The Cronos Group 5, rue Guillaume Kroll L-1882 Luxembourg May 31, 2006
Exhibit(d)(8)
May 31, 2006
Fortis Capital Corp.
Xxxxxxxxxx 00/0
0000 Xx Xxxxxxxxx
Xxx Xxxxxxxxxxx
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0000 Xx Xxxxxxxxx
Xxx Xxxxxxxxxxx
Gentlemen:
Fortis Capital Corp. (the “Company”), wishes to initiate discussions with The Cronos
Group, a société anonyme holding organized and existing under the laws of Luxembourg
(“Cronos”), for the purpose of evaluating a potential purchase of the assets or equity of
Cronos (the “Proposed Transaction”). In connection with such evaluation and any resulting
negotiations (all the foregoing, the “Negotiations”), information of a confidential nature
may be disclosed by Cronos (the term “Cronos” including, for purposes of this Agreement, all of its
directly and indirectly owned subsidiaries and other controlled affiliates of The Cronos Group, all
of the limited partnerships managed by subsidiaries of Cronos (the “Cronos Partnerships”),
and all of its and its directly and indirectly owned subsidiaries’, the Cronos Partnerships’ and
Cronos’ other affiliates’ officers, employees, representatives and other agents) to the Company or
to its Agents (as hereinafter defined). In consideration of Cronos’ providing such information to
the Company and to its Agents and in order to protect Cronos’ interests therein, the Company and
Cronos hereby agree as follows:
1. All information disclosed or transmitted by Cronos, whether verbally or in written,
electronic, recorded or other form, to the Company or to any of its Agents hereunder or in
connection with the Proposed Transaction, including, without limitation, all financial information,
financial projections, budgets, marketing information, customer and supplier information,
manufacturing and technical information and intellectual property, whether prior to, on, or after
the date hereof, and whether or not in writing (collectively, the “Confidential
Information”) shall be treated by the Company and its Agents as set forth in this Agreement.
As used herein, the term “Confidential Information” shall also include (a) all analyses,
records, compilations, studies, notes or other documents (whether in written, electronic, recorded
or other form) prepared by the Company or its Agents which contain or otherwise reflect
Confidential Information, and
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(b) all information concerning the fact that Negotiations are taking, or have taken, place
between the parties and the status and terms thereof, including the fact that this Agreement has
been entered into.
2. All requests for Confidential Information made by the Company hereunder, and all
communications initiated by the Company with respect to the Proposed Transaction, shall be directed
to Cronos’ financial advisor, unless the Company is otherwise instructed, in writing (an email
qualifies as a writing) by S. Xxxxxxxx Xxxxxx, Chair of the Transaction Committee
(“Committee”) of the Board of Directors of Cronos, or his successor. The Company’s
financial advisor is:
Xxxxxxx Xxxxx & Associates, Inc. | ||
000 Xxxxxxxx Xxxxxxx | ||
Xx. Xxxxxxxxxx, Xxxxxxx 00000 | ||
Telephone: (000) 000-0000 | ||
Attention: X. Xxxxxxxxx Xxxxx, III | ||
Senior Managing Director | ||
Email: xxx.xxxxx@xxxxxxxxxxxx.xxx |
The foregoing shall not apply to inquiries from the Company’s counsel, which shall be directed to
Cronos’ counsel.
3. Without the prior written consent of the Committee, the Company, except as required by
applicable law or regulation, shall keep confidential and shall not disclose any Confidential
Information to any third person or entity (private or governmental) except to such of its or its
affiliates’ officers, directors, employees, agents, advisors or other representatives, including,
without limitation, accountants, attorneys, auditors, business consultants, financial advisors, and
financing sources (all the foregoing, “Agents”) who the Company determines need to know the
Confidential Information for the purposes contemplated by this Agreement, who are informed of the
confidential nature of the Confidential Information and who agree to be bound by the restrictions
of this Agreement. Further, the Company shall, and shall use reasonable efforts to cause its
Agents to whom any Confidential Information is disclosed by the Company or by an Agent of the
Company to, use the Confidential Information only for the purposes contemplated by this Agreement.
