1
Exhibit 7
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT is being executed and delivered as of
December 3, 1999 by ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Stockholder") in favor of, and for the
benefit of, OZ TECHNOLOGIES, INC., a California corporation (the "Company"),
CERPROBE CORPORATION, a Delaware corporation (the "Purchaser"), and the other
"Indemnitees" (as hereinafter defined). Certain capitalized terms used in this
Noncompetition Agreement are defined in Section 19.
RECITALS
A. As a direct or indirect stockholder and employee of the Company, the
Stockholder has obtained extensive and valuable knowledge and confidential
information concerning the businesses of the Company and its subsidiaries. (The
Company and its subsidiaries are referred to collectively herein as the
"Acquired Companies.")
B. Pursuant to a Stock Purchase Agreement dated as of December 3, 1999
among the Purchaser, the Company, the Stockholder, the other stockholders of the
Company, and certain trustees for certain trusts in which certain of the
stockholders of the Company hold their shares of the Company's common stock (the
"Purchase Agreement"), the Company's direct and indirect stockholders are
selling all of the outstanding stock of the Company to the Purchaser
contemporaneously with the execution and delivery of this Noncompetition
Agreement. As a result of the Purchaser's acquisition of all of the outstanding
stock of the Company, the Acquired Companies are becoming subsidiaries of the
Purchaser.
C. In connection with the acquisition by the Purchaser of all of the
outstanding stock of the Company pursuant to the Purchase Agreement (and as a
condition to the consummation of such acquisition), and to enable the Purchaser
to secure more fully the benefits of such acquisition, the Purchaser has
required that the Stockholder enter into this Noncompetition Agreement, and the
Stockholder is entering into this Noncompetition Agreement in order to induce
the Purchaser to consummate the acquisition contemplated by the Purchase
Agreement.
AGREEMENT
In order to induce the Purchaser to consummate the transactions contemplated by
the Purchase Agreement, and for other good and valuable consideration, the
Stockholder agrees as follows:
1. RESTRICTION ON COMPETITION. The Stockholder agrees that, during the
Noncompetition Period, the Stockholder shall not, and shall not permit any of
his Affiliates to:
(a) engage directly or indirectly in Competition in any
Restricted Territory; or
(b) directly or indirectly be or become an officer, director,
stockholder, owner, co-owner, proprietor, Affiliate, partner, promoter,
employee, agent, representative, designer, consultant, advisor,
manager, licensor, sublicensor, licensee or sublicensee of, for or to,
or otherwise be or become associated with or acquire or hold (of
record, beneficially or otherwise) any direct or indirect interest in,
any Person that engages directly or indirectly in Competition in any
Restricted Territory;
2
provided, however, that the Stockholder may, without violating this Section 1,
(i) perform his obligations under any employee agreement executed by the
Purchaser and the Stockholder substantially contemporaneously with the execution
and delivery of this Agreement (an "Employment Agreement") and (ii) own, as a
passive investment, shares of capital stock of a publicly-held corporation that
engages in Competition if (i) such shares are actively traded on an established
national securities market in the United States, (ii) the number of shares of
such corporation's capital stock that are owned beneficially (directly or
indirectly) by the Stockholder and the number of shares of such corporation's
capital stock that are owned beneficially (directly or indirectly) by the
Stockholder's Affiliates collectively represent less than one percent of the
total number of shares of such corporation's capital stock outstanding, and
(iii) neither the Stockholder nor any Affiliate of the Stockholder is otherwise
associated directly or indirectly with such corporation or with any Affiliate of
such corporation.
