EXHIBIT E(2)
March 23, 2000
Siemens Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Vice President - Corporate Development
CONFIDENTIALITY AND STANDSTILL AGREEMENT
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Ladies and Gentlemen:
Siemens Corporation ("Siemens") has expressed an interest in exploring a
possible transaction (a "Transaction") involving Shared Medical Systems
Corporation and its Affiliates (collectively, the "Company"). In connection
with the Transaction, the parties contemplate exchanging Information (as defined
herein). This letter agreement sets forth the terms and conditions on which
this Information will be exchanged.
1. Definitions:
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- "Affiliate" has the meaning set forth in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934, as amended (the "1934 Act").
- "Disclosing Party" means the party (or its Affiliates or
Representatives) providing Information (or on whose behalf Information
is provided) to the other party (or its Affiliates or Representatives).
- "Evaluation Material" means all Information received by a Receiving
Party (or its Affiliates or Representatives) from a Disclosing Party (or
its Affiliates or Representatives) together with all notes, documents,
and materials prepared by or for the Receiving Party (or its Affiliates
or Representatives) which reflect, interpret, evaluate, include or are
derived from such Information; provided that "Evaluation Material" shall
not include Information which: (i) was or becomes generally available to
or known by the public other than as a result of a disclosure by a
Receiving Party (or its Affiliates or Representatives) in violation of
this Agreement; or (ii) was or becomes available to the Receiving Party
on a non-confidential basis from a source other than the Disclosing
Party (or its Affiliates or Representatives), which the Receiving Party
believes was not prohibited from so disclosing by any contractual, legal
or fiduciary obligation.
- "Information" means all information, in whatever form or medium (oral,
written, printed, electronic, etc.), including, without limitation, all
financial, business, and other information, trade secrets, technical
data, processes, documents, data bases, plans, marketing and client data
provided to a Receiving Party (or its Affiliates or Representatives) by
a Disclosing Party (or its Affiliates or Representatives), whether
before, on or after the date of this Agreement.
- "Person" means any corporation, partnership, limited liability
company, joint venture, business entity, or individual.
- "Receiving Party" means a party (or its Affiliates or Representatives)
who receives Information from a Disclosing Party (or its Affiliates or
Representatives).
- "Representative" means any director, officer, associate, partner,
employee, agent, financing source, attorney, investment banker, or other
advisor who provides advice or counsel to a party in connection with the
interpretation, evaluation, processing, or review of Information or
Evaluation Material or otherwise in connection with a Transaction.
- "Standstill" means the provisions of Section 4 of this Agreement.
2. Confidentiality and Non Disclosure.
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As a condition to receiving information from a Disclosing Party (or
its Affiliates or Representatives), each Receiving Party agrees to treat all
Information concerning the Disclosing Party (and its Affiliates and
Representatives) in accordance with the provisions of this Agreement and to take
or abstain from taking certain other actions as set forth herein for a period of
36 months.
Each Receiving Party agrees that Evaluation Material will not be used
by it (or its Affiliates or Representatives) in any way that is detrimental to
the Disclosing Party or for any purpose other than evaluating and effectuating a
Transaction between it and the Disclosing Party, and that the Evaluation
Material will be kept confidential by it (and by its Affiliates or
Representatives); provided, however, that any such Evaluation Material may be
disclosed to a party's Representatives who are working on or consulted in
connection with any such Transaction (it being agreed that such Representatives
shall be informed of the confidential nature of such information and the
obligations set forth in this Agreement). Each party shall be liable for any
breach of this Agreement by its Affiliates or Representatives (including,
without limitation, by such Affiliates and Representatives who, subsequent to
the first date of disclosure of Information hereunder, become former Affiliates
or Representatives of such Party).
Without the prior written consent of the other party, neither party
will (and will direct its Affiliates or Representatives not to) disclose to any
Person, except as such party reasonably believes based upon the advice of
counsel to be required by law, regulation, rule of any applicable
stock exchange or legal process, or as requested by a regulatory authority,
either the existence of this Agreement, the exchange of Information, the fact
that discussions or negotiations are taking place concerning a Transaction or
any of the terms, conditions or other matters with respect to any such
Transaction, including the existence or status thereof.
