CONFIDENTIALITY AGREEMENT
Exhibit (e)(2)
Agreement dated and effective as of May 15, 2006 (the
“Effective Date”), between WiderThan Co., Ltd., a
company organized under the laws of the Republic of Korea
(“WiderThan”), and RealNetworks, Inc., a Washington
corporation (“Real”).
Background
1. WiderThan and Real have proposed to exchange
information, which is either confidential or proprietary in
nature, in connection with their consideration of a possible
negotiated transaction between the two companies.
2. Each party desires to protect the confidentiality of the
information it provides and to have the other party take or
abstain from taking certain actions in accordance with the terms
of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Section 1. Definitions.
(a) “Disclosing Party” means the party disclosing
Evaluation Material.
(b) “Evaluation Material” means any information
concerning the Disclosing Party (whether prepared by the
Disclosing Party, its Representatives or otherwise and
irrespective of the form of communication) that is furnished to
the Receiving Party or any of its Representatives by or on
behalf of the Disclosing Party, and all notes, analyses,
compilations, studies, interpretations, memoranda, reports or
other documents (regardless of the form thereof) prepared by the
Receiving Party or its Representatives which contain, reflect or
are based upon, in whole or in part, any information furnished
to the Receiving Party or its Representatives pursuant to this
Agreement; provided, however, that “Evaluation
Material” does not include information of a Disclosing
Party which:
(i) is or becomes generally available to the public other
than as a result of a disclosure directly or indirectly by the
Receiving Party or its Representatives that violates the terms
of this Agreement;
(ii) was within the Receiving Party’s possession prior
to it being furnished to the Receiving Party or its
Representatives by or on behalf of the Disclosing Party pursuant
to this Agreement, provided that, to the knowledge of the
Receiving Party, the source of such information was not
breaching any confidentiality obligation to the Disclosing Party
by providing such information;
(iii) is or becomes available to the Receiving Party from a
source other than the Disclosing Party or any of its
Representatives, provided that, to the knowledge of the
Receiving Party, such source is not breaching any
confidentiality obligation to the Disclosing Party by providing
such information; or
(iv) is independently developed by the Receiving Party or
others on its behalf without reference to or reliance upon any
information furnished to the Receiving Party or any of its
Representatives by or on behalf of the Disclosing Party.
(c) “Receiving Party” means the party receiving
Evaluation Material.
(d) “Representatives” means, with respect to a
party, its parents and subsidiaries, and its and their
respective directors, officers, affiliates, employees, partners,
agents, financing sources or advisors (including, without
limitation, attorneys, accountants, consultants, bankers and
financial advisors).
(e) The term “person” means any entity or
individual and the term “affiliate” has the meaning
set forth in
Rule 12b-2
under the Securities Exchange Act of 1934 (the “Exchange
Act”).
Section 2. Use and Disclosure of Evaluation
Material.
(a) Except as otherwise provided in this Agreement, each
party hereby agrees that it and its Representatives shall:
(i) use the Evaluation Material of the other party solely
for the purpose of evaluating and negotiating a possible
transaction between the parties;
(ii) keep the Evaluation Material of the other party
confidential in accordance with the terms of this
Agreement; and
(iii) not disclose any Evaluation Material of the other
party except in accordance with the terms of this Agreement;
provided, however, that the Receiving Party may
disclose any Evaluation Material of the Disclosing Party to the
Receiving Party’s Representatives who need to know such
information for the purpose of evaluating and negotiating a
possible transaction between the parties, provided that the
Receiving Party’s Representatives are informed of the
confidential nature of such Evaluation Material and are bound to
maintain the confidentiality of such Evaluation Material.
(b) Except as otherwise provided in this Agreement, neither
party nor any of its Representatives shall disclose to any other
person (i) the existence of this Agreement, (ii) the
fact that Evaluation Material of the other party has been made
available to it, (iii) that discussions are taking place
concerning a possible negotiated transaction between the
parties, (iv) any of the terms, conditions or other facts
with respect thereto, or (v) the status of such discussions
(collectively, the “Transaction Information”).
