RP Management, LLC 110 East 59th Street Suite 3300 New York, NY. 10022 Confidentiality Agreement Ladies and Gentlemen:
Exhibit
(e)(9)
October 14, 2010
RP Management, LLC
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX. 10022
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX. 10022
Confidentiality Agreement
Ladies and Gentlemen:
In connection with the financing of a potential transaction involving Cypress Bioscience, Inc. and
its subsidiaries (collectively, the “Company”) and Ramius Value and Opportunity Advisors LLC and
Ramius V&O Acquisition LLC (“Ramius”) and/or a possible negotiated transaction between RP
Management, LLC (the “Recipient”) and the Company, 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 (A) the prospect of providing financing to Ramius in
connection with (i) the tender offer to acquire all of the outstanding common stock of the Company
commenced by Ramius on September 15, 2010 (the “Offer”) or (ii) a possible negotiated transaction
between Ramius and the Company, or (B) a possible negotiated transaction between the Recipient and
the Company (either clause (A) or (B), a “Transaction”); or
(b) disclose any Confidential Information to any other Person (as defined in section 13
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). The 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. For the avoidance of doubt, Ramius and its affiliates are not
Representatives of the Recipient.
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
Cypress Bioscience, Inc.
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the Recipient’s Representatives will contact or otherwise communicate with any other
Representative of the Company 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(b) below, 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 Recipient consider and evaluate a Transaction,
and (B) has agreed to abide and be bound by the provisions hereof or is otherwise bound by
confidentiality obligations at least as restrictive as those contained in this letter agreement,
and the Recipient may disclose Confidential Information to Ramius and its representatives except
that such right to disclose Confidential Information to Ramius and its representatives shall
terminate with respect to any subsequent disclosures if the Recipient is notified in writing by
Ramius, or Ramius publicly discloses in writing, that Ramius has determined that it does not wish
to proceed with a possible transaction involving the Company; and
(iii) subject to section 4(c) below, the Recipient may disclose Confidential Information to
the extent required by applicable law or governmental regulation or by valid legal process.
(b) 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 and/or stating that certain specific Confidential
Information may not be disclosed to Ramius or its representatives, then, notwithstanding anything
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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 and/or Ramius or its representatives, as applicable.
(c) If the Recipient or any of the Recipient’s Representatives is required by law or
governmental regulation or 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 law, regulation, 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, and if in the reasonable judgment of Recipient’s legal counsel the
disclosure of such Confidential Information is legally required, 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.
5. Return of Confidential Information. If the Recipient determines that it does not wish to
proceed with a Transaction, the 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 Recipient or any of the Recipient’s Representatives using
Confidential Information); provided, however, that, 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 and the Recipient shall certify any such destruction to
the Company in writing. 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
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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 all
discussions regarding a possible Transaction.
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 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 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
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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 to this letter agreement (the “Parties”): (a)
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 purposes of any action,
suit or proceeding arising out of or relating to this letter agreement (and the Parties agree not
to commence any action, suit or proceeding related thereto except in such courts); (b) agree that
service of any process, summons, notice or document by U.S. registered mail to the other Parties’
address set forth at the end of this letter agreement shall be effective service of process for any
action, suit or proceeding brought against such Party; (c) irrevocably and unconditionally waive
any objection to the laying of venue of any action, suit or proceeding arising out of or relating
to this letter agreement in any state or federal court located in Los Angeles County in the State
of California; and (d) irrevocably and unconditionally waive the right to plead or claim, and
irrevocably and unconditionally agree not to plead or claim, that any action, suit or proceeding
arising out of or relating to this letter agreement that is brought in any state or federal court
located in Los Angeles County in the State of California has been brought in an inconvenient forum.
The parties to this letter agreement specifically waive any right to jury trial with respect to
any matter arising under, or relating to, 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 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;
(c) the terms of this letter agreement, and the fact that information of the type referred to
in clause “(a)” of this sentence has been made available to the Recipient or any of its
Representatives; and
(d) the proposed terms, conditions or other facts with respect to any possible transaction
involving Ramius and/or 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 was in the Recipient’s possession
prior to the time it was first made available to the Recipient or any of the Recipient’s
Representatives by or on behalf of the Company or any of the Company’s Representatives without
violation of any obligation under
Cypress Bioscience, Inc.
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this letter agreement, provided that such source is not bound by any contractual or other
obligation of confidentiality to the Company or any other Person with respect to any of such
information; (iii) any information that becomes known or available to the Recipient 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, any of the Company’s Representatives or any other Person that directly or
indirectly owes a contractual, legal or fiduciary obligation to the Company; 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 subsidiary of such party and (ii) an officer,
director, employee, attorney or accountant (including outside counsel and accountants) of such
party or of any of such party’s subsidiaries, or (iii) only upon prior written approval of the
Company, any advisor or any financing source to be used in connection with a potential negotiated
transaction involving the Company; provided that any financing source enters into a confidentiality
agreement with the Company on similar terms as this letter agreement.
(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,
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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 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 third anniversary of the date of this letter
agreement; provided, however, that (i) 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 (ii) 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.
[Remainder of Page Intentionally Left Blank]
| Very truly yours, | ||||
| Cypress Bioscience, Inc. | ||||
| /s/ Xxxxxxx Xxxxxxxx Xxxxxxx | ||||
| Name: | Xxxxxxx Xxxxxxxx Xxxxxxx | |||
| Title: | Executive Vice President, COO and CFO | |||
| Address: | 0000 Xxxxxxxxx Xxxxx, Xxxxx 000 Xxx Xxxxx, XX 00000 |
|||
Accepted and agreed to
as of the date below:
as of the date below:
RP Management, LLC
By:
|
/s/ Xxxxx Xxxxxxxxx | |||
Name:
|
||||
Title:
|
Chief Executive Officer | |||
Address:
|
000 Xxxx 00xx Xxxxxx, Xxxxx 0000 Xxx Xxxx, XX 00000 |
|||
Date:
|
October 14, 2010 |