If a party (or any of its Affiliates or Representatives) is required
by legal process to disclose all or any part of the Information contained in the
other party's Evaluation Material, it will promptly notify the other party of
the existence and terms of, and circumstances surrounding, such a request so
that the other party may, if it desires, seek an appropriate protective order.
If a party seeks such an order, the other party will provide such cooperation as
shall be reasonably requested of it. Anything in this Agreement to the contrary
notwithstanding, each party may (in the absence of such an order or in
compliance therewith) provide so much of such information as it is advised by
its counsel that it must provide to avoid legal sanction, so long as it uses
reasonable efforts to obtain confidential treatment by the recipient thereof and
consults in advance with the other party as to such disclosure.
Each party acknowledges that it is aware of its obligations under
United States securities laws regarding trading in the securities of an issuer
while in possession of material non-public information of such issuer, and that
it has advised its Affiliates and Representatives of such obligations.
3. Return or Destruction of Evaluation Material.
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Each party agrees upon written request from the other promptly to
deliver to the other all Information and Evaluation Material (whether in its
possession or the possession of its Affiliates or Representatives) and to not
retain any copies, extracts or other reproductions in whole or in part of such
material or, alternatively, to destroy, and cause its Affiliates or
Representatives to destroy, such Information and Evaluation Material and, upon
the request of the other, confirm such destruction separately in writing. The
delivery or destruction of such material shall not relieve a party of its
obligation of confidentiality or any other obligations hereunder.
4. Standstill.
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For a period of 24 months after the date of this Agreement unless
requested in writing by the Company, neither Siemens nor any entity which
Siemens controls will in any manner, directly or indirectly, (a) effect, or
seek, offer, propose or agree (whether publicly or otherwise) to effect, or
otherwise participate in (i) any acquisition of securities (or beneficial
ownership thereof) of the Company except for de minimus purchases for benefit
plans and the like, (ii) any tender or exchange offer, merger or other business
combination or asset purchase involving the Company, (iii) any recapitalization,
restructuring, liquidation, dissolution or other extraordinary transaction with
respect to the Company, 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 or other securities of the Company; (b) form, join
or otherwise participate in a
"group" (as defined under the 0000 Xxx) or otherwise act, alone or in concert
with others, (i) to own, or seek, offer, propose or agree to acquire, any voting
or other securities of the Company except for de minimus purchases for benefit
plans and the like, or (ii) to seek to control or influence the management,
Board of Directors, or policies of the Company; (c) take any action which might
force the Company to make a public announcement regarding any of the types of
matters set forth in (a) above; (d) disclose any intention, plan or arrangement
inconsistent with, or take any action to circumvent, the terms of this
Agreement; (e) become a participant in any election contest with respect to the
Company, seek to influence any Person with respect to the voting or other
securities of the Company or demand a copy of the list of the stockholders or
other books and records of the Company; (f) loan money to, advise or assist any
Person with any action inconsistent with the terms of this Agreement; (g) induce
or attempt to induce any Person who is then an employee, or use the Information
or Evaluation Material to induce or attempt to induce any customer or supplier
of the Company, to terminate a then-existing relationship with the Company,
except that, subject to the provisions of clause (h), below, Siemens may offer
employment to and hire any person who responds to Siemens' general solicitations
for employment, such as through newspaper advertisements and trade journals; (h)
employ or attempt to employ any employee listed on Schedule A attached unless
such Person's employment with the Company shall have been terminated at least
six months prior to the date on which Siemens or its Affiliates or
Representatives offers such Person employment; (i) request the Company or its
Affiliates or Representatives, directly or indirectly, to amend or waive any
provision of this Section (including this sentence); (j) take any action which
might require the Company to make a public announcement regarding the
possibility of a merger, consolidation, business combination or other
transaction of any kind with Siemens; or (k) enter into any discussion or
arrangements with or advise, assist or encourage any other Persons in connection
with any of the foregoing.
5. Due Diligence Procedures.
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It is understood that the Company and Siemens may, as may be mutually
agreed upon, conduct appropriate due diligence using procedures acceptable to
each of them and reasonably designed to effectuate the purposes of this
Agreement.
