Weintraub Tobin`s labour and labour law specialists continue to wish you and your health good health at this very worrying time. If we can help you meet any of your labour law needs, contact one of us. Lenders should exercise at least the same caution in financing SBA loans as they do for their conventional institutions. This means that SBA lenders should consider a non-compete agreement on the basis of the particular facts of the transaction. While laws differ from state to state, courts generally consider whether the non-competition agreement is appropriate or not. Lenders should cooperate with borrowers` and borrowers` advisors to obtain as much comfort and protection as possible through a non-compete agreement, without overdoing it to ensure that a court does not crack down on the agreement and renders it unenforceable. Some common elements of a non-competition agreement that should be considered are the type of industry, the geographic scope and duration. When a new business is acquired, a non-compete clause can make the difference between a successful business and a failed business. It can also help SBA lenders protect the credit guarantee in the event of a business failure. Accordingly, the lender and its borrower should carefully consider whether the terms of a non-competition agreement are appropriate and sufficient for their transaction. When the party (or party) that receives information in an NDA receives information, the agreement will frequently determine the obligations to be fulfilled with respect to the information. For example, the receiving party may be obliged not to allow people outside its company to access confidential information. Often, it is the type of industry that determines the appropriate geographic extent of the restriction.
For example, when a borrower buys a local dental practice, a few miles may be enough for a non-compete agreement. However, when a borrower buys a production company that markets products in many states, a larger, limited geographic area should be included in the non-competition agreement. SBA.com® has created a free NDA model, is available free of charge and contains the necessary points to protect both parties who conclude the agreement. Form SBA 601 is used when the construction costs listed in the SBA 1919 form (borrower information form) exceed $10,000. Form SBA 601 ensures that the borrower is not involved in discriminatory recruitment and dismissal practices and is in compliance with Executive Order 11246. This means that the borrower agrees not to make employment decisions based on the race, colour, religion, gender or national origin of a potential employee. The purpose of a confidentiality agreement (or “NOA”) is to protect private information exchanged between two or more parties from becoming public or more known. This agreement aims to create a legal obligation that requires the parties who sign it to keep all disclosed information confidential and secure. NDAs offer the ability to protect confidential information such as trade secrets, customer information, marketing plans and financial data. For example, an inventor who has developed a new product may create an NDA to protect his rights to his invention if the public disclosure of this new invention may have terminated his patent rights.