2. NO HIRING OR SOLICITATION OF EMPLOYEES; NO SOLICITATION OF CUSTOMERS
OR SUPPLIERS. The Stockholder agrees that, while the Stockholder is employed in
any capacity by, or serves as an independent contractor or consultant to, the
Purchaser or any of the Acquired Companies, and for a period of one year
following the termination of such employment or independent service, the
Stockholder shall not, and shall not permit any of his Affiliates (other than,
in each case, in connection with performing his obligations under any Employment
Agreement), to hire any Specified Employee (including as an independent
contractor). The Stockholder also agrees that, during the Noncompetition Period,
the Stockholder shall not, and shall not permit any of his Affiliates (other
than, in each case, in connection with performing his obligations under any
Employment Agreement), to: (a) directly or indirectly, personally or through
others, encourage, induce, attempt to induce, solicit or attempt to solicit (on
the Stockholder's own behalf or on behalf of any other Person) any Specified
Employee or any other employee to leave his or her employment with the
Purchaser, any of the Acquired Companies or any of the Purchaser's other
subsidiaries, or (b) directly or indirectly, personally or through others,
solicit or attempt to solicit (on the Stockholder's own behalf or on behalf of
any other Person) a Specified Customer or Supplier if such solicitation or
attempt to solicit is for or related to any Competing Product or Competing
Service. (For purposes of this Section 2, "Specified Employee" shall mean any
individual who (i) is or was an employee of any of the Acquired Companies on the
date of this Noncompetition Agreement or during the 12 month period ending on
the date of this Noncompetition Agreement, and (ii) remains or becomes an
employee of the Purchaser, any of the Acquired Companies or any of the
Purchaser's other subsidiaries on the date of this Noncompetition Agreement or
at any time during the Noncompetition Period, and "Specified Customer or
Supplier" shall mean any customer or supplier of any of the Acquired Companies
who is or was such a customer or supplier on the date of this Noncompetition
Agreement or during the 12 month period ending on the date of this
Noncompetition Agreement and any customer or supplier of the Purchaser, any of
the Acquired Companies or the Purchaser's other subsidiaries who is or becomes
such a customer or supplier following the date of this Noncompetition Agreement
and prior to the expiration of the Noncompetition Period.) In the event that the
Stockholder violates any of his obligations under this Section 2, the
Noncompetition Period shall be extended with respect to such obligations by the
period of time equal to that period beginning when the activities constituting
such violation commenced and ending when the activities constituting such
violation terminated. The provisions of Section 1 and Section 2 of this
Agreement shall terminate if the Purchaser does not cause all amounts payable on
any maturity date provided for in the Note (as defined in the Purchase
Agreement) to
2.
3
be paid to the Agent (as defined in the Purchase Agreement) or his
successor within thirty days of such maturity date.
3. CONFIDENTIALITY. The Stockholder agrees that he shall hold all
Confidential Information in strict confidence and shall not at any time (whether
during or after the Noncompetition Period): (a) reveal, report, publish,
disclose or transfer any Confidential Information to any Person (other than the
Purchaser, any of the Acquired Companies or any of the Purchaser's other
subsidiaries), except in the performance of his obligations under any Employment
Agreement, (b) use any Confidential Information for any purpose, except in the
performance of his obligations under any Employment Agreement, or (c) use any
Confidential Information for the benefit of any Person (other than the
Purchaser, any of the Acquired Companies or any of the Purchaser's other
subsidiaries).
4. REPRESENTATIONS AND WARRANTIES. The Stockholder represents and
warrants, to and for the benefit of the Indemnitees, that: (a) he has full power
and capacity to execute and deliver, and to perform all of his obligations
under, this Noncompetition Agreement; and (b) neither the execution and delivery
of this Noncompetition Agreement nor the performance of this Noncompetition
Agreement will result directly or indirectly in a violation or breach of (i) any
agreement or obligation by which the Stockholder or any of his Affiliates is or
may be bound, or (ii) any law, rule or regulation. The Stockholder's
representations and warranties shall survive the expiration of the
Noncompetition Period for an unlimited period of time.
5. SPECIFIC PERFORMANCE. The Stockholder agrees that, in the event of
any breach or threatened breach by the Stockholder of any covenant or obligation
contained in this Noncompetition Agreement, each of the Purchaser, the Company
and the other Indemnitees shall be entitled (in addition to any other remedy
that may be available to it, including monetary damages) to seek and obtain (a)
a decree or order of specific performance to enforce the observance and
performance of such covenant or obligation, and (b) an injunction restraining
such breach or threatened breach. The Stockholder further agrees that no
Indemnitee shall be required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any remedy referred
to in this Section 5, and the Stockholder irrevocably waives any right he may
have to require any Indemnitee to obtain, furnish or post any such bond or
similar instrument.
6. INDEMNIFICATION. Without in any way limiting any of the rights or
remedies otherwise available to any of the Indemnitees, the Stockholder shall
indemnify and hold harmless each Indemnitee against and from any loss, damage,
injury, harm, detriment, lost opportunity, liability, exposure, claim, demand,
settlement, judgment, award, fine, penalty, tax, fee (including attorneys'
fees), charge or expense (whether or not relating to any third-party claim) that
is directly or indirectly suffered or incurred at any time (whether during or
after the Noncompetition Period) by such Indemnitee, or to which such Indemnitee
otherwise becomes subject at any time (whether during or after the
Noncompetition Period), and that arises directly or indirectly out of or by
virtue of, or relates directly or indirectly to, (a) any inaccuracy in or breach
of any representation or warranty contained in this Noncompetition Agreement, or
(b) any failure on the part of the Stockholder to observe, perform or abide by,
or any other breach of, any restriction, covenant, obligation or other provision
contained in this Noncompetition Agreement.
