Exhibit (c)(2)
Confidentiality Agreement, dated as of October 21, 1998, by and between Parent
and the Company.
CONFIDENTIALITY AGREEMENT
In connection with the consideration of a possible transaction between each
of the parties that have signed this agreement and/or its respective
subsidiaries, affiliates or divisions (each such party being hereinafter
referred to, collectively with such subsidiaries, affiliates and divisions, as a
"Company"), each Company (in its capacity as a provider of information hereunder
being referred to as a "Provider") is prepared to make available to the other
Company (in its capacity as a recipient of information hereunder being referred
to as a "Recipient") certain information concerning the business, financial
condition, operations, assets and liabilities of the Provider. As a condition to
such information being provided to each Recipient and its Recipient
Representatives (as hereinafter defined), each Recipient agrees to treat any
information concerning the Provider (whether prepared by the Provider, such
Provider's Representatives (as hereinafter defined) or otherwise and
irrespective of the form of communication) which is furnished to the Recipient
or such Recipient's Representatives now or in the future by or on behalf of the
Provider (herein collectively referred to, with respect to information furnished
by or on behalf of either Company in its capacity as a Provider to the other
Company in its capacity as a Recipient, as the "Evaluation Material") in
accordance with the provisions of this agreement, and to take or abstain from
taking certain other actions as hereinafter set forth. As used in this
agreement, a "Recipient's Representatives" shall include the directors,
officers, employees, agents, partners or advisors of such Recipient (including,
without limitation, attorneys, accountants, consultants, bankers and financial
advisors).
The term "Evaluation Material" also shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents prepared by
either Recipient or such Recipient's Representatives which contain, reflect or
are based upon, in whole or in part, the information furnished to such Recipient
or such Recipient's Representatives pursuant hereto. 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 Recipient
or such Recipient's Representatives in breach of this Agreement, (ii) was within
the Recipient's or such Recipient's Representatives' possession prior to its
being furnished to the Recipient or such Recipient's Representatives by or on
behalf of the Provider pursuant hereto, provided that the source of such
information was not known by the Recipient to be bound by a confidentiality
agreement with, or other contractual, legal or fiduciary obligation of
confidentiality to, the Provider or any other party with respect to such
information or (iii) becomes available to the Recipient or such Recipient's
Representatives on a non-confidential basis from a source other than the
Provider or any of its directors, officers, employees, agents or advisors
(including, without limitation, attorneys, accountants, consultants, bankers and
financial advisors) (collectively, "Provider Representatives"), provided that
such source is not known by the Recipient to be bound by a confidentiality
agreement with, or other contractual, legal or fiduciary obligation of
confidentiality to, the Provider or any other party with respect to such
information.
Each Recipient hereby agrees that such Recipient and such Recipient's
Representatives shall use the Evaluation Material solely for the purpose of
evaluating a possible
transaction between the Companies and for no other purpose, that the Evaluation
Material will be kept confidential and that the Recipient and such Recipient's
Representatives will not disclose any of the Evaluation Material in any manner
whatsoever: provided, however, that (i) the Recipient may make any disclosure of
such information as to which the Provider gives its prior written consent, and
(ii) any of such information may be disclosed to the Recipient's Representatives
who need to know such information for the sole purpose of evaluating a possible
transaction between the Companies, who are provided with a copy of this
agreement and who you shall cause to be bound by the terms hereof to the same
extent as if they were such Recipient. In any event, each Recipient agrees to
undertake reasonable precautions to safeguard and protect the confidentiality of
the Evaluation Material, to accept responsibility for any breach of this
agreement by any of such Recipient's Representatives, and at such Recipient's
sole expense to take all reasonable measures (including but not limited to
court proceedings) to restrain such Recipient's Representatives from prohibited
or unauthorized disclosure or uses of the Evaluation Material.
