Exhibit (d)(3)
U.S. Laboratories Inc.
00000 Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
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March 17, 2002
PERSONAL AND CONFIDENTIAL
Bureau Veritas S.A.
00000 Xxxxx Xx Defense Cedex
France
Attention: Xx. Xxxxx Xxxxxxxxxxx, Chief Executive Officer
Re: Confidentiality and Standstill Agreement
Gentlemen:
You have expressed an interest in considering a possible acquisition (the
"Acquisition") of U.S. Laboratories Inc. (the "Company"). In connection with
your consideration of the Acquisition, the Company is furnishing you or your
directors, officers, employees, advisors, agents, lenders and others associated
with you (collectively, "Representatives") with certain information relating to
the Company which is either non-public, confidential or proprietary in nature.
This information, whether oral or written, together with analyses, compilations,
excerpts, forecasts, summaries, studies or other documents and writings prepared
by you or your Representatives which contain or otherwise reflect such
information or your review of the Company, is hereinafter referred to as the
"Confidential Information."
The term "Confidential Information" shall not include those portions of the
Confidential Information that you can demonstrate (i) are or become generally
available to the public other than as a result of a disclosure by you or your
Representatives, (ii) become available to you on a nonconfidential basis from a
source (other than the Company) which is not to your knowledge prohibited from
disclosing such Confidential Information to you by a legal, contractual or
fiduciary obligation to the Company, or (iii) were in your possession prior to
being furnished to you or your Representatives by the Company.
In consideration of the Confidential Information being provided to you, you
agree as follows:
1. Maintenance of Confidentiality; Representatives' Obligations. For a period
of two (2) years from the date of this Agreement, the Confidential
Information will be kept confidential and will not, without the Company's
prior written consent, be disclosed by
Bureau Veritas S.A. - March 17, 2002 - Page 2
you or by your Representatives in any manner whatsoever, in whole or in
part, and shall not be used by you or your Representatives except for the
sole purpose of developing, proposing, negotiating and consummating an
Acquisition pursuant to this Agreement. Moreover, you agree to reveal the
Confidential Information only to your Representatives who need to know the
Confidential Information for the purpose of evaluating such an Acquisition,
who are informed by you in writing of the confidential nature of the
Confidential Information and who agree to act in accordance with the terms
and conditions of this Agreement.
2. Non-Disclosure of Potential Acquisition. For a period of two (2) years
after the date of this Agreement, without the Company's prior written
consent, you and your Representatives will not (i) disclose to any person
the fact that the Confidential Information has been made available, that
discussions or negotiations are taking place or have taken place concerning
a possible Acquisition involving you and the Company, or any of the terms,
conditions or other facts with respect to a possible Acquisition,
including, but not limited to, the status thereof or (ii) make any contact
of any nature in connection with the possible Acquisition with any officer,
employee, supplier, customer, bank or other lender of or to the Company,
except for contacts with Xxxxxxxxx Xxxxxx or as otherwise approved in
advance and coordinated by Xxxxxxxxx Xxxxxx. The term "person" as used in
this Agreement shall be broadly interpreted and shall include, without
limitation, any individual or any corporation, company, group, partnership
or other entity. Likewise, the Company will not (except as otherwise
required by state or federal securities laws or judicial orders) disclose
to any person (other than employees of the Company with a need to know the
information and to the Company's financial, legal and accounting advisors)
the fact that Confidential Information has been made available to you or
your Representatives, that discussions or negotiations are taking place or
have taken place concerning a possible Acquisition involving you and the
Company, or any of the terms, conditions or other facts with respect to a
possible Acquisition, including, but not limited to, the status thereof.
3. Return of Confidential Information. You and your Representatives will
return to the Company immediately upon its request all copies of the
Confidential Information, including, without limitation, that portion of
the Confidential Information consisting of analyses, compilations,
excerpts, forecasts, summaries, studies or other documents and writings
prepared by you or your Representatives. At your election , the
Confidential Information that is required to be returned to the Company can
be destroyed and such destruction shall be certified in writing to the
Company by an authorized representative of the party in possession. The
return and/or destruction of such Confidential Information as provided
above shall not relieve you and your Representatives of other obligations
under this Agreement.
