CHIREX
May 26, 2000
Rhodia
26, quai Alphonse Le Gallo
F-92512 Boulogne-Billancourt Cedex
France
Dear Sir/Madam:
In connection with Rhodia's consideration of the potential acquisition
(the "Transaction") of all or any portion of the assets, securities or
businesses of ChiRex Inc. ("ChiRex"), ChiRex directly or through its financial
advisor Chase Securities Inc. ("Chase"), is prepared to make available to Rhodia
("Rhodia") certain information concerning its business, operations and assets
(all of which information so provided to Rhodia shall be known as the
"Evaluation Material"), subject to the conditions set forth below.
Rhodia agrees to use the Evaluation Material solely for evaluating the
Transaction and not in any way detrimental to ChiRex and that the Evaluation
Material will be kept confidential by Rhodia; provided, however, Rhodia may
disclose any Evaluation Material to Rhodia's directors, officers, employees,
agents, advisors, financing sources, attorneys and other representatives
(collectively, Rhodia's "Representative(s)") in each case who need to know such
information for the purpose of evaluating the Transaction (it being understood
that they shall be informed by Rhodia of the confidential nature of such
information and that Rhodia shall cause them to treat such information
confidentially and that Rhodia shall be responsible for any breach by them of
this agreement).
The term "Evaluation Material" means all information or data received
by Rhodia or Rhodia's Representatives, whether before or after Rhodia's
execution of this agreement, relating to the business and operations (including,
without limitation, information regarding customers and intellectual property)
of ChiRex or any of its affiliates or subsidiaries, and shall also be deemed to
include all notes, analyses, compilations, studies, interpretations or other
documents prepared by Rhodia or Rhodia's Representatives based on the Evaluation
Material made available by or on behalf of ChiRex.
The term "Evaluation Material" does not include information which (i)
is or becomes generally available to the public other than as a result of the
breach of this agreement by Rhodia or Rhodia's Representatives, (ii) was
available to Rhodia or Rhodia's Representatives on a non-confidential basis
prior to its disclosure by ChiRex or its representatives, (iii) is or becomes
available to Rhodia on a non-confidential basis, provided that the source of
such information is not known by Rhodia to be bound by a confidentiality
agreement or other obligation of confidentiality with respect to such
information, or (iv) was independently developed by employees or consultants of
Rhodia or Rhodia's Representatives without reference to or knowledge of the
Evaluation Material.
______________________________________________________________________________
ChiRex, Inc., 300 Atlantic St., Suite 402, Stamford, CT 06901 USA
Voice: (203) 351-2300 Facsimile: (203) 425-9996
Rhodia agrees that neither Rhodia nor Rhodia's Representatives will
disclose to any person the fact that the Evaluation Material has been made
available to Rhodia or them, that discussions or negotiations are taking place
concerning the Transaction or any of the terms, conditions or other facts with
respect thereto; provided that Rhodia or Rhodia's Representatives may make such
disclosure if they have received the written opinion of counsel that such
disclosure must be made in order not to commit a violation of law. Rhodia shall
not knowingly take any action that would result in such a legal requirement to
disclose.
In the event that Rhodia or any of Rhodia's Representatives are requested
or required (by subpoena, court order, or other similar process) to disclose any
of the Evaluation Material, that discussions or negotiations are taking place
concerning the Transaction or any of the terms, conditions, or other facts with
respect thereto, Rhodia shall provide ChiRex with prompt written notice, unless
notice is prohibited by law, of any such request or requirement so that ChiRex
may seek a protective order or other appropirate remedy. In the event that such
protective order or other remedy is not obtained, Rhodia may disclose such
information and Rhodia will exercise Rhodia's best efforts to obtain assurance
that confidential treatment will be accorded to such information.
Rhodia hereby acknowledges that it is aware (and that its Representatives
who are apprised of this matter have been or will be advised ) that U.S.
securities laws restrict persons with material non-public information about a
company obtained directly or indirectly from that company from purchasing or
selling securities of such company, 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.