In addition, each Recipient agrees that, without the prior written
consent of the Provider, such Recipient and such Recipient's Representatives
will not disclose to any other person the fact that the Evaluation Material has
been made available to such Recipient, that discussions or negotiations are
taking place concerning a possible transaction between the Companies or any of
the terms, conditions or other facts with respect thereto (including the status
thereof); provided, however, that such Recipient may make such disclosure in
the circumstances set forth in clause (i) or clause (ii) of the immediately
preceding paragraph.
In the event that either Recipient or any of such Recipient's
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 Evaluation
Material, such Recipient shall provide the Provider with prompt written notice
of any such request or requirement so that the Provider may seek a protective
order or other appropriate remedy and/or waive compliance with the provision of
this agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Provider, the Recipient or any of such Recipient's
Representatives are nonetheless, as advised by counsel, legally compelled to
disclose Evaluation Material to any tribunal or else stand liable for contempt
or suffer other censure or penalty, such Recipient or such Recipient's
Representatives may, without liability hereunder, disclose to such tribunal only
that portion of the Evaluation Material which such counsel advises the Recipient
is legally required to be disclosed, provided that the Recipient exercises its
best efforts to preserve the confidentiality of the Evaluation Material,
including, without limitation, by cooperating with the Provider to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Evaluation Material by such tribunal.
If either Company decides that it does not wish to proceed with a
transaction with the other, it will promptly inform the other of that decision.
In that case, each Company will promptly deliver to the other Company all
Evaluation Material (and all copies thereof) furnished to such Company in its
capacity as a Recipient or such Recipient's Representatives by or on
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behalf of the other Company in its capacity as Provider pursuant hereto. In the
event of such a decision, all other Evaluation Material prepared by either
Company in its capacity as a Recipient or such Recipient's Representatives
shall, at the Recipient's option, be destroyed or returned and no copy thereof
shall be retained and the Recipient shall provide to the other Company a
certificate of compliance with this sentence. Notwithstanding the return or
destruction of the Evaluation Material, each Company in its capacity as a
Recipient and such Recipient's Representatives will continue to be bound by
such Recipient's respective obligations of confidentiality and other obligations
hereunder.
Each Company understands and acknowledges that neither Company, in its
capacity as a Provider, nor such Provider's Representatives, makes any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material furnished by or on behalf of such
Provider and shall have no liability to the other Company in its capacity as a
Recipient or to any of such Recipient's Representatives relating to or resulting
from the use of the Evaluation Material furnished to such Recipient or any
errors therein or omissions therefrom. Only those representations or warranties
which are made in a final definitive agreement regarding any transactions
contemplated hereby, when, as and if executed, and subject to such limitations
and restrictions as may be specified therin, will have any legal effect.
To the extent that any Evaluation Material may include materials
subject to the attorney-client privilege, work product doctrine or any other
applicable privilege concerning pending or threatened legal proceedings or
governmental investigations, each Company understands and agrees that the
Companies have a commonality of interest with respect to such matters and it is
the desire, intention and mutual understanding of both Companies that the
sharing of such material is not intended to, and shall not, waive or diminish in
any way the confidentiality of such material or its continued protection under
the attorney-client privilege, work product doctrine or other applicable
privilege. All Evaluation Material provided by either Company that is entitled
to protection under the attorney-client privilege, work product doctrine or
other applicable privilege shall remain entitled to such protection under these
privileges, this agreement, and under the joint defense doctrine.
Each Company, in its capacity as a Recipient, acknowledges and agrees
that such Recipient is aware (and that such Recipient's Representatives are
aware or, upon receipt of any Evaluation Material, will be advised by such
Recipient) of the restrictions imposed by the United States federal securities
laws and other applicable foreign and domestic laws on a person possessing
material non-public information about a public company and that such Recipient
and such Recipient's Representatives will comply with such laws.
