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EXHIBIT 2.3
NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENT
AGREEMENT entered into as of this 6th day of January, 2000, by and
among Xxxxxx Automation, Inc., a Delaware corporation ("Xxxxxx"), Daifuku Co.,
Ltd., a Japanese company ("Daifuku Japan"), and Daifuku America Corporation, an
Illinois corporation and wholly-owned subsidiary of Daifuku Japan (the "Company
Shareholder"). (The Company Shareholder and Daifuku Japan are referred to
collectively as the "Sellers.")
WITNESSETH:
WHEREAS, Xxxxxx, ASC Merger Corp. and ASI Merger Corp., two
wholly-owned subsidiaries of Xxxxxx, and the Sellers have entered into an
Agreement and Plan of Merger dated December 15, 1999 (the "Merger Agreement"),
pursuant to which ASC Merger Corp. and ASI Merger Corp. are being merged into
Auto-Soft Corporation ("ASC") and AutoSimulations, Inc. ("ASI"), respectively
two Utah corporations which are wholly-owned subsidiaries of the Company
Shareholder (the "Mergers") in consideration for payment by Xxxxxx to Company
Shareholder of $59 million (subject to adjustment) in cash and stock; and
WHEREAS, pursuant to the Merger Agreement, ASI and ASC (collectively,
the "Companies") will survive the Mergers and become wholly-owned subsidiaries
of Xxxxxx (the term "Surviving Companies" shall mean ASC and ASI after the
Mergers); and
WHEREAS, it is a condition to the Mergers that this Noncompetition
and Confidentiality Agreement be entered into; and
WHEREAS, the Sellers have had access to information relating to the
Companies' business activities, business plans, personnel, financial status and
other confidential and proprietary information including, but not limited to,
existing and potential customers, customer information, target market areas,
potential and future products, methods, techniques, trade secrets and other
confidential and proprietary information of and about the Companies and their
affiliates and who their customers and suppliers are, all of which are
significant components of the value of the businesses being acquired, and are of
value to Xxxxxx; and
WHEREAS, Xxxxxx and its affiliates do now and in the future will
continue to produce and license and sell products and technologies to their
customers on a worldwide basis; and
WHEREAS, as a result of the Sellers' involvement with and knowledge
of the Companies' business and their access to the Companies' confidential
customer information, the Sellers acknowledge the need for and agree to impose
certain restrictions on the ability of the Sellers to compete with Xxxxxx and
its Affiliates, including the Surviving Companies, following the Effective Time
in order to keep intact the Surviving Companies' business organization, to keep
available their present officers, employees and agents and to preserve the good
will of the Surviving Companies as going concerns;
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NOW THEREFORE, in consideration of the consideration received under
the Merger Agreement and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and intending to be legally
bound, it is hereby agreed by and among the parties as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms will
have the indicated meanings:
"Affiliate" means a second person controlling, controlled by or under
common control with a first person, and includes without limitation
any second person with 50% or more of the equity ownership of which
is held by the first person.
"Allowed Product or Market Areas" means the product or market areas
identified in Exhibit B.
"Xxxxxx Group" means Xxxxxx or any Affiliate of Xxxxxx.
"Company Information" has the meaning specified in Section 4(a).
"Competitors of Xxxxxx Group" means any third party producing or
selling products or services into the Identified Market Areas.
"Customer Information" has the meaning specified in Section 4(b).
"Identified Market Areas" means the market areas identified in
Exhibit A.
"Non-Competition Period" means the period of five years commencing on
the date of Closing under the Merger Agreement.
"Sellers" includes Daifuku Japan, the Company Shareholder and any
successor to a majority of the business of either of them.
"New Products" means any product first completed and shipped to a
customer after September 1, 1999.
2. COVENANT NOT TO COMPETE.
(a) During the Non-Competition Period, except as provided in
paragraphs (b) and (c) below, neither the Sellers nor any
of their Affiliates shall, directly or indirectly, whether
as owners, partners, shareholders, joint venturers, or
otherwise, engage or attempt to engage in the following:
(i) the competitive development of New Products in the
Identified Market Areas, or (ii) distribution agreements
with Competitors of Xxxxxx Group to distribute, sell,
market or act as sales agent for any products in the
Identified Market Areas.
