-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HYy5+hdNN2w3a9oH67PcRh78vf8Xz1//nKXvMnM1CdDJIRoc3xtu6dQ179bXEvac DAcuTqdqxKqCC/pnZOwqqg== 0000950153-99-001530.txt : 19991221 0000950153-99-001530.hdr.sgml : 19991221 ACCESSION NUMBER: 0000950153-99-001530 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19991203 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CERPROBE CORP CENTRAL INDEX KEY: 0000725259 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 860312814 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-11370 FILM NUMBER: 99777343 BUSINESS ADDRESS: STREET 1: 1150 NORTH FIESTA BLVD CITY: GILBERT STATE: AZ ZIP: 85233-2237 BUSINESS PHONE: 6029677885 MAIL ADDRESS: STREET 1: 600 S ROCKFORD DR CITY: TEMPE STATE: AZ ZIP: 85281 8-K 1 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) December 3, 1999 ------------------------------- CERPROBE CORPORATION (Exact name of Registrant as specified in its Charter) Delaware 0-11370 86-0312814 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1150 North Fiesta Boulevard, Gilbert, Arizona 85233-2237 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (480) 333-1500 ------------------------------ 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December 3, 1999 (the "Closing Date"), Cerprobe Corporation, a Delaware corporation (the "Registrant"), completed its purchase (the "Stock Purchase") of all of the capital stock of OZ Technologies, Inc., a California corporation ("OZ"), pursuant to that certain Stock Purchase Agreement dated as of December 3, 1999 (the "Stock Purchase Agreement") by and among the Registrant, OZ, and the following parties: Nasser Barabi, Iraj Barabi, Ali Bushehri, and Ahmad Barabi, as individuals, Ali Bushehri, as trustee for the Ali and Nassrin Bushehri Trust, a trust established under the laws of the state of California, and Ahmad Barabi, as trustee for the Ahmad and Zakieh Barabi Trust, a trust established under the laws of the state of California (Nasser Barabi, Iraj Barabi, the Ali and Nassrin Bushehri Trust and the Ahmad and Zakieh Barabi Trust are referred to herein as the "Selling Stockholders"). The purchase price paid by the Registrant under the Stock Purchase Agreement consisted of (i) $19,000,000 in cash, (ii) 1,500,000 shares of the Registrant's common stock (the "Registrant Common Stock"), (iii) a note from the Registrant issued to the agent of the Selling Stockholders in the amount of $2,830,000 (the "Subordinated Promissory Note"), and (iv) a note from the Registrant issued to the agent of the Selling Stockholders in the amount of $2,800,000 (the "Promissory Note"). The amount and nature of the purchase price was determined by arms-length negotiations among the parties. In connection with the Stock Purchase, Registrant and its domestic subsidiaries, Cerprobe Interconnect Solutions, Inc., OZ and OZ's domestic subsidiary, Triple S Engineering, Inc. (the "Borrowers"), entered into a three-year senior secured credit facility with Bank of America, N.A. (the "Loan and Security Agreement"). The Loan and Security Agreement includes a revolving credit facility in the amount of $15,000,000 subject to borrowing base requirements providing for advances of up to eighty-five (85%) of eligible accounts receivable. Initial advances on the revolving line of credit were approximately $1,800,000. Advances on the revolving credit facility bear interest at prime rate plus 0.50%. The facility also includes an inventory term loan in the amount of approximately $5,800,000 and a machinery and equipment term loan in the amount of $2,000,000, both of which bear interest at prime rate plus 2.00%. The inventory term shall be repaid based upon a 24-month amortization with a balloon payment of the outstanding principal balance at the end of 12 months. The machinery and equipment term loan shall be repaid based upon a 60-month amortization with a balloon payment of the outstanding principal balance at the end of 36 months. All loans, advances, and other obligations, liabilities, and indebtedness of Registrant and its domestic subsidiaries shall be secured by valid, perfected, and enforceable first priority liens upon and security interest in substantially all of the Borrower's present and future assets, including all accounts, contract rights, inventory instruments, documents, fixtures, chattel paper, general intangibles, patents, trademarks, copyrights, trade names, deposit accounts, vehicles, equipment, and pledge of stock of all domestic subsidiaries of Cerprobe and OZ and 65% of the stock of each wholly-owned foreign subsidiary of Cerprobe. The facility is also guaranteed by all wholly-owned subsidiaries of Cerprobe and OZ. The Loan and Security Agreement contains a number of covenants that, among other things, restrict the ability of the Borrowers to dispose of assets, incur additional indebtedness, incur guaranty obligations, prepay indebtedness except in accordance with relevant subordination provisions, pay dividends or make capital distribution (other than distributions in capital stock), create liens on assets, engage in mergers or consolidations (except that any Borrower may voluntarily merge into another Borrower), engage in certain transactions with subsidiaries and affiliates, make any change in accounting policies or reporting practices except as required or permitted by generally accepted accounting principles and otherwise restrict corporate activities. In addition, the Loan and Security Agreement 2 3 requires the Borrowers to comply with certain financial covenants, including the maintenance of a consolidated Tangible Net Worth (as defined in the Loan and Security Agreement). Borrowers do not expect that such covenants will materially impact the ability of Borrowers to operate their respective businesses. The Loan and Security Agreement contains customary events of default, including the failure to pay principal when due or any interest or other amount that becomes due, any representation or warranty being made by Borrowers that is incorrect in any material respect on or as of the date made, a default in the performance of any covenant which continues for more than thirty days, default in certain other indebtedness, certain insolvency events, certain ERISA events, and certain change of control events. In connection with the Stock Purchase, the Registrant agreed to prepare and file a registration statement (the "Registration Statement") on Form S-3 with the Securities and Exchange Commission no later than seven days after the Closing Date to register the resale of the Registrant Purchaser Shares. The Selling Stockholders have waived this provision of the Stock Purchase Agreement and the Registrant expects that it will file the Registration Statement within ninety days after the Closing Date. Under the Stock Purchase Agreement, the maximum number of shares of the Registrant Common Stock that the Selling Stockholders may sell (i) during the 180-day period beginning on the effective date of the Registration Statement is 554,089 shares and (ii) during each of the four consecutive 30-day periods that begin immediately following the end of such 180-day period is 100,000 shares. The Stock Purchase Agreement also provides that, to the extent that the Selling Stockholders sell shares of the Registrant Common Stock during the 180-day period beginning on the effective date of the Registration Statement, if the average proceeds per share to the Selling Stockholders from such sales after customary selling expenses are less than $7.58 per share, the product of (i) the difference between $7.58 per share and such average proceeds per share and (ii) the number of shares of the Registrant Common Stock sold during such 180-day period shall be added to the principal amount of the Subordinated Promissory Note. The principal amount of the Subordinated Promissory Note may be reduced by an amount up to $3,000,000 under the Stock Purchase Agreement in satisfaction of certain of the Selling Stockholders' indemnification obligations to the Registrant thereunder. The principal amount of the Subordinated Note also may be reduced under the Stock Purchase Agreement based on payments made by the Registrant to OZ's counter-party under two contracts OZ has with that counter-party, with the principal amount being so reduced as follows: (i) by 50% of all payments (other than payments for legal fees) made by the Registrant pursuant to or in settlement of those contracts after the Registrant's total for such payments exceeds $50,000 but is less than $250,000 and (ii) by 100% of all payments (other than payments for legal fees) made by the Registrant pursuant to or in settlement of those contracts after the Registrant's total for such payments exceeds $250,000. The Subordinated Promissory Note matures on the earlier of the Registrant's receiving at least $10,000,000 in gross proceeds from an underwritten public offering of its common stock or December 3, 2002, and accrues interest at the rate of 10% per annum. The Promissory Note matures on February 3, 2000 and accrues interest at the rate of 10% per annum. Under the Stock Purchase Agreement, the Registrant may satisfy the Promissory Note on February 3, 2000 by paying in cash all amounts then due under the Promissory Note or by transferring its real property located at 10365 Sanden Drive, Dallas, Texas (the "Real Property") to the Selling Stockholders' agent, unencumbered except for minor liens and any mortgage that is executed by the Registrant in favor of the Selling Stockholders with respect to the Real Property. In the event that the Registrant satisfies the Promissory Note by transferring the Real Property to the Selling Stockholders' agent on February 3, 2000, the Stock Purchase Agreement provides that the Registrant and the Selling Stockholders' agent shall assign a value (the "Appraised Value") to the Real Property equal to the appraised value for the Real Property as determined by a mutually agreed-upon real estate appraiser. 3 4 The Stock Purchase Agreement further provides that (i) to the extent the Appraised Value is less than $2,800,000 plus interest due under the Promissory Note, the amount of the difference shall be added to the principal amount of the Subordinated Promissory Note and (ii) to the extent the Appraised Value is more than $2,800,000 plus interest due under the Promissory Note, the amount of the difference may be applied to reduce the principal amount of the Subordinated Promissory Note if doing so does not cause the Registrant to violate any covenant in any loan document to which it is a party. In connection with the Stock Purchase, Nasser Barabi and Iraj Barabi have entered into employment agreements with OZ, which expire December 6, 2001. Under these employment agreements, Nasser Barabi will serve as OZ's Director of Engineering and Research and Development at a salary of $175,000 per year, and Iraj Barabi will serve as OZ's Director of Operations at a salary of $175,000 per year. In connection with the Stock Purchase, the Registrant entered into a consulting agreement with C-MA International, Ltd., the sole equity holder of which is Ali Bushehri, which expires March 6, 2001. Under this consulting agreement, C-MA International, Ltd. will perform certain financial and administrative consulting services for an amount equal to $100 per hour with a guaranteed 120 hours per month during the term of the agreement. In connection with the Stock Purchase, each of Nasser Barabi, Iraj Barabi, Ali Bushehri and Ahmad Barabi entered into a noncompetition agreement with the Registrant. Each of these agreements contains certain noncompetition provisions that expire on the third anniversary of the Closing Date. The acquisition will be accounted for using the purchase method. Accordingly, the purchase price will be allocated to assets acquired and liabilities assumed based upon their estimated fair values. The amount of purchased in-process research and development in connection with the allocation is still to be determined. The current state of the research and development products/processes is not yet at a technological feasible or commercially viable stage. The Registrant does not believe that the research and development products/processes have any future alternative use because if they are not finished and brought to ultimate product or process completion, they have no other value. Therefore, consistent with generally accepted accounting principles, the Registrant intends to take a one-time charge for the purchased in-process research and development in the fourth quarter ending December 31, 1999. OZ manufactures systems solutions for IC package test and is a leading designer and producer of high performance test sockets and contactors. OZ also designs and distributes ATE test boards and burn-in interfaces and systems. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired. As of the date of filing of this Form 8-K, it is impracticable for the Registrant to provide the financial statements required by this Item 7(a). In accordance with Item 7(a)(4) of Form 8-K, such financial statements shall be filed by amendment to this form 8-K not later than 60 days after the date of this Form 8-K. (b) Pro Forma Financial Information As of the date of filing of this Form 8-K, it is impracticable for the Registrant to provide the pro forma financial statements required by this Item 7(b). In accordance with Item 7(b) of Form 8-K, 4 5 such financial statements shall be filed by amendment to this form 8-K not later than 60 days after the date of this Form 8-K. (c) Exhibits.
Exhibit No. Description of Exhibit - ----------- ---------------------- 1 Stock Purchase Agreement 2 Subordinated Promissory Note $2,830,000 3 Promissory Note $2,800,000 4 Employment Agreement-Nasser Barabi 5 Employment Agreement-Iraj Barabi 6 Consulting Agreement-C-MA International, Ltd. 7 Noncompetition Agreement-Nasser Barabi 8 Noncompetition Agreement-Iraj Barabi 9 Noncompetition Agreement-Ali Bushehri 10 Noncompetition Agreement-Ahmad Barabi 11 Loan and Security Agreement with Bank of America, N.A.
5 6 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigning hereunto duly authorized. CERPROBE CORPORATION By: /s/ Randal L. Buness ------------------------------------ Randal L. Buness Senior Vice President, Chief Financial Officer, Secretary, and Treasurer Dated as of December 20, 1999 6 7 Exhibit Index
Number Description - ------ ----------- 1 Stock Purchase Agreement 2 Subordinated Promissory Note $2,830,000 3 Promissory Note $2,800,000 4 Employment Agreement-Nasser Barabi 5 Employment Agreement-Iraj Barabi 6 Consulting Agreement-C-MA International, Ltd. 7 Noncompetition Agreement-Nasser Barabi 8 Noncompetition Agreement-Iraj Barabi 9 Noncompetition Agreement-Ali Bushehri 10 Noncompetition Agreement-Ahmad Barabi 11 Loan and Security Agreement with Bank of America, N.A.
EX-99.1 2 EX-99.1 1 Exhibit 1 STOCK PURCHASE AGREEMENT among: CERPROBE CORPORATION, a Delaware corporation; OZ TECHNOLOGIES, INC., a California corporation; and NASSER BARABI, IRAJ BARABI, ALI BUSHEHRI, INDIVIDUALLY AND AS TRUSTEE FOR THE ALI AND NASSRIN BUSHEHRI TRUST, AND AHMAD BARABI, INDIVIDUALLY AND AS TRUSTEE FOR THE AHMAD AND ZAKIEH BARABI TRUST Dated as of December 3, 1999 2 TABLE OF CONTENTS
PAGE Section 1. Sale and Purchase of Shares; Related Transactions ...... 1 1.1 Sale and Purchase of Shares ............................ 1 1.2 Purchase Price ......................................... 1 1.3 Closing ................................................ 2 Section 2. Representations and Warranties of the Company and the Selling Stockholders ................................... 4 2.1 Due Organization; Subsidiaries, Etc .................... 4 2.2 Certificate of Incorporation and Bylaws; Records ....... 5 2.3 Capitalization, Etc .................................... 5 2.4 Financial Statements ................................... 6 2.5 Absence of Changes ..................................... 6 2.6 Title to Assets ........................................ 8 2.7 Bank Accounts; Receivables ............................. 8 2.8 Equipment; Leasehold ................................... 9 2.9 Proprietary Assets ..................................... 9 2.10 Contracts .............................................. 12 2.11 Liabilities; Fees, Costs and Expenses .................. 14 2.12 Compliance with Legal Requirements ..................... 15 2.13 Governmental Authorizations ............................ 15 2.14 Tax Matters ............................................ 15 2.15 Employee and Labor Matters; Benefit Plans .............. 16 2.16 Environmental Matters .................................. 19 2.17 Insurance .............................................. 19 2.18 Related Party Transactions ............................. 20 2.19 Legal Proceedings; Orders .............................. 20 2.20 Authority; Binding Nature of Agreement ................. 21 2.21 Non-Contravention; Consents ............................ 21 2.22 Customers .............................................. 22 2.23 Product Development .................................... 23 2.24 Company Projections .................................... 23 2.25 Full Disclosure ........................................ 23
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PAGE 2.26 Sale of Products; Performance of Services ................ 23 2.27 Certain Business Practices ............................... 24 2.28 Selling Stockholders and Trusts .......................... 24 Section 3. Representations and Warranties of Purchaser .............. 26 3.1 Acquisition of Shares .................................... 26 3.2 Organization, Standing and Power ......................... 26 3.3 Authority; Binding Nature of Agreement ................... 26 3.4 Non-Contravention; Consents .............................. 26 3.5 Valid Issuance ........................................... 27 3.6 SEC Filings; Financial Statements ........................ 27 3.7 Hart-Scott-Rodino Compliance ............................. 27 Section 4. Pre-Closing Covenants .................................... 27 4.1 Access and Investigation ................................. 27 4.2 Operation of the Business of the Acquired Corporations ... 27 4.3 Notification; Updates to Disclosure Schedule ............. 29 4.4 No Negotiation ........................................... 30 4.5 Payment of Indebtedness by Related Parties ............... 31 4.6 Confidentiality .......................................... 31 Section 5. Additional Covenants of the Parties ...................... 32 5.1 Filings and Consents ..................................... 32 5.2 Best Efforts ............................................. 32 5.3 Termination of Agreements ................................ 32 5.4 Treatment of Company's Employee Benefit Plans ............ 32 5.5 Best Efforts to Release Guarantees; Indemnification Agreement ................................................ 33 5.6 Registration Requirements ................................... 33 5.7 Registration Statement Indemnification ...................... 35 5.8 Transfer of Aggregate Purchaser Shares After Registration ... 37 5.9 Additional Selling Stockholder Information Covenants ........ 37 5.10 Termination of Registration Rights .......................... 38 5.11 Certain Provisions Relating to the Real Property Note ....... 38 5.12 Mortgage of the Real Property ............................... 38
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PAGE 5.13 Certain Provisions Relating to the Software Agreements .................. 39 SECTION 6. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE ................. 39 6.1 Accuracy of Representations ............................................. 39 6.2 Performance of Covenants ................................................ 40 6.3 Consents ................................................................ 40 6.4 No Adverse Change ....................................................... 40 6.5 Additional Documents .................................................... 40 6.6 No Legal Proceedings .................................................... 41 6.7 No Claim Regarding Stock Ownership or Sale Proceeds ..................... 41 6.8 No Prohibition .......................................................... 41 SECTION 7. CONDITIONS PRECEDENT TO SELLING STOCKHOLDERS' AND TRUSTS' OBLIGATIONS TO CLOSE ............................................ 42 7.1 Accuracy of Representations ............................................. 42 7.2 Performance of Covenants ................................................ 42 7.3 Purchaser's Performance ................................................. 42 7.4 No Injunction ........................................................... 42 7.5 Release of Guarantees ................................................... 42 7.6 Additional Documents .................................................... 42 SECTION 8. TERMINATION ............................................................. 43 8.1 Termination Events ...................................................... 43 8.2 Termination Procedures .................................................. 44 8.3 Effect of Termination ................................................... 44 8.4 Exclusivity of Termination Rights ....................................... 44 8.5 Audit Fees and Expenses ................................................. 44 SECTION 9. INDEMNIFICATION, ETC. ................................................... 45 9.1 Survival of Representations, Etc. ....................................... 45 9.2 Indemnification by Selling Stockholders ................................. 45 9.3 Threshold ............................................................... 47 9.4 Right of Offset of Indemnification Claims; Aggregate Liability of Selling Stockholders ................................................. 47 9.5 No Contribution ......................................................... 48 9.6 Defense of Third Party Claims ........................................... 48
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PAGE 9.7 Exercise of Remedies by Indemnitees Other Than Purchaser ................ 49 9.8 Insurance Proceeds ...................................................... 49 9.9 Exclusive Remedy ........................................................ 49 9.10 Note to be Held as Security ............................................. 50 9.11 Administration of Note By the Agent ..................................... 50 SECTION 10. MISCELLANEOUS PROVISIONS ................................................ 52 10.1 Joint and Several Liability ............................................. 52 10.2 Selling Stockholders' Agent ............................................. 53 10.3 Further Assurances ...................................................... 54 10.4 Fees and Expenses ....................................................... 54 10.5 Attorneys' Fees ......................................................... 55 10.6 Notices ................................................................. 55 10.7 Publicity ............................................................... 57 10.8 Time of the Essence ..................................................... 57 10.9 Headings ................................................................ 57 10.10 Counterparts ............................................................ 57 10.11 Governing Law; Venue .................................................... 57 10.12 Successors and Assigns .................................................. 58 10.13 Remedies Cumulative; Specific Performance ............................... 59 10.14 Waiver .................................................................. 59 10.15 Amendments .............................................................. 60 10.16 Severability ............................................................ 60 10.17 Parties in Interest ..................................................... 60 10.18 Entire Agreement ........................................................ 60 10.19 Construction ............................................................ 60
iv. 6 TABLE OF CONTENTS EXHIBITS
PAGE Exhibit A: Certain Definitions Exhibit B: Form of Employment Agreement Exhibit C: Form of General Release Exhibit D: Form of Spousal Consent Exhibit E: Form of Non Competition Agreement Exhibit F: Form of Substitute Form W-8 Exhibit G: Form of Legal Opinion of Ferrari, Olsen, Ottoboni & Bebb, LLP Exhibit H: Form of Note Exhibit I: Form of Registration Statement Questionnaire Exhibit J: Intentionally Omitted Exhibit K: Form of Amended Company Lease Exhibit L: Form of Notice of Non Real Property Holding Corporation Status Exhibit M: Form of Consulting Agreement Exhibit N: Section 5.6(b) Illustration Exhibit O: Form of Real Property Note
V. 7 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT is entered into as of December 3, 1999, by and among CERPROBE CORPORATION, a Delaware corporation (the "Purchaser"), OZ TECHNOLOGIES, INC., a California corporation (the "Company"), and the following parties: NASSER BARABI, IRAJ BARABI, ALI BUSHEHRI, AHMAD BARABI (each, a "Selling Stockholder," and, collectively, the "Selling Stockholders"; Nasser Barabi and Iraj Barabi are referred to together in this Agreement as the "Non-Trust Selling Stockholders," and Ali Bushehri and Ahmad Barabi are referred to together in this Agreement as the "Trust Selling Stockholders"), ALI BUSHEHRI, as trustee (the "Bushehri Trustee") for the ALI AND NASSRIN BUSHEHRI TRUST, a trust established under the laws of the State of California (the "Bushehri Trust"), and AHMAD BARABI, as trustee (the "Barabi Trustee"; each of the Bushehri Trustee and the Barabi Trustee are referred to in this Agreement as a "Trustee" and together as the "Trustees") for the AHMAD AND ZAKIEH BARABI TRUST, a trust established under the laws of the State of California (the "Barabi Trust"; each of the Bushehri Trust and the Barabi Trust are referred to in this Agreement as a "Trust" and together as the "Trusts"). Certain capitalized terms used in this Agreement are defined on Exhibit A. RECITALS A. The Non-Trust Selling Stockholders and the Trusts hold 100,000 shares (the "Shares") of the common stock of the Company, no par value per share (the "Company Common Stock"), which constitute all of the outstanding capital stock of the Company. There are no outstanding stock options, warrants or other rights or commitments that could require the Company to issue any additional shares of its capital stock. B. The Non-Trust Selling Stockholders and the Trusts wish to sell the Shares to the Purchaser on the terms set forth in this Agreement. AGREEMENT The Purchaser, the Company, the Selling Stockholders and the Trustees acting on behalf of their respective Trusts, intending to be legally bound, agree as follows: SECTION 1. SALE AND PURCHASE OF SHARES; RELATED TRANSACTIONS 1.1 SALE AND PURCHASE OF SHARES. At the Closing, the Non-Trust Selling Stockholders and the Trustees on behalf of their respective Trusts shall sell, assign, transfer and deliver the Shares to the Purchaser, and the Purchaser shall purchase the Shares from the Non-Trust Selling Stockholders and the Trusts, on the terms and subject to the conditions set forth in this Agreement. 1.2 PURCHASE PRICE. The purchase price payable by the Purchaser for all of the Shares (the "Aggregate Share Purchase Price") shall consist of the following: 1. 8 (a) cash in the amount of $19,000,000, less the total amount of all loan and interest and other loan-related payments, fees, costs and expenses set forth in Part 1.2(a), Part 2.11(b) and Part 2.11(c) of the Disclosure Schedule (but not including the Aggregate Accounting Fees to the extent that the Aggregate Accounting Fees exceed $40,000) (the "Cash Amount"); (b) 1,500,000 shares (the "Aggregate Purchaser Shares") of common stock of the Purchaser, $0.05 par value per share (the "Purchaser Common Stock"); (c) a note (the "Note") from the Purchaser to the Agent in the form of Exhibit H having an initial principal amount equal to the Initial Note Amount; and (d) a note (the "Real Property Note") from the Purchaser to the Agent in the form of Exhibit O having an initial principal amount equal to $2,800,000. The Aggregate Share Purchase Price shall be paid (in the case of the Cash Amount) and delivered (in the case of the Aggregate Purchaser Shares, the Note and the Real Property Note) by the Purchaser to either the Agent or the Selling Stockholders and the Trustees on behalf of the Trusts at the Closing. In addition, on behalf of the Selling Stockholders, the Purchaser shall pay the fees, costs and expenses set forth in Part 2.11(b) and Part 2.11(c) of the Disclosure Schedule at the Closing. If the Agent receives the Cash Amount at the Closing, the Agent shall distribute the Cash Amount to the Non-Trust Selling Stockholders and the Trusts pro rata in proportion to their ownership percentage (the "Applicable Share Ownership Percentage") in the Shares as determined from Section 2.28(f) herein. The Aggregate Purchaser Shares to be delivered by the Purchaser at the Closing shall be registered in the names of the Non-Trust Selling Stockholders and the Trusts pro rata in proportion to their Applicable Share Ownership Percentage; provided, however that the Purchaser shall only deliver stock certificates representing whole shares of Purchaser Common Stock at the Closing, and, in lieu of any fractional shares to which any Non-Trust Selling Stockholder or Trust would otherwise be entitled, the Purchaser shall pay to such Non-Trust Selling Stockholder or Trust an amount equal to the dollar amount (rounded to the nearest whole cent) determined by multiplying the Average Purchaser Common Stock Closing Price by the fraction of a share of Purchaser Common Stock that would otherwise be deliverable to such Non-Trust Selling Stockholder or Trust. The Agent shall distribute the proceeds of the Note and the Real Property Note to the Non-Trust Selling Stockholders and the Trusts pro rata in proportion to their Applicable Share Ownership Percentage. 1.3 CLOSING. (a) The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Cooley Godward LLP, Five Palo Alto Square, Palo Alto, California 94306 at 10:00 a.m. (California time) on December 3, 1999 (or at such other place or time as the Purchaser and the Agent may jointly designate). For purposes of this Agreement: "Scheduled Closing Time" shall mean the time and date as of which the Closing is required to take place pursuant to this Section 1.3(a); and "Closing Date" shall mean the time and date as of which the Closing actually takes place. 2. 9 (b) At the Closing: (i) the Non-Trust Selling Stockholders and the Trustees on behalf of their respective Trusts shall deliver to the Purchaser the stock certificates representing the Shares, duly endorsed (or accompanied by duly executed stock powers), and the Purchaser shall pay (in the case of the Cash Amount) and deliver (in the case of the Aggregate Purchaser Shares, the Note and the Real Property Note) the Aggregate Share Purchase Price to the Agent as contemplated by Section 1.2; (ii) the Purchaser and each of the Non-Trust Selling Stockholders shall execute and deliver an Employment Agreement in the form of Exhibit B; (iii) the Selling Stockholders shall execute and deliver to the Purchaser and the Company a General Release in the form of Exhibit C; (iv) each Selling Stockholder (or the Agent on behalf of the Selling Stockholders) shall execute and deliver to the Purchaser a Selling Stockholder Compliance Certificate; (v) the Chief Executive Officer and the Chief Financial Officer of the Company (prior to their resignations as contemplated by clause (x) below) shall execute and deliver to the Purchaser a Company Compliance Certificate; (vi) the Selling Stockholders shall deliver duly executed spousal consents in the form of Exhibit D (the "Spousal Consents") from their respective spouses; (vii) the Selling Stockholders shall deliver releases satisfactory to the Purchaser of all guarantees by any Acquired Corporation of any indebtedness of any Related Party; (viii) the Selling Stockholders shall each execute and deliver to the Purchaser and the Company a Non Competition Agreement in the form of Exhibit F; (ix) each of the Non-Trust Selling Stockholders shall execute and deliver a Substitute Form W-8 in the form of Exhibit G; (x) the Existing Directors and Officers shall resign from their positions and deliver letters of resignation to the Purchaser; (xi) the Company and The B IV Group shall execute the Amended Company Lease in the form of Exhibit K; (xii) the Chief Executive Officer or the Chief Financial Officer of the Company (prior to their resignations as contemplated by clause (x) above) shall execute and deliver to the Purchaser a Notice of Non Real Property Holding Corporation Status in the form of Exhibit L; (xiii) intentionally omitted; 3. 10 (xiv) the Company and the Selling Stockholders shall deliver evidence satisfactory to the Purchaser of the payment in full and discharge of all indebtedness and other liabilities of all Related Parties to the Acquired Corporations, which evidence shall include checks payable to the Company from applicable Related Parties that are dated the Closing Date; and (xv) the Purchaser and Ali Bushehri shall execute and deliver a Consulting Agreement in the form of Exhibit M. SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING STOCKHOLDERS. The Company and each of the Selling Stockholders jointly and severally represent and warrant, to and for the benefit of the Indemnitees, as follows: 2.1 DUE ORGANIZATION; SUBSIDIARIES, ETC. (a) The Company has no Subsidiaries, except for the Entities identified as Subsidiaries in Part 2.1 of the Disclosure Schedule; and neither the Company nor any of the other Entities identified in Part 2.1 of the Disclosure Schedule owns any capital stock of, or any equity interest of any nature in, any other Entity, other than the Entities identified in Part 2.1 of the Disclosure Schedule. (The Company and each of its Subsidiaries are referred to collectively in this Agreement as the "Acquired Corporations.") None of the Acquired Corporations has agreed or is obligated to make any future investment in or capital contribution to any other Entity. None of the Acquired Corporations has guaranteed or become responsible or liable for any obligation of any of the Entities in which it owns or has owned any equity interest. Each of the Acquired Corporations is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under all Acquired Corporation Contracts. (b) Except as set forth in Part 2.1 of the Disclosure Schedule, none of the Acquired Corporations has conducted any business under or otherwise used, for any purpose or in any jurisdiction, any fictitious name, assumed name, trade name or other name, other than the names "Oz Technologies, Inc.," "Oz Tek," "Triple S Engineering" and "TSE." (c) Each Acquired Corporation is not and has not been required to be qualified, authorized, registered or licensed to do business as a foreign corporation in any jurisdiction other than the jurisdictions identified in Part 2.1 of the Disclosure Schedule, except where the failure to be so qualified, authorized, registered or licensed has not had and will not have a Material Adverse Effect on the Acquired Corporations. Each Acquired Corporation is in good standing as a foreign corporation in each of the jurisdictions identified with respect to it in Part 2.1 of the Disclosure Schedule. (d) Part 2.1 of the Disclosure Schedule accurately sets forth, without giving effect to the resignations contemplated by Section 6.5(d) of this Agreement, (i) the names of the members of each Acquired Corporation's board of directors, (ii) the names of the members of 4. 11 each committee of each Acquired Corporation's board of directors, and (iii) the names and titles of each Acquired Corporation's officers. (e) Except as set forth in Part 2.1 of the Disclosure Schedule, no assets were transferred from Ketzo Corporation to any of its equity holders or any other party in connection with its dissolution and the distribution of its equity interests prior to the Closing or in the six months prior to such dissolution and distribution. 2.2 CERTIFICATE OF INCORPORATION AND BYLAWS; RECORDS. The Company has delivered to the Purchaser accurate and complete copies of: (i) the certificate of incorporation or charter and bylaws of each of the Acquired Corporations, including all amendments thereto; (ii) the stock records of each of the Acquired Corporations; and (iii) the minutes and other records of the meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the stockholders of any of the Acquired Corporations, the board of directors of any of the Acquired Corporations and all committees of the board of directors of any of the Acquired Corporations. There have been no formal meetings or other proceedings of the stockholders of any of the Acquired Corporations, the board of directors of any of the Acquired Corporations or any committee of the board of directors of any of the Acquired Corporations that are not fully reflected in such minutes or other records. There has not been any violation of any of the provisions of any Acquired Corporation's certificate of incorporation or charter or bylaws, and no Acquired Corporation has taken any action that is inconsistent in any material respect with any resolution adopted by its stockholders, its board of directors or any committee of its board of directors. The books of account, stock records, minute books and other records of each of the Acquired Corporations are accurate, up-to-date and complete in all material respects, and have been maintained in accordance with prudent business practices. 2.3 CAPITALIZATION, ETC. (a) The authorized capital stock of the Company consists of 1,000,000 shares of Company Common Stock, of which 100,000 shares have been issued and are outstanding as of the date of this Agreement. All of the outstanding shares of Company Common Stock have been duly authorized and validly issued, and are fully paid and non-assessable. All outstanding shares of Company Common Stock have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts. (b) There is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of capital stock or other securities of the Company; (iii) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities of the Company; or (iv) to the knowledge of the Company and each of the Selling Stockholders, except as set forth in Part 2.3 of the Disclosure Schedule, condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of the Company. 5. 12 (c) Except as set forth in Part 2.3 of the Disclosure Schedule, no Acquired Corporation has ever repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities of itself or any other Acquired Corporation. Any securities so reacquired by the Acquired Corporations were reacquired in compliance with (i) the applicable provisions of the California Corporations Code and all other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts. 2.4 FINANCIAL STATEMENTS. (a) The Company has delivered to the Purchaser the following financial statements and notes (collectively, the "Company Financial Statements"): (i) The audited consolidated balance sheet of the Company and its Subsidiaries as of December 31, 1998, and the related audited consolidated statement of income and retained earnings and statement of cash flows of the Company and its Subsidiaries for the year then ended, together with the notes thereto and the unqualified report and opinion of Frank, Rimerman & Co. LLP relating thereto; and (ii) the unaudited Interim Balance Sheet, and the related unaudited consolidated statement of income and retained earnings and statement of cash flows of the Company and its Subsidiaries for the nine months then ended, together with the notes thereto. (b) Except as set forth in Part 2.4 of the Disclosure Schedule, the Company Financial Statements are accurate and complete in all material respects and present fairly the financial position of the Company and its Subsidiaries as of the respective dates thereof and the results of operations and cash flows of the Company and its Subsidiaries for the periods covered thereby. Except as set forth in Part 2.4 of the Disclosure Schedule, the Company Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered. 2.5 ABSENCE OF CHANGES. Except as set forth in Part 2.5 of the Disclosure Schedule, since September 30, 1999: (a) there has not been any material adverse change in the business, condition, assets, liabilities, operations, financial performance or prospects of the Acquired Corporations taken as a whole, and, to the knowledge of the Company and each of the Selling Stockholders, no event has occurred that will, or could reasonably be expected to, have a Material Adverse Effect on the Acquired Corporations; (b) there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of any of the Acquired Corporations (whether or not covered by insurance); (c) none of the Acquired Corporations has declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock, or has repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities; 6. 13 (d) none of the Acquired Corporations has sold, issued or authorized the issuance of (i) any capital stock or other securities, (ii) any option or right to acquire any capital stock or any other securities, or (iii) any instrument convertible into or exchangeable for any capital stock or other securities; (e) there has been no amendment to the certificate of incorporation or charter or bylaws of any of the Acquired Corporations, and none of the Acquired Corporations has effected or been a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (f) none of the Acquired Corporations has formed any Subsidiary or acquired any equity interest or other interest in any other Entity; (g) none of the Acquired Corporations has made any expenditure to acquire or improve any capital asset; (h) none of the Acquired Corporations has (i) entered into or permitted any of the assets owned or used by it to become bound by any Contract that is or would constitute a Material Contract (as defined in Section 2.10(a)), or (ii) amended or prematurely terminated, or waived any material right or remedy under, any such Contract; (i) none of the Acquired Corporations has (i) acquired, leased or licensed any right or other asset from any other Person, (ii) sold or otherwise disposed of, or leased or licensed, any right or other asset to any other Person, or (iii) waived or relinquished any right, except for immaterial rights or other immaterial assets acquired, leased, licensed or disposed of in the ordinary course of business and consistent with past practices; (j) none of the Acquired Corporations has written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or other indebtedness; (k) none of the Acquired Corporations has made any pledge of any of its assets or otherwise permitted any of its assets to become subject to any Encumbrance, except for pledges of immaterial assets made in the ordinary course of business and consistent with past practices; (l) none of the Acquired Corporations has (i) lent money to any Person (other than pursuant to routine travel advances made to employees in the ordinary course of business), or (ii) incurred or guaranteed any indebtedness for borrowed money; (m) none of the Acquired Corporations has (i) established or adopted any Employee Benefit Plan, (ii) paid any bonus or made any profit-sharing or similar payment to, or increased the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, (iii) except as contemplated by Section 6.5(c) and Section 6.5(q) of this Agreement, entered into, amended or modified any contract or agreement (either oral or written) with any of its directors, officers or employees or (iv) hired any new employee; 7. 14 (n) none of the Acquired Corporations has changed any of its methods of accounting or accounting practices in any respect; (o) none of the Acquired Corporations has made any Tax election; (p) none of the Acquired Corporations has commenced or settled any Legal Proceeding; (q) none of the Acquired Corporations has entered into any material transaction or taken any other material action outside the ordinary course of business or inconsistent with its past practices; (r) none of the Acquired Corporations has entered into any material transaction or taken any other material action that has had, or would reasonably be expected to have, a Material Adverse Effect on the Acquired Corporations; and (s) none of the Acquired Corporations has agreed or committed to take any of the actions referred to in clauses "(c)" through "(r)" above. 2.6 TITLE TO ASSETS. (a) The Acquired Corporations own, and have good, valid and marketable title to, all assets purported to be owned by them, including: (i) all assets reflected on the Interim Balance Sheet; (ii) all assets referred to in Parts 2.7 and 2.9 of the Disclosure Schedule and all of the rights of the Acquired Corporations under the Material Contracts; and (iii) all other assets reflected in the books and records of the Acquired Corporations as being owned by the Acquired Corporations. Except as set forth in Part 2.6 of the Disclosure Schedule, all of said assets are owned by the Acquired Corporations free and clear of any liens or other Encumbrances, except for (i) any lien for current taxes not yet due and payable, and (ii) minor liens that have arisen in the ordinary course of business and that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of any of the Acquired Corporations. (b) Part 2.6 of the Disclosure Schedule identifies all assets that are material to the business of any of the Acquired Corporations and that are being leased or licensed to any of the Acquired Corporations. 2.7 BANK ACCOUNTS; RECEIVABLES. (a) Part 2.7(a) of the Disclosure Schedule provides accurate information with respect to each account maintained by or for the benefit of any Acquired Corporation at any bank or other financial institution including the name of the bank or financial institution, the account number and the balance as of the date hereof. (b) Part 2.7(b) of the Disclosure Schedule provides an accurate and complete breakdown and aging of all accounts receivable, notes receivable and other receivables of the Company and its Subsidiaries as of September 30, 1999. Except as set forth in Part 2.7(b) of the Disclosure Schedule, all existing accounts receivable of the Acquired Corporations (including 8. 15 those accounts receivable reflected on the Interim Balance Sheet that have not yet been collected and those accounts receivable that have arisen since September 30, 1999 and have not yet been collected) (i) represent valid obligations of customers of the Acquired Corporations arising from bona fide transactions entered into in the ordinary course of business, and (ii) are current. To the knowledge of the Company and each of the Selling Stockholders, none of the existing accounts receivable are subject to any counterclaim or right of set off. 2.8 EQUIPMENT; LEASEHOLD. (a) All material items of equipment and other tangible assets owned by or leased to the Acquired Corporations are adequate for the uses to which they are being put, are in good condition and repair (ordinary wear and tear excepted) and are adequate for the conduct of the business of the Acquired Corporations in the manner in which such business is currently being conducted. (b) None of the Acquired Corporations owns any real property or any interest in real property, except for the leaseholds created under the real property leases identified in Part 2.10 of the Disclosure Schedule. 2.9 PROPRIETARY ASSETS. (a) Part 2.9(a)(i) of the Disclosure Schedule sets forth, with respect to each Proprietary Asset owned by the Acquired Corporations and registered with any Governmental Body or for which an application has been filed with any Governmental Body, (i) a brief description of such Proprietary Asset, and (ii) the names of the jurisdictions covered by the applicable registration or application. Part 2.9(a)(ii) of the Disclosure Schedule identifies and provides a brief description of all other Proprietary Assets owned by the Acquired Corporations that are material to the business of any of the Acquired Corporations and all other Proprietary Assets owned by the Acquired Corporations that the Company or any of the Selling Stockholders reasonably believes are patentable and for which a patent application on behalf of the Company has not been filed. Part 2.9(a)(iii) of the Disclosure Schedule identifies and provides a brief description of, and identifies any ongoing royalty or payment obligations in excess of $10,000 with respect to, each Proprietary Asset that is licensed or otherwise made available to any of the Acquired Corporations by any Person and is material to the business of any of the Acquired Corporations (except for any Proprietary Asset that is licensed to any of the Acquired Corporations under any third party software license generally available to the public), and identifies the Contract under which such Proprietary Asset is being licensed or otherwise made available to such Acquired Corporation. The Acquired Corporations have good, valid and marketable title to all of the Acquired Corporation Proprietary Assets identified in Parts 2.9(a)(i) and 2.9(a)(ii) of the Disclosure Schedule, free and clear of all Encumbrances, except for (i) any lien for current taxes not yet due and payable, and (ii) minor liens that have arisen in the ordinary course of business and that do not (individually or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of any of the Acquired Corporations. The Acquired Corporations have a valid right to use, license and otherwise exploit all Proprietary Assets identified in Part 2.9(a)(iii) of the Disclosure Schedule. Except as set forth in Part 2.9(a)(iv) of the Disclosure Schedule, none of the Acquired Corporations has developed jointly with any other Person any Acquired Corporation Proprietary Asset that is material to the 9. 16 business of any of the Acquired Corporations with respect to which such other Person has any rights. Except as set forth in Part 2.9(a)(v) of the Disclosure Schedule, there is no Acquired Corporation Contract (with the exception of end user license agreements in the form previously delivered by the Company to the Purchaser) pursuant to which any Person has any right (whether or not currently exercisable) to use, license or otherwise exploit any Acquired Corporation Proprietary Asset. (b) The Acquired Corporations have taken reasonable measures and precautions to protect and maintain the confidentiality, secrecy and value of all material Acquired Corporation Proprietary Assets (except Acquired Corporation Proprietary Assets whose value would be unimpaired by disclosure). Part 2.9(b) of the Disclosure Schedule lists all current and former employees of the Acquired Corporations and all current and former consultants and independent contractors to the Acquired Corporations who are or were involved in, or who have contributed to, the creation or development of any material Acquired Corporation Proprietary Asset. No current or former employee, officer, director, stockholder, consultant or independent contractor has any right, claim or interest in or with respect to any Acquired Corporation Proprietary Asset. (c) To the knowledge of the Company and each of the Selling Stockholders: (i) all patents, trademarks, service marks and copyrights held by any of the Acquired Corporations are valid, enforceable and subsisting; (ii) none of the Acquired Corporation Proprietary Assets and no Proprietary Asset that is currently being developed by any of the Acquired Corporations (either by itself or with any other Person) infringes, misappropriates or conflicts with any Proprietary Asset owned or used by any other Person; (iii) none of the products that are or have been designed, created, developed, assembled, manufactured or sold by any of the Acquired Corporations is infringing, misappropriating or making any unlawful or unauthorized use of any Proprietary Asset owned or used by any other Person, and none of such products has at any time infringed, misappropriated or made any unlawful or unauthorized use of, and none of the Acquired Corporations has received any notice or other communication (in writing or otherwise) of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Proprietary Asset owned or used by any other Person; and (iv) no other Person is infringing, misappropriating or making any unlawful or unauthorized use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any material Acquired Corporation Proprietary Asset. (d) The Acquired Corporation Proprietary Assets constitute all the Proprietary Assets necessary to enable the Acquired Corporations to conduct their business in the manner in which such business has been and is being conducted. None of the Acquired Corporations has (i) licensed any of the material Acquired Corporation Proprietary Assets to any Person on an exclusive basis, or (ii) entered into any covenant not to compete or Contract limiting its ability to exploit fully any material Acquired Corporation Proprietary Asset or to transact business in any market or geographical area or with any Person. (e) Except as set forth in Part 2.9(e)(i) of the Disclosure Schedule, none of the Acquired Corporations has disclosed or delivered to any Person, or permitted the disclosure or delivery to any escrow agent or other Person, of any Acquired Corporation Source Code. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse 10. 17 of time) will, or could reasonably be expected to, result in the disclosure or delivery to any Person of any Acquired Corporation Source Code. Part 2.10(a)(ii) of the Disclosure Schedule identifies each Contract pursuant to which any Acquired Corporation has deposited or is required to deposit with an escrow holder or any other Person any Acquired Corporation Source Code, and further describes whether the execution of this Agreement or the consummation of any of the transactions contemplated hereby could reasonably be expected to result in the release or disclosure of any Acquired Corporation Source Code. (f) To the knowledge of the Company and each of the Selling Stockholders, except as set forth in Part 2.9(f)(i) of the Disclosure Schedule, each computer, computer program and other item of software (whether installed on a computer or on any other piece of equipment, including firmware) that is owned, licensed or used by any of the Acquired Corporations for its internal business operations is Year 2000 Compliant. Except as set forth in Part 2.9(f)(ii) of the Disclosure Schedule, each computer program and other item of software that has been designed, developed, sold, licensed or otherwise made available to any Person by any of the Acquired Corporations is Year 2000 Compliant. Except as set forth in Part 2.9(f)(iii) of the Disclosure Schedule, each of the Acquired Corporations has conducted sufficient Year 2000 compliance testing for each computer, computer program and item of software referred to in the preceding two sentences to be able to determine whether such computer, computer program and item of software is Year 2000 Compliant, and has obtained warranties or other written assurances from each of its suppliers to the effect that the products and services provided by such suppliers to the Acquired Corporation is Year 2000 Compliant. As used in this Section 2.9, "Year 2000 Compliant" means, with respect to a computer, computer program or other item of software (i) the functions, calculations, and other computing processes of the computer, program or software (collectively, "Processes") perform in a consistent and correct manner without interruption regardless of the date on which the Processes are actually performed and regardless of the date input to the applicable computer system, whether before, on, or after January 1, 2000; (ii) the computer, program or software accepts, calculates, compares, sorts, extracts, sequences, and otherwise processes date inputs and date values, and returns and displays date values, in a consistent and correct manner regardless of the dates used whether before, on, or after January 1, 2000; (iii) the computer, program or software accepts and responds to year input, if any, in a manner that resolves any ambiguities as to century in a defined, predetermined, and appropriate manner; (iv) the computer, program or software stores and displays date information in ways that are unambiguous as to the determination of the century; and (v) leap years will be determined by the following standard (A) if dividing the year by 4 yields an integer, it is a leap year, except for years ending in 00, but (B) a year ending in 00 is a leap year if dividing it by 400 yields an integer. (g) Except with respect to demonstration or trial copies, no product, system, program or software module designed, developed, sold, licensed or otherwise made available by any of the Acquired Corporations to any Person contains any "back door," "time bomb," "Trojan horse," "worm," "drop dead device," "virus" or other software routines or hardware components designed to permit unauthorized access or to disable or erase software, hardware or data without the consent of the user. 11. 18 2.10 CONTRACTS. (a) Part 2.10 of the Disclosure Schedule identifies: (i) each Acquired Corporation Contract relating to the employment of, or the performance of services by, any employee, consultant or independent contractor; (ii) each Acquired Corporation Contract relating to the acquisition, transfer, use, development, sharing or license of any technology or any Proprietary Asset; (iii) each Acquired Corporation Contract imposing any restriction on the right or ability of any Acquired Corporation (A) to compete with any other Person, (B) to acquire any product or other asset or any services from any other Person, to sell any product or other asset to or perform any services for any other Person or to transact business or deal in any other manner with any other Person, or (C) develop or distribute any technology; (iv) each Acquired Corporation Contract creating or involving any agency relationship, distribution arrangement or franchise relationship; (v) each Acquired Corporation Contract relating to the acquisition, issuance or transfer of any securities; (vi) each Acquired Corporation Contract relating to the creation of any Encumbrance with respect to any asset of any Acquired Corporation; (vii) each Acquired Corporation Contract involving or incorporating any guaranty, any pledge, any performance or completion bond, any indemnity or any surety arrangement; (viii) each Acquired Corporation Contract creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses, costs or liabilities; (ix) each Acquired Corporation Contract relating to the purchase or sale of any product or other asset or the creation of any indebtedness by or to, or the performance of any services by or for, any Related Party (as defined in Section 2.18); (x) each Acquired Corporation Contract constituting or relating to a Government Contract or Government Bid; (xi) any other Acquired Corporation Contract that was entered into outside the ordinary course of business or was inconsistent with past practices; (xii) any other Acquired Corporation Contract that has a term of more than 60 days and that may not be terminated by the applicable Acquired Corporation (without penalty) within 60 days after the delivery of a termination notice by such Acquired Corporation; (xiii) any other Acquired Corporation Contract that contemplates or involves (A) the payment or delivery of cash or other consideration in an amount or having a 12. 19 value in excess of $50,000 in the aggregate, or (B) the performance of services having a value in excess of $50,000 in the aggregate; (xiv) each Acquired Corporation Contract constituting a commitment of any Person to purchase products (including products in development) of any Acquired Corporation; and (xv) each Acquired Corporation Contract contemplating or creating indebtedness on the part of any Acquired Corporation. (Acquired Corporation Contracts in the respective categories described in clauses "(i)" through "(xv)" above are referred to in this Agreement as "Material Contracts.") (b) The Company has delivered to the Purchaser accurate and complete copies of all written Material Contracts, including all amendments thereto. Part 2.10 of the Disclosure Schedule provides an accurate description of the terms of each Acquired Corporation Contract that is not in written form. Each Contract identified in Part 2.10 of the Disclosure Schedule is valid and in full force and effect, and, to the knowledge of the Company and each of the Selling Stockholders, is enforceable by the applicable Acquired Corporation in accordance with its terms. (c) Except as set forth in Part 2.10 of the Disclosure Schedule: (i) none of the Acquired Corporations has violated or breached, or committed any default under, any Acquired Corporation Contract, and, to the knowledge of the Company and each of the Selling Stockholders, no other Person has violated or breached, or committed any default under, any Acquired Corporation Contract; (ii) to the knowledge of the Company and each of the Selling Stockholders, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to, (A) result in a violation or breach of any of the provisions of any Acquired Corporation Contract, (B) give any Person the right to declare a default or exercise any remedy under any Acquired Corporation Contract, (C) give any Person the right to accelerate the maturity or performance of any Acquired Corporation Contract, or (D) give any Person the right to cancel, terminate or modify any Acquired Corporation Contract; (iii) since their inception, none of the Acquired Corporations has received any notice or other communication regarding any actual or possible violation or breach of, or default under, any Acquired Corporation Contract; and (iv) none of the Acquired Corporations has waived any of its material rights under any Material Contract. (d) No Person is renegotiating, or has a right pursuant to the terms of any Acquired Corporation Contract to renegotiate, any amount paid or payable to any Acquired Corporation under any Material Contract or any other material term or provision of any Material Contract. 13. 20 (e) The Material Contracts collectively constitute all of the Contracts necessary to enable each of the Acquired Corporations to conduct its business in the manner in which its business is currently being conducted. (f) Part 2.10 of the Disclosure Schedule identifies and provides a brief description of each proposed Contract as to which any bid, offer, award, written proposal, term sheet or similar document has been submitted or received by any Acquired Corporation since January 1, 1999. (g) Part 2.10 of the Disclosure Schedule provides an accurate description and breakdown of the backlog of the Acquired Corporations under Acquired Corporation Contracts. 2.11 LIABILITIES; FEES, COSTS AND EXPENSES. (a) None of the Acquired Corporations has accrued, contingent or other liabilities of any nature, either matured or unmatured (whether or not required to be reflected in financial statements in accordance with GAAP, and whether due or to become due), except for: (i) liabilities identified as such in the "liabilities" column of the Interim Balance Sheet; (ii) accounts payable or accrued salaries that have been incurred by the Acquired Corporations since September 30, 1999 in the ordinary course of business and consistent with past practices; (iii) liabilities under the Material Contracts, to the extent the nature and magnitude of such liabilities can be specifically ascertained by reference to the text of such Contracts; and (iv) the liabilities identified in Part 2.11(a) of the Disclosure Schedule. (b) Part 2.11(b) of the Disclosure Schedule sets forth the total amount of all legal fees and expenses payable to Ferrari, Olsen, Ottoboni & Bebb and all investment banking and other fees and expenses payable to Broadview Associates LLC that have been incurred by or that will in the future be incurred by or for the benefit of the Company in connection with (i) the negotiation, preparation and review of any term sheet or similar document relating to any of the transactions contemplated by this Agreement, (ii) the investigation and review conducted by the Purchaser and its Representatives with respect to the business of the Acquired Corporations (and the furnishing of information to the Purchaser and its Representatives in connection with such investigation and review), (iii) the negotiation, preparation and review of this Agreement (including the Disclosure Schedule), the other agreements referred to in this Agreement and all certificates, opinions and other instruments and documents delivered or to be delivered in connection with the transactions contemplated by this Agreement, (iv) the preparation and submission of any filing or notice required to be made or given in connection with any of the transactions contemplated by this Agreement, and the obtaining of any Consent required to be obtained in connection with any of such transactions, or (v) the consummation and performance of the transactions contemplated by this Agreement. (c) Part 2.11(c) of the Disclosure Schedule sets forth the total amount of all accounting fees and expenses (the "Aggregate Accounting Fees") payable to Frank, Rimerman & Co. LLP, Duane Roemmich, KPMG LLP or any other accountant that have been incurred by or that will in the future be incurred by or for the benefit of the Company in connection with KPMG LLP's (i) audit of the consolidated balance sheet of the Company and its Subsidiaries as of September 30, 1999 (the "Interim Balance Sheet"), and the related consolidated statement of 14. 21 income and retained earnings and statement of cash flows of the Company and its Subsidiaries for the nine months then ended, together with the notes thereto, and (ii) issuance of its unqualified report and opinion, if any, relating to such financial statements. 2.12 COMPLIANCE WITH LEGAL REQUIREMENTS. Each of the Acquired Corporations is, and has at all times since its inception been, in compliance with all applicable Legal Requirements, except where the failure to comply with such Legal Requirements has not had and will not have a Material Adverse Effect on the Acquired Corporations. Except as set forth in Part 2.12 of the Disclosure Schedule, none of the Acquired Corporations has received any notice or other communication from any Governmental Body regarding any actual or possible violation of, or failure to comply with, any Legal Requirement, since its inception. 2.13 GOVERNMENTAL AUTHORIZATIONS. Part 2.13 of the Disclosure Schedule identifies each material Governmental Authorization held by any Acquired Corporation, and the Company has delivered to the Purchaser accurate and complete copies of all Governmental Authorizations identified in Part 2.13 of the Disclosure Schedule. The Governmental Authorizations identified in Part 2.13 of the Disclosure Schedule are valid and in full force and effect, and collectively constitute all Governmental Authorizations necessary to enable each of the Acquired Corporations to conduct its business in the manner in which its business is currently being conducted. Each Acquired Corporation is, and at all times since its inception has been, in substantial compliance with the terms and requirements of the applicable Governmental Authorizations identified in Part 2.13 of the Disclosure Schedule. Since the date of their inception, none of the Acquired Corporations has received any notice or other communication from any Governmental Body regarding (a) any actual or possible violation of or failure to comply with any term or requirement of any Governmental Authorization, or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Authorization. 