4. No Representations or Warranties. You acknowledge that the Company makes no
express or implied representation or warranty as to the accuracy or
completeness of the Confidential Information, and that the Company shall
not have any liability resulting from the use of the Confidential
Information, errors therein or omissions therefrom. You agree for yourself
and on behalf of your Representatives that you and your
Bureau Veritas S.A. - March 17, 2002 - Page 3
Representatives shall be entitled to rely solely on the representations and
warranties, if any, made to you by the Company in any agreement regarding
an Acquisition.
5. Notification to Company of Mandatory Disclosure. If you or any of your
Representatives are requested or required by oral questions (that a court
orders to be answered), interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process, to
disclose any part of the Confidential Information, you or your
Representatives, as the case may be, will (i) promptly notify the Company
of each such request or requirement and the documents requested thereby, so
that the Company may seek an appropriate protective order or other remedy
and/or waive compliance by you or your Representatives, as the case may be,
with the provisions of this Agreement, and (ii) consult with the Company on
the advisability of taking legally available steps to resist or narrow such
request or requirement. If in the absence of such a protective order or
receipt of such a waiver, you or your Representative is nonetheless in the
written opinion of your outside counsel (a copy of which shall be furnished
in advance to the Company) compelled to disclose, by mandatorily applicable
law, any part of the Confidential Information, you may disclose such
Confidential Information without liability under this Agreement, except
that in that event, if the circumstances so permit, you shall give the
Company written notice of the Confidential Information to be so disclosed
as far in advance of its disclosure as is lawful and practicable, and you
shall cooperate with the Company in its efforts to obtain an order or other
reliable assurances that confidential treatment will be accorded to the
portion of the Confidential Information so required to be disclosed.
6. Non-solicitation of Company Employees. Without the Company's prior written
consent, you and your Representatives will not for a period of two years
from the date of this Agreement directly or indirectly solicit for
employment or, within one year after the date hereof, employ any person who
is now employed as an officer of the Company or any of its divisions;
provided, however, that nothing in this paragraph shall prohibit you from
(i) conducting general solicitations for employment and from hiring any
individual who responds to any general solicitation for employment or (ii)
hiring any individual who initiates contact with you independently of any
solicitation by you.
7. Acquisition Subject to Definitive Agreement. No contract or agreement
providing for an Acquisition shall be deemed to exist between you and the
Company unless and until a definitive agreement has been executed and
delivered, and you hereby waive for yourself and on behalf of your
Representatives, in advance, any claims (including without limitation,
breach of contract) in connection with any such Acquisition until you shall
have entered into a definitive agreement. Unless and until a definitive
agreement between you and the Company with respect to such an Acquisition
has been executed and delivered, the Company shall not have any legal
obligation of any kind whatsoever to your or your Representatives with
respect to any such Acquisition by virtue of this Agreement or any other
written or oral expression with respect to such Acquisition except, in the
case of this Agreement, for the matters specifically agreed to in this
Agreement. For purposes of this paragraph and of Paragraph 4, the term
"definitive agreement" does not include an executed letter of intent or any
other preliminary written
Bureau Veritas S.A. - March 17, 2002 - Page 4
agreement, nor does it include any written or oral acceptance of an offer
or proposal on the Company's part.
8. Company's Right to Terminate Access. The Company may terminate access for
you or your Representatives to the Confidential Information at any time.
You and your Representatives may freely terminate considering the
Acquisition or evaluating the Confidential Information at any time for any
reason whatsoever without incurring any liability to the Company, its
directors, officers, employees or advisors.