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(b) Nothing in paragraph (a) shall prohibit Sellers from: (i)
engaging in the competitive development of and marketing of
products which are not New Products within the Identified
Market Areas, (ii) performing system integration work with
Competitors of Xxxxxx Group, or (iii) engaging in any
activities in Allowed Product or Market Areas.
(c) Notwithstanding paragraph (a), CONTEC Co., Ltd., an
Affiliate of Sellers, may continue to act as a distributor
of WonderWare products pursuant to the Wonderware Embedded
OEM Licensing and Distribution Agreement between Wonderware
Corporation, a Delaware corporation, and CONTEC dated April
1, 1999. In addition, Sellers may continue development and
sales of the current MCS product which was previously
developed, sold, and installed by Sellers separate and
independent of the MCS product developed by ASC.
(d) Notwithstanding paragraph (a), in the event and to the
extent that (i) Xxxxxx Group is in material breach of its
obligations pursuant to a certain License Agreement of the
date hereof (Exhibit 4 of the Operating Agreement between
the parties), (ii) such material breach has not been cured
after sixty (60) days written notice, and (iii) such
default could reasonably be expected to adversely affect
AMHS sales by Sellers, then upon sixty (60) days prior
written notice to Xxxxxx, Sellers may procure, or engage in
the competitive development and marketing of, New Products
in the Material Control Systems software market for the
limited purposes of selling in conjunction with Sellers'
AMHS products or supporting Sellers' existing installed
base of AMHS products.
(e) Notwithstanding paragraph (a), in the event and to the
extent that (i) Seller provides reasonable written evidence
that the aggregate fees, royalties, prices, other
consideration, and delivery required by Xxxxxx Group for
software products pursuant to a certain License Agreement
of the date hereof (Exhibit 4 of the Operating Agreement
between the parties) is non-competitive as compared to the
aggregate fees, royalties, prices, other consideration, and
delivery required by competitors when the competitors are
selling Material Control System software independently from
sales of AMHS products, and (ii) this pricing and delivery
could reasonably be expected to adversely affect AMHS sales
by Sellers, then at Sellers' request, the parties shall
review options and endeavor in good faith to negotiate
arrangements which make Xxxxxx Group's prices competitive
within sixty (60) days of Sellers' request. Should Xxxxxx
Group's pricing and delivery nevertheless remain
non-competitive after the end of the sixty (60) day period
despite such efforts, then upon thirty (30) days prior
written notice to Xxxxxx, Sellers may procure, or engage in
the competitive development and marketing of, New Products
in the Material Control Systems software market for the
limited purpose of selling in conjunction with Sellers'
AMHS products or supporting Sellers' existing installed
base of AMHS products.
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3. NON-SOLICITATION/INTERFERENCE. During the Non-Competition Period, the
Sellers shall not, nor shall they attempt to or assist any other
person in attempting to do any of the following: (i) solicit for
employment or other engagement any director, officer, employee, then
employed by any member of the Xxxxxx Group, or encourage any such
person to terminate such relationship with any member of the Xxxxxx
Group, (ii) encourage any customer or supplier of the Xxxxxx Group to
terminate or alter such relationship, whether contractual or
otherwise, written or oral, with any member of the Xxxxxx Group,
(iii) encourage any prospective customer or supplier not to enter
into a business relationship with any member of the Xxxxxx Group; or
(iv) impair or attempt to impair any business relationship,
contractual or otherwise, between any member of the Xxxxxx Group and
any customer, supplier or other person; provided however that the
foregoing restrictions shall not apply to (i) unsolicited approaches
by any person in response to newspaper, magazine, or radio or other
mass media hiring advertisements, or to (ii) transactions or
relationships unrelated to the Identified Market Areas.
4. COMPANY INFORMATION AND CUSTOMER INFORMATION.
(a) The Sellers recognize that the Surviving Companies, Xxxxxx
and their Affiliates have developed confidential and
proprietary information regarding costs, profits, markets,
operating procedures, products, methods, systems,
techniques, customer lists, machinery, tooling, hardware,
computer software programs and applications, designs,
formulae, schematics, maskworks, specifications, processes,
"know-how" designs, plans for present and future
development and expansion into new markets and other
tangible and intangible proprietary information, which is
secret and confidential in nature and is not available to
the public, which gives the Surviving Companies, Xxxxxx and
their Affiliates a special competence in their respective
fields of endeavor, all of which have been acquired or
developed at considerable expense. The information referred
to in the preceding sentence is hereafter collectively
referred to as the "Company Information."
