Exhibit (c)(4)
State of the Art, Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
X.X.X.
January 7, 1998
The Sage Group plc
Sage House
Benton Park Road
Newcastle upon Tyne
NE7 7LZ
United Kingdom
Attention: P. A. Xxxxxx, Chief Executive
CONFIDENTIALITY AGREEMENT
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Gentlemen:
In connection with your consideration of a possible business
transaction (a "Transaction") with State Of The Art, Inc. (the "Company"), the
Company and you expect to make available to one another certain nonpublic
information concerning their respective business, financial condition,
operations, assets and liabilities. As a condition to such information being
furnished to each party and its directors, officers, employees, agents or
advisors, including, without limitation, attorneys, accountants, consultants,
bankers and financial advisors) (collectively, "Representatives"), each party
agrees to treat any nonpublic information concerning the other party (whether
prepared by the disclosing party, its advisors or otherwise and irrespective of
the form of communication) which is furnished hereunder to a party or to its
Representatives now or in the future by or on behalf of the disclosing party
(herein collectively referred to as the "Evaluation Material") in accordance
with the provisions of this Agreement, and to take or abstain from taking
certain other actions hereinafter set forth.
1. Evaluation Material. The term "Evaluation Material" also shall be
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deemed to include all notes, analyses, compilations, studies, interpretations or
other documents prepared by each party or its Representatives which contain,
reflect or are based upon, in whole or in part, the information furnished to
such party or its Representatives pursuant hereto which is not available to the
general public. The term "Evaluation Material" does not include information on
which (i) is or becomes generally available to the public other than as a result
of a breach of this Agreement by the receiving party or its Representatives (ii)
was within the receiving party's possession prior to its being furnished to the
receiving party by or on behalf of the disclosing party, provided that the
source of such information was not know by the receiving party to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the disclosing party, (iii) is or becomes
available to the receiving party on a non-confidential basis from a source other
than the disclosing party or any of its Representatives, provided that such
source was not known by the receiving party to be bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the disclosing party or any other party with respect to such
information, (iv) is disclosed by the disclosing party to a third party without
a duty of confidentiality, (v) is independently developed by the recipient
without use of Evaluation Material, (vi) is disclosed under operation of law, or
(vii) is disclosed by the recipient or its Representatives with the discloser's
prior written approval.
2. Purpose of Disclosure of Evaluation Material. It is understood
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and agreed to by each party that any exchange of information under this
Agreement shall be solely for the purpose of evaluating a Transaction between
the parties and not to affect, in any way, each party's relative competitive
position to each party or to other entities. It is further agreed, that the
information to be disclosed to each other shall only be that information which
is reasonably necessary to a Transaction and that information which is not
reasonably necessary for such purposes shall not be disclosed or exchanged. For
purposes of determining when information is reasonably necessary for such
purpose. legal counsel to each party shall agree, in advance, to review
information requests so as to comply with such standard. In addition, review of
competitively sensitive information such as information concerning product
development or marketing plans, product prices or pricing plans, cost data,
customer or similar information which has been determined to be reasonably
necessary to a Transaction, shall be limited only to those senior executives and
Representatives who are involved in evaluating or negotiating a Transaction or
approving the value of a Transaction.
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3. Use of Evaluation Material. Each party hereby agrees that it and
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its Representatives shall use the other's Evaluation Material solely for the
purpose of evaluating a possible Transaction between the parties, and that the
disclosing party's Evaluation Material will be kept confidential and each party
and its Representatives will not disclose or use for purposes other than the
evaluation of a Transaction any of the other's Evaluation Material in any manner
whatsoever; provided, however, that (i) the receiving party may make any
disclosure of such information to which the disclosing party gives its prior
written consent and (ii) any of such information may be disclosed to the
receiving party's Representatives who need to know such information for the sole
purpose of evaluating a possible Transaction between the parties, who are
provided with a copy of this Agreement and who are directed by the receiving
party to treat such information confidentially. Each party is aware, and will
advise its Representatives who are informed of the matters that are the subject
of this Agreement, of the restrictions imposed by the United States securities
laws on the purchase or sale of securities by any person who has received
material, nonpublic information from the issuer of such securities and on the
communication of such information to any other person when it is reasonably
foreseeable that such other person is likely to purchase or sell such securities
in reliance upon such information.
4. Non-Disclosure. In addition, each party agrees that, without the
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prior written consent of the other party, its Representatives will not disclose
to any other person the fact that any Evaluation Material has been made
available hereunder, that discussions or negotiations are taking place
concerning a Transaction involving the parties or any of the terms, conditions
or other facts with respect thereto (including the status thereof), provided
that you may make such disclosure to the London Stock Exchange on a confidential
basis in order to seek a waiver of shareholder approval of the Transaction and
provided further that a party may make such disclosure if in the written opinion
of a party's outside counsel, such disclosure is necessary to avoid committing a
violation of law. In such event, the disclosing party shall use its best
efforts to give advance notice to the other party.
5. Required Disclosure. In the event that a party or its
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Representatives are requested or required (by oral questions, interrogatories,
requests for information or documents in legal proceedings, subpoena, civil
investigative demand or other similar process) to disclose any of the other
party's Evaluation Material, the party requested or required to make the
disclosure shall provide the other party with prompt notice of any such request
or requirement so that the other party may seek a protective order or other
appropriate remedy and/or waive compliance with the
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provisions of this Agreement. If, in the absence of a protective order or other
remedy or the receipt of a wavier by such other party, the party requested or
required to make the disclosure or any of its Representatives are nonetheless,
in the opinion of counsel, legally compelled to disclose the other party's
Evaluation Material to any tribunal, the party requested or required to make the
disclosure or its Representative may, without liability hereunder, disclose to
such tribunal only that portion of the other party's Evaluation Material which
such counsel advises is legally required to be disclosed, provided that the
party requested or required to make the disclosure exercises its reasonable
efforts to preserve the confidentiality of the other party's Evaluation
Material, including, without limitation, by cooperating with the other party to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the other party's Evaluation Material by
such tribunal.