Without limiting the foregoing, each party shall, and shall use reasonable efforts to cause its
Agents to, not make any public disclosure concerning the subject matter of this Agreement, except
as may be required under applicable law or regulation (including, without limitation, stock
exchange or Nasdaq rule). The Company may disclose the existence of Negotiations and Confidential
Information, to the extent necessary, to bank regulators and examiners without violating this
Agreement.
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4. This Agreement shall be inoperative as to any Confidential Information which (a) is or
becomes available or known publicly or generally in the industry without a breach of this Agreement
by Cronos, the Company or their respective Agents, as applicable, (b) was or is subsequently
disclosed to the Company or its Agents by a third person or entity that is not known to be
prohibited from disclosing the same by a contractual, fiduciary or other legal obligation to
Cronos, (c) is or was developed by the Company or its Agents without violation of any obligation
under this Agreement or (d) was known to the Company or its Agents prior to being furnished such
information by Cronos or its Agents.
5. Each party shall be responsible for any breach of this Agreement by any of its Agents,
including those who become former Agents after the date hereof.
6. Any Confidential Information provided to the Company or its Agents shall be returned (with
all copies, extracts or other whole or partial reproductions thereof) to Cronos, and the Company
and its Agents shall destroy all analyses, records, compilations, studies, notes or other documents
(whether in written, electronic, recorded or other form) prepared by or for the Company which
contain or are based on any Confidential Information and provide to the Committee a certificate to
the effect that all such Confidential Information has been returned or destroyed as required, all
within twenty (20) days of receipt by the Company of a written request therefor from the Committee,
provided that the Company may retain one copy of the Confidential Information as needed for audit
or regulatory purposes.
7. Nothing in this Agreement shall give the Company any right, title, license or interest
whatever in or to the Confidential Information (which shall remain at all times the property of
Cronos) or in or to any existing or future patents, know-how, inventions or other intellectual
property of Cronos.
8. If the Company or any of its Agents is requested, or, after consultation with counsel, is
required, in any court proceeding (e.g., by oral questions, interrogatories, requests for
information or documents, subpoena or the like), by any government agency or authority or by law to
disclose any of the Confidential Information, the Company shall, if permitted by law, use its
reasonable efforts to promptly so notify the Committee so that Cronos may, at its own expense, seek
appropriate protective relief or waive compliance with the applicable provisions of this Agreement
for such situation. If Cronos does not obtain such relief on a timely basis, the Company may
disclose only that portion of the Confidential Information which, after consultation with counsel,
must be disclosed.
9. The obligations of the Company not to use or disclose (including not to allow the use or
disclosure by its Agents), and to return on request or destroy, the
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Confidential Information shall continue for a period of two (2) years from the date hereof.
10. For a period of two (2) years from the date of this Agreement, the Company shall not
solicit for hire as a director, officer, employee, independent contractor, consultant or advisor
any person employed by Cronos in an executive or significant managerial, financial, sales,
marketing, engineering, research, development, manufacturing or technical position, except (i) with
the prior written consent of Cronos, (ii) in so far that such individual responds to a bona fide
job advertisement of general circulation made by the Company or any of its affiliates, (iii) if
such individual has been terminated by Cronos prior to the commencement of employment discussions
between such individual and the Company or any of this affiliates, or (iv) if such individual is
submitted to the Company or any of its affiliates by a third-party unaffiliated employment agency,
provided neither the Company or any of its affiliates has provided such employment agency any
information regarding its interest in such individual.
11. The Company understands that Cronos shall endeavor to assure that any Confidential
Information or other information provided to the Company will be accurate and relevant for the
purposes contemplated by this Agreement but acknowledges that Cronos is not making any
representation or warranty as to, and shall not have any liability in regard to, the accuracy or
completeness of such Confidential Information or other information.