(b) The Sellers further recognize that the Sellers may have
obtained or had access to certain confidential and
proprietary information concerning the respective customers
and suppliers of the Surviving Companies and their
Affiliates, which the Surviving Companies and such
Affiliates treat and desire to continue to treat on a
confidential basis ("Customer Information") and that the
Sellers, during the course of the Company Shareholder's
ownership of the Companies, had access to such Customer
Information.
(c) Company Information and Customer Information shall not
include information relating to Allowed Product or Market
Areas.
5. PROTECTION OF INFORMATION. The Sellers agree that:
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(a) The Sellers shall not disclose, either directly or
indirectly, under any circumstances, at any time, excepted
as specifically provided for in paragraph (e) below, any of
the Company Information or Customer Information to any
person, firm, corporation, association or other entity for
any reason or purpose whatsoever; provided that Sellers
shall not be deemed to be in breach of such covenant if:
(i) Sellers shall have promptly given written notice to
Xxxxxx of the request or demand for such disclosure; (ii)
Xxxxxx has been afforded the right to participate, at its
own expense in objecting to or limiting the nature and
scope of such disclosure, and to seek judicial protection
available for like material, such as protective orders and
sealed records of proceedings; and (iii) the Sellers make
such disclosure pursuant to an order of a court of
competent jurisdiction from which no appeal may be taken or
for which the appeal period has expired.
(b) Sellers agree not to use any of the Company Information or
Customer Information for their own benefit or for the
benefit of any other person, firm, corporation, association
or other entity for any reason or purpose whatsoever,
except as otherwise provided in this Agreement or in
separate agreements involving Xxxxxx, Daifuku Japan or
Company Shareholder.
(c) Sellers agree that at any time upon the request of Xxxxxx,
Sellers will deliver to Xxxxxx all documents and data of
any nature pertaining to any Company Information and
Customer Information which is in the direct or indirect
possession, or under the direct or indirect control, of
Sellers.
(d) Sellers represent that Sellers' performance of all of the
terms of this Agreement does not and will not breach any
agreement by which Sellers are bound to keep in confidence
proprietary information or trade secrets of any other
person acquired by Sellers in confidence or in trust and
Sellers agree not to enter into any agreement either
written or oral in conflict herewith.
(e) The obligations of confidentiality and nondisclosure shall
not include information which Sellers can show is (i) in
the public domain unless there by reason of Sellers'
improper disclosure, (ii) was disclosed to Sellers in good
faith by a third party having the right to disclose such
information, or (iii) is independently developed by or on
either of the Sellers' behalf, independently of any
disclosure hereunder.
6. REMEDIES. Sellers expressly acknowledge that, in the event that the
provisions of Section 2, 3 or 5 hereof are breached, Xxxxxx will
suffer damages incapable of ascertainment and will be irreparably
damaged if any provision of such Sections is not enforced. Therefore,
should any dispute arise with respect to the breach or threatened
breach of any provision of said Sections, Sellers agree and consent
that, in addition to any and all other remedies available to Xxxxxx,
an injunction or restraining order or other equitable relief may be
issued or ordered by a court of competent jurisdiction restraining
any breach or threatened breach of any of such provisions. Sellers
consent that, for purposes of any
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action initiated against Sellers hereunder, service of process may be
effected by certified mail or overnight receipted courier as set
forth in Section 10 hereof and shall be acceptable and adequate to
satisfy the requirement that service of process be served on Sellers
in connection therewith. All such proceedings may be pursued and such
remedies sought and obtained concurrently or consecutively at the
election of Xxxxxx.
7. INTEGRAL PART OF TRANSACTION; PROTECTION OF INTERESTS. The
undertakings and covenants of Sellers contained in this Agreement are
an integral part of the transactions set forth in the Merger
Agreement. Sellers acknowledge, warrant and agree that the
restrictive covenants contained in this Agreement are necessary for
the protection of the business investment by Xxxxxx in the capital
stock of the Companies and the legitimate business interests of the
Surviving Companies and their Affiliates, respectively, and are
reasonable in scope and content and in the event any such
territorial, time or other limitations are found to be unreasonable
by a court of competent jurisdiction, Sellers agree and submit to the
reduction of such territorial, time or other limitations to such an
area, period or otherwise as the court may determine to be
reasonable. In the event that any limitation contained in Sections
2,3 or 5 of this Agreement is found to be unreasonable or otherwise
invalid in whole or in part in any jurisdiction, Sellers agree that
such limitations shall be and remain valid in all other
jurisdictions.
