner of the Securities, officer or director and an employee of the Company (as applicable)or the Company’s Subsidiary, each Seller Shareholder has had access to and contributed to information and materials of a highly sensitive nature (including Confidential Information, as defined below) of the Company, its current and future, direct and indirect, Subsidiaries, parent (including, without limitation, Buyer), and related entities (each of the foregoing, an “INSOURCE Entity,” and collectively, the “INSOURCE Group”). Each Seller Shareholder agrees that except as otherwise contemplated by this Agreement, in connection with the enforcement of rights or performance of duties hereunder or in the course of employment by any Buyer Entity, unless such Seller Shareholder first secures the written consent of an authorized representative of Parent or the Company and Buyer, such Seller Shareholder shall not use for himself, herself, itself his or herself or anyone else, and shall not disclose to others, any Confidential Information, except as may be necessary for him or her to carry out his or her duties or except to the extent such use or disclosure is required by Law law or order of any Governmental or Regulatory Authority governmental authority (in which event each Seller Shareholder shall, to the extent practicable, inform Buyer the Company in advance of any such required disclosure, shall cooperate with Buyer the Company in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). Each Seller Shareholder shall use all reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. (bi) Each Seller Shareholder further agrees that promptly after the Closingthat, at any time requested, such Seller Shareholder shall promptly deliver to the Buyer or destroy, at the request and option of Buyer, Company all Confidential Information and other Intellectual Property of the Company INSOURCE Group in such SellerSeller Shareholder’s possession and controlcontrol and all copies thereof, in whatever form or medium, including, without limitation, written records, optical and magnetic media, and all other materials containing or embodying any such Intellectual Property. If the Buyer Company requests, each Seller Shareholder shall promptly provide written confirmation and certification that such Seller Shareholder has returned or destroyed all such materials. (c) The Each Seller Shareholder agrees that the Company and its Subsidiaries have received from third parties their confidential or proprietary information subject to a duty on the Company’s and its Subsidiaries’ part to maintain the confidentiality of such information and to use it only for certain limited purposes. Each Seller Shareholder agrees that he or she owes the Company, its Subsidiaries and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm, or corporation (except as necessary in carrying out such Seller Shareholder’s future work for the Company or its Subsidiaries consistent with the Company’s or Subsidiaries’ agreement with such third party) or to use it for the benefit of anyone other than for the Company, its Subsidiaries or such third party (consistent with the Company’s or Subsidiaries’ agreement with such third party) without the express authorization of the Company or its Subsidiaries. (d) Each Seller Shareholder acknowledges that he or she shall become familiar with Confidential Information concerning the INSOURCE Group and that his or her services have been and shall be of special, unique and extraordinary value to the INSOURCE Group. Therefore, each Seller Shareholder agrees that during the period beginning on the Closing Date date hereof and ending on the five three (53) year anniversary of the Closing Date (the “Noncompete Period”), it he or she shall not (and shall not take any steps toward or preparations in respect of), directly or indirectly, either for itself himself or herself or for any other Personperson, ownpartner, manageofficer, controldirector, participate inconsultant, consult withagent, render services foremployee, permit his, her or its name to be used stockholder of any company or in any other manner commercial enterprise (i) engage in any Competing Business. “Competing Business” is business or accept employment with any Competitor or (ii) provide any services whether directly or indirectly and whether on such Seller Shareholder’s own or on behalf of any InSource Competitor to any person or entity that provides legal discovery-related services or products in competition was either a Company Customer during the term of such Seller Shareholder’s term of employment with the BusinessCompany or Buyer (as the case may be), or a Prospective Customer. For purposes of this Agreement, the term “participate” includes any direct or indirect interest in any enterprise, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner; provided that the foregoing activities shall not include passive ownership of less than two percent (2%) 3% of the stock of a publicly publicly-held corporation whose stock is traded on a national securities exchange or in the over the over-the-counter marketmarket by each Seller Shareholder. Each Seller Shareholder agrees that this covenant is reasonable with respect to its duration, geographical area and scope. (de) During the Noncompete Period, each Seller Shareholder shall not directly or indirectly through another entity (i) encourage, induce, solicit induce or attempt to encourage, induce or solicit any officer, director or employee of Buyer or Buyer’s subsidiaries parent and related entities (each of the foregoing, a “Buyer Entity” and collectively, the “Buyer Group”) INSOURCE Group to leave the employ of the Buyer INSOURCE Group; , (ii) hire or employ any Person person who was an officer, director or employee of the Company (other than any Employee listed on Schedule 4.3(b)), INSOURCE Group at any time during the six (6) month period immediately prior to the date of this Agreement; hereof, (iii) call on, solicit, or service any customer, supplier, licensee, licensor or