Contract
Exhibit
(e)(8)
October 8, 2010
Xxxxxxx X. Xxxxx
Ramius Value and Opportunity Advisors, LLC
Ramius V&O Acquisition LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ramius Value and Opportunity Advisors, LLC
Ramius V&O Acquisition LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with a potential negotiated transaction involving Cypress Bioscience, Inc. and its
subsidiaries (collectively, the “Company”) and Ramius Value and Opportunity Advisors LLC and Ramius
V&O Acquisition LLC (collectively, the “Recipient”), the Recipient has requested access to certain
non-public information regarding the Company. This letter agreement sets forth the Recipient’s
obligations regarding the use and disclosure of such information and regarding various related
matters.
The Recipient, intending to be legally bound, acknowledges and agrees as follows:
1. Limitations on Use and Disclosure of Confidential Information. Subject to section 4 below,
neither the Recipient nor any of the Recipient’s Representatives (as defined in section 13 below)
will, at any time, directly or indirectly:
(a) make use of any Confidential Information (as defined in section 11 below), except for the
specific purpose of considering and evaluating the tender offer to acquire all of the outstanding
common stock of the Company commenced by Recipient on September 15, 2010 (the “Offer”) or
considering, evaluating and negotiating a possible negotiated transaction between the Recipient and
the Company; or
(b) disclose any Confidential Information to any other Person (as defined in section 13
below), including any disclosure in any press release, public communication or filing with the
Securities and Exchange Commission (“SEC”) or any other governmental body in connection with the
Offer or otherwise.
Notwithstanding anything in this letter agreement to the contrary, the Recipient shall be permitted
to continue and consummate the Offer and to take into account the Confidential Information in
connection with the Offer (provided that any disclosure of Confidential Information shall be
subject to Section 4 below).
The Recipient will be liable and responsible for any breach of this letter agreement by any of its
Representatives (it being understood that any action, conduct or omission on the part of any of its
Representatives shall be deemed to constitute a breach or violation of this letter agreement if
such action or omission would constitute a breach or violation of this letter agreement if taken or
omitted by the Recipient) except that the Recipient will not be liable and responsible for any
breach by any of its potential financing sources that have entered into a separate confidentiality
agreement with the Company in accordance with section 13(a) of this letter agreement. The
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Recipient will (at its own expense) take all actions reasonably necessary to restrain its
Representatives from making any unauthorized use or disclosure of any Confidential Information.
2. Contact. Unless otherwise instructed by the Company, any request by the Recipient or any
of its Representatives to review Confidential Information or for management meetings and any
questions regarding procedures with respect to a potential transaction must be directed to
Xxxxxxxxx & Company, Inc. or Xxxxxxx Xxxxxxxx Partners, as financial advisors to the Company, and
not to the Company nor any other Representative of the Company. Neither the Recipient nor any of
the Recipient’s Representatives will contact or otherwise communicate with any other Representative
of the Company with respect to such matters without the prior written authorization of the Company.
3. No Representations by Company. The Company will have the exclusive authority to decide
what Confidential Information (if any) is to be made available to the Recipient and its
Representatives. Neither the Company nor any of the Company’s Representatives will be under any
obligation to make any particular Confidential Information available to the Recipient or any of the
Recipient’s Representatives or to supplement or update any Confidential Information previously
furnished. Subject to section 7 of this letter agreement, the Company will give the Recipient
access to the electronic data room that the Company generally makes available to all participants
in its process. Neither the Company nor any of its Representatives has made or is making any
representation or warranty, express or implied, as to the accuracy or completeness of any
Confidential Information, and neither the Company nor any of its Representatives will have any
liability to the Recipient or to any of the Recipient’s Representatives on any basis (including,
without limitation, in contract, tort or under United States federal or state securities laws or
otherwise) relating to or resulting from the use of any Confidential Information or any
inaccuracies or errors therein or omissions therefrom. Only those representations and warranties
(if any) that are included in any final definitive written agreement that provides for the
consummation of a negotiated transaction between the Recipient and the Company and is validly
executed on behalf of the Recipient and the Company (a “Definitive Agreement”) will have legal
effect.