Each Company understands and agrees that no contract or agreement
providing for any transaction between the Companies shall be deemed to exist
between the Companies unless and until a final definitive agreement has been
executed and delivered, and each Company hereby waives, in advance, any claims
(including, without limitation, breach of contract) in connection with any such
transaction unless and until both Companies shall have entered into a
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final definitive agreement. Each Company also agrees that unless and until a
final definitive agreement regarding a transaction between the Companies has
been executed and delivered, neither Company will be under any legal obligation
of any kind whatsoever with respect to such a transaction by virtue of this
agreement except for the matters specifically agreed to herein. Each Company
further acknowledges and agrees that the other Company reserves the right, in
its sole discretion, to reject any and all proposals made by the agreeing
Company or any of the persons who are Recipient Representatives or Provider
Representatives with respect to the agreeing Company with regard to a
transaction between the Companies, and, subject to the next paragraph of this
agreement, to terminate discussions and negotiations with the agreeing Company
at any time. Neither this paragraph nor any other provision in this agreement
can be waived or amended in favor of either Company except by written consent of
the other Company, which consent shall specifically refer to this paragraph (or
such provision) and explicitly make such waiver or amendment.
[LeaRonal, Inc.] agrees that during the period commencing on the date
hereof and ending on the earlier of February 28, 1999 and three days after the
date on which [LeaRonal, Inc.] notifies [Rohm and Xxxx Company] in writing of
its intention to terminate discussions in regard to the transactions described
in the first paragraph of this agreement, neither [LeaRonal, Inc.] nor any of
its Provider or Recipient Representatives shall take any action to directly or
indirectly, encourage, initiate, solicit or engage in discussions or
negotiations with, or provide any information to, any entity or person other
that [Rohm and Xxxx Company] (and its Provider and Recipient Representatives)
concerning any Alternate Transaction (as defined below). For purposes hereof,
and "Alternate Transaction" shall mean (a) any stock purchase, merger,
consolidation, reorganization, change in organizational form, spin-off, split-
off, recapitalization, sale of equity interests or other similar transaction
involving [LeaRonal, Inc.] or any of its majority-owned affiliates which would
prejudice the ability of [Rohm and Xxxx Company] and [LeaRonal, Inc.] to
complete the transactions described in the first paragraph of this agreement, or
(b) any sale of all or any significant portion of [LeaRonal, Inc.'s] or any of
its majority-owner affiliates' business, operations or assets, or (c) any other
transaction or series of transactions which has substantially similar economic
effects.
Each Company represents to the other Company that neither it nor its
majority-owned affiliates beneficially own more than 1% of any class of
securities entitled to be voted generally in the election of directors of the
other Company (including for this purpose any direct or indirect options or
other rights to acquire any such securities) ("Voting Securities"). Each
Company agrees that, for a period of two years from the date of this agreement,
except pursuant to the terms of a specific written request from the other
Company that has been approved by its board of directors, neither such Company
nor any of it majority-owned affiliates will (or will assist or encourage others
to):
(1) propose or publicly announce or otherwise disclose an intent to
propose, or enter into or agree to enter into, singly or with any
other person or directly or indirectly, any form of business
combination, acquisition, restructuring,
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recapitalization or other transaction relating to the other Company or any
majority-owned affiliate thereof,
(2) acquire, or offer, propose, seek or agree to acquire, by purchasing or
otherwise, ownership (including as a beneficial owner) of any Voting
Securities or any other securities, assets or businesses of the other
Company or any of its majority-owned affiliates or any of their respective
successors, or any options or other rights to acquire any such ownership
from a third party or otherwise,
(3) make, or in any way participate in, any solicitation of proxies with
respect to any Voting Securities (including by the execution of action by a
written consent) or take any similar action with respect to any Voting
Securities, become a participant in any election contest with respect to
the other Company, or seek to advise or influence any person with respect
to any Voting Securities or demand a copy of the other Company's list of
stockholders,
(4) participate in or encourage the formation of any group that owns or seeks
or offers to acquire beneficial ownership of any Voting Securities or seeks
to affect control of the other Company or for the purpose of circumventing
any provision of this agreement,
(5) otherwise act, alone or in concert with others (including by providing
financing for another person), to seek, offer or purpose to control or
influence, in any manner, the board of directors, management or policies of
the other Company,
(6) publicly make or announce, or otherwise disclose an intent to propose, any
demand, request or proposal to amend, waive or terminate any provision of
this agreement,
(7) enter into any discussions, negotiations, arrangements or understandings
with any third party to facilitate or encourage the efforts of such third
party with respect to any of the foregoing,
(8) disclose any intention, plan or arrangement inconsistent with the
foregoing,
or
(9) take any action that would require the other Company to make a public
announcement regarding a possible transaction involving the other Company.
