November 9, 2010 RC2 Corporation 1111 West 22nd Street Suite 320 Oak Brook, IL 60523 RE: Confidentiality Agreement Ladies and Gentlemen:
Exhibit
(d)(2)
CONFIDENTIAL
November 9, 2010
RC2 Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Ladies and Gentlemen:
Tomy Company, Ltd. (“Tomy”) has expressed an interest in exploring a possible strategic
negotiated relationship or venture (a “Transaction”) with RC2 Corporation, a Delaware
corporation (together with its subsidiaries and affiliates, the
“Company”). Tomy and the Company
are sometimes individually referred to herein as a “Party” and collectively referred to herein as
the “Parties”. In connection with their interest in a Transaction, the Parties may request certain
information relating to each other. As a condition to any information being furnished to the
Parties and their Representatives (as defined below), Tomy and the Company agree to be bound by the
terms and conditions set forth in this letter agreement (this “Agreement”). Each
Party further agrees to inform each of its Representatives to whom any information subject to this
Agreement is disclosed of the terms and conditions of this Agreement, and to direct each such
Representative to fully observe and be bound by this Agreement (other than Section 11 hereof,
except as provided therein) to the same extent as if such Representative were a Party. As used in
this Agreement, the Party disclosing Proprietary Information is the “Disclosing Party” and the
Party receiving the Proprietary Information is the “Recipient”.
1. Proprietary Information. As used in this Agreement, the term “Proprietary
Information” means all information (whether oral, written or electronic) concerning the
Disclosing Party which is furnished to the Recipient by or on behalf of the Disclosing Party or any
of its Representatives, and all portions of analyses, data, compilations, notes, forecasts,
summaries, studies and other materials prepared by the Recipient or its Representatives, or
otherwise on the Recipient’s behalf, that contain, reflect or are based in whole or in part, on
such information. The term “Proprietary Information” shall not include, however,
information that: (a) is or becomes generally available to the public other than as a result of a
disclosure or other action by the Recipient or its Representatives; (b) was in the Recipient’s
possession and obtained on a non-confidential basis prior to the disclosure thereof by the
Disclosing Party or its Representatives; (c) becomes available to the Recipient on a
non-confidential basis from a person other than the Disclosing Party or its Representatives who is
not to the Recipient’s knowledge
otherwise bound by any obligation of confidentiality with respect thereto; or (d) is independently
developed by the Recipient or its Representatives without reference to any Proprietary Information.
2. Representatives. As used in this Agreement, the term “Representatives” means, as
to any person, such person’s affiliates and its and their directors, officers, employees, agents
and advisors (including, without limitation, financial advisors, counsel and accountants).
3. Restrictions on Use and Disclosure. Subject to Section 4 below, unless otherwise agreed
to by the Parties in writing, each Party agrees, for a period of two (2) years from the date of
this Agreement:
(a) to keep all Proprietary Information confidential and not to disclose or reveal any Proprietary
Information to any person other than its Representatives who are participating in the evaluation of
a
Transaction on its behalf; and (b) not to use Proprietary Information for any purpose other than
its evaluation of a Transaction. Each Party agrees to take reasonable measures to restrain its
Representatives from prohibited or unauthorized disclosure or use of any Proprietary Information
and, regardless of compliance by such Party with the foregoing, shall be responsible and liable to
the Disclosing Party for any breach of the terms of this Agreement by the Recipient or any of its
Representatives. Neither Party shall, without the other Party’s prior written consent, disclose to
any person (other than those of its Representatives who are participating in the evaluation of a
Transaction) any information relating to a Transaction, any proposed terms or conditions of a
Transaction, or any other information or matters relating thereto, including, without limitation,
the fact that discussions are taking place with respect thereto, the status thereof or the fact
that Proprietary Information has been made available to such Party or its Representatives. Each
Party agrees to take reasonable measures to restrain its respective Representatives from prohibited
or unauthorized disclosure of any information relating to a Transaction and, regardless of
compliance by such Party with the foregoing, shall be responsible and liable to the other Party for
any breach of the terms of this Agreement by any of its Representatives.
