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EXHIBIT 99.1
MUTUAL NONDISCLOSURE AGREEMENT
In connection with consideration of a possible negotiated transaction
between Simulation Sciences Inc. (the "Company") and Xxxxx plc ("Xxxxx"), the
Company and Xxxxx expect to make available to one another certain non-public
information concerning their respective businesses, subsidiaries, financial
condition, operations, assets and liabilities. As a condition to such
information being furnished to each party and its directors, officers,
employees, agents or advisors (including, without limitation, attorneys,
accountants, consultants, bankers and financial advisors) (collectively,
"Representatives"), each party agrees to treat any non-public information
concerning the other party (whether prepared by the disclosing party, its
Representatives or otherwise and irrespective of the form of communication)
which is furnished hereunder to a party or to its Representatives (the
"Recipient") now or in the future by or on behalf of the disclosing party
(herein collectively referred to as the "Evaluation Material") in accordance
with the provisions of this Mutual Nondisclosure Agreement ("Agreement"), and to
take or abstain from taking certain other actions hereinafter set forth.
1. Evaluation Material. The term "Evaluation Material" also means all
information that is furnished to a Recipient or its Representatives by a party
or its Representatives (the "Discloser") that concerns the Discloser, its
affiliates or subsidiaries, and which is either confidential, proprietary or
otherwise not generally available to the public. The term "Evaluation Material"
also shall be deemed to include all notes, analyses, compilations, studies,
interpretations or other documents prepared by each party or its Representatives
which contain, reflect or are based upon, in whole or in part, the information
furnished to such party or its Representatives pursuant hereto which is not
available to the general public. The term "Evaluation Material" does not include
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by the receiving party or its Representatives, (ii)
was within the receiving party's knowledge or possession prior to its being
furnished to the receiving party by or on behalf of the disclosing party
pursuant hereto, provided that the source of such information was not known by
the receiving party to be in breach of an applicable confidentiality agreement
with or other contractual, legal or fiduciary obligation of confidentiality to
the disclosing party or any other party with respect to such information, (iii)
becomes available to the receiving party on a non-confidential basis from a
source other than the disclosing party or any of its Representatives, provided
that such source is not known by the receiving party to be in breach of an
applicable confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the disclosing party or any other
party with respect to such information, or (iv) is independently invented,
conceived or discovered by the receiving party or its employees or agents
without access to the Evaluation Materials.
2. Purpose of Disclosure of Evaluation Material. It is understood and agreed by
each party that any exchange of information under this Agreement shall be solely
for the purpose of evaluating a potential transaction between the parties and
that such information exchange is not to affect, in any way, either party's
relative competitive position regarding the other party or other entities. It is
further agreed that the information to be disclosed by each party shall only be
that information which is reasonably necessary to evaluate a proposed
transaction and that information which is not reasonably necessary for such
purposes shall not be disclosed or exchanged. In addition, competitively
sensitive information such as information concerning product development or
marketing plans, product prices or pricing plans, cost data, customers or
similar information which has been determined to be reasonably necessary to a
potential transaction, shall be limited only to each party's "Control Group."
For purposes of this Agreement, a party's "Control Group" means only those
senior executives and Representatives who are involved in evaluating or
negotiating a potential transaction or approving the value of a potential
transaction and who have a need to know such competitively sensitive information
for purposes of such evaluation, negotiation or approval.
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3. Use of Evaluation Material. Each party hereby agrees that it and its
Representatives shall use the other's Evaluation Material solely for the purpose
of evaluating a possible transaction between the parties, and that the
Discloser's Evaluation Material will be kept confidential; provided, however,
that (i) the Recipient may make any disclosure of such information as to which
the Discloser gives its prior written consent and (ii) any of such information
may be disclosed to the Recipient's Representatives who (x) need to know such
information for the sole purpose of evaluating a possible transaction between
the parties and who (y) agree to keep such information confidential. The
Recipient will not disclose the Evaluation Material to any person other than as
permitted hereby and will use its best efforts to safeguard the Evaluation
Material from unauthorized disclosure. Nothing in this Agreement shall obligate
either party, however, to use any greater care in the protection of the
Evaluation Material against disclosure than the care it uses generally with
respect to information relating to it which is similar in type to the Evaluation
Material. The term "person" as used in this Agreement shall be broadly
interpreted to include without limitation any corporation, company, partnership
or individual.
4. Nondisclosure. In addition, each party agrees that, without the prior written
consent of the other party, neither it nor its Representatives will disclose to
any other person the fact that any Evaluation Material has been made available
hereunder, that discussions or negotiations are taking place concerning a
possible transaction involving the parties or any of the terms, conditions or
other facts with respect thereto (including the status thereof); provided, that
a party may make such disclosure pursuant to the procedures set forth herein if,
in the written opinion of a party's outside counsel, such disclosure is
necessary to avoid committing a violation of law. In such event, the disclosing
party shall use its best efforts to give advance notice to the other party.
