May 29, 2008 Strictly Private and Confidential Sagard Capital Partners Management Corporation Greenwich, CT 06870 Attention: Dan Friedberg President Dear Mr. Friedberg,
EXHIBIT
D
May 29,
2008
Strictly Private and
Confidential
Sagard
Capital Partners Management Corporation
000
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attention: Xxx
Xxxxxxxxx
President
Dear Xx.
Xxxxxxxxx,
This
confidentiality agreement (this “Agreement”) is by and between X-Rite
Incorporated, a Michigan corporation (the “Disclosing Party”), and Sagard
Capital Partners Management Corporation (the “Interested Party”) (each a
“Party,” and collectively the “Parties”), and is being entered into in
connection with the Interested Party’s desire to explore the possibility of
entering into a transaction (the “Transaction”) with the Disclosing
Party. In connection with the evaluation of the Transaction by the
Interested Party, the Disclosing Party, one or more of its subsidiaries, or its
Representatives (as defined below) may furnish certain information to the
Interested Party or its Representatives regarding the Disclosing Party, its
subsidiaries, its or their business, operations, financial condition, results of
operations, and assets and liabilities, and in consideration of the disclosure
of such information, the Parties hereby agree as follows:
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1.
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The
term “Information” shall mean all confidential or proprietary information
furnished to the Interested Party or its Representatives by or on behalf
of the Disclosing Party, on or after the date of this Agreement, whether
tangible or intangible and in whatever form or medium
provided. The term Information shall also include that portion
of all information, in whatever form or medium, generated by the
Interested Party or by its Representatives that contains, reflects or is
derived from, in whole or in part, the Information, including without
limitation, all notes, analyses, compilations, studies, interpretations,
reports, projections, records, memoranda, or summaries (collectively,
“Notes”).
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2.
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The
Interested Party agrees (a) that it will keep the Information strictly
confidential; (b) that the Information will not, without the prior written
consent of the Disclosing Party, be disclosed or made available by the
Interested Party or by its officers, directors, partners, employees,
agents, affiliates or representatives, including without limitation,
attorneys, accountants, consultants, bankers, and financial advisors
(collectively, “Representatives”), in any manner whatsoever, in whole or
in part, to any Person (as defined below) except as expressly provided in
this paragraph 2 or paragraph 5; and (c) that the Information shall not be
used by the Interested Party or by any of its Representatives for any
reason other than solely in connection with an evaluation of the
Transaction; provided however, that the Interested Party may disclose
Information that (i) is or becomes generally available to the public other
than as a result of a disclosure by the Interested Party or by any of its
Representatives in breach of this Agreement, (ii) is or becomes available
to the Interested Party on a non-confidential basis from a source other
than the Disclosing Party or any of the Disclosing Party’s
Representatives, provided that such source is not known to the Interested
Party or its Representatives to be prohibited from disclosing the
Information to the Interested Party by a contractual, legal or fiduciary
obligation, (iii) is already in the possession of the Interested Party or
its Representatives on a non-confidential basis at the time of disclosure
by the Disclosing Party, or (iv) is independently developed by the
Interested Party or its Representatives without use of or reference to the
Information. For the avoidance of doubt, a person or entity
shall only be deemed to be a “Representative” if such person or entity
receives Information. Moreover, the Interested Party agrees to
disclose the Information only to such of its Representatives who need to
know the Information for the sole purpose of assisting the Interested
Party in evaluating the Transaction and who are informed of this Agreement
and its terms. The Interested Party shall be fully liable for
any breach of this Agreement by it or any of its Representatives as if the
Representatives were the Interested Party. All Information
shall remain the property of the Disclosing Party and nothing contained in
this Agreement shall be construed as giving the Interested Party any
license or rights with respect to any
Information. Notwithstanding this Agreement or anything to the
contrary set forth herein, the Interested Party understands and agrees
that the Disclosing Party shall have no obligation to disclose any
Information to the Interested
Party.
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3.
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Without
the prior written consent of the Disclosing Party or as otherwise
expressly provided in this Agreement or as required by law or regulation
(including any forms required under the federal securities laws), neither
the Interested Party nor its Representatives shall disclose to any Person
the fact that the Interested Party or its Representatives have received
any Information, the fact that this Agreement exists or its terms, that
discussions or negotiations are taking place concerning the Transaction,
including the status thereof, or any opinion or view of the Disclosing
Party or the Information. For the purposes of this Agreement,
the term “Person” shall be construed as broadly as possible and shall
include, without limitation, any natural person, corporation, partnership,
limited partnership, limited liability company, group, association or
other entity.