2.14 TAX MATTERS. (a) All Tax Returns required to be filed by or on behalf of the Acquired Corporations with any Governmental Body with respect to any taxable period ending on or before the Closing Date (the "Acquired Corporation Returns") (i) have been or will be filed on or before the applicable due date (including any extensions of such due date), and (ii) except as set forth in Part 2.14 of the Disclosure Schedule, have been, or will be when filed, accurately and completely prepared in all material respects in compliance with all applicable Legal Requirements. All amounts shown on the Acquired Corporation Returns to be due on or before the Closing Date have been or will be paid on or before the Closing Date. The Company has delivered to the Purchaser accurate and complete copies of all Acquired Corporation Returns filed since December 31, 1993 which have been requested by the Purchaser. (b) The Company Financial Statements fully accrue all actual and contingent liabilities for Taxes with respect to all periods through the dates thereof in accordance with GAAP. Each Acquired Corporation will establish, in the ordinary course of business and consistent with its past practices, reserves adequate for the payment of all Taxes for the period from September 30, 1999 through the Closing Date, and will disclose the dollar amount of such reserves to the Purchaser on or prior to the Closing Date. 15. 22 (c) Except as set forth in Part 2.14 of the Disclosure Schedule, no Acquired Corporation Return relating to income Taxes has ever been examined or audited by any Governmental Body. Except as set forth in Part 2.14 of the Disclosure Schedule, there have been no other examinations or audits of any Acquired Corporation Return. The Company has delivered to the Purchaser accurate and complete copies of all audit reports and similar documents (to which the Company has access) relating to the Acquired Corporation Returns. Except as set forth in Part 2.14 of the Disclosure Schedule, no extension or waiver of the limitation period applicable to any of the Acquired Corporation Returns has been granted (by any Acquired Corporation or any other Person), and no such extension or waiver has been requested from any Acquired Corporation. (d) Except as set forth in Part 2.14 of the Disclosure Schedule, no claim or Legal Proceeding is pending or has been threatened against or with respect to any Acquired Corporation in respect of any Tax. There are no unsatisfied liabilities for Taxes (including liabilities for interest, additions to tax and penalties thereon and related expenses) with respect to any notice of deficiency or similar document received by any Acquired Corporation with respect to any Tax (other than liabilities for Taxes asserted under any such notice of deficiency or similar document which are being contested in good faith by the applicable Acquired Corporations and with respect to which adequate reserves for payment have been established). There are no liens for Taxes upon any of the assets of any of the Acquired Corporations except liens for current Taxes not yet due and payable. None of the Acquired Corporations has entered into or become bound by any agreement or consent pursuant to Section 341(f) of the Code. None of the Acquired Corporations has been, and none of the Acquired Corporations will be, required to include any adjustment in taxable income for any tax period (or portion thereof) pursuant to Section 481 or 263A of the Code or any comparable provision under state or foreign Tax laws as a result of transactions or events occurring, or accounting methods employed, prior to the Closing. (e) There is no agreement, plan, arrangement or other Contract covering any employee or independent contractor or former employee or independent contractor of any of the Acquired Corporations that, considered individually or considered collectively with any other such Contracts, will, or could reasonably be expected to, give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162 of the Code. None of the Acquired Corporations is, or has ever been, a party to or bound by any tax indemnity agreement, tax sharing agreement, tax allocation agreement or similar Contract. 2.15 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS. (a) Part 2.15(a) of the Disclosure Schedule identifies each salary, bonus, deferred compensation, incentive compensation, stock purchase, stock option, severance pay, termination pay, hospitalization, medical, life or other insurance, supplemental unemployment benefits, profit-sharing, pension or retirement plan, program or agreement (collectively, the "Plans") sponsored, maintained, contributed to or required to be contributed to by any of the Acquired Corporations for the benefit of any employee of any of the Acquired Corporations ("Employee"), except for Plans which would not require any of the Acquired Corporations to make payments or provide benefits having a value in excess of $10,000 in the aggregate. The 16. 23 Acquired Corporations have received and are in possession of executed Form I-9s for each former and current Employee. (b) Except as set forth in Part 2.15(a) of the Disclosure Schedule, none of the Acquired Corporations maintains, sponsors or contributes to, and, to the knowledge of the Company and each of the Selling Stockholders, has not at any time in the past maintained, sponsored or contributed to, any employee pension benefit plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), whether or not excluded from coverage under specific Titles or Merger Subtitles of ERISA) for the benefit of Employees or former Employees (a "Pension Plan"). (c) The Acquired Corporations maintain, sponsor or contribute only to those employee welfare benefit plans (as defined in Section 3(1) of ERISA, whether or not excluded from coverage under specific Titles or Merger Subtitles of ERISA) for the benefit of Employees or former Employees which are described in Part 2.15(c) of the Disclosure Schedule (the "Welfare Plans"), none of which is a multiemployer plan (within the meaning of Section 3(37) of ERISA). (d) With respect to each Plan, the Company has delivered to the Purchaser: (i) an accurate and complete copy of such Plan (including all amendments thereto); (ii) an accurate and complete copy of the annual report, if required under ERISA, with respect to such Plan for the last two years; (iii) an accurate and complete copy of the most recent summary plan description, together with each Summary of Material Modifications, if required under ERISA, with respect to such Plan, and all material employee communications relating to such Plan; (iv) if such Plan is funded through a trust or any third party funding vehicle, an accurate and complete copy of the trust or other funding agreement (including all amendments thereto) and accurate and complete copies the most recent financial statements thereof; (v) accurate and complete copies of all Contracts relating to such Plan, including service provider agreements, insurance contracts, minimum premium contracts, stop-loss agreements, investment management agreements, subscription and participation agreements and record keeping agreements; and (vi) an accurate and complete copy of the most recent determination letter received from the Internal Revenue Service with respect to such Plan (if such Plan is intended to be qualified under Section 401(a) of the Code). (e) None of the Acquired Corporations is required to be, and, to the knowledge of the Company and each of the Selling Stockholders, has never been required to be, treated as a single employer with any other Person under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code. None of the Acquired Corporations has ever been a 17. 24 member of an "affiliated service group" within the meaning of Section 414(m) of the Code. To the knowledge of the Company and each of the Selling Stockholders, none of the Acquired Corporations has ever made a complete or partial withdrawal from a multiemployer plan, as such term is defined in Section 3(37) of ERISA, resulting in "withdrawal liability," as such term is defined in Section 4201 of ERISA (without regard to subsequent reduction or waiver of such liability under either Section 4207 or 4208 of ERISA). (f) None of the Acquired Corporations has any plan or commitment to create any additional Welfare Plan or any Pension Plan, or to modify or change any existing Welfare Plan or Pension Plan (other than to comply with applicable law) in a manner that would affect any Employee. (g) Except as set forth in Part 2.15(g) of the Disclosure Schedule, no Welfare Plan provides death, medical or health benefits (whether or not insured) with respect to any current or former Employee after any such Employee's termination of service (other than (i) benefit coverage mandated by applicable law, including coverage provided pursuant to Section 4980B of the Code, (ii) deferred compensation benefits accrued as liabilities on the Interim Balance Sheet, and (iii) benefits the full cost of which are borne by current or former Employees (or the Employees' beneficiaries)). (h) With respect to each of the Welfare Plans constituting a group health plan within the meaning of Section 4980B(g)(2) of the Code, the provisions of Section 4980B of the Code ("COBRA") have been complied with in all material respects. (i) Each of the Plans has been operated and administered in all material respects in accordance with applicable Legal Requirements, including but not limited to ERISA and the Code. (j) Each of the Plans intended to be qualified under Section 401(a) of the Code has received a favorable determination from the Internal Revenue Service, and neither the Company nor any of the Selling Stockholders is aware of any reason why any such determination letter should be revoked. (k) Except as set forth in Part 2.15(k) of the Disclosure Schedule, neither the execution, delivery or performance of this Agreement, nor the consummation of the transactions contemplated by this Agreement, will result in any payment (including any bonus, golden parachute or severance payment) to any current or former Employee or director of any of the Acquired Corporations (whether or not under any Plan), or materially increase the benefits payable under any Plan, or result in any acceleration of the time of payment or vesting of any such benefits. (l) Part 2.15(l) of the Disclosure Schedule contains a list of all salaried employees of each of the Acquired Corporations as of the date of this Agreement, and correctly reflects, in all material respects, their salaries, any other compensation payable to them (including compensation payable pursuant to bonus, deferred compensation or commission arrangements), their dates of employment and their positions. None of the Acquired Corporations is a party to any collective bargaining contract or other Contract with a labor union 18. 25 involving any of its Employees. All of the employees of the Acquired Corporations are "at will" employees. (m) Part 2.15(m) of the Disclosure Schedule identifies each Employee who is not fully available to perform work because of disability or other leave and sets forth the basis of such leave and the anticipated date of return to full service. (n) Each of the Acquired Corporations is in compliance in all material respects with all applicable Legal Requirements and Contracts relating to employment, employment practices, wages, bonuses and terms and conditions of employment, including employee compensation matters. (o) Except as set forth in Part 2.15(o) of the Disclosure Schedule, each of the Acquired Corporations has good labor relations, and neither the Company nor any of the Selling Stockholders has any reason to believe that (i) the consummation of the transactions contemplated by this Agreement will have a material adverse effect on the labor relations of any of the Acquired Corporations, or (ii) any of the employees of any of the Acquired Corporations intends to terminate his or her employment with such Acquired Corporation. 2.16 ENVIRONMENTAL MATTERS. Each of the Acquired Corporations is in compliance in all material respects with all applicable Environmental Laws, which compliance includes the possession by each of the Acquired Corporations of all permits and other Governmental Authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof. None of the Acquired Corporations has received any notice or other communication (in writing or otherwise), whether from a Governmental Body, citizens group, employee or otherwise, that alleges that any of the Acquired Corporations is not in compliance with any Environmental Law, and, to the knowledge of the Company and each of the Selling Stockholders, there are no circumstances that may prevent or interfere with any Acquired Corporation's compliance with any Environmental Law in the future. To the knowledge of the Company and each of the Selling Stockholders, no current or prior owner of any property leased or controlled by any of the Acquired Corporations has received any notice or other communication (in writing or otherwise), whether from a Government Body, citizens group, employee or otherwise, that alleges that such current or prior owner or any of the Acquired Corporations is not in compliance with any Environmental Law. All Governmental Authorizations currently held by any of the Acquired Corporations pursuant to Environmental Laws are identified in Part 2.16 of the Disclosure Schedule. (For purposes of this Section 2.16: (i) "Environmental Law" means any federal, state, local or foreign Legal Requirement relating to pollution or protection of human health or the environment (including ambient air, surface water, ground water, land surface or subsurface strata), including any law or regulation relating to emissions, discharges, releases or threatened releases of Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.) 2.17 INSURANCE. Part 2.17 of the Disclosure Schedule identifies all insurance policies maintained by, at the expense of or for the benefit of any of the Acquired Corporations and identifies any material claims made thereunder, and the Company has delivered to the Purchaser accurate and complete copies of the insurance policies identified on Part 2.17 of the Disclosure 19. 26 Schedule. Each of the insurance policies identified in Part 2.17 of the Disclosure Schedule is in full force and effect. None of the Acquired Corporations, since their inception, has received any notice or other communication regarding any actual or possible (a) cancellation or invalidation of any insurance policy, (b) refusal of any coverage or rejection of any claim under any insurance policy, or (c) material adjustment in the amount of the premiums payable with respect to any insurance policy. 2.18 RELATED PARTY TRANSACTIONS. Except as set forth in Part 2.18 of the Disclosure Schedule: (a) no Related Party has, and no Related Party has had at any time since the inception of the Acquired Corporations, any direct or indirect interest in any material asset used in or otherwise relating to the business of any Acquired Corporation; (b) no Related Party is, or has been at any time since the inception of the Acquired Corporations, indebted to any Acquired Corporation; (c) since the inception of the Acquired Corporations, no Related Party has entered into, or has had any direct or indirect financial interest in, any Material Contract, transaction or business dealing involving any Acquired Corporation; (d) no Related Party is competing, or has at any time since the inception of the Acquired Corporations, competed, directly or indirectly, with any Acquired Corporation; and (e) no Related Party has any claim or right against any Acquired Corporation (other than rights to receive compensation for services performed as an employee of such Acquired Corporation). 2.19 LEGAL PROCEEDINGS; ORDERS. (a) Except as set forth in Part 2.19 of the Disclosure Schedule, there is no pending Legal Proceeding, and to the knowledge of the Company and each of the Selling Stockholders, no Person has threatened to commence any Legal Proceeding: (i) that involves any of the Acquired Corporations or any of the assets owned or used by any of the Acquired Corporations or any Person whose liability any of the Acquired Corporations has or may have retained or assumed, either contractually or by operation of law; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the transactions contemplated by this Agreement. To the knowledge of the Company and each of the Selling Stockholders, except as set forth in Part 2.19 of the Disclosure Schedule, no event has occurred, and no claim, dispute or other condition or circumstance exists, that will, or that could reasonably be expected to, give rise to or serve as a basis for the commencement of any such Legal Proceeding. (b) Except as set forth in Part 2.19 of the Disclosure Schedule, no Legal Proceeding has been commenced by or has been pending against any of the Acquired Corporations since January 1, 1995. (c) There is no order, writ, injunction, judgment or decree to which any of the Acquired Corporations, or any of the assets owned or used by any of the Acquired Corporations, is subject, and none of the Selling Stockholders is subject to any order, writ, injunction, judgment or decree that relates to the business of any of the Acquired Corporations or to any assets owned or used by any of the Acquired Corporations. To the knowledge of the Company and each of the Selling Stockholders, no officer or other employee of any of the Acquired Corporations is subject to any order, writ, injunction, judgment or decree that prohibits such 20. 27 officer or other employee from engaging in or continuing any conduct, activity or practice relating to the business of any of the Acquired Corporations. 2.20 AUTHORITY; BINDING NATURE OF AGREEMENT. (a) The Company has the absolute and unrestricted right, power and authority to enter into and to perform its obligations under this Agreement; and the execution, delivery and performance by the Company of this Agreement have been duly authorized by all necessary action on the part of the Company and its board of directors and this Agreement and the transactions contemplated hereby have been unanimously approved by the board of directors of the Company. This Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. (b) Each Selling Stockholder has the absolute and unrestricted right, power and capacity to enter into and to perform such Selling Stockholder's obligations under this Agreement and the other agreements referred to in this Agreement to which such Selling Stockholder is or may become a party. This Agreement constitutes the legal, valid and binding obligation of each of the Selling Stockholders, enforceable against each of the Selling Stockholders in accordance with its terms. Upon the execution of each of the other agreements referred to in this Agreement at the Closing, each of such other agreements will constitute the legal, valid and binding obligation of each Selling Stockholder who is a party thereto, and will be enforceable against such Selling Stockholder in accordance with its terms. (c) The respective spouses of the Selling Stockholders have the absolute and unrestricted right, power and capacity to execute and deliver and to perform their obligations under the Spousal Consents being executed by them. Said Spousal Consents constitute their legal, valid and binding obligations, enforceable against them in accordance with their terms. (d) Each Trustee has the unrestricted right, power, authority and capacity to act for and bind its respective Trust with respect to all matters relating to this Agreement and the transactions contemplated by this Agreement. This Agreement and all other agreements referred to in this Agreement to which either of the Trusts is a party constitute the legal, valid and binding obligations of each Trust that is a party thereto, enforceable against such Trust in accordance with its terms. (e) The Agent has the unrestricted right, power, authority and capacity to act for and bind each of the Selling Stockholders with respect to all matters relating to this Agreement, the other agreements referred to in this Agreement and the transactions contemplated by this Agreement. 2.21 NON-CONTRAVENTION; CONSENTS. Except as set forth in Part 2.21 of the Disclosure Schedule, neither (i) the execution, delivery or performance of this Agreement or any of the other agreements referred to in this Agreement, nor (ii) the consummation of any of the transactions contemplated by this Agreement, will directly or indirectly (with or without notice or lapse of time): 21. 28 (a) contravene, conflict with or result in a violation of (i) any of the provisions of the certificate of incorporation or charter or bylaws of any of the Acquired Corporations, (ii) any resolution adopted by the stockholders, the board of directors or any committee of the board of directors of any of the Acquired Corporations or (iii) the constitutive documents of either Trust; (b) contravene, conflict with or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirement or any order, writ, injunction, judgment or decree to which any of the Acquired Corporations, any of the Selling Stockholders, either of the Trusts or any of the assets owned or used by any of the Acquired Corporations, is subject; (c) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by any of the Acquired Corporations or that otherwise relates to the business of any of the Acquired Corporations or to any of the assets owned or used by any of the Acquired Corporations; (d) contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Acquired Corporation Contract that is or would constitute a Material Contract, or give any Person the right to (i) declare a default or exercise any remedy under any such Acquired Corporation Contract, (ii) accelerate the maturity or performance of any such Acquired Corporation Contract, or (iii) cancel, terminate or modify any such Acquired Corporation Contract; (e) contravene, conflict with or result in a violation or breach of or a default under any provision of, or give any Person the right to declare a default under, any Contract to which any of the Selling Stockholders or either of the Trusts is a party or by which any of the Selling Stockholders or either of the Trusts is bound; or (f) result in the imposition or creation of any lien or other Encumbrance upon or with respect to any asset owned or used by any of the Acquired Corporations (except for minor liens that will not, in any case or in the aggregate, materially detract from the value of the assets subject thereto or materially impair the operations of any of the Acquired Corporations). Except as set forth in Part 2.21 of the Disclosure Schedule, none of the Acquired Corporations or any of the Selling Stockholders or either of the Trustees acting on behalf of their respective Trusts is or will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with (i) the execution, delivery or performance of this Agreement or any of the other agreements referred to in this Agreement, or (ii) the consummation of any of the transactions contemplated by this Agreement. 2.22 CUSTOMERS. Part 2.22 of the Disclosure Schedule identifies each Person that has committed (whether oral or written and whether pursuant to an agreement or purchase order or otherwise) to purchase existing products or products being developed by any of the Acquired Corporations, and sets forth for each such Person the quantities or amounts of such products that 22. 29 such Person has committed to purchase (the "Purchase Commitments") and whether such commitment is oral or written. The Company has provided to the Purchaser true and complete copies of all documents evidencing such Purchase Commitments. All such Purchase Commitments are in full force and effect, have not been withdrawn, amended, modified or terminated and are enforceable by the applicable Acquired Corporation against the other party to such Purchase Commitments. No fact, condition or circumstance exists that would give any party the right to withdraw, amend, modify or terminate any Purchase Commitment and no Person has given any notice to any Acquired Corporation, and neither the Company nor any Selling Stockholder has any reason to believe, that any Person intends to withdraw, amend, modify or terminate any Purchase Commitment. 2.23 PRODUCT DEVELOPMENT. Part 2.23 of the Disclosure Schedule sets forth for each product being developed by or on behalf of any Acquired Corporation a true and correct product development status, including the dates on which the development of each such product will be completed. No fact, condition or circumstance exists that would materially impair or delay the development of any such products. 2.24 COMPANY PROJECTIONS. Part 2.24 of the Disclosure Schedule sets forth consolidated financial projections of the Company and its Subsidiaries for the periods through December 31, 2001 (the "Company Financial Projections") and all assumptions used by the Company's management or any other Person in preparing such Company Financial Projections (the "Assumptions"). The Company reasonably believes that the Assumptions constitute all of the assumptions necessary in order to accurately prepare the Company Financial Projections. The Company Financial Projections have been prepared in good faith and the Company reasonably believes that the Company Financial Projections are materially accurate. Except as explicitly set forth in the Assumptions, the Company has no reason to believe that the Company Financial Projections will not be achieved or that the Assumptions will prove to be inaccurate or incomplete. 2.25 FULL DISCLOSURE. To the knowledge of each of the Selling Stockholders (it being understood by the parties hereto that the Company is also making the representation and warranty set forth in this Section 2.25 and is making such representation and warranty without a qualification as to its knowledge), this Agreement (including the Disclosure Schedule) does not (i) contain any representation, warranty or information that is false or misleading with respect to any material fact, or (ii) omit to state any material fact or necessary in order to make the representations, warranties and information contained and to be contained herein and therein (in the light of the circumstances under which such representations, warranties and information were or will be made or provided) not false or misleading. 2.26 SALE OF PRODUCTS; PERFORMANCE OF SERVICES. (a) Except as set forth in Part 2.26 of the Disclosure Schedule, each product, system, program, Proprietary Asset or other asset designed, developed, manufactured, assembled, sold, installed, repaired, licensed or otherwise made available by any of the Acquired Corporations to any Person: 23. 30 (i) conformed and complied in all material respects with the terms and requirements of any applicable warranty or other Contract and with all applicable Legal Requirements; and (ii) was free of any bug, virus, design defect or other defect or deficiency at the time it was sold or otherwise made available, other than any immaterial bug or similar defect that would not adversely affect in any material respect such product, system, program, Proprietary Asset or other asset (or the operation or performance thereof). Part 2.26 of the Disclosure Schedule contains an accurate and complete copy of the most recent "bug list" with respect to each product, system, program or software module of each of the Acquired Corporations. (b) All installation services, programming services, repair services, maintenance services, support services, training services, upgrade services and other services that have been performed by the Acquired Corporations were performed properly and in full conformity with the terms and requirements of all applicable warranties and other Contracts and with all applicable Legal Requirements. (c) Except as set forth in Part 2.26 of the Disclosure Schedule, since January 1, 1996, no customer or other Person has asserted or threatened to assert any claim against any of the Acquired Corporations (i) under or based upon any warranty provided by or on behalf of any of the Acquired Corporations, or (ii) under or based upon any other warranty relating to any product, system, program, Proprietary Asset or other asset designed, developed, manufactured, assembled, sold, installed, repaired, licensed or otherwise made available by any of the Acquired Corporations or any services performed by any of the Acquired Corporations. 2.27 CERTAIN BUSINESS PRACTICES. None of the Acquired Corporations nor (to the knowledge of the Company and each of the Selling Stockholders) any director, officer, agent or employee of any of the Acquired Corporations has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iii) made any other unlawful payment. 2.28 SELLING STOCKHOLDERS AND TRUSTS. (a) Each Selling Stockholder has the capacity and financial capability to comply with and perform all of such Selling Stockholder's covenants and obligations under this Agreement and each other agreement referred to in this Agreement to which such Selling Stockholder is or may become a party. (b) No Selling Stockholder: (i) has, at any time, (A) made a general assignment for the benefit of creditors, (B) filed, or had filed against such Selling Stockholder, any bankruptcy petition or similar filing, (C) suffered the attachment or other judicial seizure of all or a substantial portion of such Selling Stockholder's assets, (D) admitted in writing such Selling Stockholder's inability 24. 31 to pay such Selling Stockholder's debts as they become due, (E) been convicted of, or pleaded guilty to, any felony, or (F) taken or been the subject of any action that may have an adverse effect on such Selling Stockholder's ability to comply with or perform any of such Selling Stockholder's covenants or obligations under this Agreement or any other agreement referred to in this Agreement to which such Selling Stockholder is or may become a party; or (ii) is subject to any order, writ, injunction, judgment or decree that may have an adverse effect on such Selling Stockholder's ability to comply with or perform any of such Selling Stockholder's covenants or obligations under this Agreement or any other agreement referred to in this Agreement to which such Selling Stockholder is or may become a party. (c) Neither of the Trustees has taken on behalf of its respective Trust, and neither of the Trustees nor either of the Trusts has been the subject of, any action that may have an adverse effect on (i) either Trust's ability to comply with or perform its covenants or obligations under this Agreement or any other agreement referred to in this Agreement to which either Trust is or may become a party or (ii) either Trustee's ability to act for and bind its respective Trust with respect to any matter relating to this Agreement or any other agreement referred to in this Agreement to which its respective Trust is or may become a party. (d) Neither of the Trustees nor either of the Trusts is subject to any order, writ, injunction, judgment or decree that may have an adverse effect on (i) either Trust's ability to comply with or perform its covenants or obligations under this Agreement or any other agreement referred to in this Agreement to which either Trust is or may become a party or (ii) either Trustee's ability to act for and bind its respective Trust with respect to any matter relating to this Agreement or any other agreement referred to in this Agreement to which its respective Trust is or may become a party. (e) There is no Legal Proceeding pending, and no Person has threatened to commence any Legal Proceeding, that may have an adverse effect on the ability of (i) any Selling Stockholder to comply with or perform any of such Selling Stockholder's covenants or obligations under this Agreement or any other agreement referred to in this Agreement to which such Selling Stockholder is or may become a party, (ii) either Trust to comply with or perform its covenants or obligations under this Agreement or any other agreement referred to in this Agreement to which either Trust is or may become a party or (iii) either Trustee to act for and bind its respective Trust with respect to any matter relating to this Agreement or any other agreement referred to in this Agreement to which its respective Trust is or may become a party. No event has occurred, and no claim, dispute or other condition or circumstance exists, that might directly or indirectly give rise to or serve as a basis for the commencement of any such Legal Proceeding. (f) The Non-Trust Selling Stockholders and the Trusts have, and the Purchaser will acquire at the Closing, good and valid title to the Shares free and clear of any Encumbrances. Of the Shares: (i) Nasser Barabi owns, beneficially and of record, 35,000 Shares; (ii) Iraj Barabi owns, beneficially and of record, 25,000 Shares; (iii) the Bushehri Trust owns, beneficially and of record, 20,000 Shares; and (iv) the Barabi Trust owns, beneficially and of record, 20,000 Shares. The Non-Trust Selling Stockholders and the Trustees on behalf of the 25. 32 Trusts have delivered to the Purchaser accurate and complete copies of the stock certificates evidencing the Shares. (g) Each of the Trust Selling Stockholders is a United States citizen, and each of the Non-Trust Selling Stockholders has properly completed, executed and delivered to the Purchaser a Substitute Form W-8 in the Form of Exhibit F. The purchase of the Shares by the Purchaser from the Non-Trust Selling Stockholders and the Trusts as contemplated herein will not subject the Purchaser to any withholding or other Tax. SECTION 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER The Purchaser represents and warrants, to and for the benefit of the Selling Stockholders, as follows: 3.1 ACQUISITION OF SHARES. The Purchaser is not acquiring the Shares with the current intention of making a public distribution thereof. 3.2 ORGANIZATION, STANDING AND POWER. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under all Contracts by which it is bound. 3.3 AUTHORITY; BINDING NATURE OF AGREEMENT. The Purchaser has the absolute and unrestricted right, power and authority to perform its obligations under this Agreement; and the execution, delivery and performance (including the issuance and delivery in accordance with this Agreement of the Aggregate Purchaser Shares, the Note and the Real Property Note) by the Purchaser of this Agreement has been duly authorized by all necessary action on the part of the Purchaser and its board of directors. Each of this Agreement, the Note and the Real Property Note constitutes the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. 3.4 NON-CONTRAVENTION; CONSENTS. Neither the execution and delivery of this Agreement by the Purchaser nor the consummation by the Purchaser of the transactions contemplated by this Agreement will (i) conflict with or result in any breach of any provision of the certificate of incorporation or bylaws of the Purchaser, (ii) result in a default by the Purchaser under any Contract to which the Purchaser is a party, except for any default which has not had and will not have a Material Adverse Effect on the Purchaser, or (iii) result in a violation by the Purchaser of any order, writ, injunction, judgment or decree to which the Purchaser is subject, except for any violation which has not had and will not have a Material Adverse Effect on the Purchaser. The Purchaser is not and will not be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated by this Agreement. 26. 33 3.5 VALID ISSUANCE. The shares of Purchaser Common Stock to be issued pursuant to Section 1.2 will be, when issued in accordance with the provisions of this Agreement, validly issued, fully paid and nonassessable. 3.6 SEC FILINGS; FINANCIAL STATEMENTS. (a) The Purchaser has delivered to the Company accurate and complete copies (excluding copies of exhibits) of each report, registration statement (on a form other than Form S-8) and definitive proxy statement filed by the Purchaser with the SEC between January 1, 1999 and the date of this Agreement (the "Purchaser SEC Documents"). As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the Purchaser SEC Documents complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be); and (ii) none of the Purchaser SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) The financial statements contained in the Purchaser SEC Documents: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered, except as may be indicated in the notes to such financial statements and (in the case of unaudited statements) as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject to year-end audit adjustments; and (iii) fairly present the financial position of the Purchaser and its subsidiaries as of the respective dates thereof and the results of operations of the Purchaser for the periods covered thereby. 3.7 HART-SCOTT-RODINO COMPLIANCE. No approval under the Hart-Scott-Rodino Anti-Trust Act of 1976 is necessary for the purchase of the Shares by the Purchaser from the Non-Trust Selling Stockholders and the Trusts as contemplated herein. SECTION 4. PRE-CLOSING COVENANTS 4.1 ACCESS AND INVESTIGATION. During the period from the date of this Agreement to the Closing Date (the "Pre-Closing Period"), the Company shall, and shall cause the respective Representatives of the Acquired Corporations to: (i) provide the Purchaser and the Purchaser's Representatives with reasonable access to the Acquired Corporations' Representatives, personnel and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Acquired Corporations; and (ii) provide the Purchaser and the Purchaser's Representatives with copies of such existing books, records, Tax Returns, work papers and other documents and information relating to the Acquired Corporations, and with such additional financial, operating and other data and information regarding the Acquired Corporations, as the Purchaser may reasonably request. 4.2 OPERATION OF THE BUSINESS OF THE ACQUIRED CORPORATIONS. The Company and the Selling Stockholders shall ensure that, during the Pre-Closing Period: 27. 34 (a) none of the Selling Stockholders and neither of the Trustees on behalf of their respective Trusts directly or indirectly sells or otherwise transfers, or offers, agrees or commits (in writing or otherwise) to sell or otherwise transfer, any of the Shares or any interest in or right relating to any of the Shares; (b) none of the Selling Stockholders and neither of the Trustees on behalf of their respective Trusts permits, or offers, agrees or commits (in writing or otherwise) to permit, any of the Shares to become subject, directly or indirectly, to any Encumbrance; (c) each of the Acquired Corporations shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement; (d) each of the Acquired Corporations preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with such Acquired Corporation; (e) each applicable Acquired Corporation shall keep in full force and effect all insurance policies identified with respect to it in Part 2.17 of the Disclosure Schedule; (f) the officers of each of the Acquired Corporations report regularly (but in no event less frequently than weekly) to the Purchaser concerning the status of the applicable Acquired Corporation's business; (g) none of the Acquired Corporations shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or shall repurchase, redeem or otherwise reacquire any shares of capital stock or other securities; (h) none of the Acquired Corporations shall sell, issue or authorize the issuance of (i) any capital stock or other securities, (ii) any option or right to acquire any capital stock or other securities, or (iii) any instrument convertible into or exchangeable for any capital stock or other securities; (i) none of the Acquired Corporations shall amend or permit the adoption of any amendment to its certificate of incorporation or charter or bylaws, or effect or become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (j) none of the Acquired Corporations shall form any Subsidiary or acquire any equity interest or other interest in any other Entity; (k) none of the Acquired Corporations shall make any expenditure to acquire or improve any capital asset; (l) none of the Acquired Corporations shall (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a 28. 35 Material Contract, or (ii) amend or prematurely terminate, or waive any material right or remedy under, any such Contract; (m) none of the Acquired Corporations shall (i) acquire, lease or license any right or other asset from any other Person, (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person, or (iii) waive or relinquish any right, except for assets acquired, leased, licensed or disposed of by any Acquired Corporation pursuant to Contracts that are not Material Contracts; (n) none of the Acquired Corporations shall (i) lend money to any Person (except that the Acquired Corporations may make routine travel advances to employees in the ordinary course of business), or (ii) incur or guarantee any indebtedness for borrowed money; (o) none of the Acquired Corporations shall (i) establish, adopt or amend any Employee Benefit Plan, (ii) pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, (iii) except as contemplated by Section 6.5(c) and Section 6.5(q) of this Agreement, enter into, amend or modify any contract or agreement (either oral or written) with any of its directors, officers or employees, or (iv) hire any new employee whose aggregate annual compensation exceeds $60,000; (p) none of the Acquired Corporations shall change any of its methods of accounting or accounting practices in any material respect; (q) none of the Acquired Corporations shall make any Tax election; (r) none of the Acquired Corporations shall commence or settle any material Legal Proceeding; and (s) none of the Acquired Corporations shall agree or commit to take any of the actions described in clauses "(g)" through "(r)" above. Notwithstanding the foregoing, any of the Acquired Corporations may take any action described in clauses "(g)" through "(r)" above if the Purchaser gives its prior written consent to the taking of such action by the applicable Acquired Corporation, which consent will not be unreasonably withheld (it being understood that the Purchaser's withholding of consent to any action will not be deemed unreasonable if the Purchaser determines in good faith that the taking of such action would not be in the best interests of the Purchaser or would not be in the best interests of any of the Acquired Corporations). 4.3 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE. (a) During the Pre-Closing Period, the Company shall promptly notify the Purchaser in writing of: (i) the discovery by the Company or any of the Selling Stockholders of any event, condition, fact or circumstance that occurred or existed on or prior to the date of 29. 36 this Agreement and that caused or constitutes an inaccuracy in or breach of any representation or warranty made by the Company or any of the Selling Stockholders in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute an inaccuracy in or breach of any representation or warranty made by the Company or any of the Selling Stockholders in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any breach of any covenant or obligation of the Company or any of the Selling Stockholders; (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any condition set forth in Section 6 or Section 7 impossible or unlikely; and (v) any event, condition, fact or circumstance that may have an adverse effect on either Trust's ability to comply with or perform its obligations under this Agreement or either Trustee's ability to act for and bind its respective Trust with respect to any matter relating to this Agreement. (b) If any event, condition, fact or circumstance that is required to be disclosed pursuant to Section 4.3(a) requires any change in the Disclosure Schedule, or if any such event, condition, fact or circumstance would require such a change assuming the Disclosure Schedule were dated as of the date of the occurrence, existence or discovery of such event, condition, fact or circumstance, then the Company and the Selling Stockholders shall promptly deliver to the Purchaser an update to the Disclosure Schedule specifying such change. No such update shall be deemed to supplement or amend the Disclosure Schedule for the purpose of (i) determining the accuracy of any of the representations and warranties made by the Company or any of the Selling Stockholders in this Agreement, or (ii) determining whether any condition set forth in Section 6 has been satisfied. 4.4 NO NEGOTIATION. The Company and the Selling Stockholders shall ensure that, during the Pre-Closing Period, the Company and the Selling Stockholders shall not, directly or indirectly: (a) solicit or encourage the initiation of any inquiry, proposal or offer from any Person (other than the Purchaser) relating to a possible Acquisition Transaction; (b) participate in any discussions or negotiations or enter into any agreement with, or provide any non-public information to, any Person (other than the Purchaser) relating to or in connection with a possible Acquisition Transaction; or (c) consider, entertain or accept any proposal or offer from any Person (other than the Purchaser) relating to a possible Acquisition Transaction. 30. 37 The Company and the Selling Stockholders shall promptly notify Parent in writing of any inquiry, proposal or offer relating to a possible Acquisition Transaction that is received by the Company or any Selling Stockholder during the Pre-Closing Period. 4.5 PAYMENT OF INDEBTEDNESS BY RELATED PARTIES. The Company and the Selling Stockholders shall cause all indebtedness and other liabilities of each Related Party to the Acquired Corporations to be discharged and paid in full prior to or on the Closing Date. 4.6 CONFIDENTIALITY. (a) The Company and the Selling Stockholders shall ensure that, during the Pre-Closing Period: (i) each of the Acquired Corporations and their respective Representatives and the Trustees on behalf of the Trusts keep strictly confidential the existence and terms of this Agreement; (ii) none of the Acquired Corporations or any of their respective Representatives or either of the Trustees on behalf of the Trusts issue or disseminate any press release or other publicity or otherwise makes any disclosure of any nature (to any of the Acquired Corporations' suppliers, customers, landlords, creditors or employees or to any other Person) regarding any of the transactions contemplated by this Agreement, except to the extent that (i) any Acquired Corporation or Trustee on behalf of its Trust is required by law to make any such disclosure regarding such transactions or (ii) any Acquired Corporation or Trustee on behalf of its Trust is required to obtain the Consent of such Person in connection with the transactions contemplated by this Agreement; and (iii) if any Acquired Corporation or Trustee on behalf of its Trust is required by law to make any disclosure regarding the transactions contemplated by this Agreement or is required to obtain such Consent, the Company advises the Purchaser, at least five business days before making such disclosure or seeking such Consent, of the nature and content of the intended disclosure or Consent. (b) The Purchaser shall ensure that, during the Pre-Closing Period: (i) the Purchaser and its Representatives keep strictly confidential the existence and terms of this Agreement; (ii) neither the Purchaser nor any of its Representatives issues or disseminates any press release or other publicity or otherwise makes any disclosure of any nature (to any of the Purchaser's suppliers, customers, landlords, creditors or employees or to any other Person) regarding any of the transactions contemplated by this Agreement, except to the extent that (i) the Purchaser is required by law to make such disclosure regarding such transactions or (ii) the Purchaser is required to obtain the Consent of such Person in connection with the transactions contemplated by this Agreement; and (iii) if the Purchaser is required by law to make any disclosure regarding the transactions contemplated by this Agreement or is required to obtain such Consent, 31. 38 the Purchaser advises the Company, at least five business days before making such disclosure or seeking such Consent, of the nature and content of the intended disclosure or Consent; provided, however, that any time that the Purchaser determines in good faith, based on the advice of counsel, that it is required by law to make such disclosure or seek such Consent, and that it cannot comply with the law if it must afford the Company at least five business days between the date the Company is advised of such disclosure or Consent and the date the Purchaser makes such disclosure or seeks such Consent, the Purchaser may make such disclosure or seek such Consent without advising the Company or without affording it such five business days, as applicable. SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES 5.1 FILINGS AND CONSENTS. Subject to Section 5.6(a), as promptly as practicable after the execution of this Agreement, each party to this Agreement (i) shall make all filings (if any) and give all notices (if any) required to be made and given by such party in connection with the transactions contemplated by this Agreement, and (ii) shall use all commercially reasonable efforts to obtain all Consents (if any) required to be obtained (pursuant to any applicable Legal Requirement or Contract, or otherwise) by such party in connection with the transactions contemplated by this Agreement. The Company and the Selling Stockholders shall (upon request) promptly deliver to the Purchaser a copy of each such filing made, each such notice given and each such Consent obtained by any of the Acquired Corporations, any Selling Stockholder or either Trustee acting on behalf of its respective Trust during the Pre-Closing Period. 5.2 BEST EFFORTS. During the Pre-Closing Period, (i) the Company and the Selling Stockholders shall use their best efforts to cause the conditions set forth in Section 6 to be satisfied on a timely basis, and (ii) the Purchaser shall use its best efforts to cause the conditions set forth in Section 7 to be satisfied on a timely basis. 5.3 TERMINATION OF AGREEMENTS. Prior to the Closing, the Company and the Selling Stockholders shall cause the parties to the Stockholders Agreement to enter into an agreement, reasonably satisfactory in form and content to the Purchaser (and conditioned and effective upon the Closing), terminating all of such parties' rights under the Stockholders Agreement. 5.4 TREATMENT OF COMPANY'S EMPLOYEE BENEFIT PLANS. (a) Prior to the Closing, the Company shall terminate the Oz Technologies, Inc. 401(k) Profit Sharing Plan (the "401(k) Plan") to provide that (i) no employee of any of the Acquired Corporations shall be able to make elective deferrals to the 401(k) Plan as of the date the 401(k) Plan is terminated and (ii) no employer contributions shall be made to the 401(k) Plan with respect to any period after the date the 401(k) Plan is terminated. (b) Effective on the first day of the month immediately following the Closing, the Purchaser shall provide eligibility for all Employees to participate in any medical plan provided by the Purchaser to its other employees (i) without imposition of any pre-existing condition limitations and at the same contribution rate paid by the Employees for medical coverage under the Company's medical benefit plan covering the Employee prior to the first of 32. 39 the month immediately following the Closing and (ii) with grandfathering of any payments by the Employees prior to the Closing Date toward the satisfaction of any deductible amounts under the Purchaser's medical plans. (c) The Purchaser shall grandfather all prior service by the Employees with the Company for purposes of participation in (i) Purchaser's benefit plans and programs regularly maintained for its employees and (ii) Purchaser's vacation policy or program regularly maintained and provided for its employees. (d) The Purchaser shall grandfather all prior service of the Employees with the Company prior to the Closing for purposes of eligibility to participate and vesting of benefits under the Purchaser's Section 401(k) Plan. 5.5 BEST EFFORTS TO RELEASE GUARANTEES; INDEMNIFICATION AGREEMENT. Each of the Purchaser, the Company and each of the Selling Stockholders will use its best efforts to obtain, prior to or at the Closing, the release of the Selling Stockholders from all guarantees made by them that are set forth in Part 2.10(a)(vii) of the Disclosure Schedule. In the event that all of the guarantees made by the Selling Stockholders and set forth in Part 2.10(a)(vii) of the Disclosure Schedule have not been or are not released prior to or at the Closing, the Company hereby agrees to indemnify the Selling Stockholders, pursuant to a separate indemnification agreement to be entered into among the Company and the Selling Stockholders on terms satisfactory to all parties, for payments made by the Selling Stockholders after the Closing pursuant to the guarantees set forth in Part 2.10(a)(vii) of the Disclosure Schedule. 5.6 REGISTRATION REQUIREMENTS. (a) The Purchaser shall prepare and file, not later than seven days after the Closing Date, a registration statement on Form S-3 or another available form (the "Registration Statement") with the SEC under the Securities Act to register the resale of the Aggregate Purchaser Shares by the Non-Trust Selling Stockholders and the Trustees on behalf of the Trusts, and thereafter shall use its best efforts to secure effectiveness of the Registration Statement within ninety days after the Closing Date. (b) The Selling Stockholders and the Trustees on behalf of the Trusts hereby agree that, during the Initial Selling Period, the maximum aggregate number of shares of Purchaser Common Stock that may be sold by or on behalf of the Selling Stockholders and the Trusts shall be the Calculated Purchaser Shares. The Selling Stockholders and the Trustees on behalf of the Trusts also hereby agree that, during each of the four consecutive 30-day periods (each, a "Subsequent Period") that begin immediately following the end of the Initial Selling Period, the maximum aggregate number of shares of Purchaser Common Stock that may be sold by or on behalf of the Selling Stockholders and the Trusts shall be 100,000 shares per Subsequent Period. The Selling Stockholders and the Trustees on behalf of the Trusts further agree that the Agent shall notify the Purchaser in writing within seventy-five days after the Closing Date of the total number of Aggregate Purchaser Shares (the "Initial Selling Period Shares") that the Selling Stockholders and the Trusts want to sell during the Initial Selling Period, which amount shall be subject to the first sentence of this paragraph. The Purchaser hereby agrees to arrange the sale of the Initial Selling Period Shares during the Initial Selling 33. 40 Period, subject to the receipt from the Selling Stockholders or the Trustees on behalf of the Trusts (or the Agent on behalf of any of them) of stock certificates representing the Initial Selling Period Shares, if any such stock certificates are required by the Purchaser. The parties hereto hereby agree that sales of Purchaser Common Stock by or on behalf of the Selling Stockholders or the Trustees on behalf of the Trusts during the Initial Selling Period shall be limited to sales of the Initial Selling Period Shares and shall only be made pursuant to arrangements made by the Purchaser in accordance with the immediately preceding sentence. The parties hereto hereby also agree that, to the extent a Total Initial Selling Period Share Shortfall exists at the end of the Initial Selling Period, the Purchaser shall instruct the Agent in writing to endorse an addition to the principal amount of the Note in the amount of such Shortfall within five days following (i) written notice to the Purchaser from the Agent specifying in reasonable detail the calculation of such Shortfall and (ii) the Purchaser's delivery to the Agent of a written notice confirming such calculation. The Purchaser may include any written instruction to the Agent pursuant to the immediately preceding sentence in its written confirmation of the Agent's calculation of the Total Initial Selling Period Share Shortfall. The Agent hereby agrees to make such endorsement as promptly as practicable following receipt of such written instruction from the Purchaser which includes the amount of any Total Initial Selling Period Share Shortfall. The Agent hereby agrees to furnish the Purchaser with copies of such existing records, books and other documents and information relating to the Purchaser's confirmation of the Agent's calculation of the Total Initial Selling Period Share Shortfall as the Purchaser may reasonably request. Exhibit N is included herein for illustrative purposes only and shall not be deemed to supersede, amend or modify this Agreement in any respect whatsoever. (c) The Purchaser shall pay all Registration Expenses in connection with any registration, qualification or compliance hereunder, and each Selling Stockholder and Trustee on behalf of its Trust shall pay all of its respective Selling Expenses and other expenses that are not Registration Expenses relating to the Aggregate Purchaser Shares resold by such Selling Stockholder or Trustee, as the case may be. (d) In the case of any registration effected by the Purchaser pursuant to these registration provisions, the Purchaser will use its reasonable best efforts to: (i) keep such registration effective until the earlier of (A) such date as all of the Aggregate Purchaser Shares have been resold or (B) the date on which each Non-Trust Selling Stockholder and each Trustee on behalf of its Trust is entitled to sell all of its Aggregate Purchaser Shares pursuant to Rule 144 promulgated under the Securities Act; (ii) prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the Aggregate Purchaser Shares covered by the Registration Statement; (iii) cause the Aggregate Purchaser Shares to be listed on each securities exchange and quoted on each quotation service on which similar securities issued by the Purchaser are then listed or quoted; (iv) provide a transfer agent and registrar for the Aggregate Purchaser Shares; (v) comply with all applicable rules and regulations of the SEC governing such registration; and (vi) file the documents required of the Purchaser by, and otherwise use its reasonable best efforts to maintain requisite blue sky clearance in, (X) all jurisdictions in which any of the Aggregate Purchaser Shares are originally sold and (Y) all other states specified in writing by any Non-Trust Selling Stockholder or Trustee on behalf of its Trust; provided, however, that as to clause 34. 41 (Y), the Purchaser shall not be required to qualify to do business or consent to service of process in any state in which it is now so qualified or has not so consented. (e) The Purchaser shall furnish to each Non-Trust Selling Stockholder and Trustee on behalf of its Trust upon request a reasonable number of copies of a supplement to or an amendment of the prospectus used in connection with the Registration Statement as may be necessary in order to facilitate the public sale or other disposition of all or any of the Aggregate Purchaser Shares held by such Non-Trust Selling Stockholder or Trustee on behalf of its Trust. (f) With a view to making available to the Non-Trust Selling Stockholders and the Trustees on behalf of their Trusts, the benefit of Rule 144 and Form S-3 and any other rule or regulation of the SEC that may at any time permit a Non-Trust Selling Stockholder or either Trustee on behalf of its Trust to sell any of the Aggregate Purchaser Shares to the public without registration, the Purchaser covenants and agrees to use its reasonable best efforts to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) the date on which each Non-Trust Selling Stockholder and Trustee on behalf of its Trust is entitled to sell all of its Aggregate Purchaser Shares pursuant to Rule 144 promulgated under the Securities Act or (B) such date as all of the Aggregate Purchaser Shares shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Purchaser under the Exchange Act; and furnish to any Non-Trust Selling Stockholder or Trustee on behalf of its Trust upon request, as long as such Non-Trust Selling Stockholder or Trustee owns any Aggregate Purchaser Shares, (A) a written statement by the Purchaser that it has complied with the reporting requirements of the Exchange Act, (B) a copy of the most recent annual or quarterly report of the Purchaser, and (C) such other information as may be reasonably requested in order to avail any Non-Trust Selling Stockholder or Trustee on behalf of its Trust of any rule or regulation of the SEC that permits the selling of any Aggregate Purchaser Shares without registration or pursuant to a registration statement on Form S-3. (g) The Purchaser may suspend the use of the Registration Statement and refuse to permit the Selling Stockholders and the Trustees on behalf of their Trusts to resell the Aggregate Purchaser Shares pursuant to the Registration Statement for a period not to exceed 20 days in any twelve month period; provided, however, that in order to exercise this right, the Purchaser must notify the Selling Stockholders and the Trustees to the effect that such action is necessary because there then exists material, non-public information relating to the Purchaser, which, in the reasonable opinion of the board of directors of the Purchaser would not be appropriate for disclosure during that time. In such an event, the Purchaser shall use its best efforts to amend the Registration Statement as necessary and to take all other actions necessary to allow such sales and shall notify the Selling Stockholders and the Trustees promptly after it has determined that such sales have become permissible. 5.7 REGISTRATION STATEMENT INDEMNIFICATION. (a) The Purchaser agrees to indemnify and hold harmless each Non-Trust Selling Stockholder and each Trustee on behalf of its Trust from and against any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) to which such Non-Trust Selling Stockholder or Trustee may become subject (under the Securities Act or otherwise) 35. 42 insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement on the effective date thereof or the omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, or arise out of any failure by the Purchaser to fulfill any undertaking included in the Registration Statement, and the Purchaser will reimburse such Non-Trust Selling Stockholder or Trustee for any reasonable legal or other expenses incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however, that the Purchaser shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon (i) an untrue statement made in the Registration Statement in reliance upon and in conformity with written information furnished to the Purchaser by or on behalf of such Non-Trust Selling Stockholder or Trustee (or the Trust Selling Stockholder applicable to such Trustee) specifically for use in preparation of the Registration Statement, (ii) the failure of such Non-Trust Selling Stockholder or Trustee to comply with the covenants and agreements contained in Section 5.8 hereof, or (iii) any statement or omission in any prospectus that is corrected in any subsequent prospectus that was delivered to such Non-Trust Selling Stockholder or Trustee (or the Trust Selling Stockholder applicable to such Trustee) prior to the pertinent sale or sales by such Non-Trust Selling Stockholder or Trustee. (b) Each Selling Stockholder, severally and not jointly, agrees to indemnify and hold harmless the Purchaser from and against any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) to which the Purchaser may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon an untrue statement made in the Registration Statement in reliance upon and in conformity with written information furnished by such Selling Stockholder or, with respect to either Trust Selling Stockholder, the Trustee on behalf of its Trust in the Registration Statement Questionnaire (the form of which is attached hereto as Exhibit I) for use in preparation of the Registration Statement; provided, however, that no Selling Stockholder shall be liable in any such case for any untrue statement included in any prospectus which statement has been corrected, in writing, by such Selling Stockholder or, with respect to either Trust Selling Stockholder, the Trustee on behalf of its Trust and delivered to the Purchaser before the sale from which such loss occurred, and each Selling Stockholder, severally and not jointly, will reimburse the Purchaser for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, further, however, that in no event shall any indemnity under this Section 5.7(b) exceed the portion of the Aggregate Share Purchase Price received by the applicable Selling Stockholder, or, with respect to either Trust Selling Stockholder, the Trustee on behalf of its Trust, from the sale of the Shares. (c) Promptly after receipt by any indemnified person of a notice of a claim to the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 5.7, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, and subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person and the indemnifying person shall have been notified thereof, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall wish, to 36. 43 assume the defense thereof, with counsel reasonably satisfactory to the indemnified person. After notice from the indemnifying person to such indemnified person of the indemnifying person's election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expense subsequently incurred by such indemnified person in connection with the defense thereof; provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person; provided further, however, that no indemnifying person shall be responsible for the fees and expenses of more than one separate counsel for all indemnified parties. (d) The obligations of the Selling Stockholders under this Section 5.7 shall be in addition to any liability which each respective Selling Stockholder may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Purchaser within the meaning of the Securities Act. 5.8 TRANSFER OF AGGREGATE PURCHASER SHARES AFTER REGISTRATION. Each Selling Stockholder and each Trustee on behalf of its Trust hereby covenants with the Purchaser not to make any sale of the Aggregate Purchaser Shares except either (a) in accordance with the Registration Statement, in which case each Selling Stockholder and each Trustee on behalf of its Trust covenants to comply with the requirements of delivering a current prospectus, (b) in accordance with Rule 144, in which case each Selling Stockholder and each Trustee on behalf of its Trust covenants to comply with Rule 144, or (c) subject to such conditions as the Purchaser shall reasonably impose, in accordance with another exemption from the registration requirements of the Securities Act. Each Selling Stockholder and each Trustee on behalf of its Trust also covenants that it will not make any sale of any Aggregate Purchaser Shares pursuant to the Registration Statement during any period in which the Purchaser has suspended use of the Registration Statement pursuant to Section 5.6(g) of this Agreement. Each Selling Stockholder and each Trustee on behalf of its Trust further acknowledges and agrees that the Aggregate Purchaser Shares are not transferable on the books of the Purchaser unless the stock certificate submitted to the Purchaser's transfer agent evidencing such Aggregate Purchaser Shares is accompanied by such additional certification, documentation or information as the Purchaser shall reasonably require in order to effect such sale in accordance with the Registration Statement, Rule 144 or such other exemption from the registration requirements of the Securities Act. 5.9 ADDITIONAL SELLING STOCKHOLDER INFORMATION COVENANTS. Each Selling Stockholder covenants that it will promptly notify the Purchaser of any changes in the information set forth in the Registration Statement regarding such Selling Stockholder, its Trust (in the case of Trust Selling Stockholders) or such Selling Stockholder's or its Trust's "Plan of Distribution," including, without limitation, the information contained in any Registration Statement Questionnaire (the form of which is attached hereto as Exhibit I) relating to such Selling Stockholder and, in the case of the Trust Selling Stockholders, its Trust. Each Selling Stockholder shall provide the Purchaser in writing with such change or additional information necessary so that the information set forth in the Registration Statement regarding such Selling Stockholder or (in the case of the Trust Selling Stockholders) its Trust will be true and correct as 37. 