Amended and Restated Confidentiality Agreement
Exhibit (d)(1)(B)
As of October 11, 2006
CONFIDENTIAL
CGEA Holdings, Inc.
CGEA Investor, Inc.
Carlyle Investment Management L.L.C.
0000 Xxxxxxxxxxxx Xxx, XX
Xxxxx 000 Xxxxx
Xxxxxxxxxx XX 00000
CGEA Investor, Inc.
Carlyle Investment Management L.L.C.
0000 Xxxxxxxxxxxx Xxx, XX
Xxxxx 000 Xxxxx
Xxxxxxxxxx XX 00000
Amended and Restated Confidentiality Agreement
Ladies and Gentlemen:
Reference is hereby made to (i) the Confidentiality Agreement, dated October 11, 2006 (the
“Confidentiality Agreement”), between ElkCorp (the “Company”) and Carlyle Investment Management
L.L.C. and (ii) the Agreement and Plan of Merger, dated as of December 18, 2006 (the “Merger
Agreement”), by and among CGEA Holdings, Inc. (“Parent”), CGEA Investor, Inc. (“Merger Sub”) and
the Company. In consideration of the consent of Parent and Merger Sub to the Company’s request to
enter into that Confidentiality Agreement, dated December 29, 2006, by and among the Company,
Xxxxxx Investment Associates Limited Partnership and Building Materials Corporation of America
having the terms set forth in such agreement, the Company and you hereby agree to amend and restate
the Confidentiality Agreement as set forth in this letter agreement. This letter agreement amends
and restates the Confidentiality Agreement and as so amended and restated shall be deemed to be the
Confidentiality Agreement referred to in Sections 5.2(b) and Section 8.10 of the Merger Agreement.
You have requested information from the Company, in connection with your consideration of a
possible negotiated transaction between the Company and you (the “Transaction”) pursuant to
the Merger Agreement and any potential New Offer (as such term is defined below). As a condition
to furnishing such information to you, you agree, as set forth below, to treat confidentially any
information (whether prepared by the Company, its Representatives or otherwise, whether in oral,
written, electronic or other form, and whether prepared before, on or after the date hereof) that
the Company or its Representatives, furnish (or have furnished) to you or your Representatives
(such information being collectively referred to herein as the “Evaluation Material”) and
to take or abstain from taking certain other actions set forth herein. The term “Evaluation
Material” shall be deemed to include, without limitation, notes, analyses, compilations,
summaries, data, studies, interpretations, forecasts, records, memoranda or other documents or
information prepared by you or your Representatives which contain, reflect or are based on, in
whole or in part, any Evaluation Material. The term “Evaluation Material” shall not be deemed to
include information that (i) is already in your possession, provided that such information
is not known by you to be subject to another confidentiality agreement with or other obligation of
secrecy to the Company or another party, (ii) becomes generally available to the public
other than as a result of a disclosure by you or your Representatives, (iii) becomes
available to you on a non-confidential basis from a source other than the Company or its
Representatives, provided that you do not have reason to believe that such source is bound by a
confidentiality agreement with or other obligation of secrecy to the Company or another party, or
(iv) you can demonstrate was independently developed by you or on your behalf without
violation of any of your obligations hereunder and without reference to any Evaluation Material.
You hereby agree that the Evaluation Material will be used by you or your Representatives
solely for the purpose of evaluating a possible acquisition by you of the Company or a New Offer,
will not be used in any way directly or indirectly detrimental to the Company, or for any other
purpose, and will be kept confidential by you and your Representatives and will not be disclosed by
you or any of your Representatives to any other person; provided, however, that any
of such information may be disclosed to your Representatives who (i) need to know such
information for the sole purpose of evaluating any such possible transaction between the Company
and you, (ii) are informed by you of the confidential nature of such information and
(iii) agree to keep such information confidential and to be bound by this letter agreement
to the same extent as if they were parties hereto. You hereby agree that you will be responsible
for any breach of this letter agreement by your Representatives, and that the Company shall be
entitled to directly enforce such agreements (it being understood that such responsibility shall be
in addition to and not by way of limitation of any right or remedy the Company may have against
your Representatives with respect to such breach). You understand that some Evaluation Material
deemed competitively sensitive may, and Evaluation Material related to product pricing shall, if
provided, be designated for review solely by your outside advisors or by those of your employees
whose responsibilities do not include contacting customers or potential customers or the
determination of product pricing, and you agree to, and to cause your Representatives to, abide by
such designation.