9. Standstill Agreement. Without the Company's prior written consent, you will
not (and you will ensure that your Affiliates (as defined in Rule 12b-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
will not for a period of two years from the date of this Agreement (i)
purchase or otherwise acquire, or offer, seek, propose or agree to acquire,
ownership (including, but not limited to, beneficial ownership as defined
in Rule 13d-3 under the Exchange Act) of any securities of the Company, or
any direct or indirect rights or options to acquire any such securities or
any securities convertible into such securities (collectively,
"Securities"); (ii) seek or propose, alone or in concert with others, to
control or influence in any manner the management, the Board of Directors
or the policies of the Company; (iii) make any proposal or any statement
regarding any proposal, whether written or oral, to the Board of Directors
of the Company or any director or officer of the Company, or otherwise make
any public announcement or proposal whatsoever, with respect to any
transaction or proposed transaction between the Company or any of its
security holders and you or any of your Affiliates, including, without
limitation, any Acquisition, tender or exchange offer, merger, sale of
assets or securities, or other business combination, unless (a) the
Company's Board of Directors or its designated Representatives shall have
requested in advance the submission of such proposal, (b) such proposal is
directed to the Company's Board of Directors or its designated
Representatives, and (c) any public announcement with respect to such
proposal is approved in advance by the Company's Board of Directors; (iv)
make a request in any form, other than a confidential request directed to
the Company in accordance with Paragraph 2(ii) above, that the prohibitions
of this Paragraph 9 be waived or that the Company take any action which
would permit you to take any of the actions described in this Paragraph 9;
or (v) enter into any discussions, negotiations, arrangements or
understandings with any person with respect to any of the foregoing.
If at any time during such period you are approached by any person
concerning your or their participation in a transaction or proposed
transaction involving the Company's assets or businesses or Securities, you
will promptly inform the Company of the nature of such contact and the
parties thereto.
10. Waiver. No failure or delay by the Company or by you or your
Representatives in exercising any right, power or privilege 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.
Bureau Veritas S.A. - March 17, 2002 - Page 5
11. Specific Performance. If any of the provisions of this Agreement are not
performed by you or your Representatives in accordance with their
respective terms or were otherwise breached, money damages would not be a
sufficient remedy for any breach of this Agreement and the business and
assets of the Company would be irreparably harmed. Accordingly, the Company
shall be entitled to specific performance and injunctive or other equitable
relief as a remedy for any such breach. Further, for yourself and on behalf
of your Representatives, you hereby waive any requirement for the securing
or posting of any bond in connection with any such remedy. Such remedy
shall not be deemed to be the exclusive remedy for the breach of this
Agreement, but shall be in addition to all of the remedies available to the
Company, at law or in equity.
12. Consent to Jurisdiction; Service of Process; Venue. For yourself and on
behalf of your Representatives, you hereby irrevocably and unconditionally
(i) consent to the submission to the exclusive jurisdiction of the courts
of the State of California and of the United States of America located in
the State of California for any actions, suits or proceedings arising out
of or relating to this Agreement, (ii) agree not to commence any action,
suit or proceeding relating thereto except in such courts and in accordance
with the provisions of this Agreement, (iii) agree that service of any
process, summons, notice or document by U.S. registered mail or as
otherwise provided in this Agreement shall be effective service of process
for any action, suit or proceeding brought against you or your
Representatives, as the case may be, in any such court, (iv) waive any
objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement, in the courts of the State of California or the
United States of America located in the State of California, and (v) agree
not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient
forum.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without
giving effect to the principles of conflict of laws thereof.
14. Entire Agreement. This Agreement contains the entire understanding between
the parties with respect to the matters contemplated by this Agreement and
supersedes all prior written or oral communications, negotiations,
understandings or agreements of any kind with respect to such matters.
15. Amendments. No amendment or modification of this Agreement shall be
effective unless made or agreed to in writing by an executive officer of
the Company.
16. Parties in Interest. This Agreement shall be binding on the parties and
their respective Representatives and their respective successors and
assigns and shall inure to the benefit of the parties and their respective
successors and assigns.
17. Counterparts. This Agreement may be executed in counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.
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18. Headings. Paragraph headings in the Agreement are for convenience only and
shall not be deemed to be part of this Agreement.
Very truly yours,
U.S. LABORATORIES INC.
By: /s/ XXXXXXXXX XXXXXX
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Xxxxxxxxx Xxxxxx
Chief Executive Officer
Confirmed and Agreed to:
BUREAU VERITAS S.A.
By: /s/ XXXXX XXXXXXXXXXX
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Title: President and Chief Executive Officer
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Date: March 20, 2002
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