4. Permitted Disclosures.
(a) Notwithstanding the limitations set forth in section 1 above:
(i) the Recipient may disclose Confidential Information if and to the extent that the Company
consents in writing to the Recipient’s disclosure thereof;
(ii) subject to section 4(a)(iii), the Recipient may disclose Confidential Information to any
Representative of the Recipient, but only to the extent such Representative (A) needs to know such
Confidential Information for the purpose of helping the Recipient evaluate the Offer or evaluate or
negotiate a possible transaction between the Recipient and the Company, and (B) has agreed to abide
and be bound by the provisions hereof (including in the case of Representatives that are financing
sources that have entered into a separate
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confidentiality agreement with the Company) or is
otherwise bound by confidentiality obligations at least as restrictive as those contained in this
letter agreement; and
(iii) If the Company delivers to the Recipient a written notice stating that certain specific
Confidential Information (such as competitively sensitive information) may be disclosed only to
specified Representatives of the Recipient, then, notwithstanding anything to the contrary
contained in Section 4(a)(ii) above, the Recipient shall not disclose or permit the disclosure of
any of such Confidential Information to any other Representative of the Recipient.
(b) If the Recipient or any of the Recipient’s Representatives is required by subpoena or
other valid legal process to disclose any Confidential Information to any Person, then, to the
extent legally permissible, the Recipient will promptly provide the Company with written notice of
the applicable subpoena or process so that the Company may seek a protective order or other
appropriate remedy, at the Company’s sole expense, or waive compliance with the provisions of this
letter agreement. The Recipient and its Representatives will reasonably cooperate with the Company
and the Company’s Representatives, at the Company’s sole expense, in any attempt by the Company to
obtain any such protective order or other remedy. If the Company elects not to seek, or is
unsuccessful in obtaining, any such protective order or other remedy in connection with any
requirement that the Recipient disclose Confidential Information, or if it so directs the
Recipient, the Recipient or its Representatives, as the case may be, may furnish only that portion
of the Confidential Information which the Recipient or its Representatives, as the case may be, is
legally required to furnish and shall exercise reasonable best efforts to obtain assurance that
confidential treatment shall be accorded such Confidential Information. If the Recipient believes
that it is required under the Securities Exchange Act of 1934, as amended, or the rules and
regulations promulgated thereunder (“Exchange Act”) to disclose any Confidential Information in a
filing with the SEC in order to consummate the Offer, then the Recipient will provide the Company
with written notice of the applicable Exchange Act requirement, the specific Confidential
Information to be disclosed and a draft of the proposed disclosure reasonably in advance of the
proposed filing with the SEC to enable the Company and its representatives to adequately review the
filing and either object to all or a portion of the filing or provide comments on the proposed
disclosure. If the Company, on advice of counsel, objects to all or a portion of the proposed
disclosure on the grounds that the disclosure is not required to be made under the Exchange Act in
order to consummate the Offer (including, without limitation, because the conditions to the
consummation of the Offer cannot be reasonably expected to be satisfied by the scheduled expiration
date so that such disclosure could be made, if required, at a future date), then the Recipient will
limit its disclosure to the extent of such objection. If the Company comments on the disclosure,
then the Recipient will reasonably take into account all such comments.
5. Return of Confidential Information. If Recipient determines that it does not wish to
proceed with a possible negotiated transaction with the Company, Recipient will promptly advise the
Company in writing of that decision. Upon the Company’s written request, the Recipient and the
Recipient’s Representatives will promptly deliver to the Company or destroy (at Recipient’s
option) any Confidential Information (and all copies thereof, including all Confidential
Information in any electronic form or media) obtained or possessed by the Recipient or any of the
Recipient’s Representatives (including all documents prepared by the
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Recipient or any of the
Recipient’s Representatives using Confidential Information); provided, that the Recipient shall
certify any such destruction to the Company in writing. Notwithstanding anything to the contrary
contained in this section 5, Recipient may retain copies of Confidential Information to the extent
required by law; provided, however, Recipient may not access such information for any other purpose
other than as required by applicable law. Notwithstanding the delivery to the Company (or the
destruction by the Recipient) of Confidential Information pursuant to this section 5, the Recipient
and its Representatives will continue to be bound by their confidentiality obligations and other
obligations under this letter agreement. Notwithstanding the foregoing, the Recipient shall only
be required to use reasonable best efforts to erase electronic information from its computer
systems and shall not be permitted to access such electronic information for any purpose other than
deletion.