In addition, without the prior written consent of the Company, you will not, and will cause
your Representatives not to, discuss with or offer to any third party (other than Hood Companies,
Inc. and its subsidiaries (“Hood”)) an equity participation in a possible transaction or any other
form of joint acquisition by you and a third party (other than Hood), or enter into any agreement
relating to the foregoing.
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In the event that you or your Representatives receive a request to disclose all or any part of
the information contained in the Evaluation Material under the terms of a valid and effective
subpoena or order issued by a court of competent jurisdiction or by a governmental body or are
required by applicable law, rule or regulation to disclose such Evaluation Material in connection
with the Merger Agreement or a New Offer (as defined below), you agree (x) in the case of such a
request, to (i) to the extent permitted by law, promptly notify the Company in writing of
the existence, terms and circumstances surrounding such a request, so that it may seek an
appropriate protective order and/or waive your compliance with the provisions of this letter
agreement (and, if the Company seeks such an order, to provide such cooperation as the Company
shall reasonably request) and (ii) if such protective order or other remedy is not obtained
or the Company waives compliance with the provisions of this letter agreement, and if disclosure of
such information is required in the opinion of your counsel, who shall be reasonably satisfactory
to the Company, disclose only that portion of the Evaluation Material that is legally required to
be disclosed in the opinion of such counsel and exercise your reasonable best efforts to obtain an
order or other reliable assurance that confidential treatment will be accorded to such of the
disclosed information which the Company so designates, and (y) in the case of such a requirement to
promptly notify the Company of any such required disclosure and to reasonably cooperate with the
Company to agree on the nature of such disclosure; provided, that in the absence of such an
agreement, you may disclose such of the Evaluation Material as would be required in the opinion of
your counsel, who shall be reasonably satisfactory to the Company, to be disclosed in a proxy
statement of the Company for a merger by an acquiror possessing such Evaluation Material.
During the course of your evaluation, all inquiries and other communications in connection
with a possible negotiated Transaction are to be made directly to Xxxxxx Xxxxx, Chief Executive
Officer of the Company, or through UBS Investment Bank (primary contact: Xxx Xxxxxx, 000.000.0000),
or Wachtell, Lipton, Xxxxx & Xxxx (“WLRK”) (primary contact: Xxxx Xxxxxx, 000.000.0000). Until the
Standstill Termination Date (as defined below) except with the express written permission of the
Company, you will not, and will cause your Representatives not to, initiate or maintain contact
with any officer (other than Xx. Xxxxx or Mr. Xxxxxxx Xxxxx, the Chief Operating Officer of the
Company), employee, agent, or affiliate of the Company or any of its subsidiaries regarding the
Company or any of its subsidiaries or their respective operations, assets, prospects or finances,
or seek any information from such person, in each case in connection with a possible Transaction.
Subject to your compliance with the restrictions of the next paragraph (when applicable to you),
you may contact directors of the Company in connection with a possible Transaction.
You hereby acknowledge that the Evaluation Material is being furnished to you in consideration
of your agreement, and you hereby agree, subject to the following paragraph, that from the date
hereof until the earlier of: (A) six (6) months from the date
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of this letter agreement or (B) if the Company advances the Company Proposal Date (as defined
below) to a date that is earlier than six months from the date of this letter agreement, the fifth
business day prior to such new, earlier Company Proposal Date, increasing the conditions to closing
or extending the time for performance (such earlier date, the “Standstill Termination Date”),
unless specifically invited in writing by the Company, neither you nor any of your Representatives
will in any manner, directly or indirectly: (a) effect or seek, offer or propose (whether
publicly or otherwise) to effect, or participate in, facilitate or encourage any other person to
effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in,
(i) any acquisition of any securities (or beneficial ownership thereof), or rights or
options to acquire any securities (or beneficial ownership thereof), or any assets, indebtedness or
businesses of the Company or any of its subsidiaries, other than acquisitions not in excess of, in
the aggregate, 2% of such securities, (ii) any tender offer or exchange offer, merger or
other business combination involving the Company, any of the subsidiaries or assets of the Company
or the subsidiaries constituting a significant portion of the consolidated assets of the Company
and its subsidiaries, (iii) any recapitalization, restructuring, liquidation, dissolution
or other extraordinary transaction with respect to the Company or any of its subsidiaries, 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 securities of the Company,
including soliciting consents or taking other action with respect to the calling of a special
meeting of the Company’s shareholders; (b) form, join or in any way participate in a
“group” (as defined under the Exchange Act) with respect to the Company; (c) otherwise act,
alone or in concert with others, to seek representation on or to control or influence the
management, Board of Directors or policies of the Company or to obtain representation on the Board
of Directors of the Company; (d) disclose or direct any person to disclose, any intention,
plan or arrangement inconsistent with the foregoing; (e) take any action that could
reasonably be expected to result in a request to disclose all or any part of the information
contained in the Evaluation Material by a court of competent jurisdiction or by a governmental
body; or (f) advise, assist or encourage or direct any person to advise, assist or
encourage any other persons in connection with any of the foregoing. You also agree during such
period not to request the Company or any of its Representatives, directly or indirectly to amend or
waive any provision of this paragraph (including this sentence). Your association with Hood in
connection with your consideration of a transaction shall not be deemed to violate the terms of
this paragraph. For the avoidance of doubt, this standstill provision shall not apply to any
investment fund focused on high yield or fixed income securities managed or sponsored by you unless
you disclose Evaluation Material to such investment fund. The Company has publicly announced that
advance notice of any shareholder proposals for business to be conducted at the Company’s 2007
annual meeting of stockholders must be given by a proposing shareholder by August 1, 2007. Such
deadline is referred to herein as the “Company Proposal Date”.
