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EXHIBIT (c)(2)
[▇▇▇▇▇▇, READ & CO. INC. LETTERHEAD]
MARCH 17, 1997
STRICTLY PRIVATE AND CONFIDENTIAL
Seneca Resources Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Re: CONFIDENTIALITY AGREEMENT
Dear Sirs:
You have requested information on HarCor Energy, Inc. ("HarCor" or the
"Company") directly or through us in connection with your investigation
concerning the acquisition by you of certain businesses, assets or stock of
HarCor (the "Transaction"). ▇▇▇▇▇▇, Read & Co. Inc. ("▇▇▇▇▇▇ Read"), which for
purposes of this letter shall also include all of its officers, directors,
employees, agents and controlling persons, has been retained by the Company as
a financial advisor to attempt to identify and consummate a Transaction. As a
condition of the Company's consent to communicate such information to you, it
is required that you agree, on the terms set forth below (the "Agreement"), to
treat confidentially all such information that ▇▇▇▇▇▇ Read, HarCor or its agents
may communicate to you for this purpose, whether communications before or after
the date of this letter, orally, in writing, by inspection, or through any
other means, regardless of whether specifically identified as "confidential"
and regardless of whatever form or medium such information may take during or
after its communication (collectively, the "Confidential Information"). For
greater certainty, all information communicated to you shall be deemed
Confidential Information except information which:
(a) as shown by written records, was already known by you at the time of
its receipt by you;
(b) has been or becomes published or otherwise within the public
knowledge as is generally known at the time of its disclosure to you
without any breach by you of your obligations hereunder; or
(c) as shown by written records, was known or available to you through an
independent third party source under no obligation of confidentiality
to ▇▇▇▇▇▇ Read or HarCor and without breach of your obligations
hereunder.
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You understand and agree that the Confidential Information is being given to
you without any liability on the part of HarCor or ▇▇▇▇▇▇ Read, or on the part
of the Company's directors and officers, whatsoever, and no representation or
warranty with respect to the accuracy, completeness or validity of any
Confidential Information is hereby made by ▇▇▇▇▇▇ Read or HarCor or its
directors or officers. You agree that neither ▇▇▇▇▇▇ ▇▇▇▇, HarCor nor its
directors and officers, shall have any liability to you resulting from the
selection, or reliance of the Confidential Information by you.
In consideration of our communicating the Confidential Information to you, you
agree on your own behalf and on behalf of your directors, officers, employees,
advisors, agents, consultants, affiliates and other representatives
(collectively included in the term "you"), all of whom must agree to be bound
by the terms of this Agreement as a condition of receiving the Confidential
Information, that:
1. the Confidential Information is strictly confidential and
shall be treated in the strictest confidence and privilege and
shall be used only for the purpose of evaluating a proposed
Transaction and for no other purpose;
2. you shall not disclose or allow disclosure, to any third
party individual or corporate entity of whatever nature
("person") that the Confidential Information has been made
available to you. Further, without ▇▇▇▇▇▇'s prior written
consent, you shall not disclose to any person, that
discussions or negotiations, are taking place concerning any
possible Transaction or any of the terms, conditions or other
facts regarding any possible Transaction or its status; This
paragraph does not apply as to any person who may join with
you in a possible transaction with HarCor.
