Exhibit (d)(2)
CONFIDENTIALITY AGREEMENT
January 15, 2002
Xxxxxxxxx Research, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX
Ladies and Gentlemen:
In connection with evaluating a possible transaction (the
"Transaction") involving Giga Information Group, Inc. ("GIGA") and Xxxxxxxxx
Research, Inc. ("Buyer"), each such entity has requested certain information
concerning the other. This letter will confirm the mutual agreement and
understanding between GIGA and Buyer, regarding such information and certain
other matters, as follows:
1. Each party in its capacity as the recipient of Information (as
defined below) from the other party or the other party's Representatives (as
defined below) is referred to herein as a "Receiving Party," and each party in
its capacity as the party providing Information (either directly or through its
Representatives) concerning it or its affiliates is referred to herein as a
"Disclosing Party." The term "Information" shall mean all information (whether
written, visual, electronic, oral or transferred by any other means) concerning
or relating to the Disclosing Party or its affiliates or their respective
businesses that is furnished to the Receiving Party or its Representatives,
together with all compilations, forecasts, studies, reproductions, databases or
analyses by whomsoever made that contain or otherwise reflect or are generated
from such information. A party's directors, officers, partners, employees,
affiliates, agents, lenders, accountants, investment bankers, attorneys and such
other persons acting for or on behalf of such party or with whom such party and
its agents have a bona fide need to consult in connection with the Transaction
are collectively referred to herein as its "Representatives."
2. Each Receiving Party will not, and will cause its Representatives
not to (except as required by applicable law, regulation, court or
administrative order or other legal process or by the rules or regulations of
any applicable self-regulatory organization, including, without limitation, the
Nasdaq Stock Market, and only after compliance with Paragraph 4 hereof),
directly or indirectly, without the prior written consent of the Disclosing
Party, (a) use any Information for any purpose other than in connection with
evaluating, or negotiating the terms and conditions of, the Transaction; or (b)
distribute, disclose, or disseminate any Information, or disclose the existence
or
content of any investigations, discussions or negotiations that are taking or
have taken place concerning the Transaction, or any term, condition or other
fact relating to the Transaction or such investigations, discussions or
negotiations, including, without limitation, the status thereof, to any person;
provided, however, that the Receiving Party may reveal the foregoing to its
Representatives who: (i) have a bona fide need to know such information for
purposes of evaluating or facilitating, or advising the Receiving Party with
respect to, the Transaction; and (ii) have been advised of the confidential
nature of such information and have agreed to be bound by the terms hereof.
Notwithstanding anything herein to the contrary, the obligations of non-use and
confidentiality hereunder shall not apply to information that: (A) is or becomes
publicly available other than as a result of disclosure by the Receiving Party
or its Representatives; (B) becomes available to the Receiving Party on a
nonconfidential basis from a party, other than the Disclosing Party or its
Representatives, without breach of such party's legal, contractual or fiduciary
obligations that are known to the Receiving Party following due inquiry; or (C)
is independently developed by the Receiving Party or its Representatives or was
otherwise within their possession (without breach of their legal, contractual or
fiduciary obligations), prior to such information being furnished to the
Receiving Party or its Representatives by the Disclosing Party or the Disclosing
Party's Representatives. As used herein, the term "person" shall be broadly
interpreted to include, without limitation, any corporation, company,
partnership and individual or group of individuals.
3. If either party determines not to proceed with the Transaction,
it will promptly inform the other party of such decision and in that case and at
any time upon the request of the Disclosing Party, the Receiving Party will
return or destroy, as directed by the Disclosing Party, all tangible Information
furnished by the Disclosing Party in its possession or in the possession of its
Representatives (and all copies thereof) that was furnished by the Disclosing
Party or the Disclosing Party's Representatives. All other tangible Information
will be destroyed and any oral Information will continue to be subject to the
terms of this Agreement. After written request by the Disclosing Party, the
Receiving Party shall provide to the Disclosing Party reasonable assurance in
writing that the Receiving Party has complied with its obligations under the
preceding sentences of this Paragraph 3.