44 of the effective date of the Registration Statement and until the Purchaser is no longer required to keep the Registration Statement effective pursuant to Section 5.6(d) of this Agreement. 5.10 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted under this Section 5 shall expire and be of no further force and effect if all Aggregate Purchaser Shares held by each Non-Trust Selling Stockholder and Trustee on behalf of its Trust may be sold under Rule 144 promulgated under the Securities Act. 5.11 CERTAIN PROVISIONS RELATING TO THE REAL PROPERTY NOTE. The parties hereto hereby agree that the Real Property Note shall be due and payable on February 3, 2000 (the "Real Property Note Payment Date") and may be satisfied on the Real Property Note Payment Date by either (a) the payment in cash by the Purchaser to the Agent of all amounts then owing under the Real Property Note or (b) the transfer of the Real Property to the Agent by the Purchaser, unencumbered except to the extent of the mortgage described in Section 5.12 below and minor liens that do not (in any case or in the aggregate) materially detract from the value of the Real Property. In the event that the Real Property Note is satisfied on the Real Property Note Payment Date by the transfer of the Real Property to the Agent by the Purchaser, the Purchaser and the Agent shall assign a value to the Real Property on the Real Property Note Payment Date equal to the appraised value (the "Appraised Value") for the Real Property as determined by a real estate appraiser who has been mutually agreed upon between the Purchaser and the Agent. To the extent that the Appraised Value is less than $2,800,000 plus interest due under the Real Property Note to the Real Property Note Payment Date (the "Real Property Shortfall"), the Purchaser shall instruct the Agent in writing to endorse an addition to the principal amount of the Note in the amount of the Real Property Shortfall, and the Agent shall make such endorsement as promptly as practicable following receipt of such written instruction from the Purchaser which includes the amount of any Real Property Shortfall. To the extent that the Appraised Value is more than $2,800,000 plus interest due under the Real Property Note to the Real Property Note Payment Date (the "Real Property Surplus"), the Purchaser may apply the Real Property Surplus to reduce the principal amount of the Note, provided doing so does not cause the Purchaser to violate any covenant in any loan document to which the Purchaser is a party. In the event that the Purchaser chooses to apply any Real Property Surplus to reduce the principal amount of the Note, the Purchaser shall instruct the Agent in writing to endorse a subtraction to the principal amount of the Note in the amount of the Real Property Surplus, and the Agent shall make such endorsement as promptly as practicable following receipt of such written instruction from the Purchaser which includes the amount of the Real Property Surplus. The parties hereto hereby agree that the Real Property Note shall be cancelled on the Real Property Note Payment Date upon its satisfaction in either manner provided in clause (a) or (b) of the first sentence of this paragraph. 5.12 MORTGAGE OF THE REAL PROPERTY. The parties hereto hereby agree to execute a mortgage relating to the Real Property prior to the Real Property Note Payment Date that shall be for the benefit of the Agent on behalf of the Selling Stockholders and the Trusts. The parties hereto hereby also agree that the mortgage to be executed shall contain reasonable and customary provisions for transactions of this type and be in a form to be mutually agreed upon among the parties. 38. 45 5.13 CERTAIN PROVISIONS RELATING TO THE SOFTWARE AGREEMENTS. The Purchaser hereby agrees that, in the event (a) the Company pursues obtaining a release from, or otherwise settling amounts outstanding under, the Software Agreements or (b) J.D. Edwards initiates any manner of legal proceeding to enforce the provisions of the Software Agreements against the Company (any such pursuit of a release or settlement or initiated legal proceeding being herein referred to as a "Software Proceeding"), the Purchaser shall pay or cause to be paid all attorneys' fees, costs and disbursements incurred by the Company in connection with any Software Proceeding. The Purchaser also hereby agrees that the Purchaser may only settle, adjust or compromise any Software Proceeding in a manner that results in monetary liability of the Company to J.D. Edwards with the consent of the Agent (any such consented-to settlement, adjustment or compromise, a "Software Settlement"); provided, however, that the Agent shall not unreasonably withhold such consent. The parties hereto hereby agree that, to the extent the Company makes any payments to J.D. Edwards (the "J.D. Edwards Payments") pursuant to any Software Settlement or the Software Agreements, the Purchaser shall cause cancelled checks or other customary commercial evidence of such payments (the "Payment Evidence") to be delivered to the Agent. The parties hereto hereby also agree that, with respect to the first $50,000 of any J.D. Edwards Payments made by the Company for which Payment Evidence is delivered to the Agent, the amount of such J.D. Edwards Payments shall be applied to reduce the dollar amount of the Indemnity Basket on a dollar-for-dollar basis. The parties hereto hereby further agree that, with respect to the next $200,000 of any J.D. Edwards Payments made by the Company for which Payment Evidence is delivered to the Agent, the Purchaser shall instruct the Agent in writing to endorse a subtraction to the principal amount of the Note in the amount of one-half of the amount of such J.D. Edwards Payments, and the Agent shall make such endorsement as promptly as practicable following receipt of such written instruction from the Purchaser which includes such amount. The remaining one-half of the amount of such J.D. Edwards Payments shall be borne by the Company and not applied to reduce the Indemnity Basket. The parties hereto hereby also agree that, with respect to any J.D. Edwards Payments for which Payment Evidence is delivered to the Agent that are in addition to the $250,000 in J.D. Edwards Payments referenced in the two immediately preceding sentences, the Purchaser shall instruct the Agent in writing to endorse a subtraction to the principal amount of the Note in the amount of such J.D. Edwards Payments, and the Agent shall make such endorsement as promptly as practicable following receipt of such written instruction from the Purchaser which includes such amount. SECTION 6. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE The Purchaser's obligations to purchase the Shares and to take the other actions required to be taken by the Purchaser at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions: 6.1 ACCURACY OF REPRESENTATIONS. Each of the representations and warranties made by the Company and the Selling Stockholders in this Agreement and in each of the other agreements and instruments delivered to the Purchaser in connection with the transactions contemplated by this Agreement shall have been accurate in all material respects as of the date of this Agreement (without giving effect to any "Material Adverse Effect" or other materiality qualifications, or any similar qualifications, contained or incorporated directly or indirectly in such representations and warranties), and shall be accurate in all material respects as of the Scheduled Closing Time as if made at the Scheduled Closing Time (without giving effect to any 39. 46 update to the Disclosure Schedule, and without giving effect to any "Material Adverse Effect" or other materiality qualifications, or any similar qualifications, contained or incorporated directly or indirectly in such representations and warranties). 6.2 PERFORMANCE OF COVENANTS. All of the covenants and obligations that the Company, the Selling Stockholders and the Trustees acting on behalf of the Trusts are required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects. 6.3 CONSENTS. All Consents required to be obtained in connection with the transactions contemplated by this Agreement (including the Consents identified in Part 2.21 of the Disclosure Schedule) shall have been obtained and shall be in full force and effect. 6.4 NO ADVERSE CHANGE. There shall have been no material adverse change in the business, condition, assets, liabilities, operations, financial performance, net income or prospects of the Acquired Corporations taken as a whole since the date of this Agreement. 6.5 ADDITIONAL DOCUMENTS. The Purchaser shall have received the following agreements and documents, each of which shall be in full force and effect: (a) a legal opinion from Ferrari, Olsen, Ottoboni & Bebb, LLP, counsel for the Company and the Selling Stockholders, dated the Closing Date, in the form of Exhibit G; (b) the Amended Company Lease in the form of Exhibit K, executed by the Company and The B IV Group; (c) Employment Agreements in the form of Exhibit B, executed by the Non-Trust Selling Stockholders; (d) written resignations of all Existing Directors and Officers, effective as of the Closing; (e) satisfactory releases of all guarantees by any of the Acquired Corporations of any indebtedness of any Related Party; (f) a certificate signed on behalf of the Company by the Chief Executive Officer and the Chief Financial Officer of the Company (prior to their resignations pursuant to clause (d) above) representing and warranting that the conditions applicable to the Company set forth in Sections 6.1 and 6.2 have been duly satisfied (the "Company Compliance Certificate"); (g) a certificate signed by each Selling Stockholder representing and warranting that the conditions applicable to such Selling Stockholder set forth in Sections 6.1 and 6.2 (including, with respect to the Trust Selling Stockholders, the conditions set forth in Sections 6.1 and 6.2 relating to their respective Trusts and the Trustees who are acting on behalf of such Trusts) have been duly satisfied (the "Selling Stockholder Compliance Certificates"); (h) Spousal Consents in the form of Exhibit D delivered by each of the Selling Stockholders and duly executed by their respective spouses; 40. 47 (i) General Releases in the form of Exhibit C executed and delivered by the Selling Stockholders; (j) Non Competition Agreements in the form of Exhibit E, executed and delivered by the Selling Stockholders; (k) Substitute Form W-8s in the form of Exhibit F, properly completed, executed and delivered by each of the Non-Trust Selling Stockholders; (l) intentionally omitted; (m) a Registration Statement Questionnaire in the form of Exhibit I, properly completed, executed and delivered by each of the Selling Stockholders and each Trustee on behalf of its Trust; (n) a Notice of Non Real Property Holding Corporation Status in the form of Exhibit L, executed and delivered by the Chief Executive Officer or Chief Financial Officer of the Company (prior to their resignations pursuant to clause (d) above); (o) intentionally omitted; (p) satisfactory evidence of the payment in full and discharge of all indebtedness and other liabilities of all Related Parties to the Acquired Corporations, which evidence shall include checks payable to the Company from applicable Related Parties that are dated the Closing Date; and (q) a Consulting Agreement in the form of Exhibit M, executed by Ali Bushehri. 6.6 NO LEGAL PROCEEDINGS. Since the date of this Agreement, there shall not have been commenced or threatened against the Purchaser, or against any Person affiliated with the Purchaser, any Legal Proceeding (i) involving any challenge to, or seeking damages or other relief in connection with, any of the transactions contemplated by this Agreement, (ii) that may have the effect of preventing, delaying, making illegal or otherwise interfering with any of the transactions contemplated by this Agreement, (iii) seeking to prohibit or limit in any material respect the Purchaser's ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the capital stock of any of the Acquired Corporations (including the Shares) or (iv) which would materially and adversely affect the right of any of the Acquired Corporations to own the assets or operate the business of the Acquired Corporations. 6.7 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. No Person shall have made or threatened any claim asserting that such Person (i) may be the holder or the beneficial owner of, or may have the right to acquire or to obtain beneficial ownership of, any capital stock or other securities of the Acquired Corporations (including the Shares), or (ii) may be entitled to all or any portion of the Aggregate Share Purchase Price. 6.8 NO PROHIBITION. Neither the consummation nor the performance of any of the transactions contemplated by this Agreement will, directly or indirectly (with or without notice 41. 48 or lapse of time), contravene or conflict with or result in a violation of, or cause the Purchaser or any Person affiliated with the Purchaser to suffer any adverse consequence under, (i) any applicable Legal Requirement or order, writ, injunction, judgment or decree, or (ii) any Legal Requirement or order, writ, injunction, judgment or decree that has been proposed by or before any Governmental Body. SECTION 7. CONDITIONS PRECEDENT TO SELLING STOCKHOLDERS' AND TRUSTS' OBLIGATIONS TO CLOSE. The obligation of the Non-Trust Selling Stockholders and the Trustees on behalf of their respective Trusts to sell the Shares and to take the other actions required to be taken by them at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions: 7.1 ACCURACY OF REPRESENTATIONS. Each of the representations and warranties made by the Purchaser in this Agreement shall have been accurate in all material respects as of the date of this Agreement (without giving effect to any materiality qualifications or similar qualifications contained or incorporated directly or indirectly in such representations and warranties), and shall be accurate in all material respects as of the Scheduled Closing Time as if made at the Scheduled Closing Time (without giving effect to any materiality qualifications or similar qualifications contained or incorporated directly or indirectly in such representations and warranties). 7.2 PERFORMANCE OF COVENANTS. All of the covenants and obligations that the Purchaser is required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects. 7.3 PURCHASER'S PERFORMANCE. The Purchaser shall have paid (in the case of the Cash Amount) and delivered (in the case of the Aggregate Purchaser Shares, the Note and the Real Property Note) the Aggregate Share Purchase Price to either the Agent or the Selling Stockholders and the Trustees on behalf of the Trusts as contemplated by Section 1.2. 7.4 NO INJUNCTION. There shall not be in effect any injunction that shall have been entered by a court of competent jurisdiction since the date of this Agreement and that prohibits the sale of the Shares by the Non-Trust Selling Stockholders and the Trustees on behalf of their respective Trusts to the Purchaser. 7.5 RELEASE OF GUARANTEES. The Selling Stockholders either shall have (a) been released from all guarantees made by them that are set forth on Part 2.10(a)(vii) of the Disclosure Schedule or (b) entered into an indemnification agreement with the Company whereby the Company indemnifies the Selling Stockholders for any payments made by them after the Closing pursuant to the guarantees set forth in Part 2.10(a)(vii) of the Disclosure Schedule. 7.6 ADDITIONAL DOCUMENTS. The Agent shall have received the Amended Company Lease in the form of Exhibit K, executed by the Company and The B IV Group. 42. 49 SECTION 8. TERMINATION 8.1 TERMINATION EVENTS. This Agreement may be terminated prior to the Closing: (a) by the Purchaser if the Purchaser reasonably determines that the timely satisfaction of any condition set forth in Section 6 has become impossible (other than as a result of any failure on the part of the Purchaser to comply with or perform any covenant or obligation of the Purchaser set forth in this Agreement); (b) by the Agent if the Agent reasonably determines that the timely satisfaction of any condition set forth in Section 7 has become impossible (other than as a result of any failure on the part of the Company, any of the Selling Stockholders or either of the Trusts or the Trustees acting on their behalf to comply with or perform any covenant or obligation set forth in this Agreement or in any other agreement or instrument delivered to the Purchaser); (c) by the Purchaser at or after the Scheduled Closing Time if any condition set forth in Section 6 has not been satisfied by the Scheduled Closing Time; (d) by the Agent at or after the Scheduled Closing Time if any condition set forth in Section 7 has not been satisfied by the Scheduled Closing Time; (e) by the Purchaser if any of the Company's or any of the Selling Stockholders' representations and warranties contained in this Agreement shall have been materially inaccurate as of the date of this Agreement or shall have become materially inaccurate as of any subsequent date (as if made on such subsequent date), or if any of the Company's or any of the Selling Stockholders' covenants contained in this Agreement shall have been breached in any material respect; provided, however, that the Purchaser may not terminate this Agreement under this Section 8.1(e) on account of an inaccuracy in the Company's or the Selling Stockholders' representations and warranties that is curable by the Company or the Selling Stockholders or on account of a breach of a covenant by the Company or the Selling Stockholders that is curable by the Company or the Selling Stockholders unless the Company or the Selling Stockholders fail to cure such inaccuracy or breach within five days after receiving written notice from the Purchaser of such inaccuracy or breach; (f) by the Agent if any of the Purchaser's representations and warranties contained in this Agreement shall have been materially inaccurate as of the date of this Agreement or shall have become materially inaccurate as of any subsequent date (as if made on such subsequent date), or if any of the Purchaser's covenants contained in this Agreement shall have been breached in any material respect; provided, however, that the Agent may not terminate this Agreement under this Section 8.1(f) on account of an inaccuracy in the Purchaser's representations and warranties that is curable by the Purchaser or on account of a breach of a covenant by the Purchaser that is curable by the Purchaser unless the Purchaser fails to cure such inaccuracy or breach within five days after receiving written notice from the Agent of such inaccuracy or breach; (g) by the Purchaser if the Closing has not taken place on or before December 3, 1999 (other than as a result of any failure on the part of the Purchaser to comply with or perform any covenant or obligation of the Purchaser set forth in this Agreement); 43. 50 (h) by the Agent if the Closing has not taken place on or before December 3, 1999 (other than as a result of the failure on the part of the Company, any of the Selling Stockholders or either of the Trusts or the Trustees acting on their behalf to comply with or perform any covenant or obligation set forth in this Agreement or in any other agreement or instrument delivered to the Purchaser); or (i) by the mutual consent of the Purchaser and the Agent. 8.2 TERMINATION PROCEDURES. If the Purchaser wishes to terminate this Agreement pursuant to Section 8.1(a), Section 8.1(c), Section 8.1(e) or Section 8.1(g), the Purchaser shall deliver to the Agent a written notice stating that the Purchaser, subject to Section 8.1(e), is terminating this Agreement and setting forth a brief description of the basis on which the Purchaser is terminating this Agreement. If the Agent wishes to terminate this Agreement pursuant to Section 8.1(b), Section 8.1(d), Section 8.1(f) or Section 8.1(h), the Agent shall deliver to the Purchaser a written notice stating that the Agent, subject to Section 8.1(f), is terminating this Agreement and setting forth a brief description of the basis on which the Agent is terminating this Agreement. 8.3 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to Section 8.1, all further obligations of the parties under this Agreement shall terminate; provided, however, that: (a) the parties shall, in all events, remain bound by and continue to be subject to the provisions set forth in Section 10; and (b) the parties shall, in all events, remain bound by and continue to be subject to Section 4.6. 8.4 EXCLUSIVITY OF TERMINATION RIGHTS. The termination rights provided in Section 8.1 shall be the exclusive remedy under this Agreement in the event that this Agreement is terminated by any party hereto pursuant to the provisions of this Section 8. 8.5 AUDIT FEES AND EXPENSES. If this Agreement is terminated by the Agent pursuant to Section 8.1(f), the Purchaser shall pay all accounting fees and expenses payable to KPMG LLP in connection with its audit (the "Audit") of the Interim Balance Sheet and the related consolidated statement of income and retained earnings and statement of cash flows of the Company and its Subsidiaries for the nine months ended September 30, 1999, together with the notes thereto; provided, however, that, if the Purchaser is required to pay any accounting fees or expenses of KPMG LLP pursuant to this Section 8.5, any report and opinion of KPMG LLP relating to the Audit shall be the property of and be held in the possession of the Purchaser, and any other party to this Agreement which has any copies of such report or opinion in its possession shall not make any use of and shall destroy all such copies immediately after termination of this Agreement pursuant to Section 8.1(f). 44. 51 SECTION 9. INDEMNIFICATION, ETC. 9.1 SURVIVAL OF REPRESENTATIONS, ETC. (a) The representations and warranties made by the Company and the Selling Stockholders (including, subject to the immediately succeeding proviso, the representations and warranties set forth in Section 2 and the representations set forth in the Company Compliance Certificate and the Selling Stockholder Compliance Certificates) shall survive the Closing and shall expire on the first anniversary of the Closing Date; provided, however, that the Specified Representations shall expire on the Applicable Specified Representations Expiration Date; and provided further, however, that if, at any time prior to the first anniversary of the Closing Date (with respect to the representations and warranties made by the Company and the Selling Stockholders other than the Specified Representations) or the Applicable Specified Representations Expiration Date (with respect to the Specified Representations), any Indemnitee (acting in good faith) delivers to the Agent a written notice alleging the existence of an inaccuracy in or a breach of any of such representations and warranties (and setting forth in reasonable detail the basis for such Indemnitee's belief that such an inaccuracy or breach may exist) and asserting a claim for recovery under Section 9.2 based on such alleged inaccuracy or breach, then the claim asserted in such notice shall survive the first anniversary of the Closing or the Applicable Specified Representations Expiration Date, as applicable, until such time as such claim is fully and finally resolved. All representations and warranties made by the Purchaser shall terminate and expire as of the Closing Date, and any liability of the Purchaser with respect to such representations and warranties shall thereupon cease. (b) The representations, warranties, covenants and obligations of the Company, the Selling Stockholders, the Trusts and the Trustees acting on their behalf, and the rights and remedies that may be exercised by the Indemnitees, shall not be limited or otherwise affected by or as a result of any information furnished to, or any investigation made by or knowledge of, any of the Indemnitees or any of their Representatives. (c) For purposes of this Agreement, each statement or other item of information set forth in the Disclosure Schedule or in any update to the Disclosure Schedule shall be deemed to be a representation and warranty made by the Company and the Selling Stockholders in this Agreement. 9.2 INDEMNIFICATION BY SELLING STOCKHOLDERS. (a) The Selling Stockholders, jointly and severally, shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees for, any Damages which are directly or indirectly suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any third-party claim) and which arise directly or indirectly from or as a direct or indirect result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach of any representation or warranty of the Company or any of the Selling Stockholders set forth in this Agreement (without giving 45. 52 effect to any "Material Adverse Effect" or other materiality qualification or any similar qualification contained or incorporated directly or indirectly in such representation or warranty, and without giving effect to any update to the Disclosure Schedule delivered by the Company or any Selling Stockholder to the Purchaser prior to the Closing) or in the Company Compliance Certificate or any Selling Stockholder Compliance Certificate; (ii) any inaccuracy in or breach of any representation or warranty made by the Company or any of the Selling Stockholders in this Agreement (without giving effect to any "Material Adverse Effect" or other materiality qualification or any similar qualification contained or incorporated directly or indirectly in such representation or warranty, and without giving effect to any update to the Disclosure Schedule delivered by the Company or any Selling Stockholder to the Purchaser prior to the Closing) or in the Company Compliance Certificate or any Selling Stockholder Compliance Certificate, in each case as if such representation or warranty were made on and as of the Closing Date; (iii) any breach of any covenant or obligation of the Company, any of the Selling Stockholders or either of the Trusts or the Trustees acting on their behalf; (iv) any obligation or liability to which any of the Acquired Corporations or any of the Indemnitees may become subject and that arises directly or indirectly from or relates directly or indirectly to (A) any product manufactured or sold, or any service performed, by or on behalf of any of the Acquired Corporations on or at any time prior to the Closing Date, (B) the presence of any Hazardous Material at any site owned, leased, occupied or controlled by any of the Acquired Corporations on or at any time prior to the Closing Date, or (C) the generation, manufacture, production, transportation, importation, use, treatment, refinement, processing, handling, storage, discharge, release or disposal of any Hazardous Material (whether lawfully or unlawfully) by or on behalf of any of the Acquired Corporations on or at any time prior to the Closing Date; (v) any matter identified or referred to in Part 2.12 or Part 2.19 of the Disclosure Schedule; or (vi) any Legal Proceeding relating directly or indirectly to any inaccuracy or breach, alleged inaccuracy or breach, obligation, liability or other matter of the type referred to in clause "(i)," "(ii)," "(iii)," "(iv)," or "(v)" above (including any Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 9). (b) The Selling Stockholders acknowledge and agree that, if there is any inaccuracy or breach of any representation, warranty or other provision relating to any of the Acquired Corporations or the business, condition, assets, liabilities, operations, financial performance, net income or prospects of the Acquired Corporations, or if any of the Acquired Corporations becomes subject to any obligation or liability of the type referred to in clause "(iv)" of Section 9.2(a), then the Purchaser itself shall be deemed, by virtue of its ownership of common stock of the Company, to have incurred Damages as a result of such inaccuracy, breach, obligation or liability. Nothing contained in this Section 9.2(b) shall have the effect of (i) limiting the circumstances under which the Purchaser may otherwise be deemed to have 46. 53 incurred Damages for purposes of this Agreement, (ii) limiting the other types of Damages that the Purchaser may be deemed to have incurred (whether in connection with any such inaccuracy, breach, obligation or liability or otherwise), or (iii) limiting the rights of the Company or any of the Indemnitees under this Section 9.2. 9.3 THRESHOLD. The Selling Stockholders shall not be required to make any indemnification payment pursuant to Section 9.2 for any inaccuracy or breach of any of their representations, warranties, covenants or obligations set forth in this Agreement or in the Company Compliance Certificate or any Selling Stockholder Compliance Certificate until such time as the total amount of all Damages (including the Damages arising from such inaccuracy or breach and all other Damages arising from any other inaccuracies or breaches of any such representations, warranties, covenants or obligations) that have been directly or indirectly suffered or incurred by any one or more of the Indemnitees, or to which any one or more of the Indemnitees has or have otherwise become subject, exceeds $100,000 (the "Indemnity Basket") in the aggregate. The parties hereto hereby agree that the amount of the Indemnity Basket may be reduced from time to time in accordance with the provisions of Section 5.13 of this Agreement. At such time as the total amount of such Damages exceeds $100,000 (or the then current amount of the Indemnity Basket following any reduction to the Indemnity Basket pursuant to Section 5.13 of this Agreement) in the aggregate, the Indemnitees shall be entitled to be indemnified against the portion of such Damages exceeding $100,000 (or such then current amount of the Indemnity Basket). 9.4 RIGHT OF OFFSET OF INDEMNIFICATION CLAIMS; AGGREGATE LIABILITY OF SELLING STOCKHOLDERS. Subject to Section 9.3, in the event any Indemnitee shall assert any claim prior to the first anniversary of the Closing Date that such Indemnitee has suffered or incurred any Damages for which such Indemnitee is entitled to indemnification under this Section 9, such Indemnitee's sole recourse with respect to the Damages relating to such claim (other than for claims asserted prior to the first anniversary of the Closing Date that are related to fraud, tortious misrepresentation or willful or reckless misconduct) shall be to offset any such Damages against the principal amount of the Note in accordance with the procedures set forth in Section 9.11. Any payment of insurance proceeds received by any Indemnitee prior to the first anniversary of the Closing Date for Damages that were previously offset against the principal amount of the Note shall result in an increase in the principal amount of the Note as provided for in Section 9.11. With respect to any claim asserted by any Indemnitee on or following the first anniversary of the Closing Date for Damages that such Indemnitee has suffered or incurred and is entitled to be indemnified, compensated or reimbursed for under this Section 9 (other than claims asserted on or following the first anniversary of the Closing Date that are related to fraud, tortious misrepresentation or willful or reckless misconduct), the aggregate liability of the Selling Stockholders to such Indemnitee under this Section 9 shall not exceed the amount by which $3,000,000 exceeds the sum of (i) amounts for Damages for which insurance proceeds were not received by the applicable Indemnitee prior to the first anniversary of the Closing Date and that were previously offset against the principal amount of the Note in accordance with the procedures set forth in Section 9.11 and (ii) amounts for Damages for which insurance proceeds were not paid to the Agent pursuant to Section 9.8 and that relate to claims asserted by any Indemnitee on or following the first anniversary of the Closing Date that such Indemnitee was previously indemnified, compensated or reimbursed for by any Selling Stockholder under this Section 9. 47. 54 9.5 NO CONTRIBUTION. Each Selling Stockholder waives, and acknowledges and agrees that such Selling Stockholder shall not have and shall not exercise or assert or attempt to exercise or assert, any right of contribution or right of indemnity or any other right or remedy against any of the Acquired Corporations in connection with any indemnification obligation or any other liability to which such Selling Stockholder may become subject under this Agreement or any agreement referred to in this Agreement or otherwise in connection with any of the transactions contemplated by this Agreement. 9.6 DEFENSE OF THIRD PARTY CLAIMS. In the event of the assertion or commencement by any Person of any claim or Legal Proceeding (whether against any of the Acquired Corporations, against any Indemnitee or against any other Person) with respect to which any of the Selling Stockholders may become obligated to indemnify, hold harmless, compensate or reimburse any Indemnitee pursuant to this Section 9, the Purchaser shall have the right, at its election, to designate the Agent to assume the defense of such claim or Legal Proceeding at the sole expense of the Selling Stockholders. If the Purchaser so elects to designate the Agent to assume the defense of any such claim or Legal Proceeding: (a) the Agent shall proceed to defend such claim or Legal Proceeding in a diligent manner with counsel satisfactory to the Purchaser; (b) the Purchaser shall make available to the Agent any non-privileged documents and materials in the possession of the Purchaser that may be necessary to the defense of such claim or Legal Proceeding; (c) the Agent shall keep the Purchaser informed of all material developments and events relating to such claim or Legal Proceeding; (d) the Purchaser shall have the right to participate in the defense of such claim or Legal Proceeding; (e) the Agent shall not settle, adjust or compromise such claim or Legal Proceeding without the prior written consent of the Purchaser; and (f) the Purchaser may at any time (notwithstanding the prior designation of the Agent to assume the defense of such claim or Legal Proceeding) assume the defense of such claim or Legal Proceeding. If the Purchaser does not elect to designate the Agent to assume the defense of any such claim or Legal Proceeding (or if, after initially designating the Agent to assume such defense, the Purchaser elects to assume such defense), the Purchaser may proceed with the defense of such claim or Legal Proceeding on its own. If the Purchaser so proceeds with the defense of any such claim or Legal Proceeding on its own: (i) the Purchaser shall notify the Agent in writing that it is doing so and keep the Agent informed of all material developments and events relating to such claim or Legal Proceeding; 48. 55 (ii) all expenses relating to the defense of such claim or Legal Proceeding (whether or not incurred by the Purchaser) shall be satisfied by offsetting the principal amount of the Note in accordance with the procedures set forth in Section 9.11 or, otherwise, subject to Section 9.4, shall be borne and paid exclusively by the Selling Stockholders; (iii) the Selling Stockholders shall make available to the Purchaser any documents and materials in the possession or control of any of the Selling Stockholders that may be necessary to the defense of such claim or Legal Proceeding; (iv) if such claim or Legal Proceeding is a Minor Claim or Legal Proceeding, the Purchaser shall have the right to settle, adjust or compromise such claim or Legal Proceeding without the consent of the Agent; and (v) if such claim or Legal Proceeding is not a Minor Claim or Legal Proceeding, the Purchaser may only settle, adjust or compromise such claim or Legal Proceeding with the consent of the Agent; provided, however, that the Agent shall not unreasonably withhold such consent. 9.7 EXERCISE OF REMEDIES BY INDEMNITEES OTHER THAN PURCHASER. No Indemnitee (other than the Purchaser or any successor thereto or assign thereof) shall be permitted to assert any indemnification claim or exercise any other remedy under this Agreement unless the Purchaser (or any successor thereto or assign thereof) shall have consented to the assertion of such indemnification claim or the exercise of such other remedy. 9.8 INSURANCE PROCEEDS. In the event that any Indemnitee receives any insurance proceeds that compensate it, in whole or in part, for any Damages suffered or incurred by such Indemnitee, the amount of such insurance proceeds, net of Taxes, shall be deducted from the amount that such Indemnitee is otherwise entitled to under this Section 9 with respect to such Damages, or, if such Indemnitee has been previously indemnified, compensated or reimbursed for such Damages under this Section 9, such Indemnitee shall promptly notify the Agent of the amount of such insurance proceeds, net of Taxes (if the insurance proceeds are received by such Indemnitee prior to the first anniversary of the Closing Date), or otherwise pay the Agent, on behalf of the Selling Stockholders, the amount of such insurance proceeds, net of Taxes, up to the amount that such Indemnitee has been previously indemnified, compensated or reimbursed for under this Section 9 with respect to such Damages. The Purchaser agrees that it shall seek recovery for Damages under any applicable insurance policies. 9.9 EXCLUSIVE REMEDY. The remedies provided by this Section 9 shall constitute the exclusive remedies available to the Indemnitees with respect to inaccuracies in or breaches of representations and warranties of the Company or any of the Selling Stockholders set forth in this Agreement or in the Company Compliance Certificate or any Selling Stockholder Compliance Certificate (whether those inaccuracies or breaches existed on the date made or as of the Closing Date), other than claims for inaccuracies or breaches related to fraud, tortious misrepresentation or willful or reckless misconduct. 49. 56 9.10 NOTE TO BE HELD AS SECURITY. The Note shall be held by the Agent as security for the Selling Stockholders' indemnification obligations under this Section 9 until the date that is one year after the Closing Date (the "Termination Date"). In addition, to the extent that, on the Termination Date, (i) any Claimed Amount (as defined in Section 9.11(b) below) exists for which (A) the Agent has not delivered a Response Notice (as defined in Section 9.11(b) below) and (B) with respect to which the Agent's 20-day period to do so pursuant to Section 9.11(b) has not expired or (ii) any Contested Amount (as defined in Section 9.11(e) below) exists (all such Claimed Amounts and Contested Amounts referred to in the immediately preceding clauses (i) and (ii) being hereinafter referred to in aggregate as the "Termination Date Amount"), the Note shall continue to be held by the Agent as security for the Selling Stockholders' indemnification obligations under this Section 9. The Agent shall continue to hold the Note as security pursuant to the immediately preceding sentence until the date (the "Subsequent Termination Date") on which all such Claimed Amounts and/or Contested Amounts referred to therein shall have been resolved in accordance with the provisions of Section 9.11. The Note and the Real Property Note shall be held by the Agent in trust and shall not be subject to (i) any sale, assignment, transfer or other disposition or (ii) any lien, attachment, pledge, hypothecation or other judicial process of any creditor of any party hereto. 9.11 ADMINISTRATION OF NOTE BY THE AGENT. The Agent shall administer the Note as follows: (a) If any Indemnitee has incurred or suffered Damages for which it is or may be entitled to indemnification under this Section 9 and such Indemnitee is cognizant of such Damages prior to the Termination Date, such Indemnitee may, but is not obligated hereunder to, on or prior to the Termination Date, give written notice of such claim (a "Claim Notice") to the Agent. In the event that any Indemnitee gives a Claim Notice to the Agent on or prior to the Termination Date pursuant to the immediately preceding sentence, such Indemnitee's sole recourse for the Damages asserted in such Claim Notice (other than Damages related to fraud, tortious misrepresentation or willful or reckless misconduct) shall be to offset such Damages against the principal amount of the Note pursuant to the provisions of this Section 9.11. (b) Each Claim Notice given to the Agent pursuant to Section 9.11(a) above shall state the amount of Claimed Damages (the "Claimed Amount") and the basis for such claim. Within 20 days after delivery of a Claim Notice, the Agent shall provide to the Purchaser a written response (the "Response Notice") in which the Agent shall: (i) agree that the full Claimed Amount may be offset against the principal amount of the Note, (ii) agree that part, but not all, of the Claimed Amount (the "Agreed Amount") may be offset against the principal amount of the Note, or (iii) contest the use of any of the Claimed Amount to offset the principal amount of the Note. The Agent may contest the use of any of the Claimed Amount to offset the principal amount of the Note only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnitee is entitled to indemnification under this Section 9. If no Response Notice is delivered by the Agent within such 20-day period, the Agent shall be deemed to have agreed that an amount equal to all of the Claimed Amount may be offset against the principal amount of the Note. (c) If the Agent in the Response Notice agrees (or, pursuant to the last sentence of the immediately preceding paragraph, is deemed to have agreed) that the Claimed 50. 57 Amount may be offset against the principal amount of the Note, the Purchaser shall instruct the Agent in writing to endorse a subtraction on Schedule A to the Note to effect a reduction in its principal amount by the amount of the Claimed Amount, and the Agent shall, as promptly as practicable following the receipt of such written instruction, make such endorsement. (d) If the Agent in the Response Notice agrees that part, but not all, of the Claimed Amount may be offset against the principal amount of the Note the Purchaser shall instruct the Agent in writing to endorse a subtraction on Schedule A to the Note to effect a reduction in its principal amount by the amount of the Agreed Amount, and the Agent shall, as promptly as practicable following the receipt of such written instruction, make such endorsement. (e) If the Agent in the Response Notice contests the use of all or part of the Claimed Amount to offset the principal amount of the Note (the "Contested Amount"), and the Contested Amount is $250,000 or more (a "Non-Arbitration Contested Amount") the Agent shall only endorse a subtraction on Schedule A to the Note upon (i) delivery of a settlement agreement executed by the Purchaser and the Agent that sets forth instructions to the Agent as to any endorsement to Schedule A of the Note that shall be made with respect to the Non-Arbitration Contested Amount or (ii) delivery of a copy of a court order to the Agent that sets forth instructions as to any endorsement to Schedule A of the Note that shall be made with respect to the Non-Arbitration Contested Amount. The Agent shall thereupon endorse a subtraction on Schedule A of the Note if required by such settlement agreement or instructions. If the Contested Amount is less than $250,000 (an "Arbitration Contested Amount"), the matter shall be settled by binding arbitration in California. All claims shall be settled by one arbitrator in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Agent and the Purchaser shall agree on one arbitrator within fifteen days of delivery of the Response Notice contesting the Claimed Amount; provided, however, that failing such agreement within fifteen days of delivery of such Response Notice, the arbitrator shall be appointed in accordance with the AAA Rules. There shall be limited discovery prior to the arbitration hearing, subject to the discretion of the arbitrator, as follows: (i) exchange of witness lists and copies of documentary evidence and documents related to or arising out of the issues to arbitrated, (ii) depositions of all party witnesses, and (iii) such other depositions as may be allowed by the arbitrator upon a showing of good cause. Depositions shall be conducted in accordance with the California Code of Civil Procedure. Each of (i) the Purchaser and (ii) the Selling Stockholders shall bear one-half of the fees and expenses of the arbitrator. The arbitrator shall decide the matter to be arbitrated pursuant hereto within sixty days after his or her appointment. The arbitrator's decision shall relate solely to whether the Purchaser is entitled to offset the Arbitration Contested Amount (or a portion thereof) against the principal amount of the Note pursuant to the terms of this Agreement. If the arbitrator decides that the Purchaser is entitled to offset at least a majority of the Arbitration Contested Amount against the principal amount of the Note, the Selling Stockholders shall pay the Purchaser's costs and expenses (including counsel fees) relating to such arbitration. If the arbitrator decides that the Purchaser is not entitled to offset at least a majority of the Arbitration Contested Amount against the principal amount of the Note, the Purchaser shall pay the Agent's costs and expenses (including counsel fees) relating to such arbitration. The final decision of the arbitrator shall be furnished to the Agent and the Purchaser in writing, shall set forth instructions, if applicable, as 51. 58 to any endorsement to Schedule A of the Note that shall be made with respect to the Arbitration Contested Amount, shall constitute a conclusive determination of the issue in question, binding upon the Agent, the Purchaser, the Selling Stockholders and the Trusts, and shall not be contested by any of them. Upon receipt of the written decision of the arbitrator, the Agent shall thereupon endorse a subtraction on Schedule A of the Note if required by such decision. The arbitrator's decision may be used in a court of law only for the purpose of seeking its enforcement. Once the portion of a Claimed Amount that is a Contested Amount has become the subject of a settlement agreement, court order or arbitrator's written decision pursuant to the preceding two paragraphs and the Agent has endorsed all subtractions on Schedule A of the Note required by such settlement agreement, court order or written decision, such Contested Amount shall no longer be deemed a "Contested Amount" for purposes of this Agreement. (f) If the Agent receives written instructions from any Indemnitee pursuant to Section 9.8 (i) stating the amount of any insurance proceeds, net of Taxes, received by such Indemnitee prior to the first anniversary of the Closing Date that relate to Damages which such Indemnitee was previously indemnified, compensated or reimbursed for under this Section 9 and (ii) instructing the Agent to endorse an addition on Schedule A to the Note in the amount of such insurance proceeds, the Agent shall, as promptly as practicable following receipt of such instructions, make such endorsement. (g) If the Agent receives written instructions from the Purchaser pursuant to Section 9.6(i) prior to the Termination Date or the Subsequent Termination Date, as applicable, (i) stating the amount of expenses relating to the defense of a claim or Legal Proceeding referenced therein that the Purchaser has elected to proceed with on its own and (ii) instructing the Agent to endorse a subtraction on Schedule A to the Note in the amount of such expenses, the Agent shall, as promptly as practicable following receipt of such instructions, make such endorsement. (h) The parties hereto hereby agree that no amounts shall be due under the Note until the Agent shall have endorsed all subtractions and additions on Schedule A to the Note that are required by the preceding provisions of this Section 9.11 (and, with respect to any Termination Date Amount, shall have made all such endorsements and/or received settlement agreements, court orders or arbitrator's written decisions instructing it to not do so for the entire Termination Date Amount). SECTION 10. MISCELLANEOUS PROVISIONS 10.1 JOINT AND SEVERAL LIABILITY. Subject to Section 5.7(b) and Section 9.5: (a) the Selling Stockholders jointly and severally agree that they shall be jointly and severally liable with the Company for the due and timely compliance with and performance of each of the covenants and obligations of the Company set forth in this Agreement; (b) each Selling Stockholder agrees that such Selling Stockholder shall be jointly and severally liable with each of the other Selling Stockholders for the due and timely 52. 59 compliance with and performance of each of the covenants and obligations of such other Selling Stockholders and the Trusts and the Trustees acting on their behalf set forth in this Agreement; and (c) the Company agrees that, prior to the Closing, the Company shall be jointly and severally liable with each Selling Stockholder for the due and timely compliance with and performance of each of the covenants and obligations of such Selling Stockholder set forth in this Agreement. 10.2 SELLING STOCKHOLDERS' AGENT. (a) The Selling Stockholders and the Trustees on behalf of the Trusts hereby irrevocably nominate, constitute and appoint Ali Bushehri as the agent and true and lawful attorney-in-fact of the Selling Stockholders and the Trusts (the "Agent"), with full power of substitution, to act in the name, place and stead of the Selling Stockholders and the Trusts for purposes of executing any documents and taking any actions that the Agent may, in his sole discretion, determine to be necessary, desirable or appropriate in connection with this Agreement or any agreement referred to in this Agreement or any of the transactions contemplated by this Agreement. Ali Bushehri hereby accepts his appointment as Agent. (b) The Selling Stockholders and the Trusts hereby grant to the Agent full authority to execute, deliver, acknowledge, certify and file on behalf of the Selling Stockholders (in the name of any or all of the Selling Stockholders or otherwise) and the Trusts (in the name of either or both of the Trusts or otherwise) any and all documents that the Agent may, in his sole discretion, determine to be necessary, desirable or appropriate, in such forms and containing such provisions as the Agent may, in his sole discretion, determine to be appropriate (including the General Release referred to in Section 1.3(b)(iii), any Selling Stockholder Compliance Certificate and any amendment to or waiver of rights under this Agreement or any agreement referred to in this Agreement). Notwithstanding anything to the contrary contained in this Agreement or any agreement referred to in this Agreement: (i) the Purchaser shall be entitled to deal exclusively with the Agent on all matters relating to this Agreement or any agreement referred to in this Agreement and the transactions contemplated by this Agreement that involve the Selling Stockholders or the Trusts (including all matters relating to any notice to, or any Consent to be given or action to be taken by, any Selling Stockholder or either Trust); and (ii) each Indemnitee shall be entitled to rely conclusively (without further evidence of any kind whatsoever) on any document executed or purported to be executed on behalf of any Selling Stockholder or either Trust by the Agent, and on any other action taken or purported to be taken on behalf of any Selling Stockholder or either Trust by the Agent, as fully binding upon such Selling Stockholder or Trust, as the case may be. (c) The Selling Stockholders and the Trustees on behalf of the Trusts recognize and intend that the power of attorney granted in Section 10.2(a): (i) is coupled with an interest and is irrevocable; 53. 60 (ii) may be delegated by the Agent; and (iii) shall survive the death or incapacity of each of the Selling Stockholders and the termination of each of the Trusts. (d) The Agent shall be entitled to treat as genuine, and as the document it purports to be, any letter, facsimile, telex or other document that is believed by him to be genuine and to have been telexed, telegraphed, faxed or cabled by a Selling Stockholder or a Trustee on behalf of a Trust or to have been signed and presented by a Selling Stockholder or a Trustee on behalf of a Trust. (e) If the Agent shall die, become disabled or otherwise be unable to fulfill his responsibilities hereunder, the Selling Stockholders and the Trustees on behalf of the Trusts shall, within ten days after such death or disability, appoint a successor to the Agent and immediately thereafter notify the Purchaser of the identity of such successor. Any such successor shall succeed the Agent as Agent hereunder. If for any reason there is no Agent at any time, all references herein to the Agent shall be deemed to refer to the Selling Stockholders and the Trustees on behalf of the Trusts. (f) All expenses incurred by the Agent in connection with the performance of his duties as Agent shall be borne and paid by the Selling Stockholders. 10.3 FURTHER ASSURANCES. Each party hereto shall execute and/or cause to be delivered to each other party hereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (prior to, at or after the Closing) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement. 10.4 FEES AND EXPENSES. (a) Without limiting the generality of anything contained in Section 10.4(b), and subject to Section 1.2, the Selling Stockholders shall bear and pay all fees, costs and expenses (including all legal fees and expenses payable to Ferrari, Olsen, Ottoboni & Bebb, LLP, all of the Aggregate Accounting Fees to the extent that the Aggregate Accounting Fees do not exceed $40,000, and all investment banking and other fees and expenses payable to Broadview Associates LLC, but not including any Registration Expenses) that have been incurred or that are in the future incurred by, on behalf of or for the benefit of the Company, any of the Selling Stockholders or either of the Trusts or the Trustees on their behalf in connection with: (i) the negotiation, preparation and review of any term sheet or similar document relating to any of the transactions contemplated by this Agreement; (ii) the investigation and review conducted by the Purchaser and its Representatives with respect to the business of the Acquired Corporations (and the furnishing of information to the Purchaser and its Representatives in connection with such investigation and review); (iii) the negotiation, preparation and review of this Agreement (including the Disclosure Schedule), the other agreements referred to in this Agreement and all 54. 61 certificates, opinions and other instruments and documents delivered or to be delivered in connection with the transactions contemplated by this Agreement; (iv) the preparation and submission of any filing or notice required to be made or given in connection with any of the transactions contemplated by this Agreement, and the obtaining of any Consent required to be obtained in connection with any of such transactions; and (v) the consummation and performance of the transactions contemplated by this Agreement. Subject to Section 1.2 and the immediately succeeding sentence, neither the Purchaser nor any of the Acquired Corporations shall bear or pay, and the Selling Stockholders shall not permit the Purchaser or any of the Acquired Corporations to bear or pay, any such fees, costs or expenses. The Purchaser shall pay all the Aggregate Accounting Fees to the extent that the Aggregate Accounting Fees exceed $40,000. (b) Subject to the provisions of Section 9 (including the indemnification and other obligations of the Selling Stockholders thereunder), the Purchaser shall bear and pay all fees, costs and expenses (including all legal fees and expenses payable to Cooley Godward LLP and all investment banking and other fees and expenses payable to Banc of America Securities LLC, but not including any Selling Expenses) that have been incurred or that are in the future incurred by or on behalf of the Purchaser in connection with: (i) the negotiation, preparation and review of any term sheet or similar document relating to any of the transactions contemplated by this Agreement; (ii) the investigation and review conducted by the Purchaser and its Representatives with respect to the business of the Acquired Corporations; (iii) the negotiation, preparation and review of this Agreement, the other agreements referred to in this Agreement and all certificates, opinions and other instruments and documents delivered or to be delivered in connection with the transactions contemplated by this Agreement; and (iv) the consummation and performance of the transactions contemplated by this Agreement. 10.5 ATTORNEYS' FEES. Subject to the second paragraph of Section 9.11(e) of this Agreement, if any legal action or other legal proceeding relating to this Agreement or any agreement referred to in this Agreement or the enforcement of any provision of this Agreement or any agreement referred to in this Agreement is brought against any party hereto, 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). 10.6 NOTICES. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received when delivered (by hand, by registered mail, by courier or express 55. 62 delivery service or by facsimile) to the address or facsimile number set forth beneath the name of such party below (or to such other address or facsimile number as such party shall have specified in a written notice given to the other parties hereto): if to the Company: Oz Technologies, Inc. 3387 Investment Boulevard Hayward, CA 94545 Attention: President Facsimile: (725) 828-8050 if to Nasser Barabi: 4067 Happy Valley Rd. Lafayette, CA 94549 if to Ahmad Barabi or Iraj Barabi: 4 Margaret Lane Danville, CA 94526 if to Ali Bushehri: 468 El Rio Rd. Danville, CA 94526 with a copy to: Ferrari, Olsen, Ottoboni & Bebb, LLP 333 West Santa Clara Street, Suite 700 San Jose, CA 95113-1787 Attention: Peter D. Feinberg, Esq. Facsimile: (408) 280-0151 if to the Purchaser: Cerprobe Corporation 1150 North Fiesta Boulevard Gilbert, AZ 85233 Attention: Randal L. Buness Facsimile: (480) 333-1799 56. 63 with a copy to: Cooley Godward LLP 4365 Executive Drive, Suite 1100 San Diego, CA 92121 Attention: Lance W. Bridges, Esq. Facsimile: (858) 453-3555 10.7 PUBLICITY. Without limiting the generality of anything contained in Section 4.6, on and at all times after the Closing Date: (a) no press release or other publicity concerning any of the transactions contemplated by this Agreement shall be issued or otherwise disseminated by or on behalf of any of the Selling Stockholders or either of the Trustees on behalf of their respective Trusts, and the Selling Stockholders and the Trustees shall continue to keep the existence and terms of this Agreement and the other agreements referred to in this Agreement strictly confidential; and (b) each Selling Stockholder shall keep strictly confidential, and shall not use or disclose to any other Person, any non-public document or other information in such Selling Stockholder's possession that relates directly or indirectly to the business of any of the Acquired Corporations, the Purchaser or any affiliate of the Purchaser. 10.8 TIME OF THE ESSENCE. Time is of the essence of this Agreement. 10.9 HEADINGS. The headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. 10.10 COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement. 10.11 GOVERNING LAW; VENUE. (a) This Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the State of California (the "Agreed-to State") (without giving effect to principles of conflicts of laws). (b) Any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement may be brought or otherwise commenced in any state or federal court located in the County of San Diego, California. Each party to this Agreement: (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; 57. 64 (ii) agrees that each state and federal court located in the County of San Diego, California, shall be deemed to be a convenient forum; and (iii) 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 such party 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 Agreement or the subject matter of this Agreement may not be enforced in or by such court. (c) Each Selling Stockholder agrees that, if any Legal Proceeding is commenced against any Indemnitee by any Person in or before any court or other tribunal anywhere in the world, then such Indemnitee may proceed against such Selling Stockholder in such court or other tribunal with respect to any indemnification claim or other claim arising directly or indirectly from or relating directly or indirectly to such Legal Proceeding or any of the matters alleged therein or any of the circumstances giving rise thereto. (d) Nothing contained in Section 10.11(b) or 10.11(c) shall be deemed to limit or otherwise affect the right of any Indemnitee to commence any legal proceeding or otherwise proceed against the Company or any of the Selling Stockholders in any other forum or jurisdiction; provided, however, that the Indemnitees may not commence any legal proceeding against the Company or any Selling Stockholder in any State other than the Agreed-to State if the Company or such Selling 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 an existing judgment. (e) The Selling Stockholders irrevocably constitute and appoint the Agent as their agent to receive service of process in connection with any legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement. (f) The Purchaser and the Selling Stockholders irrevocably waive the right to a jury trial in connection with any legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement. 10.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon: the Company and its successors and assigns (if any); the Selling Stockholders and their respective personal representatives, executors, administrators, estates, heirs, successors and assigns (if any); the Trusts and the Trustees on their behalf and each of their respective successors and assigns (if any); and the Purchaser and its successors and assigns (if any). This Agreement shall inure to the benefit of: the Company; the Selling Stockholders; the Trusts and the Trustees on their behalf; the Purchaser; the other Indemnitees (subject to Section 9.7); and the respective successors and assigns (if any) of the foregoing. The Purchaser may freely assign any or all of its rights under this Agreement (including its indemnification rights under Section 9), in whole or in part, to any other Person without obtaining the consent or approval of any other party hereto or of any other Person. 58. 65 10.13 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. (a) The rights and remedies of the parties hereto shall be cumulative (and not alternative). Each Selling Stockholder and each Trustee on behalf of its respective Trust agrees that: (i) in the event of any breach or threatened breach by such Selling Stockholder or such Trustee acting on behalf of its Trust of any covenant, obligation or other provision set forth in this Agreement, the Purchaser shall be entitled (in addition to any other remedy that may be available to it) to (A) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision, and (B) an injunction restraining such breach or threatened breach; and (ii) neither the Purchaser nor any other Indemnitee shall be required to provide any bond or other security in connection with any such decree, order or injunction or in connection with any related action or Legal Proceeding. (b) The Purchaser agrees that: (i) in the event of any breach or threatened breach by the Purchaser prior to the Closing of any covenant, obligation or other provision set forth in this Agreement, the Selling Stockholders and the Trustees acting on behalf of their respective Trusts shall be entitled (in addition to any other remedy that may be available to them) to (A) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision, and (B) an injunction restraining such breach or threatened breach; and (ii) none of the Selling Stockholders or either of the Trustees acting on behalf of their respective Trusts shall be required to provide any bond or other security in connection with any such decree, order or injunction or in connection with any related action or Legal Proceeding. 10.14 WAIVER. (a) No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this 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. (b) No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. 59. 66 10.15 AMENDMENTS. This 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 Purchaser, the Company, the Agent and the Trustees on behalf of the Trusts. 10.16 SEVERABILITY. In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law. 10.17 PARTIES IN INTEREST. Except for the provisions of Section 5.7(b) and Section 9 hereof, none of the provisions of this Agreement is intended to provide any rights or remedies to any Person other than the parties hereto and their respective successors and assigns (if any). 10.18 ENTIRE AGREEMENT. This Agreement and the other agreements referred to in this Agreement set forth the entire understanding of the parties relating to the subject matter thereof and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter thereof. 10.19 CONSTRUCTION. (a) For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include the masculine and feminine genders. (b) The parties hereto agree that 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 Agreement. (c) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation." (d) Except as otherwise indicated, all references in this Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement and Exhibits to this Agreement. 60. 67 The parties hereto have caused this Agreement to be executed and delivered as of December 3, 1999. CERPROBE CORPORATION, a Delaware corporation. By:_______________________________________ Title: ___________________________________ OZ TECHNOLOGIES, INC., a California corporation. By:_______________________________________ Title: ___________________________________ By:_______________________________________ Nasser Barabi By:_______________________________________ Iraj Barabi By:_______________________________________ Ali Bushehri By:_______________________________________ Ahmad Barabi By:_______________________________________ Ali Bushehri, as Trustee for the Bushehri Trust By:_______________________________________ Ahmad Barabi, as Trustee for the Barabi Trust 61. 68 EXHIBIT A CERTAIN DEFINITIONS For purposes of the Agreement (including this Exhibit A): AAA RULES. "AAA Rules" shall have the meaning specified in Section 9.11(e) of the Agreement. ACQUIRED CORPORATION CONTRACT. "Acquired Corporation Contract" shall mean any Contract: (a) to which any of the Acquired Corporations is a party; (b) by which any of the Acquired Corporations or any of the assets of any of the Acquired Corporations is or may become bound or under which any of the Acquired Corporations has, or may become subject to, any obligation; or (c) under which any of the Acquired Corporations has or may acquire any right or interest. ACQUIRED CORPORATION PROPRIETARY ASSET. "Acquired Corporation Proprietary Asset" shall mean any Proprietary Asset owned by or licensed to any of the Acquired Corporations or otherwise used by the Acquired Corporations. ACQUIRED CORPORATION RETURNS. "Acquired Corporation Returns" shall have the meaning specified in Section 2.14(a) of the Agreement. ACQUIRED CORPORATION SOURCE CODE. "Acquired Corporation Source Code" shall mean any source code, or any portion, aspect or segment of any source code, relating to any Proprietary Asset owned by or licensed to any of the Acquired Corporations or otherwise used by any of the Acquired Corporations. ACQUIRED CORPORATIONS. "Acquired Corporations" shall have the meaning specified in Section 2.1(a) of the Agreement. ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any transaction involving: (a) the sale or other disposition of all or any portion of the business or assets of any of the Acquired Corporations (other than in the ordinary course of business); (b) the issuance, sale or other disposition of (i) any capital stock of any of the Acquired Corporations, (ii) any option, call, warrant or right (whether or not immediately exercisable) to acquire any capital stock of any of the Acquired Corporations, or (iii) any security, instrument or obligation that is or may become convertible into or exchangeable for any capital stock of any of the Acquired Corporations; or A-1. 69 (c) any merger, consolidation, business combination, share exchange, reorganization or similar transaction involving of any of the Acquired Corporations. AGENT. "Agent" shall have the meaning specified in Section 10.2 of the Agreement. AGGREGATE ACCOUNTING FEES. "Aggregate Accounting Fees" shall have the meaning specified in Section 2.11(c) of the Agreement. AGGREGATE PURCHASER SHARES. "Aggregate Purchaser Shares" shall have the meaning specified in Section 1.2(b) of the Agreement. AGGREGATE PURCHASER SHARES VALUE. The "Aggregate Purchaser Shares Value" shall be equal to $11,370,000. AGGREGATE SHARE PURCHASE PRICE. "Aggregate Share Purchase Price" shall have the meaning specified in Section 1.2 of the Agreement. AGREED AMOUNT. "Agreed Amount" shall have the meaning specified in Section 9.11(b) of the Agreement. AGREED-TO STATE. "Agreed-to State" shall have the meaning specified in Section 10.11(a) of the Agreement. AGREEMENT. "Agreement" shall mean the Stock Purchase Agreement to which this Exhibit A is attached (including the Disclosure Schedule), as it may be amended from time to time. APPLICABLE SHARE OWNERSHIP PERCENTAGE. "Applicable Share Ownership Percentage" shall have the meaning specified in Section 1.2 of the Agreement. APPLICABLE SPECIFIED REPRESENTATIONS EXPIRATION DATE. "Applicable Specified Representations Expiration Date" shall mean (i) with respect to the Environmental Representations, the Environmental Representations Expiration Date, (ii) with respect to the Proprietary Asset Representations, the Proprietary Asset Representations Expiration Date and (iii) with respect to the Tax Representations, the Tax Representations Expiration Date. APPRAISED VALUE. "Appraised Value" shall have the meaning specified in Section 5.11 of the Agreement. ARBITRATION CONTESTED AMOUNT. "Arbitration Contested Amount" shall have the meaning specified in Section 9.11(e) of the Agreement. ASSUMPTIONS. "Assumptions" shall have the meaning specified in Section 2.24 of the Agreement. AUDIT. "Audit" shall have the meaning specified in Section 8.5 of the Agreement. A-2. 70 AVERAGE INITIAL SELLING PERIOD SHARE PROCEEDS. "Average Initial Selling Period Share Proceeds" shall mean the dollar amount equal to the quotient obtained by dividing the Initial Selling Period Share Proceeds by the Initial Selling Period Shares. AVERAGE INITIAL SELLING PERIOD SHARE SHORTFALL. "Average Initial Selling Period Share Shortfall" shall mean the dollar amount equal to the difference (if any such difference exists and is greater than 0) between the Average Purchaser Common Stock Closing Price and the Average Initial Selling Period Share Proceeds. AVERAGE PURCHASER COMMON STOCK CLOSING PRICE. "Average Purchaser Common Stock Closing Price" shall mean the average closing sales price of one share of Purchaser Common Stock as quoted on The Nasdaq National Market for the period of twenty-five trading days that ends on the third day preceding the date of this Agreement (including, for any particular date during such twenty-five day trading period when a closing sales price for the Purchaser Common Stock is unavailable, the mean between the highest bid and lowest asked prices as quoted on The Nasdaq National Market as a substitute for such closing sales price). BARABI TRUST. "Barabi Trust" shall have the meaning specified in the introductory paragraph of the Agreement. BARABI TRUSTEE. "Barabi Trustee" shall have the meaning specified in the introductory paragraph of the Agreement. BUSHEHRI TRUST. "Bushehri Trust" shall have the meaning specified in the introductory paragraph of the Agreement. BUSHEHRI TRUSTEE. "Bushehri Trustee" shall have the meaning specified in the introductory paragraph of the Agreement. CALCULATED PURCHASER SHARES. "Calculated Purchaser Shares" shall mean the number of shares of Purchaser Common Stock equal to the quotient obtained by dividing $4,200,000 by the Average Purchaser Common Stock Closing Price, rounded down to the nearest whole share. CASH AMOUNT. "Cash Amount" shall have the meaning specified in Section 1.2(a) of the Agreement. CERCLA. "CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act. CLAIM NOTICE. "Claim Notice" shall have the meaning specified in Section 9.11(a) of the Agreement. CLAIMED AMOUNT. "Claimed Amount" shall have the meaning specified in Section 9.11(b) of the Agreement. CLOSING. "Closing" shall have the meaning specified in Section 1.3(a) of the Agreement. A-3. 71 CLOSING DATE. "Closing Date" shall have the meaning specified in Section 1.3(a) of the Agreement. COBRA. "COBRA" shall have the meaning specified in Section 2.15(h) of the Agreement. CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended. COMPANY. "Company" shall mean Oz Technologies, Inc., a California corporation. COMPANY COMMON STOCK. "Company Common Stock" shall have the meaning specified in Recital "A" to the Agreement. COMPANY COMPLIANCE CERTIFICATE. "Company Compliance Certificate" shall have the meaning specified in Section 6.5(f) of the Agreement. COMPANY FINANCIAL PROJECTIONS. "Company Financial Projections" shall have the meaning specified in Section 2.24 of the Agreement. COMPANY FINANCIAL STATEMENTS. "Company Financial Statements" shall have the meaning specified in Section 2.4(a) of the Agreement. CONSENT. "Consent" shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization). CONTESTED AMOUNT. "Contested Amount" shall have the meaning specified in Section 9.11(e) of the Agreement. CONTRACT. "Contract" shall mean any written, oral, implied or other agreement, contract, understanding, arrangement, instrument, note, guaranty, indemnity, representation, warranty, deed, assignment, power of attorney, certificate, purchase order, work order, insurance policy, benefit plan, commitment, covenant, assurance or undertaking of any nature. DAMAGES. "Damages" shall include any loss, damage, injury, decline in value, lost opportunity, liability, claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or advisory fee), charge, cost (including any cost of investigation) or expense of any nature. DISCLOSURE SCHEDULE. "Disclosure Schedule" shall mean the schedule (dated as of the date of the Agreement) delivered to the Purchaser on behalf of the Company and the Selling Stockholders, a copy of which is attached to the Agreement and incorporated in the Agreement by reference. EMPLOYEE. "Employee" shall have the meaning specified in Section 2.15(a) of the Agreement. EMPLOYEE BENEFIT PLAN. "Employee Benefit Plan" shall have the meaning specified in Section 3(3) of ERISA. A-4. 72 ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, equity, trust, equitable interest, claim, preference, right of possession, lease, tenancy, license, encroachment, covenant, infringement, interference, order, writ, injunction, judgment, decree, proxy, option, right of first refusal, preemptive right, community property interest, legend, defect, impediment, exception, reservation, limitation, impairment, imperfection of title, condition or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset). ENTITY. "Entity" shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity. ENVIRONMENTAL LAW. "Environmental Law" shall have the meaning specified in Section 2.16 of the Agreement. ENVIRONMENTAL REPRESENTATIONS. "Environmental Representations" shall mean the representations and warranties made by the Company and the Selling Stockholders in Section 2.16 of the Agreement. ENVIRONMENTAL REPRESENTATIONS EXPIRATION DATE. "Environmental Representations Expiration Date" shall mean the third anniversary of the Closing Date. ERISA. "ERISA" shall have the meaning specified in Section 2.15(b) of the Agreement. EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. EXISTING DIRECTORS AND OFFICERS. "Existing Directors and Officers" shall mean the directors that compose the boards of directors of the Acquired Corporations, and the officers of the Acquired Corporations, in each case immediately prior to the Closing. 401(k) PLAN. "401(k) Plan" shall have the meaning specified in Section 5.4 of the Agreement. GAAP. "GAAP" shall mean generally accepted accounting principles, applied on a basis consistent with the basis on which the Company Financial Statements were prepared. GOVERNMENT BID. "Government Bid" shall mean any quotation, bid or proposal submitted to any Governmental Body or any proposed prime contractor or higher-tier subcontractor of any Governmental Body. GOVERNMENT CONTRACT. "Government Contract" shall mean any prime contract, subcontract, letter contract, purchase order or delivery order executed or submitted to or on behalf of any Governmental Body or any prime contractor or higher-tier subcontractor, or under A-5. 73 which any Governmental Body or any such prime contractor or subcontractor otherwise has or may acquire any right or interest. GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any: (a) permit, license, certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization that is, has been or may in the future be issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body. GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal); (d) multi-national organization or body; or (e) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature. HAZARDOUS MATERIAL. "Hazardous Material" shall include: (a) any petroleum, waste oil, crude oil, asbestos, urea formaldehyde or polychlorinated biphenyl; (b) any waste, gas or other substance or material that is explosive or radioactive; (c) any "hazardous substance," "pollutant," "contaminant," "hazardous waste," "regulated substance," "hazardous chemical" or "toxic chemical" as designated, listed or defined (whether expressly or by reference) in any statute, regulation or other Legal Requirement (including CERCLA, any other so-called "superfund" or "superlien" law, the Resource Conservation Recovery Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know Act and the respective regulations promulgated thereunder); A-6. 74 (d) any other substance or material (regardless of physical form) or form of energy that is subject to any Legal Requirement which regulates or establishes standards of conduct in connection with, or which otherwise relates to, the protection of human health, plant life, animal life, natural resources, property or the enjoyment of life or property from the presence in the environment of any solid, liquid, gas, odor, noise or form of energy; and (e) any compound, mixture, solution, product or other substance or material that contains any substance or material referred to in clause "(a)", "(b)", "(c)" or "(d)" above. INDEMNITEES. "Indemnitees" shall mean the following Persons: (a) the Purchaser; (b) the Purchaser's current and future affiliates (including the Acquired Corporations and all persons who control the Purchaser within the meaning of the Securities Act); (c) the respective Representatives of the Persons referred to in clauses "(a)" and "(b)" above; and (d) the respective successors and assigns of the Persons referred to in clauses "(a)", "(b)" and "(c)" above; provided, however, that (i) none of the Acquired Corporations shall be entitled to exercise any rights as an Indemnitee prior to the Closing, and (ii) the Selling Stockholders shall not be deemed to be "Indemnitees." INDEMNITY BASKET. "Indemnity Basket" shall have the meaning specified in Section 9.3 of the Agreement. INITIAL NOTE AMOUNT. The "Initial Note Amount" shall be equal to $3,200,000 plus the dollar amount equal to the difference (positive or negative) between $11,000,000 and the Aggregate Purchaser Shares Value. INITIAL SELLING PERIOD. "Initial Selling Period" shall mean the period beginning on the date that the Registration Statement becomes effective and ending on the date that is 179 days thereafter. INITIAL SELLING PERIOD SELLING EXPENSES. "Initial Selling Period Selling Expenses" shall mean all reasonable and customary selling commissions, underwriting fees and stock transfer taxes paid to third parties with respect to the sales of the Initial Selling Period Shares during the Initial Selling Period. INITIAL SELLING PERIOD SHARE PROCEEDS. "Initial Selling Period Share Proceeds" shall mean the aggregate proceeds (net of all Initial Selling Period Selling Expenses) received by any Selling Stockholder or either Trust from sales of the Initial Selling Period Shares during the Initial Selling Period. A-7. 75 INITIAL SELLING PERIOD SHARES. "Initial Selling Period Shares" shall have the meaning specified in Section 5.6(b) of the Agreement. INTERIM BALANCE SHEET. "Interim Balance Sheet" shall have the meaning specified in Section 2.11(c) of the Agreement. J. D. EDWARDS PAYMENTS. "J. D. Edwards Payments" shall have the meaning specified in Section 5.13 of the Agreement. LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation that is, has been or may in the future be commenced, brought, conducted or heard by or before, or that otherwise has involved or may involve, any Governmental Body or any arbitrator or arbitration panel. LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation that is, has been or may in the future be issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Body. MATERIAL ADVERSE EFFECT. (a) An event, violation, inaccuracy, circumstance or other matter will be deemed to have a "Material Adverse Effect" on the Acquired Corporations if such event, violation, inaccuracy, circumstance or other matter (considered together with all other matters that would constitute exceptions to the representations and warranties of the Company and the Selling Stockholders set forth in the Agreement, the Company Compliance Certificate or any Selling Stockholder Compliance Certificate but for the presence of "Material Adverse Effect" or other materiality qualifications, or any similar qualifications, in such representations and warranties) has had or could have a material adverse effect on the business, condition, prospects, assets, liabilities, operations, financial performance or capitalization of the Acquired Corporations taken as a whole; (b) An event, violation, inaccuracy, circumstance or other matter will be deemed to have a "Material Adverse Effect" on the Purchaser if such event, violation, inaccuracy, circumstance or other matter (considered together with all other matters that would constitute exceptions to the representations and warranties of the Purchaser set forth in the Agreement but for the presence of "Material Adverse Effect" or other materiality qualifications, or any similar qualifications, in such representations and warranties) has had or could have a material adverse effect on the business, condition, prospects, assets, liabilities, operations, financial performance or capitalization of the Purchaser. A-8. 76 MATERIAL CONTRACTS. "Material Contracts" shall have the meaning specified in Section 2.10(a) of the Agreement. MINOR CLAIM OR LEGAL PROCEEDING. A "Minor Claim or Legal Proceeding" is a claim or Legal Proceeding that the Purchaser settles, adjusts or compromises and that, together with all settlements, adjustments or compromises entered into by the Purchaser without the consent of the Agent, results in aggregate liability to the Selling Stockholders under Section 9 of the Agreement of $100,000 or less. NON-ARBITRATION CONTESTED AMOUNT. "Non-Arbitration Contested Amount" shall have the meaning specified in Section 9.11(e) of the Agreement. NON-TRUST SELLING STOCKHOLDERS. "Non-Trust Selling Stockholders" shall have the meaning specified in the introductory paragraph of the Agreement. NOTE. "Note" shall have the meaning specified in Section 1.2(c) of the Agreement. PAYMENT EVIDENCE. "Payment Evidence" shall have the meaning specified in Section 5.13 of the Agreement. PENSION PLAN. "Pension Plan" shall have the meaning specified in Section 2.15(b) of the Agreement. PERSON. "Person" shall mean any individual, Entity or Governmental Body. PLANS. "Plans" shall have the meaning specified in Section 2.15(a) of the Agreement. PRE-CLOSING PERIOD. "Pre-Closing Period" shall have the meaning specified in Section 4.1 of the Agreement. PROCESSES. "Processes" shall have the meaning specified in Section 2.9(f) of the Agreement. PROPRIETARY ASSET. "Proprietary Asset" shall mean any: (i) patent, patent application, trademark (whether registered or unregistered), trademark application, trade name, fictitious business name, service mark (whether registered or unregistered), service mark application, copyright (whether registered or unregistered), copyright application, maskwork, maskwork application, trade secret, know-how, customer list, franchise, system, computer software, computer program, source code, algorithm, invention, design, blueprint, engineering drawing, proprietary product, technology, proprietary right or other intellectual property right or intangible asset; or (ii) right to use or exploit any of the foregoing. PROPRIETARY ASSET REPRESENTATIONS. "Proprietary Asset Representations" shall mean the representations and warranties made by the Company and the Selling Stockholders in Section 2.9 of the Agreement. PROPRIETARY ASSET REPRESENTATIONS EXPIRATION DATE. "Proprietary Asset Representations Expiration Date" shall mean the fifth anniversary of the Closing Date. A-9. 77 PURCHASE COMMITMENTS. "Purchase Commitments" shall have the meaning specified in Section 2.22 of the Agreement. PURCHASER. "Purchaser" shall mean Cerprobe Corporation, a Delaware corporation. PURCHASER COMMON STOCK. "Purchaser Common Stock" shall have the meaning specified in Section 1.2(b) of the Agreement. PURCHASER SEC DOCUMENTS. "Purchaser SEC Documents" shall have the meaning specified in Section 3.6(a) of the Agreement. REAL PROPERTY. "Real Property" shall mean the Purchaser's real property located at 10365 Sanden Drive, Dallas, Texas 75238. REAL PROPERTY NOTE. "Real Property Note" shall have the meaning specified in Section 1.2(d) of the Agreement. REAL PROPERTY NOTE PAYMENT DATE. "Real Property Note Payment Date" shall have the meaning specified in Section 5.11 of the Agreement. REAL PROPERTY SHORTFALL. "Real Property Shortfall" shall have the meaning specified in Section 5.11 of the Agreement. REAL PROPERTY SURPLUS. "Real Property Surplus" shall have the meaning specified in Section 5.11 of the Agreement. REAL PROPERTY VALUE. The "Real Property Value" shall be equal to $2,800,000. REGISTRATION EXPENSES. "Registration Expenses" shall mean all expenses, except for Selling Expenses, incurred by the Purchaser in complying with the registration provisions of this Agreement, including, without limitation, all registration, qualification and filing fees, printing expenses, fees and disbursements of counsel and accountants for the Purchaser, blue sky fees and expenses and the expense of any special audits incidents to or required by any such registration. REGISTRATION STATEMENT. "Registration Statement" shall have the meaning specified in Section 5.6(a) of the Agreement. RELATED PARTY. Each of the following shall be deemed to be a "Related Party": (a) each of the Selling Stockholders; (b) each individual who is, or who has at any time been, an officer or director of any of the Acquired Corporations; (c) each member of the family of each of the individuals referred to in clauses "(a)" and "(b)" above; and A-10. 78 (c) any Entity (other than the Acquired Corporations) in which any one of the individuals referred to in clauses "(a)", "(b)" and "(c)" above holds (or in which more than one of such individuals collectively hold), beneficially or otherwise, a material voting, proprietary or equity interest. REPRESENTATIVES. "Representatives" shall mean officers, directors, employees, agents, attorneys, accountants, advisors and representatives. The Selling Stockholders and all other Related Parties shall be deemed to be "Representatives" of the Company. RESPONSE NOTICE. "Response Notice" shall have the meaning specified in Section 9.11(b) of the Agreement. RULE 144. "Rule 144" shall mean Rule 144 under the Securities Act. SCHEDULED CLOSING TIME. "Scheduled Closing Time" shall have the meaning specified in Section 1.3(a) of the Agreement. SEC. "SEC" shall mean the Securities and Exchange Commission. SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933, as amended. SELLING EXPENSES. "Selling Expenses" shall mean all selling commissions, underwriting fees and stock transfer taxes applicable to the Aggregate Purchaser Shares and all fees and disbursements of counsel for any Selling Stockholder or either Trustee on behalf of its Trust. SELLING STOCKHOLDER COMPLIANCE CERTIFICATE. "Selling Stockholder Compliance Certificate" shall have the meaning specified in Section 6.5(g) of the Agreement. SELLING STOCKHOLDER and SELLING STOCKHOLDERS. "Selling Stockholder" and "Selling Stockholders" shall have the meanings specified in the introductory paragraph of the Agreement. SHARES. "Shares" shall have the meaning specified in Recital "A" to the Agreement. SOFTWARE AGREEMENTS. "Software Agreements" shall mean (a) the Software License Agreement dated July 31, 1999 between the Company and J.D. Edwards and (b) the Maintenance Agreement dated July 31, 1999 between the Company and J.D. Edwards. SOFTWARE PROCEEDING. "Software Proceeding" shall have the meaning specified in Section 5.13 of the Agreement. SOFTWARE SETTLEMENT. "Software Settlement" shall have the meaning specified in Section 5.13 of the Agreement. SPECIFIED REPRESENTATIONS. "Specified Representations" shall mean the Environmental Representations, the Proprietary Asset Representations and the Tax Representations. SPOUSAL CONSENTS. "Spousal Consents" shall have the meaning specified in Section 1.3(b)(vi) of the Agreement. A-11. 79 STOCKHOLDERS AGREEMENT. "Stockholders Agreement" shall mean the Stockholders Agreement dated December 1, 1991 among the Company, the Selling Stockholders and Nassrin Barabi-Bushehri. SUBSEQUENT PERIOD. "Subsequent Period" shall have the meaning specified in Section 5.6(b) of the Agreement. SUBSEQUENT TERMINATION DATE. "Subsequent Termination Date" shall have the meaning specified in Section 9.10 of the Agreement. SUBSIDIARY. An entity shall be deemed to be a "Subsidiary" of another Person if such Person directly or indirectly owns, beneficially or of record, (i) an amount of voting securities or other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity's board of directors or other governing body, or (ii) at least 50% of the outstanding equity or financial interests of such Entity. TAX. "Tax" shall mean any tax (including any income tax, franchise tax, capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, occupation tax, inventory tax, occupancy tax, withholding tax or payroll tax), levy, assessment, tariff, impost, imposition, toll, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), that is, has been or may in the future be (i) imposed, assessed or collected by or under the authority of any Governmental Body, or (ii) payable pursuant to any tax-sharing agreement or similar Contract. TAX REPRESENTATIONS. "Tax Representations" shall mean the representation and warranties made by the Company and the Selling Stockholders in Section 2.14 of the Agreement. TAX REPRESENTATIONS EXPIRATION DATE. Tax Representations Expiration Date shall mean the date on which the statute of limitations for examination or audit of all of the Acquired Corporation Returns by all Governmental Bodies has expired. TAX RETURN. "Tax Return" shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information that is, has been or may in the future be filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax. TERMINATION DATE. "Termination Date" shall have the meaning specified in Section 9.10 of the Agreement. TERMINATION DATE AMOUNT. "Termination Date Amount" shall have the meaning specified in Section 9.10 of the Agreement. A-12. 80 TOTAL INITIAL SELLING PERIOD SHARE SHORTFALL. "Total Initial Selling Period Share Shortfall" shall mean the dollar amount equal to the product obtained by multiplying the Initial Selling Period Shares by the Average Initial Selling Period Share Shortfall; provided, however, that if the Initial Selling Period Share Proceeds are greater than or equal to $4,000,000, no Total Initial Selling Period Share Shortfall shall be deemed to exist at the end of the Initial Selling Period. TRUSTEE and TRUSTEES. "Trustee" and "Trustees" shall have the meanings specified in the introductory paragraph of the Agreement. TRUST and TRUSTS. "Trust" and "Trusts" shall have the meanings specified in the introductory paragraph of the Agreement. TRUST SELLING STOCKHOLDERS. "Trust Selling Stockholders" shall have the meaning specified in the introductory paragraph of the Agreement. WELFARE PLANS. "Welfare Plans" shall have the meaning specified in Section 2.15(c) of the Agreement. YEAR 2000 COMPLIANT. "Year 2000 Compliant" shall have the meaning specified in Section 2.9(f) of the Agreement. A-13. EX-99.2 3 EX-99.2 1 Exhibit 2 THIS PROMISSORY NOTE MAY NOT BE (I) SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF OR (II) SUBJECTED TO ANY LIEN, ATTACHMENT, PLEDGE, HYPOTHECATION OR ANY JUDICIAL PROCESS OF ANY CREDITOR OF THE HOLDER OF THIS NOTE OR ANY PARTY TO THE STOCK PURCHASE AGREEMENT (AS DEFINED BELOW) EXCEPT PURSUANT TO A VALID WAIVER OF THE APPLICABLE PROVISIONS OF SECTION 9.10 OF SUCH AGREEMENT. THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE PAYOR (AS DEFINED BELOW), THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION. THIS PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT, DATED AS OF DECEMBER 3, 1999 AMONG BANK OF AMERICA, N.A., AS SENIOR LENDER AND THE PAYOR. THIS PROMISSORY NOTE IS SUBORDINATED IN RIGHT AND TIME OF PAYMENT TO THE PRIOR INDEFEASIBLE PAYMENT IN FULL IN CASH OF ALL SENIOR DEBT (AS DEFINED THEREIN), AND ALL LIENS AND SECURITY INTERESTS SECURING THIS PROMISSORY NOTE ARE SUBORDINATED TO LIENS AND SECURITY INTERESTS SECURING SUCH SENIOR DEBT, IN ACCORDANCE WITH THE TERMS OF SUCH SUBORDINATION AGREEMENT AND EACH HOLDER OF THIS PROMISSORY NOTE, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE TERMS AND PROVISIONS OF SUCH SUBORDINATION AGREEMENT. SUBORDINATED PROMISSORY NOTE December 3, 1999 FOR VALUE RECEIVED, CERPROBE CORPORATION, a Delaware corporation (together with its successors and assigns, the "PAYOR"), promises to pay to ALI BUSHEHRI (the "AGENT") or any successor appointed pursuant to Section 10.2(e) of the Stock Purchase Agreement (as defined below) (the "HOLDER") the principal amount of $2,830,000 (as may be adjusted from time to time as set forth herein) on the earlier of (i) December 3, 2002 or (ii) the third business day following the Payor's receipt of gross proceeds equal to or in excess of $10,000,000 from a public offering of shares of its common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, and "firm commitment" underwriting arrangements (such earlier date, the "MATURITY DATE"), along with interest on the outstanding principal amount at the rate of 10% per annum. The principal amount payable by the Payor to the Holder on the Maturity Date and the interest thereon then due are together referred to herein as the "MATURITY AMOUNT." The Maturity Amount constitutes a portion of the Aggregate Share Purchase Price (capitalized terms used and not defined herein shall have the meanings assigned to them in the Stock Purchase Agreement (the "STOCK PURCHASE AGREEMENT") dated as of 1. 2 December 3, 1999 by and among the Payor, Oz Technologies, Inc., a California corporation, Nasser Barabi, Iraj Barabi, Ali Bushehri, individually and as trustee for the Ali and Nassrin Bushehri Trust, and Ahmad Barabi, individually and as trustee for the Ahmad and Zakieh Barabi Trust) payable to the Holder on behalf of the Non-Trust Selling Stockholders and the Trusts under the Stock Purchase Agreement. The principal amount payable by the Payor to the Holder on the Maturity Date pursuant to the first sentence of this paragraph is subject to adjustment as provided in this paragraph and paragraph 1 below, and shall equal the principal amount (the "MATURITY DATE PRINCIPAL AMOUNT") on Schedule A hereto that (i) has been endorsed by the Holder and for which an Anniversary Instruction, a 5.6(b) Instruction, a 5.11 Instruction, a 5.13 Instruction or a 9.11 Instruction (each as defined herein) is attached hereto and (ii) corresponds to the Maturity Date or the date closest to the Maturity Date, as applicable (or, if no endorsements have been made by the Holder, the amount corresponding to December 3, 1999). The interest due on this note (this "NOTE") on the Maturity Date shall commence on the date hereof and be calculated on the basis of a 365-day or a 366-day year, as applicable, by reference to the outstanding principal amount under this Note as determined on a daily basis from Schedule A hereof (except that any portion of the original outstanding principal amount under this Note that has been subtracted on Schedule A hereto based on a 9.11 Instruction that has been endorsed by the Agent shall be deemed, for purposes of calculating interest under this Note, to have never been outstanding). No portion of the Maturity Amount shall be payable by the Payor to the Holder until the Maturity Date. The Payor may, at its option, on each of December 3, 2000 and December 3, 2001, pay to the Holder all or any portion of the principal and interest then outstanding under this Note to the extent that doing so does not cause the Payor to violate any covenant in any loan, security or subordination document to which the Payor is then a party. To the extent that any such payment is made and constitutes a principal payment, the Payor shall deliver a written instruction (an "Anniversary Instruction") to the Holder instructing it to endorse a subtraction on Schedule A hereto in the amount provided in such Anniversary Instruction, and the Holder shall endorse such subtraction in such amount as promptly as practicable (an in no event later than the Maturity Date) after its receipt of such Anniversary Instruction. The Holder shall attach to this Note each Anniversary Instruction pursuant to which it makes any endorsement to Schedule A of this Note, and no endorsement to Schedule A of this Note made pursuant to an Anniversary Instruction shall be effective unless a corresponding Anniversary Instruction is attached to this Note. To the extent that all or any portion of the Maturity Date Principal Amount is not paid by the Payor to the Holder on the Maturity Date (the portion of the Maturity Date Principal Amount that is not paid on the Maturity Date being herein referred to as the "UNPAID MATURITY DATE PRINCIPAL AMOUNT"), the Unpaid Maturity Date Principal Amount shall accrue interest at the rate of 10% per annum commencing on the Maturity Date until the date on which the Unpaid Maturity Date Principal Amount (and all interest thereon pursuant to this sentence) has been paid in full to the Holder, with such interest being calculated based on a 365-day or a 366-day year, as applicable, and by reference to the Unpaid Maturity Date Principal Amount as determined on a daily basis. 1. This Note shall be held by the Holder until the Termination Date or the Subsequent Termination Date, as applicable, as collateral to secure the rights of the Indemnitees under the Stock Purchase Agreement. In the event that, prior to or on the Maturity Date, the Payor instructs the Holder in writing pursuant to Section 5.6(b) of the Stock Purchase Agreement 2. 3 to endorse an addition on Schedule A hereto in the amount of the Total Initial Selling Period Share Shortfall (a "5.6(b) INSTRUCTION"), the Holder shall endorse such addition on Schedule A hereto as promptly as practicable (and in no event later than the Maturity Date) after receipt of such 5.6(b) Instruction. The Holder shall attach to this Note each 5.6(b) Instruction pursuant to which it makes any endorsement to Schedule A of this Note, and no endorsement to Schedule A of this Note made pursuant to a 5.6(b) Instruction shall be effective unless the corresponding 5.6(b) Instruction is attached to this Note. In the event that, prior to or on the Maturity Date, the Payor instructs the Holder in writing pursuant to Section 5.11 of the Stock Purchase Agreement to endorse an addition or subtraction on Schedule A hereto in the amount of the Real Property Shortfall or Real Property Surplus, as applicable (a "5.11 INSTRUCTION"), the Holder shall endorse such addition or subtraction on Schedule A hereto as promptly as practicable (and in no event later than the Maturity Date) after receipt of such 5.11 Instruction. The Holder shall attach to this Note each 5.11 Instruction pursuant to which it makes any endorsement to Schedule A of this Note, and no endorsement to Schedule A of this Note made pursuant to a 5.11 Instruction shall be effective unless the corresponding 5.11 Instruction is attached to this Note. In the event that, prior to or on the Maturity Date, the Payor instructs the Holder in writing pursuant to Section 5.13 of the Stock Purchase Agreement (a "5.13 INSTRUCTION") to endorse a subtraction on Schedule A hereto in the amount of the J.D. Edwards Payment stated in such instruction, the Holder shall endorse such subtraction on Schedule A hereto as promptly as practicable (and in no event later than the Maturity Date) after receipt of such 5.13 Instruction. The Holder shall attach to this Note each 5.13 Instruction pursuant to which it makes any endorsement to Schedule A of this Note, and no endorsement to Schedule A of this Note made pursuant to a 5.13 Instruction shall be effective unless a corresponding 5.13 Instruction is attached to this Note. In the event that, prior to or on the Maturity Date, the Holder receives, pursuant to the provisions of Section 9.11 ("SECTION 9.11") of the Stock Purchase Agreement, either (i) a written instruction or notice from the Payor, (ii) a settlement agreement executed by the Payor and the Holder, (iii) a copy of a court order or (iv) an arbitrator's written decision (any such instruction, notice, settlement agreement, court order or written decision delivered to the Holder pursuant to Section 9.11 being herein referred to as a "9.11 INSTRUCTION") instructing it to endorse a subtraction or addition on Schedule A hereto in the amount provided in such 9.11 Instruction, the Holder shall endorse such subtraction or addition in such amount as promptly as practicable (and in no event later than the Maturity Date) after its receipt of such 9.11 Instruction. The Holder shall attach to this Note each 9.11 Instruction pursuant to which it makes any endorsement to Schedule A of this Note, and no endorsement to Schedule A of this Note made pursuant to a 9.11 Instruction shall be effective unless the corresponding 9.11 Instruction is attached to this Note. No amounts shall be due under this Note (and no Unpaid Maturity Date Principal Amount shall be deemed to exist with respect to this Note) on the Maturity Date or thereafter until the Holder shall have endorsed all the subtractions and additions on Schedule A hereto required by the immediately preceding paragraph and this paragraph 1 and shall have attached all the Anniversary Instructions, 5.6(b) Instructions, 5.11 Instructions, 5.13 Instructions and 9.11 Instructions corresponding to such endorsements. If the Holder has not endorsed all the subtractions and additions on Schedule A hereto required by the immediately preceding paragraph and this paragraph 1 on the Maturity Date specified in the introductory paragraph, the Maturity Date shall become, for all purposes of this Note, the date on which the Holder has endorsed all such subtractions and additions. 3. 4 2. All amounts then owing under this Note shall become due and payable immediately in the event of a sale of all of substantially all of the Payor's assets or capital stock to an unaffiliated third party or a general assignment by the Payor for the benefit of its creditors. Any date on which any of the preceding events occurs shall be deemed, for all purposes of this Note, the Maturity Date. Notwithstanding the immediately preceding sentence, if the Holder has not endorsed all the subtractions and additions on Schedule A hereto required by the second preceding paragraph and paragraph 1 on any date on which any of the preceding events occurs, the Maturity Date with respect to such event shall become, for all purposes of this Note, the date on which the Holder has endorsed all such subtractions and additions. 2a. If (i) the Payor is permitted under CRPB Investors, L.L.C.'s constitutive documents, (ii) its doing so would not cause the Payor to violate any covenant in any loan, security or subordination document to which the Payor is then a party (it being understood that the Payor shall not enter into any such document containing any such covenant after the date hereof), and (iii) the pledge of the Payor's membership interest (the "MEMBERSHIP INTEREST") in CRPB Investors, L.L.C. existing on the date hereof is released prior to the Maturity Date, the Payor shall use its best efforts to pledge the Membership Interest as security for amounts outstanding under this Note. 3. All payments of interest and principal shall be in lawful money of the United States of America and shall be made to the Holder. All payments shall be applied first to accrued interest, and thereafter to principal. 4. In the event of any default hereunder, Payor shall pay all reasonable attorneys' fees and court costs incurred by Holder in enforcing and collecting this Note. 5. Payor hereby waives demand, notice, presentment, protest and notice of dishonor. 6. The terms of this Note shall be construed in accordance with, and governed in all respects by, the internal laws of the State of California (without giving effect to principles of conflicts of laws). 4. 5 7. Any term of this Note may be amended or waived with the written consent of Payor and the Holder. CERPROBE CORPORATION By: --------------------------------- 5. 6 SCHEDULE A PRINCIPAL AMOUNT OF THE PROMISSORY NOTE The following subtractions and additions of portions of the principal amount of this Promissory Note have been made:
PRINCIPAL AMOUNT FOLLOWING SUCH PRINCIPAL AMOUNT SUBTRACTION OR DATE MADE SUBTRACTED OR ADDED ADDITION NOTATION MADE ON BEHALF OF THE HOLDER - ------------------------- ------------------- --------------- ------------------------------------- December 3, 1999 ----- $2,830,000 -----
NO ENDORSEMENT BY THE HOLDER OF THIS SCHEDULE A SHALL BE EFFECTIVE UNLESS THE CORRESPONDING ANNIVERSARY INSTRUCTION, 5.6(b) INSTRUCTION, 5.11 INSTRUCTION, 5.13 INSTRUCTION OR 9.11 INSTRUCTION (EACH AS DEFINED IN THIS NOTE) IS ATTACHED HERETO. EX-99.3 4 EX-99.3 1 Exhibit 3 THIS PROMISSORY NOTE MAY NOT BE (I) SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF OR (II) SUBJECTED TO ANY LIEN, ATTACHMENT, PLEDGE, HYPOTHECATION OR ANY JUDICIAL PROCESS OF ANY CREDITOR OF THE HOLDER OF THIS NOTE OR ANY PARTY TO THE STOCK PURCHASE AGREEMENT (AS DEFINED BELOW) EXCEPT PURSUANT TO A VALID WAIVER OF THE APPLICABLE PROVISIONS OF SECTION 9.10 OF SUCH AGREEMENT. THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE PAYOR (AS DEFINED BELOW), THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION. PROMISSORY NOTE December 3, 1999 FOR VALUE RECEIVED, CERPROBE CORPORATION, a Delaware corporation (together with its successors and assigns, the "PAYOR"), promises either (i) to pay to ALI BUSHEHRI (the "AGENT") or any successor appointed pursuant to Section 10.2(e) of the Stock Purchase Agreement (as defined below) (the "HOLDER") the principal amount of $2,800,000 on February 3, 2000 (the "MATURITY DATE"), along with interest on the outstanding principal amount at the rate of 10% per annum, or (ii) to transfer to the Holder on the Maturity Date the Real Property (capitalized terms used and not defined herein shall have the meanings assigned to them in the Stock Purchase Agreement (the "STOCK PURCHASE AGREEMENT") dated as of December 3, 1999 by and among the Payor, Oz Technologies, Inc., a California corporation, Nasser Barabi, Iraj Barabi, Ali Bushehri, individually and as trustee for the Ali and Nassrin Bushehri Trust, and Ahmad Barabi, individually and as trustee for the Ahmad and Zakieh Barabi Trust), unencumbered except to the extent of any mortgage for the benefit of the Selling Stockholders and the Trusts and minor liens that do not (in any case or in the aggregate) materially detract from the value of the Real Property on the Maturity Date. This Note (this "NOTE") constitutes a portion of the Aggregate Share Purchase Price payable to the Holder on behalf of the Non-Trust Selling Stockholders and the Trusts under the Stock Purchase Agreement. The interest due on this Note on the Maturity Date shall commence on the date hereof and be calculated on the basis of a 365-day year by reference to the outstanding principal amount under this Note as determined on a daily basis. No amounts shall be payable by the Payor to the Holder under this Note until the Maturity Date. To the extent that the Payor does not make the payment or transfer required by clause (a) or (b) of the first sentence to this paragraph on the Maturity Date, the portion of the outstanding principal amount under this Note that remains unpaid or unsatisfied on the Maturity Date shall accrue interest at the rate of 10% per annum commencing on the Maturity Date until the date on which such amount (and all interest thereon pursuant to this sentence) has been paid in full to the Holder, with such interest being calculated based on a 365-day or a 366-day year, as applicable, and by reference to the unpaid outstanding principal amount under this Note as 2 determined on a daily basis. This Note shall be deemed fully satisfied and cancelled and of no further effect whatsoever on the Maturity Date upon its payment in full pursuant to clause (a) of the first sentence to this paragraph or the transfer of the Real Property pursuant to clause (b) of the first sentence to this paragraph. 1. All amounts then owing under this Note shall become due and payable immediately in the event of a sale of all of substantially all of the Payor's assets or capital stock to an unaffiliated third party or a general assignment by the Payor for the benefit of its creditors. Any date on which any of the preceding events occurs shall be deemed, for all purposes of this Note, the Maturity Date. 2. All payments of interest and principal shall be in lawful money of the United States of America and shall be made to the Holder. All payments shall be applied first to accrued interest, and thereafter to principal. 3. In the event of any default hereunder, Payor shall pay all reasonable attorneys' fees and court costs incurred by Holder in enforcing and collecting this Note. 4. Payor hereby waives demand, notice, presentment, protest and notice of dishonor. 5. The terms of this Note shall be construed in accordance with, and governed in all respects by, the internal laws of the State of California (without giving effect to principles of conflicts of laws). 3 6. Any term of this Note may be amended or waived with the written consent of Payor and the Holder. CERPROBE CORPORATION By: EX-99.4 5 EX-99.4 1 Exhibit 4 EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement") is made this 3rd day of December, 1999, by and between Nasser Barabi ("Employee") and Oz Technologies, Inc., a California corporation ("Company"), effective December 6, 1999 ("Effective Date"). Company wishes to retain the services of Employee pursuant to this Employment Agreement, the terms and provisions of which are set forth below. 1. POSITION AND DUTIES. During the Term (as defined in Section 5) Employee will be employed by Company as its Director of Engineering and Research and Development and will perform those duties as from time to time determined by the Board of Directors of Company ("Board") or Company's CEO in accordance with the policies, practices, and bylaws of Company. Employee will serve Company faithfully, loyally, honestly, and to the best of Employee's ability. Employee will devote Employee's best efforts and substantially all of the Employee's business time to the performance of Employee's duties for, and in the business and affairs of, Company. The Board reserves the right, in its sole discretion, to change or modify Employee's position, title, and duties during the Term of this Agreement. 2. BASE SALARY. During the Term of this Agreement, Employee's base salary will be $175,000, payable in accordance with Company's customary payroll practice. Employee's base salary will be reviewed annually by the Board in accordance with Company's compensation review policies and practices, all as determined by Company in its discretion. 2 3. INCENTIVE COMPENSATION. Employee is eligible to participate in any performance-based incentive compensation program that the Board establishes for Employee, as well as any performance-based incentive compensation program established from time to time for other employees of Company in the same or similar job classification. 4. BENEFIT PLANS. Employee will be entitled to be eligible to participate in all employee benefit plans, including, but not limited to, retirement plans, life insurance plans, and health and dental plans available to other Company employees, subject to restrictions (including waiting periods) specified in the applicable Plan. Employee is entitled to four weeks of paid vacation per calendar year, with such vacation to be scheduled and taken in accordance with Company's standard vacation policies. 5. TERM AND TERMINATION. The "Term" of this Agreement shall begin on the Effective Date and will expire by its terms on December 6, 2001, unless sooner terminated in accordance with this Agreement. [NASSER AND IRAJ - 2 YEARS; ALL OTHERS - 1 YEAR]. 6. TERMINATION BY COMPANY. (a) Termination For Cause. Company may terminate this Agreement and Employee's employment for Cause at any time upon written notice. For purposes of this Agreement, "Cause" is limited to discharge resulting from a determination by Company that Employee: (i) is convicted of a felony involving dishonesty, fraud, theft, or embezzlement; (ii) 3 repeatedly fails or refuses to follow reasonable policies or directives established by Company after written notice from Company, and a reasonable opportunity by Employee to cure the failures or refusals; (iii) willfully and persistently fails to attend to the material duties or obligations imposed upon Employee under this Agreement after written notice from Company and a reasonable opportunity by Employee to cure the failure; (iv) performs an act or fails to act, which, if Employee were prosecuted and convicted, would constitute a felony involving $1,000 or more of money or property of Company; or (v) intentionally misrepresents or conceals a material fact for purposes of securing employment with Company or this Agreement. If this Agreement and Employee's employment are terminated by Company for Cause, Employee will receive no Severance Benefits. (b) Termination Without Cause. Company also may terminate this Agreement and Employee's employment at any time or elect to not renew this Agreement at the end of any Term without Cause by giving at least 30 days prior written notice to Employee. In the event Company elects to not renew this Agreement at the end of any Term, without Cause, Employee is not entitled to receive Severance Benefits pursuant to Section 9. 7. TERMINATION BY EMPLOYEE. Employee may terminate this Agreement and his employment with Company at any time by giving 90 days written notice to Company. If Employee terminates this Agreement and Employee's employment, Employee is not entitled to receive Severance Benefits. 8. DEATH OR DISABILITY. This Agreement will terminate automatically on Employee's death. Any salary or other amounts due to Employee for services rendered prior to Employee's death will be 4 paid to Employee's surviving spouse, or if Employee does not leave a surviving spouse, to Employee's estate. No other benefits will be paid to Employee's estate or heirs under this Agreement, but amounts may be payable pursuant to any life insurance or other benefit plans maintained in whole or in part by Company for the benefit of Employee, his estate, or heirs. Employee is considered "Disabled" or to be suffering from a "Disability" for purposes of this Section 8 if, in the reasonable, good faith judgment of a licensed physician selected by the Board, Employee is unable to perform the essential functions of Employee position required under this Agreement for a period of 90 consecutive business days, with or without reasonable accommodations, because of a physical or mental impairment. Any dispute relating to the existence of a Disability will be resolved by the opinion of the licensed physician selected by the Board, provided, however, that if Employee does not accept the opinion of the licensed physician selected by Company, the dispute will be resolved by the opinion of a licensed physician selected by Employee; provided further, however, that if Company does not accept the opinion of the licensed physician selected by Employee, the dispute will be finally resolved by the opinion of a licensed physician selected by the physicians selected by Company and Employee. 9. SEVERANCE BENEFITS. If this Agreement and Employee's employment with Company are terminated without Cause pursuant to Section 6(b), Employee will receive the "Severance Benefits" as provided by this Section. The Severance Benefits will equal the number of whole months of Employee's base salary remaining from the date of termination of employment to the expiration of the Term of this Agreement (as defined in Section 5) and will be payable over that number of months in accordance with Company's payroll practices. The Employee's right to 5 elect to continue coverage under the Company's group health plans pursuant to Section 601 et seq. of the Employee Retirement Income Security Act of 1974, as amended, will commence following his termination of employment with Company. Employee has no duty to mitigate damages in order to receive the benefits provided by this Section. No Severance Benefits will be paid in the event of Employee's death or disability while actively employed by Company. 10. CONFIDENTIALLY AND NON-DISCLOSURE. During the course of Employee's employment, Employee will become exposed to a substantial amount of confidential and proprietary information, including, but not limited to financial information, annual reports, audited and unaudited financial reports, strategic plans, business plans, marketing strategies, new business strategies, personnel and compensation information, and other such reports, documents, or information. If Employee's employment with Company is terminated by either party for any, reason, Employee will return to Company and Employee will not take, any copies of such documents, computer print-outs, computer tapes, floppy disks, CD ROMS, etc., in any form, format, or manner whatsoever, nor will Employee disclose this information in whole or in part to any person or entity, in any manner either directly or indirectly. Excluded from this Agreement is information that is already disclosed to third parties and is in the public domain or that Company consents to be disclosed in writing. The provisions of this Section 10 will survive the termination of this Agreement. 11. EMPLOYEE COVENANTS. 6 (a) Interests to be Protected. The parties acknowledge that during the Term, Employee will perform essential functions for Company, its employees and shareholders, and for customers of Company. Therefore, Employee will be given an opportunity to meet, work with, and develop close working relationships with Company's clients on a first-hand basis and will gain valuable insight as to the clients' operations, personnel, and need for services. In addition, Employee will have access to, and be required to work with, a considerable amount of Company's confidential and proprietary information, including but not limited to information concerning Company's methods of operation, financial information, strategic planning, operational budgets and strategies, payroll data, management systems programs, computer systems, marketing plans and strategies, merger and acquisition strategies, and customer lists. The parties acknowledge that this covenant has an extended duration; however, they agree that this covenant is reasonable and that it is necessary to protect Company, its shareholders and employees. For these and other reasons, and the fact that there are many other employment opportunities available to Employee if Employee should terminate, the parties are in full and complete agreement that the following covenants are fair and reasonable and are freely, voluntarily, and knowingly entered into. Further, each party has been given the opportunity to consult with independent legal counsel before entering into this Agreement. (b) Devotion to Employment. Employee will devote substantially all of Employee's business time and best efforts to the performance of Employee's duties on behalf of Company. During the term of employment, Employee will not at any time or place or to any extent whatsoever, either directly or indirectly, without the express written consent of Company, 7 engage in any outside employment, or in any activity competitive with or adverse to Company's business, practice or affairs, whether alone or as partner, officer, director, employee, shareholder of any corporation, or as a trustee, fiduciary, consultant, or other representative. This is not intended to prohibit Employee from engaging in nonprofessional activities such as personal investments or conducting to a reasonable extent private business affairs which may include other boards of directors' activity, as long as they do not conflict with Company. Participation to a reasonable extent in civic, social, or community activities is encouraged. (c) Notification and Disclosure. Employee will promptly and fully disclose to Company in writing, whether or not requested by Company, any and all ideas, improvements, discoveries, inventions, trademarks, proprietary information, know-how, processes, or other developments or improvements (collectively, the "Inventions"), whether or not Employee believes them to be patentable, that relate to the business of Company now or hereafter engaged in, that Employee conceives or first actually reduces to a plan, practice, or device, either individually or jointly with others, during the term of Employee's employment with Company, or within the period ending six moths after the termination thereof, and that relate to the business of Company now or hereafter engaged in, resulting from or arising out of Employee's use of Company's equipment, supplies, facilities, or trade secret information that result from any work performed by employee in his capacity as an employee of Company, whether conceived or developed during Company's business hours or otherwise. Employee will keep current, accurate, and complete records of all Inventions, which records will belong to Company and at all times be kept and stored on Company's premises. 8 (d) Ownership and Patenting of Inventions. The Inventions will be the sole and exclusive property of Company. During the term of Employee's employment by Company and at any time thereafter, Employee, at any time upon the requests of Company, will execute and deliver an assignment or assignments of any and all applications, plans, devices, and other uses relating to the Inventions that Company deems necessary or convenient to apply for, obtain, or maintain patents of the United States, and any other foreign countries, for the Inventions and to assign and convey to Company or its nominee the sole and exclusive right, title, and interest in and to the Inventions. Employee will provide any and all aid and assistance deemed necessary by Company to protect Company's interest in the Inventions with respect to any disputes arising out of any unauthorized use or infringement of the Inventions or any patents issued in relation thereto. (e) Judicial Amendment. If the scope of any provision of this Section 11 is found by a court of competent jurisdiction to be too broad to permit enforcement to its full extent, the provision will be enforced to the maximum extent permitted by law. The parties agree that the scope of any provision of this Agreement may be modified by a judge in any proceeding to enforce this Agreement, so that such provision can be enforced to the maximum extent permitted by law. If any provision of this Agreement is found to be invalid or unenforceable for any reason, it will not affect the validity of the remaining provisions of this Agreement. (f) Injunctive Relief Damages and Forfeiture. Due to the nature of Employee's position with Company, and with full realization that a violation of this Agreement will cause immediate and irreparable injury and damage, which is not readily measurable, and to 9 protect Company's interests, Employee understands and agrees that in addition to instituting legal proceedings to recover damages resulting from a breach of this Agreement, Company may seek to enforce this Agreement with an action for injunctive relief to cease or prevent any actual or threatened violation of this Agreement on the part of Employee. (g) Survival. The provisions of this Section 11, will survive the termination of this Agreement. 12. AMENDMENTS. This Agreement constitutes the entire agreement between the parties as to the subject matter hereof. Accordingly, there are no side agreements or verbal agreements other than those that are stated in this document. Any amendment, modification, or change in this Agreement must be done so in writing and signed by both parties. 13. SEVERABILITY. If a court or arbitrator declares that any provision of this Agreement is invalid or unenforceable, it will not affect or invalidate any of the remaining provisions. Further, the court has the authority to re-write that portion of the Agreement it deems unenforceable, to make it enforceable. 14. GOVERNING LAW. The law of the State of California will govern the interpretation and application of all of the provisions of this Agreement. 15. INDEMNITY. (a) General. Company will, to the fullest extent authorized by applicable law, indemnify and hold harmless Employee in any threatened, pending or completed 10 action, suit or proceeding, whether civil, criminal, administrative, or investigative against expenses, liabilities, and losses (including attorneys' fees, judgments, fines, excise taxes, or penalties and amounts paid in settlement) reasonably incurred or suffered by Employee. (b) Expenses. This right to indemnification includes the right to be paid by Company the expenses (including attorneys' fees) incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if applicable law requires, an advancement of expenses incurred by Employee will be made only if Employee agrees to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that Employee is not entitled to be indemnified for such expenses. The rights to indemnification and to the advancement of expenses are contract rights and such rights will continue as to Employee after his termination of employment and will inure to the benefit of the Indemnitee's heirs, executors and administrators. (c) Claims for Indemnification or Expenses. If a claim under either (a) or (b) above is not paid in full by Company within 60 days after Company receives a written claim, except in the case of a claim for an advancement of expenses, in which case the applicable period is 20 days, Employee may at any time thereafter bring suit against Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, Employee is entitled to be paid the expense of prosecuting or defending such suit. In any suit brought by the Employee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by Company to recover an advancement of expenses, the burden of proving that Employee is not entitled to be indemnified, or to such advancement of expenses, is on Company. 16. DISPUTE RESOLUTION. 11 (a) Mediation. Any and all disputes arising under, pertaining to or touching upon this Agreement (excepting the confidentiality and non-disclosure provisions of Section 10 hereof, and the provisions of Section 11 hereof), or the statutory rights or obligations of either party hereto, will, if not settled by negotiation, be subject to non-binding mediation before an independent mediator selected by the parties pursuant to Section 16(d) below. Any demand for mediation must be made in writing party to the dispute, by certified mail, return receipt requested, at the business address, or at the last known residence address, of Employee. The demand must set forth with reasonable specificity the basis of the dispute and the relief sought. The mediation hearing will occur at a time and place convenient to the parties in Maricopa County, Arizona, within 30 days of the date of selection or appointment of the mediator and will be governed by the National Rules for the Resolution of Employment Disputes of the American Arbitration Association ("AAA"). (b) Arbitration. If the dispute is not settled through mediation, the parties will proceed to binding arbitration before a single independent arbitrator selected pursuant to Section 16(d). The mediator shall not serve as arbitrator. ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT DISCRIMINATION TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY, OR ALLEGED EMPLOYMENT TORT COMMITTED BY COMPANY OR A REPRESENTATIVE OF COMPANY INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR STATE DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO THIS POLICY AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR WITHOUT A JURY TRIAL. The arbitration hearing will occur at a time and 12 place convenient to the parties in Alameda County, California, within 30 days of selection or appointment of the arbitrator. If Company has adopted a policy that applies to arbitrations with Employees, the arbitration will be conducted in accordance with the policy to the extent that the policy is consistent with this Agreement and the Federal Arbitration Act, 9 U.S.C. Sections 1-16. If no policy has been adopted, the arbitration will be governed by the National Rules for the Resolution of Employment Disputes of the AAA. The arbitrator will issue written findings of fact and conclusions of law, and an award, within 15 days of the date of the hearing unless the parties otherwise agree. (c) Damages. In cases of breach of contract or policy, damages will be limited to contract damages. In cases of intentional discrimination claims prohibited by statute, the arbitrator may direct payment consistent with 42 U.S.C. Section 1981(a) and the Civil Rights Act of 1991. In cases of employment tort, the arbitrator may award punitive damages if proved by clear and convincing evidence. Any award of punitive damages will not exceed two times any compensatory award and in any event, will not exceed $250,000. The arbitrator may award fees to the prevailing party and assess costs of the arbitration to the non-prevailing party. Issues of procedure, arbitrability, or confirmation of award will be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16, except that court review of the arbitrator's award will be that of an appellate court reviewing a decision of a trial judge sitting without a jury. (d) Selection of Mediators or Arbitrators. The parties will select the mediator or arbitrator form a panel list made available by the AAA. If the parties are unable to agree to a mediator or arbitrator within 10 days of receipt of a demand for mediation or 13 arbitration, the mediator or arbitrator will be chosen by alternatively striking from a list of five mediators or arbitrators obtained by Company from AAA. Employee will have the first strike. 14 IN WITNESS WHEREOF, Company and Employee have executed this Agreement effective on the date set forth above. OZ TECHNOLOGIES, INC. By: ---------------------------------- Name: ---------------------------------- Its: ---------------------------------- "EMPLOYEE" --------------------------------------- Nasser Barabi EX-99.5 6 EX-99.5 1 Exhibit 5 EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement") is made this 3rd day of December, 1999, by and between Iraj Barabi ("Employee") and Oz Technologies, Inc., a California corporation ("Company"), effective December 6, 1999 ("Effective Date"). Company wishes to retain the services of Employee pursuant to this Employment Agreement, the terms and provisions of which are set forth below. 1. POSITION AND DUTIES. During the Term (as defined in Section 5) Employee will be employed by Company as its Director of Operations and will perform those duties as from time to time determined by the Board of Directors of Company ("Board") or Company's CEO in accordance with the policies, practices, and bylaws of Company. Employee will serve Company faithfully, loyally, honestly, and to the best of Employee's ability. Employee will devote Employee's best efforts and substantially all of the Employee's business time to the performance of Employee's duties for, and in the business and affairs of, Company. The Board reserves the right, in its sole discretion, to change or modify Employee's position, title, and duties during the Term of this Agreement. 2. BASE SALARY. During the Term of this Agreement, Employee's base salary will be $175,000, payable in accordance with Company's customary payroll practice. Employee's base salary will be reviewed annually by the Board in accordance with Company's compensation review policies and practices, all as determined by Company in its discretion. 2 3. INCENTIVE COMPENSATION. Employee is eligible to participate in any performance-based incentive compensation program that the Board establishes for Employee, as well as any performance-based incentive compensation program established from time to time for other employees of Company in the same or similar job classification. 4. BENEFIT PLANS. Employee will be entitled to be eligible to participate in all employee benefit plans, including, but not limited to, retirement plans, life insurance plans, and health and dental plans available to other Company employees, subject to restrictions (including waiting periods) specified in the applicable Plan. Employee is entitled to four weeks of paid vacation per calendar year, with such vacation to be scheduled and taken in accordance with Company's standard vacation policies. 5. TERM AND TERMINATION. The "Term" of this Agreement shall begin on the Effective Date and will expire by its terms on December 6, 2001, unless sooner terminated in accordance with this Agreement. [NASSER AND IRAJ - 2 YEARS; ALL OTHERS - 1 YEAR]. 6. TERMINATION BY COMPANY. (a) Termination For Cause. Company may terminate this Agreement and Employee's employment for Cause at any time upon written notice. For purposes of this Agreement, "Cause" is limited to discharge resulting from a determination by Company that Employee: (i) is convicted of a felony involving dishonesty, fraud, theft, or embezzlement; (ii) 3 repeatedly fails or refuses to follow reasonable policies or directives established by Company after written notice from Company, and a reasonable opportunity by Employee to cure the failures or refusals; (iii) willfully and persistently fails to attend to the material duties or obligations imposed upon Employee under this Agreement after written notice from Company and a reasonable opportunity by Employee to cure the failure; (iv) performs an act or fails to act, which, if Employee were prosecuted and convicted, would constitute a felony involving $1,000 or more of money or property of Company; or (v) intentionally misrepresents or conceals a material fact for purposes of securing employment with Company or this Agreement. If this Agreement and Employee's employment are terminated by Company for Cause, Employee will receive no Severance Benefits. (b) Termination Without Cause. Company also may terminate this Agreement and Employee's employment at any time or elect to not renew this Agreement at the end of any Term without Cause by giving at least 30 days prior written notice to Employee. In the event Company elects to not renew this Agreement at the end of any Term, without Cause, Employee is not entitled to receive Severance Benefits pursuant to Section 9. 