3. you will not assert or allege the existence of any
representation, warranty or agreement by ▇▇▇▇▇▇ ▇▇▇▇, HarCor
or its directors or officers arising from the communication to
you of the Confidential Information, it being the intent of
this clause that there shall be no liability or obligation
except in respect of any representations, warranties and
agreements which are in writing and duly executed by ▇▇▇▇▇▇ in
a definitive agreement with respect to a Transaction;
4. should you be requested or required by oral questions,
interrogations, requests for more information, subponea, civil
investigatory demand or similar process to disclose any
Confidential Information, you shall provide HarCor with prompt
written notice thereof so that HarCor may seek an appropriate
protective order and/or waive your compliance with provisions
of the Agreement. You further agree to provide to HarCor your
active assistance and cooperation as may be reasonably
required by HarCor to secure protection of the Confidential
Information. If, however, you are, in the reasonable opinion
of your counsel, compelled to disclose Confidential
Information concerning HarCor to any tribunal, legislative
authority or government body or else stand liable for contempt
or suffer other censure or penalty, you may so disclose that
portion of the Confidential Information so compelled without
liability hereunder;
5. the Confidential Information is and shall remain at all times
the sole, absolute and exclusive property of HarCor. In the
event that the Transaction is not effected with HarCor after
you have been furnished with the Confidential Information, you
will promptly return to HarCor all the Confidential
Information and will destroy any and all internal working
papers, analysis, documents or materials directly or
indirectly derived from or reflecting anything contained in
the Confidential Information, without retaining any copy
thereof or any notes relating thereto. You shall certify
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that you have returned all Confidential Information and destroyed all
such internal memoranda derived from the Confidential Information;
6. this Agreement shall inure to the benefit of and be binding upon
any successors and assigns of the parties hereto, such assignment by
you only to be upon ▇▇▇▇▇▇'s written consent which may be arbitrarily
withheld;
7. in addition to all other remedies available, HarCor shall be entitled
to equitable relief, including injunction or specific performance
other than being required to enter into a transaction with HarCor, as
to any breach of the provisions of this Agreement without any
requirement for the securing or posting of any bond in connection with
such remedy. You hereby agree to the granting of such injunctive
relief in HarCor's favor without proof of mutual damages. You agree
that any failure by HarCor in exercising any right, power or privilege
herein shall not operate as a waiver thereof, or that any single or
partial exercise thereof shall not preclude any other or further
exercise thereof by HarCor or the exercise of any right, power or
privilege hereunder;
8. except in connection with the negotiation of the terms of a
Transaction or in accordance with the terms of a Transaction Agreement
or through standard business transactions (such as farming, farmouts,
joint ventures or other similar transactions) directly with HarCor,
for a period of eighteen months from the date of this Agreement
neither you or your representatives nor any person or entity
controlled by you shall, directly or indirectly:
(i) acquire, or offer or agree to acquire, directly or indirectly, by
purchase or otherwise, 5% or more of any securities of the Company (or
direct or indirect rights or options to acquire any securities of the
Company), except by way of stock dividends or other distributions made
on a pro rata basis with respect to securities of the Company acquired
by you prior to the date of this Agreement;
(ii) solicit proxies or consents or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the
Securities Exchange Act of 1934, as amended) of proxies or consents
with respect to securities of the Company with regard to seeking
control or influence of management of Company;
(iii) seek to control or influence the management or Board of
Directors of the Company with respect to the policies of the Company,
seek to advise, encourage or influence any person with respect to the
voting of any securities of the Company or seek to induce or in any
manner to assist any other person to initiate any stockholder proposal
with respect to the securities of the Company, any change of control
of the Company or for the purpose of convening a meeting of
stockholders of the Company or to initiate any tender or exchange
offer for securities of the Company;
(iv) acquire or agree to acquire, by purchase or otherwise, more than
5% of any class of equity securities of any entity which, prior to the
time you acquire or agree to acquire more than 5% of such class, has
publicly disclosed (by a filing with the Securities and Exchange
Commission or otherwise) that it is, or is otherwise known to you to
be, the beneficial owner of more than 5% of the outstanding common
stock of the Company;
(v) without the prior written consent of the Company, make any public
announcement (except as required by law or stock exchange policy) or
make any written or oral proposal relating to a tender or exchange
offer for securities of the Company, a business combination (or other
similar transaction which would result in a change of control), sale
of assets, liquidation or other extraordinary corporate
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transaction between the Company or any of its affiliates and you (each
such transaction being referred to herein as a "Transaction") or take
any action which might require the Company to make a public
announcement regarding any Transaction;
(vi) deposit any securities of the Company in a voting trust or
subject any securities of the Company to any arrangement or agreement
with respect to the voting of securities of the Company; or
(vii) form, join or in any way participate in a partnership, limited
partnership, syndicate or other group (or otherwise act in concert
with any other person) for the purpose of acquiring, holding, voting
or disposing of more than 5% of the securities of the Company or
taking any other actions restricted or prohibited under clauses (i)
through (vi) of this Section 8.
