Exhibit 2.04
Execution Copy
CONFIDENTIAL DISCLOSURE AGREEMENT
This Confidential Disclosure Agreement (the "AGREEMENT") is effective
as of April 9, 2004 (the "EFFECTIVE DATE"), between Kinetics Group, Inc., Inc.,
a Delaware corporation (the "COMPANY"), and Kinetic Systems, Inc., a California
corporation ("KSI"). The Company and KSI are sometimes referred to herein
individually as the "party" or collectively as the "parties."
WHEREAS, the Board of Directors of each of the Company and KSI have
determined that it is in the best interest of the Company and its stockholders
to separate the Company's existing businesses into two independent businesses;
WHEREAS, as part of the foregoing, the Company and KSI have entered
into a Separation Agreement (as defined below), which provides, among other
things, for the separation of certain KSI assets and KSI liabilities and the
execution and delivery of certain other agreements in order to facilitate and
provide for the foregoing; and
WHEREAS, also as part of the foregoing, the parties further desire to
enter into this Agreement to provide for the protection of their Confidential
Information (as defined below).
NOW, THEREFORE, in consideration of the mutual promises of the parties,
and of good and valuable consideration, it is agreed by and between the parties
as follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following capitalized terms are
defined in this Article I.
1.1 "ANCILLARY AGREEMENTS" has the meaning set forth in the
Separation Agreement.
1.2 "CONFIDENTIAL INFORMATION" means any and all financial,
technical, commercial or other information of the Company or KSI, as appropriate
(whether written or oral), including, without limitation, all information,
notes, client lists and records, reports, analyses, financial statements,
compilations, studies, forms, business or management methods, marketing data,
product designs, inventions, software, processes, manufacturing methods,
manufacturing line design or procedures, engineering design tools, test hardware
or software, supply base information, fee schedules, information technology
systems and programs, projections, forecasts or trade secrets of the Company or
KSI, as applicable, in each case whether or not such Confidential Information is
disclosed or otherwise made available to one party by the other party pursuant
to this Agreement, as well as information disclosed by one party to the other in
connection with the Management Services Agreement of even date herewith.
Confidential
Information does not include any information that (i) is or becomes generally
available to and known by the public (other than as a result of an unpermitted
disclosure directly or indirectly by the Receiving Party or its affiliates,
advisors or representatives); (ii) is or becomes available to the Receiving
Party on a nonconfidential basis from a source other than the Disclosing Party
or its affiliates, advisors or representatives, provided that such source is not
and was not bound by a confidentiality agreement with or other obligation of
secrecy to the Disclosing Party; or (iii) has already been developed, or is
hereafter independently acquired or developed, by the Receiving Party without
violating any confidentiality agreement with or other obligation of secrecy to
the Disclosing Party.
1.3 "CONFIDENTIALITY PERIOD" means such period of time until the
information no longer constitutes "Confidential Information" under Section 1.2.
1.4 "DISCLOSING PARTY" means the party owning or disclosing the
relevant Confidential Information.
1.5 "CLOSING DATE" has the meaning set forth in the Separation
Agreement.
1.6 OMITTED.
1.7 "SEPARATION AGREEMENT" means the Separation Agreement dated
April 9, 2004 between the parties.
1.8 "PERSON" has the meaning set forth in the Separation
Agreement.
1.9 "RECEIVING PARTY" means the non-owning party or recipient of
the relevant Confidential Information.
1.10 OMITTED.
1.11 "SUBSIDIARY" means, as to any Person, any corporation, limited
liability entity, association, partnership, joint venture or other business
entity of which more than 50% of the voting capital stock or other voting
ownership interests is owned or controlled directly or indirectly by such Person
or by one or more of the Subsidiaries of such Person or by a combination
thereof.
1.12 "THIRD PARTY" means a Person other than the Company, its
Subsidiaries and their respective employees and KSI, its Subsidiaries and their
respective employees.
1.13 "TRANSACTION AGREEMENTS" means the Separation Agreement and
the Ancillary Agreements.
ARTICLE II
CONFIDENTIALITY
2.1 CONFIDENTIALITY AND NON-USE OBLIGATIONS. During the
Confidentiality Period, the Receiving Party shall (i) protect the Confidential
Information of the
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Disclosing Party by using the same degree of care, but no less than a reasonable
degree of care, to prevent the unauthorized use, dissemination, or publication
of the Confidential Information as the Receiving Party uses to protect its own
Confidential Information of a like nature, (ii) not use such Confidential
Information except as expressly permitted by the Disclosing Party in writing,
and (iii) not disclose such Confidential Information to any Third Party, except
as expressly permitted under this Agreement, in the Transaction Agreements or in
any other agreements entered into between the parties in writing, without prior
written consent of the Disclosing Party.
