EXHIBIT 99.7
NON-COMPETITION, NON-SOLICITATION AND
CONFIDENTIALITY AGREEMENT
THIS NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT
(the "Agreement") is made and entered into this 2nd day of September 1997, by
and between Computer Products, Inc., a Florida corporation ("CPI"), and Xxxx X.
Steel (the "Shareholder").
W I T N E S S E T H:
WHEREAS, the Shareholder is a principal shareholder of Zytec
Corporation, a Minnesota corporation ("Zytec");
WHEREAS, CPI, CPI Acquisition Corp., a Minnesota corporation and
wholly-owned subsidiary of CPI ("CPI Sub"), and Zytec contemplate entering into
an Agreement and Plan of Merger (the "Merger Agreement") of even date herewith
providing, among other things, for the merger (the "Merger") of CPI Sub with and
into Zytec (capitalized terms not otherwise defined herein shall be as defined
in the Merger Agreement);
WHEREAS, the Board of Directors of Zytec has adopted resolutions
approving the Merger, upon the terms and subject to the conditions set forth in
the Merger Agreement;
WHEREAS, CPI wishes to consummate the Merger pursuant to the terms and
conditions of the Merger Agreement; however, before executing the Merger
Agreement, CPI requires certain assurances and commitments from the Shareholder
as set forth herein; and
WHEREAS, in order to induce CPI to enter into the Merger Agreement,
the Shareholder has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements herein contained, the parties hereto hereby agree as
follows:
1. NON-COMPETITION. During the term of the Shareholder's
relationship with CPI (including the Surviving Corporation in and after the
Merger) as a director and/or employee thereof following the consummation of the
Merger with CPI, or any subsidiary thereof, and for a period of two (2) years
after the termination or expiration of such relationship (such period, the
"Non-Competition Period"), the Shareholder shall not, directly or indirectly,
(a) engage in any business or activity that competes with the power conversion
business of CPI or any person controlling, controlled by (including any of its
subsidiaries), or under common control with CPI (an "Affiliate") in which CPI or
any of its Affiliates is then engaged, anywhere in the United States and
elsewhere in the
world (the "Business"); (b) enter the employ of any person engaged in any
business or activity that competes with the Business or render any consulting or
other services to any person for use in or with the effect of competing with the
Business; or (c) have an interest in any business or activity that competes with
the Business, in any capacity, including, without limitation, as an investor,
partner, shareholder, officer, director, principal, agent, employee, or
creditor; PROVIDED, HOWEVER, that nothing herein shall prevent the purchase or
ownership by the Shareholder of less than 3% of the outstanding equity
securities of any class of securities of a company registered under Section 12
of the Securities and Exchange Act of 1934, as amended.
2. NO COMPETING INTERESTS. The Shareholder hereby represents and
warrants to CPI that he has no ownership or other interest in any business or
activity that competes, directly or indirectly, with the Business, except his
ownership of capital stock of Zytec.
3. NON-SOLICITATION. During the Non-Competition Period, the
Shareholder shall not, directly or indirectly, hire, offer to hire, divert,
entice away, solicit or in any other manner persuade or attempt to persuade
("Solicitation") any person who is, or was, at any time within the twelve (12)
months prior to such Solicitation, an officer, director, employee, agent,
licensor, licensee, customer, or supplier of CPI or any of its Affiliates to
discontinue, cease or alter his, her or its relationship therewith.
4. NON-DISRUPTION. During the Non-Competition Period, the
Shareholder shall not, directly or indirectly, interfere with, disrupt or
attempt to disrupt any present or prospective relationship, contractual or
otherwise, between CPI or any of its Affiliates, on the one hand, and any of its
customers, suppliers or employees, on the other hand.
5. CONFIDENTIALITY. The Shareholder shall not use for his own
behalf or divulge to any other person or entity any confidential information or
trade secrets of or relating to CPI or any of its Affiliates in any manner
whatsoever (except as authorized and required in connection with the
Shareholder's relationship with CPI or any of its Affiliates during the term of
such relationship or except as may be required under legal process by subpoena
or other court order; PROVIDED, HOWEVER, that the Shareholder shall give CPI
prompt prior written notice thereof in order to contest such requirement or
order). The Shareholder further covenants and agrees that he shall not, at any
time, take or remove from the property of CPI or any of its Affiliates any
documents, copies, records, extracts or materials containing any such
confidential information or trade secrets. As used herein,
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confidential information shall consist of all information, knowledge or data
relating to CPI or any of its Affiliates (including, without limitation, all
information relating to inventions, procedures and operations, processes and
methods, financial information, customer and prospective customer lists, prices
and trade practices) which is not in the public domain or otherwise published or
publicly available.
