DON T GET BURNED BOILERPLATE PROVISIONS IN CONTRACTS Business Law & Corporate Counsel Section Program

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1 DON T GET BURNED BOILERPLATE PROVISIONS IN CONTRACTS Business Law & Corporate Counsel Section Program Bradley L. Whitlock Scheef & Stone, L.L.P. Dallas, Texas (214) Thursday, June 10, :45 a.m. 11:30 a.m.

2 Brad L. Whitlock Brad Whitlock is a partner with Scheef & Stone, L.L.P. His practice focuses on business transactions, including mergers and acquisitions (including stock and asset purchases and tender offers), securities matters (including representation of issuers, underwriters, venture capitalists, and private equity and hedge funds in connection with public and private offerings of debt and equity securities), and lending transactions (including the representation of lenders and borrowers in connection with loan documentation). He also has considerable experience representing companies in connection with their general legal needs, including labor and employment, contracts, and real estate. He was a partner in the corporate section of a large Dallas-based law firm for many years and has served as the general counsel for a large Dallas-based manufacturing company, where he was responsible for all of the legal aspects of the company. Mr. Whitlock was named as one of the best lawyers in Dallas in the May 2003 issue of D Magazine and as a Texas Super Lawyer by Texas Monthly magazine from He is also included in the 2005 and 2006 editions of The Best Lawyers In America. MEMBERSHIPS In addition to his law practice, Mr. Whitlock is involved in many bar and professional activities. He is a past Chair of the Business Law Section of the State Bar of Texas. From he served as Chair of the Corporation Laws Committee of the Business Law Section and he has helped draft sections of the Texas Business Organizations Code. Mr. Whitlock has served as chairman of the Securities Law Section of the Dallas Bar Association, as Chairman of the Texas Business Law Foundation, and on the Council of the Business Law Section. Mr. Whitlock has served on the board of several civic organizations, including the Greater Dallas Youth Orchestra and the Arts District Friends. He is a 2001 graduate of the Leadership Dallas program sponsored by the Greater Dallas Chamber of Commerce and served as chair of the Chamber s Leadership Advisory Council. PUBLICATIONS/SPEAKING ENGAGEMENTS Mr. Whitlock is the co-author of the four volume Texas Practice Guide Business Transactions published by Thompson Reuters/West. This treatise analyzes a number of Texas contracts, including employment agreements, technology agreements and service agreements. Mr. Whitlock is also a frequent speaker on a variety of transactional topics. EDUCATION Mr. Whitlock received his J.D. degree from the Southern Methodist University School of Law where he was a member of the Journal of Air Law & Commerce and a Hatton W. Sumners Scholar. He received his B. A. degree from Westminster College in Fulton, Missouri.

3 Don t Get Burned: Boilerplate Provisions in Contracts Brad Whitlock Scheef & Stone, L.L.PL (214)

4 ! Disclaimer: The views expressed in this speech do not represent the views of the State Bar of Texas, the Business Law Section of the State Bar of Texas, any other Section of the State Bar of Texas, or any sane lawyer anywhere. Any retransmission, re-telecast or other use of this speech without the express written consent of the Commissioner of Baseball is prohibited. Objects in mirror are closer than they appear. Coffee is hot.! AND:! Use the sample language at your own risk. 2

5 Introductory Paragraph!Set Forth and Define Parties!Set Forth Effective Date This Agreement (this Agreement ) is dated to be effective as of the day of, 2010 (the Effective Date ) and is between XYZ, Inc. ( Vendor ) and ABC, LLC ( Customer ). 3

6 Recitals!Not technically part of the contract!great for describing the intent of the parties 4

7 Statement of Consideration!Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are herby acknowledged 5

8 Choice of Law!Qualified Transactions!Notice of Provision! This contract, the entire relationship of the parties hereto, and any litigation between the parties (whether grounded in contract, tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted pursuant to the laws of the State of Texas, without giving effect to its choice of laws principles. p 6

9 Forum Selectioin!Generally Enforceable!Beware of Exceptions! This contract is wholly performable in Dallas County, Texas. Exclusive venue for any litigation between the parties hereto shall be in Dallas County, Texas, and shall be brought in the State District Courts of Dallas County, Texas, or in the United States District Court for the Northern District of Texas, Dallas Division. The parties hereto waive any challenge to personal jurisdiction or venue (including without limitation a challenge based on inconvenience) in Dallas County, Texas, and specifically consent to the jurisdiction i of the State of District i Courts of Dallas County and the United States District Court for the Northern District of Texas, Dallas Division. 7

10 Alternative Dispute Resolution!Mediation!Arbitration! Any controversy or claim arising out of or relating to this contract, the breach thereof, and any other dispute between the parties hereto (whether grounded in contract, tort, statute, law or equity), shall be settled by arbitration before a panel of three impartial arbitrators, administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 8

11 Severability!Give Court the Authority to Sever!Direct Court to Substitute Language! If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. 9

12 Assignment!Neither this Agreement nor any right created hereby or in any agreement entered into in connection with the transactions contemplated hereby shall be assignable by any party hereto without the prior consent of the other parties. 10

13 Prevent the Backdoor Assignment!For purposes of this Section, a sale of all or substantially all of a party s assets, or a transfer of at least a majority of the outstanding equity interests of a party by the holders thereof (whether by merger or otherwise), will be deemed d to be an assignment subject to this Section. 11

14 Merger and Integration!Also called Parol Evidence clause!helps prove a valid, integrated agreement! This Agreement and the agreements contemplated hereby constitute the entire agreement of the parties regarding the subject matter hereof, and supersede all prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. 12

15 Notice!Make it easy to give notice!have a deemed received provision!consider notices 13

16 Third Party Beneficiaries!Must be specified to be considered a TPB!If none are intended, that should be specified! Neither this Agreement nor any other agreement contemplated hereby shall be deemed to confer upon any person not a party hereto or thereto any rights or remedies hereunder or thereunder. 14

17 Other Boilerplate Items!Captions! The captions in this Agreement are for convenience of reference only and shall not limit or otherwise affect any of the terms or provisions hereof.!counterpartsp! This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.!amendment! This Agreement may be amended, modified or supplemented only by an instrument in writing executed by all the parties hereto. 15

18 Signature Block!Should match the first paragraph!xyz, Inc. By: Its: ABC, LLC By: Its: 16

19 Brad Whitlock, Partner Scheef & Stone, L.L.P. 500 N. Akard, Suite 2700 Dallas, Texas (Direct) (Fax) 17

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