5. Required Disclosure. In the event that a party or its Representatives are
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) to disclose any of the other party's Evaluation
Material, the party requested or required to make the disclosure shall provide
the other party with prompt written notice of any such request or requirement so
that the other party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this Agreement. If, in the absence of a
protective order or other remedy or the receipt of a waiver by such other party,
the party requested or required to make the disclosure or any of its
Representatives are nonetheless legally compelled to disclose the other party's
Evaluation Material to any tribunal or else stand liable for contempt or suffer
other significant censure or penalty, the party requested or required to make
the disclosure or its Representative may, without liability hereunder, disclose
to such tribunal only that portion of the other party's Evaluation Material that
is legally required to be disclosed, provided that the party requested or
required to make the disclosure exercises its best efforts to preserve the
confidentiality of the other party's Evaluation Material, including, without
limitation, by cooperating with the other party to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded the other party's Evaluation Material by such tribunal.
6. Termination of Discussions. If either party decides that it does not wish to
proceed with a transaction with the other party, the party so deciding will
promptly inform the other party by way of a notice of that decision. The written
Evaluation Material, except for that portion of the Evaluation Material that may
be found in analyses, compilations, studies or other documents prepared by or
for the Recipient, will be returned to the Discloser immediately upon the
Discloser's request, and no copies shall be retained by the Recipient or its
Representatives. Recipient shall certify
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in writing within five (5) business days that all such Evaluation Material has
been returned and that the other provisions of this material Nondisclosure
Agreement have been complied with by it. For the purposes of this Agreement,
"written" Evaluation Material shall include, without limitation, information
contained in printed, magnetic or other tangible media, or in information
storage and retrieval systems. That portion of the Evaluation Material that may
be found in analyses, compilations, studies or other documents prepared by or
for a Recipient, oral Evaluation Material and written Evaluation Material not so
requested or returned will be held by the Recipient and kept subject to the
terms of this Agreement, or destroyed. Notwithstanding the return or destruction
of the Evaluation Material, each party and its Representatives will continue to
be bound by its obligations of confidentiality and other obligations hereunder.
7. No Representation of Accuracy. Each party understands and acknowledges that
although the agreements and covenants of the parties contained herein shall be
binding, neither party nor any of its Representatives makes any representation
or warranty, express or implied, as to the accuracy or completeness of the
Evaluation Material made available to it. Only those representations or
warranties that are made in a final definitive agreement regarding any
transaction contemplated hereby, when, as and if executed, and subject to such
limitations and restrictions as may be specified therein, will have any legal
effect. Each party agrees that, except as contemplated by the preceding
sentence, neither party nor any of its Representatives shall have any liability
to the other party or to any of its Representatives relating to or resulting
from the use by the other of the providing party's Evaluation Material or any
errors therein or omissions therefrom.
8. Definitive Agreements. Each party understands and agrees that no contract or
agreement providing for any transaction involving the parties shall be deemed to
exist between the parties unless and until a final definitive agreement has been
executed and delivered. Each party also agrees that unless and until a final
definitive agreement regarding a transaction between the parties has been
executed and delivered, neither party will be under any legal obligation of any
kind whatsoever with respect to completing or negotiating such a transaction by
virtue of this Agreement or any written or oral expression with respect to such
a transaction by any of its respective directors, officers, employees, agents or
any other Representatives except, in the case of this Agreement, for the matters
specifically agreed to herein. Both parties further acknowledge and agree that
each party reserves the right, in its sole discretion, to provide or not provide
Evaluation Material to the receiving party under this Agreement, to reject any
and all proposals made by the other party or any of its Representatives with
regard to a transaction between the parties, and to terminate discussions and
negotiations at any time.
9. Ownership of Evaluation Material. All information, and any Derivatives (as
defined below) thereof whether created by Discloser or Recipient, remains the
property of Discloser and no license or other rights to information is granted
or implied hereby. For purposes of this Agreement, "Derivatives" shall mean: (i)
for copyrightable or copyrighted material, any translation, abridgment, revision
or other form in which an existing work may be recast, transformed or adapted;
(ii) for patentable or patented material, any improvement thereon and (iii) for
material which is protected by trade secret, any new material derived from such
existing trade secret material, including new material which may be protected by
copyright, patent or trade secret. For the purposes of this Section 9,
"information" is deemed to include all information furnished by either party to
the other, whether or not Evaluation Material.
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10. Independent Development. Each party understands that the other party may
currently or in the future be developing information internally or receiving
information from other parties that may be similar to that received from a
Discloser. Accordingly, nothing in this Agreement will be construed as a
representation, inference or agreement that either party will not develop
products, or have products developed for it, that, without violation of this
Agreement, compete with the products or systems contemplated by the other's
Evaluation Material.