4. Compelled Disclosure. In the event that a Recipient or any of its Representatives is
legally compelled pursuant to a subpoena, civil investigative demand, regulatory demand or similar
process, or is required pursuant to applicable law, rule, regulation, stock exchange rule or
disclosure requirement of the Securities and Exchange Commission or the Financial Instruments and
Exchange Law and the relevant Cabinet Order hereunder (collectively, “Law”), to disclose
any Proprietary Information or either Party is legally compelled or required by Law to disclose any
other information concerning a Transaction, the compelled Party agrees that it shall provide the
non-compelled Party with prompt notice of such request or requirement as far in advance of its
disclosure as is reasonably practicable, and will in good faith consult with and consider the
suggestions of the non-compelled Party concerning the nature and scope of the information the
compelled Party proposes to disclose. Each Party agrees to cooperate fully with and not to oppose
any action by the non-compelled Party to obtain a protective order or other appropriate remedy, if
applicable, in order to limit such disclosure. In the event that no such protective order or other
remedy is obtained, or in the event that the non-compelled Party waives compliance with the terms
of this Agreement, the compelled Party may disclose only that part of the Proprietary Information
or other information concerning a Transaction as it is advised by its legal counsel is required to
be disclosed, and shall use its reasonable best efforts to ensure that all Proprietary Information
and other information concerning a Transaction that is so disclosed will be accorded confidential
treatment to the extent permitted by applicable law, rules and regulations.
5. Ownership. The Recipient acknowledges that the Proprietary Information is and shall
remain the sole and exclusive property of the Disclosing Party, and that the Disclosing Party has
the exclusive right, title and interest to such Proprietary Information. No right
or license, by implication or otherwise, is granted by the Disclosing Party as a result of this
Agreement or as a result of any disclosure of Proprietary Information.
6. Return or Destruction. In the event that a Transaction is not consummated, or at any
time upon the written request of the Disclosing Party for any reason, the Recipient will promptly,
at its sole option (which will be promptly communicated to the Disclosing Party), destroy or
redeliver to the Disclosing Party all written, electronic or tangible Proprietary Information
provided to it or its Representatives by or on behalf of the Disclosing Party or its
Representatives, and the Recipient and its Representatives shall not retain any copies, extracts or
other reproductions in whole or in part of such written material. Notwithstanding the return or
destruction of the Proprietary Information, the Recipient and its Representatives will continue to
be bound by their obligations of confidentiality and other obligations hereunder. Notwithstanding
the foregoing, the Recipient and its Representatives may retain (i) solely for compliance purposes
copies of the Proprietary Information in order to comply with Law, regulation or professional
standards and (ii) electronic copies resulting from automatic processes or in
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accordance with document or communications retention policies; provided, however, that any
Proprietary Information retained in any such case will continue to be held as confidential and not
used for any commercial purpose pursuant to and in accordance with the terms of this Agreement.
7. No Warranty or Agreement. The Parties acknowledge that neither the Company nor Tomy nor
any of their respective Representatives makes any express or implied representation or warranty as
to the accuracy or completeness of any information provided to the other Party or its
Representatives. Except as may be provided in a definitive written agreement with regard to any
Transaction between the Company and Tomy, each Party agrees that neither Party nor any of their
respective Representatives shall have any liability to the other Party or any of its
Representatives relating to or arising from the use of any information by such other Party or its
Representatives or for any errors in or omissions from such information or, except as expressly set
forth in this Agreement, be under any obligation in connection with a Transaction, any other
strategic transaction or any process relating thereto. Either Party may terminate access to
Proprietary Information at any time and for any reason.
