EXHIBIT(c)(2)
[Xxxxxxx Xxxxx & Associates, Inc. Logo]
[XXXXXXX XXXXX & ASSOCIATES, INC. LETTERHEAD]
MUTUAL NONDISCLOSURE AND CONFIDENTIALITY AGREEMENT
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CONFIDENTIAL
February 10, 1999
Xx. Xxxxx Xxxxx
The IT Group, Inc.
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxxx:
To facilitate discussions relating to a potential acquisition (the
"Transaction") between our client (the "Client") and your company (the
"Company"), our Client and the Company will each be expected to make available
to each other certain nonpublic information concerning their respective
businesses, financial condition, operations, assets, properties, liabilities,
and prospects. As a condition to such information being made available by our
client, the Company agrees, and as a condition to such information being made
available by our Company, our Client agrees, that all Evaluation Material (as
hereinafter defined) received from the other party or any of its directors,
officers, employees, agents or advisors (including, without limitation,
attorneys, accountants, investment bankers, and other consultants and advisors)
(collectively, "Representatives") shall be treated in accordance with this
Agreement. As used in this Agreement, the term "Receiving Party" means the
party receiving Evaluation Material and the term "Furnishing Party" means the
party providing Evaluation Material or causing Evaluation Material to be
provided.
1. Definition of "Evaluation Material". The term "Evaluation Material"
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shall mean all information concerning the Furnishing Party or any of its
subsidiaries or affiliates, whether in verbal, visual, written,
electronic or other form, which is made available by the Furnishing
Party or any of its Representatives to the Receiving Party or any of its
Representatives ("Primary Evaluation Material"), together, in each case,
with all notes, memoranda, summaries, analyses, studies, compilations
and other writings relating thereto or based thereon prepared by the
Receiving Party or any of its Representatives ("Derivative Evaluation
Material"). Notwithstanding the foregoing, the term "Evaluation
Material" shall not include, and the parties' obligations herein (other
than their obligations under Paragraph 5 of this Agreement) shall not
extent to, information which the Receiving Party can demonstrate (a) was
rightfully in the possession of the Receiving Party prior to disclosures
by the Furnishing Party; (b) was or is independently developed by the
Receiving Party without use of the Evaluation Material; (c) is now or
hereafter becomes available to the public other than as a result of
disclosure by the Receiving Party or any of the Receiving Party's
Representatives in violation of this Agreement; or (d) becomes available
to the Receiving Party or any of its Representatives on a non-
confidential basis from a source other than the Furnishing Party or any
of its Representatives and such source is not, to the knowledge of the
Xx. Xxxxx Xxxxx CONFIDENTIAL February 10, 1999
IT Group, Inc. Page 2
Receiving Party, under any obligation to the Furnishing Party or any of
its Representatives (whether contractual, legal or fiduciary) to keep
such information confidential.
2. Confidentiality and Use of Evaluation Material.
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(a) Confidentiality of Evaluation Material. All Evaluation Material (i)
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shall be used solely for the purpose of evaluating and considering
the Transaction; (ii) shall be kept strictly confidential by the
Receiving Party; and (iii) shall be provided by the Receiving Party
solely to those of its Representatives to whom disclosure is
reasonably deemed to be required to facilitate the Receiving Party's
evaluation or consideration of the Transaction. The parties agree
that all Evaluation Material is and shall remain the property of the
Furnishing Party. Before providing access to Evaluation Material to
any Representative, the Receiving Party shall inform such
Representative of the contents of this Agreement and the
confidentiality of the Evaluation Material, and shall advise such
Representative that, by accepting possession of or access to such
information, such Representative is agreeing to be bound by this
Agreement. Each party shall instruct its Representatives to observe
the terms of this Agreement and shall be responsible for any breach
of this Agreement by any of its Representatives.
(b) Compulsory Disclosure of Evaluation Material. If the Receiving Party
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is requested in any judicial or administrative proceeding or by any
governmental or regulatory authority to disclose any Evaluation
Material (whether by deposition, interrogatory, request for
documents, subpoena, civil investigative demand, or otherwise), the
Receiving Party shall give the Furnishing Party prompt notice of such
request so that the Furnishing Party may seek an appropriate
protective order, and, upon the Furnishing Party's request and at the
Furnishing Party's expense, shall cooperate with the Furnishing Party
in seeking such an order. If the Receiving Party is nonetheless
compelled to disclose Evaluation Material, the Receiving Party shall
disclose only that portion of the Evaluation Material which the
Receiving Party is legally required to disclose and, upon the
Furnishing Party's request and at the Furnishing Party's expense,
shall use its reasonable best efforts to obtain assurances that
confidential treatment will be accorded to such Evaluation Material
to the extent such assurances are available. Subject to the
foregoing conditions and limitations, the Receiving Party may
disclose Evaluation Material without liability hereunder.
(c) Other Public Disclosure. Except (i) for such public disclosure as
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may be necessary, in the good faith judgment of the disclosing party
following consultation with outside counsel, for the disclosing party
not to be in violation of any applicable law, regulation or order, or
(ii) with the prior written consent of the other party, neither party
shall:
(x) make any disclosure (and each party shall direct its
Representatives not to make any disclosure) to any person of (A)
the fact that discussions, negotiations or investigations are
taking or have taken place concerning a Transaction, (B) the
Xx. Xxxxx Xxxxx CONFIDENTIAL February 10, 1999
IT Group, Inc. Page 3
existence or covenants of this Agreement, or the fact that either
party has requested or received Evaluation Material from the other
party, or (C) any of the terms, conditions or other facts with
respect to any proposal Transactions, including the status thereof,
or
(y) make any public statement concerning a proposed Transaction.