11. No License. Nothing in this Agreement is intended to grant any rights to
either party under any patent, mask work right or copyright of the other party,
nor shall this Agreement grant any party any rights in or to the Evaluation
Material of the other party except as expressly set forth herein.
12 Waiver. It is understood and agreed that no failure or delay by either 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
future exercise thereof or the exercise of any other right, power or privilege
hereunder.
13. Standstill. Beginning on the date of this letter and continuing for a period
of 12 months after the date of a notice of termination under Section 6 above,
each party and its affiliates will not (and each party and its affiliates will
not assist or encourage others to), directly or indirectly, unless specifically
requested to do so in writing in advance by the other party's Board of
Directors:
(a) acquire or agree, offer, seek or propose to acquire, or cause
to be acquired, ownership (including, but not limited to, beneficial ownership
as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of any of the other party's assets (other than in the
ordinary course of business) or businesses or any voting securities issued by
the other party, or any rights or options to acquire such ownership, including
from a third party; or
(b) make, or in any way participate, in any solicitation of
proxies or consents with respect to any securities of the other party which are,
or may be, entitled to vote in the election of the other party's directors
("Voting Securities"), become a "participant" in any "election contest" (as such
terms are defined or used in Rule 14a-11 under the Exchange Act) with respect to
the other party; or seek to advise, encourage or influence any person or entity
with respect to the voting of any Voting Securities; or demand a copy of the
other party's stock ledger, list of its stockholders or other books and records;
or call or attempt to call any meeting of the stockholders of the other party;
or
(c) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the matters described
in (a) or (b) above; provided, however, that the restrictions contained in this
Section 13 shall not apply if (i) another person or entity (including the
Company) shall have commenced a tender or exchange offer for 50% or more of the
Company's securities or (ii) another person or entity or the Company has made
public disclosure of a transaction to acquire 50% or more of the securities of
the Company.
14 No Market Disclosures. Each party understands and agrees that information
"leaks" or rumors of a potential transaction between the parties would be
disruptive to stock market transactions, customer relationships and potential
customer transactions. Accordingly, each party specifically agrees to take all
commercially reasonable actions to prevent any such disclosure (including by
specifically notifying its directors, officers, employees and Representatives
that have knowledge of
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this transaction of the requirements of this paragraph), to notify the other
party immediately of any such "leak" or rumor of which it becomes aware, to
assist in tracing the source of any such "leak" or rumor and providing that
information to the other party, and to being held legally responsible, at law,
in equity, in arbitration or otherwise, for any breach of the provisions of this
Agreement.
15 No Solicitation. From and after the date of this Agreement until its
termination under Section 6 hereof, neither party nor any of their respective
Representatives shall (i) solicit, encourage or take any other action which is
intended to induce any employee of the other party to terminate its employment
with such other party, or (ii) interfere in any manner with any contractual or
employment relationship between such other party and its employees; provided,
however, that nothing in this paragraph shall preclude either party from hiring
or offering employment to any employee of the other as a consequence of such
employee's unsolicited response to a general public advertisement of employment
or such employee being identified as a candidate as part of a non-directed
executive search.
16. Injunctive Relief. It is further understood and agreed that money damages
would not be a sufficient remedy for any breach of this Agreement by either
party or any of its Representatives and that the non-breaching party shall be
entitled to equitable relief, including injunction and specific performance, as
a remedy for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for a breach of this Agreement but shall be in addition to
all other remedies, if any, available at law or equity. In the event of
litigation relating to this Agreement, if a court of competent jurisdiction
determines that either party or any of its Representatives have breached this
Agreement, then the breaching party shall be liable and pay to the non-breaching
party the reasonable legal fees incurred in connection with such litigation,
including any appeal therefrom.
17. Successors and Assigns. This Agreement shall bind and inure to the benefit
of the parties hereto and their successors and assigns.
18. Jurisdiction and Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard
to the conflicts of laws doctrine thereof.
19. Miscellaneous. Each party agrees to be responsible for any breach of this
agreement by any of its Representatives. No failure or delay by either party or
any of its Representatives in exercising any right, power or privileges under
this Agreement shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise of any right, power or
privilege hereunder. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of the agreement shall not in any way be affected or
impaired thereby.
20. Counterparts. This Agreement may be executed in counterparts, each of which
shall be enforceable as against the party actually signing, and all of which
together shall constitute one agreement.
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In witness of the foregoing agreements, the undersigned parties have
entered into this Agreement as of April 7, 1998.
SIMULATION SCIENCES INC. XXXXX PLC
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxx
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Title: President and Title: President and
Chief Executive Officer Chief Operation Officer
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