12. The Company acknowledges and agrees that the Committee may establish procedures and
guidelines for the submission of proposals with respect to any transaction contemplated by this
Agreement and may change those procedures at any time without prior notice. The Company further
acknowledges that the Committee, for and on behalf of Cronos, is free to conduct the process
leading up to a possible sale of Cronos as the Committee, in its sole discretion, determines,
including, without limitation, the negotiation and entering into of any preliminary or definitive
agreement with any other person or entity without prior notice to the Company. Unless and until a
complete and definitive written agreement for an actual sale and purchase of Cronos between Cronos
and the Company have been formally prepared, executed and delivered by both parties, after approval
by the Company and by the Committee and by Cronos’ Board of Directors, (a) each has the right, in
its sole discretion, to reject any proposal from the other and/or to terminate the Negotiations at
any time, and (b) neither will have any further legal obligation of any sort except for the matters
specifically agreed to in this Agreement. Only representations and warranties, if any, hereafter
made in such definitive agreements shall have any legal effect.
13. The Company agrees to advise its Agents who are aware or become aware of the Negotiations
and/or to whom Confidential Information is disclosed that United States securities laws prohibit
them, as recipients from an issuer of material,
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non-public information regarding Cronos, from buying or selling securities of Cronos or from
communicating such material, non-public information to any other person where it is reasonably
likely or foreseeable that such person may purchase or sell common shares of Cronos.
14. For the period of two (2) years from the date of this letter set forth above, the Company
shall not, alone or through or with any other person or entity, in any manner:
(a) without your prior consent, acquire, announce an intention to acquire, offer or propose to
acquire, solicit an offer to sell or agree to acquire, or enter into any agreement, arrangement or
undertaking to acquire, directly or indirectly, by purchase, any direct or indirect interest in any
securities or assets of Cronos or any Cronos Partnership or direct or indirect rights, warrants or
options to acquire any securities or assets of Cronos or any Cronos Partnership (other than
ordinary course commercial dealings with respect to particular assets);
(b) solicit, make, or in any way participate in, directly or indirectly, any “solicitation” of
“proxies” (as such terms are used in the proxy rules of the SEC promulgated pursuant to Section 14
of the Exchange Act) from the shareholders of Cronos or the limited partners of any of the Cronos
Partnerships; provided, however, that for the purposes of this Agreement, the term “solicitation”
shall include a solicitation where the total number of persons solicited is not more than ten,
notwithstanding the exemption of such solicitations from the scope of Regulation 14A by the
provisions of Rule 14a-2(b)(2); or become a “participant” (as such term is defined by instruction
no. 3 to Item 4 of Schedule 14A) in any solicitation with respect to the Board of Directors of
Cronos; or with respect to the General Partner(s) of the Cronos Partnerships; or solicit or execute
any written consent in lieu of a meeting of holders of voting securities except to support the
nominees for directors of the Board of Directors of Cronos; or call or seek to have called any
meeting of the shareholders of Cronos or the limited partners of any of the Cronos Partnerships;
(c) (1) act, directly or indirectly, to seek to control, direct or influence the management,
Board of Directors, shareholders, policies or affairs of Cronos or the Cronos Partnerships, (2)
solicit, propose, seek to effect or negotiate with any other person or entity with respect to any
form of business combination transaction with Cronos or the Cronos Partnerships, or any
restructuring, recapitalization or similar transaction with respect to Cronos or the Cronos
Partnerships, (3) solicit, make or propose to negotiate with any other person or entity with
respect to any tender offer, takeover bid or exchange offer for any securities of Cronos or the
Cronos Partnerships, (4) disclose an intent, purpose, plan or proposal with respect to Cronos or
the Cronos Partnerships, or any securities or assets of Cronos or the Cronos Partnerships,
inconsistent with the provisions of this Agreement, including an intent, purpose, plan or proposal
that is conditioned or
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requires Cronos to waive the benefit of or amend any provision of this Section 14, or (5)
assist, participate in, facilitate, encourage or solicit any effort or attempt by any person or
entity to do or seek to do any of the foregoing; or
(d) announce an intention to do, or enter into any arrangement or understanding with others to
do, any of the actions restricted or prohibited under paragraphs (a) through (c) of this Section
14.