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The preceding paragraph notwithstanding, (1) you will not be deemed to be in breach of the
preceding paragraph by virtue of any action taken by you that is permitted under the Merger
Agreement or by the announcement, commencement, maintenance, amendment and/or extension by you or
your affiliates of an acquisition offer, whether by way of a tender or exchange offer, merger or
otherwise (a “New Offer”); provided that the terms of the New Offer (including any extension or
amendment thereof) shall in no event (A) provide for a per share consideration that is less than
the Merger Consideration or (B) otherwise contain terms and conditions that in the aggregate are
materially less favorable to the Company’s shareholders than the terms and conditions set forth in
the Merger Agreement, provided that an extension of the expiration date of a New Offer shall not be
deemed to be an adverse change; and (2) you will not be deemed to be in breach of the preceding
paragraph by virtue of the taking of any action otherwise prohibited by such provisions so long as
any such action is taken during the time that such New Offer is pending and open.
In consideration of the Evaluation Material being furnished to you, you also hereby agree
that, for the period of two years from the date hereof, neither you nor any of your Representatives
will solicit for employment, or employ, any of the officers or employees of the Company or its
affiliates without obtaining the prior written consent of the Company; provided,
however, that you and your Representatives may engage in general solicitations (and employ
pursuant to such solicitations) for employees in the ordinary course of business and consistent
with past practice and that you and your Representatives may solicit or employ any officer or
employee of the Company or its affiliates six months after such person’s employment with the
Company or its affiliate, as the case may be, has terminated.
You understand that, except as set forth in the Merger Agreement, neither the Company nor any
of its Representatives have made or make any representation or warranty as to the accuracy or
completeness of the Evaluation Material and that nothing contained in any discussions between the
Company or any of its Representatives and you or any of your Representatives shall be deemed to
constitute a representation or warranty. You agree that neither the Company nor its
Representatives shall have any liability to you or any of your Representatives resulting from the
use or content of the Evaluation Material or from any action taken or any inaction occurring in
reliance on the Evaluation Material, except as may be included in the Merger Agreement or any other
definitive agreement which provides for any transaction between the Company and you.
At the request of the Company in its sole discretion and for any reason, or on your own
initiative if you decide not to proceed with a possible transaction, you will promptly (and in no
event later than five business days after the request therefor) deliver to the Company or destroy
(including, to the extent practicable, expunging all such Evaluation Material from any computer,
word processor or other device containing such information) all Evaluation Material (whether
prepared by the Company or its
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Representatives), including all documents, memoranda, notes and other writings whatsoever
prepared by you or your Representatives based on the information in the Evaluation Material, and
cause your Representatives to do the same and you shall provide the Company with written
confirmation of destruction. Notwithstanding the foregoing, you and your Representatives may
retain one copy if and to the extent required in order to satisfy any law, rule or regulation to
which you are subject. The return or destruction of the Evaluation Material notwithstanding, you
and your Representatives will continue to be bound by your obligations of confidentiality and other
obligations hereunder.
You hereby acknowledge that you are aware, and that you will advise your Representatives who
are informed as to the matters which are the subject of this letter agreement, that the United
States securities laws prohibit any person who has received from an issuer material, non-public
information concerning the matters which are the subject of this letter agreement from purchasing
or selling securities of such issuer or from communicating such information to any other person
under circumstances in which it is reasonably foreseeable that such person is likely to purchase or
sell such securities.
It is further understood and agreed that no failure or delay by a party in exercising any
right, power or privilege under this letter agreement 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. This letter agreement and the Merger
Agreement represent the entire understanding of the parties with respect to the matters referred to
in this letter agreement and supersede all prior understandings, written or oral, between the
parties with respect to such matters. The agreements set forth in this letter agreement may be
modified or waived only by a separate writing between the Company and you expressly so modifying or
waiving such agreements.