3.
4
7. NON-EXCLUSIVITY. The rights and remedies of the Purchaser, the
Company and the other Indemnitees under this Noncompetition Agreement are not
exclusive of or limited by any other rights or remedies which they may have,
whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative). Without limiting the generality of the
foregoing, the rights and remedies of the Purchaser, the Company and the other
Indemnitees under this Noncompetition Agreement, and the obligations and
liabilities of the Stockholder under this Noncompetition Agreement, are in
addition to their respective rights, remedies, obligations and liabilities under
the law of unfair competition, under laws relating to misappropriation of trade
secrets, under other laws and common law requirements and under all applicable
rules and regulations. Nothing in this Noncompetition Agreement shall limit any
of the Stockholder's obligations, or the rights or remedies of the Purchaser,
the Company or any of the other Indemnitees, under the Purchase Agreement or any
Employment Agreement, and (subject to the last sentence of Section 2) nothing in
the Purchase Agreement or any Employment Agreement shall limit any of the
Stockholder's obligations, or any of the rights or remedies of the Purchaser,
the Company, or any of the other Indemnitees, under this Noncompetition
Agreement. Subject to the last sentence of Section 2, no breach on the part of
the Purchaser, the Company or any other party of any covenant or obligation
contained in the Purchase Agreement, any Employment Agreement or any other
agreement shall limit or otherwise affect any right or remedy of the Purchaser,
the Company or any of the other Indeminitees under this Noncompetition
Agreement.
8. SEVERABILITY. If any provision of this Noncompetition Agreement or
any part of any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Noncompetition
Agreement. Each provision of this Noncompetition Agreement is separable from
every other provision of this Noncompetition Agreement, and each part of each
provision of this Noncompetition Agreement is separable from every other part of
such provision.
9. GOVERNING LAW; VENUE.
(a) This Noncompetition Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of laws).
4.
5
(B) Any legal action or other legal proceeding relating to this
Noncompetition Agreement or the enforcement of any provision of this
Noncompetition Agreement may be brought or otherwise commenced in any state or
federal court located in the County of San Diego, California (the "Agreed-to
State"). The Stockholder:
(i) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in the County of
San Diego, California (and each appellate court located in the State of
California), in connection with any such legal proceeding;
(ii) agrees that service of any process, summons, notice or
document by U.S. mail addressed to him at the address set forth on the
signature page of this Noncompetition Agreement shall constitute
effective service of such process, summons, notice or document for
purposes of any such legal proceeding;
(iii) agrees that each state and federal court located in the
County of San Diego, California, shall be deemed to be a convenient
forum; and
(iv) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any state or
federal court located in the County of San Diego, California, any claim
that the Stockholder is not subject personally to the jurisdiction of
such court, that such legal proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or
that this Noncompetition Agreement or the subject matter of this
Noncompetition Agreement may not be enforced in or by such court.
Nothing contained in this Section 9 shall be deemed to limit or otherwise affect
the right of any Indemnitee to commence any legal proceeding or otherwise
proceed against the Stockholder in any other forum or jurisdiction; provided,
however, that the Indemnitees may not commence any legal proceeding against the
Stockholder in any State other than the Agreed-to State if the Stockholder is
domiciled, at the time of commencement of the applicable legal proceeding, in
the Agreed-to State, unless the Indemnitees are seeking to enforce any existing
judgment.
(c) THE STOCKHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY
TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS NONCOMPETITION
AGREEMENT OR THE ENFORCEMENT OF ANY PROVISION OF THIS NONCOMPETITION AGREEMENT.
10. WAIVER. No failure on the part of the Purchaser, the Company or any
other Indemnitee to exercise any power, right, privilege or remedy under this
Noncompetition Agreement, and no delay on the part of the Purchaser, the Company
or any other Indemnitee in exercising any power, right, privilege or remedy
under this Noncompetition Agreement, shall operate as a waiver of such power,
right, privilege or remedy; and no single or partial exercise of any such power,
right, privilege or remedy shall preclude any other or further exercise thereof
or of any other power, right, privilege or remedy. No Indemnitee shall be deemed
to have waived any claim of such Indemnitee arising out of this Noncompetition
Agreement, or any power, right, privilege or remedy of such Indemnitee under
this Noncompetition Agreement, unless the waiver
5.