6. Termination of Discussion. If either party decides that it does
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not wish to proceed with a transaction with the other party, the party so
deciding will promptly inform the other party of that decision by giving a
written notice of termination. In that case, or at any time upon the request of
either disclosing party for any reason, each receiving party will promptly
deliver to the disclosing party or destroy all written Evaluation Material (and
all copies thereof and extracts therefrom) furnished to the receiving party or
its Representatives by or on behalf of the disclosing party pursuant hereto. In
the event of such a decision or request, all other Evaluation Material prepared
by the requesting party shall be destroyed and no copy thereof shall be
retained, and in no event shall either party be obligated to disclose or provide
the Evaluation Material prepared by it or its Representatives to the other
party. Notwithstanding the return or destruction of the Evaluation Material,
each party and its Representatives will continue to be bound by its obligations
of confidentiality and other obligations hereunder.
7. No Representation of Accuracy. Each party understands and
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acknowledges that neither party nor any of its Representatives makes any
representation or warranty, expressed or implied, as to the accuracy or
completeness of the Evaluation Material made available by it or to it. Each
party agrees that neither party nor any of its Representatives shall have any
liability to the other party or to any of its Representatives relating to or
resulting from the use of or reliance upon such other party's Evaluation
Material or any errors therein or omissions therefrom. Only those
representations or warranties which are made in a final definitive agreement
regarding the Transaction, when, as and if executed, and subject to such
limitations and restrictions, as may be specified therein, will have any legal
effect.
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8. Definitive Agreements. Each party understands and agrees that no
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contract or agreement providing for any Transaction involving the parties shall
be deemed to exist between the parties unless and until a final definitive
agreement has been executed and delivered. Each party also agrees that unless
and until a final definitive agreement regarding a Transaction between the
parties has been executed and delivered, neither party will be under any legal
obligation of any kind whatsoever with respect to such a Transaction by virtue
of this Agreement, except for the matters specifically agreed to herein. Both
parties further acknowledge and agree that each party reserves the right, in its
sole discretion, to provide or not 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 between the
parties, and to terminate discussions and negotiations at any time.
9. Waiver. It is understood and agreed that no failure or delay by
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either party 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 future exercise thereof or the exercise of any other right, power
or privilege hereunder.
10. Miscellaneous. Each party agrees to be reasonable for any breach
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of this Agreement by any of its Representatives. No failure or delay by either
party or any of their respective Representatives in exercising any right, power
or privileges under this Agreement shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege hereunder. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
11. Injunctive Relief. It is further understood and agreed that
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money damages would not be a sufficient remedy for any breach of this Agreement
by either party or any of its Representatives and that the non-breaching party
shall be entitled to equitable relief, including injunction and specific
performance, 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 equity. In the event of
litigation relating to this Agreement, if a court of competent jurisdiction
determines that either party or any of its Representatives have breached this
Agreement, then the breaching party shall be liable and pay
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to the non-breaching party the reasonable legal fees incurred in connection with
such litigation, including an appeal therefrom.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
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IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, THE UNITED STATES OF
AMERICA, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN SUCH STATE.
13. Term. This Agreement shall terminate three years from the date
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first set forth above.
14. Standstill. For a period of one year from the date of this
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Agreement, each party and its Affiliates (as defined under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), will not (and each party
and its Affiliates will not assist or encourage others to, directly or
indirectly, unless specifically requested to do so in writing in advance by the
other party's Board of Directors:
a. acquire or agree, offer, seek or propose to acquire, or cause to
be acquired ownership (including, but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Exchange Act) of any
of the other party's or its subsidiaries' assets (other than in
the ordinary course of business) or business or any voting
securities issued by the other party which are, or may be,
entitled to vote in the election of the other party's directors
("Voting Securities"), or any rights or options to acquire such
ownership, including from a third party; or
b. make, or in any way participate in, any solicitation of proxies
or consents with respect to any Voting Securities of the other
party, become a participant in any proxy context with respect to
the other party; or seek to advise, encourage or influence any
person or entity with respect to the voting of any Voting
Securities, or demand a copy of the other party's stock ledger,
list of its stockholders or other books and records, or call or
attempt to call any meeting of the stockholders of the other
party, or
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c. enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the
matters described in (a) or (b) above.
15. Non-Solicitation. The Company and you agree that, for a period
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of one year from the date of the Agreement, the Company and you will not,
directly or indirectly, solicit for employment any employee of you (or any
subsidiary of you) or the Company (or any subsidiary of the Company),
respectively, or with whom the Company or you, respectively, have had contact or
who became known to the Company or you, respectively, in connection with the
Company's or your, respectively, consideration of the Transaction except for a
general solicitation not aimed at such employees.
16. Counterparts. This Agreement may be executed in two
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counterparts, which together shall be considered one and the same agreement and
shall become effective when such counterparts have been signed by each party and
delivered to the other party, it being understood that all parties need not sign
the same counterpart.
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Please confirm your agreement with the foregoing by signing and
returning one copy of this Agreement to the undersigned, whereupon this
Agreement shall become a binding agreement between you and the Company.
Very truly yours,
State of the Art, Inc.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Chairman, President
Chief Executive Officer
Accepted and Agreed as of
the date first written above
The Sage Group plc
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Chief Executive Officer
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