The Protective Covenant Agreement serves as a crucial legal instrument under Indonesian law for businesses seeking to protect their legitimate interests, trade secrets, and competitive position in the market. This document is typically used when engaging employees, contractors, or business partners who will have access to sensitive information or strategic relationships. It combines elements of confidentiality, non-competition, and non-solicitation provisions, all structured to comply with Indonesian legal requirements, particularly the Civil Code and Law No. 13 of 2003 on Manpower. The agreement is essential for safeguarding intellectual property, customer relationships, and business methodologies, while ensuring enforceability within the Indonesian legal framework. Special attention is given to balancing business protection with reasonable restrictions that courts will uphold.
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1. Parties: Identification of all parties to the agreement, including full legal names and addresses
2. Background: Context of the agreement, relationship between parties, and purpose of the protective covenants
3. Definitions: Detailed definitions of key terms used throughout the agreement, including 'Confidential Information', 'Trade Secrets', 'Intellectual Property', and 'Restricted Activities'
4. Duration and Term: Specified period for which the protective covenants will remain in effect
5. Confidentiality Obligations: Detailed provisions regarding the protection and non-disclosure of confidential information
6. Non-Competition Covenant: Restrictions on competitive activities, including geographic and temporal scope
7. Non-Solicitation Provisions: Restrictions on soliciting employees, customers, or business partners
8. Intellectual Property Protection: Provisions protecting intellectual property rights and preventing unauthorized use
9. Return of Materials: Requirements for returning company materials and information upon termination
10. Breach and Remedies: Consequences of breach and available remedies, including injunctive relief
11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes
12. Execution: Signature blocks and execution requirements
1. Assignment and Succession: Include when the agreement needs to address transferability of obligations or rights
2. Separation or Severability: Include when there's a need to ensure remaining provisions stay valid if some are found unenforceable
3. Training and Trade Secrets: Include when specific training or trade secrets are provided to the restricted party
4. Garden Leave Provisions: Include for senior employees where applicable under Indonesian law
5. International Operations: Include when the protected business operates across multiple jurisdictions
6. Digital Assets Protection: Include when dealing with digital intellectual property or online business assets
7. Third Party Rights: Include when protection needs to extend to affiliated companies or specific third parties
1. Schedule A - Protected Information: Detailed list of confidential information and trade secrets covered by the agreement
2. Schedule B - Restricted Territory: Geographic areas where non-compete and non-solicitation provisions apply
3. Schedule C - Restricted Activities: Detailed description of prohibited business activities
4. Schedule D - Company Intellectual Property: Comprehensive list of protected intellectual property
5. Appendix 1 - Acknowledgment Form: Form for periodic reaffirmation of obligations under the agreement
6. Appendix 2 - Exit Procedures: Procedures for ensuring compliance upon termination of relationship
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