8. Standstill. For a period of one year from the date hereof (the “Standstill
Period”), each Party agrees that neither it nor its subsidiaries or affiliates alone, through
its Representatives or with others will, in any manner, unless invited by the Board of Directors of
the other Party in writing: (i) acquire, offer, propose (whether publicly or otherwise), solicit or
seek to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any voting
securities or direct or indirect rights to acquire any voting securities of the other Party or any
subsidiary thereof or any assets of the other Party, (ii) solicit, seek or offer to effect, or
actually effect, negotiate with, or make or participate in any statement or proposal, whether
written or oral, either alone or in concert with others, to the other Party or any of its
stockholders or make or participate in any public announcement or proposal or offer whatsoever
(including, but not limited to, any “solicitation” of “proxies” as such terms are defined or used
in the proxy rules of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
or the Financial Instruments and Exchange Law and the relevant Cabinet Law thereunder, as
applicable, to vote, or to seek to advise or influence any person with respect to the voting of any
securities of the other Party) with respect to (a) any form of business combination or similar
transaction, including, a merger, tender or exchange offer or liquidation of the other Party’s
assets, (b) any form of restructuring, recapitalization or similar transaction with respect to the
other Party or any of its subsidiaries, (c) any purchase of any securities or any material or
substantial portion of assets, or rights to acquire any securities or any material or substantial
portion of assets, of the other Party or any of its subsidiaries, (d) any proposal to seek
representation on the board of directors of the other Party or otherwise to seek to control or to
influence the board of directors of the other Party, the management or the policies of the other
Party or any of its subsidiaries, (e) forming, joining or in any way participating, or directing
any person to form, join or in any way
participate, in a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any securities of the other Party or any of its subsidiaries or (f) disclosing or
directing any person to disclose, any intention, plan or arrangement inconsistent with the
foregoing or (iii) instigate, advise, encourage, assist or direct any third party to do any of the
foregoing. Each Party also agrees, and agrees on behalf of its subsidiaries and affiliates referred
to in the first sentence of this paragraph, during such period not to (x) request the other Party,
any of its subsidiaries or any of their respective directors, officers, employees, affiliates and
representatives, directly or indirectly, to amend, waive or terminate any provisions of this
paragraph (including this sentence) or (y) take any action which might require the other Party or
any of its subsidiaries to make a public announcement regarding any of the matters specified in
this paragraph. The limitations and prohibitions on each Party set forth in this paragraph shall no
longer apply from the earliest of (x) the date the other Party publicly announces it has entered
into a definitive written agreement with any person or group other than the first Party which
provides for any transaction where such person or group (or such person’s or group’s stockholders)
would be acquiring at least 50% or more of the outstanding capital stock of the other Party or all
or substantially all of the assets of the other Party (each, a “Third Party Acquisition”)
or (y) the date the other Party recommends that its stockholders accept a tender or exchange offer
by one or more third parties to acquire
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50% or more of the equity of such Party or the date the Board of Directors of the other Party both
(i)
withdraws its recommendation against such tender or exchange offer and (ii) adopts either (A) a
recommendation that the stockholders accept such tender or exchange offer or (B) a position of
neutrality.
9. Securities Laws. Each Party is aware, and will advise its respective Representatives who
are informed of the matters that are the subject of this Agreement, of the restrictions imposed by
(i) the United States securities laws on the purchase or sale of securities by any person who has
received material, non-public information from the issuer of such securities and on the
communication of such information to any other person when it is reasonably foreseeable that such
other person is likely to purchase or sell such securities in reliance upon such information or
(ii) the xxxxxxx xxxxxxx rules under the Japanese securities law.
10. No Implied Obligations. This Agreement binds the Parties only with respect to the
matters expressly set forth herein. Neither Party has any obligation to disclose any information to
the other Party or its Representatives. Neither Party is bound or committed to negotiate or
consummate a Transaction unless and until a definitive written agreement regarding such Transaction
has been executed and delivered on behalf of both Parties by their duly authorized officers, in
which case the obligations of the parties to consummate such Transaction and to negotiate any
matters in connection therewith shall be subject to, and governed solely by, the terms and
conditions of such definitive written agreement.
11. Non-Exclusive Remedies. It is understood and agreed that each Party’s Proprietary
Information is special, unique and of extraordinary character, and that the Party may be
irreparably harmed by a breach of this Agreement by the other Party. Without prejudice to the
rights and remedies otherwise available to a Party, each Party agrees that the other Party shall be
entitled to equitable relief by way of injunction or otherwise if such Party or any of its
respective Representatives breach or threaten to breach any of the provisions of this Agreement.
12. Assignment. Each Party agrees that the rights and remedies of the other Party under
this Agreement shall inure to the benefit of, and shall be separately enforceable by, the other
Party and its successors and permitted assigns. Neither Party shall assign this Agreement without
the prior written consent of the other Party except that, without such consent, each Party shall
cause all of its obligations under this Agreement to be assumed, either in writing or by operation
of law, by any successor (by merger, sale of assets or otherwise) to the business of such Party or
of any portion thereof. No assignment of this Agreement or of any rights or obligations hereunder
shall relieve a Party of any of its obligations hereunder.
13. Governing Law; Jurisdiction and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to contracts executed in
and to be performed in that State, without regard to conflict of laws principles. The Parties
hereto agree that venue in any and all actions and proceedings related to this Agreement shall be
had in the State and Federal courts located in the city of New York, New York, which courts shall
have personal and subject matter jurisdiction for such purpose, and the parties hereto irrevocably
submit to the jurisdiction of such courts and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding. Tomy has designated and will maintain a
person in the following position as its agent to accept service of process on its behalf.