6. Limitation on Hiring and Soliciting Employees. During the one-year period commencing on
the date of this letter agreement, neither the Recipient nor any of the Recipient’s Representatives
will directly or indirectly solicit, induce, encourage or attempt to solicit, induce or encourage
any Covered Person (as defined herein) to terminate such Covered Person’s relationship with the
Company in order to become an employee, consultant, or independent contractor, to or for any other
person or entity; provided, however that this section will not prevent Recipient from hiring any
Covered Person who responds to a general solicitation of employment not specifically directed to
the Company, its employees or any particular employee. For purposes of this Agreement, “Covered
Person” shall mean any Person who is an employee of the Company as of the date of this letter
agreement or who becomes an employee of the Company before the termination of discussions regarding
a possible negotiated transaction involving the Recipient and the Company.
7. No Obligation to Pursue Transaction. Unless the Recipient and the Company enter into a
Definitive Agreement, no agreement providing for a transaction involving the Company will be deemed
to exist between the Recipient and the Company, and the Company will be under no obligation to
negotiate or enter into any such agreement or transaction with the Recipient. The Company reserves
the right, in its sole discretion: (a) to conduct any process it deems appropriate with respect to
any transaction or proposed transaction involving the Company, and to modify any procedures
relating to any such process without giving notice to the Recipient or any other Person; (b) to
reject any proposal made by the Recipient or any of the Recipient’s Representatives with respect to
a transaction involving the Company; and (c) to terminate discussions and negotiations with the
Recipient at any time. Neither the Company, nor any of its Representatives, including its
financial advisors, shall have any legal, fiduciary or other duty with respect to the manner in
which any transaction process is conducted. The Recipient recognizes that, except as expressly
provided in any definitive agreement between the Recipient and the Company: (i) the Company and its
Representatives will be free to negotiate with, and to enter into any agreement or transaction
with, any other party; and (ii) the Recipient will not have any rights or claims against the
Company or any of the Company’s Representatives arising out of or relating to any transaction or
proposed transaction involving the Recipient and the Company.
8. No Waiver. No failure or delay by the Company or any of its Representatives in exercising
any right, power or privilege under this letter agreement will operate as a waiver
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thereof, and no
single or partial exercise of any such right, power or privilege will preclude any other or future
exercise thereof or the exercise of any other right, power or privilege under this letter
agreement. No provision of this letter agreement can be waived or amended except by means of a
written instrument that is validly executed on behalf of the Company and that refers specifically
to the particular provision or provisions being waived or amended.
9. Remedies. The Recipient acknowledges that money damages would not be a sufficient remedy
for any breach of this letter agreement by the Recipient or any of the Recipient’s Representatives
and that the Company would suffer irreparable harm as a result of any such breach. Accordingly,
the Company will also be entitled to equitable relief, including injunction and specific
performance, as a remedy for any breach or threatened breach of this letter agreement. The
indemnification and equitable remedies referred to above will not be deemed to be the exclusive
remedies for a breach of this letter agreement, but rather will be in addition to all other
remedies available at law or in equity to the Company. In the event of litigation relating to this
letter agreement, the prevailing party in a final, non-appealable judgment will be entitled to
reimbursement from the non-prevailing party for the reasonable legal fees it incurred in connection
with such litigation (including any appeal relating thereto).