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4.
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If the
Interested Party determines that it does not wish to proceed with the
Transaction, it will promptly advise the Disclosing Party of that
decision. The Interested Party agrees that, promptly upon the
conclusion of its review of the Information or use of the Information for
the purposes specified in this Agreement, and upon written request of the
Disclosing Party, the Interested Party and its Representatives will
destroy that portion of any Notes containing Information, in any form
whatsoever, and destroy or return all other Information, in any form
whatsoever, to the Disclosing Party, and no copy thereof, electronic or
otherwise, shall be retained by the Interested Party or any of its
Representatives. In addition, at the request of the Disclosing
Party, the Interested Party will promptly thereafter notify the Disclosing
Party in writing that it has complied with its obligations pursuant to the
immediately preceding sentence. Notwithstanding the foregoing, (i) if a
legal proceeding has been instituted to seek disclosure of the
Information, such material shall not be destroyed until the proceeding is
settled or a final judgment with respect thereto has been rendered and
(ii) one copy of any item of written Information may be retained by the
Interested Party’s legal counsel or accountants for record retention
purposes or as required in accordance with applicable rules of
professional conduct or Interested Party’s record retention policies;
provided, that the confidentiality obligations with respect to such
retained Information shall survive the termination of this
Agreement. The Interested Party’s confidentiality obligations
under this Agreement shall continue in full force and effect until the
termination of this Agreement in accordance with its terms notwithstanding
the return or destruction of Information in accordance with this
paragraph.
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5.
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In the
event that the Interested Party or any of its Representatives receives a
request to disclose all or any part of the Information by interrogatories
or other requests for information or documents in legal proceedings,
subpoena, civil investigative demand or other similar legal process, or is
otherwise required by law or regulation (including any forms required
under the federal securities laws) to make such disclosure, the Interested
Party agrees, if it is legally permitted to do so, (a) to notify the
Disclosing Party immediately, in writing, of the existence, terms and
circumstances surrounding such request or requirement, (b) to cooperate
with the Disclosing Party (at Disclosing Party’s expense) in taking steps
to resist or narrow such request or requirement to the extent permitted by
law, and (c) if disclosure of such Information is required to prevent the
Interested Party from being held in contempt or subject to other legal
penalties by a court of competent jurisdiction or other governmental or
regulatory authority, to furnish only such portion of the Information as,
upon the advice of counsel satisfactory to the Disclosing Party, it is
legally compelled to disclose and to exercise all commercially reasonable
best efforts, at the expense of the Disclosing Party, to obtain an order
or other reliable assurance that confidential treatment will be accorded
to the disclosed Information. For the avoidance of doubt, the
Disclosing Party consents in advance to the Interested Party’s filing of
an amendment to the Interested Party’s Schedule 13D to disclose the
execution and delivery of this Agreement and to attach a copy of this
Agreement as an exhibit.
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6.
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The
Interested Party hereby agrees that, until the 18 month anniversary of the
Date of this Agreement, it will not solicit to employ, offer to hire, hire
or enter into any contract or discussions relating to employment or any
consulting relationship with any of the officers or key employees of the
Disclosing Party or any of its subsidiaries with whom the Interested Party
has had contact or of whom the Interested Party has become aware during
the Interested Party’s evaluation of the Transaction; provided that,
general solicitations of employment for employees published in a journal,
newspaper or other publication of general circulation and not directed
specifically toward one or more employees of the Disclosing Party and the
hiring of any such employee of the Disclosing Party or any of its
subsidiaries who contacts the Interested Party on his or her own
initiative without any solicitation by or encouragement from the
Interested Party and has been terminated by the Disclosing Party or any of
its subsidiaries at least six months prior to the commencement of
employment discussions with the Interested Party or its affiliates shall
not be deemed to be in violation of this paragraph. Until the
earlier to occur of (a) the consummation of a Transaction or (b) the 270th
day after the Date of this Agreement, the Interested Party agrees not to,
and shall cause its Representatives (to the extent acting on its behalf)
not to, initiate or maintain contact with any officer, employee, customer
or supplier of the Disclosing Party or a subsidiary thereof regarding the
Disclosing Party’s or such subsidiary’s business, operations, prospects or
finances, or regarding a Transaction, except with the prior written
permission of the Disclosing Party or except for contacts made in the
ordinary course of the Interested Party’s business and research/due
diligence practices not related to the Information. The
Interested Party shall direct all requests for Information or regarding
due diligence, management meetings and discussions or questions regarding
procedures concerning a possible Transaction to the Disclosing Party's
financial advisors, RBC Capital Markets, Attention: Xxxxx Xxxxxxxxx,
000-000-0000,
xxxxx.xxxxxxxxx@xxxxx.xxx.