Name: | TOMY Corporation | |||
Address: | 0 XxxXxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxx, XX 00000, XXX | |||
Attention: | Xxxxx Xxxxxxxxx, President and CEO |
14. Communications. Neither Party will (A) initiate or cause to be initiated any
communication to the other Party or any of its employees (other than through the persons specified
on
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Annex A in the case of communications to the Company and other than through the persons specified
on Annex B in the case of communications to Tomy) concerning the Proprietary Information or any
potential Transaction or (B) make contact with any other Representative of the other Party that is
not aware that a Transaction is contemplated under circumstances that are reasonably likely to
result in such other Representative becoming aware that a Transaction is contemplated or that the
parties may be interested in pursuing a Transaction unless the other Party has given its prior
written consent or a potential Transaction is disclosed pursuant to
Section 4 hereof.
15. Employees. Neither Party will, for the one-year period from the date of this Agreement,
solicit or cause to be solicited the employment of, or hire, any officer or any other senior
manager of the other Party met during such Party’s evaluation of a potential Transaction; provided,
however, that the foregoing shall not apply to (i) any such employee who was not employed by the
other Party at the commencement of any such solicitation, (ii) any employees solicited or employed
as a result of generalized searches for employees by use of advertisements in the media which are
not targeted at employees of the other Party, (iii) the employment of any such employee who
contacts a Party on his or her own initiative without any direct or indirect solicitation from such
party, or (iv) the solicitation or employment of any employee as a result of or in connection with
the consummation of a Transaction.
16. Miscellaneous. Tomy and the Company each agree to bear its respective costs and
expenses, including, without limitation, expenses of counsel, outside auditors, advisors and
consultants, in connection with the evaluation of a possible Transaction. This Agreement contains
the entire agreement between the Company and Tomy concerning the subject matter hereof, and no
modification of this Agreement or waiver of any terms hereof shall be binding upon the Company or
Tomy, unless approved in writing by both of the parties hereto. No failure or delay by a Party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder. If any provision of this Agreement shall, for any
reason, be adjudged by any court of competent jurisdiction to be invalid or unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this Agreement but shall be
confined in its operation to the provision of this Agreement directly involved in the controversy
in which such judgment shall have been rendered. This Agreement may be executed in counterparts and
by original, facsimile or electronic signatures, each of which shall be an original, but all of
which together shall constitute one and the same agreement.
[Signature page follows.]
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Please confirm your agreement with the foregoing by signing and returning to the undersigned a copy
of this Agreement.
TOMY COMPANY, LTD. |
||||
By: | /s/ KANTARO TOMIYAMA | |||
Name: | KANTARO TOMIYAMA | |||
Title: | PRESIDENT & CEO |
Accepted and agreed as of the date set forth above: RC2 CORPORATION |
||||
By: | /s/ Xxxx Xxxxxxxxx | |||
Name: | Xxxx Xxxxxxxxx | |||
Title: | CEO |
- Execution Version-
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ANNEX A
Company Permitted Contacts
Xxxxxx X. Xxxxxxxxx, CEO
Xxxxx X. Xxxxxxxx, President
Xxxxx X. Xxxxxxxxx, CFO
Xxxxxxx X. Xxxxxx, COO
Xxxxxx X. Xxxxxxxxx, CEO
Xxxxx X. Xxxxxxxx, President
Xxxxx X. Xxxxxxxxx, CFO
Xxxxxxx X. Xxxxxx, COO
Execution Version
ANNEX B
Tomy Permitted Contacts
Kantaro Tomiyama, Board Director, President & CEO
Shiryo Okuaki, Board Director, Executive Vice President
Xxxxxxx Xxxxx, Board Director, CFO
Xxxxx Xxxxxxxxx, Board Director, Executive Managing Officer
Xxxxxxxx Xxxxxxxx, Executive General Manager, Corporate Strategy
Xxxxxxxx Xxxxxxxx, General Manager, Legal
Kantaro Tomiyama, Board Director, President & CEO
Shiryo Okuaki, Board Director, Executive Vice President
Xxxxxxx Xxxxx, Board Director, CFO
Xxxxx Xxxxxxxxx, Board Director, Executive Managing Officer
Xxxxxxxx Xxxxxxxx, Executive General Manager, Corporate Strategy
Xxxxxxxx Xxxxxxxx, General Manager, Legal
Execution Version