10. Successors and Assigns; Applicable Law; Jurisdiction and Venue. This letter agreement
will be binding upon the Recipient and its Representatives and their respective heirs, successors
and assigns, and will inure to the benefit of the Company and its Representatives and their
respective heirs, successors and assigns. This letter agreement will be governed by and construed
in accordance with the laws of the State of California (without giving effect to principles of
conflicts of laws). The Parties also hereby irrevocably and unconditionally consent and submit to
the exclusive jurisdiction of the state and federal courts located in Los Angeles County in the
State of California for any actions, suits or proceedings arising out of or relating to this letter
agreement or any transaction involving the Recipient and the Company (and the Parties agree not to
commence any action, suit or proceeding relating thereto except in such courts), and further agree
that service of any process, summons, notice or document by U.S. registered mail to the other
Parties’ address set forth below shall be effective services of process for any action, suit or
proceeding brought in any such court. The Parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out of this letter
agreement or any transaction involving the Recipient and the Company, in the state and federal
courts located in Los Angeles County in the State of California, and hereby further irrevocably and
unconditionally waive and 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. The Parties
specifically waive any right to a jury trial with respect to any matter arising under this letter
agreement.
11. Confidential Information. For purposes of this letter agreement, “Confidential
Information” will be deemed to include:
(a) any information (including any technology, know-how, patent application, test result,
research study, business plan, budget, forecast or projection) relating directly or indirectly to
the business of the Company, any predecessor entity (whether prepared by the Company or by any
other Person and whether or not in written form) that is or has been made
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available to the
Recipient or any Representative of the Recipient by or on behalf of the Company or any
Representative of the Company, regardless of the manner in which it was made available;
(b) any memorandum, analysis, compilation, summary, interpretation, study, report or other
document, record or material that is or has been prepared by or for the Recipient or any
Representative of the Recipient and that contains, reflects, interprets or is based directly or
indirectly upon any information of the type referred to in clause “(a)” of this sentence; and
(c) the terms of this letter agreement;
(d) the proposed terms, conditions or other facts with respect to a possible transaction
involving the Recipient and the Company, including the status thereof.
However, “Confidential Information” will not be deemed to include: (i) any information that is or
becomes generally available to the public other than as a direct or indirect result of the
disclosure of any of such information by the Recipient or by any of the Recipient’s Representatives
in breach of this letter agreement; (ii) any information that becomes known or available to the
Recipient or any of the Recipient’s Representatives on a non-confidential basis from a source
(other than the Company or any of the Company’s Representatives) that, to the Recipient’s
knowledge, after reasonable inquiry, is not prohibited from disclosing such information to the
Recipient by a contractual, legal or fiduciary obligation owed to the Company or any of the
Company’s Representatives; (iii) any information that is already in the possession of the Recipient
prior to the time it was first made available to Recipient or its Representatives without violation
of any obligation under this letter agreement; or (iv) any information that is developed by or on
behalf of the Recipient independently of the disclosure of Confidential Information and without
reference to or use of Confidential Information.
12. Trading in Securities. The Recipient acknowledges and agrees that it is aware (and that
Recipient’s Representatives are aware or will be advised by the Recipient) that Confidential
Information being furnished by the Company may contain material, non-public information regarding
the Company and that the United States securities laws prohibit any persons who have such material,
non-public information from purchasing or selling securities of the Company on the basis of such
information, or from communicating such information to any person under circumstances in which it
is reasonably foreseeable that such person is likely to purchase or sell such securities on the
basis of such information.
