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EXHIBIT - (c)(3)
MUTUAL NONDISCLOSURE AGREEMENT
In connection with consideration of a possible negotiated transaction
between Simulation Sciences Inc. (the "Company") and ▇▇▇▇▇ plc ("▇▇▇▇▇"), the
Company and ▇▇▇▇▇ expect to make available to one another certain non-public
information concerning their respective businesses, subsidiaries, 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 non-public information
concerning the other party (whether prepared by the disclosing party, its
Representatives or otherwise and irrespective of the form of communication)
which is furnished hereunder to a party or to its Representatives (the
"Recipient") 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 Mutual Nondisclosure Agreement ("Agreement"), and to
take or abstain from taking certain other actions hereinafter set forth.
1. Evaluation Material. The term "Evaluation Material" also means all
information that is furnished to a Recipient or its Representatives by a party
or its Representatives (the "Discloser") that concerns the Discloser, its
affiliates or subsidiaries, and which is either confidential, proprietary or
otherwise not generally available to the public. The term "Evaluation Material"
also shall be 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 which (i) is or becomes generally available to the public other than
as a result of a disclosure by the receiving party or its Representatives, (ii)
was within the receiving party's knowledge or possession prior to its being
furnished to the receiving party by or on behalf of the disclosing party
pursuant hereto, provided that the source of such information was not known by
the receiving party to be in breach of an applicable 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, (iii)
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 is not known by the receiving party to be in breach of an
applicable 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, or (iv) is independently invented,
conceived or discovered by the receiving party or its employees or agents
without access to the Evaluation Materials.
2. Purpose of Disclosure of Evaluation Material. It is understood and
agreed by each party that any exchange of information under this Agreement shall
be solely for the purpose of evaluating a potential transaction between the
parties and that such information exchange is not to affect, in any way, either
party's relative competitive position regarding the other party or other
entities. It is further agreed that the information to be disclosed by each
party shall only be that information which is reasonably necessary to evaluate a
proposed transaction and that
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information which is not reasonably necessary for such purposes shall not be
disclosed or exchanged. In addition, competitively sensitive information such as
information concerning product development or marketing plans, product prices or
pricing plans, cost data, customers or similar information which has been
determined to be reasonably necessary to a potential transaction, shall be
limited only to each party's "Control Group." For purposes of this Agreement, a
party's "Control Group" means only those senior executives and Representatives
who are involved in evaluating or negotiating a potential transaction or
approving the value of a potential transaction and who have a need to know such
competitively sensitive information for purposes of such evaluation, negotiation
or approval.
3. Use of Evaluation Material. Each party hereby agrees that it and its
Representatives shall use the other's Evaluation Material solely for the purpose
of evaluating a possible transaction between the parties, and that the
Discloser's Evaluation Material will be kept confidential; provided, however,
that (i) the Recipient may make any disclosure of such information as to which
the Discloser gives its prior written consent and (ii) any of such information
may be disclosed to the Recipient's Representatives who (x) need to know such
information for the sole purpose of evaluating a possible transaction between
the parties and who (y) agree to keep such information confidential. The
Recipient will not disclose the Evaluation Material to any person other than as
permitted hereby and will use its best efforts to safeguard the Evaluation
Material from unauthorized disclosure. Nothing in this Agreement shall obligate
either party, however, to use any greater care in the protection of the
Evaluation Material against disclosure than the care it uses generally with
respect to information relating to it which is similar in type to the Evaluation
Material. The term "person" as used in this Agreement shall be broadly
interpreted to include without limitation any corporation, company, partnership
or individual.
4. Nondisclosure. In addition, each party agrees that, without the prior
written consent of the other party, neither it nor its Representatives will
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 possible transaction involving the parties or any of the terms,
conditions or other facts with respect thereto (including the status thereof);
provided, that a party may make such disclosure pursuant to the procedures set
forth herein 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 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 written notice of any such request or requirement so
that the other party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this Agreement. If, in the absence of a
protective order or other remedy or the receipt of a waiver by such other party,
the party requested or required to make the disclosure or any of its
Representatives are nonetheless legally compelled to disclose the other party's
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Evaluation Material to any tribunal or else stand liable for contempt or suffer
other significant censure or penalty, 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 that
is legally required to be disclosed, provided that the party requested or
required to make the disclosure exercises its best 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 Discussions. If either party decides that it does not
wish to proceed with a transaction with the other party, the party so deciding
will promptly inform the other party by way of a notice of that decision. The
written Evaluation Material, except for that portion of the Evaluation Material
that may be found in analyses, compilations, studies or other documents prepared
by or for the Recipient, will be returned to the Discloser immediately upon the
Discloser's request, and no copies shall be retained by the Recipient or its
Representatives. Recipient shall certify in writing within five (5) business
days that all such Evaluation Material has been returned and that the other
provisions of this material Nondisclosure Agreement have been complied with by
it. For the purposes of this Agreement, "written" Evaluation Material shall
include, without limitation, information contained in printed, magnetic or other
tangible media, or in information storage and retrieval systems. That portion of
the Evaluation Material that may be found in analyses, compilations, studies or
other documents prepared by or for a Recipient, oral Evaluation Material and
written Evaluation Material not so requested or returned will be held by the
Recipient and kept subject to the terms of this Agreement, or destroyed.