6
of such claim, power, right, privilege or remedy is expressly set forth in a
written instrument duly executed and delivered on behalf of such Indemnitee; and
any such waiver shall not be applicable or have any effect except in the
specific instance in which it is given.
11. SUCCESSORS AND ASSIGNS. Each of the Purchaser, the Company and the
other Indemnitees may freely assign any or all of its rights under this
Noncompetition Agreement, at any time, in whole or in part, to any Person
without obtaining the consent or approval of the Stockholder or of any other
Person. This Noncompetition Agreement shall be binding upon the Stockholder and
his heirs, executors, estate, personal representatives, successors and assigns,
and shall inure to the benefit of the Purchaser, the Company and the other
Indemnitees.
12. FURTHER ASSURANCES. The Stockholder shall (at the Stockholder's
sole expense) execute and/or cause to be delivered to each Indemnitee such
instruments and other documents, and shall (at the Stockholder's sole expense)
take such other actions, as such Indemnitee may reasonably request at any time
(whether during or after the Noncompetition Period) for the purpose of carrying
out or evidencing any of the provisions of this Noncompetition Agreement.
13. ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Noncompetition Agreement or the enforcement of any provision of
this Noncompetition Agreement is brought against the Stockholder, the prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and
disbursements (in addition to any other relief to which the prevailing party may
be entitled).
14. CAPTIONS. The captions contained in this Noncompetition Agreement
are for convenience of reference only, shall not be deemed to be a part of this
Noncompetition Agreement and shall not be referred to in connection with the
construction or interpretation of this Noncompetition Agreement.
15. CONSTRUCTION. Whenever required by the context, the singular number
shall include the plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; and the neuter gender shall include the masculine
and feminine genders. Any rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be applied in the
construction or interpretation of this Noncompetition Agreement. Neither the
drafting history nor the negotiating history of this Noncompetition Agreement
shall be used or referred to in connection with the construction or
interpretation of this Noncompetition Agreement. As used in this Noncompetition
Agreement, the words "include" and "including," and variations thereof, shall
not be deemed to be terms of limitation, and shall be deemed to be followed by
the words "without limitation." Except as otherwise indicated in this
Noncompetition Agreement, all references in this Noncompetition Agreement to
"Sections" are intended to refer to Sections of this Noncompetition Agreement.
16. SURVIVAL OF OBLIGATIONS. Except as specifically provided herein,
the obligations of the Stockholder under this Noncompetition Agreement
(including his obligations under Sections 3, 6 and 12) shall survive the
expiration of the Noncompetition Period. The expiration of the Noncompetition
Period shall not operate to relieve the Stockholder of any obligation or
liability arising from any prior breach by the Stockholder of any provision of
this Noncompetition Agreement.
6.
7
17. OBLIGATIONS ABSOLUTE. Subject to the last sentence of Section 2,
the Stockholder's obligations under this Noncompetition Agreement are absolute
and shall not be terminated or otherwise limited by virtue of any breach (on the
part of the Purchaser, the Company, any other Indemnitee or any other Person) of
any provision of the Purchase Agreement or any other agreement, or by virtue of
any failure to perform or other breach of any obligation of the Purchaser, the
Company, any other Indemnitee or any other Person.
18. AMENDMENT. This Noncompetition Agreement may not be amended,
modified, altered or supplemented other than by means of a written instrument
duly executed and delivered on behalf of the Stockholder, the Purchaser (or any
successor to the Purchaser) and the Company (or any successor to the Company).
19. DEFINED TERMS. For purposes of this Noncompetition Agreement:
(a) "Affiliate" means, with respect to any specified Person,
any other Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with such
specified Person.
(b) "Competing Product" means any: (i) probe card, automatic
test equipment interface assembly, automatic test equipment test board, socket,
receptacle, adapter or similar product used in the semiconductor manufacturing
industry; (ii) product, equipment, device or system that has been designed,
developed, manufactured, assembled, promoted, sold, supplied, distributed,
resold, installed, supported, maintained, repaired, refurbished, licensed,
sublicensed, financed, leased or subleased by or on behalf of any of the
Acquired Companies (or any predecessor of any of the Acquired Companies) at any
time on or prior to this date of this Noncompetition Agreement; (iii) product,
equipment, device or system that is designed, developed, manufactured,
assembled, promoted, sold, supplied, distributed, resold, installed, supported,
maintained, repaired, refurbished, licensed, sublicensed, financed, leased or
subleased by or on behalf of the Purchaser, any of the Acquired Companies or any
of the Purchaser's other subsidiaries at any time during the Noncompetition
Period; or (iv) product, equipment, device or system that is substantially the
same as, incorporates, is a material component or part of, is based upon, is
functionally similar to or competes in any material respect with any product,
equipment, device or system of the type referred to in clause "(i)", clause
"(ii)" or clause "(iii)" of this sentence.