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7.
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The
Disclosing Party makes no representation or warranty, express or implied,
as to the accuracy or completeness of the Information or
otherwise. Only those representations or warranties which are
made in a final definitive agreement regarding the Transaction, when, as
and if executed, subject to such limitations and restrictions as may be
specified therein, will have any legal effect. The Interested
Party agrees that neither the Disclosing Party nor any of its subsidiaries
or Representatives shall have any liability to the Interested Party or any
of its Representatives resulting from the provision or use of the
Information.
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8.
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The
Interested Party acknowledges and agrees that, in the event of any breach
of this Agreement by the Interested Party or any of its Representatives,
the Disclosing Party may be irreparably and immediately harmed and could
not be made whole by monetary damages. Accordingly, it is
agreed that, in addition to any other remedy to which it may be entitled
at law or in equity, the Disclosing Party shall be entitled to an
injunction or injunctions (without the posting of any bond) to prevent any
breach or threatened breach of this Agreement or to compel specific
performance of this Agreement. If a court of competent
jurisdiction issues a determination as to whether or not a Party has
breached this Agreement, the non-prevailing Party will reimburse the
prevailing Party for all reasonable costs and expenses, including
reasonable attorneys’ fees, incurred in attempting to enforce the
obligations of the non-prevailing Party hereunder, including any appeals
therefrom.
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9.
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Intentionally
omitted.
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10.
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The
Interested Party hereby covenants and agrees that, for a period of 270
days from the date of this Agreement, without the prior written consent of
the Disclosing Party, the Interested Party will not in any manner,
directly or indirectly, or in conjunction with any other Person, effect,
or publicly offer or propose to
effect:
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a.
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any
tender or exchange offer, merger or other business combination involving
the Disclosing Party,
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b.
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any
sale of all or substantially all of the Disclosing Party’s assets, or any
recapitalization, restructuring, liquidation, dissolution or other similar
extraordinary transaction with respect to the Disclosing Party (provided
that, for the avoidance of doubt, this clause (b) shall not restrict the
Interested Party from proposing to the Disclosing Party the terms and
conditions of a proposed investment by the Interested Party in the
securities of the Disclosing Party),
or
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c.
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any
“solicitation” of “proxies” (as such terms are defined in Rule 14a-1 under
the Securities Exchange Act of 1934) or consents to vote any securities of
the Disclosing Party (provided that this clause (c) shall not be deemed to
prohibit Interested Party from nominating one (1) designee to the Board of
Directors of the Disclosing Party, so long as such designation is not part
of a “slate” in opposition to nominees proposed by the Disclosing Party’s
Board of Directors); or
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d.
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take
any action which would reasonably be expected to require the Disclosing
Party to make a public announcement regarding any of the
foregoing.
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Notwithstanding
the foregoing, nothing contained in this Section 10 shall be deemed to prohibit
the Interested Party from taking any action described in clauses (a)-(d) above
from and after the public disclosure that the Disclosing Party has entered into
an agreement with any party or group of parties who are unaffiliated with the
Interested Party (i) relating to a transaction or occurrence of the type
described in clauses (a), (b) or (c) involving the Disclosing Party or (ii)
involving the proposed issuance of securities by the Disclosing Party to such
parties or group as a consequence of which any person or group would acquire
beneficial ownership of more than 50% of the outstanding voting power of the
Disclosing Party’s voting securities.
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11.
