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EXHIBIT 10.16
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (this "Agreement") dated May
31, 2000 is made and entered into by and among Medical Device Manufacturing,
Inc., d/b/a Rivo Technologies, a Colorado corporation ("MDMI"), UTI Corporation,
a Pennsylvania corporation ("UTI"), and Xxxxxx X. Xxxxx ("Xxxxx").
WITNESSETH:
WHEREAS, UTI Acquisition Corp., a Colorado corporation and
wholly-owned subsidiary of MDMI has entered into that certain Share Purchase
Agreement, dated May 31, 2000 (the "Purchase Agreement"), by and among UTI
Acquisition Corp., UTI, Freed and the other shareholders of UTI (Freed, together
with the other shareholders of UTI, the "Sellers"), pursuant to which UTI
Acquisition Corp. is purchasing from the Sellers all of the outstanding capital
stock of UTI;
WHEREAS, UTI Acquisition Corp. is unwilling to proceed with
the transactions contemplated by the Purchase Agreement (the "Purchase") unless
Freed agrees to refrain from engaging in certain activities described herein,
and UTI Acquisition Corp. has conditioned its commitment to proceed with the
transactions under the Purchase Agreement upon the receipt of this duly executed
Agreement from Freed.
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein, the agreement of UTI Acquisition Corp. to consummate
the Purchase, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, MDMI, and Freed agree as follows:
1. Non-Competition Commitment.
(a) Agreement Not to Compete. Freed agrees that, for
a period the later of (i) five (5) years after the date of this Agreement or
(ii) one (1) year after the termination of Freed's employment, if any, with
MDMI, UTI or any of their Affiliates (as defined below) (or other arrangement
pursuant to which Freed provides services to MDMI, UTI or any of their
Affiliates) (the "Non-Competition Period"), he shall not, directly or
indirectly, through an Affiliate or otherwise, either for the benefit of himself
or for the benefit of any other person, firm, corporation, governmental or
private entity, or any other entity of any kind, without the prior written
consent of MDMI and UTI, which consent may be withheld by MDMI or UTI, in its
sole discretion, compete with MDMI, UTI or any Affiliate of either MDMI or UTI
in any manner or capacity (e.g., through any form of ownership or as an advisor,
principal, agent, consultant, partner, joint venturer, officer, director,
stockholder, employee, member of any association or otherwise) in any phase of
the business that MDMI, UTI or any Affiliate of either MDMI or UTI is conducting
during the term of this Agreement or has specific plans of which Freed is aware
to conduct business within the geographical area described in Section 1(b) below
that (i) is related to, similar to or substantially equivalent to Freed's
capacity with MDMI, UTI or any Affiliate of either MDMI or UTI, as applicable or
(ii) would permit or require Freed to direct, control or have
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substantial input into the strategy, marketing or operations of an entity
competing with or seeking to compete with MDMI, UTI or any Affiliate of either
MDMI or UTI. Notwithstanding the foregoing, Freed may provide services to eVasc,
L.P. ("eVasc") without violating the terms of this Agreement, provided that such
services are performed in accordance with the provisions of Section 3 of that
certain License and Technical Assistance Agreement between UTI and eVasc, as
amended from time to time, ("License Agreement") and are charged for and billed
by UTI in accordance with Section 4 of the License Agreement. For purposes of
this Agreement, (i) "Affiliate" of a person or entity means any person or entity
controlled by, controlling or under common control with such person or entity;
provided, however, that for purposes of this Agreement, Freed and MDMI shall not
be considered Affiliates of each other and (ii) "Control" including the
correlated terms "controlling," "controlled by" and "under common control with,"
shall mean possession, directly or indirectly, of the power to direct or cause
the direction of management or powers whether through ownership of securities or
any partnership or other ownership interest, by contract or otherwise, of a
person or entity.
(b) Geographic Extent of Covenant. The obligations of Freed
under Section 1(a) shall apply to any geographic area in which MDMI, UTI or any
Affiliate of either MDMI or UTI currently conducts, or at the time of
termination or expiration of Freed's employment, if any, with MDMI, UTI or any
Affiliate of either MDMI or UTI, conducts or has specific plans of which Freed
is aware to conduct business or provide services. Freed hereby acknowledges that
the geographic boundaries, scope of prohibited activities and the time duration
of the provisions of this Section 1 are reasonable and are no broader than
necessary to protect the legitimate business interests of MDMI and UTI,
including, without limitation, the ability of MDMI to realize the benefit of its
bargain and enjoy the goodwill of UTI.
(c) Indirect Competition. Freed further agrees that, during
the Non-Competition Agreement, he will not, knowingly directly or indirectly,
assist or encourage any other person in carrying out, directly or indirectly,
any activity that would be prohibited by the foregoing provisions of this
Section 1 if such activity were carried out by Freed, either directly or
indirectly.