7. TERMINATION BY EMPLOYEE. Employee may terminate this Agreement and his employment with Company at any time by giving 90 days written notice to Company. If Employee terminates this Agreement and Employee's employment, Employee is not entitled to receive Severance Benefits. 8. DEATH OR DISABILITY. This Agreement will terminate automatically on Employee's death. Any salary or other amounts due to Employee for services rendered prior to Employee's death will be 4 paid to Employee's surviving spouse, or if Employee does not leave a surviving spouse, to Employee's estate. No other benefits will be paid to Employee's estate or heirs under this Agreement, but amounts may be payable pursuant to any life insurance or other benefit plans maintained in whole or in part by Company for the benefit of Employee, his estate, or heirs. Employee is considered "Disabled" or to be suffering from a "Disability" for purposes of this Section 8 if, in the reasonable, good faith judgment of a licensed physician selected by the Board, Employee is unable to perform the essential functions of Employee position required under this Agreement for a period of 90 consecutive business days, with or without reasonable accommodations, because of a physical or mental impairment. Any dispute relating to the existence of a Disability will be resolved by the opinion of the licensed physician selected by the Board, provided, however, that if Employee does not accept the opinion of the licensed physician selected by Company, the dispute will be resolved by the opinion of a licensed physician selected by Employee; provided further, however, that if Company does not accept the opinion of the licensed physician selected by Employee, the dispute will be finally resolved by the opinion of a licensed physician selected by the physicians selected by Company and Employee. 9. SEVERANCE BENEFITS. If this Agreement and Employee's employment with Company are terminated without Cause pursuant to Section 6(b), Employee will receive the "Severance Benefits" as provided by this Section. The Severance Benefits will equal the number of whole months of Employee's base salary remaining from the date of termination of employment to the expiration of the Term of this Agreement (as defined in Section 5) and will be payable over that number of months in accordance with Company's payroll practices. The Employee's right to 5 elect to continue coverage under the Company's group health plans pursuant to Section 601 et seq. of the Employee Retirement Income Security Act of 1974, as amended, will commence following his termination of employment with Company. Employee has no duty to mitigate damages in order to receive the benefits provided by this Section. No Severance Benefits will be paid in the event of Employee's death or disability while actively employed by Company. 10. CONFIDENTIALLY AND NON-DISCLOSURE. During the course of Employee's employment, Employee will become exposed to a substantial amount of confidential and proprietary information, including, but not limited to financial information, annual reports, audited and unaudited financial reports, strategic plans, business plans, marketing strategies, new business strategies, personnel and compensation information, and other such reports, documents, or information. If Employee's employment with Company is terminated by either party for any, reason, Employee will return to Company and Employee will not take, any copies of such documents, computer print-outs, computer tapes, floppy disks, CD ROMS, etc., in any form, format, or manner whatsoever, nor will Employee disclose this information in whole or in part to any person or entity, in any manner either directly or indirectly. Excluded from this Agreement is information that is already disclosed to third parties and is in the public domain or that Company consents to be disclosed in writing. The provisions of this Section 10 will survive the termination of this Agreement. 11. EMPLOYEE COVENANTS. 6 (a) Interests to be Protected. The parties acknowledge that during the Term, Employee will perform essential functions for Company, its employees and shareholders, and for customers of Company. Therefore, Employee will be given an opportunity to meet, work with, and develop close working relationships with Company's clients on a first-hand basis and will gain valuable insight as to the clients' operations, personnel, and need for services. In addition, Employee will have access to, and be required to work with, a considerable amount of Company's confidential and proprietary information, including but not limited to information concerning Company's methods of operation, financial information, strategic planning, operational budgets and strategies, payroll data, management systems programs, computer systems, marketing plans and strategies, merger and acquisition strategies, and customer lists. The parties acknowledge that this covenant has an extended duration; however, they agree that this covenant is reasonable and that it is necessary to protect Company, its shareholders and employees. For these and other reasons, and the fact that there are many other employment opportunities available to Employee if Employee should terminate, the parties are in full and complete agreement that the following covenants are fair and reasonable and are freely, voluntarily, and knowingly entered into. Further, each party has been given the opportunity to consult with independent legal counsel before entering into this Agreement. (b) Devotion to Employment. Employee will devote substantially all of Employee's business time and best efforts to the performance of Employee's duties on behalf of Company. During the term of employment, Employee will not at any time or place or to any extent whatsoever, either directly or indirectly, without the express written consent of Company, 7 engage in any outside employment, or in any activity competitive with or adverse to Company's business, practice or affairs, whether alone or as partner, officer, director, employee, shareholder of any corporation, or as a trustee, fiduciary, consultant, or other representative. This is not intended to prohibit Employee from engaging in nonprofessional activities such as personal investments or conducting to a reasonable extent private business affairs which may include other boards of directors' activity, as long as they do not conflict with Company. Participation to a reasonable extent in civic, social, or community activities is encouraged. (c) Notification and Disclosure. Employee will promptly and fully disclose to Company in writing, whether or not requested by Company, any and all ideas, improvements, discoveries, inventions, trademarks, proprietary information, know-how, processes, or other developments or improvements (collectively, the "Inventions"), whether or not Employee believes them to be patentable, that relate to the business of Company now or hereafter engaged in, that Employee conceives or first actually reduces to a plan, practice, or device, either individually or jointly with others, during the term of Employee's employment with Company, or within the period ending six moths after the termination thereof, and that relate to the business of Company now or hereafter engaged in, resulting from or arising out of Employee's use of Company's equipment, supplies, facilities, or trade secret information that result from any work performed by employee in his capacity as an employee of Company, whether conceived or developed during Company's business hours or otherwise. Employee will keep current, accurate, and complete records of all Inventions, which records will belong to Company and at all times be kept and stored on Company's premises. 8 (d) Ownership and Patenting of Inventions. The Inventions will be the sole and exclusive property of Company. During the term of Employee's employment by Company and at any time thereafter, Employee, at any time upon the requests of Company, will execute and deliver an assignment or assignments of any and all applications, plans, devices, and other uses relating to the Inventions that Company deems necessary or convenient to apply for, obtain, or maintain patents of the United States, and any other foreign countries, for the Inventions and to assign and convey to Company or its nominee the sole and exclusive right, title, and interest in and to the Inventions. Employee will provide any and all aid and assistance deemed necessary by Company to protect Company's interest in the Inventions with respect to any disputes arising out of any unauthorized use or infringement of the Inventions or any patents issued in relation thereto. (e) Judicial Amendment. If the scope of any provision of this Section 11 is found by a court of competent jurisdiction to be too broad to permit enforcement to its full extent, the provision will be enforced to the maximum extent permitted by law. The parties agree that the scope of any provision of this Agreement may be modified by a judge in any proceeding to enforce this Agreement, so that such provision can be enforced to the maximum extent permitted by law. If any provision of this Agreement is found to be invalid or unenforceable for any reason, it will not affect the validity of the remaining provisions of this Agreement. (f) Injunctive Relief Damages and Forfeiture. Due to the nature of Employee's position with Company, and with full realization that a violation of this Agreement will cause immediate and irreparable injury and damage, which is not readily measurable, and to 9 protect Company's interests, Employee understands and agrees that in addition to instituting legal proceedings to recover damages resulting from a breach of this Agreement, Company may seek to enforce this Agreement with an action for injunctive relief to cease or prevent any actual or threatened violation of this Agreement on the part of Employee. (g) Survival. The provisions of this Section 11, will survive the termination of this Agreement. 12. AMENDMENTS. This Agreement constitutes the entire agreement between the parties as to the subject matter hereof. Accordingly, there are no side agreements or verbal agreements other than those that are stated in this document. Any amendment, modification, or change in this Agreement must be done so in writing and signed by both parties. 13. SEVERABILITY. If a court or arbitrator declares that any provision of this Agreement is invalid or unenforceable, it will not affect or invalidate any of the remaining provisions. Further, the court has the authority to re-write that portion of the Agreement it deems unenforceable, to make it enforceable. 14. GOVERNING LAW. The law of the State of California will govern the interpretation and application of all of the provisions of this Agreement. 15. INDEMNITY. (a) General. Company will, to the fullest extent authorized by applicable law, indemnify and hold harmless Employee in any threatened, pending or completed 10 action, suit or proceeding, whether civil, criminal, administrative, or investigative against expenses, liabilities, and losses (including attorneys' fees, judgments, fines, excise taxes, or penalties and amounts paid in settlement) reasonably incurred or suffered by Employee. (b) Expenses. This right to indemnification includes the right to be paid by Company the expenses (including attorneys' fees) incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if applicable law requires, an advancement of expenses incurred by Employee will be made only if Employee agrees to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that Employee is not entitled to be indemnified for such expenses. The rights to indemnification and to the advancement of expenses are contract rights and such rights will continue as to Employee after his termination of employment and will inure to the benefit of the Indemnitee's heirs, executors and administrators. (c) Claims for Indemnification or Expenses. If a claim under either (a) or (b) above is not paid in full by Company within 60 days after Company receives a written claim, except in the case of a claim for an advancement of expenses, in which case the applicable period is 20 days, Employee may at any time thereafter bring suit against Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, Employee is entitled to be paid the expense of prosecuting or defending such suit. In any suit brought by the Employee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by Company to recover an advancement of expenses, the burden of proving that Employee is not entitled to be indemnified, or to such advancement of expenses, is on Company. 16. DISPUTE RESOLUTION. 11 (a) Mediation. Any and all disputes arising under, pertaining to or touching upon this Agreement (excepting the confidentiality and non-disclosure provisions of Section 10 hereof, and the provisions of Section 11 hereof), or the statutory rights or obligations of either party hereto, will, if not settled by negotiation, be subject to non-binding mediation before an independent mediator selected by the parties pursuant to Section 16(d) below. Any demand for mediation must be made in writing party to the dispute, by certified mail, return receipt requested, at the business address, or at the last known residence address, of Employee. The demand must set forth with reasonable specificity the basis of the dispute and the relief sought. The mediation hearing will occur at a time and place convenient to the parties in Maricopa County, Arizona, within 30 days of the date of selection or appointment of the mediator and will be governed by the National Rules for the Resolution of Employment Disputes of the American Arbitration Association ("AAA"). (b) Arbitration. If the dispute is not settled through mediation, the parties will proceed to binding arbitration before a single independent arbitrator selected pursuant to Section 16(d). The mediator shall not serve as arbitrator. ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT DISCRIMINATION TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY, OR ALLEGED EMPLOYMENT TORT COMMITTED BY COMPANY OR A REPRESENTATIVE OF COMPANY INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR STATE DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO THIS POLICY AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR WITHOUT A JURY TRIAL. The arbitration hearing will occur at a time and 12 place convenient to the parties in Alameda County, California, within 30 days of selection or appointment of the arbitrator. If Company has adopted a policy that applies to arbitrations with Employees, the arbitration will be conducted in accordance with the policy to the extent that the policy is consistent with this Agreement and the Federal Arbitration Act, 9 U.S.C. Sections 1-16. If no policy has been adopted, the arbitration will be governed by the National Rules for the Resolution of Employment Disputes of the AAA. The arbitrator will issue written findings of fact and conclusions of law, and an award, within 15 days of the date of the hearing unless the parties otherwise agree. (c) Damages. In cases of breach of contract or policy, damages will be limited to contract damages. In cases of intentional discrimination claims prohibited by statute, the arbitrator may direct payment consistent with 42 U.S.C. Section 1981(a) and the Civil Rights Act of 1991. In cases of employment tort, the arbitrator may award punitive damages if proved by clear and convincing evidence. Any award of punitive damages will not exceed two times any compensatory award and in any event, will not exceed $250,000. The arbitrator may award fees to the prevailing party and assess costs of the arbitration to the non-prevailing party. Issues of procedure, arbitrability, or confirmation of award will be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16, except that court review of the arbitrator's award will be that of an appellate court reviewing a decision of a trial judge sitting without a jury. (d) Selection of Mediators or Arbitrators. The parties will select the mediator or arbitrator form a panel list made available by the AAA. If the parties are unable to agree to a mediator or arbitrator within 10 days of receipt of a demand for mediation or 13 arbitration, the mediator or arbitrator will be chosen by alternatively striking from a list of five mediators or arbitrators obtained by Company from AAA. Employee will have the first strike. 14 IN WITNESS WHEREOF, Company and Employee have executed this Agreement effective on the date set forth above. OZ TECHNOLOGIES, INC. By: ___________________________________ Name:__________________________________ Its: __________________________________ "EMPLOYEE" _______________________________________ Iraj Barabi EX-99.6 7 EX-99.6 1 Exhibit 6 CONSULTING AGREEMENT THIS CONSULTING AGREEMENT (the "Agreement") is made this 3rd day of December, 1999, by and between C-MA International, Ltd. ("Consultant") and Oz Technologies, Inc. ("Company"). In consideration of the mutual promises set forth herein, the sufficiency of which is hereby acknowledged by each of the parties hereto, the parties hereby agree as follows: 1. CONSULTING SERVICES. Consultant hereby agrees to provide and perform for the benefit of Company certain financial and administrative consulting services (the "Services"), or those requested by Company and approved by the Consultant and Company hires and engages Consultant to provide Services. 2. CONSIDERATION FOR SERVICES. As consideration for each Services, Company shall pay Consultant an amount equal to $100 per hour multiplied by the number of hours worked by Consultant in the performance of such Services provided, however, that Consultant will be guaranteed at least 120 hours per month during the term of this Agreement. Company will be under no obligation to pay or reimburse Consultant for any additional services or for any costs or expenses incurred in connection with the Services, except upon Company's prior written approval. 3. COMPLETION OF TASKS; TERM OF AGREEMENT. The term of this Agreement shall commence on December 6, 1999, and shall end on March 6, 2001. However, Company has the right to terminate this Agreement for "Cause." For purposes of this Agreement, Cause shall mean Consultant is discharged resulting from a determination by Company that Consultant: (i) is convicted of a felony involving dishonesty, fraud, theft, or 2 embezzlement; (ii) repeatedly fails or refuses to follow reasonable policies or directives established by Company after written notice from Company, and a reasonable opportunity by Consultant to cure the failures or refusals; (iii) willfully and persistently fails to attend to the material duties or obligations imposed upon Consultant under this Agreement after written notice from Company and a reasonable opportunity by Consultant to cure the failure; (iv) performs an act or fails to act, which, if Consultant were prosecuted and convicted, would constitute a felony involving $1,000 or more of money or property of Company; or (v) intentionally misrepresents or conceals a material fact for purposes of securing services with Company or this Agreement. 4. BILLING FOR SERVICES. Consultant will submit invoices to Company each month for the actual number of hours worked during the previous month, and for any costs or expenses previously authorized by Company. The invoice should include a breakdown of each of the Services provided to Company, the per hour dollar rate charged for each of such Services, the number of hours worked during such time period for each of such Services, an itemization of all such costs and expenses, and any other information that Company may request provided, however, that Consultant will be guaranteed at last 100 hours per month during the term of this Agreement. Company shall make payment for all such charges incurred in accordance with the terms of this Agreement and properly reflected in such invoice to the Consultant within ten (10) business days after the receipt of each invoice. 5. CHANGE OF CONTROL PAYMENT. In the event of a "Change of Control," Consultant shall receive a payment from Company equal to the number of months remaining on the Agreement multiplied by $12,000. Consultant shall also receive a pro rata payment for any partial month. The Company shall pay such payment in a lump sum to -2- 3 Consultant within ten (10) days of the date of the Change of Control event. For purposes of this Agreement, Change of Control shall mean and include the following transactions or situations: (a) A sale, transfer, or other disposition by Cerprobe Corporation ("Cerprobe") through a single transaction or a series of transactions of securities of Cerprobe representing 30% or more of the combined voting power of Cerprobe's then outstanding securities to any "Unrelated Person" or "Unrelated Persons" acting in concert with one another. For purposes of this Section, the term "Person" shall mean and include any individual, partnership, joint venture, association, trust, corporation, or other entity (including a "group" as referred to in Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Act")). For purposes of this Section, the term "Unrelated Person" shall mean and include any Person other than the Company, or an Consultant benefit Plan of the Company. (b) A sale, transfer, or other disposition through a single transaction or a series of transactions of all or substantially all of the assets of Cerprobe to an Unrelated Person or Unrelated Persons acting in concert with one another. (c) A change in the ownership of Cerprobe through a single transaction or a series of transactions such that any Unrelated Person or Unrelated Persons acting in concert with one another become the "Beneficial Owner," directly or indirectly, of securities of Cerprobe representing at least 30% of the combined voting power of Cerprobe's then outstanding securities. For purposes of this Section, the term "Beneficial Owner" shall have the same meaning as given to that term in Rule 13d-3 promulgated under the Act, provided that any pledgee of voting securities shall not be deemed to be the Beneficial Owner thereof prior to its acquisition of voting rights with respect to such securities. -3- 4 (d) Any consolidation or merger of Cerprobe with or into an Unrelated Person, unless immediately after the consolidation or merger the holders of the common stock of Cerprobe immediately prior to the consolidation or merger are the Beneficial Owners of securities of the surviving corporation representing at least 50% of the combined voting power of the surviving corporation's then outstanding securities. (e) During any period of two (2) years, individuals who, at the beginning of such period, constituted the Board of Directors of Cerprobe cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by the vote of at least two-thirds (2/3) of the directors then still in office who were directors at the beginning of such period. (f) A change in control of Cerprobe of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Act, or any successor regulation of similar import, regardless of whether Cerprobe is subject to such reporting requirement. Notwithstanding any provision herein to the contrary, the filing of a proceeding for the reorganization of Cerprobe under Chapter 11 of the Federal Bankruptcy Code or any successor or other statute of similar import shall not be deemed to be a Change of Control for purpose of this Agreement. 6. INDEPENDENT CONTRACTOR STATUS. The relationship of Consultant to Company is that of an independent contractor, and nothing herein shall be construed or deemed as creating any other relationship. Without limiting the foregoing, the relationship between the parties hereto shall not be deemed to be that of an employer-employee, -4- 5 joint venture, or partnership. As an independent contractor, Consultant shall have the sole responsibility for paying taxes, workers compensation, employee benefits (if any), and all similar obligations, and shall be charged with performing the Services and completing the Tasks in the way that Consultant deems the most feasible or desirable in order to accomplish the Tasks in the most efficient manner possible. 7. CONFIDENTIAL INFORMATION AND WORK FOR HIRE. Consultant and Company hereby acknowledge and agree that in connection with the performance of the Services set forth herein, Consultant shall be provided with or shall otherwise be exposed to or receive certain confidential and/or proprietary information of Company or of third parties and may develop certain products, services, methods, know-how, procedures, formulae, processes, specifications, and information of a similar nature that relate to the Services rendered hereunder. Consultant therefore agrees not to disclose such information at any time unless authorized by Company or required by law. 8. AUDIT AND RECORDS. Consultant shall keep accurate records and books of account showing all charges, disbursements, and expenses made or incurred by Consultant in the performance of the Services. Company shall have the right, upon reasonable notice, to audit at any time up to one year after payment of its final invoice, the direct costs, expenses, and disbursements made with respect to the performance of the Services. 9. TITLE TO MATERIALS AND EQUIPMENT. All materials and equipment furnished by Company and all materials and equipment the cost of which shall be reimbursed to Consultant by Company hereunder are to be and remain the sole property of Company and are to be returned to Company within thirty (30) days of the expiration or earlier -5- 6 termination of this Agreement, or within ten (10) days after written demand by Company, whichever first occurs. 10. NOTIFICATION AND DISCLOSURE. Consultant will promptly and fully disclose to Company in writing, whether or not requested by Company, any and all ideas, improvements, discoveries, inventions, trademarks, proprietary information, know-how, processes, or other developments or improvements (collectively, the "Inventions"), whether or not Consultant believes them to be patentable, that relate to the business of Company now or hereafter engaged in, that Consultant conceives or first actually reduces to a plan, practice, or device, either individually or jointly with others, during the term of Consultant's employment with Company, or within the period ending six moths after the termination thereof, and that relate to the business of Company now or hereafter engaged in, resulting from or arising out of Consultant's use of Company's equipment, supplies, facilities, or trade secret information that result from any work performed by Consultant in his or her capacity as service provider for Company, whether conceived or developed during Company's business hours or otherwise. Consultant will keep current, accurate, and complete records of all Inventions, which records will belong to Company and at all times be kept and stored on Company's premises. 11. OWNERSHIP AND PATENTING OF INVENTIONS. The Inventions will be the sole and exclusive property of Company. During the term that Consultant is providing services to Company and at any time thereafter, Consultant, at any time upon the requests of Company, will execute and deliver an assignment or assignments of any and all applications, plans, devices, and other uses relating to the Inventions that Company deems necessary or convenient to apply for, obtain, or maintain patents of the United States, and any other foreign countries, for the Inventions and to assign and convey to Company or its nominee -6- 7 the sole and exclusive right, title, and interest in and to the Inventions. Consultant will provide any and all aid and assistance deemed necessary by Company to protect Company's interest in the Inventions with respect to any disputes arising out of any unauthorized use or infringement of the Inventions or any patents issued in relation thereto. 12. ASSIGNABILITY. This Agreement shall be binding upon and inure to the benefit of the parties, their legal representatives, successors, and assigns. This Agreement may not be assigned, transferred, conveyed, or encumbered, whether voluntarily or by operation of law, by Consultant without the prior written consent of Company (which may be granted or withheld in Company's sole and absolute judgment). 13. AMENDMENTS, ETC. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by each of the parties hereto. Any waiver of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which given. 14. NO WAIVER; REMEDIES. No failure on the part of Company to exercise, and no delay in exercising, any right, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 15. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the state of California. -7- 8 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. "OZ TECHNOLOGIES, INC." By: _______________________ Its: _______________________ "C-MA INTERNATIONAL" ________________________________ EX-99.7 8 EX-99.7 1 Exhibit 7 NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT is being executed and delivered as of December 3, 1999 by NASSER BARABI (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 1150 North Fiesta Boulevard, Gilbert, AZ 85233 (Attention: Randal L. Buness), 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. NASSER BARABI Address: Telephone No.: ( ) Facsimile:( ) 10. EX-99.8 9 EX-99.8 1 Exhibit 8 NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT is being executed and delivered as of December 3, 1999 by IRAJ BARABI (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 Indemnitees 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 1150 North Fiesta Boulevard, Gilbert, AZ 85233 (Attention: Randal L. Buness), 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. ------------------------------------------ IRAJ BARABI Address: ----------------------------- ------------------------------------- ------------------------------------- Telephone No.:( ) ---------------- Facsimile:( ) --------------------- 10. EX-99.9 10 EX-99.9 1 Exhibit 9 NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT is being executed and delivered as of December 3, 1999 by ALI BUSHEHRI (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 Indemnitees 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 1150 North Fiesta Boulevard, Gilbert, AZ 85233 (Attention: Randal L. Buness), 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. ---------------------------------------------- ALI BUSHEHRI Address: ------------------------------ -------------------------------------- -------------------------------------- Telephone No.:( ) ----------------- Facsimile:( ) ---------------------- 10. EX-99.10 11 EX-99.10 1 Exhibit 10 NONCOMPETITION AGREEMENT THIS NONCOMPETITION AGREEMENT is being executed and delivered as of December 3, 1999 by AHMAD BARABI (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 Indemnitees 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 1150 North Fiesta Boulevard, Gilbert, AZ 85233 (Attention: Randal L. Buness), 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. AHMAD BARABI Address: Telephone No.:( ) Facsimile:( ) 10. EX-99.11 12 EX-99.11 1 Exhibit 11 LOAN AND SECURITY AGREEMENT Dated as of December 3, 1999 Among BANK OF AMERICA, N.A. as the Lender and CERPROBE CORPORATION CERPROBE INTERCONNECT SOLUTIONS, INC. and (immediately following consummation of the Acquisition) OZ TECHNOLOGIES, INC. and TRIPLE S ENGINEERING, INC. as the Borrowers 2 TABLE OF CONTENTS
Section Page ARTICLE 1 INTERPRETATION OF THIS AGREEMENT................................................................1 1.1 Definitions.....................................................................................1 1.2 Accounting Terms...............................................................................23 1.3 Interpretive Provisions........................................................................23 ARTICLE 2 LOANS AND LETTERS OF CREDIT....................................................................24 2.1 Total Facility.................................................................................24 2.2 Revolving Loans................................................................................24 2.3 Term Loans.....................................................................................26 2.4 Letters of Credit..............................................................................26 2.5 Bank Products..................................................................................30 ARTICLE 3 INTEREST AND FEES..............................................................................30 3.1 Interest.......................................................................................30 3.2 Continuation and Conversion Elections..........................................................31 3.3 Maximum Interest Rate..........................................................................32 3.4 Closing Fee....................................................................................32 3.5 Unused Line Fee................................................................................32 3.6 Letter of Credit Fee...........................................................................33 ARTICLE 4 PAYMENTS AND PREPAYMENTS.......................................................................33 4.1 Revolving Loans................................................................................33 4.2 Termination of Facility........................................................................33 4.3 Repayment of the Term Loans....................................................................34 4.4 Voluntary Prepayments of the Term Loans; Voluntary Reduction of Inventory Sublimit.............34 4.5 Mandatory Prepayments of the Term Loans and Inventory Loans....................................34 4.6 Payments by the Borrowers......................................................................35 4.7 Payments as Revolving Loans....................................................................35 4.8 Application and Reversal of Payments...........................................................35 4.9 Indemnity for Returned Payments................................................................35 4.10 Lender's Books and Records; Monthly Statements.................................................36 ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................36 5.1 Taxes..........................................................................................36 5.2 Illegality.....................................................................................37 5.3 Increased Costs and Reduction of Return........................................................37
3 5.4 Funding Losses.................................................................................38 5.5 Inability to Determine Rates...................................................................38 5.6 Certificates of Lender.........................................................................39 5.7 Survival.......................................................................................39 ARTICLE 6 COLLATERAL.....................................................................................39 6.1 Grant of Security Interest.....................................................................39 6.2 Perfection and Protection of Security Interest.................................................40 6.3 Location of Collateral.........................................................................41 6.4 Title to, Liens on, and Sale and Use of Collateral.............................................41 6.5 Appraisals.....................................................................................41 6.6 Access and Examination; Confidentiality; Consent to Advertising................................41 6.7 Collateral Reporting...........................................................................42 6.8 Accounts.......................................................................................43 6.9 Collection of Accounts; Payments...............................................................44 6.10 Inventory; Perpetual Inventory.................................................................45 6.11 Equipment......................................................................................45 6.12 Assigned Contracts.............................................................................46 6.13 Documents, Instruments, and Chattel Paper......................................................46 6.14 Right to Cure..................................................................................47 6.15 Power of Attorney..............................................................................47 6.16 The Lender's Rights, Duties and Liabilities....................................................47 ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES..............................................48 7.1 Books and Records..............................................................................48 7.2 Financial Information..........................................................................48 7.3 Notices to the Lender..........................................................................50 ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS.........................................................52 8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents...........52 8.2 Validity and Priority of Security Interest.....................................................53 8.3 Organization and Qualification.................................................................53 8.4 Corporate Name; Prior Transactions.............................................................53 8.5 Subsidiaries and Affiliates....................................................................53 8.6 Financial Statements and Projections...........................................................54 8.7 Capitalization.................................................................................54 8.8 Solvency.......................................................................................54 8.9 Debt...........................................................................................54 8.10 Distributions..................................................................................55 8.11 Title to Property..............................................................................55 8.12 Real Estate; Leases............................................................................55 8.13 Proprietary Rights.............................................................................55 8.14 Trade Names....................................................................................55
2 4 8.15 Litigation.....................................................................................55 8.16 Restrictive Agreements.........................................................................55 8.17 Labor Disputes.................................................................................56 8.18 Environmental Laws.............................................................................56 8.19 No Violation of Law............................................................................57 8.20 No Default.....................................................................................57 8.21 ERISA Compliance...............................................................................57 8.22 Taxes..........................................................................................58 8.23 Regulated Entities.............................................................................58 8.24 Use of Proceeds; Margin Regulations............................................................58 8.25 Copyrights, Patents, Trademarks and Licenses, etc..............................................58 8.26 No Material Adverse Change; Year 2000..........................................................58 8.27 Full Disclosure................................................................................59 8.28 Material Agreements............................................................................59 8.29 Bank Accounts..................................................................................59 8.30 Governmental Authorization.....................................................................59 8.31 Representations and Warranties in Transaction Documents........................................59 ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................60 9.1 Taxes and Other Obligations....................................................................60 9.2 Corporate Existence and Good Standing..........................................................60 9.3 Compliance with Law and Agreements; Maintenance of Licenses....................................60 9.4 Maintenance of Property........................................................................60 9.5 Insurance......................................................................................60 9.6 Condemnation...................................................................................62 9.7 Environmental Laws.............................................................................62 9.8 Compliance with ERISA..........................................................................63 9.9 Mergers, Consolidations or Sales...............................................................63 9.10 Distributions; Capital Change; Restricted Investments..........................................63 9.11 Transactions Affecting Collateral or Obligations...............................................63 9.12 Guaranties.....................................................................................63 9.13 Debt...........................................................................................64 9.14 Prepayment; Subordinated Debt..................................................................64 9.15 Transactions with Affiliates...................................................................64 9.16 Investment Banking and Finder's Fees...........................................................65 9.17 [intentionally omitted]........................................................................65 9.18 Business Conducted.............................................................................65 9.19 Liens..........................................................................................65 9.20 Sale and Leaseback Transactions................................................................65 9.21 New Subsidiaries...............................................................................65 9.22 Fiscal Year....................................................................................65 9.23 [intentionally omitted]........................................................................65 9.24 Operating Lease Obligations....................................................................65 9.25 Adjusted Tangible Net Worth....................................................................66 9.26 Fixed Charge Coverage Ratio....................................................................66 9.27 Use of Proceeds................................................................................66
3 5 9.28 Further Assurances.............................................................................66 9.29 No Restrictions on Subsidiary Distributions....................................................67 ARTICLE 10 CONDITIONS OF LENDING..........................................................................67 10.1 Conditions Precedent to Making of Loans on the Closing Date....................................67 10.2 Conditions Precedent to Each Loan..............................................................70 ARTICLE 11 DEFAULT; REMEDIES..............................................................................70 11.1 Events of Default..............................................................................70 11.2 Remedies.......................................................................................72 ARTICLE 12 TERM AND TERMINATION...........................................................................74 12.1 Term and Termination...........................................................................74 ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS............................................................74 13.1 Amendments and Waivers.........................................................................74 13.2 Participations.................................................................................75 13.3 Pledge by Lender...............................................................................75 ARTICLE 14 MISCELLANEOUS..................................................................................75 14.1 No Waivers; Cumulative Remedies................................................................75 14.2 Severability...................................................................................75 14.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver..........................75 14.4 WAIVER OF JURY TRIAL...........................................................................77 14.5 Survival of Representations and Warranties.....................................................78 14.6 Other Security and Guaranties..................................................................78 14.7 Fees and Expenses..............................................................................78 14.8 Notices........................................................................................78 14.9 Waiver of Notices..............................................................................79 14.10 Binding Effect.................................................................................79 14.11 Indemnity of the Lender by the Borrowers.......................................................80 14.12 Limitation of Liability........................................................................80 14.13 Final Agreement................................................................................80 14.14 Counterparts...................................................................................81 14.15 Captions.......................................................................................81 14.16 Right of Setoff................................................................................81 14.17 Joint and Several Liability....................................................................81 14.18 Contribution and Indemnification among the Borrowers...........................................82 14.19 Agency of the Parent for each other Borrower; Joint Account....................................82
4 6 EXHIBITS AND SCHEDULES EXHIBIT A - FORM OF TERM LOAN NOTE EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE EXHIBIT C - FINANCIAL STATEMENTS EXHIBIT D - FORM OF NOTICE OF BORROWING EXHIBIT E - FORM OF NOTICE OF CONVERSION/CONTINUATION EXHIBIT F - PRO FORMA BALANCE SHEET SCHEDULE 1.1A - ASSIGNED CONTRACTS SCHEDULE 1.1B - APPROVED FOREIGN ACCOUNT DEBTORS SCHEDULE 1.1C - INVESTMENT POLICY SCHEDULE 6.3 - LOCATIONS OF COLLATERAL, CHIEF EXECUTIVE OFFICES SCHEDULE 8.3 - ORGANIZATION AND QUALIFICATIONS SCHEDULE 8.4 - OTHER NAMES; PRIOR TRANSACTIONS SCHEDULE 8.5 - SUBSIDIARIES AND AFFILIATES SCHEDULE 8.7 - CAPITALIZATION SCHEDULE 8.9 - DEBT SCHEDULE 8.12 - REAL ESTATE; LEASES SCHEDULE 8.13 - PROPRIETARY RIGHTS SCHEDULE 8.14 - TRADE NAMES SCHEDULE 8.15 - LITIGATION SCHEDULE 8.17 - LABOR DISPUTES SCHEDULE 8.18 - ENVIRONMENTAL LAW SCHEDULE 8.21 - ERISA COMPLIANCE SCHEDULE 8.28 - MATERIAL AGREEMENTS 5 7 SCHEDULE 8.29 - BANK ACCOUNTS SCHEDULE 9.12 - GUARANTIES SCHEDULE 9.13 - PERMITTED LIENS 6 8 LOAN AND SECURITY AGREEMENT LOAN AND SECURITY AGREEMENT, dated as of December 3, 1999, by and among BANK OF AMERICA, N.A. with an office at 55 South Lake Avenue, Pasadena, California 91101 and CERPROBE CORPORATION, a Delaware corporation ("Cerprobe") with offices at 1150 North Fiesta Boulevard, Gilbert, Arizona 85233, and its wholly-owned Subsidiary, CERPROBE INTERCONNECT SOLUTIONS, INC., a Delaware corporation ("CIS") with offices at 10365 Sanden Dr., Dallas, Texas 75238 and, immediately following consummation of the Acquisition (as defined below) OZ TECHNOLOGIES, INC., a California corporation ("Oz")") with offices at 3387 Investment Blvd., Hayward, California 94545 and TRIPLE S ENGINEERING, INC., a California corporation ("TSE") with offices at 26010 Eden Landing Rd., Suite 3, Hayward, California 94545 (collectively, the "Borrowers"). W I T N E S S E T H WHEREAS, the Borrowers have requested the Lender to make available to the Borrowers a revolving line of credit for loans and letters of credit in an amount not to exceed $15,000,000 and to make certain term loans to Cerprobe and CIS in the aggregate principal amount of $2,000,000, which extensions of credit to Cerprobe will be used to fund a portion of the costs for the acquisition by Cerprobe of all of the issued and outstanding capital stock of Oz, and the balance will be used to refinance certain Debt and for the working capital needs and general business purposes of the Borrowers; WHEREAS, following the consummation of the Acquisition, Oz and its wholly-owned Subsidiary, TSE will execute and deliver the Joinder Agreement and thereupon become borrowers hereunder; and WHEREAS, the Lender has agreed to make available to the Borrowers a revolving credit facility and term loans upon the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the Lender and the Borrowers hereby agree as follows. ARTICLE 1 INTERPRETATION OF THIS AGREEMENT 1.1 Definitions. As used herein: "Accounts" means, as to any Borrower, all of the Borrower's now owned or hereafter acquired or arising accounts as defined in the UCC, including any rights to payment for the sale or lease of goods or rendition of services, whether or not they have been earned by performance. 1 9 "Account Debtor" means each Person obligated in any way on or in connection with an Account. "ACH Transactions" means any cash management or related services including the automatic clearing house transfer of funds by the Lender for the account of a Borrower pursuant to agreement or overdrafts. "Acquisition" means the purchase by Cerprobe of all the issued and outstanding capital stock of Oz in accordance with the Purchase Agreement and the other Transaction Documents. "Adjusted Net Earnings from Operations" means, with respect to any fiscal period, the net income of Cerprobe and its Subsidiaries after provision for income taxes for such fiscal period, as determined in accordance with GAAP and reported on the Financial Statements for such period, excluding any and all of the following included in such net income: (a) gain or loss arising from the sale of any capital assets; (b) gain arising from any write-up in the book value of any asset; (c) earnings of any Person, substantially all the assets of which have been acquired by a Borrower in any manner, to the extent realized by such other Person prior to the date of acquisition; (d) earnings of any Person in which a Borrower has an ownership interest unless (and only to the extent) such earnings shall actually have been received by the Borrower in the form of cash distributions; (e) earnings of any Person to which assets of a Borrower shall have been sold, transferred or disposed of, or into which the Borrower shall have been merged, or which has been a party with the Borrower to any consolidation or other form of reorganization, prior to the date of such transaction; (f) gain arising from the acquisition of debt or equity securities of a Borrower or from cancellation or forgiveness of Debt; and (g) gain arising from extraordinary items, as determined in accordance with GAAP, or from any other non-recurring transaction. "Affiliate" means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person or which owns, directly or indirectly, five percent (5%) or more of the outstanding equity interest of such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract, or otherwise. "Aggregate Availability" means, at any time, the sum of the Availability of all Borrowers. "Aggregate Revolver Outstandings" means with respect to a Borrower or all Borrowers, as the case may be, at any date of determination, the sum of (a) the unpaid balance of Revolving Loans, (b) the aggregate amount of Pending Revolving Loans, (c) one hundred percent (100%) of the aggregate undrawn face amount of all outstanding Letters of Credit, and (d) the aggregate amount of any unpaid reimbursement obligations in respect of Letters of Credit. "Agreement" means this Loan and Security Agreement. "Anniversary Date" means each anniversary of the Closing Date. 2 10 "Applicable Margin" means (a) with respect to Base Rate Revolving Loans (other than Inventory Loans) and all other Obligations (other than any Term Loan and any LIBOR Rate Loan), 0.50%; (b) with respect to the Term Loans and Inventory Loans, 2%; (c) with respect to LIBOR Rate Loans, 2.75%. "Assigned Contracts" means, collectively, all of each Borrower's rights and remedies under, and all moneys and claims for money due or to become due to such Borrower under those contracts set forth on Schedule 1.1, and any other material contracts, and any and all amendments, supplements, extensions, and renewals thereof including all rights and claims of the Borrowers now or hereafter existing: (i) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (ii) for any damages arising out of or for breach or default under or in connection with any of the foregoing contracts; (iii) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or (iv) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder. "Attorney Costs" means and includes all reasonable fees, expenses and disbursements of any law firm or other counsel engaged by the Lender, the allocated costs of internal legal services of the Lender and the reasonable expenses of internal counsel to the Lender. "Availability" of a Borrower means, at any time, (a) the Borrowing Base of such Borrower minus (b) the Aggregate Revolver Outstandings of such Borrower. "Bank Products" means any one or more of the following types of services or facilities extended to any Borrower by the Lender or any Affiliate of the Lender in reliance on the Lender's agreement to indemnify such affiliate: (i) credit cards; (ii) ACH Transactions; and (iii) Hedge Agreements. "Bank Product Reserves" means all reserves which the Lender from time to time establishes in its sole discretion for the Bank Products then provided or outstanding. "Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C. Section 101 et seq.). "Base Rate" means, for any day, the rate of interest in effect for such day as publicly announced from time to time by the Lender in Charlotte, North Carolina as its "prime rate" (the "prime rate" being a rate set by the Lender based upon various factors including the Lender's costs and desired return, general economic conditions and other factors, and is used as a prime point for pricing some loans, which may be priced at, above, or below such announced rate). Any change in the prime rate announced by the Lender shall take effect at the opening of business on the day specified in the public announcement of such change. Each Interest Rate based upon the Base Rate shall be adjusted simultaneously with any change in the Base Rate. 3 11 "Base Rate Loans" means, collectively, the Base Rate Revolving Loans and the Term Loans. "Base Rate Revolving Loan" means a Revolving Loan during any period in which it bears interest based on the Base Rate. "Blocked Account Agreement" means an agreement among a Borrower, the Lender and a Clearing Bank, in form and substance satisfactory to the Lender, concerning the collection of payments which represent the proceeds of Accounts or of any other Collateral. "Borrower Guaranty" means the Guaranty executed by each Borrower (including the Joinder Agreement) and delivered to the Lender to guarantee the Obligations of the other Borrowers. "Borrowing" means a borrowing hereunder consisting of Revolving Loans or a Term Loan made on the same day by the Lender to a Borrower or the issuance of Letters of Credit hereunder. "Borrowing Base" means with respect to a Borrower, at any time, an amount equal to (a) the lesser of (i) the Maximum Revolver Amount less the Aggregate Revolver Outstandings of all other Borrowers or (ii) the sum of (A) eighty-five percent (85%) of the Net Amount of Eligible Accounts; plus (B) the lesser of (x) initially eighty-five percent (85%) of the value of Inventory (valued at the lower of cost (first-in, first-out method) or market as reported on Borrower's books and records consistent with past practices), reducing by two percent (2%) per month effective as of the first day of each month and (y) the Inventory Sublimit less the outstanding principal amount of Inventory Loans of all other Borrowers; minus (b) the sum of (i) reserves for accrued and unpaid interest on the Obligations of such Borrower, (ii) any Bank Product Reserves of such Borrower and (iii) all other reserves which the Lender deems necessary in the exercise of its reasonable credit judgment to maintain with respect to the Borrower's account, including reserves for any amounts which the Lender may be obligated to pay in the future for the account of such Borrower. "Borrowing Base Certificate" means a certificate by a Responsible Officer of the Borrowers, substantially in the form of Exhibit B (or another form acceptable to the Lender), setting forth the calculation of the Borrowing Base of each Borrower, including a calculation of each component thereof, all in such detail as shall be satisfactory to the Lender. All calculations of the Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall originally be made by the Borrowers and certified to the Lender; provided, that the Lender shall have the right to review and adjust, in the exercise of its reasonable credit judgment, any such calculation (i) to reflect its reasonable estimate of declines in value of any of the Collateral described therein, and (ii) to the extent that such calculation is not in accordance with this Agreement. "Business Day" means (a) any day that is not a Saturday, Sunday, or a day on which banks in Los Angeles, California or Charlotte, North Carolina are required or permitted to be closed, and (b) with respect to all notices, determinations, fundings and payments in connection with the LIBOR Rate or LIBOR Rate Loans, any day that is a Business Day pursuant 4 12 to clause (a) above and that is also a day on which trading in Dollars is carried on by and between banks in the London interbank market. "Capital Adequacy Regulation" means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank. "Capital Expenditures" means all payments due (whether or not paid) in respect of the cost of any fixed asset or improvement, or replacement, substitution, or addition thereto, which has a useful life of more than one year, including, without limitation, those costs arising in connection with the direct or indirect acquisition of such asset by way of increased product or service charges or in connection with a Capital Lease. "Capital Lease" means any lease of property which, in accordance with GAAP, should be reflected as a capital lease on the lessee's balance sheet. "Cash Flow" means, for any fiscal period, (a) EBITDA less (b) income taxes paid or accrued less (c) Capital Expenditures made in cash, all determined on a consolidated basis for Borrowers (but excluding any Subsidiary which is not a Borrower). "Change of Control" means (a) any Person or group (within the meaning of Rule 13d-5, as in effect on the date hereof, under the Exchange Act) shall become the beneficial owner of more than twenty-five percent (25%) of the outstanding capital stock of Cerprobe entitled to vote for the election of the board of directors; (b) during any period of twelve consecutive months individuals who at the beginning of such period constituted a majority of the board of directors of Cerprobe (together with new directors whose election by such board or whose nomination for the election by the shareholders of Cerprobe was approved by the majority of the directors still in office who were either directors at the beginning of such period or whose election was previously so approved) shall cease for any reason to constitute a majority of the board of directors of Cerprobe then in office; or (c) Cerprobe shall cease to be the legal and beneficial owner of all of the issued and outstanding capital stock of each other Loan Party. "Clearing Bank" means the Lender or any other banking institution with whom a Payment Account has been established pursuant to a Blocked Account Agreement. "Closing Date" means the date of this Agreement. "Closing Fee" has the meaning specified in Section 3.4. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute, and regulations promulgated thereunder. "Collateral" means the "Collateral" as defined in Section 6.1 and all other assets and properties of the Loan Parties on which a Lien is granted to the Lender to secure the Obligations of the Borrowers. 