Legal Covenants Template

LEGAL COVENANTS AGREEMENT

This Legal Covenants Agreement (the Agreement) is made as of Effective Date: by and between Covenantor Name: , Entity Type: Individual Corporation LLC, Address: (hereafter Covenantor), and Covenantee Name: , Address: (hereafter Covenantee).

Recitals

WHEREAS, Covenantor possesses certain confidential information, business methods, goodwill and other proprietary interests that Covenantor desires to protect; and

WHEREAS, Covenantee seeks assurance from Covenantor that specific affirmative and restrictive covenants will be observed to protect Covenantee's legitimate business interests; and

WHEREAS, the parties wish to set forth their mutual covenants, remedies for breach, and related terms in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions

1.1 "Confidential Information" means all non-public information disclosed by Covenantor to Covenantee or otherwise learned by Covenantee, whether oral, written, electronic or tangible, that (i) is designated as confidential or proprietary, or (ii) by its nature would reasonably be understood to be confidential, including but not limited to trade secrets, customer lists, pricing, strategic plans and technical data.

1.2 "Restricted Activities" means those activities described in Section 3 and any written supplement agreed to by the parties.

2. Representations and Warranties

2.1 Each party represents and warrants that it has full power and authority to enter into this Agreement and to perform its obligations hereunder and that execution and delivery of this Agreement has been duly authorized by all necessary corporate or other action.

2.2 Covenantor warrants that to the best of its knowledge, the performance of the covenants contained herein will not violate any agreement or obligation to third parties.

3. Covenants of Covenantor

3.1 Affirmative Covenants. Covenantor covenants that, during the Term, Covenantor shall: (a) preserve and protect all Confidential Information from unauthorized use and disclosure; (b) comply with all applicable laws and regulatory requirements in the performance of its obligations; and (c) cooperate reasonably with Covenantee in documenting compliance with this Agreement.

3.2 Negative Covenants. Covenantor covenants that, during the Restriction Period defined below, Covenantor shall not, directly or indirectly, engage in the following Restricted Activities within the Territory:

4. Term; Restriction Period; Territory

4.1 Term. The term of this Agreement (the Term) commences on Term Start Date: and, unless earlier terminated in accordance with Section 8, continues until Term End Date: .

4.2 Restriction Period. The restrictive covenants set forth in Section 3.2 shall continue for a period of years following termination or expiration of the Term.

4.3 Territory. The geographical scope for the restrictive covenants is:

5. Remedies; Liquidated Damages; Injunctive Relief

5.1 Remedies. In the event of a breach or threatened breach of Section 3, Covenantee shall be entitled to seek injunctive relief restraining such breach in addition to any other remedies available at law or in equity, including specific performance.

5.2 Liquidated Damages. If Covenantor breaches the restrictive covenants of Section 3.2, Covenantor shall pay liquidated damages in the amount of for each distinct violation, such amount representing a reasonable estimate of probable damages and not a penalty.

6. Enforcement; Attorneys' Fees

6.1 If any action is necessary to enforce this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable attorneys' fees, costs and expenses incurred in connection with such enforcement, including costs on appeal.

7. Notices

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below:

Notices shall be deemed given when delivered personally, on the third day after deposit with certified mail, return receipt requested, or upon confirmed electronic transmission where acknowledgment of receipt is obtained.

8. Termination

8.1 Termination for Cause. Either party may terminate this Agreement upon material breach by the other party if such breach remains uncured for thirty (30) days after written notice specifying the breach.

8.2 Survival. Notwithstanding termination, the rights and obligations of the parties that by their nature survive termination, including Sections 1, 3, 5, 6, 9, 12 and 13, shall survive termination or expiration of this Agreement for the periods specified herein.

9. Assignment

Neither party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other party, except that Covenantee may assign this Agreement in connection with a merger, sale of substantially all assets, or similar transfer provided the assignee assumes the obligations hereunder.

10. Amendments; Waiver

No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. The waiver by either party of a breach shall not operate as a waiver of any subsequent breach.

11. Severability

If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be reformed only to the extent necessary to make it valid and enforceable, and the remaining provisions shall continue in full force and effect.

12. Governing Law; Venue

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflicts of law principles. The parties hereby consent to the exclusive jurisdiction of the state and federal courts located in that state for resolution of disputes arising under this Agreement.

13. Entire Agreement; Counterparts

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and communications, whether written or oral. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

14. Miscellaneous Provisions

14.1 No waiver of any right hereunder shall be effective unless in writing. 14.2 Headings are for convenience only and shall not affect interpretation. 14.3 The parties shall execute such further documents and take such further actions as may be reasonably necessary to effectuate the purposes of this Agreement.

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