If either party proposes to make any disclosure in reliance on clause (i)
above, the disclosing party shall, if practicable, provide the other party
with the text of the proposed disclosure as far in advance of its
disclosure as is practicable and shall in good faith consult with and
consider the suggestions of the other party concerning the nature and scope
of the information it proposes to disclose.
3. Accuracy of Evaluation Material; No Representations of Warranties. Each
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party acknowledges and agrees (a) that no representation of warranty,
express or implied, is made by either party or any of its respective
Representatives as to the accuracy or completeness of the Evaluation
Material, and (b) that the parties shall be entitled to rely only on
those representations and warranties (if any) that may be made in a
definitive written Transaction agreement, signed and delivered by both
parties, and then only to the extent, and subject to the limitations,
provided therein. Unless otherwise provided in the definitive written
Transaction Agreement, neither the Furnishing Party nor any of its
Representatives shall have any liability to the Receiving Party or any
of its Representatives on account of the use of any Evaluation Material
by the Receiving Party or any of its Representatives or any inaccuracy
therein or omission therefrom.
4. No Solicitation. For a period of two years subsequent to the
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termination of discussions regarding a Transaction, the Company shall
not directly or indirectly solicit for hire any employee of the Client
or any person who was an employee of the Client within six months of the
date of such solicitation with whom it has first had contact or who
first became known to it in connection with its consideration of a
Transaction; provided, however, that the foregoing provision shall not
prevent the Company from employing any employee or former employee of
the Client who contacts the Company, directly or indirectly through an
intermediary, at his or her own initiative without any direct or
indirect solicitation by or encouragement from the Company.
5. Return and Destruction of Evaluation Material. At any time after
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termination of discussions by either party to this Agreement with
respect to the Transaction, upon the request of the Furnishing Party,
the Receiving Party shall promptly (and in no event later than five (5)
business days after such request) (a) redeliver or cause to be
redelivered to the Furnishing Party all copies of all Primary Evaluation
Material in the possession or control of the Receiving Party or its
Representatives which is in a visual or written format and erase or
destroy all copies of such Primary Evaluation Material which is stored
in electronic format, and (b) destroy or cause to be destroyed all
Derivative Evaluation Material in the
Xx. Xxxxx Xxxxx CONFIDENTIAL February 10, 1999
IT Group, Inc. Page 4
possession or control of the Receiving Party or any of its
Representatives. Nothing herein shall obligate the Receiving Party to
provide any Derivative Evaluation Material to the Furnishing Party.
Notwithstanding the return, destruction or erasure of Evaluation
Material hereunder, the Receiving Party and its Representatives shall
continue to be bound by their confidentiality or other obligations
hereunder.
6. Remedies. Each party agrees that money damages would not be a
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sufficient remedy for any breach of any provision of this Agreement by
the other party or any of its Representatives, and that in addition to
all other remedies which any party hereto may have, each party shall be
entitled to specific performance and injunctive or other equitable
relief as a remedy for any such breach. Such remedies shall not be
deemed to be the exclusive remedies for a breach of this Agreement but
shall be in addition to all other remedies available at law or in
equity. No failure or delay by any party hereto 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 thereof or the exercise of any right, power or
privilege hereunder.
7. Miscellaneous.
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(a) Neither party grants a license, by implication or otherwise, under
any of its trade secrets or other intellectual property rights to
the Receiving Party.
(b) This Agreement contains the sole and entire agreement between the
parties with respect to the confidentiality of the Evaluation
Material and the confidentiality of their discussions, negotiations
and investigations concerning a Transaction.
(c) This Agreement may be amended, modified or waived only by a separate
written instrument duly signed and delivered by or on behalf of both
parties.
(d) The invalidity or unenforceability of any provision of this
Agreement shall not impair or affect the validity or enforceability
of any other provision of this Agreement unless the enforcement of
such provision in such circumstances would be inequitable.
(e) It is expressly understood that this Agreement is not intended to,
and does not, constitute an agreement to consummate a Transaction,
to conduct or continue negotiations with respect to a Transaction,
or to enter into a definitive Transaction agreement, and neither
party shall have any rights or obligations of any kind whatsoever
with respect to such a Transaction by virtue of this Agreement or by
virtue of any other written or oral expression by the parties'
respect Representatives unless and until a definitive Transaction
agreement between the parties is executed and delivered by both
parties, other than for the matters specifically agreed to herein.
Both parties further acknowledge
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IT Group, Inc. Page 5
and agree that each party reserves the right, in its sole discretion,
to provide or not to provide Evaluation Material to the Receiving
Party under this Agreement, to reject any and all proposals made by
the other party or any of its Representatives with regard to a
Transaction, and to terminate discussions and negotiations at any
time.
(f) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of California without giving effect to
the conflicts of laws principles thereof. Each party hereto consents
and submits to the jurisdiction of the courts of the State of
California and the courts of the United States located in the
Northern District of California for the adjudication of any action,
suit, or proceeding arising out of or otherwise relating to this
Agreement.
If the foregoing correctly sets forth our agreement with respect to the
matters set forth herein, please so indicate by signing two copies of this
Agreement and returning one signed copy to me, whereupon this Agreement shall
constitute our binding agreement with respect to the matters set forth herein.
Sincerely,
XXXXXXX XXXXX & ASSOCIATES, INC.
On behalf of our Client
By: /s/ X. Xxxxxxxxx Xxxxx, III
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X. Xxxxxxxxx Xxxxx, III
Managing Director
CONFIRMED AND AGREED TO AS OF THE
DATE FIRST ABOVE WRITTEN
THE IT GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Sr. Corp. Counsel; Ass't Secretary