(d) Limitation on Covenant. Ownership by Freed, as a passive
investment, of less than one percent (1%) of the outstanding shares of capital
stock, outstanding debt instruments or other securities convertible into capital
stock or debt instruments of any corporation listed on a national securities
exchange or publicly traded on any nationally recognized over-the-counter market
shall not constitute a breach of this Section 1.
2. No Interference; Nonsolicitation. During the
Non-Competition Period, Freed agrees that he shall not take any action to
interfere with the relationships between MDMI, UTI or any Affiliate of either
MDMI or UTI, and their respective suppliers or customers, including, without
limitation, former customers of UTI. During the Non-Competition Period, Freed
agrees that he shall not, directly or indirectly through another entity, (a)
induce or attempt to induce any employee or independent contractor of MDMI, UTI
or any Affiliate of either MDMI or UTI to leave the employ of MDMI, UTI or any
Affiliate of either MDMI or UTI, as applicable, (b) hire any person who was an
employee or independent contractor of MDMI, UTI
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or any Affiliate of either MDMI or UTI if such person was employed by MDMI, UTI
or any Affiliate of either MDMI or UTI at any time during the one-year period
prior to such hiring or (c) induce or attempt to induce any customer, supplier,
licensee or other business relation of MDMI, UTI or any Affiliate of either MDMI
or UTI to withdraw, curtail or cease doing business with MDMI, UTI or any
Affiliate of either MDMI or UTI, as applicable.
3. Confidential Information.
(a) Except as permitted or directed by MDMI's Board of
Directors or UTI's Board of Directors, Freed agrees not to divulge, furnish or
make accessible to anyone or use in any way (other than in connection with and
in furtherance of Freed's work on behalf of UTI or MDMI) any confidential or
secret knowledge or nonpublic information of MDMI, UTI or any Affiliate of
either MDMI or UTI that Freed has acquired or become acquainted with prior to
the date of this Agreement, whether developed by Freed or by others, concerning
any trade secrets, confidential or secret designs, processes, formulae, plans,
devices or material (whether or not patented or patentable) directly or
indirectly useful in any aspect of the business of MDMI, UTI or any Affiliate of
either MDMI or UTI, any customer or supplier lists, details of relationships
with customers, vendors, distributors or suppliers, financial information,
details of operation, organization and management, business plans and
strategies, information about employees and agents of MDMI, UTI or any Affiliate
of either MDMI or UTI, any confidential or secret development or research work
of MDMI, UTI or any Affiliate of either MDMI or UTI, any analyses, records or
date generated from any such information of MDMI, UTI or any Affiliate of either
MDMI or UTI, or any other confidential information or secret aspects of the
business of MDMI, UTI or any Affiliate of either MDMI or UTI (collectively,
"Confidential Information"). This Agreement shall not prohibit Freed from
complying with any subpoena or court order, provided that Freed shall at the
earliest practicable date provide a copy of the subpoena or court order to the
President of MDMI, UTI or any Affiliate of either MDMI or UTI, as applicable, it
being the parties' intention to give MDMI, UTI or any Affiliate of either MDMI
or UTI a fair opportunity to take appropriate steps to prevent the unnecessary
and/or improper use or disclosure of Confidential Information, as determined by
MDMI, UTI or any Affiliate of either MDMI or UTI in its reasonable judgment.
(b) Freed acknowledges that the Confidential Information
constitutes a unique and valuable asset of MDMI and/or UTI, represents a
substantial investment of time and expense by MDMI or UTI, as applicable, would
be susceptible to immediate competitive application by a competitor of MDMI or
UTI and that any disclosure or other use of such Confidential Information other
than for the sole benefit of MDMI and/or UTI would be wrong and would cause
irreparable harm to MDMI and/or UTI. Freed agrees to refrain from any acts or
omissions that would reduce the value of such Confidential Information to MDMI,
UTI or any Affiliate of either MDMI or UTI. The foregoing obligations of
confidentiality shall not apply to any Confidential Information that
subsequently becomes generally publicly known in the form in which it was
obtained from MDMI, UTI or any Affiliate of either MDMI or UTI, other than as a
direct or indirect result of the breach of this Agreement by Freed.