other business relation or prospective client of the Buyer INSOURCE Group with respect to products or and/or services that have been provided by the Company INSOURCE Group, are currently being provided by the Buyer INSOURCE Group or which the Buyer INSOURCE Group is currently in the process of developing; developing or (iv) encourage, induce or solicit, or attempt to encourage, induce or solicit, any customer, supplier, licensee, licensor or other business relation of the Buyer INSOURCE Group to cease doing business with the Buyer INSOURCE Group. (ef) Each Seller Shareholder acknowledges and represents that: (i) sufficient consideration has been given by each party to this Agreement to , in the other as it relates hereto; (ii) such Seller has consulted with independent legal counsel regarding course of his or her rights employment with the INSOURCE Group, he or she has and obligations under this Section 4.9; (iii) such will become familiar with the Confidential Information of the INSOURCE Group. Each Seller fully understands the terms and conditions contained herein; (iv) Shareholder further acknowledges that the scope of the business of the Company INSOURCE Group is independent of location (such that it is not practical to limit the restrictions contained in this Section 4.9 4.3 to a specified country, city city, or part thereof); (v) and, that such Seller Shareholder has had direct or indirect responsibility, oversight or duties with respect to all of the businesses of the INSOURCE Group and its and their current and prospective employees, vendors, customers, clients and other business relations, and that, accordingly, the restrictions and agreements contained in this Section 4.9 4.3 are reasonable in all respects and necessary for to protect the protection goodwill and Confidential Information of the Parent and Buyer and the other members of the Buyer INSOURCE Group and its Confidential Information and goodwill and that, without such protection, the Buyer INSOURCE Group customer and client relationship and competitive advantage would be materially adversely affected; (vi) . It is specifically recognized by each Seller Shareholder that his or her services to the agreements INSOURCE Group are special, unique, and of extraordinary value, that the Company and the other members of the INSOURCE Group have a protectable interest in prohibiting each Seller Shareholder as provided in this Section 4.9 are an essential inducement to the Buyer to enter into this Agreement and they are in addition to4.3, rather than in lieu of, any similar or related covenants to which that such Seller is party or by which it is bound; Shareholder was significantly responsible for the creation and (vii) preservation of the INSOURCE Group goodwill, and that money damages are insufficient to protect such interest, and that such prohibitions would be necessary and appropriate without regard to payments being made to each Seller is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any Person other than the BuyerShareholder hereunder. Each Seller Shareholder that is an individual further acknowledges that the restrictions contained in this Section 4.9 4.3 do not impose an undue hardship on him, him or her or it and, since he, he or she or it has general business skills which may be used in industries other than that in which each Buyer INSOURCE Entity conducts its business and do not deprive either Seller Shareholder of his or her livelihood or its businesslivelihood. (fg) If If, at any the time of enforcement of this Agreement, a court or arbitrator’s award holds that the restrictions stated in this Section 4.9 4.3 are unreasonable under circumstances then existing, the parties Parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area. The parties Parties hereto agree that any breach of the provisions contained in this Section 4.9 will result in serious and irreparable injury and therefore money damages would not be an adequate remedy for any such breachbreach of this Agreement. Therefore, in the event of a breach or threatened breach of any provisions of this Section 4.9 4.3 that is continuing, the Parent and BuyerCompany, its successors and assigns and any third-third party beneficiary to this AgreementAgreement may, in addition to other rights and remedies existing in their favor, shall be entitled apply to any court of competent jurisdiction for specific performance or and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security). In addition, in the event of a breach or of violation by any each Seller Shareholder of this Section 4.94.3, the Noncompete Period shall be tolled until such breach or violation has been duly cured. Each Seller Shareholder agrees that the restrictions contained in this Section 4.3 are reasonable. (h) Each Seller Shareholder acknowledges and represents that: (i) sufficient consideration has been given by each party to this Agreement to the other as it relates hereto; (ii) he or she has consulted with independent legal counsel regarding his or her rights and obligations under this Section 4.3, (iii) that he or she fully understands the terms and conditions contained herein, and (iv) that the agreements in this Section 4.3 are reasonable and necessary for the protection of the Company and the other members of the INSOURCE Group and are an essential inducement to Buyer to enter into this Agreement. (i) Each Seller Shareholder further represents and warrants that: (i) the execution, delivery and performance of this Agreement does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which either Seller Shareholder is a party or by which he or she is bound; (ii) this Agreement is a valid and binding obligation on each Seller Shareholder and is enforceable in accordance with its terms; and (iii) each Seller Shareholder is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any Person or entity other than the Company.

Appears in 1 contract

Samples: Stock Purchase Agreement (Virtusa Corp)

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