(c) The Receiving Party shall be liable to the Disclosing
Party for any use or disclosure by any of the Receiving
Party’s Representatives of (i) Evaluation Material of
the Disclosing Party or (ii) Transaction Information, which
if done by the Receiving Party itself would be a breach of this
Agreement. The Receiving Party agrees, at its sole expense, to
take reasonable measures to restrain its Representatives from
prohibited or unauthorized disclosure or use of the Disclosing
Party’s Evaluation Material and the Transaction Information.
(d) 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, the
parties understand and agree that they have a commonality of
interest with respect to such matters and it is their mutual
desire, intention and understanding 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
that is entitled to protection under the attorney-client
privilege, work product doctrine and other applicable privilege
shall remain entitled to such protection under these privileges,
this agreement, and under the joint defense doctrine.
Section 3. Legally Required Disclosure.
If either party (for purposes of this Section 3, the
“Obligated Party”) or any of its Representatives is
requested or required (by oral questions, interrogatories,
requests for information or documents in legal proceedings,
subpoena, civil investigative demand or other similar process,
or by the rules or regulations of any regulatory authority
having jurisdiction over the Obligated Party or a stock exchange
on which the Obligated Party’s securities are traded) to
disclose any of the Evaluation Material of the other party or
the Transaction Information, the Obligated Party shall, except
as prohibited by law, provide the other party with prompt
written notice of any such request or requirement so that the
other party may seek, at the other party’s expense, a
protective order or other remedy
and/or waive
compliance with the provisions of this Agreement. If the other
party seeks a protective order or other remedy, the Obligated
Party shall provide such cooperation as the other party shall
reasonably request. If, in the absence of a protective order or
other remedy or the receipt by the Obligated Party of a waiver
from the other party, the Obligated Party or any of its
Representatives is required to disclose Evaluation Material or
Transaction Information to any person, the Obligated Party or
its Representatives may, without liability hereunder, disclose
to such person only that portion of the Evaluation Material or
Transaction Information which is legally required to be
disclosed, provided that the Obligated Party and its
Representatives shall exercise reasonable efforts to minimize
the disclosure of the Evaluation Material or Transaction
Information.
-2-
Section 4. Return of Evaluation Material.
At any time upon the written request of the Disclosing Party for
any reason:
(a) the Receiving Party shall promptly return to the
Disclosing Party all Evaluation Material furnished to the
Receiving Party or its Representatives by or on behalf of the
Disclosing Party and shall not retain any copies, extracts or
other reproductions (including Evaluation Material stored in any
computer or other electronic storage device) in whole or in part
of such material; and
(b) the Receiving Party and its Representatives shall
destroy all Evaluation Material prepared by the Receiving Party
or its Representatives and shall not retain any copies, extracts
or other reproductions (including using commercially reasonable
endeavors with regard Evaluation Material stored in any computer
or other electronic storage device) in whole or in part of such
material, and such destruction shall be certified in writing to
the Disclosing Party by an authorized officer of the Receiving
Party upon request of the Disclosing Party.
Notwithstanding the return or destruction of Evaluation
Material, each party and its Representatives shall continue to
be bound by their obligations hereunder.
Section 5. Term.
This Agreement shall apply to all Evaluation Material disclosed
prior to the date that is six months after the Effective Date.
Unless otherwise expressly stated herein, the obligations set
forth in this Agreement shall continue until the third
anniversary of the Effective Date.
Section 6. Nonsolicitation.
For a period of one (1) year from the Effective Date,
neither party nor its affiliates shall solicit to employ any
person who (i) is, or within the prior six months was, an
officer of the other party or (ii) is, or within the prior
six months was, employed in any capacity by the other party and
with whom Representatives of the first party came in contact
during the process of considering a transaction contemplated by
this Agreement; provided, however, that this
paragraph shall not prevent a party or its affiliates from
hiring a person identified in clause (i) or (ii) (a
“Covered Person”) if: (1) such Covered Person
contacts the party or its Representatives on the Covered
Person’s own initiative without any direct or indirect
solicitation by or encouragement from such party or its
Representatives; or (2) such Covered Person responds to a
general solicitation of employment not specifically directed
towards the other party or particular employees of the other
party.