9. the parties hereto understand and agree that unless and until a
definitive agreement has been executed and delivered, no contract or
agreement providing for a transaction between the parties shall be
deemed to exist between the parties, and neither party will be under
any legal obligation of any kind whatsoever with respect to such
Transaction by virtue of this or any written or oral expression
thereof, except, in the case of this Agreement, for the matters
specifically agreed to herein. For purposes of this Agreement, the
term "definitive agreement" does not include an executed letter of
intent or any other preliminary written agreement or offer, unless
specifically so designated in writing and executed by both parties.
Furthermore, this Agreement is not intended to and does not create a
partnership, joint venture or any other business combination between
the parties. You agree that HarCor reserves the right, in its sole and
absolute discretion, to reject any or all proposals, to decline to
furnish further information, to deny access to data rooms and to
terminate discussions and negotiations with you at any time. The
exercise by HarCor of these rights shall not affect the enforceability
of any provision of this Agreement;
10. you will not directly or indirectly contact any employee, officer, or
representative of HarCor with respect to the Transaction without the
prior authorization of ▇▇▇▇▇▇ ▇▇▇▇;
11. you will not, during the two year period after the date hereof,
directly or indirectly, solicit for employment or hire any employee of
HarCor with whom you have had contact or who became known to you in
connection with the consideration of the Transaction, provided that
this restriction is not prohibited by any law or regulation and does
not prevent you from employing any person who contacts you on his or
her own initiative without encouragement from you; and
12. you acknowledge that this Agreement is for the benefit of HarCor and
▇▇▇▇▇▇ ▇▇▇▇. You agree that any action, suit or proceeding for the
enforcement of the terms of this Agreement may be brought by HarCor
without the necessity of any joinder therein by ▇▇▇▇▇▇ ▇▇▇▇, and you
expressly waive any claim that there is a lack of privity of contract
between you and HarCor and that, as a consequence thereof, HarCor has
no standing to bring any action with respect to this Agreement.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Texas applicable to agreements made and to be performed within
such State without regard to principles of conflicts of laws.
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All obligations under this Agreement shall terminate upon the earlier of (a)
the successful closing of Transaction; and (b) the second anniversary date of
this Agreement.
Very truly yours,
▇▇▇▇▇▇, READ & CO. INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AGREED TO AND ACCEPTED this
20th day of March, 1997.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇*
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Offshore Area ▇▇▇▇▇▇▇
*THE PARTIES HERETO AGREE THAT ANY DISPUTE THAT ARISES WITH RESPECT TO THIS
AGREEMENT SHALL BE ARBITRATED IN ACCORDANCE WITH THE TEXAS GENERAL ARBITRATION
ACT ("ACT") AND THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("RULES") AND
THAT THE DECISION OF THE ARBITRATOR RENDERED PURSUANT TO THE ACT AND RULES
SHALL BE BINDING UPON THE PARTIES AND MAY BE ENFORCED IN ANY COURT OF COMPETENT
JURISDICTION. ANY ARBITRATION PROCEEDINGS PURSUANT TO THIS AGREEMENT SHALL BE
HELD IN HOUSTON, ▇▇▇▇▇▇ COUNTY, TEXAS. THE ARBITRATOR SHALL NOT AWARD PUNITIVE,
CONSEQUENTIAL, NOR MULTIPLE DAMAGES IN SETTLEMENT OF ANY DISPUTE.