5 13 "Contaminant" means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos in any form or condition, polychlorinated biphenyls ("PCBs"), or any constituent of any such substance or waste. "Credit Support" has the meaning specified in Section 2.4(a). "Debt" means, with respect to any Person and without duplication, all liabilities, obligations and indebtedness of such Person to any Person, of any kind or nature, now or hereafter owing, arising, due or payable, howsoever evidenced, created, incurred, acquired or owing, whether primary, secondary, direct, contingent, fixed or otherwise, and including, without in any way limiting the generality of the foregoing: (a) liabilities and obligations to trade creditors; (b) all Obligations; (c) all obligations and liabilities of any Person secured by any Lien on the property of such Person, even though such Person shall not have assumed or become liable for the payment thereof; provided, however, that all such obligations and liabilities which are limited in recourse to such property shall be included in Debt only to the extent of the book value of such property as would be shown on a balance sheet of such Person prepared in accordance with GAAP; (d) all obligations or liabilities created or arising under any Capital Lease or conditional sale or other title retention agreement with respect to property used or acquired by such Person, even if the rights and remedies of the lessor, seller or lender thereunder are limited to repossession of such property; provided, however, that all such obligations and liabilities which are limited in recourse to such property shall be included in Debt only to the extent of the book value of such property as would be shown on a balance sheet of such Person prepared in accordance with GAAP; and (e) all obligations and liabilities under Guaranties. "Debt For Borrowed Money" means, as to any Person, and without duplication, (a) Debt for borrowed money or as evidenced by notes, bonds, debentures or similar evidences of any such Debt of such Person, (b) the deferred and unpaid purchase price of any property or business (other than trade accounts payable incurred in the ordinary course of business and constituting current liabilities), (c) all obligations under Capital Leases and (d) all Guaranties of any of the foregoing. "Default" means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured, waived, or otherwise remedied during such time) constitute an Event of Default. "Default Rate" means a fluctuating per annum interest rate at all times equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two percent (2%). Each Default Rate shall be adjusted simultaneously with any change in the applicable Interest Rate. In addition, with respect to Letters of Credit, the Default Rate shall mean an increase in the Letter of Credit Fee by two percentage points. "Distribution" means, in respect of any corporation: (a) the payment or making of any dividend or other distribution of property in respect of capital stock (or any options or warrants for or other rights with respect to such stock) of such corporation, other than distributions in capital stock (or any options or warrants for such stock) of the same class; or (b) 6 14 the redemption or other acquisition by such corporation of any capital stock (or any options or warrants for or other rights with respect to such stock) of such corporation. "DOL" means the United States Department of Labor or any successor department or agency. "Dollar" and "$" means dollars in the lawful currency of the United States. "EBITDA" means, for any fiscal period, for the Borrowers, the sum of the following: (a) Adjusted Net Earnings from Operations (b) income taxes paid or accrued, plus (c) interest expense paid in cash, plus (d) depreciation and amortization, plus (e) non-recurring non-cash charges resulting from the write-off of research and development costs acquired in an acquisition, plus (f) minority interests, all determined in accordance with GAAP. "Eligible Accounts" of a Borrower means the Accounts of such Borrower which the Lender in the exercise of its reasonable commercial discretion determines to be Eligible Accounts. Without limiting the discretion of the Lender to establish other criteria of ineligibility, Eligible Accounts shall not include any Account: (a) with respect to which more than 90 days have elapsed since the date of the original invoice therefor or which is more than 60 days past due; (b) with respect to which any of the representations, warranties, covenants, and agreements contained in Section 6.8 are not or have ceased to be complete and correct or have been breached; (c) with respect to which Account (or any other Account due from such Account Debtor), in whole or in part, a check, promissory note, draft, trade acceptance or other instrument for the payment of money has been received, presented for payment and returned uncollected for any reason; (d) which represents a progress billing (as hereinafter defined) or as to which the Borrower has extended the time for payment without the consent of the Lender; for the purposes hereof, "progress billing" means any invoice for goods sold or leased or services rendered under a contract or agreement pursuant to which the Account Debtor's obligation to pay such invoice is conditioned upon the Borrower's completion of any further performance under the contract or agreement; (e) with respect to which any one or more of the following events has occurred to the Account Debtor on such Account: death or judicial declaration of incompetency of an Account Debtor who is an individual; the filing by or against the Account Debtor of a request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or similar laws of the United States, any state or territory thereof, or any foreign jurisdiction, now or hereafter in effect; the making of any general assignment by the Account Debtor for the benefit of creditors; the appointment of a receiver or trustee for the Account Debtor or for any of the assets of the Account Debtor, including, without limitation, the appointment of or taking possession by a "custodian," as defined in the Federal Bankruptcy Code; the institution by or against the Account 7 15 Debtor of any other type of insolvency proceeding (under the bankruptcy laws of the United States or otherwise) or of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against, or winding up of affairs of, the Account Debtor; the sale, assignment, or transfer of all or any material part of the assets of the Account Debtor; the nonpayment generally by the Account Debtor of its debts as they become due; or the cessation of the business of the Account Debtor as a going concern; (f) if fifty percent (50%) or more of the aggregate Dollar amount of outstanding Accounts owed at such time to all Borrowers by the Account Debtor thereon is classified as ineligible under clause (a) above; (g) owed by an Account Debtor which: (i) does not maintain its chief executive office in the United States of America or Canada; or (ii) is not organized under the laws of the United States of America or Canada or any state or province thereof; or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof; except to the extent that (x) such Account is secured or payable by a letter of credit satisfactory to the Lender in its discretion or (y) the Account Debtor is listed on Schedule 1.1(b) (as it may be revised from time to time by the Lender) or otherwise has been approved in writing by the Lender; (h) owed by an Account Debtor which is an Affiliate or employee of any Borrower; (i) except as provided in clause (k) below, with respect to which either the perfection, enforceability, or validity of the Lender's Lien in such Account, or the Lender's right or ability to obtain direct payment to the Lender of the proceeds of such Account, is governed by any federal, state, or local statutory requirements other than those of the UCC; (j) owed by an Account Debtor to which any Borrower or any of its Subsidiaries is indebted in any way, or which is subject to any right of setoff or recoupment by the Account Debtor, unless the Account Debtor has entered into an agreement acceptable to the Lender to waive setoff rights; or if the Account Debtor thereon has disputed liability or made any claim with respect to any other Account due from such Account Debtor; but in each such case only to the extent of such indebtedness, setoff, recoupment, dispute, or claim; (k) owed by the government of the United States of America, or any department, agency, public corporation, or other instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727 et seq.), and any other steps necessary to perfect the Lender's Lien therein, have been complied with to the Lender's satisfaction with respect to such Account; (l) owed by any state, municipality, or other political subdivision of the United States of America, or any department, agency, public corporation, or other instrumentality thereof and as to which the Lender determines that its Lien therein is not or cannot be perfected; 8 16 (m) which represents a sale on a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or return basis; (n) which is evidenced by a promissory note or other instrument or by chattel paper; (o) if the Lender believes, in the exercise of its reasonable judgment, that the prospect of collection of such Account is impaired or that the Account may not be paid by reason of the Account Debtor's financial inability to pay; (p) with respect to which the Account Debtor is located in any state requiring the filing of a Notice of Business Activities Report or similar report in order to permit the Borrower to seek judicial enforcement in such State of payment of such Account, unless such Borrower has qualified to do business in such state or has filed a Notice of Business Activities Report or equivalent report for the then current year; (q) which arises out of a sale not made in the ordinary course of the Borrower's business; (r) with respect to which the goods giving rise to such Account have not been shipped and delivered to and accepted by the Account Debtor or the services giving rise to such Account have not been performed by the Borrower, and, if applicable, accepted by the Account Debtor, or the Account Debtor revokes its acceptance of such goods or services; (s) owed by an Account Debtor which is obligated to the Borrower respecting Accounts the aggregate unpaid balance of which exceeds fifteen percent (15%) (or with respect to Intel Corporation and its Subsidiaries, thirty-five percent (35%)) of the aggregate unpaid balance of all Accounts owed to the Borrower at such time by all of the Borrower's Account Debtors, but only to the extent of such excess; (t) which arises out of an enforceable contract or order which, by its terms, forbids, restricts or makes void or unenforceable the granting of a Lien by the Borrower to the Lender with respect to such Account; or (u) which is not subject to a first priority and perfected security interest in favor of the Lender. If any Account at any time ceases to be an Eligible Account, then such Account shall promptly be excluded from the calculation of Eligible Accounts. "Eligible Inventory" of a Borrower means Inventory of such Borrower which the Lender, in its reasonable discretion, determines to be Eligible Inventory. Without limiting the discretion of the Lender to establish other criteria of eligibility, Eligible Inventory shall meet all of the following requirements: (a) such Inventory is owned by the Borrower; 9 17 (b) such Inventory is subject to the Lender's Liens, which are perfected as to such Inventory, and is subject to no other Lien whatsoever (other than the Liens described in clause (d) of the definition of Permitted Liens provided that such Permitted Liens (i) are junior in priority to the Lender's Liens and (ii) do not impair directly or indirectly the ability of the Lender to realize on or obtain the full benefit of the Collateral); (c) such Inventory consists of finished goods or raw materials; (d) such Inventory does not consist of work-in-process, chemicals, supplies, subassemblies, or packing and shipping materials; (e) such Inventory shall exclude the amount of Borrower's Inventory reserves, as shown on its books and records and established pursuant to policies in effect on the date hereof; (f) such Inventory is located within the United States of America or Canada (and not in-transit from vendors or suppliers); (g) if such Inventory is located in a public warehouse or in possession of a bailee or in a facility leased by the Borrower, the warehouseman, or the bailee, or the lessor has delivered to the Lender, if requested by the Lender, a subordination agreement in form and substance satisfactory to the Lender; (h) if such Inventory contains or bears any Proprietary Rights licensed to a Borrower by any Person, the Lender shall be satisfied that it may sell or otherwise dispose of such Inventory in accordance with Article 11 without infringing the rights of the licensor of such Proprietary Rights or violating any contract with such licensor (and without payment of any royalties other than any royalties due with respect to the sale or disposition of such Inventory pursuant to the existing license agreement), and, if the Lender deems it necessary, the applicable Borrower shall deliver to the Lender a consent or sublicense agreement from such licensor in form and substance acceptable to the Lender; and (i) If any Inventory at any time ceases to be Eligible Inventory, such Inventory shall promptly be excluded from the calculation of Eligible Inventory. "Environmental Claims" means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for a Release or injury to the environment. "Environmental Laws" means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case relating to environmental, health, safety and land use matters. "Environmental Lien" means a Lien in favor of any Governmental Authority for (a) any liability under Environmental Laws, or (b) damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment. 10 18 "Equipment" of a Borrower means all of the Borrower's now owned and hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and other tangible personal property (except Inventory), including motor vehicles with respect to which a certificate of title has been issued, aircraft, dies, tools, jigs, and office equipment, as well as all of such types of property leased by the Borrower and all of the Borrower's rights and interests with respect thereto under such leases (including, without limitation, options to purchase); together with all present and future additions and accessions thereto, replacements therefor, component and auxiliary parts and supplies used or to be used in connection therewith, and all substitutes for any of the foregoing, and all manuals, drawings, instructions, warranties and rights with respect thereto; wherever any of the foregoing is located. "ERISA" means the Employee Retirement Income Security Act of 1974, and regulations promulgated thereunder. "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA, (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan is in reorganization, (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multi-employer Plan, (e) the occurrence of an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multi-employer Plan, or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate. "Event of Default" has the meaning specified in Section 11.1. "Exchange Act" means the Securities Exchange Act of 1934, and regulations promulgated thereunder. "FDIC" means the Federal Deposit Insurance Corporation, and any Governmental Authority succeeding to any of its principal functions. "Federal Funds Rate" means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) such day is not a Business Day, the 11 19 Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Lender on such day on such transactions as determined by the Lender. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System or any successor thereto. "Financial Statements" means, according to the context in which it is used, the financial statements referred to in Section 8.6 or any other financial statements required to be given to the Lender pursuant to this Agreement. "Fiscal Year" means the Borrowers' fiscal year for financial accounting purposes. The current Fiscal Year of the Borrowers will end on December 31, 1999. "Fixed Assets" of a Borrower means the Equipment and Real Estate of the Borrower. "Fixed Charge Coverage" means, for any fiscal period, the ratio of (a) Cash Flow for such period to (b) the sum of (i) interest expense of Borrowers for such period plus (ii) principal payments with respect to Debt for Borrowed Money of Borrowers for such period, in the case of (i) and (ii) to the extent paid in cash. "Foreign Subsidiary" means any Subsidiary of Cerprobe or any of its Subsidiaries which is organized under the laws of any jurisdiction other than the United States or any state thereof. "Funding Date" means the date on which a Borrowing occurs. "GAAP" means generally accepted accounting principles and practices set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the Closing Date. "General Intangibles" of a Borrower means all of the Borrower's now owned or hereafter acquired general intangibles, chooses in action and causes of action and all other intangible personal property of the Borrower of every kind and nature (other than Accounts), including, without limitation, all contract rights, Proprietary Rights, corporate or other business records, inventions, designs, blueprints, plans, specifications, patents, patent applications, trademarks, service marks, trade names, trade secrets, goodwill, copyrights, computer software, customer lists, registrations, licenses, franchises, tax refund claims, any funds which may become due to the Borrower in connection with the termination of any Plan or other employee benefit plan or any rights thereto and any other amounts payable to the Borrower from any Plan or other employee benefit plan, rights and claims against carriers and shippers, rights to indemnification, business interruption insurance and proceeds thereof, property, casualty or any 12 20 similar type of insurance and any proceeds thereof, proceeds of insurance covering the lives of key employees on which the Borrower is beneficiary, and any letter of credit, guarantee, claim, security interest or other security held by or granted to the Borrower. "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. "Guaranty" means, with respect to any Person, all obligations of such Person which in any manner directly or indirectly guarantee or assure, or in effect guarantee or assure, the payment or performance of any indebtedness, dividend or other obligations of any other Person (the "guaranteed obligations"), or assure or in effect assure the holder of the guaranteed obligations against loss in respect thereof, including any such obligations incurred through an agreement, contingent or otherwise: (a) to purchase the guaranteed obligations or any property constituting security therefor; (b) to advance or supply funds for the purchase or payment of the guaranteed obligations or to maintain a working capital or other balance sheet condition; or (c) to lease property or to purchase any debt or equity securities or other property or services. "Hedge Agreement" means any and all transactions, agreements or documents now existing or hereafter entered into, which provides for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging a Borrower's exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices. "Intercompany Accounts" means all assets and liabilities, however arising, which are due to a Borrower from, which are due from the Borrower to, or which otherwise arise from any transaction by a Borrower with any Affiliate. "Interest Period" means, as to any LIBOR Rate Loan, the period commencing on the Funding Date of such Loan or on the Continuation/Conversion Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and ending on the date one, two, three or six months thereafter as selected by a Borrower in its Notice of Borrowing, in the form attached hereto as Exhibit D, or Notice of Continuation/Conversion, in the form attached hereto as Exhibit E; provided that: (a) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (b) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and 13 21 (c) no Interest Period shall extend beyond the Stated Termination Date. "Interest Rate" means each or any of the interest rates, including the Default Rate, set forth in Section 3.1. "Inventory" of a Borrower means all of the Borrower's now owned and hereafter acquired inventory, goods and merchandise, wherever located, to be furnished under any contract of service or held for sale or lease, all returned goods, raw materials, other materials and supplies of any kind, nature or description which are used or consumed in the Borrower's business or used in connection with the packing, shipping, advertising, selling or finishing of such goods, merchandise and such other personal property, and all documents of title or other documents representing them. "Inventory Loans" means Revolving Loans the amount of which is based on Eligible Inventory. All Revolving Loans shall be deemed first to be Inventory Loans to the maximum amount permitted under the definition of Borrowing Base. "Inventory Sublimit" initially, for all Borrowers, $5,834,000, decreasing on the first day of each month hereafter by an amount equal to $243,083.33 until December 1, 2000, on which date the Inventory Sublimit shall reduce to zero. The Inventory Sublimit may be permanently reduced by the Borrowers in accordance with Section 4.4 hereof and shall be permanently reduced in accordance with Section 4.5 hereof. "Investment Property" of a Borrower means all of the Borrower's right title and interest in and to any and all: (a) securities whether certificated or uncertificated; (b) securities entitlements; (c) securities accounts; (d) commodity contracts; or (e) commodity accounts. "IRS" means the Internal Revenue Service and any Governmental Authority succeeding to any of its principal functions under the Code. "Joinder Agreement" means the Borrower Joinder Agreement executed and delivered by Oz and TSE on the Closing Date immediately following consummation of the Acquisition. "Latest Projections" means: (a) on the Closing Date and thereafter until the Lender receives new projections pursuant to Section 7.2(f), the projections of the Borrowers' financial condition, results of operations, and cash flows, for the period commencing on December 31, 1999 and ending on December 31, 2001 and delivered to the Lender prior to the Closing Date; and (b) thereafter, the projections most recently received by the Lender pursuant to Section 7.2(f). "Lender" means Bank of America, N.A., a national banking association, or any successor entity thereto. "Letter of Credit" has the meaning specified in Section 2.4. "Letter of Credit Fee" has the meaning specified in Section 3.6. 14 22 "Letter of Credit Issuer" means the Lender, any affiliate of the Lender or any other financial institution that issues any Letter of Credit pursuant to this Agreement. "LIBOR Rate" means, for any Interest Period, with respect to LIBOR Rate Loans, the rate of interest per annum determined pursuant to the following formula:
LIBOR Rate = Offshore Base Rate ____________________________________ 1.00 - Eurodollar Reserve Percentage
Where, "Offshore Base Rate" means the rate per annum appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the Offshore Base Rate shall be, for any Interest Period, the rate per annum appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates. If for any reason none of the foregoing rates is available, the Offshore Base Rate shall be, for any Interest Period, the rate per annum determined by the Lender as the rate of interest at which dollar deposits in the approximate amount of the LIBOR Rate Loan comprising part of such Borrowing would be offered by the Lender's London Branch to major banks in the offshore dollar market at their request at or about 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. "Eurodollar Reserve Percentage" means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such day applicable to Lender under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Offshore Rate for each outstanding LIBOR Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. 15 23 "LIBOR Rate Loan" means a Revolving Loan during any period in which it bears interest based on the LIBOR Rate. "Lien" means: (a) any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute, or contract, and including a security interest, charge, claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes; (b) to the extent not included under clause (a), any reservation, exception, encroachment, easement, right-of-way, covenant, condition, restriction, lease or other title exception or encumbrance affecting property; and (c) any contingent or other agreement to provide any of the foregoing. "Loan Account" of a Borrower means the loan account of the Borrower, which account shall be maintained by the Lender. "Loan Documents" means this Agreement, the Term Loan Notes, the Patent and Trademark Agreements, the Borrower Guaranty, the Pledge Agreements, the Joinder Agreement, and any other agreements, instruments, and documents heretofore, now or hereafter evidencing, securing, guaranteeing or otherwise relating to the Obligations, the Collateral, or any other aspect of the transactions contemplated by this Agreement. "Loans" means, collectively, all loans and advances provided for in Article 2. "Margin Stock" means "margin stock" as such term is defined in Regulation T, U or X of the Federal Reserve Board. "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of the Borrowers taken as a whole or the Collateral; (b) a material impairment of the ability of any Borrower to perform under any Loan Document to which it is a party and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Borrower of any Loan Document to which it is a party. "Maximum Revolver Amount" means $15,000,000. "Multi-employer Plan" means a "multi-employer plan" as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding six (6) years contributed to by any Borrower or any ERISA Affiliate. "Net Amount of Eligible Accounts" of a Borrower means, at any time, the gross amount of Eligible Accounts of such Borrower less sales, excise or similar taxes, and less returns, discounts, claims, credits and allowances of any nature at any time issued, owing, granted, outstanding, available or claimed. "Notice of Borrowing" has the meaning specified in Section 2.2(b). "Notice of Conversion/Continuation" has the meaning specified in Section 3.2(b). 16 24 "Obligations" of a Borrower means all present and future loans, advances, liabilities, obligations, covenants, duties, and debts owing by the Borrower to the Lender whether or not arising under or pursuant to this Agreement or any of the other Loan Documents, whether or not evidenced by any note, or other instrument or document, whether arising from an extension of credit, opening of a letter of credit, acceptance, loan, guaranty (including the Borrower Guaranty), indemnification or otherwise, whether direct or indirect (including those acquired by assignment from others, and any participation by the Lender in the Borrower's debts owing to others), absolute or contingent, due or to become due, primary or secondary, as principal or guarantor, and including all principal, interest, charges, expenses, fees, attorneys' fees, filing fees and any other sums chargeable to the Borrower hereunder or under any of the other Loan Documents. "Obligations" includes, without limitation, (a) all debts, liabilities, and obligations now or hereafter arising from or in connection with the Letters of Credit and (b) all debts, liabilities and obligations now or hereafter arising from or in connection with Bank Products. "Other Taxes" means any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Documents. "Participant" means any Person who shall have been granted the right by the Lender to participate in the financing provided by the Lender under this Agreement, and who shall have entered into a participation agreement in form and substance satisfactory to the Lender. "Patent and Trademark Agreements" means, collectively, the Patent and Trademark Security Agreements, each dated as of the date hereof, executed and delivered by any Borrower to the Lender to evidence and perfect the Lender's security interest in the Borrower's present and future patents, trademarks, and related licenses and rights. "Payment Account" of a Borrower means each bank account established pursuant to Section 6.9, to which the proceeds of Accounts and other Collateral are deposited or credited, and which is maintained in the name of the Lender or the Borrower, as the Lender may determine, on terms acceptable to the Lender. "PBGC" means the Pension Benefit Guaranty Corporation or any Governmental Authority succeeding to the functions thereof. "Pending Revolving Loans" means, with respect to any Borrower or all Borrowers, as the case may be, at any time, the aggregate principal amount of all Revolving Loans requested in any Notice of Borrowing received by the Lender which have not yet been advanced. "Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which any Borrower sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a Multiple-employer Plan has made contributions at any time during the immediately preceding five (5) plan years. 17 25 "Permitted Liens" means: (a) Liens for taxes not delinquent or statutory Liens for taxes in an amount not to exceed $100,000 provided that the payment of such taxes which are due and payable is being contested in good faith and by appropriate proceedings diligently pursued and as to which adequate financial reserves have been established on the applicable Borrower's books and records and a stay of enforcement of any such Lien is in effect; (b) the Lender's Liens; (c) Liens consisting of deposits made in the ordinary course of business in connection with, or to secure payment of, obligations under worker's compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than liens arising under ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds; (d) Liens securing the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons, provided that if any such Lien arises from the nonpayment of such claims or demand when due, such claims or demands do not exceed $100,000 in the aggregate; (e) Liens constituting encumbrances in the nature of reservations, exceptions, encroachments, easements, rights of way, covenants running with the land, and other similar title exceptions or encumbrances affecting any Real Estate; provided that they do not in the aggregate materially detract from the value of the Real Estate or materially interfere with its use in the ordinary conduct of any Borrower's business; (f) Liens arising from judgments and attachments in connection with court proceedings provided that the attachment or enforcement of such Liens would not result in an Event of Default hereunder and such Liens are being contested in good faith by appropriate proceedings, adequate reserves have been set aside and no material Property is subject to a material risk of loss or forfeiture and the claims in respect of such Liens are fully covered by insurance (subject to ordinary and customary deductibles) and a stay of execution pending appeal or proceeding for review is in effect; (g) Liens existing on the Closing Date and listed on Schedule 9.19; (h) Liens securing purchase money Debt or Capital Leases permitted hereunder which encumber only the Fixed Assets purchased or leased as permitted hereby; (i) Liens securing Debt previously permitted to be secured hereunder and which has been extended, renewed or refunded so long as (x) the principal amount of the Debt so secured is not increased, (y) such Liens encumber only the assets theretofore subject to a Permitted Lien and (z) at the time of such extension, renewal or refunding and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; 18 26 (j) Liens securing Debt of a newly acquired Subsidiary permitted under Section 9.13, provided that such Liens shall not encumber any assets other than those subject to such Liens at the time of the acquisition; and (k) Liens on Cerprobe's interest in CRPB Investors L.L.C., subject to the terms of the Subordination Agreement. "Permitted Rentals" has the meaning specified in Section 9.24. "Person" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, Governmental Authority, or any other entity. "Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA) which any Borrower sponsors or maintains or to which the Borrower makes, is making, or is obligated to make contributions and includes any Pension Plan. "Pledge Agreements" means, collectively, the pledge agreements, each dated the date hereof, executed and delivered by Borrowers to the Lender to pledge and grant a security interest in the capital stock of Subsidiaries and any notes or other instruments. "Post Closing Letter" means that certain letter agreement dated the Closing Date among the Borrowers and the Lender. "Proprietary Rights" of a Borrower means all of the Borrower's now owned and hereafter arising or acquired: licenses, franchises, permits, patents, patent rights, copyrights, works which are the subject matter of copyrights, trademarks, service marks, trade names, trade styles, patent, trademark and service mark applications, and all licenses and rights related to any of the foregoing, including those patents, trademarks, service marks, trade names and copyrights set forth on Schedule 8.13 hereto, and all other rights under any of the foregoing, all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing, and all rights to sue for past, present and future infringement of any of the foregoing. "Purchase Agreement" means that certain Stock Purchase Agreement dated as of December 3, 1999 among Cerprobe, as purchaser, Oz, and the Sellers. "Real Estate" of a Borrower means all of the Borrower's now or hereafter owned or leased estates in real property, including, without limitation, all fees, leaseholds and future interests, together with all of the Borrower's now or hereafter owned or leased interests in the improvements thereon, the fixtures attached thereto and the easements appurtenant thereto. "Real Estate Note: means the promissory note in the original principal amount of $2,800,000 owed by Cerprobe to the Sellers and secured solely by the Texas Real Estate. "Release" means a release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant into the indoor or outdoor environment or into or out of any Real Estate or other property, including the movement of 19 27 Contaminants through or in the air, soil, surface water, groundwater or Real Estate or other property. "Rentals" has the meaning specified in Section 9.24. "Reportable Event" means, any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC. "Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject. "Responsible Officer" of a Borrower means the chief executive officer, the chairman of the board of directors, the president or the chief financial officer of such Borrower, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants and the preparation of any Borrowing Base Certificate, the chief financial officer or the treasurer of such Borrower, or any other officer having substantially the same authority and responsibility. "Restricted Investment" means, as to any Person, any acquisition of property by such Person in exchange for cash or other property, whether in the form of an acquisition of stock, debt, or other indebtedness or obligation, or the purchase or acquisition of any other property, or a loan, advance, capital contribution, or subscription (each, an "Investment"), except the following: (a) acquisitions of Equipment to be used in the business of such Person so long as the acquisition costs thereof constitute Capital Expenditures permitted hereunder; (b) acquisitions of Inventory in the ordinary course of business of such Person; (c) acquisitions of current assets acquired in the ordinary course of business of such Person; (d) direct obligations of the United States of America, or any agency or instrumentality thereof, or obligations guaranteed by the United States of America, provided that such obligations mature within one year from the date of acquisition thereof; (e) acquisitions of certificates of deposit maturing within one year from the date of acquisition, bankers' acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case issued by, created by, or with a bank or trust company organized under the laws of the United States or any state thereof having capital and surplus aggregating at least $100,000,000; (f) acquisitions of commercial paper given a rating of "A2" or better by Standard & Poor's Corporation or "P2" or better by Moody's Investors Service, Inc. and maturing not more than 90 days from the date of creation thereof; (g) other Investments permitted under Cerprobe's investment policy attached hereto as Exhibit 1.1C; (h) Hedge Agreements; (i) acquisitions of all of the capital stock of another Person or substantially all of the assets of another Person solely in exchange for the capital stock of Cerprobe; provided, that any Subsidiary shall become a Guarantor hereunder in compliance with Section 9.28 of this Agreement; (j) Investments existing on the date hereof; (k) Investments by a Borrower with respect to Debt of a Borrower to another Borrower; (l) Investments by a Borrower in another Borrower; (m) Investments consisting of promissory notes received as proceeds of asset dispositions permitted hereunder; (n) Investments made in connection with acquisitions permitted under Section 9.9; (o) advances to its employees or employees of any of its 20 28 Subsidiaries for travel or other ordinary business expenses in amounts which are consistent with a Borrower's past practices as in effect on the Closing Date; [(p) advances to subcontractors and suppliers in maximum aggregate amounts which are consistent with a Borrower's past practices determined as of the Closing Date;] and (q) shares of stock, obligations or other securities received in settlement of claims arising in the ordinary course of business. "Revolving Loans" has the meaning specified in Section 2.2. "Seller Subordinated Note" means that certain subordinated promissory note executed and delivered by Cerprobe to the Sellers in accordance with the Purchase Agreement, which shall contain terms and conditions, including without limitation payment and subordination terms, satisfactory to Lender, and which shall be in the initial aggregate outstanding principal amount of $2,830,000, as increased (or decreased) as required by the terms of the Purchase Agreement. "Sellers" means Nasser Barabi, Iraj Barabi, Ali Busheri, Ahmad Barabi, Ali Busheri as trustee for the Ali and Nassrin Busheri Trust, and Ahmad Barabi, as trustee for the Ahmad and Zakieh Barabi Trust. "Solvent" means when used with respect to any Person that at the time of determination: (a) the assets of such Person, at a fair valuation, are in excess of the total amount of its debts (including contingent liabilities); and (b) the present fair saleable value of its assets is greater than its probable liability on its existing debts as such debts become absolute and matured; and (c) it is then able and expects to be able to pay its debts (including contingent debts and other commitments) as they mature; and (d) it has capital sufficient to carry on its business as conducted and as proposed to be conducted. For purposes of determining whether a Person is Solvent, the amount of any contingent liability shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Stated Termination Date" means December 2, 2002. "Subordination Agreement" means that certain Subordination Agreement dated the date hereof among Sellers and the Lender. "Subsidiary" of a Person means any corporation, association, partnership, joint venture or other business entity of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a 21 29 combination thereof. Unless the context otherwise clearly requires, references herein to a "Subsidiary" refer to a Subsidiary of a Borrower. "Tangible Net Worth" means, at any date, (a) the gross book value of the assets of Cerprobe and its Subsidiaries minus goodwill, patents, trademarks, trade names, organization expense, treasury stock, unamortized debt discount and expense, deferred research and development costs, deferred marketing expenses, and other like intangibles and monies due from affiliates, officers, directors or shareholders of Cerprobe and its Subsidiaries and related reserves less (b) total liabilities of Cerprobe and its Subsidiaries, including but not limited to accrued and deferred income taxes, and any reserves against assets, all determined in accordance with GAAP. "Taxes" means any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of the Lender, such taxes (including income taxes or franchise taxes) as are imposed on or measured by the Lender's net income in any jurisdiction (whether federal, state or local and including any political subdivision thereof) under the laws of which the Lender is organized or maintains a lending office. "Term Loans" means the Term Loans made pursuant to Section 2.3(b). "Term Loan Note" has the meaning specified in Section 2.3(b). "Termination Date" means the earliest to occur of (a) the Stated Termination Date, (b) the date the Total Facility is terminated either by the Borrowers pursuant to Section 4.2 or by the Lender pursuant to Section 11.2, and (c) the date this Agreement is otherwise terminated for any reason whatsoever pursuant to the terms of this Agreement. "Texas Real Estate" means the Real Estate owned by Cerprobe in Dallas, Texas, encumbered by the mortgage secured by the Real Estate Note. "Total Facility" has the meaning specified in Section 2.1. "Transaction Documents" means the Purchase Agreement and all other documents, agreements and instruments executed and delivered in connection with the Acquisition. "UCC" means the Uniform Commercial Code (or any successor statute), as in effect from time to time, of the State of California or of any other state the laws of which are required as a result thereof to be applied in connection with the issue of perfection of security interests. "Unfunded Pension Liability" means the excess of a Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Plan's assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year. 22 30 "Unused Letter of Credit Subfacility" means an amount equal to $3,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit plus (b) the aggregate unpaid reimbursement obligations with respect to all Letters of Credit. "Unused Line Fee" has the meaning specified in Section 3.5. 1.2 Accounting Terms. Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with GAAP, and all financial computations hereunder shall be computed, unless otherwise specifically provided herein, in accordance with GAAP as consistently applied and using the same method for inventory valuation as used in the preparation of the Financial Statements. 1.3 Interpretive Provisions. (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) The words "hereof," "herein," "hereunder" and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and Subsection, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified. (c) (i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. (ii) The term "including" is not limiting and means "including without limitation." (iii) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the words "to" and "until" each mean "to but excluding" and the word "through" means "to and including." (d) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation. (e) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. (f) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. (g) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Lender, the Borrowers and the other parties, and are the products of all parties. Accordingly, they shall not be construed against 23 31 the Lender or the Lender merely because of the Lender's or Lender' involvement in their preparation. ARTICLE 2 LOANS AND LETTERS OF CREDIT 2.1 Total Facility. Subject to all of the terms and conditions of this Agreement, the Lender agrees to make available a total credit facility of up to $17,000,000 (the "Total Facility") for the Borrowers' use from time to time during the term of this Agreement. The Total Facility shall be composed of: (a) a revolving line of credit consisting of Revolving Loans and Letters of Credit up to the Borrowing Bases of the Borrowers, as described in Sections 2.2 and 2.4; and (b) the Term Loans described in Section 2.3. 2.2 Revolving Loans. (a) Amounts. Subject to the satisfaction of the conditions precedent set forth in Article 10, the Lender agrees, upon a Borrower's request from time to time on any Business Day during the period from the Closing Date to the Termination Date, to make revolving loans (the "Revolving Loans") to the Borrower in amounts not to exceed the Borrowing Base of such Borrower. The Lender, however, may elect to make Revolving Loans or issue or arrange to have issued Letters of Credit in excess of the Availability of a Borrower on one or more occasions but if it does so the Lender shall not be deemed thereby to have changed the limits of the Borrowing Base or to be obligated to exceed such limits on any other occasion. If the Aggregate Revolver Outstandings of a Borrower exceed the Borrowing Base of such Borrower, or the Aggregate Revolver Outstandings of all Borrowers exceed the Borrowing Base of all Borrowers or the Aggregate Availability, the Lender may refuse to make or otherwise restrict the making of Revolving Loans as the Lender determines until such excess has been eliminated. All Revolving Loans shall be deemed first to be Inventory Loans to the maximum amount permitted under the definition of Borrowing Base, and payments of Revolving Loans shall be applied first to Revolving Loans other than Inventory Loans except as required by Section 4.4 or 4.5. (b) Procedure for Borrowing. (i) Each Borrowing shall be made upon a Borrower's irrevocable written notice delivered to the Lender in the form of a notice of borrowing ("Notice of Borrowing") together with a Borrowing Base Certificate reflecting sufficient Availability of such Borrower, (which must be received by the Lender prior to 11:00 a.m. (Los Angeles time) (A) three Business Days prior to the requested Funding Date, in the case of LIBOR Rate Loans and (B) no later than 11:00 a.m. on the requested Funding Date, in the case of Base Rate Loans, specifying: (1) the amount of the Borrowing; (2) the requested Funding Date, which shall be a Business Day; (3) whether the Revolving Loans requested are to be Base Rate Revolving Loans or LIBOR Rate Loans (and if not specified, it shall be deemed a request for a Base Rate Revolving Loan); and 24 32 (4) the duration of the Interest Period if the requested Revolving Loans are to be LIBOR Rate Loans. If the Notice of Borrowing fails to specify the duration of the Interest Period for any Borrowing comprised of LIBOR Rate Loans, such Interest Period shall be one month; provided, however, that with respect to the Borrowing to be made on the Closing Date and all Inventory Loans, such Borrowings will consist of Base Rate Revolving Loans only. (ii) With respect to any request for Base Rate Revolving Loans, in lieu of delivering the above-described Notice of Borrowing the Borrower may give the Lender telephonic notice of such request by the required time, with such telephonic notice to be confirmed in writing within 24 hours of the giving of such notice but the Lender at all times shall be entitled to rely on such telephonic notice in making such Revolving Loans, regardless of whether any such confirmation is received by the Lender. (iii) No Borrower shall have the right to request a LIBOR Rate Loan while a Default or Event of has occurred and is continuing. (c) Reliance upon Authority. Each Borrower shall deliver to the Lender prior to the Closing Date, a writing setting forth the account of the Borrower to which the Lender is authorized to transfer the proceeds of the Revolving Loans requested pursuant to this Section 2.2, which shall be reasonably satisfactory to the Lender. The Lender shall be entitled to rely conclusively on any person's request for Revolving Loans on behalf of a Borrower, the proceeds of which are to be transferred to any of the accounts specified by such Borrower pursuant to the immediately preceding sentence, until the Lender receives written notice from such Borrower that the proceeds of the Revolving Loans are to be sent to a different account. The Lender shall have no duty to verify the identity of any individual representing himself or herself as a person authorized by such Borrower to make such requests on its behalf. (d) No Liability. The Lender shall not incur any liability to any Borrower as a result of acting upon any notice referred to in Sections 2.2(b) and (c), which notice the Lender believes in good faith to have been given by an officer or other person duly authorized by such Borrower to request Revolving Loans on its behalf or for otherwise acting in good faith under this Section 2.2, and the crediting of Revolving Loans to the Borrower's deposit account, as the Borrower shall direct, shall conclusively establish the obligation of the Borrower to repay such Revolving Loans as provided herein. (e) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice in lieu thereof) made pursuant to Section 2.2(b) shall be irrevocable and the Borrower shall be bound to borrow the funds requested therein in accordance therewith. 25 33 2.3 Term Loans. (a) Amount of the Term Loans. The Lender agrees to make a term loan (a "Term Loan") to Cerprobe and CIS on the Closing Date, upon the satisfaction of the conditions precedent set forth in Article 10, in an aggregate amount equal to $2,000,000. The Term Loans shall be Base Rate Loans. (b) Term Loan Notes. Cerprobe and CIS shall execute and deliver to the Lender on the Closing Date a promissory note substantially in the form of Exhibit A attached hereto and made a part hereof (each, a "Term Loan Note") to evidence Term Loans. Each Term Loan Note shall be dated the Closing Date and the principal amount thereof shall be payable in thirty-five (35) monthly installments of $24,916.67 each for Cerprobe's Term Loan and $8,416.67 for CIS's Term Loan, in each case with the first installment due on the first day of the month following the Closing Date, and a final installment due on the Stated Maturity Date in the outstanding balances of the Term Loan Notes. 2.4 Letters of Credit. (a) Agreement to Issue or Cause To Issue. Subject to the terms and conditions of this Agreement, and in reliance upon the representations and warranties of the Borrowers herein set forth, the Lender agrees (i) to cause the Letter of Credit Issuer to issue for the account of any Borrower one or more commercial/documentary and standby letters of credit ("Letter of Credit") and/or (ii) to provide credit support or other enhancement to a Letter of Credit Issuer acceptable to Lender, which issues a Letter of Credit for the account of any Borrower (any such credit support or enhancement being herein referred to as a "Credit Support") in accordance with this Section 2.4 from time to time during the term of this Agreement. (b) Amounts; Outside Expiration Date. The Lender shall not have any obligation to take steps to issue or cause to be issued any Letter of Credit or to provide Credit Support for any Letter of Credit at any time if: (i) the maximum face amount of the requested Letter of Credit is greater than the Unused Letter of Credit Subfacility at such time; (ii) the maximum undrawn amount of the requested Letter of Credit and all commissions, fees, and charges due from the Borrower in connection with the opening thereof exceed the Availability of such Borrower or of all Borrowers at such time; or (iii) such Letter of Credit has an expiration date later than thirty (30) days prior to the Stated Termination Date or more than twelve (12) months from the date of issuance for standby letters of credit and 180 days for merchandise letters of credit. (c) Other Conditions. In addition to being subject to the satisfaction of the applicable conditions precedent contained in Article 10, the obligation of the Lender to issue or to cause to be issued any Letter of Credit or to provide Credit Support for any Letter of Credit is subject to the following conditions precedent having been satisfied in a manner reasonably satisfactory to the Lender: (i) The Borrower shall have delivered to the Letter of Credit Issuer, at such times and in such manner as such Letter of Credit Issuer may prescribe, an application in 26 34 form and substance satisfactory to such Letter of Credit Issuer and the Lender for the issuance of the Letter of Credit and such other documents as may be required pursuant to the terms thereof, and the form and terms of the proposed Letter of Credit shall be reasonably satisfactory to the Lender and the Letter of Credit Issuer; and (ii) As of the date of issuance, no order of any court, arbitrator or Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that the proposed Letter of Credit Issuer refrain from, the issuance of letters of credit generally or the issuance of such Letters of Credit. (d) Issuance of Letters of Credit. (i) Request for Issuance. A Borrower shall give the Lender three (3) Business Days prior written notice of the Borrower's request for the issuance of a Letter of Credit. Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, the effective date (which date shall be a Business Day) of issuance of such requested Letter of Credit, whether such Letter of Credit may be drawn in a single or in partial draws, the date on which such requested Letter of Credit is to expire (which date shall be a Business Day), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit. The Borrower shall attach to such notice the proposed form of the Letter of Credit. (ii) Responsibilities of the Lender; Issuance. The Lender shall determine, as of the Business Day immediately preceding the requested effective date of issuance of the Letter of Credit set forth in the notice from the Borrower pursuant to Section 2.4(d)(1), (A) the amount of the applicable Unused Letter of Credit Subfacility and (B) the Availability as of such date. If (i) the undrawn amount of the requested Letter of Credit is not greater than the Unused Letter of Credit Subfacility and (ii) the amount of such requested Letter of Credit and all commissions, fees, and charges due from the Borrower in connection with the opening thereof would not exceed the Availability, the Lender shall, so long as the other conditions hereof are met, cause the Letter of Credit Issuer to issue the requested Letter of Credit on such requested effective date of issuance. (iii) No Extensions or Amendment. The Lender shall not be obligated to extend or amend any Letter of Credit issued hereunder unless the requirements of this Section 2.4 are met as though a new Letter of Credit were being requested and issued. (e) Payments Pursuant to Letters of Credit. (i) Payment of Letter of Credit Obligations. Each Borrower agrees promptly upon demand to reimburse the Letter of Credit Issuer for any draw under any Letter of Credit and the Lender upon any payment pursuant to any Credit Support, and to pay the Letter of Credit Issuer the amount of all other obligations and other amounts payable to such Letter of 27 35 Credit Issuer under or in connection with any Letter of Credit immediately when due, irrespective of any claim, setoff, defense or other right which the Borrower may have at any time against such issuer or any other Person. (ii) Revolving Loans to Satisfy Reimbursement Obligations. Each drawing under any Letter of Credit shall constitute a request by the applicable Borrower to the Lender for a Borrowing of a Base Rate Revolving Loan in the amount of such drawing. The Funding Date with respect to such borrowing shall be the date of such drawing. (f) Indemnification; Exoneration; Power of Attorney (i) Indemnification. In addition to amounts payable as elsewhere provided in this Section 2.4, each Borrower hereby agrees to protect, indemnify, pay and save the Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) which the Lender (other than the Lender in its capacity as Letter of Credit Issuer) may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit or the provision of any Credit Support or enhancement in connection therewith. The agreement in this Section 2.4(g)(1) shall survive payment of all Obligations. Nothing contained in this Agreement is intended to limit the Borrower's rights, if any, with respect to the Letter of Credit Issuer which arise as a result of the letter of credit application and related documents executed by and between the Borrower and the Letter of Credit Issuer. (ii) Assumption of Risk by the Borrowers. As among the Borrowers and the Lender, the Borrowers assume all risks of the acts and omissions of, or misuse of any of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Lender shall not be responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any Person in connection with the application for and issuance of and presentation of drafts with respect to any of the Letters of Credit, even if it should prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (C) the failure of the beneficiary of any Letter of Credit to comply duly with conditions required in order to draw upon such Letter of Credit; (D) errors, omissions, interruptions, or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (E) errors in interpretation of technical terms; (F) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (G) the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (H) any consequences arising from causes beyond the control of the Lender, including any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority. None of the foregoing shall affect, impair or prevent the vesting of any rights or powers of the Lender under this Section 2.4(g). (iii) Exoneration. In furtherance and extension, and not in limitation, of the specific provisions set forth above, any action taken or omitted by the Lender under or in 28 36 connection with any of the Letters of Credit or any related certificates, if taken or omitted in good faith, shall not put the Lender under any resulting liability to the Borrowers or relieve the Borrowers of any obligations hereunder to the Lender. Nothing contained in this Agreement is intended to limit any Borrower's rights, if any, with respect to the Letter of Credit Issuer which arise as a result of the letter of credit application and related documents executed by and between the Borrower and the Letter of Credit Issuer. (iv) Power of Attorney. In connection with all Inventory financed by Letters of Credit, each Borrower hereby appoints the Lender, or the Lender's designee, as its attorney, with full power and authority: (a) to sign and/or endorse the Borrower's name upon any warehouse or other receipts; (b) to sign the Borrower's name on bills of lading and other negotiable and non-negotiable documents; (c) to clear Inventory through customs in the Lender's or the Borrower's name, and to sign and deliver to customs officials powers of attorney in the Borrower's name for such purpose; (d) to complete in the Borrower's or the Lender's name, any order, sale, or transaction, obtain the necessary documents in connection therewith, and collect the proceeds thereof; and (e) to do such other acts and things as are necessary in order to enable the Lender to obtain possession or control of the Inventory and to obtain payment of the Obligations. Neither the Lender nor its designee, as the Borrower's attorney, will be liable for any acts or omissions, nor for any error of judgment or mistakes of fact or law. This power, being coupled with an interest, is irrevocable until all Obligations have been paid and satisfied. (v) Account Party. Each Borrower hereby authorizes and directs any Letter of Credit Issuer to name the Borrower as the "Account Party" therein and to deliver to the Lender all instruments, documents and other writings and property received by the Letter of Credit Issuer pursuant to the Letter of Credit, and to accept and rely upon the Lender's instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the application therefor. (vi) Control of Inventory. In connection with all Inventory financed by Letters of Credit, each Borrower will, at the Lender's request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses or others receiving or holding cash, checks, Inventory, documents or instruments in which the Lender holds a security interest to deliver them to the Lender and/or subject to the Lender's order, and if they shall come into the Borrower's possession, to deliver them, upon request, to the Lender in their original form. The Borrower shall also, at the Lender's request, designate the Lender as the consignee on all bills of lading and other negotiable and non-negotiable documents. (h) Supporting Letter of Credit; Cash Collateral. If, notwithstanding the provisions of Section 2.4(b) and Section 12.1 any Letter of Credit is outstanding upon the termination of this Agreement, then upon such termination the Borrowers shall deposit with the Lender, with respect to each Letter of Credit or Credit Support then outstanding, as the Lender in its discretion shall specify, either (i) a standby letter of credit (a "Supporting Letter of Credit") in form and substance satisfactory to the Lender, issued by an issuer satisfactory to the Lender in an amount equal to the greatest amount for which such Letter of Credit or such Credit Support may be drawn plus any fees and expenses associated with such Letter of Credit or such Credit Support, under which Supporting Letter of Credit the Lender is entitled to draw amounts necessary to reimburse the Lender for payments to be made by the Lender under such Letter of 29 37 Credit or Credit Support and any fees and expenses associated with such Letter of Credit or Credit Support, or (ii) cash in amounts necessary to reimburse the Lender for payments made by the Lender under such Letter of Credit or such Credit Support and any fees and expenses associated with such Letter of Credit. Such Supporting Letter of Credit or deposit of cash shall be held by the Lender as security for, and to provide for the payment of, the aggregate undrawn amount of such Letters of Credit or such Credit Support remaining outstanding. 2.5 Bank Products. A Borrower may request and the Lender may, in its sole and absolute discretion, arrange for the Borrower to obtain from the Lender or the Lender's Affiliates Bank Products although the Borrower is not required to do so. To the extent Bank Products are provided by an Affiliate, the Borrowers agree to indemnify and hold the Lender harmless from any and all costs and obligations now or hereafter incurred by the Lender which arise from the indemnity given by the Lender to its Affiliate relating to such Bank Products; provided, however, nothing contained herein is intended to limit the Borrowers' rights, with respect to the Lender or its Affiliates, if any, which arise as a result of the execution of documents by and between a Borrower and the Lender or its Affiliates which relate to Bank Products. The agreement contained in this section shall survive termination of the Agreement. Each Borrower acknowledges and agrees that the obtaining of Bank Products from the Lender or the Lender's Affiliates (a) is in the sole and absolute discretion of the Lender or the Lender's Affiliates, and (b) is subject to all rules and regulations of the Lender or the Lender's Affiliates. ARTICLE 3 INTEREST AND FEES 3.1 Interest. (a) Interest Rates. All outstanding Obligations shall bear interest on the unpaid principal amount thereof (including, to the extent permitted by law, on interest thereon not paid when due) from the date made until paid in full in cash at a rate determined by reference to the Base Rate or the LIBOR Rate and Sections 3.1(a)(i) or (ii), as applicable, but not to exceed the Maximum Rate described in Section 3.3. Subject to the provisions of Section 3.2, any of the Revolving Loans other than Inventory Loans may be converted into, or continued as, Base Rate Loans or LIBOR Rate Loans in the manner provided in Section 3.2. The Term Loans and all Inventory Loans shall be Base Rate Loans. If at any time Revolving Loans are outstanding with respect to which notice has not been delivered to the Lender in accordance with the terms of this Agreement specifying the basis for determining the interest rate applicable thereto, then those Loans shall be Base Rate Loans and shall bear interest at a rate determined by reference to the Base Rate until notice to the contrary has been given to the Lender in accordance with this Agreement and such notice has become effective. Except as otherwise provided herein, the outstanding Obligations shall bear interest as follows: (i) For the Term Loans at a fluctuating per annum rate equal to the Base Rate plus the Applicable Margin; 30 38 (ii) For all Base Rate Revolving Loans and other Obligations (other than the Term Loans and LIBOR Rate Loans) at a fluctuating per annum rate equal to the Base Rate plus the Applicable Margin; and (iii) For all LIBOR Rate Loans at a per annum rate equal to the LIBOR Rate plus the Applicable Margin. Each change in the Base Rate shall be reflected in the interest rate described in clause (i) above as of the effective date of such change. All interest charges shall be computed on the basis of a year of 360 days and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest accrued on all Loans will be payable in arrears on the first day of each month hereafter and on the Termination Date. (b) Default Rate. If any Default or Event of Default occurs and is continuing and the Lender in its discretion so elect, then, while any such Default or Event of Default is continuing, all of the Obligations shall bear interest at the Default Rate applicable thereto. 3.2 Continuation and Conversion Elections. (a) A Borrower may, upon irrevocable written notice to the Lender in accordance with Section 3.2(b): (i) elect, as of any Business Day, in the case of Base Rate Revolving Loans (other than Inventory Loans) to convert any such Loans (or any part thereof in an amount not less than $1,000,000, or that is in an integral multiple of $500,000 in excess thereof) into LIBOR Rate Loans; or (ii) elect, as of the last day of the applicable Interest Period, to continue any LIBOR Rate Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than $1,000,000, or that is in an integral multiple of $500,000 in excess thereof); provided, that if at any time the aggregate amount of LIBOR Rate Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less than $1,000,000, such LIBOR Rate Loans shall automatically convert into Base Rate Loans, and on and after such date the right of the Borrower to continue such Loans as, and convert such Loans into, LIBOR Rate Loans, as the case may be, shall terminate, and provided further that if the notice shall fail to specify the duration of the Interest Period, such Interest Period shall be one month. (b) Each Borrower shall deliver a notice of continuation/conversion ("Notice of Continuation/Conversion") to be received by the Lender not later than 11:00 a.m. (Los Angeles time) at least three (3) Business Days in advance of the Continuation/Conversion Date, if the Loans are to be converted into or continued as LIBOR Rate Loans and specifying: (i) the proposed Continuation/Conversion Date; (ii) the aggregate amount of Loans to be converted or renewed; 31 39 (iii) the type of Loans resulting from the proposed conversion or continuation; and (iv) the duration of the requested Interest Periods. (c) If upon the expiration of any Interest Period applicable to LIBOR Rate Loans, a Borrower has failed to select timely a new Interest Period to be applicable to LIBOR Rate Loans or if any Default or Event of Default then exists, the Borrower shall be deemed to have elected to convert such LIBOR Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period. (d) During the existence of a Default or Event of Default, no Borrower may elect to have a Loan converted into or continued as a LIBOR Rate Loan. (e) After giving effect to any conversion or continuation of Loans, there may not be more than four (4) different Interest Periods in effect hereunder. 3.3 Maximum Interest Rate. In no event shall any interest rate provided for hereunder exceed the maximum rate legally chargeable by the Lender under applicable law with respect to loans of the type provided for hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent such limitation, would have exceeded the Maximum Rate, then the interest rate for that month shall be the Maximum Rate, and, if in future months, that interest rate would otherwise be less than the Maximum Rate, then that interest rate shall remain at the Maximum Rate until such time as the amount of interest paid hereunder equals the amount of interest which would have been paid if the same had not been limited by the Maximum Rate. In the event that, upon payment in full of the Obligations, the total amount of interest paid or accrued under the terms of this Agreement is less than the total amount of interest which would, but for this Section 3.3, have been paid or accrued if the interest rate otherwise set forth in this Agreement had at all times been in effect, then the Borrower shall, to the extent permitted by applicable law, pay the Lender an amount equal to the excess of (a) the lesser of (i) the amount of interest which would have been charged if the Maximum Rate had, at all times, been in effect or (ii) the amount of interest which would have accrued had the interest rate otherwise set forth in this Agreement, at all times, been in effect over (b) the amount of interest actually paid or accrued under this Agreement. In the event that a court of competent jurisdiction determines that the Lender has received interest and other charges hereunder in excess of the Maximum Rate, such excess shall be deemed received on account of, and shall automatically be applied to reduce, the Obligations other than interest, in the inverse order of maturity, and if there are no Obligations outstanding, the Lender shall refund to the applicable Borrower such excess. 3.4 Closing Fee. The Borrowers, jointly and severally, agree to pay the Lender on the Closing Date a closing fee (the "Closing Fee") in the amount of $170,000, which Closing Fee shall be fully earned by the Lender on the Closing Date, and non-refundable. The Lender and the Borrowers agree that the Closing Fee shall be financed by the Lender as a Revolving Loan. 3.5 Unused Line Fee. Until the Loans have been paid in full and the Agreement terminated, the Borrowers, jointly and severally, agree to pay, on the first day of each month and on the Termination Date, to the Lender an unused line fee (the "Unused Line Fee") equal to 32 40 three-eighths of one percent (3/8%) per annum times the amount by which the Maximum Revolver Amount exceeded the sum of the average daily outstanding amount of Revolving Loans and the average daily undrawn face amount of outstanding Letters of Credit, during the immediately preceding month or shorter period if calculated on the Termination Date. The Unused Line Fee shall be computed on the basis of a 360-day year for the actual number of days elapsed. All payments received by the Lender shall be deemed to be credited to the Borrowers' Loan Accounts immediately upon receipt for purposes of calculating the Unused Line Fee pursuant to this Section 3.5. 3.6 Letter of Credit Fee. Each Borrower agrees to pay to the Lender for each Letter of Credit issued for its account, a fee (the "Letter of Credit Fee") equal to one and one-quarter percent (1 1/4%) per annum of the undrawn face amount of each Letter of Credit, plus all out-of-pocket costs, fees and expenses incurred by the Lender in connection with the application for, processing of, issuance of, or amendment to any Letter of Credit, which costs, fees and expenses shall include a "fronting fee" payable to such issuer; The Letter of Credit Fee shall be payable monthly in arrears on the first day of each month following any month in which a Letter of Credit was issued and/or in which a Letter of Credit remains outstanding and on the Termination Date. The Letter of Credit Fee shall be computed on the basis of a 360-day year for the actual number of days elapsed. ARTICLE 4 PAYMENTS AND PREPAYMENTS 4.1 Revolving Loans. The Borrowers shall repay the outstanding principal balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on the Termination Date. The Borrowers may prepay Revolving Loans at any time, and reborrow subject to the terms of this Agreement; provided, however, that with respect to any LIBOR Rate Loans prepaid by the Borrowers prior to the expiration date of the Interest Period applicable thereto, the Borrowers shall pay to the Lender the amounts described in Section 5.4. In addition, and without limiting the generality of the foregoing, upon demand each Borrower shall pay to the Lender the amount, without duplication, by which the Aggregate Revolver Outstandings of such Borrower exceeds its Borrowing Base, or the aggregate Inventory Loans of such Borrower exceed the Inventory Sublimit of such Borrower. 4.2 Termination of Facility. The Borrowers may terminate this Agreement upon at least thirty (30) Business Days' notice to the Lender, upon (a) the payment in full of all outstanding Revolving Loans, together with accrued interest thereon, and the cancellation and return of all outstanding Letters of Credit, (b) the prepayment in full of the Term Loans, together with accrued and unpaid interest thereon, (c) the payment of the early termination fee set forth in the next sentence, (d) the payment in full in cash of all other Obligations, together with accrued and unpaid interest thereon, and (e) with respect to any LIBOR Rate Loans prepaid in connection with such termination prior to the expiration date of the Interest Period applicable thereto, the payment of the amounts described in Section 5.4. If this Agreement is terminated at any time prior to the Stated Termination Date, whether pursuant to this Section or pursuant to 33 41 Section 11.2, the Borrowers shall, jointly and severally, pay to the Lender an early termination fee determined in accordance with the following table:
PERIOD DURING WHICH EARLY TERMINATION EARLY TERMINATION OCCURS FEE ------------------- ----------------- On or prior to the first Anniversary Date 3% of the average Loans and Letters of Credit outstanding during the 180 days (or lesser period if within 180 days of the Closing Date) prior to the date of termination. After the first Anniversary Date but on or 2% of the average Loans and Letters of Credit prior to the second Anniversary Date outstanding during the 180 days prior to the date of termination. After the second Anniversary Date but prior 1% of the average Loans and Letters of Credit to the Stated Termination Date outstanding during the 180 days prior to the date of termination.