4. If the Receiving Party or any of its Representatives are
requested pursuant to, or required by, applicable law, regulation, court or
administrative order or other legal process or by the rules or regulations of
any applicable self-regulatory organization, including, without limitation, the
Nasdaq Stock Market, to disclose any Information, the Receiving Party will
notify the Disclosing Party promptly so that the Disclosing Party may seek a
protective order or other appropriate remedy or, in its sole discretion, waive
compliance with the terms of this Agreement. If no such protective order or
other remedy is obtained within a reasonable period of time, or if the
Disclosing Party does not waive compliance with the terms hereof, the Disclosing
Party shall be deemed to consent to the disclosure of, and the Receiving Party
will furnish, only the portion of Information that the Receiving Party is
legally required to disclose, or is
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required to disclose pursuant to the rules and regulations of any applicable
self-regulatory organization, including, without limitation, the Nasdaq Stock
Market, and the Receiving Party agrees to exercise all reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded to such
disclosed Information. The Receiving Party shall give the Disclosing Party
written notice of Information to be disclosed as far in advance of its
disclosure as is reasonably practicable and, upon the Disclosing Party's request
and at the Disclosing Party's expense, the Receiving Party shall use its best
efforts to obtain assurances that confidential treatment will be accorded to
such Information.
5. For a period of six months from the date hereof, each party will
not, and will cause its subsidiaries not to, without the prior written consent
of the other party, directly or indirectly solicit for employment or engagement
as a consultant, or employ or retain as a consultant, any individual who was
employed by the other party or any of its subsidiaries at any time during the
period in which the parties evaluate the Transaction and who the party spoke
with or became aware of in connection with the evaluation; provided, however,
that the foregoing provision shall not prevent either party from employing any
such person who contacts such party on his or her own initiative without any
direct or indirect solicitation from such party; and provided further, that this
Agreement shall not prohibit any advertisement or general solicitation (or any
hiring pursuant thereto) that is not specifically targeted at such persons.
6. Without the prior written consent of the Board of Directors of
the other party, for a period of six months from the date hereof (the
"Standstill Period"), each party will not, and will cause its affiliates (as
such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934
(the "Act")) not to (and will not, and will cause its affiliates not to, assist,
provide or arrange financing to or for others or encourage others to), directly
or indirectly, acting alone or as part of a group, acquire, by purchase or
otherwise, any voting securities or securities convertible into voting
securities of the other party, or any of the assets or businesses of the other
party or otherwise seek to influence or control, in any manner whatsoever
(including proxy solicitation or otherwise), the management or policies of the
other party, enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing, make
any public announcement with respect to any of the foregoing or request
permission to do any of the foregoing. Each party will not during such period,
directly or indirectly, (i) request the other party (or its directors, officers,
employees or agents) to amend or waive any provision of this paragraph or (ii)
take any action that might require the other party to make a public announcement
regarding the possibility of a business combination or other similar
transaction. The limitations on each party and its affiliates set forth in this
paragraph shall also apply to any entity, assets or business that is distributed
to the stockholders of the other party, including any voting or convertible
securities representing an interest in any such entity, assets or business,
unless such party obtains the prior written consent of the Board of Directors of
such entity or business. Notwithstanding the foregoing, if during the Standstill
Period, any third party shall publicly announce and thereafter commence a tender
or exchange offer which, if
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consummated, would give such third party ownership of 50% or more of the
outstanding shares of either party (a "Third Party Offer"), the other party
shall be entitled to commence a tender offer (a "Competing Offer") for at least
the same number of shares (provided that the Competing Offer provides for a
second-step merger yielding a blended purchase price per share which is at least
equal to the purchase price per share offered by the third party in the Third
Party Offer and in any subsequent second-step merger or acquisition transaction
if one is proposed by such third party) and to purchase shares pursuant to such
Competing Offer.
7. Each Receiving Party hereby acknowledges that it is aware, and
that it will advise each of its Representatives who are informed as to the
matters that are the subject of this Agreement, that the United States
securities laws prohibit any person who has received from an issuer material,
non-public information concerning the matters that are the subject of this
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.