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 acknowledges
that although the agreements and covenants of the parties contained herein shall
be binding, neither party nor any of its Representatives makes any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material made available to it. Only those
representations or warranties that are made in a final definitive agreement
regarding any transaction contemplated hereby, when, as and if executed, and
subject to such limitations and restrictions as may be specified therein, will
have any legal effect. Each party agrees that, except as contemplated by the
preceding sentence, 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 by the other of the providing party's Evaluation Material
or any errors therein or omissions therefrom.
8. Definitive Agreements. Each party understands and agrees that no
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 completing or negotiating such
a transaction
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by virtue of this Agreement or any written or oral expression with respect to
such a transaction by any of its respective directors, officers, employees,
agents or any other Representatives except, in the case of this Agreement, 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. Ownership of Evaluation Material. All information, and any Derivatives
(as defined below) thereof whether created by Discloser or Recipient, remains
the property of Discloser and no license or other rights to information is
granted or implied hereby. For purposes of this Agreement, "Derivatives" shall
mean: (i) for copyrightable or copyrighted material, any translation,
abridgment, revision or other form in which an existing work may be recast,
transformed or adapted; (ii) for patentable or patented material, any
improvement thereon and (iii) for material which is protected by trade secret,
any new material derived from such existing trade secret material, including new
material which may be protected by copyright, patent or trade secret. For the
purposes of this Section 9, "information" is deemed to include all information
furnished by either party to the other, whether or not Evaluation Material.
10. Independent Development. Each party understands that the other party
may currently or in the future be developing information internally or receiving
information from other parties that may be similar to that received from a
Discloser. Accordingly, nothing in this Agreement will be construed as a
representation, inference or agreement that either party will not develop
products, or have products developed for it, that, without violation of this
Agreement, compete with the products or systems contemplated by the other's
Evaluation Material.
11. No License. Nothing in this Agreement is intended to grant any rights
to either party under any patent, mask work right or copyright of the other
party, nor shall this Agreement grant any party any rights in or to the
Evaluation Material of the other party except as expressly set forth herein.
12. Waiver. It is understood and agreed that 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 thereof preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege hereunder.
13. Standstill. Beginning on the date of this letter and continuing for a
period of 12 months after the date of a notice of termination under Section 6
above, each party and its affiliates 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 Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of any of the other party's
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assets (other than in the ordinary course of business) or businesses or any
voting securities issued by the other party, 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 securities of the other party which are, or may
be, entitled to vote in the election of the other party's directors ("Voting
Schedule"), become a "participant" in any "election contest" (as such terms are
defined or used in Rule 14a-11 under the Exchange Act) 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
(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; provided, however, that the restrictions contained in this
Section 13 shall not apply if (i) another person or entity (including the
Company) shall have commenced a tender or exchange offer for 50% or more of the
Company's securities or (ii) another person or entity or the Company has made
public disclosure of a transaction to acquire 50% or more of the securities of
the Company.
14. No Market Disclosures. Each party understands and agrees that
information "leaks" or rumors of a potential transaction between the parties
would be disruptive to stock market transactions, customer relationships and
potential customer transactions. Accordingly, each party specifically agrees to
take all commercially reasonable actions to prevent any such disclosure
(including by specifically notifying its directors, officers, employees and
Representatives that have knowledge of this transaction of the requirements of
this paragraph), to notify the other party immediately of any such "leak" or
rumor of which it becomes aware, to assist in tracing the source of any such
"leak" or rumor and providing that information to the other party, and to being
held legally responsible, at law, in equity, in arbitration or otherwise, for
any breach of the provisions of this Agreement.
15. No Solicitation. From and after the date of this Agreement until its
termination under Section 6 hereof, neither party nor any of their respective
Representatives shall (i) solicit, encourage or take any other action which is
intended to induce any employee of the other party to terminate its employment
with such other party, or (ii) interfere in any manner with any contractual or
employment relationship between such other party and its employees; provided,
however, that nothing in this paragraph shall preclude either party from hiring
or offering employment to any employee of the other as a consequence of such
employee's unsolicited response to a general public advertisement of employment
or such employee being identified as a candidate as part of a non-directed
executive search.
16. Injunctive Relief. It is further understood and agreed that 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
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be deemed to be the exclusive remedies for a breach of this Agreement but shall
be in addition to all other remedies, if any, 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 to the
non-breaching party the reasonable legal fees incurred in connection with such
litigation, including any appeal therefrom.
17. Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties hereto and their successors and assigns.
18. Jurisdiction and Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California without
regard to the conflicts of laws doctrine thereof.
19. Miscellaneous. Each party agrees to be responsible for any breach of
this agreement by any of its Representatives. No failure or delay by either
party or any of its Representatives in exercising any right, power or privileges
under this Agreement shall operate as a waive 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 the agreement shall not in any way be affected or
impaired thereby.
20. Counterparts. This Agreement may be executed in counterparts, each of
which shall be enforceable as against the party actually signing, and all of
which together shall constitute one agreement.
In witness of the foregoing agreements, the undersigned parties have
entered into this Agreement as of April 7, 1998.
SIMULATION SCIENCES INC. ▇▇▇▇▇ PLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: President and Title: President and
Chief Executive Officer Chief Operation Officer
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