The foregoing provisions of this Section 14 do not apply to purchases of securities of Cronos
or the Cronos Partnerships by any pension or other retirement fund of the Company made solely for
investment purposes without regard to any Confidential Information disclosed in connection with the
Negotiations. Nothing in this Section 14 shall prohibit or otherwise prevent the Negotiations, as
contemplated by this Agreement, between the Committee and the Company or any ordinary course
banking or investment dealings between the Company and Cronos. Each of the restrictions contained
in this Section 14 shall lapse with respect to the Company at such time as (x) Cronos enters into a
transaction regarding its securities or assets with any person not affiliated with Cronos, or (y) a
person not affiliated with Cronos has commenced a formal tender offer to acquire Cronos’
outstanding voting securities.
15. Each party agrees that the other party shall not be obligated to pay any fees on such
other party’s behalf to any brokers, finders, or other parties claiming to represent such other
party in the transaction contemplated by this Agreement.
16. In the event of any breach of any provision of this Agreement, the parties acknowledge and
agree that money damages may not be a sufficient remedy, and each party shall therefore be entitled
to seek equitable relief, including in the form of injunctions and orders for specific performance
and without the necessity of posting any bond, in an action instituted in any court having subject
matter jurisdiction, in addition to all other remedies available to such party with respect thereto
at law or in equity. Notwithstanding anything to the contrary in this Agreement, neither party
shall be liable to the other for special, consequential, punitive or exemplary damages under this
Agreement. The expiration of any period of time specified in this Agreement is not intended to
terminate the rights and obligations of either party hereto in regard to any breaches of this
Agreement occurring prior to the expiration of such period, which rights and obligations shall
continue. The availability of equitable remedies under the provisions of this Section 16 shall not
preclude the availability of money damages in the event that either party violates the terms of
this Agreement.
17. No failure or delay by either party hereto in exercising in whole or in part any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise or waiver thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or at law or in
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equity. Either party hereto may at any time waive compliance by the other with any covenant,
condition or agreement contained in this Agreement, but only by a written instrument executed by
the party expressly waiving such compliance.
18. This Agreement shall be governed by, and interpreted and enforced in accordance with, the
local laws of the State of California, excluding all conflicts of law rules. The Company and
Cronos agree that the non-exclusive venue for the adjudication of any dispute or the enforcement of
any rights arising out of this Agreement shall be the courts located in the State of California,
and each of the parties hereto consents to and hereby submits to the jurisdiction of any court
located in the State of California.
19. This Agreement will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. This Agreement may not be assigned or otherwise
transferred by either party (including by operation of law) without the prior written consent of
the other party hereto. No assignment will in any event relieve either party of any of its
obligations hereunder without the prior written consent of the other party. The language used in
this Agreement was selected by the parties jointly, and no presumptions of legal construction or
interpretation are intended to, or shall, apply against either party as the author hereof. If any
provision of this Agreement shall be determined to be invalid or unenforceable, it shall not affect
the remainder of this Agreement, which shall continue in full force and effect. This Agreement
will be executed in two or more counterparts, any or all of which shall constitute one and the same
instrument.
20. This Agreement supersedes any other representation, warranty, agreement, commitment,
arrangement or understanding of any sort whatever, whether written or oral, that may have been made
or entered into by either of Cronos or the Company or its Agents relating to the matters
contemplated hereby. This Agreement constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof, and there are no representations, warranties,
agreements, commitments, arrangements or understandings except as expressly set forth herein. This
Agreement may not be amended orally, but only by a written instrument executed by both parties
hereto expressly setting forth such amendment.
[Signature page follows.]
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If the foregoing agreement is acceptable, please sign two copies of this letter, and return
one to me at The Cronos Group, c/o Cronos Capital Corp., Xxx Xxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000.
THE CRONOS GROUP |
||||
By | /s/ S. Xxxxxxxx Xxxxxx | |||
S. Xxxxxxxx Xxxxxx | ||||
Chair, Transaction Committee Board of Directors | ||||
THE FOREGOING IS HEREBY
ACCEPTED AND AGREED TO:
ACCEPTED AND AGREED TO:
FORTIS CAPITAL CORP.
By
|
/s/ Xxxxxx X. Xxxxxxxx | |||
Xxxx Xxxxxxxx Managing Director |
By
|
/s/ Menno van Lacum | |||
Menno
van Lacum Director |