13. Miscellaneous.
(a) For purposes of this letter agreement, a party’s “Representatives” will be deemed to
include each Person that is or becomes (i) a member of the Recipient’s group as identified in the
joint filing agreement filed as an exhibit to the Schedule 13D of the Recipient filed with respect
to the Company with the SEC prior to the date of this letter agreement and the executive officers
and directors of Xxxxx Group, Inc. but only to the extent that such executive officers and
directors of Xxxxx Group, Inc. do not participate in any discussions or negotiations with Xxxxx
Healthcare Royalty Management, LLC with respect to the Company (the “Ramius Group”), (ii) an
officer, director, employee, attorney or accountant (including outside counsel
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and
accountants) of such party or of any of the Ramius Group, or (iii) upon written approval of the
Company not to be unreasonably withheld or delayed (and for this purpose Royalty Pharma Finance
Trust is deemed approved by the Company but only if and after Royalty Pharma Trust enters into a
confidentiality agreement with the Company), any advisor or any financing source to be used in
connection with the Offer or a potential negotiated transaction involving the Company; provided
that the financing source enters into a confidentiality agreement with the Company on similar terms
as this letter agreement. The parties agree that the Ramius Group shall not include Xxxxx
Healthcare Royalty Management, LLC or its controlled affiliates.
(b) The term “Person,” as used in this letter agreement, will be broadly interpreted to
include any individual and any corporation, partnership, entity, group, tribunal or governmental
authority.
(c) The bold-faced captions appearing in this letter agreement have been included only for
convenience and shall not affect or be taken into account in the interpretation of this letter
agreement.
(d) Any term or provision of this letter agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(e) By making Confidential Information or other information available to the Recipient or the
Recipient’s Representatives, the Company is not, and shall not be deemed to be, granting (expressly
or by implication) any license or other right under or with respect to any patent, trade secret,
copyright, trademark or other proprietary or intellectual property right. Neither the Recipient nor
the Recipient’s Representatives shall file any patent application containing any claim to any
subject matter derived from the Confidential Information.
(f) To the extent that any Confidential Information includes materials or other information
that may be subject to the attorney-client privilege, work product doctrine or any other applicable
privilege or doctrine concerning any pending, threatened or prospective action, suit, proceeding,
investigation, arbitration or dispute, it is acknowledged and agreed that the Recipient and the
Company have a commonality of interest with respect to such action, suit, proceeding,
investigation, arbitration or dispute and that it is their mutual desire, intention and
understanding that the sharing of such materials and other information is not intended to, and
shall not, affect the confidentiality of any of such materials or other information or waive or
diminish the continued protection of any of such materials or other information under the
attorney-client privilege, work product doctrine or other applicable privilege or doctrine.
Accordingly, all Confidential Information that is entitled to protection under the attorney-client
privilege, work product doctrine or other applicable privilege or doctrine shall remain entitled to
protection thereunder and shall be entitled to protection under the joint defense doctrine, and the
Recipient agrees to take all measures necessary to preserve, to the fullest extent possible, the
applicability of all such privileges or doctrines.
(g) This letter agreement constitutes the entire agreement between the Recipient and the
Company regarding the subject matter hereof and supersedes any prior agreement between the
Recipient and the Company regarding the subject matter hereof. This letter agreement may be
executed in one or more counterparts, each of which shall constitute an
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original and all of which, when taken together, shall constitute one agreement. The exchange
of a fully executed letter agreement (in counterparts or otherwise) by electronic transmission or
by facsimile shall be sufficient to bind the parties to the terms and conditions of this letter
agreement.
(h) This letter agreement shall terminate on the earlier of (i) the third anniversary of the
date of this letter agreement or (ii) the execution of a Definitive Agreement; provided, however,
that (x) nothing herein is intended to limit or abridge the protection of trade secrets under
applicable trade secrets law, and the protection of trade secrets by the Recipient shall be
maintained as such until they fall into the public domain; and (y) the termination of this letter
agreement shall not relieve any Party from any liability with respect to any violation or breach of
any provision contained in this Agreement.
| Very truly yours, |
||||
| /s/ Xxx X. Xxxxxxxx | ||||
| Cypress Bioscience, Inc. | ||||
| Accepted and agreed to | ||||
| as of the date below: | ||||
| Ramius Value and Opportunity Advisors LLC | ||||
| Ramius V&O Acquisition LLC | ||||
By: Name: |
/s/ Xxxx X. Xxxxxxx
|
|||
Title:
|
Authorized Signatory | |||
Address:
|
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx | |||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||
Date:
|
October 8, 2010 | |||
