Corporate & Securities Law

?Therefor?

By Ken Adams

A reader asked me what I think about therefor. Here’s my equivocal answer:

In MSCD 12.99 I note that here- and there- words such as herein and thereunder are dreary legalese. That’s why I use in this agreement instead of herein. But sometimes, a there- word allows you to avoid long-winded repetition.

Looking more closely at therefor suggests another wrinkle to there- words. In most cases, omitting therefor wouldn’t confuse the reasonable reader, as it’s clear from the context what’s being referred to. Consider the following crappy language, which I culled from EDGAR while wearing a HazMat suit:

A Participant required to sell any Depositary Receipts pursuant to this Section 6(b), shall be entitled to receive in exchange [therefor] the purchase price per Depositary Receipt received by the Majority Institutional Investors with respect to their Depositary Receipts in such transaction ….

“Equipment”: Includes, without limitation, “equipment” as defined in the UCC, and also all furniture, store fixtures, motor vehicles, rolling stock, machinery, office equipment, plant equipment, tools, dies, molds, and other goods, property, and assets which are used and/or were purchased for use in the operation or furtherance of any Guarantor’s business, and any and all accessions or additions thereto, and substitutions [therefor].

Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time or attainment of Performance Goals upon which such rights shall accrue and the purchase price [therefor], if any.

An option (or any part or installment thereof), to the extent then exercisable, shall be exercised by giving written notice to the Company, at the address and in the form established by the Committee and accompanied by payment in full of the aggregate exercise price [therefor] (a) in cash or by certified check or (b) in such other form as the Committee may approve.

A merger, consolidation, or sale by the Company of all or substantially all of its assets, in which the Company is not the surviving corporation, except as set forth below or in the Agreement, the options granted hereunder as of the date of such event shall continue to be outstanding and the optionee shall be entitled to receive in exchange [therefor] an option in the surviving corporation for the same number of shares of stock of the surviving corporation as he would have been entitled to receive ….

I think it’s safe to omit therefor from each of the above examples. But in the interest of being explicit, I might be inclined to keep it in, or to use instead a full prepositional phrase. I haven’t yet made up my mind. What do you think?

Full post as published by AdamsDrafting on June 11, 2010 (boomark / email).