(c) "Competing Service" means any: (i) service that has been
provided, performed or offered by or on behalf of any of the Acquired Companies
(or any predecessor of any of the Acquired Companies) at any time on or prior to
the date of this Noncompetition Agreement; (ii) service that is provided,
performed or offered by the Purchaser, any of the Acquired Companies or any of
the Purchaser's other subsidiaries at any time during the Noncompetition Period;
(iii) service that facilitates, supports or otherwise relates to the design,
development, manufacture, assembly, promotion, sale, supply, distribution,
resale, installation, support, maintenance, repair, refurbishment, licensing,
sublicensing, financing, leasing or subleasing of any Competing Product; or (iv)
service that is substantially the same as, is based upon or competes in any
material respect with any service referred to in clause "(i)", clause "(ii)" or
clause "(iii)" of this sentence.
7.
8
(d) A Person shall be deemed to be engaged in "Competition"
if: (a) such Person or any of such Person's subsidiaries or other Affiliates
(other than the Purchaser, the Acquired Companies or any of the Purchaser's
other subsidiaries) is engaged directly or indirectly in the design,
development, manufacture, assembly, promotion, sale, supply, distribution,
resale, installation, support, maintenance, repair, refurbishment, licensing,
sublicensing, financing, leasing or subleasing of any Competing Product; or (b)
such Person or any of such Person's subsidiaries or other Affiliates (other than
the Purchaser, the Acquired Companies or any of the Purchaser's other
subsidiaries) is engaged directly or indirectly in providing, performing or
offering any Competing Service.
(e) "Confidential Information" means any non-public
information (whether or not in written form and whether or not expressly
designated as confidential) relating directly or indirectly to the Purchaser,
any of the Acquired Companies or any of the Purchaser's other subsidiaries or
relating directly or indirectly to the business, operations, financial affairs,
performance, prospects, assets, technology, processes, products, contracts,
customers, licensees, sublicensees, suppliers, personnel, consultants or plans
of the Purchaser, any of the Acquired Companies or any of the Purchaser's other
subsidiaries (including any such information consisting of or otherwise relating
to trade secrets, know-how, technology, inventions, prototypes, designs,
drawings, sketches, processes, methods, license or sublicense arrangements,
formulae, proposals, research and development activities, customer lists or
preferences, pricing lists, referral sources, marketing or sales techniques or
plans, operations manuals, service manuals, financial information, projections,
lists of consultants, lists of suppliers or lists of distributors); provided,
however, that "Confidential Information" shall not be deemed to include
information of the Purchaser, any of the Acquired Companies or any of the
Purchaser's other subsidiaries that (a) was already publicly known and in the
public domain prior to the time of its initial disclosure to the Stockholder or
(ii) is required to be disclosed by law. The Stockholder shall advise the
Purchaser, in writing at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇), of any subpoena or similar legal inquiry to
disclose any Confidential Information so that the Purchaser may seek appropriate
legal relief.
(f) "Indemnitees" shall include: (i) the Purchaser, (ii) the
Company, (iii) each Person who is or becomes an Affiliate of the Purchaser or
the Company, and (iv) the successors and assigns of each of the Persons referred
to in clauses "(i)", "(ii)" and "(iii)" of this sentence.
(g) "Noncompetition Period" shall mean the period commencing
on the date of this Noncompetition Agreement and ending on the third anniversary
of the date of this Noncompetition Agreement.
(h) "Person" means any: (i) individual, (ii) corporation,
general partnership, limited partnership, limited liability partnership, trust,
company (including any limited liability company or joint stock company) or
other organization or entity, or (iii) governmental body or authority.
(i) "Restricted Territory" means each county or similar
political subdivision of each State of the United States of America (including
each of the counties in the State of Arizona), each State, territory or
possession of the United States of America, and all other countries in which the
Purchaser, any of the Acquired Companies or any of the Purchaser's other
8.
9
subsidiaries conducts business as of the date of this Noncompetition Agreement
or during the Noncompetition Period.
9.
10
IN WITNESS WHEREOF, the Stockholder has duly executed and delivered
this Noncompetition Agreement as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇
Address:
Telephone No.: ( )
Facsimile:( )
10.