Section 7. Standstill.
Each party agrees that, for a period of one (1) year from
the Effective Date, unless such party shall have been
specifically invited in writing by the other party, neither such
party nor any of its affiliates shall in any manner, directly or
indirectly:
(a) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way
advise, assist or encourage any other person to effect or seek,
offer or propose (whether publicly or otherwise) to effect,
(i) any acquisition of any securities (or beneficial
ownership thereof) or assets of the other party, other than
purchases of products in the ordinary course of business;
(ii) any tender or exchange offer, merger or other business
combination involving the other party; (iii) any
recapitalization, restructuring, liquidation, dissolution or
other extraordinary transaction with respect to the other party;
or (iv) any “solicitation” of “proxies”
(as such terms are used in the proxy rules of the Securities and
Exchange Commission) or consents to vote any voting securities
of the other party;
(b) form, join or in any way participate in a
“group” (as defined under the Exchange Act) with
respect to any securities of the other party;
(c) otherwise act, alone or in concert with others, to seek
to control or influence the management, Board of Directors or
policies of the other party;
(d) take any action which might force the other party to
make a public announcement regarding any of the types of matters
set forth in paragraph (a) above; or
-3-
(e) enter into any discussions or arrangements with any
person with respect to any of the foregoing.
Each party also agrees during such period not to request the
other party (or its Representatives), directly or indirectly, to
amend or waive any provision of this section (including
this sentence). Each party represents and warrants that, as of
the date of this Agreement, neither such party nor any of its
affiliates owns, of record or beneficially, any voting
securities of the other party, or any securities convertible
into or exercisable for any voting securities of the other party.
Section 8. Trading in Securities.
Each party acknowledges that it is aware (and that its
Representatives who are apprised of a possible transaction
between the parties have been or will be advised) that
applicable securities laws prohibit any person who is aware of
material, non-public information about a company obtained
directly or indirectly from that company from purchasing or
selling securities of such company or from communicating such
information to any other person under circumstances in which it
is reasonably foreseeable that such person is likely to purchase
or sell such securities.
Section 9. No Representations and Warranties;
Relationship to Definitive Agreement.
(a) Each party understands and acknowledges that neither
party nor any of its Representatives has made or is making any
representation or warranty, express or implied, as to the
accuracy or completeness of the Evaluation Material furnished by
or on behalf of such party. Each party agrees that neither the
other party nor its Representatives shall have any liability to
such party or any of its Representatives or any other person
relating to or resulting from the use of the Evaluation Material
furnished by or on behalf of the Disclosing Party or any errors
therein or omissions therefrom. Only those representations or
warranties which are made in a definitive agreement between the
parties, when, as and if executed, and subject to such
limitations and restrictions as may be specified therein, will
have any legal effect. For purposes of this Agreement, the term
“definitive agreement” does not include any executed
letter of intent or any other preliminary written agreement, nor
does it include any written or verbal acceptance of any offer or
bid made by one party.
(b) Each party understands and agrees that no contract or
agreement providing for any transaction involving the parties
shall be deemed to exist unless and until a definitive agreement
has been executed and delivered and each party hereby waives in
advance any claims, including without limitation claims for
breach of contract, in connection with any transaction between
the parties unless and until the parties shall have entered into
a definitive agreement. Each party also agrees that unless and
until a 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 such a transaction by virtue of this Agreement or any other
written or oral communication with respect to such transaction,
except for the matters specifically agreed to herein.
(c) Each party reserves the right, in its sole discretion,
to reject any and all proposals made by the other party with
regard to a transaction between the parties and to terminate
discussions and negotiations with the other party at any time
and for any reason or no reason. Each party understands that the
other party and its Representatives shall be free to conduct any
process for any transaction in such manner as they, in their
sole discretion, shall determine (including, without limitation,
negotiating with other interested parties and entering into a
preliminary or definitive agreement without prior notice to the
other party or any other person) and that any procedures
relating to such process or transaction may be changed at any
time without notice to the other party or any other person.