6. REMEDIES UPON BREACH. The Shareholder acknowledges and agrees
that (a) CPI shall be irreparably injured in the event of a breach by the
Shareholder of any of the Shareholder's obligations under this Agreement; (b)
monetary damages shall not be an adequate remedy for any such breach; (c) CPI
shall be entitled to injunctive relief, in addition to any other remedy which it
may have, in the event of any such breach; and (d) the existence of any claims
which the Shareholder may have against CPI, whether under this Agreement or
otherwise, shall not be a defense to the enforcement by CPI of any of its rights
under this Agreement.
7. REASONABLENESS OF PROVISIONS, SEVERABILITY. Each of the
Shareholder and CPI acknowledges and agrees that the covenants and agreements
contained in this Agreement have been negotiated in good faith by the parties,
and are reasonable and are not more restrictive or broader than necessary to
protect the interests of the parties hereto, and would not achieve their
intended purpose if they were on different terms or for periods of time shorter
than the periods of time provided herein or applied in more restrictive
geographical areas than are provided herein. The Shareholder expressly
understands and agrees that although both he and CPI consider the covenants and
agreements contained in this Agreement, including the restrictions contained in
Paragraphs 1, 2, 3, 4 and 5 hereof to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory restrictions contained herein, or any other provision or restriction
contained herein, is an unenforceable provision or restriction against the
Shareholder, the provisions and restrictions of this Agreement shall not be
rendered void but shall be deemed amended to apply as to such maximum time and
territory and to such maximum extent as such court may judicially determine or
indicate to be enforceable. Alternatively, if any court of competent
jurisdiction finds that any provision or restriction contained in this Agreement
is unenforceable, and such provision or restriction cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of any of
the remaining provisions and restrictions contained herein, which shall be
deemed severable from the unenforceable provision or restriction and remain in
full force and effect.
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8. NOT AN EMPLOYMENT AGREEMENT. This Agreement is not, and nothing
in this Agreement shall be construed as, an agreement to provide or continue to
provide employment to the Shareholder. The provisions of this Agreement shall be
operative regardless of the continuation or reasons for any termination of the
Shareholder's relationship and regardless of the performance or nonperformance
by any party under this Agreement.
9. GOVERNING LAW. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of Minnesota
without regard to conflict of laws provisions thereof.
10. ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement and understanding concerning the subject matter hereof between
the parties, and supersedes and replaces all prior agreements, whether written
or oral, concerning the subject matter hereof.
11. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand, or when delivered if mailed by registered or certified mail or private
courier service, postage prepaid, to the respective addresses as follows:
If to CPI, to:
Computer Products, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Copy to:
Xxxxxxx, Calamari & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
If to the Shareholder, to:
Xxxx X. Steel
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
or to such other address(es) as either party hereto shall have designated by
like notice to the other party hereto.
12. AMENDMENTS; NO WAIVER. No amendment or modification of this
Agreement shall be deemed effective
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unless made in writing and signed by the parties hereto. No term or condition
of this Agreement shall be deemed to have been waived, except by a statement in
writing signed by the party against whom enforcement of the waiver is sought.
Any written waiver shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.
13. ASSIGNMENT. This Agreement may be assigned by CPI to any of its
Affiliates and to any non-Affiliate of CPI that shall succeed to the business
and assets of CPI or the Surviving Corporation. This Agreement is personal to
the Shareholder and the Shareholder may not assign any rights or delegate any
responsibilities hereunder.
14. BINDING EFFECT; BENEFIT. This Agreement shall be binding upon
execution and shall become effective upon consummation of the Merger. This
Agreement shall thereafter continue in effect and shall inure to the benefit of
and be binding upon the parties hereto and their respective successors,
permitted assigns, legal representatives and beneficiaries.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.
COMPUTER PRODUCTS, INC.
By: /s/ Xxxxxx X. X'Xxxxxxx
-----------------------
Name:
Title:
/s/ Xxxx X. Steel
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Xxxx X. Steel
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