2.2 Omitted.
2.3 COMPELLED DISCLOSURE. If the Receiving Party or any of its
respective Subsidiaries believes that it will be compelled by a court or other
authority to disclose Confidential Information of the Disclosing Party, it shall
(i) give the Disclosing Party prompt and timely written notice so that the
Disclosing Party may take steps to oppose such disclosure, but in any event the
Receiving Party shall not be prohibited from complying with such requirement and
(ii) cooperate with the Disclosing Party in its attempts to oppose such
disclosure, provided that such opposition is reasonable in light of applicable
law or regulation. If the Receiving Party complies with the above, it shall not
be prohibited from complying with such requirements to disclose, but shall
cooperate with the Disclosing Party to take all reasonable steps to make such
disclosure subject to a suitable protective order or otherwise prevent
unrestricted or public disclosure.
2.4 NO RESTRICTION ON DISCLOSING PARTY. Nothing in this Agreement
shall restrict the Disclosing Party from using, disclosing, or disseminating its
own Confidential Information in any way provided that, in so doing, it does not
use, disclose or disseminate any Confidential Information of the Receiving
Party.
2.5 NO RESTRICTION ON REASSIGNMENT. This Agreement shall not
restrict reassignment of the Receiving Party's employees.
2.6 THIRD PARTY RESTRICTIONS. Nothing in the Agreement supersedes
any restriction imposed by Third Parties on their Confidential Information, and
there is no obligation on the Disclosing Party to conform Third Party agreements
to the terms of this Agreement.
ARTICLE III
WARRANTY DISCLAIMER
EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL CONFIDENTIAL INFORMATION IS PROVIDED
ON AN "AS IS, WHERE IS" BASIS AND THAT NEITHER PARTY NOR ANY OF ITS SUBSIDIARIES
HAS MADE OR WILL MAKE ANY WARRANTY WHATSOEVER WITH RESPECT TO CONFIDENTIAL
INFORMATION, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE,
ENFORCEABILITY OR NON-INFRINGEMENT.
ARTICLE IV
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TERM AND TERMINATION
4.1 TERM. This Agreement shall remain in full force and effect
unless and until terminated by the mutual written agreement of the parties.
4.2 SURVIVAL. Articles II (with respect to Confidential
Information acquired or disclosed prior to the date of termination), III, V, and
VI and this Section 4.2 shall survive any termination of this Agreement.
ARTICLE V
DISPUTE RESOLUTION
Resolution of any and all claims, controversies and disputes arising
from or in connection with this Agreement shall be exclusively governed by and
settled in accordance with the provisions of Article VII of the Separation
Agreement; provided, however, that any such claim, controversy or dispute
regarding the following is not required to be negotiated prior to seeking relief
from a court of competent jurisdiction: breach of any obligation of
confidentiality; infringement, misappropriation, or misuse of any intellectual
property right; or any other claim where interim relief from the court is sought
to prevent serious and irreparable injury to a party.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY OR ITS
SUBSIDIARIES BE LIABLE TO THE OTHER PARTY OR ITS SUBSIDIARIES FOR ANY SPECIAL,
CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES, LOST DATA OR LOST
PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE)
ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
6.2 EXPORT RESTRICTIONS. As applicable, each party shall adhere to
all applicable laws, regulations and rules relating to the export of technical
data, and shall not export or reexport any technical data, any products received
from Disclosing Party, or the direct product of such technical data, to any
proscribed country listed in such applicable laws, regulations and rules unless
properly authorized.
6.3 NO IMPLIED LICENSES. Nothing contained in this Agreement shall
be construed as conferring any rights by implication, estoppel or otherwise,
under any intellectual property right, other than the rights expressly granted
in this Agreement with respect to Confidential Information. Neither party is
required hereunder to furnish or disclose to the other any technical or other
information.
6.4 INFRINGEMENT SUITS. Neither party shall have any obligation
hereunder to institute any action or suit against Third Parties for
misappropriation of any of its Confidential
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Information or to defend any action or suit brought by a Third Party that
alleges infringement of any intellectual property rights by the Receiving
Party's authorized use of the Disclosing Party's Confidential Information.
6.5 ENTIRE AGREEMENT. This Agreement, the Separation Agreement,
the other Ancillary Agreements and the Exhibits and Schedules referenced or
attached hereto and thereto constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all prior written
and oral and all contemporaneous oral agreements and understandings with respect
to the subject matter hereof.
6.6 GOVERNING LAW. This Agreement shall be construed in accordance
with and all Disputes hereunder shall be governed by the laws of the State of
California, excluding its conflict of law rules and the United Nations
Convention on Contracts for the International Sale of Goods. The Superior Court
of Santa Xxxxx County, California and/or the United States District Court for
the Northern District of California, San Xxxx Division, shall have jurisdiction
and venue over all Disputes between the parties that are permitted to be brought
in a court of law pursuant to Article V above.