The parties hereto acknowledge that money damages are an inadequate remedy for breach of this
letter agreement because of the difficulty of ascertaining the amount of damage that will be
suffered by the Company in the event that this agreement is breached. Therefore, you agree that
the Company may obtain specific performance of this agreement and injunctive or other equitable
relief as a remedy for any such breach, and you further 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 your breach of this letter agreement, but shall be in addition to all other
remedies available at law or equity to the Company. If any term, provision, covenant or
restriction of this letter agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this
letter agreement shall remain in full force and effect and shall in no way be affected, impaired or
invalidated.
As used in this letter agreement, (i) the term “person” will be interpreted broadly to
include, without limitation, the media (electronic, print or otherwise), the Internet, any
governmental representative or authority or any corporation, company, group,
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partnership, limited liability company, other entity or individual, (ii) the term
“Representatives,” used with respect to a person, shall include its affiliates and the directors,
officers, employees, representatives, agents, attorneys, accountants, financial advisors and other
advisors, and banks and other debt financing sources of or to such person or its affiliates, but,
without the prior written consent of the Company, shall exclude any potential source of equity
capital (other than Hood), (iii) the term “affiliate” when used with respect to a person,
shall have the meaning given to it in Rule 12b-2 under the Exchange Act, (iv) the term
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and (v) the term
“change of control” shall mean (a) a sale or transfer of all or substantially all of the
assets or stock of the Company or (b) a merger or other business combination to which the
Company is a party, except for a merger or other business combination where the Company is the
surviving corporation and, after giving effect to such merger, the holders of the Company’s
outstanding capital stock (on a fully-diluted basis) immediately prior to the merger will own,
immediately following the merger, capital stock holding a majority of the voting power of the
Company. The parties hereto agree that for purposes of this letter agreement the term “affiliate”
or “Representative” shall not include any investment fund managed or sponsored by you or any
portfolio investment of any investment funds of Carlyle Investment Management, L.L.C. or any of
its affiliates or any director, officer, employee or agent of any portfolio investment unless any
director, officer, employee or agent of that portfolio investment is provided access to the
Evaluation Material or Transaction Information.
This letter agreement shall be governed by, and construed in accordance with, the laws of the
State of New York, without giving effect to the principles of conflict of laws thereof. You
irrevocably submit to (i) the exclusive jurisdiction of New York state courts and any
federal court sitting in the City and State of New York for purposes of any suit, action or other
proceeding arising out of this letter agreement, or of the transactions contemplated hereby, that
is brought by or against you, and (ii) the exclusive venue of such suit, action or
proceeding in the City and State of New York.
Except as provided in the following sentence, this letter agreement and all obligations of the
parties hereunder shall terminate two (2) years from the date hereof. Notwithstanding
anything in this letter agreement to the contrary, you agree that all of your obligations will
survive and continue: (a) with respect to Evaluation Material other than Trade Secret
Technology Information, for a period of three (3) years from the date hereof, and
(b) with respect to Trade Secret Technology Information for so long as such information
retains its status as a trade secret. For purposes of this agreement, “Trade Secret Technology
Information” means Evaluation Material without regard to form which is not commonly known by or
available to the public and which information (i) relates to proprietary inventions,
know-how, technology, processes or products of the Company, (ii) derives economic value,
actual or potential, from not being known to and not being readily ascertainable by proper means by
other persons who can obtain
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economic value from its disclosure or use, (iii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy, and (iv) is designated as a
trade secret by the Company to you by labeling such written information “trade secret” or
designating oral information or information conveyed by observation as “trade secret” in writing
within thirty (30) days after disclosure of the trade secret to you.
[Signature page follows]
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If you are in agreement with the foregoing, please so indicate by signing and returning one
copy of this letter agreement, which will constitute our agreement with respect to the matters set
forth herein.
| Very truly yours, ElkCorp |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Chairman of the Board and Chief Executive Officer |
|||
Confirmed and Agreed to:
| Carlyle Investment Management LLC | ||||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||||
| Name: | Xxxxxx Xxxxxxxx | |||||
| Title: | Principal | |||||
| CGEA Holdings, Inc. | ||||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||||
| Name: | Xxxxxx Xxxxxxxx | |||||
| Title: | Vice President | |||||
| CGEA Investor, Inc. | ||||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||||
| Name: | Xxxxxx Xxxxxxxx | |||||
| Title: | Vice President | |||||
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