8. SEVERABILITY. The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and
the unenforceability of any one clause shall in no way impair the
enforceability of any of the other clauses herein. Moreover, if one
or more of the provisions contained in this Agreement shall for any
reason be held to be excessively broad as to scope, activity or
subject, such provisions shall be construed by the appropriate
judicial body by limiting and reducing it or them, so as to be
enforceable to the extent compatible with the applicable law.
9. ASSIGNMENT. This Agreement may not be assigned by Xxxxxx without the
consent of Sellers, which will not be unreasonably withheld. The
agreements hereunder shall inure to the benefit of and be enforceable
by permitted successors or assigns.
10. NOTICES. All notices to be sent pursuant to this Agreement shall be
in writing and shall have been deemed to have been adequately given
if delivered in person or mailed by registered or certified mail,
postage prepaid or overnight receipted courier.
If to Xxxxxx or the Surviving Companies:
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
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with a copy to:
Xxxxxxxx X. Xxxx, Esquire
Brown, Rudnick, Freed & Gesmer, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Sellers to:
Natsuo Makino
Daifuku America Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxx
Masuda, Funai, Xxxxxx & Xxxxxxxx
Two Continental Towers
0000 Xxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
11. WAIVERS. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such
written waiver shall be deemed to be a continuing waiver unless
specifically stated therein.
12. MODIFICATIONS. No modifications of any provisions of this Agreement
shall be made unless made in writing and signed by the parties
hereto.
13. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
14. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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15. HEADINGS. The headings of sections and paragraphs herein are included
solely for convenience of reference and shall not affect the meaning
or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto, or their duly authorized
representatives, have signed, sealed and delivered this Agreement effective as
of the day and year first above written.
XXXXXX AUTOMATION, INC.
By:
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Name:
Title:
DAIFUKU CO., LTD.
By:
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Name:
Title:
DAIFUKU AMERICA CORPORATION
By:
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Name:
Title:
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EXHIBIT A
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Identified Market Areas
1. Material Control Systems Software products, including without
limitation products competing with or similar in functionality to the
following products or their successors:
1.2 Transport Maven
1.3 CLASS
1.4 CLASS 2000
1.5 MCS 4.x for Intel
1.6 MCS 3.x for Intel
1.7 MTS for Samsung
1.8 MTI MCS
2. Wafer/Lot Tracking Software products, including without limitation
products competing with or similar in functionality to the following
products or their successors:
2.1 WaferTrax
2.2 Laser Scribe Elimination
2.4 ID Maven
3. Cell Control Software products, including without limitation products
competing with or similar in functionality to the following products
or their successors:
3.1 Toolstation
3.2 PhotoStation
3.3 Cell Maven
3.4 APMS
4. MES Related Software and Integration products, including without
limitation products competing with or similar in functionality to the
following products or their successors:
4.1 BayStation/fabVU
4.2 MCSsrv
4.3 BOMbrowser
4.4 DataTrax
4.5 RpcMS (Reticle and Probe Card Mgmt.)
4.6 MES Integration (Wonderware)
4.7 MES Integration (FASTech)
5. Not Applicable
6. Simulation Software products, including without limitation products
competing with or similar in functionality to the following products
or their successors:
6.1 Automod
6.2 Auto Sched
7. Scheduling Software products, including without limitation products
competing with or similar in functionality to the following products
or their successors:
7.1 Advanced Productivity Family
7.2 ISS Reporter
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EXHIBIT B
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ALLOWED PRODUCT OR MARKET AREAS
1. The following Material Control System product areas
CFM/CSM (English)
CFM/CSM (Japanese)
CFM40 products which incorporate Xxxxxx technology
Products which incorporate technology licensed from Xxxxxx
2. Automotive Software markets, including without limitation markets
served by the following products:
Parts Call
Andon
Monitoring
Painted Body Storage
Parts Sequential Supply
3. Warehouse Management System Software markets, including without
limitation markets served by the following products:
Warehouse Rx (General)
WMS (Warehouse Management System)
4. The following simulation software products areas:
Daifuku Extensions to Xxxxxx' simulation products, including Automod
Daifuku Extensions
DREAMS (Daifuku Real-time Engineering Advanced Planning Tool for
Material Handling System)
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