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provided that (i) it is understood that the provisions of this paragraph shall
not prohibit the ongoing discussion between the management of the respective
Companies in respect of the transaction described in the first paragraph of this
agreement in accordance with the other provisions of this Agreement, and (ii) if
a Company enters into a definitive agreement with a third party pursuant to
which such third party will make a tender or exchange offer for, or otherwise
acquire (by merger, consolidation, purchase or otherwise), 50% or more of the
common stock or other equity interests, assets or earning power of such other
Company: then the other Company shall be permitted to contact privately the
chairman of the board of directors of such Company (or any person designated by
such chairman) and submit to such chairman or other person an offer to acquire
Voting Securities or assets of such Company and/or a request to negotiate with
such Company with respect to such offer.
Each Company agrees that, for a period of eighteen months from the
date of this agreement, it will not, directly or indirectly, solicit for
employment or hire any employee of the other Company or any of the other
Company's majority-owned affiliates with whom it has had contact or who was
specifically identified to such Company during the period of its investigation
of the other Company in connection with its consideration of a transaction
between the Companies so long as such employee is employed by such other
company; provided that the foregoing provision will not prevent either Company
from employing any such person who contacts such Company on his or her own
initiative without any direct or indirect solicitation by or encouragement from
such Company; and provided further that such solicitation or hiring shall not be
deemed a breach of this agreement if (i) the personnel who performed such
solicitation have no knowledge of any Evaluation Material provided by such other
Company, and (ii) none of the soliciting or hiring Company's personnel who have
knowledge of any such Evaluation Material have actual advance knowledge of such
solicitation. For purposes of this paragraph, "solicit to employ" shall not be
deemed to include any general solicitations of employment not specifically
directed towards employees of the other Company.
It is understood and agreed that no failure or delay by either Company
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.
It is further understood and agreed that money damages would not be
sufficient remedy for any breach of this agreement by either Company or any of
its Recipient or Provider Representatives, as the case may be, and that the
Company against which such breach is committed 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 by either Company of this agreement but shall be in addition to all
other remedies available at law or equity to the Company against which such
breach is committed. In the event of litigation relating to this agreement, if a
court of competent jurisdiction determines that either
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Company or any of the persons who are Recipient Representatives or Provider
Representatives with respect to such Company has breached this agreement, then
the Company which, or the Recipient Representatives or Provider Representatives
of which, is determined to have so breached shall be liable and pay to the other
Company the reasonable legal fees incurred by the other Company in connection
with such litigation, including any appeal therefrom.
This agreement is for the benefit of each Company, the persons who are
Recipient Representatives or Provider Representatives with respect to such
Company and their respective directors, officers, stockholders, owners,
affiliates, and agents, and shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely within such State.
This agreement shall terminate immediately upon written notice given
by either Company to the other, provided that in any event the confidentiality
(and related enforcement) provisions in this agreement shall survive until
the fifth anniversary of the date hereof.
This agreement contains the entire agreement between the Companies
regarding the subject matter hereof and supersedes all prior agreements,
understandings, arrangements and discussions between the Companies regarding
such subject matter.
This agreement may be signed in counterparts, each of which shall be
deemed an original but all of which shall be deemed to constitute a single
instrument.
IN WITNESS WHEREOF, each Company has caused this agreement to be
signed by its duly authorized representatives as of the date written below.
Date: October 21, 1998
[ROHM AND XXXX COMPANY] [LEARONAL, INC.]
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------- -------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: Vice President Title: President
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