Section 10. Contacts and Communications.
Each party agrees that all contacts or communications by it or
its Representatives with the other party regarding a possible
transaction between the parties or the Evaluation Material of
the other party, all requests for additional information,
facility tours or management meetings and all discussions or
questions regarding procedures with respect to a possible
transaction, will be submitted or directed only to
Jefferies Broadview (in the case of WiderThan)
and
(in the case
of ),
or as the other party shall otherwise instruct in writing.
Without the express prior consent of the other party, each party
agrees that it will not, directly or indirectly, contact or
communicate with any officer, employee, director, stockholder,
agent, customer or business partner of the other party regarding
Evaluation Material or a possible transaction between the
parties.
-4-
Section 11. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without
giving effect to the conflicts of law principles thereof.
(b) Each party recognizes and acknowledges the competitive
value and confidential nature of the Evaluation Material of the
other party and that irreparable damage may result to the other
party if information contained therein or derived therefrom is
disclosed to any person except as herein provided or is used for
any purpose other than the evaluation of a possible negotiated
transaction between the parties. Each party further understands
and agrees that money damages may not be a sufficient remedy for
any breach of this Agreement by either party hereto or any of
such party’s Representatives and that the non-breaching
party may 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 party of this Agreement, but shall be in
addition to all other remedies available at law or equity. In
the event of litigation relating to this Agreement, if a court
of competent jurisdiction determines in a final, nonappealable
order that a party has breached this Agreement, then the
non-breaching party may seek to recover from the breaching party
the fees and disbursements that such non-breaching party has
incurred in connection with such litigation, including any
appeal therefrom.
(c) This Agreement may not be assigned in whole or in part
by either party without the prior written consent of the other
party; provided that no such consent shall be required, and this
Agreement may be assigned by a party, in the case of a sale by
such party of all or substantially all of its business or
assets, whether by merger, sale of assets or otherwise. Subject
to the foregoing, this Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors
and assigns.
(d) This Agreement contains the entire agreement between
the parties concerning the subject matter hereof. No provision
of this Agreement may be waived or amended except by the express
written consent of the parties. 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 future exercise thereof
or the exercise of any other right, power or privilege hereunder.
(e) All notices and other communications hereunder shall be
in writing. Any notice or other communication hereunder shall be
deemed duly delivered one business day after it is sent for next
business day delivery via a reputable nationwide overnight
courier service, in each case to the intended recipient as set
forth below:
|
If to WiderThan:
|
Copy to: | |
|
WiderThan Co., Ltd. 000 Xxxxxx Xxxxxx 0xx Xxxxx Xxx Xxxx, XX 00000 Attention: Xxx Nemo, Senior Vice President and General Counsel |
WilmerHale 00 Xxxxx Xxxxxx Xxxxxx, XX 00000 Attention: Xxxx X. Xxxxxxx |
|
| If to: _ _: | Copy to: | |
| Attention: | Attention: |
Either party may give any notice or other communication
hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary
mail, or electronic mail), but no such notice or other
communication shall be deemed duly given unless and until the
party for whom it is intended actually receives it. Any party
may change the address to which notices and other communications
hereunder are to be delivered by giving the other party notice
in the manner herein set forth.
(f) For the convenience of the parties, this Agreement may
be executed by facsimile and in counterparts, each of which
shall be deemed to be an original, and both of which taken
together, shall constitute one agreement binding on both parties.
(g) The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
-5-
EXECUTED as of the date first above written.
| By: |
/s/ Sang
Xxx Xxxx
|
| Name: | Sang Xxx Xxxx |
| Title: | CEO |
REALNETWORKS, INC.
| By: |
/s/ Xxxxx
X. Xxx
|
| Name: | Xxxxx X. Xxx |
| Title: | VP — Corp Development |
-6-