8. Although Information contains information that either party
believes to be relevant for the purposes of the evaluation of the Transaction,
no representation or warranty as to the accuracy or completeness of Information
is made. Neither a Disclosing Party, its affiliates, nor any of its respective
officers, directors, employees, agents or controlling persons within the meaning
of Section 20 of the Act and the rules and regulations promulgated thereunder,
shall have any liability to the Receiving Party or any of the Receiving Party's
Representatives relating to or arising from the use or content of Information
with respect to the Disclosing Party, its affiliates or their businesses. Only
those particular representations and warranties, if any, that are made in a
definitive agreement to effect a Transaction when, as and if it is executed and
delivered, and subject to such limitations and restrictions as may be specified
therein, will have any legal effect.
9. Unless and until a definitive agreement regarding the Transaction
has been executed and delivered, neither party will be under any obligation of
any kind whatsoever with respect to any Transaction by virtue of this Agreement
or any written or oral expression with respect to such transaction by any of its
Representatives, except for the matters specifically agreed to in this
Agreement. Each party reserves the right, in its sole discretion, to reject any
and all proposals made by the other party or its Representatives, and to
terminate any discussions or negotiations at any time.
10. Each Receiving Party acknowledges and agrees that money damages
would not be an adequate remedy for breach of this Agreement by the Receiving
Party or its Representatives and that, without limiting any other rights and
remedies available, each Disclosing Party shall be entitled to equitable relief
by way of injunction or otherwise if the Receiving Party or such Representatives
breach or threaten to breach any of the provisions of this Agreement.
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11. In order to provide what Buyer believes will be adequate time to
complete due diligence, and to negotiate and document the Transaction and in
consideration of the time and resources that Buyer will devote to the
Transaction, GIGA agrees that, for the period from the date Buyer receives a
copy of this letter signed by GIGA (the "Effective Date") through the earlier to
occur of (i) the date on which GIGA receives written notice of Buyer's
unilateral decision to terminate negotiations regarding the Transaction, or (ii)
that date which is 20 days after the Effective Date (in each case, the
"Termination Date"), GIGA will not, and will cause its directors, officers,
representatives and agents not to, and will not authorize or instruct any of its
employees to, directly or indirectly, solicit or initiate or enter into
discussions or transactions with, or provide any information to, any
corporation, partnership or other entity or group (other than Buyer and its
designees) concerning any sale of stock by the stockholders of, or any merger or
sale of securities or substantial assets of, or any similar transaction
involving, GIGA and if it becomes aware that any of its employees is engaged in
any of the foregoing will cause them to cease engaging in such activities;
provided, however, that nothing herein shall prohibit any such person from
taking any such action to the extent the Board of Directors of GIGA is advised
by counsel that such action must be taken in order to fulfill the fiduciary
duties of the Board of Directors of GIGA.
12. This Agreement shall terminate and expire on the earlier of the
date on which the Transaction is consummated and one year from the date hereof.
13. This Agreement contains the entire agreement between the parties
hereto with respect to the subject matter hereof, and no modifications of this
Agreement or waiver of the terms and conditions hereof will be binding, unless
approved in writing by each party. Any purported assignment or delegation of any
rights or obligations under this Agreement by a party without the prior written
consent of the other party shall be void. Subject to the foregoing, this
Agreement and each of the covenants, terms, provisions and agreements contained
herein shall be binding upon, and inure to the benefit of, the parties hereto
and their respective successors, legal representatives, and permitted assigns.
14. No failure or delay in exercising any right, power or privilege
hereunder will operate as a waiver thereof, and no single or partial exercise
thereof will preclude any other or further exercise thereof or the exercise of
any right, power or privilege hereunder.
15. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE OF
LAWS PRINCIPLES THEREOF.
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Please confirm that the foregoing accurately sets forth our
agreement by signing and returning to the undersigned the enclosed copy of this
Agreement.
Very truly yours,
GIGA INFORMATION GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
ACCEPTED AND AGREED TO:
XXXXXXXXX RESEARCH, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: General Counsel
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