6. Representations and Warranties.
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Each party represents and warrants, by signing this Agreement, that it
is duly authorized and empowered to execute this Agreement. This Agreement may
be executed in one or more counterparts. Each party understands that the other
makes no representation or warranty as to the accuracy or completeness of the
Information or Evaluation Material furnished by or on behalf of it. Except to
the extent set forth in any definitive agreement, neither party (nor any of its
Affiliates or Representatives) shall have any liability to the other party (or
any of its Affiliates or Representatives) arising as a result of the use of the
Information or other Evaluation Material supplied or on behalf of it.
7. No Binding Agreement.
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(a) Unless and until a definitive agreement between the parties with
respect to a Transaction 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 or any written or oral expression with respect to
such a Transaction by such party or by any of its Affiliates or
Representatives, except, in the case of this Agreement, for the matters
specifically agreed to herein (which include, but are not limited to, matters
with respect to confidentiality and the Standstill). For purposes of this
Agreement, the term "definitive agreement" does not include a letter of intent
or any other preliminary written agreement, whether or not executed, nor does
it include any actual or purported written or verbal acceptance of any offer or
proposal. Except as otherwise agreed in writing or as expressly provided
herein, each party and its respective Affiliates and Representatives will be
free to conduct the process relating to any Transaction as they in their sole
discretion determine (including, without limitation, changing any procedures
relating to a Transaction, or negotiating with and entering into a definitive
agreement with any other person, without in any such case prior notice to the
other party or any other person). Neither party will have any claims against
the other party or any of its Affiliates or Representatives arising out of or
relating to any Transaction other than those, if any, arising under this
Agreement or any definitive agreement and then only in accordance with the
terms hereof or thereof, as the case may be.
(b) Without limiting the generality or effect of any other provision
of this Agreement, each party acknowledges and agrees on behalf of itself and
its Affiliates that, regardless of the facts and circumstances, (i) no
Representative of either party had, has or will have any duty to the other party
in connection with any Transaction, including the evaluation of any Transaction,
and (ii) neither party has any right to recovery against any of the other
party's Representatives in respect of any Transaction, including the evaluation
of any Transaction, on any theory, whether for alleged breach of contract,
negligent misrepresentation, actual or constructive fraud, federal or state
securities or other laws or otherwise.
8. No Waiver.
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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 further exercise of any right,
power or privilege.
9. Injunctive Relief.
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Money damages may not be a sufficient remedy for any breach of this
Agreement and each party shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach, and each
waives any requirement for the securing or posting of any bond in connection
with such remedy. Such remedy shall not be deemed to be the exclusive
remedy for breach of this Agreement, but shall be in addition to all other
remedies available at law or equity.
10. Successors.
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The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
including without limitation any person acquiring a majority of the outstanding
voting securities of either party.
11. Governing Law; Consent to Jurisdiction.
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This Agreement is made pursuant to, and shall be construed and enforced in
accordance with, the laws of the State of Delaware (and United States federal
law to the extent applicable), irrespective of the principal place of business
or domicile of the parties hereto, and without giving effect to otherwise
applicable principles of conflicts of law. Each party consents to personal
jurisdiction in any action brought in any federal or state court within the
State of Delaware having subject matter jurisdiction in the matter for purposes
of any action arising out of this Agreement. The parties hereto irrevocably
waive trial by jury. Notwithstanding anything to the contrary herein or that may
be based on facts or circumstances pertaining to the transactions under
discussion between the parties hereto, this letter agreement, the Evaluation
Material or Information provided hereunder or otherwise, the Company hereby
irrevocably and unconditionally waives and releases for itself and on behalf of
its affiliates all rights and claims that they may now or hereafter have the
Siemens' parent, Siemens Aktiengesellschaft or any of its affiliates or
subsidiaries organized outside of the United States, are subject to the
jurisdiction of the federal or state courts of the United States with respect to
this Agreement or the Evaluation Material or Information; provided, however,
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that nothing in such waiver and release shall affect the Company's and its
affiliates' rights, if any, to pursue any claim whatsoever against Siemens
Aktiengesellschaft or any of its affiliates or subsidiaries organized outside of
the United States in the courts of the Federal Republic of Germany.
If you are in agreement with the foregoing, please so indicate by
signing and returning one copy of this Agreement, whereupon it will constitute
our agreement with respect to the subject matter hereof.
Very truly yours,
SHARED MEDICAL SYSTEMS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: President/Chief Executive Officer
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Confirmed and Agreed to:
Siemens Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: VP, Corporate Development
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Date: March 23, 2000
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