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The
Interested Party acknowledges that it is aware, and agrees to advise its
Representatives who are informed as to the matters which are the subject
of this Agreement, that the United States securities laws prohibit any
Person who has material, non-public information concerning the Transaction
or the Disclosing Party from purchasing or selling securities of the
Disclosing Party or a company that may be a party to such
Transaction 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.
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12.
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No
failure or delay by either Party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude
any other or further exercise
thereof.
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13.
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Each
Party agrees that, unless and until a definitive agreement between the
Parties with respect to the Transaction has been executed and delivered,
neither Party will be under any legal obligation of any kind whatsoever
with respect to the Transaction by virtue of this Agreement, any other
written or oral expression by the either Party or by any of its
Representatives, or otherwise. The Interested Party also
acknowledges and agrees that the Disclosing Party reserves the right, in
its sole discretion, to reject any and all proposals made by the
Interested Party or any of its Representatives regarding the
Transaction. The Interested Party acknowledges and agrees that
the Disclosing Party is free to conduct the process leading up to a
possible Transaction as it determines in its sole discretion, including
without limitation, by negotiating with any third party and entering into
a preliminary or definitive agreement with a third party without prior
notice to the Interested Party or any of its
Representatives. The Disclosing Party reserves the right, in
its sole discretion, to change the procedures relating to the
consideration of the Transaction at any time without prior notice to the
Interested Party or any of its Representatives, and to terminate
discussions and negotiations with the Interested Party at any time and for
any reason or for no reason.
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14.
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Any of
the terms of this Agreement may be modified or waived only by a separate
writing between the Disclosing Party and the Interested Party expressly so
modifying or waiving this Agreement. If a court of competent
jurisdiction determines that one or more provisions of this Agreement is
in any respect unenforceable, invalid or illegal in any jurisdiction, such
unenforceability, invalidity or illegality (a) shall not affect any other
provision of this Agreement, which shall be construed as if such
unenforceable, invalid or illegal provision had never been a part hereof,
and (b) shall not render such provision or provisions unenforceable,
invalid or illegal in any other jurisdiction. In addition, such
unenforceable, invalid or illegal provision shall be reformed in a manner
or shall be replaced by a term or provision that is valid and enforceable
and that comes closest to expressing the Disclosing Party’s intention with
respect to such invalid or unenforceable term or provision. In
any event, the parties intend each and every provision of this Agreement
to be enforceable, valid and legal and each of them waives to the fullest
extent permitted by law the right to object to any such
provision.
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15.
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This
Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts between residents of the
State of New York that are to be wholly performed within such
state. Each party hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the
State of New York and of the United States of America located in the State
of New York for any action, suit, or proceeding arising out of or relating
to this Agreement and the transactions contemplated by this Agreement (and
agrees not to commence any action, suit, or proceeding relating thereto
except in such courts). Each party hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action,
suit, or proceeding arising out of this Agreement in the courts of the
State of New York or the United States of America located in New York, and
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit, or proceeding brought
in any such court has been brought in an inconvenient
forum. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY CLAIM ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE INFORMATION OR THE
TRANSACTION.
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16.
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The
Interested Party hereby represents and warrants that it is not bound by
the terms of a confidentiality agreement or other agreement with a third
party that would conflict with any of its obligations under this
Agreement. The Interested Party hereby represents and warrants
that it is not acting as a broker for or representative of any Person and
is considering the Transaction only for the Interested Party’s own
account.
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17.
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Any
assignment of this Agreement or any right or obligation hereunder by the
Interested Party without the Disclosing Party’s prior written consent
shall be void.
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18.
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The
Interested Party’s obligations under this Agreement shall expire on the
two year anniversary of the
date hereof.
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19.
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This
Agreement shall not confer or impose any rights or obligations upon or
remedies against any person or entity other than the parties and their
respective successors.
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In
witness whereof, the parties hereto have executed and delivered this
Confidentiality Agreement as of the date hereof.
Yours
sincerely,
RBC
Capital Markets Corporation
On behalf
of:
DISCLOSING
PARTY: X-Rite Incorporated
By: /s/ Xxxx X.
Xxxxxxxx
Xxxx X. Xxxxxxxx
Managing Director
For
acknowledgement and agreement,
INTERESTED
PARTY: Sagard Capital Partners Management Corporation
By: /s/ Xxxxxx
Xxxxxxxxx
Name:
Xxxxxx Xxxxxxxxx
Title: President