6.7 NOTICES. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally, (iii)
one (1) Business Day after being delivered by facsimile (with electronic receipt
of appropriate confirmation), (iv) one (1) Business Day after being deposited
with a nationally recognized overnight courier service or (v) four (4) days
after being deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the attention of:
IF TO THE COMPANY:
Kinetics Group, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
IF TO KSI:
Kinetic Systems, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
The parties may substitute a different address or facsimile number,
from time to time, if such substitute is provided to the intended notice
recipient in writing by notice given in the manner provided in this Section 6.7.
6.8 COUNTERPARTS. This Agreement, including other documents
referred to herein, may be executed in counterparts, each of which shall be
deemed to be an original but all of which shall constitute one and the same
agreement.
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6.9 BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. This Agreement may
be enforced separately by the Company and each of its Subsidiaries, and by KSI
and each of its Subsidiaries. Except as herein specifically provided to the
contrary, neither party may assign this Agreement or any rights or obligations
hereunder, without the prior written consent of the other party, and any such
assignment shall be void; provided, however, the Company (or its permitted
successive assignees or transferees hereunder) may assign or transfer this
Agreement as a whole without consent to an entity that succeeds to all or
substantially all of the business or assets of the Company.
6.10 SEVERABILITY. The parties hereto have negotiated and prepared
the terms of this Agreement in good faith with the intent that each and every
one of the terms, covenants and conditions herein be binding upon and inure to
the benefit of the respective parties. Accordingly, if any one or more of the
terms, provisions, promises, covenants or conditions of this Agreement or the
application thereof to any person or circumstance shall be adjudged to any
extent invalid, unenforceable, void or voidable for any reason whatsoever by a
court of competent jurisdiction, such provision shall be as narrowly construed
as possible, and each and all of the remaining terms, provisions, promises,
covenants and conditions of this Agreement or their application to other persons
or circumstances shall not be affected thereby and shall be valid and
enforceable to the fullest extent permitted by law. To the extent this Agreement
is in violation of applicable law, then the parties agree to negotiate in good
faith to amend the Agreement, to the extent possible consistent with its
purposes, to conform to law.
6.11 WAIVER OF BREACH. The waiver by either party hereto of a
breach or violation of any provision of this Agreement shall not operate as, or
be construed to constitute, a waiver of any subsequent breach of the same or
another provision hereof.
6.12 AMENDMENT AND EXECUTION. This Agreement and amendments hereto
shall be in writing and executed in multiple copies via facsimile or otherwise
on behalf of the Company and KSI by their respective duly authorized officers
and representatives. Each multiple copy shall be deemed an original, but all
multiple copies together shall constitute one and the same instrument.
6.13 AUTHORITY. Each of the parties hereto represents to the other
that (a) it has the corporate or other requisite power and authority to execute,
deliver and perform this Agreement, (b) the execution, delivery and performance
of this Agreement by it have been duly authorized by all necessary corporate or
other actions, (c) it has duly and validly executed and delivered this
Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.
6.14 DESCRIPTIVE HEADINGS. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this
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Agreement. When a reference is made in this Agreement to an Article or a
Section, such reference shall be to an Article or Section of this Agreement
unless otherwise indicated.
6.15 GENDER AND NUMBER. Whenever the context of this Agreement
requires, the gender of all words herein shall include the masculine, feminine
and neuter, and the number of all words herein shall include the singular and
plural.
6.16 ADDITIONAL ASSURANCES. Except as may be specifically provided
herein to the contrary, the provisions of this Agreement shall be self-operative
and shall not require further agreement by the parties; provided, however, at
the request of either party, the other party shall execute such additional
instruments and take such additional acts as are reasonable, and as the
requesting party may reasonably deem necessary, to effectuate this Agreement.
6.17 FORCE MAJEURE. Neither party shall be liable or deemed to be
in default for any delay or failure in performance, other than of
confidentiality and use restrictions, under this Agreement or other interruption
of service deemed to result, directly or indirectly, from acts of God, civil or
military authority, acts of public enemy, war, accidents, explosions,
earthquakes, floods, failure of transportation, strikes or other work
interruptions by either party's employees, or any other similar cause beyond the
reasonable control of either party unless such delay or failure in performance
is expressly addressed elsewhere in this Agreement.
[Remainder of page intentionally left blank. Signature page to follow.]
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WHEREFORE, the parties have signed this Confidential Disclosure Agreement
effective as of the date first set forth above.
KINETICS GROUP, INC. KINETIC SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxx Xxxxxxx
_________________________________ ______________________________
Name: _______________________________ Name: ____________________________
Title: ______________________________ Title: ___________________________
[SIGNATURE PAGE TO CONFIDENTIAL DISCLOSURE AGREEMENT]
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