Notwithstanding the foregoing, no early termination fee shall be payable if the Loans are repaid in full (a) with the proceeds of Debt extended by another division of the Lender, or a subsidiary or affiliate of the Lender, (b) repaid in full from the proceeds of a Debt or equity offering arranged by another division of the Lender, or a subsidiary of affiliate of the Lender, or (c) concurrently with the consummation of a transaction involving the merger of Cerprobe, or the acquisition of substantially all of the assets of Cerprobe, for which transaction the Lender, or a subsidiary or affiliate of the Lender, acted as the financial advisor for Cerprobe. 4.3 Repayment of the Term Loans. Cerprobe and CIS, as the case may be, agree to repay the principal of the Term Loans to the Lender in accordance with the terms of the Term Loan Notes and Section 2.3(b) above. 4.4 Voluntary Prepayments of the Term Loans; Voluntary Reduction of Inventory Sublimit. The Borrowers may prepay the principal of the Term Loans in whole or in part, and may prepay the Inventory Loans and concurrently permanently reduce the Inventory Sublimit, at any time and from time to time upon at least five (5) Business Days' prior written notice to the Lender. Any voluntary prepayment under this Section 4.4 of less than all of the outstanding principal of any Term Loan shall be applied to the installments of principal of the applicable Term Loan in the inverse order of maturity, and any reduction of the Inventory Sublimit shall be applied in inverse order of the scheduled reductions. Amounts prepaid in respect of any Term Loan pursuant to this Section 4.4 may not be reborrowed. No early termination fee is required unless such prepayments are made concurrently with the termination of this Agreement and a termination fee is then payable under Section 4.2. 4.5 Mandatory Prepayments of the Term Loans and Inventory Loans. (a) The Borrowers shall prepay the entire unpaid principal balance of the Term Loans, and all accrued but unpaid interest thereon, on the Termination Date. 34 42 (b) In addition, the Term Loans shall be prepaid to the extent and in the manner required by Sections 6.11, 9.5(c) and 9,6(b). (c) On the last Business Day of each month, commencing in March 2000, the Borrowers shall prepay the Inventory Loans and permanently reduce the Inventory Sublimit by an amount equal to the amount by which the average Aggregate Availability plus cash or cash equivalents of the Borrowers during the immediately preceding three months exceeded $4,000,000. Any prepayments shall permanently reduce the Inventory Sublimit in the inverse order of scheduled reductions in the amount of each prepayment. 4.6 Payments by the Borrowers. (a) All payments to be made by the Borrowers shall be made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein, all payments by the Borrowers shall be made to the Lender at the account designated by the Lender, and shall be made in Dollars and in immediately available funds, no later than 1:00 p.m. (Los Angeles time) on the date specified herein. Any payment received by the Lender later than 1:00 p.m. (Los Angeles time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue. (b) Subject to the provisions set forth in the definition of "Interest Period" herein, whenever any payment is due on a day other than a Business Day, such payment shall be due on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. 4.7 Payments as Revolving Loans. All payments of principal, interest, reimbursement obligations in connection with Letters of Credit and Credit Support for Letters of Credit, fees, premiums and other sums payable hereunder, including all reimbursements for expenses pursuant to Section 14.7, may, at the option of the Lender, in its sole discretion, subject only to the terms of this Section 4.7, be paid from the proceeds of Revolving Loans made hereunder, whether made following a request by a Borrower pursuant to Section 2.2 or a deemed request as provided in this Section 4.7. Each Borrower hereby irrevocably authorizes the Lender to charge its Loan Account for the purpose of paying principal, interest, reimbursement obligations in connection with Letters of Credit and Credit Support for Letters of Credit, fees, premiums and other sums payable hereunder, including reimbursing expenses pursuant to Section 14.7, and agrees that all such amounts charged shall constitute Revolving Loans and that all such Revolving Loans so made shall be deemed to have been requested by Borrowers pursuant to Section 2.2. 4.8 Application and Reversal of Payments. The Lender shall determine in its sole discretion the order and manner in which Proceeds of Collateral and other payments that the Lender receives are applied to the Revolving Loans, the Term Loans, interest thereon, and the other Obligations, and each Borrower hereby irrevocably waives the right to direct the application of any payment or Proceeds. The Lender shall have the continuing and exclusive right to apply and reverse and reapply any and all such Proceeds and payments to any portion of the Obligations. 4.9 Indemnity for Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations, the Lender is for any reason compelled to 35 43 surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Lender and the Borrowers shall be liable to pay to the Lender and hereby indemnify the Lender and hold the Lender harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 4.9 shall be and remain effective notwithstanding any contrary action which may have been taken by the Lender in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Lender's rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 4.9 shall survive the termination of this Agreement. 4.10 Lender's Books and Records; Monthly Statements. Each Borrower agrees that the Lender's books and records showing the Obligations and the transactions pursuant to this Agreement and the other Loan Documents shall be admissible in any action or proceeding arising therefrom, and shall constitute rebuttably presumptive proof thereof, irrespective of whether any Obligation is also evidenced by a promissory note or other instrument. The Lender will provide to the Borrowers a monthly statement of Loans, payments, and other transactions pursuant to this Agreement. Such statement shall be deemed correct, accurate, and binding on the Borrowers and an account stated (except for reversals and reapplications of payments made as provided in Section 4.8 and corrections of errors discovered by the Lender), unless the Borrowers notify the Lender in writing to the contrary within thirty (30) days after such statement is rendered. In the event a timely written notice of objections is given by the Borrowers, only the items to which exception is expressly made will be considered to be disputed by the Borrowers. ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY 5.1 Taxes. (a) Any and all payments by the Borrowers to the Lender under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for any Taxes. In addition, the Borrowers shall pay all Other Taxes. (b) The Borrowers agree to indemnify and hold harmless the Lender for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section) paid by the Lender and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the Lender makes written demand therefor. (c) If the Borrowers shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to the Lender, then: 36 44 (i) the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section) the Lender receives an amount equal to the sum it would have received had no such deductions or withholdings been made; (ii) the Borrowers shall make such deductions and withholdings; (iii) the Borrowers shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and (iv) the Borrowers shall also pay to the Lender at the time interest is paid, all additional amounts which the Lender specifies as necessary to preserve the after-tax yield the Lender would have received if such Taxes or Other Taxes had not been imposed. (d) Within 30 days after the date of any payment by the Borrowers of Taxes or Other Taxes, the Borrowers shall furnish the Lender the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to the Lender. (e) If the Borrowers are required to pay additional amounts to the Lender pursuant to subsection (c) of this Section, then the Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its lending office so as to eliminate any such additional payment by the Borrowers which may thereafter accrue, if such change in the judgment of the Lender is not otherwise disadvantageous to the Lender. 5.2 Illegality. (a) If the Lender determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for the Lender or its applicable lending office to make LIBOR Rate Loans, then, on notice thereof by the Lender to the Borrowers, any obligation of the Lender to make LIBOR Rate Loans shall be suspended until the Lender notifies the Borrowers that the circumstances giving rise to such determination no longer exist. (b) If the Lender determines that it is unlawful to maintain any LIBOR Rate Loan, the Borrowers shall, upon receipt of notice of such fact and demand from the Lender, prepay in full such LIBOR Rate Loans of the Lender then outstanding, together with interest accrued thereon and amounts required under Section 5.4, either on the last day of the Interest Period thereof, if the Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately, if the Lender may not lawfully continue to maintain such LIBOR Rate Loan. If the Borrower is required to so prepay any LIBOR Rate Loan, then concurrently with such prepayment, the Borrowers shall borrow from the Lender, in the amount of such repayment, a Base Rate Loan. 5.3 Increased Costs and Reduction of Return. (a) If the Lender determines that due to either (i) the introduction of or any change in the interpretation of any law or regulation or (ii) the compliance by the Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to the Lender of agreeing to make or making, funding or maintaining any LIBOR Rate Loans, then the Borrower shall be liable for, and shall from time to time, upon demand, pay to 37 45 the Lender additional amounts as are sufficient to compensate the Lender for such increased costs. (b) If the Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by the Lender or any corporation or other entity controlling the Lender with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by the Lender or any corporation or other entity controlling the Lender and (taking into consideration the Lender's or such corporation's or other entity's policies with respect to capital adequacy and the Lender's desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitments, loans, credits or obligations under this Agreement, then, upon demand of the Lender to the Borrowers, the Borrowers shall pay to the Lender, from time to time as specified by the Lender, additional amounts sufficient to compensate the Lender for such increase. 5.4 Funding Losses. The Borrowers shall reimburse the Lender and hold the Lender harmless from any loss or expense which the Lender may sustain or incur as a consequence of: (a) the failure of the Borrowers to make on a timely basis any payment of principal of any LIBOR Rate Loan; (b) the failure of the Borrowers to borrow, continue or convert a Revolving Loan after a Borrower has given (or is deemed to have given) a Notice of Borrowing or a Notice of Continuation/Conversion; or (c) the prepayment or other payment (including after acceleration thereof) of any LIBOR Rate Loan on a day that is not the last day of the relevant Interest Period; including any such loss of anticipated profit and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to terminate the deposits from which such funds were obtained. Borrowers shall also pay any customary administrative fees charged by the Lender in connection with the foregoing. 5.5 Inability to Determine Rates. If the Lender determines that for any reason adequate and reasonable means do not exist for determining the LIBOR Revolving for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or that the LIBOR Revolving for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lender of funding such Loan, the Lender will promptly so notify the Borrowers. Thereafter, the obligation of the Lender to make or maintain LIBOR Rate Loans hereunder shall be suspended until the Lender revokes such notice in writing. Upon receipt of such notice, the Borrowers may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it. If the Borrowers do not revoke such Notice, the Lender shall make, convert or continue the Loans, as proposed by the Borrowers, in the amount specified in the applicable notice submitted by the Borrowers, but such Loans shall be made, converted or continued as Base Rate Loans instead of LIBOR Rate Loans. 38 46 5.6 Certificates of Lender. In the event the Lender claims reimbursement or compensation under this Article 5 it shall deliver to the Borrowers a certificate setting forth in reasonable detail the amount payable to the Lender hereunder and such certificate shall be conclusive and binding on the Borrowers in the absence of manifest error. 5.7 Survival. The agreements and obligations of the Borrowers in this Article 5 shall survive the payment of all other Obligations. ARTICLE 6 COLLATERAL 6.1 Grant of Security Interest. (a) As security for payment and performance all of its Obligations, each Borrower hereby grants to the Lender a continuing security interest in, lien on, assignment of and right of set-off against, all of the following property and assets of such Borrower, whether now owned or existing or hereafter acquired or arising, regardless of where located: (i) all Accounts (including any credit enhancement therefor); (ii) all Inventory; (iii) all contract rights, letters of credit, Assigned Contracts, chattel paper, instruments, notes, documents, and documents of title; (iv) all General Intangibles; (v) all Equipment; (vi) all Investment Property (vii) all money, cash, cash equivalents, securities and other property of any kind of such Borrower held directly or indirectly by the Lender; (viii) all of such Borrower's deposit accounts, credits, and balances with and other claims against the Lender or any of its Affiliates or any other financial institution with which the Borrower maintains deposits, including any Payment Accounts; (ix) all books, records and other property related to or referring to any of the foregoing, including books, records, account ledgers, data processing records, computer software and other property and General Intangibles at any time evidencing or relating to any of the foregoing; and (x) all accessions to, substitutions for and replacements, products and proceeds of any of the foregoing, including, but not limited to, proceeds of any insurance policies, claims against third parties, and condemnation or requisition payments with respect to all or any of the foregoing. 39 47 All of the foregoing, and all other property of the Borrowers in which the Lender may at any time be granted a Lien, is herein collectively referred to as the "Collateral." (b) As additional security for all of its Obligations, Cerprobe and CIS shall simultaneously herewith execute and deliver to the Lender a Pledge Agreement and immediately following consummation of the Acquisition Oz and TSE shall execute and deliver to the Lender a Pledge Agreement, in each case pledging to the Lender all of the issued and outstanding capital stock of each Subsidiary other than any Foreign Subsidiary, and no less than 65% of the issued and outstanding capital stock of each direct Foreign Subsidiaries. (c) All of the Obligations of a Borrower shall be secured by all of the Collateral of a Borrower. 6.2 Perfection and Protection of Security Interest. (a) The Borrowers shall, at their expense, perform all steps requested by the Lender at any time to perfect, maintain, protect, and enforce the Lender's Liens, including: (i) executing, delivering and/or filing and recording of, the Patent and Trademark Agreements and executing and filing financing or continuation statements, and amendments thereof, in form and substance reasonably satisfactory to the Lender; (ii) delivering to the Lender the originals of all instruments, documents, and chattel paper, and all other Collateral of which the Lender determines it should have physical possession in order to perfect and protect the Lender's security interest therein, duly pledged, endorsed or assigned to the Lender without restriction; (iii) delivering to the Lender warehouse receipts covering any portion of the Collateral located in warehouses and for which warehouse receipts are issued and certificates of title covering any portion of the collateral for which certificates of title have been issued; (iv) when an Event of Default exists, transferring Inventory to warehouses or other locations designated by the Lender; (v) placing notations on the Borrower's books of account to disclose the Lender's security interest; (vii) delivering to the Lender all letters of credit on which any Borrower is named beneficiary; and (viii) taking such other steps as are deemed necessary or desirable by the Lender to maintain and protect the Lender's Liens. To the extent permitted by applicable law, the Lender may file, without the applicable Borrower's signature, one or more financing statements disclosing the Lender's Liens. Each Borrower agrees that a carbon, photographic, photostatic, or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. (b) If any Collateral is at any time in the possession or control of any warehouseman, bailee or any of the Borrower's agents or processors, then the Borrower shall notify the Lender thereof and shall, at the request of Lender, notify such Person of the Lender's security interest in such Collateral and instruct such Person to hold all such Collateral for the Lender's account subject to the Lender's instructions. If at any time any Collateral is located in any operating facility of a Borrower not owned by the Borrower, then the Borrower shall, at the request of the Lender, obtain written landlord lien waivers or subordinations, in form and substance reasonably satisfactory to the Lender, of all present and future Liens to which the owner or lessor of such premises may be entitled to assert against the Collateral. (c) From time to time, each Borrower shall, upon the Lender's request, execute and deliver confirmatory written instruments pledging to the Lender the Collateral, but the Borrower's failure to do so shall not affect or limit any security interest or any other rights of 40 48 the Lender in and to the Collateral. So long as this Agreement is in effect and until all Obligations have been fully satisfied, the Lender's Liens shall continue in full force and effect in all Collateral (whether or not deemed eligible for the purpose of calculating the Borrowing Base of any Borrower or as the basis for any advance, loan, extension of credit, or other financial accommodation). 6.3 Location of Collateral. Each Borrower represents and warrants to the Lender that: after giving effect to the Acquisition and the addition of Oz and TSE as Borrowers hereunder, (a) Schedule 6.3 is a correct and complete list of the Borrowers' chief executive offices, the location of their books and records, the locations of the Collateral, and the locations of all other places of business of the Borrowers; and (b) Schedule 6.3 correctly identifies any of such facilities and locations that are not owned by the applicable Borrower and sets forth the names of the owners and lessors or sublessors of such facilities and locations. Each Borrower covenants and agrees that it will not (a) maintain any Collateral at any location other than those locations listed for such Borrower on Schedule 6.3, (b) otherwise change or add to any of such locations, or (c) change the location of its chief executive office from the location identified in Schedule 6.3, unless it gives the Lender at least thirty (30) days' prior written notice thereof and executes any and all financing statements and other documents that the Lender reasonably requests in connection therewith. Without limiting the foregoing, each Borrower represents that all of its Inventory (other than Inventory in transit) is, and covenants that all of its Inventory will be, located either (a) on premises owned by such Borrower, (b) on premises leased by such Borrower, provided that the Lender has, if requested by the Lender, received an executed landlord waiver from the landlord of such premises in form and substance satisfactory to the Lender within thirty (30) days after the Closing Date, or (c) in a warehouse or with a bailee, provided that the Lender has, if requested by the Lender, received an executed bailee letter from the applicable Person in form and substance satisfactory to the Lender. 6.4 Title to, Liens on, and Sale and Use of Collateral. Each Borrower represents and warrants to the Lender and agrees with the Lender that: (a) all of the Collateral is and will continue to be owned by the applicable Borrower free and clear of all Liens whatsoever, except for Permitted Liens; (b) the Lender's Liens in the Collateral will not be subject to any prior Lien except for Permitted Liens; and (c) the Borrowers will use, store, and maintain the Collateral with all reasonable care and will use such Collateral for lawful purposes only. 6.5 Appraisals. Whenever a Default or Event of Default exists, and at such other times not more frequently than once a year as the Lender requests, the Borrowers shall, at their expense and upon the Lender's request, provide the Lender with appraisals or updates thereof of any or all of the Collateral from an appraiser, and prepared on a basis, reasonably satisfactory to the Lender, such appraisals and updates to include, without limitation, information required by applicable law and regulation and by the internal policies of the Lender. 6.6 Access and Examination; Confidentiality; Consent to Advertising. (a) The Lender may at all reasonable times during regular business hours upon prior notice (and at any time when a Default or Event of Default exists and is continuing) have access to, examine, audit, make extracts from or copies of and inspect any or all of the Borrowers' records, files, and books of account and the Collateral, and discuss the Borrowers' affairs with the Borrowers' officers and management. The Borrowers will deliver to the Lender any instrument necessary for the 41 49 Lender to obtain records from any service bureau maintaining records for any Borrower. The Lender may, at any time when a Default or Event of Default exists, and at the Borrowers' expense, make copies of all of the Borrowers' books and records, or require the Borrowers to deliver such copies to the Lender. The Lender may, without expense to the Lender, use such of the Borrowers' respective personnel, supplies, and Real Estate as may be reasonably necessary for maintaining or enforcing the Lender's Liens. The Lender shall have the right, at any time, in the Lender's name or in the name of a nominee of the Lender, to verify the validity, amount or any other matter relating to the Accounts, Inventory, or other Collateral, by mail, telephone, or otherwise. (b) The Lender agrees to take normal and reasonable precautions and exercise due care to maintain the confidentiality of all information identified as "confidential" or "secret" by the Borrowers and provided to the Lender by or on behalf of the Borrowers, under this Agreement or any other Loan Document; provided, however, that the Lender may disclose such information (a) at the request or pursuant to any requirement of any Governmental Authority to which the Lender is subject or in connection with an examination of the Lender by any such Governmental Authority; (b) pursuant to subpoena or other court process; (c) when required to do so in accordance with the provisions of any applicable Requirement of Law; (d) to the extent reasonably required in connection with any litigation or proceeding (including, but not limited to, any bankruptcy proceeding) to which the Lender or its respective Affiliates may be party; (e) to the extent reasonably required in connection with the exercise of any remedy hereunder or under any other Loan Document; (f) to the Lender's independent auditors, accountants, attorneys and other professional advisors; (g) to any prospective Participant, actual or potential, provided that such prospective Participant agrees to keep such information confidential to the same extent required of the Lender; (h) as expressly permitted under the terms of any other document or agreement regarding confidentiality to which any Borrower is party or is deemed party with the Lender; and (i) to its Affiliates. 6.7 Collateral Reporting. The Borrowers shall provide the Lender with the following documents at the following times in form satisfactory to the Lender: (a) on a daily basis, a schedule of each Borrower's Accounts created since the last such schedule and a Borrowing Base Certificate; (b) on a monthly basis, by the 10th day of the following month, or more frequently if requested by the Lender, an aging of each Borrower's Accounts, together with a reconciliation to the previous month's aging of the Borrower's Accounts and to each Borrower's general ledger; (c) on a monthly basis, by the 15th day of the following month, or more frequently if requested by the Lender, an aging of the Borrower's accounts payable; (d) on a monthly basis, by the 10th day of the following month, or more frequently if requested by the Lender, Inventory reports by category, with additional detail showing additions to and deletions from the Inventory during such month; (e) on a monthly basis, by the 10th day of the following month, or more frequently if requested by the Lender, a reconciliation of the Inventory to the general ledger; (f) upon request, copies of invoices in connection with the Borrowers' Accounts, customer statements, credit memos, remittance advices and reports, deposit slips, shipping and delivery documents in connection with the Borrowers' Accounts and for Inventory and Equipment acquired by the Borrowers, purchase orders and invoices; (g) upon request, a statement of the balance of each of the Intercompany Accounts; (h) such other reports as to the Collateral of the Borrowers as the Lender shall reasonably request from time to time; (i) on a monthly basis, by the last Business Day of the following month, a report of the average cash and 42 50 cash equivalents held by the Borrowers during the prior month and, commencing in March 2000, during the prior three months; provided that no report shall be required with respect to cash or cash equivalents held at Bank of America; and (j) with the delivery of each of the foregoing, a certificate of each Borrower executed by a Responsible Officer thereof certifying as to the accuracy and completeness of the foregoing. If any of the Borrowers' records or reports of the Collateral are prepared by an accounting service or other Lender, the Borrowers hereby authorize such service or Lender to deliver such records, reports, and related documents to the Lender. 6.8 Accounts. (a) Each Borrower hereby represents and warrants to the Lender, with respect to its Accounts, that: (i) each existing Account represents, and each future Account will represent, a bona fide sale or lease and delivery of goods by the Borrower, or rendition of services by the Borrower, in the ordinary course of the Borrower's business; (ii) each existing Account is, and each future Account will be, for a liquidated amount payable by the Account Debtor thereon on the terms set forth in the invoice therefor or in the schedule thereof delivered to the Lender, without any offset, deduction, defense, or counterclaim except those known to the Borrower and disclosed to the Lender pursuant to this Agreement; (iii) no payment will be received with respect to any Account, and no credit, discount, or extension, or agreement therefor will be granted on any Account, except as reported to the Lender in accordance with this Agreement; (iv) each copy of an invoice delivered to the Lender by the Borrowers will be a genuine copy of the original invoice sent to the Account Debtor named therein; and (v) all goods described in any invoice representing a sale of goods will have been delivered to the Account Debtor and all services of the Borrowers described in each invoice will have been performed. (b) No Borrower shall re-date any invoice or sale or make sales on extended dating beyond that customary in the Borrower's business or extend or modify any Account. If a Borrower becomes aware of any matter adversely affecting the collectibility of any Account or the Account Debtor therefor involving an amount greater than $100,000, including information regarding the Account Debtor's creditworthiness, the Borrower will promptly so advise the Lender. (c) No Borrower shall accept any note or other instrument (except a check or other instrument for the immediate payment of money) with respect to any Account without the Lender's written consent, which shall not be unreasonably withheld. If the Lender consents to the acceptance of any such instrument, it shall be considered as evidence of the Account and not payment thereof and the Borrower will promptly deliver such instrument to the Lender, endorsed by the Borrower to the Lender in a manner satisfactory in form and substance to the Lender. Regardless of the form of presentment, demand, notice of protest with respect thereto, the Borrower shall remain liable thereon until such instrument is paid in full. (d) Each Borrower shall notify the Lender promptly of all disputes and claims in excess of $100,000 with any Account Debtor, and agrees to settle, contest, or adjust such dispute or claim at no expense to the Lender. No discount, credit or allowance shall be granted to any such Account Debtor without the Lender's prior written consent, which shall not be unreasonably withheld, except for discounts, credits and allowances made or given in the ordinary course of the Borrower's business when no Event of Default exists hereunder. At the Lender's request, each Borrower shall send the Lender a copy of each credit memorandum in excess of $25,000 as soon as issued. The Lender may at all times when an Event of Default 43 51 exists hereunder, settle or adjust disputes and claims directly with Account Debtors for amounts and upon terms which the Lender shall consider advisable and, in all cases, the Lender will credit the Borrowers' Loan Account with the net amounts received by the Lender in payment of any Accounts. (e) If an Account Debtor returns any Inventory to a Borrower when no Event of Default exists, then the Borrower shall promptly determine the reason for such return and shall issue a credit memorandum to the Account Debtor in the appropriate amount. Each Borrower shall immediately report to the Lender any return involving an amount in excess of $100,000. Each such report shall indicate the reasons for the returns and the locations and condition of the returned Inventory. In the event any Account Debtor returns Inventory to a Borrower when an Event of Default exists, the Borrower, upon the request of the Lender, shall: (i) hold the returned Inventory in trust for the Lender; (ii) segregate all returned Inventory from all of its other property; (iii) dispose of the returned Inventory solely according to the Lender's written instructions; and (iv) not issue any credits or allowances with respect thereto without the Lender's prior written consent. All returned Inventory shall be subject to the Lender's Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect to such returned Inventory. 6.9 Collection of Accounts; Payments. (a) The Borrowers shall establish a lock-box service for collections of Accounts at a Clearing Bank reasonably acceptable to the Lender and subject to a Blocked Account Agreement and other documentation reasonably acceptable to the Lender, or, as the Lender may elect, shall enter into a Blocked Account Agreement with a Clearing Bank reasonably acceptable to the Lender. The Borrowers shall instruct all Account Debtors to make all payments directly to the address established for such lock-box service. If the Lender does not require that payments be delivered to a lock-box, or if notwithstanding such instructions a Borrower receives any proceeds of Accounts, each Borrower shall receive such payments as the Lender's trustee, and shall immediately deliver such payments to the Lender in their original form duly endorsed in blank or deposit them into a Payment Account, as the Lender may direct. All collections received in any lock-box or Payment Account or directly by the Borrowers or the Lender, and all funds in any Payment Account or other account to which such collections are deposited shall be subject to the Lender's sole control and withdrawals by the Borrowers shall not be permitted. The Lender or the Lender's designee may, at any time after the occurrence of an Event of Default, notify Account Debtors that the Accounts have been assigned to the Lender and of the Lender's security interest therein, and may collect them directly and charge the collection costs and expenses to the Borrower's Loan Account as a Revolving Loan. The Borrowers, at the Lender's request, shall execute and deliver to the Lender such documents as the Lender shall require to grant the Lender access to any post office box in which collections of Accounts are received. (b) If sales of Inventory are made or services are rendered for cash, the Borrowers shall immediately deliver to the Lender or deposit into a Payment Account the cash which any Borrower receives. (c) All payments including immediately available funds received by the Lender at a bank account designated by it will be the Lender's sole property and will be credited to the Borrower's Loan Account (conditional upon final collection) upon receipt of good funds. 44 52 (d) In the event the Borrowers repay all of the Obligations upon the termination of this Agreement or upon acceleration of the Obligations, other than through the Lender's receipt of payments on account of the Accounts or proceeds of the other Collateral, such payment will be credited (conditional upon final collection) to the Borrower's Loan Account after the Lender's receipt of good funds. 6.10 Inventory; Perpetual Inventory. Each Borrower represents and warrants to the Lender and agrees with the Lender that all of the Inventory owned by the Borrowers is and will be held for sale or lease, or to be furnished in connection with the rendition of services, in the ordinary course of the Borrowers' business, and is and will be fit for such purposes. Each Borrower will keep its Inventory in good and marketable condition, except for damaged or defective goods arising in the ordinary course of the Borrower's business. Borrowers will not, without the prior written consent of the Lender, acquire or accept any Inventory on consignment or approval. Each Borrower agrees that all Inventory produced by the Borrower in the United States of America will be produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations, and orders thereunder. Each Borrower will conduct a physical count of the Inventory at least once per Fiscal Year, and after and during the continuation of an Event of Default, at such other times as the Lender requests. Each Borrower will maintain a perpetual inventory reporting system at all times. No Borrower will, without the Lender's written consent, sell any Inventory on a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or return basis. 6.11 Equipment. (a) Each Borrower represents and warrants to the Lender and agrees with the Lender that all of the Equipment owned by the Borrower is and will be used or held for use in the Borrower's business, and is and will be fit for such purposes. Each Borrower shall keep and maintain its Equipment in good operating condition and repair (ordinary wear and tear excepted) and shall make all necessary replacements thereof. (b) The Borrowers shall promptly inform the Lender of any material additions to or deletions from the Equipment. No Borrower shall permit any Equipment to become a fixture with respect to real property or to become an accession with respect to other personal property with respect to which real or personal property the Lender does not have a Lien. No Borrower will, without the Lender's prior written consent, alter or remove any identifying symbol or number on any of the Borrower's Equipment constituting of Collateral. (c) The Borrowers shall not, without the Lender's prior written consent, sell, lease as a lessor, or otherwise dispose of any of the Borrowers' Equipment; provided, however, that the Borrowers may dispose of obsolete or unusable Equipment having an orderly liquidation value no greater than $100,000 in the aggregate in any Fiscal Year, or $300,000 in the aggregate during the term of this Agreement, without the Lender's consent, subject to the conditions set forth in the next sentence. In the event any of such Equipment is sold, transferred or otherwise disposed of pursuant to the proviso contained in the immediately preceding sentence, (1) if such sale, transfer or disposition is effected without replacement of such Equipment, or such Equipment is replaced by Equipment leased by a Borrower or by Equipment purchased by a Borrower subject to a Lien, then the Borrower shall deliver the net cash proceeds of any such sale, transfer or disposition to the Lender, which proceeds shall be applied to the reduction of Term Loans A (in the inverse order of Maturity) and after payment in full of Term Loans A, pro 45 53 rata to the reduction of Term Loan B (in the inverse order of maturity) and the Revolving Loans, with a permanent reduction of the Inventory Sublimit in a corresponding amount (in the inverse order of reductions), or (2) if such sale, transfer or disposition is made in connection with the purchase by the Borrower of replacement Equipment, then the Borrower shall use the proceeds of such sale, transfer or disposition to purchase such replacement Equipment and shall deliver to the Lender written evidence of the use of the proceeds for such purchase. All replacement Equipment purchased by the Borrowers shall be free and clear of all Liens except the Lender's Lien. 6.12 Assigned Contracts. Each Borrower shall fully perform all of its obligations under each of the Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems appropriate in its business judgment; provided, however, that the Borrowers shall not take any action or fail to take any action with respect to its Assigned Contracts which would cause the termination of a material Assigned Contract. Without limiting the generality of the foregoing, the Borrowers shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially adverse effect upon, the full enforcement of all indemnification rights under its Assigned Contracts. The Borrowers shall notify the Lender in writing, promptly after a Borrower becomes aware thereof, of any event or fact which could give rise to a material claim by it for indemnification under any of its Assigned Contracts, and shall diligently pursue such right and report to the Lender on all further developments with respect thereto. The Borrowers shall deposit into the Payment Account or remit directly to the Lender for application to the Obligations in such order as the Lender shall determine, all amounts received by the Borrowers as indemnification or otherwise pursuant to its Assigned Contracts. If a Borrower shall fail after the Lender's demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Lender may directly enforce such right in its own or the Borrower's name and may enter into such settlements or other agreements with respect thereto as the Lender shall determine. In any suit, proceeding or action brought by the Lender under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof, the Borrowers shall indemnify and hold the Lender harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder arising out of a breach by a Borrower of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing from any Borrower to or in favor of such obligor or its successors. All such obligations of the Borrowers shall be and remain enforceable only against the Borrowers and shall not be enforceable against the Lender. Notwithstanding any provision hereof to the contrary, the Borrowers shall at all times remain liable to observe and perform all of their duties and obligations under all Assigned Contracts, and the Lender's exercise of any of their respective rights with respect to the Collateral shall not release the Borrowers from any of such duties and obligations. The Lender shall not be obligated to perform or fulfill any of a Borrower's duties or obligations under its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property. 6.13 Documents, Instruments, and Chattel Paper. Each Borrower represents and warrants to the Lender that (a) all documents, instruments, and chattel paper describing, 46 54 evidencing, or constituting Collateral, and all signatures and endorsements thereon, are and will be complete, valid, and genuine, and (b) all goods evidenced by such documents, instruments, and chattel paper are and will be owned by the Borrower, free and clear of all Liens other than Permitted Liens. 6.14 Right to Cure. The Lender may, in its discretion, pay any amount or do any act required of the Borrowers hereunder or under any other Loan Document in order to preserve, protect, maintain or enforce the Obligations, the Collateral or the Lender's Liens therein, and which the Borrowers fail to pay or do, including payment of any judgment against Borrower, any insurance premium, any warehouse charge, any finishing or processing charge, any landlord's or bailee's claim, and any other Lien upon or with respect to the Collateral. All payments that the Lender makes under this Section 6.14 and all out-of-pocket costs and expenses that the Lender pays or incurs in connection with any action taken by it hereunder shall be charged to the Borrowers' Loan Account as a Revolving Loan. Any payment made or other action taken by the Lender under this Section 6.14 shall be without prejudice to any right to assert an Event of Default hereunder and to proceed thereafter as herein provided. 6.15 Power of Attorney. Each Borrower hereby appoints the Lender and the Lender's designee as the Borrower's attorney, with power: (a) to endorse the Borrower's name on any checks, notes, acceptances, money orders, or other forms of payment or security that come into the Lender's possession; (b) to sign the Borrower's name on any invoice, bill of lading, warehouse receipt or other document of title relating to any Collateral, on drafts against customers, on assignments of Accounts, on notices of assignment, financing statements and other public records and to file any such financing statements by electronic means with or without a signature as authorized or required by applicable law or filing procedure; (c) so long as any Event of Default has occurred and is continuing, to notify the post office authorities to change the address for delivery of the Borrower's mail to an address designated by the Lender and to receive, open and dispose of all mail addressed to the Borrower; (d) to send requests for verification of Accounts to customers or Account Debtors; (e) to clear Inventory through customs in the Borrower's name, the Lender's name or the name of the Lender's designee, and to sign and deliver to customs officials powers of attorney in the Borrower's name for such purpose; and (f) to do all things necessary to carry out this Agreement. Each Borrower ratifies and approves all acts of such attorney. The Lender and its attorneys will not be liable for any acts or omissions or for any error of judgment or mistake of fact or law except for their willful misconduct. This power, being coupled with an interest, is irrevocable until this Agreement has been terminated and the Obligations have been fully satisfied. 6.16 The Lender's Rights, Duties and Liabilities. Each Borrower assumes all responsibility and liability arising from or relating to the use, sale or other disposition of the Collateral. The Obligations shall not be affected by any failure of the Lender to take any steps to perfect the Lender's Liens or to collect or realize upon the Collateral, nor shall loss of or damage to the Collateral release any Borrower from any of its Obligations. Following the occurrence and continuation of an Event of Default, the Lender may (but shall not be required to), without notice to or consent from any Borrower, sue upon or otherwise collect, extend the time for payment of, modify or amend the terms of, compromise or settle for cash, credit, or otherwise upon any terms, grant other indulgences, extensions, renewals, compositions, or releases, and take or omit to take any other action with respect to the Collateral, any security therefor, any agreement 47 55 relating thereto, any insurance applicable thereto, or any Person liable directly or indirectly in connection with any of the foregoing, without discharging or otherwise affecting the liability of the Borrowers for the Obligations or under this Agreement or any other agreement now or hereafter existing between the Lender and any Borrower. 6.17 Release of Lien on L.L.C. Interests. Upon payment in full of the Inventory Loans and reduction of the Inventory Sublimit to zero, if no Default or Event of Default has occurred and is continuing, the Lender agrees to release its Lien on Cerprobe's membership interests in CRPB Investors, Inc., and will, at the expense of Borrowers, execute and deliver such partial release documents as Borrowers may reasonably request. ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES 7.1 Books and Records. Each Borrower shall maintain, at all times, correct and complete books, records and accounts in which complete, correct and timely entries are made of its transactions in accordance with GAAP applied consistently with the audited Financial Statements required to be delivered pursuant to Section 7.2(a). Each Borrower shall, by means of appropriate entries, reflect in such accounts and in all Financial Statements proper liabilities and reserves for all taxes and proper provision for depreciation and amortization of property and bad debts, all in accordance with GAAP. Each Borrower shall maintain at all times books and records pertaining to the Collateral in such detail, form and scope as the Lender shall reasonably require, including, but not limited to, records of (a) all payments received and all credits and extensions granted with respect to the Accounts; (b) the return, rejections, repossession, stoppage in transit, loss, damage, or destruction of any Inventory; and (c) all other dealings affecting the Collateral. 7.2 Financial Information. The Borrowers shall promptly furnish to the Lender all such financial information as the Lender shall reasonably request. Without limiting the foregoing, the Borrowers will furnish to the Lender in such detail as the Lender shall request, the following: (a) As soon as available, but in any event not later than ninety (90) days after the close of each Fiscal Year, consolidated audited balance sheets, and statements of income and expense, cash flow and of stockholders' equity and the unaudited consolidating balance sheets and income statements for Cerprobe and its Subsidiaries for such Fiscal Year, and the accompanying notes thereto, setting forth in each case in comparative form figures for the previous Fiscal Year, all in reasonable detail, fairly presenting the financial position and the results of operations of Cerprobe and its Subsidiaries as at the date thereof and for the Fiscal Year then ended, and prepared in accordance with GAAP. Such statements shall be examined in accordance with generally accepted auditing standards by and, in the case of such statements performed on a consolidated basis, accompanied by a report thereon unqualified in any respect of independent certified public accountants selected by the Borrowers and reasonably satisfactory to the Lender. 48 56 (b) As soon as available, but in any event not later than thirty (30) days after the end of each month (other than any month which is also the end of a fiscal quarter), consolidated and consolidating unaudited balance sheets of Cerprobe and its Subsidiaries as at the end of such month, and consolidated and consolidating unaudited statements of income and expense for Cerprobe and its consolidated Subsidiaries for the period from the beginning of the Fiscal Year to the end of such month, all in reasonable detail, fairly presenting the financial position and results of operations of Cerprobe and its Subsidiaries as at the date thereof and for such periods, and prepared in accordance with GAAP applied consistently with the audited Financial Statements required to be delivered pursuant to Section 7.2(a). The Borrowers shall certify by a certificate signed by the chief financial officer of Cerprobe that all such statements have been prepared in accordance with GAAP and present fairly, subject to normal year-end adjustments, Borrowers' financial position as at the dates thereof and its results of operations for the periods then ended. (c) As soon as available, but in any event not later than forty-five (45) days after the close of each fiscal quarter other than the fourth quarter of a Fiscal Year, consolidated and consolidating unaudited balance sheets of Cerprobe and its Subsidiaries as at the end of such quarter, and consolidated and consolidating unaudited statements of income and expense and statement of cash flows for Cerprobe and its Subsidiaries for the period from the beginning of the Fiscal Year to the end of such quarter, all in reasonable detail, fairly presenting the financial position and results of operation of Cerprobe and its Subsidiaries as at the date thereof and for such periods, prepared in accordance with GAAP consistent with the audited Financial Statements required to be delivered pursuant to Section 7.2(a). (d) [INTENTIONALLY OMITTED] (e) With each of the annual audited Financial Statements delivered pursuant to Section 7.2(a), and within thirty days after the end of each month (other than any month which is also the end of a fiscal quarter) and within forty-five (45) days after the end of each fiscal quarter, a certificate of the chief financial officer of each Borrower (i) setting forth in reasonable detail the calculations required to establish that the Borrowers were in compliance with the covenants set forth in Sections 9.13, 9.24, 9.25 and 9.26 during the period covered in such Financial Statements and as at the end thereof, and (ii) stating that, except as explained in reasonable detail in such certificate, (A) all of the representations and warranties of the Borrowers contained in this Agreement and the other Loan Documents are correct and complete in all material respects as at the date of such certificate as if made at such time, except for those that speak as of a particular earlier date, (B) each Borrower is, at the date of such certificate, in compliance in all material respects with all of its respective covenants and agreements in this Agreement and the other Loan Documents, (C) no Default or Event of Default then exists or existed during the period covered by such Financial Statements, (D) describing and analyzing in reasonable detail all material trends, changes, and developments in each and all Financial Statements; and (E) explaining the variances of the figures in the corresponding budgets and prior Fiscal Year financial statements. If such certificate discloses that a representation or warranty is not correct or complete, or that a covenant has not been complied with, or that a Default or Event of Default existed or exists, such certificate shall set forth what action the applicable Borrower has taken or proposes to take with respect thereto. 49 57 (f) No sooner than sixty (60) days and not less than thirty (30) days prior to the beginning of each Fiscal Year, annual forecasts (to include forecasted consolidated and consolidating balance sheets, statements of income and expenses and statements of cash flow) for Cerprobe and its Subsidiaries as at the end of and for each fiscal quarter of such Fiscal Year. (g) Promptly after filing with the PBGC and the IRS, a copy of each annual report or other filing filed with respect to each Plan of any Borrower. (h) Promptly upon the filing thereof, copies of all reports, if any, to or other documents filed by Cerprobe or any of its Subsidiaries with the Securities and Exchange Commission under the Exchange Act, and all reports, notices, or statements sent or received by any Borrower or any of its Subsidiaries to or from the holders of any equity interests of any Borrower (other than routine non-material correspondence sent by shareholders of a Borrower to the Borrower) or any such Subsidiary or of any Debt for Borrowed Money of any Borrower or any of its Subsidiaries registered under the Securities Act of 1933 or to or from the trustee under any indenture under which the same is issued. (i) As soon as available, but in any event not later than 15 days after Cerprobe's receipt thereof, a copy of all management reports and management letters prepared for Cerprobe and its Subsidiaries by any independent certified public accountants of such Borrower. (j) Promptly after their preparation, copies of any and all proxy statements, financial statements, and reports which a Borrower makes available to its shareholders. (k) Promptly after filing with the IRS, a copy of the consolidated tax return filed by Cerprobe and its Subsidiaries. (l) Such additional information as the Lender may from time to time reasonably request regarding the financial and business affairs of any Borrower or any Subsidiary. 7.3 Notices to the Lender. The Borrowers shall notify the Lender in writing of the following matters at the following times: (a) Immediately after becoming aware of any Default or Event of Default: (b) Immediately after becoming aware of the assertion by the holder of any capital stock of any Borrower or of any Subsidiary or of any Debt in a face amount in excess of $100,000 that a default exists with respect thereto or that any Borrower or such Subsidiary is not in compliance with the terms thereof, or the threat or commencement by such holder of any enforcement action because of such asserted default or non-compliance; (c) Immediately after becoming aware of any event or circumstance which could have a Material Adverse Effect; 50 58 (d) Immediately after becoming aware of any pending or threatened action, suit, proceeding, by any Person, or any pending or threatened investigation by a Governmental Authority, which may have a Material Adverse Effect; (e) Immediately after becoming aware of any pending or threatened strike, work stoppage, unfair labor practice claim, or other labor dispute affecting any Borrower or any of its Subsidiaries in a manner which could reasonably be expected to have a Material Adverse Effect; (f) Immediately after becoming aware of any violation of any law, statute, regulation, or ordinance of a Governmental Authority affecting any Borrower or any Subsidiary which could reasonably be expected to have a Material Adverse Effect; (g) Immediately after receipt of any notice of any violation by any Borrower or any of its Subsidiaries of any Environmental Law which could reasonably be expected to have a Material Adverse Effect or that any Governmental Authority has asserted in writing that any Borrower or any Subsidiary is not in compliance with any Environmental Law or is investigating any Borrower's or such Subsidiary's compliance therewith; (h) Immediately after receipt of any written notice that any Borrower or any of its Subsidiaries is or may be liable to any Person as a result of the Release or threatened Release of any Contaminant or that any Borrower or any Subsidiary is subject to investigation by any Governmental Authority evaluating whether any remedial action is needed to respond to the Release or threatened Release of any Contaminant which, in either case, is reasonably likely to give rise to liability in excess of $100,000; (i) Immediately after receipt of any written notice of the imposition of any Environmental Lien against any property of any Borrower or any of its Subsidiaries; (j) Any change in any Borrower's name, state of organization, or form of organization, trade names under which any Borrower will sell Inventory or create Accounts, or to which instruments in payment of Accounts may be made payable, in each case at least thirty (30) days prior thereto; (k) Within ten (10) Business Days after any Borrower or any ERISA Affiliate knows or has reason to know, that an ERISA Event or a prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has occurred, and, when known, any action taken or threatened by the IRS, the DOL or the PBGC with respect thereto; (l) Upon request, or, in the event that such filing reflects a significant change with respect to the matters covered thereby, within three (3) Business Days after the filing thereof with the PBGC, the DOL or the IRS, as applicable, copies of the following: (i) each annual report (form 5500 series), including Schedule B thereto, filed with the PBGC, the DOL or the IRS with respect to each Plan, (ii) a copy of each funding waiver request filed with the PBGC, the DOL or the IRS with respect to any Plan and all communications received by any Borrower or any ERISA Affiliate from the PBGC, the DOL or the IRS with respect to such request, and (iii) a copy of each other filing or notice filed with the PBGC, the DOL or the IRS, with respect to each Plan of any Borrower or any ERISA Affiliate; 51 59 (m) Upon request, copies of each actuarial report for any Plan or Multi-employer Plan and annual report for any Multi-employer Plan; and within three (3) Business Days after receipt thereof by any Borrower or any ERISA Affiliate, copies of the following: (i) any notices of the PBGC's intention to terminate a Plan or to have a trustee appointed to administer such Plan; (ii) any favorable or unfavorable determination letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Code; or (iii) any notice from a Multi-employer Plan regarding the imposition of withdrawal liability; (n) Within three (3) Business Days after the occurrence thereof: (i) any changes in the benefits of any existing Plan which increase any Borrower's annual costs with respect thereto by an amount in excess of $250,000, or the establishment of any new Plan or the commencement of contributions to any Plan to which any Borrower or any ERISA Affiliate was not previously contributing; or (ii) any failure by any Borrower or any ERISA Affiliate to make a required installment or any other required payment under Section 412 of the Code on or before the due date for such installment or payment; or (o) Within three (3) Business Days after any Borrower or any ERISA Affiliate knows or has reason to know that any of the following events has or will occur: (i) a Multi-employer Plan has been or will be terminated; (ii) the administrator or plan sponsor of a Multi-employer Plan intends to terminate a Multi-employer Plan; or (iii) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multi-employer Plan. (p) Promptly following receipt or delivery of any notice or claim under the Purchase Agreement (including any notice of any addition to or subtraction from the Seller Subordinated Note), a copy of such notice. Each notice given under this Section shall describe the subject matter thereof in reasonable detail, and shall set forth the action that the applicable Borrower, its Subsidiary, or any ERISA Affiliate, as applicable, has taken or proposes to take with respect thereto. ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS Each Borrower warrants and represents to the Lender that, except as hereafter disclosed to and accepted by the Lender in writing, and both before and after giving effect to the Acquisition (it being understood that all representations and warranties and disclosure schedules shall include Oz and its Subsidiaries): 8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents. Each Borrower has the corporate power and authority to execute, deliver and perform this Agreement and the other Loan Documents and Transaction Documents to which it is a party, to incur the Obligations, and to grant to the Lender Liens upon and security interests in the Collateral. Each Borrower has taken all necessary corporate action (including obtaining approval of its stockholders if necessary) to authorize its execution, delivery, and performance of this Agreement and the other Loan Documents and Transaction Documents to which it is a party. 52 60 This Agreement and the other Loan Documents and Transaction Documents to which it is a party have been duly executed and delivered by each Borrower, and constitute the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with their respective terms without defense, setoff or counterclaim except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors' rights generally and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought. No Borrower's execution, delivery, and performance of this Agreement and the other Loan Documents and Transaction Documents to which it is a party do or will conflict with, or constitute a violation or breach of, or constitute a default under, or result in, or require the creation or imposition of any Lien upon the property of Borrower or any of its Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien, lease, agreement, indenture, or instrument to which any Borrower or any of its Subsidiaries is a party or which is binding upon it, (b) any Requirement of Law applicable to any Borrower or any of its Subsidiaries, or (c) the certificate or articles of incorporation or by-laws of the Borrower or any of its Subsidiaries. 8.2 Validity and Priority of Security Interest. The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Lender and upon filing of the UCC-1 financing statements delivered to the Lender on or before the Closing Date and filing of the Patent and Trademark Agreements with the United States Patent and Trademark Office, such Liens will constitute perfected and continuing Liens on all the Collateral, having priority over all other Liens on the Collateral, except for those Liens identified in clauses (c), (d), (e), (g) and (j) of the definition of Permitted Liens securing, all the Obligations, and enforceable against the Borrowers and all third parties. 8.3 Organization and Qualification. Each Borrower (a) is duly incorporated and organized and validly existing in good standing under the laws of the state of its incorporation, (b) is qualified to do business as a foreign corporation and is in good standing in the jurisdictions set forth on Schedule 8.3, except to the extent that failure to be so qualified could not reasonably be expected to have a Material Adverse Effect which are the only jurisdictions in which qualification is necessary in order for it to own or lease its property and conduct its business and (c) has all requisite power and authority to conduct its business and to own its property. 8.4 Corporate Name; Prior Transactions. No Borrower has, during the past five (5) years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or acquired all or substantially all of the assets of any Person, or acquired any of its property outside of the ordinary course of business, except as described on Schedule 8.4. 8.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and complete list of the name and relationship to each Borrower of each and all of each Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly incorporated and organized and validly existing in good standing under the laws of its jurisdiction of incorporation set forth on Schedule 8.5, and (b) qualified to do business as a foreign corporation and in good standing in each jurisdiction in which the failure to so qualify or be in good standing could reasonably be expected to have a material adverse effect on any such Subsidiary's business, operations, prospects, property, or 53 61 condition (financial or otherwise) and (c) has all requisite power and authority to conduct its business and own its property. 8.6 Financial Statements and Projections. (a) The Borrowers have delivered to the Lender the audited balance sheet and related statements of income, retained earnings, cash flows, and changes in stockholders' equity for Cerprobe and its consolidated Subsidiaries as of December 31, 1995, 1996, 1997, 1998, and for the Fiscal Years then ended, accompanied by the report thereon of Cerprobe's independent certified public accountants, KPMG Peat Marwick and the unaudited balance sheet and related statements of income, retained earnings, cash flows, and changes in stockholders' equity for Oz and its consolidated Subsidiaries as of December 31, 1997 and 1998, and for the Fiscal Years then ended, accompanied by the report on the December 31, 1998 balance sheet of Oz's certified public accountants, Frank, Rimerman & Co. The Borrowers have also delivered to the Lender the unaudited balance sheets and related statements of income and cash flows for Cerprobe and its consolidated Subsidiaries and for Oz and its consolidated Subsidiaries, each as of September 30, 1999. Such financial statements are attached hereto as Exhibit C. All such financial statements have been prepared in accordance with GAAP and present accurately and fairly the financial position of the Cerprobe and its consolidated Subsidiaries and Oz and its consolidated Subsidiaries as at the dates thereof and their results of operations for the periods then ended. (b) The Latest Projections when submitted to the Lender as required herein represent the Borrowers' best estimate of the future financial performance of Cerprobe and its basis of the assumptions set forth therein, which the Borrowers believe are fair and reasonable in light of current and reasonably foreseeable business conditions at the time submitted to the Lender. (c) The pro forma balance sheet of the Borrowers as at September 30, 1999, attached hereto as Exhibit F, presents fairly and accurately in all material respects the Borrowers' financial condition as at such date after giving effect to the Acquisition as if it had occurred on such date and the Closing Date had been such date, and has been prepared in accordance with GAAP. 8.7 Capitalization. Schedule 8.7 sets forth the authorized and outstanding capital stock of each Borrower and each of its Subsidiaries, and the record and beneficial owners of such capital stock, in each case as of the Closing Date. All of such capital stock has been duly and validly issued in compliance with all applicable Requirements of Law, and is fully paid and non-assessable. Except as set forth on Schedule 8.7, there are no options, warrants or other rights to acquire the capital stock of any Borrower or any of its Subsidiaries, and no outstanding securities convertible into such capital stock. 8.8 Solvency. Each Borrower is Solvent prior to and after giving effect to the making of the Term Loans and the Revolving Loans to be made on the Closing Date and the issuance of the Letters of Credit to be issued on the Closing Date and the consummation of the Acquisition, and shall remain Solvent during the term of this Agreement. 8.9 Debt. After giving effect to the making of the Term Loans and the Revolving Loans to be made on the Closing Date, the Borrowers and their Subsidiaries have no Debt, except (a) 54 62 the Obligations, (b) Debt described on Schedule 8.9, (c) trade payables and other contractual obligations arising in the ordinary course of business, and (d) other Debt existing on the Closing Date and reflected in the Financial Statements attached hereto as Exhibit C and the pro forma balance sheet attached hereto as Exhibit F. 8.10 Distributions. Since October 31, 1999, no Distribution has been declared, paid, or made upon or in respect of any capital stock or other securities of Cerprobe or any of its Subsidiaries. 8.11 Title to Property. Each Borrower has good and marketable title in fee simple to the Real Estate identified on Schedule 8.12 as owned by such Borrower, and each Borrower has good, indefeasible, and merchantable title to all of its other property (including the assets reflected on the Financial Statements delivered to the Lender, except as disposed of in the ordinary course of business since the date thereof), free of all Liens except Permitted Liens. 8.12 Real Estate; Leases. Schedule 8.12 sets forth, as of the Closing Date, a correct and complete list of all Real Estate owned by any Borrower and of any real property owned by any of its Subsidiaries, all leases and subleases of real or personal property held by any Borrower or any of its Subsidiaries as lessee or sublessee (other than leases of personal property as to which a Borrower is lessee or sublessee for which the value of such personal property is less than $50,000), and all leases and subleases of real or personal property held by any Borrower or any of its Subsidiaries as lessor, or sublessor. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and to the best knowledge of any Borrower, no default by any party to any such lease or sublease exists. 8.13 Proprietary Rights. Schedule 8.13 sets forth a correct and complete list of all of Proprietary Rights of each Borrower. None of the Proprietary Rights is subject to any licensing agreement or similar arrangement except as set forth on Schedule 8.13. To the best of the Borrowers' knowledge, none of the Proprietary Rights infringes on or conflicts with any other Person's property, and no other Person's property infringes on or conflicts with the Proprietary Rights. The Proprietary Rights described on Schedule 8.13 constitute all of the property of such type necessary to the current and anticipated future conduct of the Borrowers' business. 8.14 Trade Names. All trade names or styles under which any Borrower or any of its Subsidiaries will sell Inventory or create Accounts, or to which instruments in payment of Accounts may be made payable, are listed on Schedule 8.14. 8.15 Litigation. Except as set forth on Schedule 8.15, there is no pending or to the best of the Borrowers' knowledge threatened, action, suit, proceeding, or counterclaim by any Person, or to the best of the Borrowers' knowledge investigation by any Governmental Authority, or any basis for any of the foregoing, which could reasonably be expected to cause a Material Adverse Effect. 8.16 Restrictive Agreements. No Borrower is a party to any contract or agreement, or subject to any charter or other corporate restriction, which affects its ability to execute, deliver, and perform the Loan Documents or the Transaction Documents and repay the Obligations or which could reasonably be expected to cause a Material Adverse Effect. 55 63 8.17 Labor Disputes. Except as set forth on Schedule 8.17, as of the Closing Date (a) there is no collective bargaining agreement or other labor contract covering employees of any Borrower or any of its Subsidiaries, (b) no such collective bargaining agreement or other labor contract is scheduled to expire during the term of this Agreement, (c) no union or other labor organization is seeking to organize, or to be recognized as, a collective bargaining unit of employees of any Borrower or any of its Subsidiaries or for any similar purpose, and (d) there is no pending or (to the best of the Borrowers' knowledge) threatened, strike, work stoppage, material unfair labor practice claim, or other material labor dispute against or affecting any Borrower or its Subsidiaries or their employees. 8.18 Environmental Laws. Except as otherwise disclosed on Schedule 8.18: (a) Each Borrower and its Subsidiaries have complied in all material respects with all Environmental Laws and neither any Borrower nor any Subsidiary nor any of its presently owned real property or presently conducted operations, nor its previously owned real property or prior operations, is subject to any enforcement order from or liability agreement with any Governmental Authority or private Person respecting (i) compliance with any Environmental Law or (ii) any potential liabilities and costs or remedial action arising from the Release or threatened Release of a Contaminant. (b) Each Borrower and its Subsidiaries have obtained all permits necessary for their current operations under Environmental Laws, and all such permits are in good standing and each Borrower and its Subsidiaries are in compliance with all material terms and conditions of such permits. (c) Neither any Borrower nor any of its Subsidiaries, nor, to the best of the Borrowers' knowledge, any of its predecessors in interest, has in violation of applicable law stored, treated or disposed of any hazardous waste. (d) Neither any Borrower nor any of its Subsidiaries has received any summons, complaint, order or similar written notice indicating that it is not currently in compliance with, or that any Governmental Authority is investigating its compliance with, any Environmental Laws or that it is or may be liable to any other Person as a result of a Release or threatened Release of a Contaminant. (e) To the best of the Borrowers' knowledge, none of the present or past operations of any Borrower and its Subsidiaries is the subject of any investigation by any Governmental Authority evaluating whether any remedial action is needed to respond to a Release or threatened Release of a Contaminant. (f) There is not now, nor to the best of the Borrowers' knowledge has there ever been on or in the Real Estate: (1) any underground storage tanks or surface impoundments, (2) any asbestos-containing material, or 56 64 (3) any polychlorinated biphenyls (PCBs) used in hydraulic oils, electrical transformers or other equipment. (g) Neither any Borrower nor any of its Subsidiaries has filed any notice under any requirement of Environmental Law reporting a spill or accidental and unpermitted Release or discharge of a Contaminant into the environment. (h) Neither any Borrower nor any of its Subsidiaries has entered into any negotiations or settlement agreements with any Person (including the prior owner of its property) imposing material obligations or liabilities on any Borrower or any of its Subsidiaries with respect to any remedial action in response to the Release of a Contaminant or environmentally related claim. (i) None of the products manufactured, distributed or sold by any Borrower or any of its Subsidiaries contain asbestos containing material. (j) No Environmental Lien has attached to the Real Estate. 8.19 No Violation of Law. Neither any Borrower nor any of its Subsidiaries is in violation of any law, statute, regulation, ordinance, judgment, order, or decree applicable to it which violation could reasonably be expected to have a Material Adverse Effect. 8.20 No Default. Neither any Borrower nor any of its Subsidiaries is in default with respect to any note, indenture, loan agreement, mortgage, lease, deed, or other agreement to which any Borrower or such Subsidiary is a party or by which it is bound, which default could reasonably be expected to have a Material Adverse Effect. 8.21 ERISA Compliance. Except as specifically disclosed in Schedule 8.21: (a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS and to the best knowledge of the Borrowers, nothing has occurred which would cause the loss of such qualification. Each Borrower and each ERISA Affiliate has made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. (b) There are no pending or, to the best knowledge of Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither any Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with 57 65 respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither any Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multi-employer Plan; and (v) neither any Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. 8.22 Taxes. The Borrowers and their Subsidiaries have filed all federal and other tax returns and reports required to be filed, and have paid all federal and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable unless such unpaid taxes and assessments would constitute a Permitted Lien. 8.23 Regulated Entities. None of any Borrower, any Person controlling any Borrower, or any Subsidiary, is an "Investment Company" within the meaning of the Investment Company Act of 1940. No Borrower is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public utilities code or law, or any other federal or state statute or regulation limiting its ability to incur indebtedness. 8.24 Use of Proceeds; Margin Regulations. The proceeds of the Term Loans and the Revolving Loans made to Cerprobe and to CIS on the Closing Date will be used solely to fund a portion of the purchase price for the Acquisition and costs associated with the Loan Documents and the Transaction Documents, to refinance certain Debt and for other corporate purposes. The proceeds of the Revolving Loans made to Oz and TSE on the Closing Date will be used solely to refinance certain Debt, to pay certain costs associated with the Acquisition and the Loan Documents and for other corporate purposes. The proceeds of the Revolving Loans made after the Closing Date are to be used solely for working capital purposes. Neither any Borrower nor any Subsidiary is engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock. 8.25 Copyrights, Patents, Trademarks and Licenses, etc. Each Borrower owns or is licensed or otherwise has the right to use all of the patents, trademarks, service marks, trade names, copyrights, contractual franchises, licenses, rights of way, authorizations and other rights that are reasonably necessary for the operation of its businesses, without conflict with the rights of any other Person. To the best knowledge of the Borrowers, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Borrower or any Subsidiary infringes upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or threatened, and no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or, to the knowledge of the Borrowers, proposed, which, in either case, could reasonably be expected to have a Material Adverse Effect. 