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(c) Records Containing Confidential Information. "Confidential
Records" means all documents and other records, whether in paper, electronic or
other form, that contain or reflect Confidential Information. All Confidential
Records prepared by or provided to Freed are and shall remain the property of
MDMI, UTI or any Affiliate of either MDMI or UTI. Except as permitted or
directed by MDMI's Board of Directors or UTI's Board of Directors, Freed shall
not, at any time, directly or indirectly: (i) copy or use any Confidential
Record for any purpose not relating directly to Freed's work for MDMI, UTI or
any Affiliate of either MDMI or UTI; or (ii) show, give, sell, disclose or
otherwise communicate any Confidential Record or the contents of any
Confidential Record to any person or entity other than MDMI, UTI or any
Affiliate of either MDMI or UTI or a person or entity authorized by MDMI, UTI or
any Affiliate of either MDMI or UTI, as applicable, to have access to the
Confidential Record in question. Upon the termination of Freed's employment, if
any, with MDMI, UTI or any Affiliate of either MDMI or UTI, or upon the request
of MDMI, UTI or any Affiliate of either MDMI or UTI, Freed shall immediately
deliver to the designated person (and shall not keep in Freed's possession or
deliver to any other person or entity) all Confidential Records and all other
property of MDMI, UTI or any Affiliate of either MDMI or UTI in Freed's
possession or control. This Agreement shall not prohibit Freed from complying
with any subpoena or court order, provided that Freed shall at the earliest
practicable date provide a copy of the subpoena or court order to the President
of MDMI, UTI or any Affiliate of either MDMI or UTI, as applicable, it being the
parties' intention to give MDMI, UTI or any Affiliate of either MDMI or UTI a
fair opportunity to take appropriate steps to prevent the unnecessary and/or
improper use or disclosure of Confidential Records, as determined by MDMI, UTI
or any Affiliate of either MDMI or UTI in its reasonable judgment.
(d) Third-Parties' Confidential Information. Freed
acknowledges that MDMI, UTI or any Affiliate of either MDMI or UTI have received
and in the future will receive from third parties confidential or proprietary
information, and that MDMI, UTI or any Affiliate of either MDMI or UTI must
maintain the confidentiality of such information and use it only for authorized
purposes. Freed shall not use or disclose any such information except as
authorized by MDMI, UTI or any Affiliate of either MDMI or UTI, as applicable or
the third party to whom the information belongs.
4. Severability Provision. To the extent that any provision of
this Agreement shall be determined to be invalid or unenforceable, such
provision shall be deleted from this Agreement, and the validity and
enforceability of the remainder of this Agreement shall be unaffected. In
furtherance of and not in limitation of the foregoing, it is expressly agreed
that, should the duration or geographical extent of, or business activities
covered by, this Agreement be finally determined to be in excess of that which
is valid or enforceable under applicable law, such provision shall be construed
to cover the maximum duration, extent or activities which may be validly or
enforceably covered. Freed acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement shall be construed in a
manner which renders its provisions valid and enforceable to the maximum extent
(not exceeding its express terms) possible under applicable law.
5. Remedies. Freed acknowledges that it would be difficult to
fully compensate MDMI and UTI for damages resulting from any breach by such
party of the
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provisions of this Agreement. Accordingly, in the event of any actual or
threatened breach of such provisions, MDMI and UTI shall (in addition to any
other remedies which it may have) be entitled to temporary and/or permanent
injunctive relief to enforce such provisions, and such relief may be granted
without the necessity of proving actual damages. Freed further acknowledges that
this Agreement constitutes a material inducement to MDMI to consummate the
transactions contemplated by the Purchase Agreement and that MDMI will be
relying on the enforceability of this Agreement in consummating the transactions
contemplated under the Purchase Agreement.
6. Remedies Cumulative. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
any party hereto shall not constitute a waiver of the right to pursue other
available remedies.
7. Complete Agreement. This Agreement constitutes the entire
agreement, and supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto relating to the
subject matter hereof. There are no representations, warranties, covenants,
statements, conditions, terms or obligations, other than those contained herein,
relating to the subject matter hereof. No amendments or modifications to or
variations of this Agreement shall be deemed valid unless in writing and
executed by MDMI, UTI and Freed.
8. Governing Law. This Agreement shall be construed and
enforced in accordance with the internal laws of the Commonwealth of
Pennsylvania, without regard to conflicts of law principles.
9. Venue. Any action at law, suit in equity or judicial
proceeding arising directly, indirectly, or otherwise in connection with, out
of, related to or from this Agreement, or any provision hereof, shall be
litigated only in the state or federal courts located in Philadelphia County,
Pennsylvania. Freed hereby consents to the jurisdiction of such courts and
waives any right to transfer or change the venue of any litigation brought
against Freed by MDMI or UTI.
10. Assignment. Freed may not assign this Agreement. The
rights of MDMI and UTI under this Agreement may be assigned to any third party
who succeeds to either MDMI's or UTI's business, as applicable.
11. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs
and personal representatives and, to the extent permitted by Section 10, their
respective successors and assigns.
12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of such
counterparts shall together constitute a single agreement.
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13. Headings. Section headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
[Signature Page follows]
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IN WITNESS WHEREOF, the parties hereto have each executed this
Agreement as of the date first written above.
MEDICAL DEVICE MANUFACTURING, INC.
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
Title: President & Chief Executive Officer
UTI CORPORATION
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President & Assistant Secretary
/s/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX
[signature page to Freed Non-Competition Agreement]
