EXHIBIT (d)(5)
CONFIDENTIALITY AGREEMENT
This CONFIDENTIALITY AGREEMENT (the "Agreement") made this 21st day of
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January, 2000, by and between Kohlberg & Co., LLC, a Delaware Limited Liability
Company ("Recipient") and BI Incorporated, a Colorado corporation (the
"Company"), on whose behalf SunTrust Equitable Securities Corporation is acting.
RECITALS:
In order to evaluate a possible transaction with the Company, the Recipient
wishes to obtain certain information about the Company. The Company considers
such information to be proprietary and confidential and is willing to disclose
such information to Recipient only upon receipt of the agreement of the
Recipient to comply with the provisions hereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and agreements contained herein, the parties hereto hereby agree as
follows:
1. Definition of Confidential Information. For the purposes of this
Agreement, the following terms shall have the following meanings:
(a) "Confidential Information" shall mean all information about the
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Company which is furnished by it or any of its Representatives, whenever
furnished and regardless of the manner in which it is furnished, and includes,
without limitation, all information regarding the business and affairs of the
Company, its plans, strategies, operations, financial information (whether
historical or forecasted), business methods, systems, practices, analyses,
compilations, forecasts, studies, designs, processes, procedures, formulae,
improvements, trade secrets or other proprietary documents or information
prepared or furnished by the Company or any of its Representatives. Confidential
Information does not include, however, information which (i) is or becomes
generally available to the public other than as a result of disclosure by the
Recipient or any of its Representatives, or (ii) was available to the Recipient
on a non-confidential basis prior to its disclosure by the Company, or (iii)
becomes available to the Recipient on a non-confidential basis from a person
other than the Company or any of its Representatives, which person is not
otherwise bound by a confidentiality agreement with the Company or any of its
Representatives, or is not otherwise prohibited from transmitting the
information to the Recipient.
(b) "person" shall include, without limitation, any corporation,
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company, partnership, limited liability company, other business organization and
any individual.
(c) "Representative" shall mean any director, officer, employee,
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attorney, independent accountant, financial advisor or other agent of a party
hereto.
2. Confidentiality of Information.
(a) Unless otherwise agreed to in writing by the Company, the Recipient
agrees (i) to keep confidential all Confidential Information and not to disclose
or reveal any Confidential Information to any person other than those employed
by it or on its behalf who are actively and directly participating in evaluating
any possible transaction involving the Company or otherwise
needs to know the Confidential Information for the purpose of such an
evaluation, and the Recipient agrees to cause those persons to observe the terms
of this Agreement, and (ii) not to use Confidential Information for any purpose
other than in connection with a possible transaction involving the Company. The
Recipient agrees that it will be responsible for any actual damages caused by
any breach of the terms hereof by it or the persons or entities referred to in
clause (i) of this Section.
(b) The Recipient agrees that neither it nor any of its Representatives
will, without the prior written consent of the Company, disclose to any person
(other than those actively and directly participating on its behalf in the
evaluation of a possible transaction) any information about a possible
transaction or the terms, conditions or other facts relating thereto, including
the fact that discussions are taking place with respect thereto or the status
thereof, or the fact that the Confidential Information has been made available
to Recipient.
3. Return of Confidential Information. If the Recipient determines that it
does not wish to proceed with a transaction with the Company, it agrees that it
will promptly advise the Company of that decision. In that case, or in the event
no transaction is consummated, the Recipient agrees that it will promptly return
to the Company the physical embodiment of all materials delivered to the
Recipient, whether written, printed or otherwise, including all copies,
reproductions, summaries, analyses or extracts thereof or based thereon, in the
possession of the Recipient or in the possession of any of its Representatives.
4. Required Disclosure. In the event that Recipient becomes legally
compelled to disclose any Confidential Information, Recipient shall provide the
Company with prompt adequate prior written notice so that the Company may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement. In the event that a protective order or other
remedy is not obtained, or the Company waives compliance with the provisions of
this Agreement, Recipient agrees that it shall furnish only that portion of the
Confidential Information which it is advised in writing by counsel that it is
legally required to disclose, and further, Recipient shall exercise its best
efforts to obtain reliable assurance that confidential treatment will be
accorded the Confidential Information which is so disclosed.
5. Standstill Agreement. (a) In further consideration of the Company's
undertakings in this Agreement, Recipient hereby covenants and agrees with the
Company that for a period of two (2) years from the date hereof, neither the
Recipient nor any affiliate of the Recipient will: (i) offer to purchase or
purchase any equity securities or assets of the Company except pursuant to a
transaction approved by the Board of Directors of the Company, provided that a
majority of such Board of Directors are directors of the Company on the date
hereof; (ii) make, or in any way participate, directly or indirectly, in any
solicitation of proxies to vote, or seek to advise or influence any shareholder
of the Company with respect to the voting of any voting securities of the
Company; (iii) form, join or in any way participate in a "group", within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
in (the "Exchange Act"), with respect to any voting securities of the Company;
(iv) otherwise act, alone or in concert with others, for the purpose or effect
of changing or influencing control of the Company, whether by change of
management, composition of the Board of Directors, or policies of the Company.
(b) Terms used in this Section 5 shall have the meanings given to such
terms as they are defined in the Securities Act of 1933, as amended, or the
Exchange Act, or rules and regulations adopted thereunder.
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6. Remedies. Recipient acknowledges and agrees that any breach, or
threatened breach, of this Agreement may result in irreparable harm and
substantial damages to the Company. Accordingly, without prejudice to the rights
and remedies otherwise available to the Company, Recipient agrees that the
Company shall be entitled to equitable relief by way of injunction if Recipient
or any of its Representatives breaches or threatens to breach any of the
provisions of this Agreement, and that the Company shall be entitled to recover
its reasonable attorney's fees and other costs and expenses incurred in
protecting its rights hereunder. It is further understood and agreed that no
failure or delay by the Company 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 remedy or the exercise thereof, or the
exercise of any right, power or privilege hereunder.
7. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado, without regard to its principles of conflicts
of laws.
(b) The terms and effects of this Agreement shall survive and continue
in full force and effect notwithstanding the cessation of discussions between
the parties hereto, or the return or destruction of any Confidential
Information.
(c) This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed an original.
IN WITNESS WHEREOF, the parties have caused this instrument to be executed
on the day and year first written above.
THE COMPANY
SunTrust Equitable Securities Corporation
On behalf of BI Incorporated
By: /s/ Charles W. Byrge
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Name: Charles W. Byrge
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Title: Managing Director
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RECIPIENT:
Kohlberg & Co., L.L.C.
By: /s/ Christopher Lacovara
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Name: Christopher Lacovara
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Title: Principal
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