8.26 No Material Adverse Change; Year 2000. No material adverse change has occurred in the Property, business, operations, or condition (financial or otherwise) or prospects of any Borrower (or, as of the Closing Date, of Oz and its Subsidiaries) since the date of the Financial Statements delivered to the Lender. On the basis of a comprehensive review and assessment undertaken by Borrowers of each Borrower's computers and computer applications 58 66 and inquiry made of Borrowers' material suppliers, vendors and customers, Borrowers reasonably believe that the "Year 2000 problem" (that is, the risk that computers and computer applications used by any person may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999) will not result in a Material Adverse Effect. 8.27 Full Disclosure. None of the representations or warranties made by any Borrower or any Subsidiary in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in any exhibit, report, statement or certificate furnished by or on behalf of any Borrower or any Subsidiary in connection with the Loan Documents (including the offering and disclosure materials delivered by or on behalf of the Borrower to the Lender prior to the Closing Date) or any Transaction Document, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered. 8.28 Material Agreements. Schedule 8.28 hereto sets forth as of the Closing Date all material agreements and contracts to which any Borrower or any of its Subsidiaries is a party or is bound as of the date hereof. 8.29 Bank Accounts. Schedule 8.29 contains as of the Closing Date a complete and accurate list of all bank accounts maintained by any Borrower with any bank or other financial institution. 8.30 Governmental Authorization. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Borrower or any of its Subsidiaries of this Agreement or any other Loan Document or Transaction Document, other than those obtained and copies of which have been delivered to the Lender. No filing is required under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976 to effect the Acquisition. 8.31 Representations and Warranties in Transaction Documents. Each of the representations and warranties contained in the Transaction Documents is true, correct and complete in all material respects of the Closing Date, and is incorporated herein by reference. 8.32 CPRB Investors, L.L.C.. The grant by Cerprobe of security interests in the membership interests in CRPB Investors, L.L.C. and any realization by the Sellers upon such security interest will not constitute a breach or default under, or permit CRPB Investors, L.L.C. to terminate or modify, the terms of the facility lease for Cerprobe's Real Estate in Gilbert, Arizona. 59 67 ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS ---------------------------------- Each Borrower covenants to the Lender that so long as any of the Obligations remain outstanding or this Agreement is in effect: 9.1 Taxes and Other Obligations. Each Borrower shall, and shall cause each of its Subsidiaries to, (a) file when due all tax returns and other reports which it is required to file; (b) pay, or provide for the payment, when due, of all taxes, fees, assessments and other governmental charges against it or upon its property, income and franchises, make all required withholding and other tax deposits, and establish adequate reserves for the payment of all such items, and provide to the Lender, upon request, satisfactory evidence of its timely compliance with the foregoing; and (c) pay when due all Debt owed by it and all claims of materialmen, mechanics, carriers, warehousemen, landlords, processors and other like Persons, and all other indebtedness owed by it and perform and discharge in a timely manner all other obligations undertaken by it; provided, however, so long as the Borrower has notified the Lender in writing, neither any Borrower nor any of its Subsidiaries need pay any tax, fee, assessment, or governmental charge, that (i) it is contesting in good faith by appropriate proceedings diligently pursued, (ii) the Borrower or its Subsidiary, as the case may be, has established proper reserves for as provided in GAAP, and (iii) no Lien (other than a Permitted Lien) results from such non-payment. 9.2 Corporate Existence and Good Standing. Each Borrower shall, and shall cause each of its Subsidiaries to, maintain its corporate existence and its qualification and good standing in all jurisdictions in which the failure to maintain such existence and qualification or good standing could reasonably be expected to have a Material Adverse Effect. 9.3 Compliance with Law and Agreements; Maintenance of Licenses. Each Borrower shall comply, and shall cause each Subsidiary to comply, in all material respects with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business (including the Federal Fair Labor Standards Act and all Environmental Laws). Each Borrower shall, and shall cause each of its Subsidiaries to, obtain and maintain all licenses, permits, franchises, and governmental authorizations necessary to own its property and to conduct its business as conducted on the Closing Date. No Borrower shall, nor shall it permit any Subsidiary to, modify, amend or alter its certificate or articles of incorporation other than in a manner which does not adversely affect the rights of the Lender (including its rights under any Pledge Agreement). 9.4 Maintenance of Property. Each Borrower shall, and shall cause each of its Subsidiaries to, maintain all of its property necessary and useful in the conduct of its business in good operating condition and repair, ordinary wear and tear excepted. 9.5 Insurance. (a) Each Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, with financially sound and reputable insurers having a rating of at least AVII or better by Best Rating Guide, insurance against loss or damage by fire with extended coverage; theft, burglary, pilferage and loss in transit; public liability and third party property damage; 60 68 larceny, embezzlement or other criminal liability; business interruption; public liability and third party property damage; and such other hazards or of such other types as is customary for Persons engaged in the same or similar business, as the Lender in its discretion shall specify, in amounts, and under policies acceptable to the Lender. Without limiting the foregoing, each Borrower shall also maintain, and shall cause each of its Subsidiaries to maintain, flood insurance for Inventory or Equipment, in the event of a designation of the area in which any Real Estate on which such Inventory and Equipment is located as "flood prone" or a "flood risk area," (hereinafter "SFHA") as defined by the Flood Disaster Protection Act of 1973, in an amount to be reasonably determined by the Lender, and shall comply with the additional requirements of the National Flood Insurance Program as set forth in said Act. (b) Each Borrower shall cause the Lender to be named as secured party or mortgagee and sole loss payee or additional insured, in a manner acceptable to the Lender. Each policy of insurance shall contain a clause or endorsement requiring the insurer to give not less than thirty (30) days' prior written notice to the Lender in the event of cancellation of the policy for any reason whatsoever and a clause or endorsement stating that the interest of the Lender shall not be impaired or invalidated by any act or neglect of any Borrower or any of its Subsidiaries or the owner of any Real Estate for purposes more hazardous than are permitted by such policy. All premiums for such insurance shall be paid by the Borrowers when due, and certificates of insurance and, if requested by the Lender, photocopies of the policies, shall be delivered to the Lender. If the Borrowers fail to procure such insurance or to pay the premiums therefor when due, the Lender may, do so from the proceeds of Revolving Loans. (c) Each Borrower shall promptly notify the Lender of any loss, damage, or destruction to the Collateral, whether or not covered by insurance. The Lender is hereby authorized to collect all insurance proceeds in respect of Collateral directly and to apply or remit them as follows: (i) With respect to insurance proceeds relating to Collateral other than Fixed Assets, after deducting from such proceeds the reasonable expenses, if any, incurred by the Lender in the collection or handling thereof, the Lender shall apply such proceeds, ratably, to the reduction of the Obligations in the order provided for in Section 4.8. (ii) With respect to insurance proceeds relating to Collateral consisting of Fixed Assets, after deducting from such proceeds the reasonable expenses, if any, incurred by the Lender in the collection or handling thereof, the Lender shall apply such proceeds to the reduction of the Term Loans and the Inventory Loans (applying such proceeds first to the installments of the Term Loans in the inverse order of maturity and then to Inventory Loans which payments shall permanently reduce the Inventory Sublimit in the inverse order of scheduled reductions, or may permit or require the Borrowers to use such money, or any part thereof, to replace, repair, restore or rebuild the relevant Fixed Assets in a diligent and expeditious manner with materials and workmanship of substantially the same quality as existed before the loss, damage or destruction; provided, however, that so long as there does not then exist any Default or Event of Default, the Borrowers shall be permitted to use insurance proceeds relating to Collateral consisting of Fixed Assets in an aggregate amount not to exceed $50,000 with respect to any occurrence, to replace, repair, restore or rebuild the relevant Fixed Assets, in the manner set forth in this sentence; and provided, further, that the Borrowers first (i) provide 61 69 the Lender with plans and specifications for any such repair or restoration which shall be reasonably satisfactory to the Lender and (ii) demonstrate to the reasonable satisfaction of the Lender that the funds available to it will be sufficient to complete such project in the manner provided therein. 9.6 Condemnation. (a) Each Borrower shall, immediately upon learning of the institution of any proceeding for the condemnation or other taking of any of its property, notify the Lender of the pendency of such proceeding, and agrees that the Lender may participate in any such proceeding, and the Borrowers from time to time will deliver to the Lender all instruments reasonably requested by the Lender to permit such participation. (b) The Lender is hereby authorized to collect the proceeds of any condemnation claim or award directly, and to apply or remit them as follows: (i) With respect to condemnation proceeds relating to Collateral other than Fixed Assets, after deducting from such proceeds the reasonable expenses, if any, incurred by the Lender in the collection or handling thereof, the Lender shall apply such proceeds, ratably, to the reduction of the Obligations in the order provided for in Section 4.8. (ii) With respect to condemnation proceeds relating to Collateral consisting of Fixed Assets, after deducting from such proceeds the reasonable expenses, if any, incurred by the Lender in the collection or handling thereof, the Lender shall apply such proceeds to the reduction of the Term Loans and the Inventory Loans (applying such proceeds first to the installments of the Term Loans and reduction of the Inventory Sublimit in the inverse order of maturity and then to Inventory Loans which payments shall permanently reduce the Inventory Sublimit in the inverse order of scheduled reductions), or may permit or require the Borrowers to use such money, or any part thereof, to replace, repair, restore or rebuild the relevant Fixed Assets in a diligent and expeditious manner with materials and workmanship of substantially the same quality as existed before the condemnation; provided, however, that so long as there does not then exist any Default or Event of Default, the Borrowers shall be permitted to use proceeds relating to Collateral consisting of Fixed Assets in an aggregate amount not to exceed $50,000 with respect to any occurrence, to replace, repair, restore or rebuild the relevant Fixed Assets, in the manner set forth in this sentence; and provided, further, that plans and specifications for any such repair or restoration shall be reasonably satisfactory to the Lender and shall be subject to the reasonable approval of the Lender. 9.7 Environmental Laws. (a) Each Borrower shall, and shall cause each of its Subsidiaries to, conduct its business in compliance with all Environmental Laws applicable to it, including those relating to the generation, handling, use, storage, and disposal of any Contaminant. Each Borrower shall, and shall cause each of its Subsidiaries to, take prompt and appropriate action to respond to any non-compliance with Environmental Laws and shall regularly report to the Lender on such response. (b) Without limiting the generality of the foregoing, each Borrower shall submit to the Lender annually, commencing on the first Anniversary Date, and on each Anniversary Date thereafter, an update of the status of each environmental compliance or liability issue. The Lender may request copies of technical reports prepared by any Borrower 62 70 and its communications with any Governmental Authority to determine whether any Borrower or any of its Subsidiaries is proceeding reasonably to correct, cure or contest in good faith any alleged non-compliance or environmental liability. The Borrowers shall, at the Lender's reasonable request and at the Borrowers' expense, (i) retain an independent environmental engineer acceptable to the Lender to evaluate the site, including tests if appropriate, where the non-compliance or alleged non-compliance with Environmental Laws has occurred and prepare and deliver to the Lender, a report setting forth the results of such evaluation, a proposed plan for responding to any environmental problems described therein, and an estimate of the costs thereof, and (ii) provide to the Lender a supplemental report of such engineer whenever the scope of the environmental problems, or the response thereto or the estimated costs thereof, shall change in any material respect. 9.8 Compliance with ERISA. Each Borrower shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; (c) make all required contributions to any Plan subject to Section 412 of the Code; (d) not engage in a prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan; and (e) not engage in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. 9.9 Mergers, Consolidations or Sales. Neither any Borrower nor any of its Subsidiaries shall enter into any transaction of merger, reorganization, or consolidation, or transfer, sell, assign, lease, or otherwise dispose of all or any part of its property, or wind up, liquidate or dissolve, or agree to do any of the foregoing, except (a) for sales of Inventory in the ordinary course of its business, (b) for sales or other dispositions of Equipment in the ordinary course of business that are obsolete or no longer useable by a Borrower in its business as permitted by Section 6.11, (c) any Borrower may voluntarily liquidate into, merge into or transfer assets to another Borrower, and (d) a Foreign Subsidiary may voluntarily liquidate into, merge into or transfer assets to another Foreign Subsidiary, and (e) sale of the Texas Real Estate permitted under Section 9.20. The inclusion of proceeds in the definition of Collateral shall not be deemed to constitute the Lender's consent to any sale or other disposition of the Collateral except as expressly permitted herein. 9.10 Distributions; Capital Change; Restricted Investments. Neither any Borrower nor any of its Subsidiaries shall (i) directly or indirectly declare or make, or incur any liability to make, any Distribution, except Distributions to a Borrower by its Subsidiaries, (ii) make any change in its capital structure which could have a Material Adverse Effect or (iii) until the Inventory Loans have been paid in full and the Inventory Sublimit reduced to zero, make any Restricted Investment. 9.11 Transactions Affecting Collateral or Obligations. Neither any Borrower nor any of its Subsidiaries shall enter into any transaction which would be reasonably expected to have a Material Adverse Effect. 9.12 Guaranties. Neither any Borrower nor any of its Subsidiaries shall make, issue, or be or become liable on any Guaranty, except Guaranties of the Obligations in favor of the Lender and Guaranties outstanding on the Closing Date and listed on Schedule 9.12 and unsecured 63 71 Guaranties by Borrower of Capital Leases and operating leases of its Subsidiaries if such leases are permitted hereunder. 9.13 Debt. Neither any Borrower nor any of its Subsidiaries shall incur or maintain any Debt, other than: (a) the Obligations; (b) trade payables and contractual obligations to suppliers and customers arising in the ordinary course of business; (c) other Debt existing on the Closing Date and reflected in the Financial Statements attached hereto as Exhibit C; (d) Debt described on Schedule 8.9; (e) the Seller Subordinated Debt; (f) Debt of one Borrower to another incurred after the Closing Date if (i) as of the date of incurrence no Default or Event of Default shall have occurred and be continuing and each Borrower is, and after giving effect to such Debt will be, Solvent, (ii) all such Debt is evidenced by a promissory note, in form and substance satisfactory to the Lender, which is pledged to the Lender in accordance with the Pledge Agreement; and (iii) such Debt is subordinated to repayment of the Obligations in a manner satisfactory to the Lender; (g) Debt of Foreign Subsidiaries owing to a Borrower if (i) as of the date of incurrence no Default or Event of Default shall have occurred and be continuing and each Borrower is, and after giving effect to such Debt will be, Solvent, (ii) all such Debt shall be evidenced by a promissory note, in form and substance satisfactory to the Lender, which is pledged to the Lender in accordance with the Pledge Agreement; and (iii) until payment in full of all Inventory Loans and reduction of the Inventory Sublimit to zero, the aggregate outstanding amount of such Debt owed by Foreign Subsidiaries shall not exceed the amount existing on the Closing Date at any time (except for Debt arising from the sale of Inventory in the ordinary course of business consistent with practices in effect on the Closing Date which Debt is paid within 60 days); (h) Capital Leases and purchase money Debt entered into after the date hereof; (i) Debt evidenced by the Real Estate Note; (j) unsecured Debt of Borrowers not to exceed $1,000,000 in the aggregate outstanding at any time; (k) unsecured Debt incurred to refinance the Inventory Loans in an aggregate principal amount not to exceed the amount refinanced; and (l) Debt of a newly acquired Subsidiary existing at the time of acquisition, and not incurred in anticipation of such acquisition. 9.14 Prepayment; Subordinated Debt; Payment of Real Estate Note. Neither any Borrower nor any of its Subsidiaries shall (a) voluntarily prepay any Debt, except the Obligations in accordance with the terms of this Agreement, or (b) make any payments or prepayments of or with respect to the Seller Subordinated Debt except payments expressly permitted by the terms of the Subordination Agreement or (c) make any cash payments on the Real Estate Note except from the proceeds of sale thereof; nor shall they amend, supplement or otherwise modify the terms of any Seller Subordinated Debt, except as permitted by the Subordination Agreement. 9.15 Transactions with Affiliates. Except as set forth below, neither any Borrower nor any of its Subsidiaries shall sell, transfer, distribute, or pay any money or property, including, but not limited to, any fees or expenses of any nature (including, but not limited to, any fees or expenses for management services), to any Affiliate, or lend or advance money or property to any Affiliate, or invest in (by capital contribution or otherwise) or purchase or repurchase any stock or indebtedness, or any property, of any Affiliate, or become liable on any Guaranty of the indebtedness, dividends, or other obligations of any Affiliate. Notwithstanding the foregoing, while no Event of Default has occurred and is continuing, a Borrower and its Subsidiaries may engage in transactions with Affiliates in the ordinary course of business consistent with past 64 72 practices, in amounts and upon terms fully disclosed to the Lender and no less favorable to the Borrower and its Subsidiaries than would be obtained in a comparable arm's-length transaction with a third party who is not an Affiliate (but in the case of Debt, subject to the restrictions of Section 9.13.) 9.16 Investment Banking and Finder's Fees. Neither any Borrower nor any of its Subsidiaries shall pay or agree to pay, or reimburse any other party with respect to, any investment banking or similar or related fee, underwriter's fee, finder's fee, or broker's fee to any Person in connection with this Agreement. The Borrowers shall defend and indemnify the Lender against and hold the Lender harmless from all claims of any Person that any Borrower is obligated to pay for any such fees, and all costs and expenses (including attorneys' fees) incurred by the Lender in connection therewith. 9.17 [intentionally omitted]. 9.18 Business Conducted. No Borrower shall, nor shall it permit any of its Subsidiaries to, engage directly or indirectly, in any line of business other than the businesses in which the Borrowers and their Subsidiaries are engaged on the Closing Date. 9.19 Liens. Neither any Borrower nor any of its Subsidiaries shall create, incur, assume, or permit to exist any Lien on any property now owned or hereafter acquired by any of them, except Permitted Liens. 9.20 Sale and Leaseback Transactions. Neither any Borrower nor any of its Subsidiaries shall, directly or indirectly, enter into any arrangement with any Person providing for the Borrower or such Subsidiary to lease or rent property that the Borrower or such Subsidiary has sold or will sell or otherwise transfer to such Person, except that the foregoing shall not prohibit the transfer of the Texas Real Estate to the Sellers and the leaseback by CIS as contemplated by the Purchase Agreement (provided that any shortfall in the purchase price from the amount of the Real Estate Note shall be added to the Seller Subordinated Note and not paid in cash), or the sale by CIS of such Real Estate to a third party, the proceeds of which are used to satisfy in full the Real Estate Note (with any shortfall in the purchase price from the amount of the Real Estate Note to be added to the Seller Subordinated Note), and the leaseback of such property by CIS. 9.21 New Subsidiaries. No Borrower shall, directly or indirectly, organize, create, acquire or permit to exist any Subsidiary other than those listed on Schedule 8.5 and any Subsidiary which is acquired solely for common stock of Cerprobe. 9.22 Fiscal Year. No Borrower shall change its Fiscal Year. 9.23 [intentionally omitted]. 9.24 Operating Lease Obligations. Neither any Borrower nor any of its Subsidiaries shall enter into, or suffer to exist, any lease of real or personal property as lessee or sublessee (other than a Capital Lease), if, after giving effect thereto, the aggregate amount of Rentals (as hereinafter defined) payable by the Borrowers and their Subsidiaries in any Fiscal Year in respect of such lease and all other such leases would exceed $1,000,000 (such amount being 65 73 referred to herein as "Permitted Rentals"). The term "Rentals" means all payments due from the lessee or sublessee under a lease, including, without limitation, basic rent, percentage rent, property taxes, utility or maintenance costs, and insurance premiums. 9.25 Tangible Net Worth. Cerprobe and its Subsidiaries will maintain consolidated Tangible Net Worth, determined for Cerprobe and its Subsidiaries on a consolidated basis, equal to (a) $28,000,000 as of December 31, 1999 and (b) as of the last day of each month thereafter, the sum of (a) the greater of (i) $28,000,000 and (ii) the Tangible Net Worth of Cerprobe and its Subsidiaries as of December 31, 1999 (as determined by the audited consolidated balance sheet as at that date) minus $1,000,000 plus (b) seventy-five percent (75%) of the consolidated net income of Cerprobe and its Subsidiaries (not to be reduced by any net losses incurred) for each fiscal quarter ending after December 31, 1999. Following repayment in full of the Inventory Loans and reduction of the Inventory Sublimit to zero, the required Tangible Net Worth shall have no further increases. 9.26 Fixed Charge Coverage Ratio. The Borrowers will maintain a Fixed Charge Coverage Ratio for each period set forth below ended at the end of each fiscal quarter in each Fiscal Year set forth below of not less than the ratio set forth below opposite such fiscal quarter: - -------------------------------------------------------------------------------- Fiscal Quarter Fixed Charge Coverage Period - -------------------------------------------------------------------------------- 3/2000 2 to 1 1 quarter - -------------------------------------------------------------------------------- 6/2000 2.1 to 1 2 quarters - -------------------------------------------------------------------------------- 9/2000 2.6 to 1 3 quarters - -------------------------------------------------------------------------------- each fiscal quarter thereafter 3 to 1 4 quarters - -------------------------------------------------------------------------------- provided, that after repayment of the Inventory Loans and reduction of the Inventory Sublimit to zero, the Borrowers will maintain a Fixed Charge Coverage Ratio for the relevant period ending at the end of each fiscal quarter of not less than 2 to 1. 9.27 Use of Proceeds. No Borrower shall, nor shall it suffer or permit any Subsidiary to, use any portion of the Loan proceeds, directly or indirectly, (a) to purchase or carry Margin Stock, (b) to repay or otherwise refinance indebtedness of any Borrower or others incurred to purchase or carry Margin Stock, (c) to extend credit for the purpose of purchasing or carrying any Margin Stock, or (d) to acquire any security in any transaction that is subject to Section 13 or 14 of the Exchange Act. 9.28 Further Assurances. The Borrowers shall execute and deliver, or cause to be executed and delivered, to the Lender such documents and agreements, and shall take or cause to be taken such actions, as the Lender may, from time to time, request to carry out the terms and conditions of this Agreement and the other Loan Documents. If any Borrower acquires a 66 74 Subsidiary, such Subsidiary (unless is a Foreign Subsidiary) shall execute and deliver to the Lender a Guaranty of the Obligations of the Borrowers, secured by a Lien on its assets and the applicable Borrower shall pledge the stock of such Subsidiary to the Lender (limited, in the case of any Foreign Subsidiary, to 65% of the capital stock). 9.29 No Restrictions on Subsidiary Distributions. The Borrowers will not, and will not permit any Subsidiary directly or indirectly to, create or otherwise cause or permit to exist any restriction on the ability of any such Subsidiary to pay dividends or make distributions to any Borrower, pay any Debt owed to any Borrower or make any loans or advances to any Borrower ARTICLE 10 CONDITIONS OF LENDING 10.1 Conditions Precedent to Making of Loans on the Closing Date. The obligation of the Lender to make the initial Revolving Loans on the Closing Date and to make the Term Loans, and the obligation of the Lender to cause the Letter of Credit Issuer to issue any Letter of Credit on the Closing Date are subject to the following conditions precedent having been satisfied in a manner satisfactory to the Lender: (a) This Agreement and the other Loan Documents shall have been executed by each party thereto and the Borrowers shall have performed and complied with all covenants, agreements and conditions contained herein and the other Loan Documents which are required to be performed or complied with by the Borrowers before or on such Closing Date. (b) Upon making the Revolving Loans (including such Revolving Loans made to finance the Acquisition and the Closing Fee or otherwise as reimbursement for fees, costs and expenses then payable under this Agreement or the Transaction Documents and to refinance Debt) and with all obligations current, the Borrowers (including Oz and TSE) would have Aggregate Availability in an amount no less than $2,000,000. (c) All representations and warranties made hereunder and in the other Loan Documents shall be true and correct as if made on such date. (d) No Default or Event of Default shall exist on the Closing Date, or would exist after giving effect to the Loans to be made, the Letters of Credit to be issued and the Credit Support to be in place on such date. (e) The Lender shall have received such opinions of counsel for the Borrowers and their Subsidiaries as the Lender shall request, each such opinion to be in a form, scope, and substance reasonably satisfactory to the Lender and its counsel. (f) The Lender shall have received: (i) acknowledgment copies of proper financing statements, duly filed on or before the Closing Date under the UCC of all jurisdictions that the Lender may deem necessary or desirable in order to perfect the Lender's Lien; and 67 75 (ii) duly executed UCC-3 Termination Statements and such other instruments, in form and substance satisfactory to the Lender, as shall be necessary to terminate and satisfy all Liens on the Property of the Borrowers and their Subsidiaries except Permitted Liens; (iii) all stock certificates and instruments required to be delivered under any Pledge Agreement (except for the stock certificate of CIS, which shall be delivered to the Lender within thirty days and as set forth in the Post Closing Letter) and (iv) the Patent and Trademark Agreements. (g) The Borrowers shall have paid all fees and expenses of the Lender and the Attorney Costs incurred in connection with any of the Loan Documents and the transactions contemplated thereby to the extent invoiced. (h) The Lender shall have received evidence, in form, scope, and substance, reasonably satisfactory to the Lender, of all insurance coverage as required by this Agreement. (i) The Lender shall have had an opportunity, if it so chooses, to examine the books of account and other records and files of the Borrowers and to make copies thereof, and to conduct a pre-closing audit which shall include, without limitation, verification of Inventory, Accounts, and the Borrowing Base of all Borrowers, and the results of such examination and audit shall have been satisfactory to the Lender in all respects. (j) All proceedings taken in connection with the execution of this Agreement, the Term Loan Notes, all other Loan Documents, the Transaction Documents and all documents and papers relating thereto shall be satisfactory in form, scope, and substance to the Lender. (k) No material adverse change shall have occurred, as determined by the Lender in its sole discretion, in the business, operations, profits or prospects of Cerprobe its Subsidiaries, taken as a whole, or of Oz and its Subsidiaries, taken as a whole, since September 30, 1999, and as of the Closing Date, the financial condition and results of operations of Cerprobe and its Subsidiaries, taken as a whole, and of Oz and its Subsidiaries, taken as a whole, shall be in compliance with the financial projections delivered to the Lender and dated November 17, 1999, as determined by the Lender in its sole discretion. (l) There shall exist no action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality that, in the Lender's reasonable judgment, could reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrowers (including Oz or TSE), taken as a whole, or which could impair any Borrower's ability to perform satisfactorily under the Loan Documents or could reasonably be expected to materially and adversely affect the transactions contemplated by the Loan Documents or the Transaction Documents. (m) The Lender shall have received, within 30 days prior to the Closing Date, a pro forma balance sheet of the Borrowers, giving effect to the Acquisition and the making of the Loans on the Closing Date, dated as of the Closing Date, which balance sheet shall reflect no 68 76 material adverse changes from the most recent pro forma balance sheet previously delivered to Lender. (n) All terms and conditions of the Transaction Documents shall be reasonably satisfactory to the Lender. The Acquisition shall be consummated on the Closing Date, in compliance with all applicable Requirements of Law and the terms of the Transaction Documents, without any waiver of such terms and conditions not approved by the Lender, and immediately following such consummation Oz and TSE shall deliver to the Lender such Loan Documents as required by the Lender and shall become Borrowers hereunder. (o) The Lender shall have received, in form and substance satisfactory to the Lender and from appraisers reasonably acceptable to the Lender, an appraisal of each Borrower's Inventory and Equipment, which appraisals shall reflect liquidation values of the Inventory and Equipment acceptable to the Lender. (p) The Lender shall have completed its due diligence with respect to each Borrower's books, records, assets and liabilities, with results satisfactory to the Lender. (q) The Borrowers shall have established a cash management system, including lock-boxes and Payment Accounts as required by Section 6.9, satisfactory to Lender. (r) The Seller Subordinated Debt shall be on terms satisfactory to the Lender and shall be subordinated to the repayment of the Obligations on terms satisfactory to the Lender. The lenders of such Debt shall have entered into the Subordination Agreement with the Lender, on terms and conditions satisfactory to the Lender (which shall include, without limitation, prohibition on exercising any rights and remedies with respect to any collateral securing such subordinated Debt until final payment and satisfaction of the Obligations of all Borrowers). (s) The Lender shall have received evidence, in form and substance reasonably satisfactory to Lender, of compliance by the Borrowers and their Subsidiaries with all Environmental Laws and the absence of any material liability with respect to environmental matters. (t) The Lender shall have received consolidating projections, giving effect to the Acquisition, on a quarterly basis for the Fiscal Year ending December 31, 2000, which shall not differ from the annual projections dated November 17, 1999 previously delivered to the Lender. (u) The Lender shall have received such certificates, financial statements and other information as it determines to be necessary to demonstrate that, after giving effect to the Loans and the Acquisition, each Borrower is Solvent. The acceptance by the Borrowers of any Loans made or Letters of Credit issued on the Closing Date shall be deemed to be a representation and warranty made by the Borrowers to the effect that all of the conditions precedent to the making of such Loans or the issuance of such Letters of Credit have been satisfied, with the same effect as delivery to the Lender of a 69 77 certificate signed by a Responsible Officer of the Borrowers, dated the Closing Date, to such effect. 10.2 Conditions Precedent to Each Loan. The obligation of the Lender to make each Loan, including the initial Revolving Loans on the Closing Date and the Term Loans, and the obligation of the Lender to cause the Letter of Credit Issuer to issue any Letter of Credit shall be subject to the further conditions precedent that on and as of the date of any such extension of credit: (a) the following statements shall be true, and the acceptance by any Borrower of any extension of credit shall be deemed to be a statement to the effect set forth in clauses (i) and (ii), with the same effect as the delivery to the Lender of a certificate signed by a Responsible Officer, dated the date of such extension of credit, stating that: (i) The representations and warranties contained in this Agreement and the other Loan Documents are correct in all material respects on and as of the date of such extension of credit as though made on and as of such date, other than any such representation or warranty which relates to a specified prior date and except to the extent the Lender has been notified by the Borrowers that any representation or warranty is not correct and the Lender has explicitly waived in writing compliance with such representation or warranty; and (ii) No event has occurred and is continuing, or would result from such extension of credit, which constitutes a Default or an Event of Default; and (iii) No event or circumstance shall have occurred which constitutes a Material Adverse Effect. (b) The amount of the Borrowing Base of the applicable Borrower shall be sufficient to make such Revolving Loans or issue such Letters of Credit without exceeding the Availability as such Borrower; and ARTICLE 11 DEFAULT; REMEDIES 11.1 Events of Default. It shall constitute an event of default ("Event of Default") if any one or more of the following shall occur for any reason: (a) any failure by any Borrower to pay the principal of or interest or premium on any of the Obligations or any fee or other amount owing hereunder when due, whether upon demand or otherwise; (b) any representation or warranty made or deemed made by any Borrower in this Agreement or by any Borrower or any of its Subsidiaries in any of the other Loan Documents, any Financial Statement, or any certificate furnished by any Borrower or any of its Subsidiaries at any time to the Lender shall prove to be untrue in any material respect as of the date on which made, deemed made, or furnished; 70 78 (c) (i) any default shall occur in the observance or performance of any of the covenants contained in Sections 9.1 through 9.4, 9.7 or 9.8 which continues for more than 30 days or (ii) any default shall occur in the observance or performance of any of the other covenants and agreements contained in this Agreement, any other Loan Documents, or any other agreement entered into at any time to which any Borrower or any Subsidiary and the Lender are party (including in respect of any Bank Products), or if any such agreement or document shall terminate (other than in accordance with its terms or the terms hereof or with the written consent of the Lender) or become void or unenforceable, without the written consent of the Lender; (d) default shall occur with respect to any Debt For Borrowed Money (other than the Obligations) in an outstanding principal amount which exceeds $100,000, or under any agreement or instrument under or pursuant to which any such Debt For Borrowed Money may have been issued, created, assumed, or guaranteed by any Borrower or any of its Subsidiaries, and such default shall continue for more than the period of grace, if any, therein specified, if the effect thereof (with or without the giving of notice or further lapse of time or both) is to accelerate, or to permit the holders of any such Debt For Borrowed Money to accelerate, the maturity of any such Debt For Borrowed Money; or any such Debt For Borrowed Money shall be declared due and payable or be required to be prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof; (e) any Borrower or any of its Subsidiaries shall (i) file a voluntary petition in bankruptcy or file a voluntary petition or an answer or otherwise commence any action or proceeding seeking reorganization, arrangement or readjustment of its debts or for any other relief under the federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act or law, state or federal, now or hereafter existing, or consent to, approve of, or acquiesce in, any such petition, action or proceeding; (ii) apply for or acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee or similar officer for it or for all or any part of its property; (iii) make an assignment for the benefit of creditors; or (iv) be unable generally to pay its debts as they become due; (f) an involuntary petition or proposal shall be filed or an action or proceeding otherwise commenced seeking reorganization, arrangement, consolidation or readjustment of the debts of any Borrower or any of its Subsidiaries or for any other relief under the federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act or law, state or federal, now or hereafter existing and shall not have been dismissed within 60 days; (g) a receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee or similar officer for any Borrower or any of its Subsidiaries or for all or any part of its property shall be appointed without the acquiescence of the Borrower or such Subsidiary or a warrant of attachment, execution or similar process shall be issued against any part of the property of any Borrower or any of its Subsidiaries and shall not have been dismissed within 60 days; (h) any Borrower or any of its Subsidiaries shall file a certificate of dissolution under applicable state law or shall be liquidated, dissolved or wound-up or shall commence or have commenced against it any action or proceeding for dissolution, winding-up or liquidation, or shall take any corporate action in furtherance thereof; 71 79 (i) all or any material part of the property of any Borrower or any of its Subsidiaries shall be nationalized, expropriated or condemned, seized or otherwise appropriated, or custody or control of such property or of any Borrower or such Subsidiary shall be assumed by any Governmental Authority or any court of competent jurisdiction at the instance of any Governmental Authority, except where contested in good faith by proper proceedings diligently pursued where a stay of enforcement is in effect; (j) any Guaranty of the Obligations shall be terminated, revoked or declared void or invalid; (k) one or more judgments, orders, decrees or arbitration awards is entered against any Borrower involving in the aggregate liability (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) as to any single or related or unrelated series of transactions, incidents or conditions, of $250,000 or more, and the same shall remain unsatisfied, unvacated and unstayed pending appeal for a period of 15 days after the entry thereof; (l) any loss, theft, damage or destruction of any item or items of Collateral, or other property of any Borrower or any Subsidiary occurs which could reasonably be expected to cause a Material Adverse Effect and is not adequately covered by insurance; (m) there is filed against any Borrower or any of its Subsidiaries any action, suit or proceeding under any federal or state racketeering statute (including the Racketeer Influenced and Corrupt Organization Act of 1970), which action, suit or proceeding (i) is not dismissed within one hundred twenty (120) days, and (ii) could reasonably be expected to result in the confiscation or forfeiture of any material portion of the Collateral; (n) for any reason other than the failure of the Lender to take any action available to it to maintain perfection of the Lender's Liens, pursuant to the Loan Documents, any Loan Document ceases to be in full force and effect or any Lien with respect to any material portion of the Collateral intended to be secured thereby ceases to be, or is not, valid, perfected and prior to all other Liens (other than Permitted Liens) or is terminated, revoked or declared void; (o) an ERISA Event shall occur with respect to a Pension Plan or Multi-employer Plan which has resulted or could reasonably be expected to result in liability of any Borrower under Title IV of ERISA to the Pension Plan, Multi-employer Plan or the PBGC in an aggregate amount in excess of $100,000; (ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans at any time exceeds $100,000; or (iii) any Borrower or any ERISA Affiliate shall fail to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multi-employer Plan in an aggregate amount in excess of $100,000; or (p) there occurs a Change of Control. 11.2 Remedies. (a) If a Default or an Event of Default exists, the Lender may, in its discretion, do one or more of the following at any time or times and in any order, without notice to or demand on any Borrower: (i) reduce the Maximum Revolver Amount, or the advance rates 72 80 against Eligible Accounts and/or Eligible Inventory used in computing the Borrowing Base, or reduce one or more of the other elements used in computing the Borrowing Base; (ii) restrict the amount of or refuse to make Revolving Loans; and (iii) restrict or refuse to provide Letters of Credit or Credit Support. If an Event of Default exists, the Lender may do one or more of the following, in addition to the actions described in the preceding sentence, at any time or times and in any order, without notice to or demand on any Borrower: (A) terminate this Agreement; (B) declare any or all Obligations to be immediately due and payable; provided, however, that upon the occurrence of any Event of Default described in Sections 11.1(e), 11.2(f), 11.1(g), or 11.1(h), the Agreement shall automatically and immediately expire and all Obligations shall automatically become immediately due and payable without notice or demand of any kind; and (C) pursue its other rights and remedies under the Loan Documents and applicable law. (b) If an Event of Default has occurred and is continuing: (i) the Lender shall have, in addition to all other rights of the Lender, the rights and remedies of a secured party under the UCC; (ii) the Lender may, at any time, take possession of the Collateral and keep it on any Borrower's premises, at no cost to the Lender, or remove any part of it to such other place or places as the Lender may desire, or the Borrowers shall, upon the Lender's demand, at the Borrowers' cost, assemble the Collateral and make it available to the Lender at a place reasonably convenient to the Lender; and (iii) the Lender may sell and deliver any Collateral at public or private sales, for cash, upon credit or otherwise, at such prices and upon such terms as the Lender deems advisable, in its sole discretion, and may, if the Lender deems it reasonable, postpone or adjourn any sale of the Collateral by an announcement at the time and place of sale or of such postponed or adjourned sale without giving a new notice of sale. Without in any way requiring notice to be given in the following manner, each Borrower agrees that any notice by the Lender of sale, disposition or other intended action hereunder or in connection herewith, whether required by the UCC or otherwise, shall constitute reasonable notice to the Borrowers if such notice is mailed by registered or certified mail, return receipt requested, postage prepaid, or is delivered personally against receipt, at least five (5) Business Days prior to such action to the Borrower's address specified in or pursuant to Section 14.8. If any Collateral is sold on terms other than payment in full at the time of sale, no credit shall be given against the Obligations until the Lender or the Lender receive payment, and if the buyer defaults in payment, the Lender may resell the Collateral without further notice to the Borrowers. In the event the Lender seeks to take possession of all or any portion of the Collateral by judicial process, each Borrower irrevocably waives: (A) the posting of any bond, surety or security with respect thereto which might otherwise be required; (B) any demand for possession prior to the commencement of any suit or action to recover the Collateral; and (C) any requirement that the Lender retain possession and not dispose of any Collateral until after trial or final judgment. Each Borrower agrees that the Lender has no obligation to preserve rights to the Collateral or marshal any Collateral for the benefit of any Person. The Lender is hereby granted a license or other right to use, without charge, the Borrower's labels, patents, copyrights, name, trade secrets, trade names, trademarks, and advertising matter, or any similar property, in completing production of, advertising or selling any Collateral, and the Borrowers' rights under all licenses and all franchise agreements shall inure to the Lender's benefit for such purpose. The proceeds of sale shall be applied first to all expenses of sale, including attorneys' fees, and then to the Obligations. The Lender will return any excess to the Borrowers and the Borrowers shall remain liable for any deficiency. 73 81 (c) If an Event of Default occurs, each Borrower hereby waives all rights to notice and hearing prior to the exercise by the Lender of the Lender's rights to repossess the Collateral without judicial process or to reply, attach or levy upon the Collateral without notice or hearing. ARTICLE 12 TERM AND TERMINATION 12.1 Term and Termination. The term of this Agreement shall end on the Stated Termination Date. The Lender may terminate this Agreement without notice upon the occurrence of an Event of Default. Upon the effective date of termination of this Agreement for any reason whatsoever, all Obligations (including all unpaid principal, accrued and unpaid interest and any early termination or prepayment fees or penalties) shall become immediately due and payable and the Borrowers shall immediately arrange for the cancellation and return of Letters of Credit then outstanding. Notwithstanding the termination of this Agreement, until all Obligations are indefeasibly paid and performed in full in cash, the Borrowers shall remain bound by the terms of this Agreement and shall not be relieved of any of their Obligations hereunder or under any other Loan Document, and the Lender shall retain all its rights and remedies hereunder (including the Lender's Liens in and all rights and remedies with respect to all then existing and after-arising Collateral). ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS 13.1 Amendments and Waivers. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by the Borrowers therefrom, shall be effective unless the same shall be in writing and signed by the Lender and the Borrowers and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 74 82 13.2 Participations. The Lender may at any time sell participating interests in any Loans and the other interest of the Lender hereunder and under the other Loan Documents; provided, however, that (i) the Lender's obligations under this Agreement shall remain unchanged, (ii) the Lender shall remain solely responsible for the performance of such obligations, and (iii) the Borrowers shall continue to deal solely and directly with the Lender in connection with the Lender's rights and obligations under this Agreement and the other Loan Documents. If amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participating Lender shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. 13.3 Pledge by Lender. Notwithstanding any other provision in this Agreement, the Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law. ARTICLE 14 MISCELLANEOUS 14.1 No Waivers; Cumulative Remedies. No failure by the Lender to exercise any right, remedy, or option under this Agreement or any present or future supplement thereto, or in any other agreement between or among any Borrower and the Lender, or delay by the Lender in exercising the same, will operate as a waiver thereof. No waiver by the Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by the Lender on any occasion shall affect or diminish the Lender's rights thereafter to require strict performance by the Borrowers of any provision of this Agreement. The Lender may proceed directly to collect the Obligations without any prior recourse to the Collateral. The Lender's rights under this Agreement will be cumulative and not exclusive of any other right or remedy which the Lender may have. 14.2 Severability. The illegality or unenforceability of any provision of this Agreement or any Loan Document or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder. 14.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver. (a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS, PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 75 83 OF THE UCC) OF THE STATE OF CALIFORNIA; PROVIDED THAT THE LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES OF AMERICA FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS AND THE LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWERS AND THE LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE LENDER SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE LENDER DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS. (c) EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 14.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW. (d) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL AT THE REQUEST OF EITHER PARTY HERETO BE DETERMINED BY BINDING ARBITRATION. The arbitration shall be conducted in accordance with the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law provision in this Agreement, and under the Commercial Rules of the American Arbitration Association ("AAA"). The arbitrator(s) shall give effect to statutes of limitation in determining any claim. Any controversy concerning whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the arbitration award may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuant to a provisional or ancillary remedy shall not constitute a waiver of the right of either 76 84 party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. (e) Notwithstanding the provisions of (d) above, no controversy or claim shall be submitted to arbitration without the consent of all parties if, at the time of the proposed submission, such controversy or claim arises from or related to an obligation to the Lender which is secured by real estate property collateral (exclusive of real estate space lease assignments). If all the parties do not consent to submission of such a controversy or claim to arbitration, the controversy or claim shall be determined as provided in Section 14.3(f). (f) At the request of either party a controversy or claim which is not submitted to arbitration as provided and limited in Section 14.3(d) and (e) shall be determined by judicial reference. If such an election is made, the parties shall designate to the court a referee or referees selected under the auspices of the AAA in the same manner as arbitrators are selected in AAA-sponsored proceedings. The presiding referee of the panel, or the referee if there is a single referee, shall be an active attorney or retired judge. Judgment upon the award rendered by such referee or referees shall be entered in the court in which such proceeding was commenced. (g) No provision of Sections (d) through (g) shall limit the right of the Lender to exercise self-help remedies such as setoff, foreclosure against or sale of any real or personal property collateral or security, or obtaining provisional or ancillary remedies from a court of competent jurisdiction before, after, or during the pendency of any arbitration or other proceeding. The exercise of a remedy does not waive the right of either party to resort to arbitration or reference. At the Lender's option, foreclosure under a deed of trust or mortgage may be accomplished either by exercise of power of sale under the deed of trust or mortgage or by judicial foreclosure. 14.4 WAIVER OF JURY TRIAL. SUBJECT TO THE PROVISIONS OF SECTION 14.3(d), EACH BORROWER AND THE LENDER EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY LENDER-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH BORROWER AND THE LENDER EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. 77 85 14.5 Survival of Representations and Warranties. All of the Borrowers' representations and warranties contained in this Agreement shall survive the execution, delivery, and acceptance thereof by the parties, notwithstanding any investigation by the Lender or their respective agents. 14.6 Other Security and Guaranties. The Lender, may, without notice or demand and without affecting the Borrowers' obligations hereunder, from time to time: (a) take from any Person and hold collateral (other than the Collateral) for the payment of all or any part of the Obligations and exchange, enforce or release such collateral or any part thereof; and (b) accept and hold any endorsement or guaranty of payment of all or any part of the Obligations and release or substitute any such endorser or guarantor, or any Person who has given any Lien in any other collateral as security for the payment of all or any part of the Obligations, or any other Person in any way obligated to pay all or any part of the Obligations. 14.7 Fees and Expenses. The Borrowers agree to pay to the Lender, on demand, all reasonable costs and expenses that Lender pays or incurs in connection with the negotiation, preparation, syndication, consummation, administration, enforcement, and termination of this Agreement or any of the other Loan Documents, including: (a) Attorney Costs; (b) costs and expenses (including reasonable attorneys' and paralegals' fees and disbursements) for any amendment, supplement, waiver, consent, or subsequent closing in connection with the Loan Documents and the transactions contemplated thereby; (c) costs and expenses of lien and title searches and title insurance; (d) taxes, fees and other charges for, filing financing statements and continuations, and other actions to perfect, protect, and continue the Lender's Liens (including costs and expenses paid or incurred by the Lender in connection with the consummation of Agreement); (e) sums paid or incurred to pay any amount or take any action required of the Borrowers under the Loan Documents that the Borrowers fail to pay or take; (f) costs of appraisals, inspections, and verifications of the Collateral, including travel, lodging, and meals for inspections of the Collateral and the Borrowers' operations by the Lender plus the Lender's then customary charge for field examinations and audits and the preparation of reports thereof (such charge is currently $750 per day (or portion thereof) for the Lender or employee of the Lender with respect to each field examination or audit); (g) costs and expenses of forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining Payment Accounts and lock boxes; (h) costs and expenses of preserving and protecting the Collateral; and (i) costs and expenses (including Attorneys' Costs) paid or incurred to obtain payment of the Obligations, enforce the Lender's Liens, sell or otherwise realize upon the Collateral, and otherwise enforce the provisions of the Loan Documents, or to defend any claims made or threatened against the Lender arising out of the transactions contemplated hereby (including preparations for and consultations concerning any such matters). The foregoing shall not be construed to limit any other provisions of the Loan Documents regarding costs and expenses to be paid by the Borrowers. All of the foregoing costs and expenses shall be charged to the Borrowers' Loan Account as Revolving Loans as described in Section 4.7. 14.8 Notices. Except as otherwise provided herein, all notices, demands and requests that any party is required or elects to give to any other shall be in writing, or by a telecommunications device capable of creating a written record, and any such notice shall become effective (a) upon personal delivery thereof, including, but not limited to, delivery by overnight mail and courier service, (b) four (4) days after it shall have been mailed by United 78 86 States mail, first class, certified or registered, with postage prepaid, or (c) in the case of notice by such a telecommunications device, when properly transmitted, in each case addressed to the party to be notified as follows: If to the Lender: Bank of America, N.A. 55 South Lake Avenue Suite 900 Pasadena, CA 91101 Attention:___________________ Telecopy No.:________________ with copies to: Bank of America, N.A. 10124 Old Grove Road San Diego, CA 92131 Attention: General Counsel Telecopy No.: ________________ If to any Borrower: Cerprobe Corporation 1150 North Fiesta Blvd. Gilbert, Arizona 85233 Attention:___________________ Telecopy No.:________________ or to such other address as each party may designate for itself by like notice. Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to the persons designated above to receive copies shall not adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication. 14.9 Waiver of Notices. Unless otherwise expressly provided herein, each Borrower waives presentment and notice of demand or dishonor and protest as to any instrument, notice of intent to accelerate the Obligations and notice of acceleration of the Obligations, as well as any and all other notices to which it might otherwise be entitled. No notice to or demand on any Borrower which the Lender may elect to give shall entitle any Borrower to any or further notice or demand in the same, similar or other circumstances. 14.10 Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective representatives, successors, and assigns of the parties hereto; provided, however, that no interest herein may be assigned by any Borrower without prior written consent of the Lender. The rights and benefits of the Lender hereunder shall, if such Persons so agree, inure to any party acquiring any interest in the Obligations or any part thereof. 79 87 14.11 Indemnity of the Lender by the Borrowers. (a) Each Borrower agrees to defend, indemnify and hold the Lender and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against any such Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any Insolvency Proceeding or appellate proceeding) related to or arising out of this Agreement, any other Loan Document, or the Loans or the use of the proceeds thereof, whether or not any Indemnified Person is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities"); provided, that the Borrowers shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting solely from the gross negligence or willful misconduct of such Indemnified Person. The agreements in this Section shall survive payment of all other Obligations. (b) Each Borrower agrees to indemnify, defend and hold harmless the Lender from any loss or liability directly or indirectly arising out of the use, generation, manufacture, production, storage, release, threatened release, discharge, disposal or presence of a hazardous substance relating to the Borrowers' operations, business or property. This indemnity will apply whether the hazardous substance is on, under or about any Borrower's property or operations or property leased to any Borrower. The indemnity includes but is not limited to Attorneys Costs. The indemnity extends to the Lender, their parents, affiliates, subsidiaries and all of their directors, officers, employees, agents, successors, attorneys and assigns. "Hazardous substances" means any substance, material or waste that is or becomes designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant" or a similar designation or regulation under any federal, state or local law (whether under common law, statute, regulation or otherwise) or judicial or administrative interpretation of such, including petroleum or natural gas. This indemnity will survive repayment of all other Obligations. 14.12 Limitation of Liability. No claim may be made by any Borrower against the Lender, or the affiliates, directors, officers, officers, employees, or agents of the Lender for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement or any other Loan Document, or any act, omission or event occurring in connection therewith, and each Borrower hereby waives, releases and agrees not to sue upon any claim for such damages, whether or not accrued and whether or not known or suspected to exist in its favor. 14.13 Final Agreement. This Agreement and the other Loan Documents are intended by the Borrowers and the Lender to be the final, complete, and exclusive expression of the agreement between them. This Agreement supersedes any and all prior oral or written agreements relating to the subject matter hereof. No modification, rescission, waiver, release, or amendment of any provision of this Agreement or any other Loan Document shall be made, 80 88 except by a written agreement signed by the Borrowers and a duly authorized officer of the Lender. 14.14 Counterparts. This Agreement may be executed in any number of counterparts, and by the Lender, and the Borrowers in separate counterparts, each of which shall be an original, but all of which shall together constitute one and the same agreement; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. 14.15 Captions. The captions contained in this Agreement are for convenience of reference only, are without substantive meaning and should not be construed to modify, enlarge, or restrict any provision. 14.16 Right of Setoff. In addition to any rights and remedies of the Lender provided by law, if an Event of Default exists or the Loans have been accelerated, the Lender is authorized at any time and from time to time, without prior notice to the Borrowers, any such notice being waived by the Borrowers to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, the Lender to or for the credit or the account of any Borrower against any and all Obligations owing to the Lender, now or hereafter existing, irrespective of whether or not the Lender shall have made demand under this Agreement or any Loan Document and although such Obligations may be contingent or unmatured. 14.17 Joint and Several Liability. Each Borrower shall be liable for all amounts due to the Lender under this Agreement, regardless of which Borrower actually receives Loans or other extensions of credit hereunder or the amount of such Loans received or the manner in which the Lender accounts for such Loans or other extensions of credit on its books and records. The Borrower's Obligations with respect to Loans made to it, and the Borrower's Obligations arising as a result of the joint and several liability of the Borrowers hereunder, with respect to Loans made to the other Borrowers hereunder, shall be separate and distinct obligations, but all such Obligations shall be primary obligations of the Borrowers. Each Borrower's Obligations arising as a result of the joint and several liability of the Borrowers hereunder with respect to Loans or other extensions of credit made to the other Borrowers hereunder shall, to the fullest extent permitted by law, be unconditional irrespective of (i) the validity or enforceability, avoidance or subordination of the Obligations of the other Borrowers or of any promissory note or other document evidencing all or any part of the Obligations of the other Borrowers, (ii) the absence of any attempt to collect the Obligations from the other Borrowers, any other guarantor, or any other security therefor, or the absence of any other action to enforce the same, (iii) the waiver, consent, extension, forbearance or granting of any indulgence by the Lender with respect to any provision of any instrument evidencing the Obligations of the other Borrowers, or any part thereof, or any other agreement now or hereafter executed by the other Borrowers and delivered to the Lender, (iv) the failure by the Lender to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or collateral for the Obligations of the other Borrowers, (v) the Lender's election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a security interest by the other Borrowers, as 81 89 debtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the disallowance of all or any portion of the Lender's claim(s) for the repayment of the Obligations of the other Borrowers under Section 502 of the Bankruptcy Code, or (viii) any other circumstances which might constitute a legal or equitable discharge or defense of a guarantor or of the other Borrowers. With respect to the Borrower's Obligations arising as a result of the joint and several liability of the Borrowers hereunder with respect to Loans or other extensions of credit made to either of the other Borrowers hereunder, each Borrower waives, until the Obligations shall have been paid in full and the Loan Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy which the Lender now has or may hereafter have against any Borrower, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to the Lender to secure payment of the Obligations or any other liability of the Borrowers to the Lender. Upon any Event of Default, the Lender may proceed directly and at once, without notice, against any Borrower to collect and recover the full amount, or any portion of the Obligations, without first proceeding against the other Borrowers or any other Person, or against any security or collateral for the Obligations. Each Borrower consents and agrees that the Lender shall be under no obligation to marshal any assets in favor of the Borrower or against or in payment of any or all of the Obligations. 14.18 Contribution and Indemnification among the Borrowers. Each Borrower is obligated to repay the Obligations as joint and several obligors under this Agreement. To the extent that any Borrower shall, under this Agreement as a joint and several obligor, repay any of the Obligations constituting Loans made to another Borrower hereunder or other Obligations incurred directly and primarily by any other Borrower (an "Accommodation Payment"), then the Borrower making such Accommodation Payment shall be entitled to contribution and indemnification from, and be reimbursed by, each of the other Borrowers in an amount, for each of such other Borrowers, equal to a fraction of such Accommodation Payment, the numerator of which fraction is such other Borrower's "Allocable Amount" (as defined below) and the denominator of which is the sum of the Allocable Amounts of all of the Borrowers. As of any date of determination, the "Allocable Amount" of each Borrower shall be equal to the maximum amount of liability for Accommodation Payments which could be asserted against such Borrower hereunder without (a) rendering such Borrower "insolvent" within the meaning of Section 101 (31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or Section 2 of the Uniform Fraudulent Conveyance Act ("UFCA"), (ii) leaving such Borrower with unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (iii) leaving such Borrower unable to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA. All rights and claims of contribution, indemnification and reimbursement under this section shall be subordinate in right of payment to the prior payment in full of the Obligations. The provisions of this section shall, to the extent expressly inconsistent with any provision in any Loan Document, supersede such inconsistent provision. 14.19 Agency of the Parent for each other Borrower; Joint Account. Each of the other Borrowers appoints Cerprobe as its Agent for all purposes relevant to this Agreement, including the giving and receipt of notices and execution and delivery of all documents, instruments and 82 90 certificates contemplated herein and all modifications hereto. Any acknowledgement, consent, direction, certification or other action which might otherwise be valid or effective only if given or taken by all of the Borrowers or acting singly, shall be valid and effective if given or taken only by Cerprobe, whether or not any of the other Borrowers joins therein. At the request of the Borrowers, the Lender shall deposit all proceeds of the Loans into an account in the name of Cerprobe. The Borrowers acknowledge and agree that the Borrowers are engaged in an integrated operation that requires financing on the basis of credit availability to each Borrower, and that each Borrower expects to derive, directly or indirectly, benefit from such credit availability to the other Borrowers. The Lender shall have no responsibility to the Borrowers to enquire into the allocation or apportionness of the proceeds of any Loans made hereunder [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 83 91 IN WITNESS WHEREOF, the parties have entered into this Loan and Security Agreement on the date first above written. "BORROWERS" CERPROBE CORPORATION By ---------------------------------- Name -------------------------------- Title: ------------------------------ CERPROBE INTERCONNECT SOLUTIONS, INC. By ---------------------------------- Name ------------------------------- Title: ------------------------------ "LENDER" BANK OF AMERICA, N.A. By ---------------------------------- Name -------------------------------- Title: ------------------------------ 84 92 EXHIBIT C FINANCIAL STATEMENTS 1 93 EXHIBIT D NOTICE OF BORROWING Date: _____________, ____ To: Bank of America, N.A. 55 South Lake Avenue Suite 900 Pasadena, CA 91101 Attention: ___________ Ladies and Gentlemen: The undersigned, ___________________________ (the "Borrower"), refers to the Loan and Security Agreement, dated as of December ___, 1999 ("Loan and Security Agreement") by and among the Borrower, certain of its Affiliates and Bank of America, N.A. ("Lender") and hereby gives you notice irrevocably of the Borrowing specified below: 1. The Business Day of the proposed Borrowing is ___________ , _____. 2. The aggregate amount of the proposed Borrowing is $_______________. 3. The Borrowing is to be comprised of $_____________ of Base Rate Loans and $__________________ of LIBOR Rate Loans. 4. The duration of the Interest Period for the LIBOR Rate Loans, if any, included in the Borrowing shall be _____ months. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Borrowing, before and after giving effect thereto and to the application of the proceeds therefrom: (a) The representations and warranties of the Borrowers contained in the Loan and Security Agreement are true and correct in all material respects as though made on and as of such date other than any such representation or warranty which relates to a specified prior date, and except to the extent the Lender has been notified by the Borrowers that any representation or warranty is not correct and the Lender has explicitly waived in writing compliance with such representation or warranty; (b) No Default or Event of Default has occurred and is continuing, or would result from such proposed Borrowing; and (c) No event or circumstance has occurred which constitutes a Material Adverse Effect; 1 94 (d) The proposed Borrowing will not (i) cause the aggregate principal amount of all outstanding Revolving Loans to the undersigned plus the aggregate amount available for drawing under all outstanding Letters of Credit for the benefit of the undersigned to exceed the Availability of the undersigned or (ii) cause, together with any proposed Borrowing on the date hereof by all other Borrowers, the aggregate principal amount of all outstanding Revolving Loans plus the aggregate amount available for drawing under all outstanding Letters of Credit to all Borrowers to exceed the Maximum Loan Amount or the Aggregate Availability or the aggregate principal amount of all Inventory Loans to exceed the Inventory Sublimit. [NAME OF BORROWER] By:___________________________ Title:________________________ By:___________________________ Title:________________________ 2 95 EXHIBIT E NOTICE OF CONTINUATION/CONVERSION Date: __________ , _____ To: Bank of America, N.A. 55 South Lake Avenue Suite 900 Pasadena, CA 91101 Attention:_______________ Ladies and Gentlemen: The undersigned, ___________________________ (the "Borrower"), refers to the Loan and Security Agreement dated as of December ___, 1999 by and among the Borrower, certain of its Affiliates and Bank of America, N.A. ("Lender") and hereby gives you notice irrevocably of the [CONTINUATION] [CONVERSION] of the Loans specified herein, that: 1. The Continuation/Conversion Date is ____________ , ________. 2. The aggregate amount of the Loans to be [CONTINUED] [CONVERTED] is $____________________. 3. The Loans are to be [CONVERTED INTO] [CONTINUED AS] [LIBOR Rate] [BASE RATE] Loans. 4. The duration of the Interest Period for the LIBOR Rate Loans included in the [CONVERSION] [CONTINUATION] shall be months. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the proposed Continuation/Conversion Date, before and after giving effect thereto and to the application of the proceeds therefrom: (a) The representations and warranties of the Borrower contained in the Loan and Security Agreement are true and correct in all material respects as though made on and as of such date other than any such representation or warranty which relates to a specified prior date, and except to the extent the Lender has been notified by the Borrowers that any representation or warranty is not correct and the Lender has explicitly waived in writing compliance with such representation or warranty; (b) No Default or Event of Default has occurred and is continuing, or would result from such proposed [CONTINUATION] [CONVERSION]; and (c) No event or circumstance has occurred which constitutes a Material Adverse Effect; 1 96 (d) The proposed conversion-continuation will not (i) cause the aggregate principal amount of all outstanding Revolving Loans to the undersigned plus the aggregate amount available for drawing under all outstanding Letters of Credit for the benefit of the undersigned to exceed the Availability of the undersigned or (ii) cause, together with any proposed Borrowing on the date hereof by all other Borrowers, the aggregate principal amount of all outstanding Revolving Loans plus the aggregate amount available for drawing under all outstanding Letters of Credit to all Borrowers to exceed the Maximum Loan Amount or the Aggregate Availability or the aggregate principal amount of all Inventory Loans to exceed the Inventory Sublimit. [NAME OF BORROWER] By: ------------------------------- Title: ---------------------------- By: ------------------------------- Title: ---------------------------- 2 -----END PRIVACY-ENHANCED MESSAGE-----