The obligations of the parties under this agreement with regard to the
confidentiality of the Evaluation Material shall terminate on the third
anniversary of the date hereof.
For a period of two years from the date of this letter agreement (the
"Standstill Period") or unless authorized by ChiRex, Rhodia, on behalf of itself
and its affiliates (as such term is defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), hereby agrees that each
of Rhodia and Rhodia's affiliates shall not, and shall cause any person or
entity controlled by Rhodia or them not to: (i) in any manner acquire, agree to
acquire or make any proposal to acquire ownership directly or indirectly
(including, but not limited to, beneficial ownership as defined in Rule 13d-3
under the Exchange Act) of any voting securities or other equity interests in,
or property of ChiRex or any right or options to acquire such ownership; (ii)
propose to enter into, directly or indirectly, any merger or business
combination involving ChiRex; (iii) solicit proxies or consents, directly or
indirectly or become a "participant" in any "solicitation" (as such terms are
defined in Regulation 14A under the Exchange Act) of proxies or consents to
vote, or seek to advise or influence any person with respect to the voting of,
any voting securities of ChiRex; (iv) with respect to any voting securities of
ChiRex, (a) form or join any "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) after the date of this agreement that would be required to
file a statement on Schedule 13D or Schedule 13G if such group had not
previously filed such statement or (b) in the event that Rhodia or any of
Rhodia's affiliates have formed or joined any such group prior to the date
hereof, participate in or benefit from any additional action by such group or
any member thereof after the date of this agreement which (1) would constitute a
violation of this paragraph if undertaken by Rhodia alone or (2) would require
such group to file a statement on Schedule 13D or Schedule 13G if such group had
not previously filed such a statement; (v) otherwise act, alone or in concert
with others, to seek to control or influence the management, Board of Directors
or
________________________________________________________________________________
ChiRex Inc., 300 Atlantic St. Suite 402, Stamford, CT 06901 USA
Voice: (203) 351-2300 Facsimile: (203) 425-9996
policies of ChiRex; (vi) initiate any communications with any employee of ChiRex
except as contemplated by this agreement concerning the Evaluation Material or
any possible transaction involving ChiRex or solicit the employment of any
current employee of ChiRex (except that employees of ChiRex may be solicited
contemporaneously with or following the execution and delivery of definitive
document for the Transaction between ChiRex and Rhodia or any of Rhodia's
affiliates; (vii) disclose any intention, plan or arrangement inconsistent with
any of the foregoing; or (viii) advise, assist or encourage any other person in
connection with any of the foregoing.
Rhodia also agrees that during the Standstill Period and other than as
authorized by this agreement or a definitive agreement for the Transaction
executed by ChiRex and Rhodia or any of Rhodia's affiliates, (i) neither Rhodia
nor any of Rhodia's Representatives will request, directly or indirectly, that
ChiRex (or its directors, officers, employees or agents) amend or waive any
provision of the preceding paragraph or this sentence, ii) neither Rhodia nor
any of Rhodia's Representatives will take any action that might require ChiRex
to make a public announcement regarding the possibility of a business
combination, merger, sale of assets, liquidation or other extraordinary
corporate transaction involving ChiRex and (iii) if at any time during the
Standstill Period, Rhodia or any of Rhodia's Representatives is approached by
any third party concerning its or their participation in a transaction involving
ChiRex's assets or businesses or securities issued by ChiRex, Rhodia will inform
ChiRex promptly of the nature of such proposed transaction and the parties
thereto. The restrictions contained in this paragraph and in the preceding
paragraph shall not be applicable to ordinary brokerage or trading transactions
by a securities dealer or purchases by an institutional investor solely for
investment purposes aggregating less than 5% of ChiRex's outstanding voting
securities.
Notwithstanding the foregoing, Rhodia shall be released from its
obligations during the Standstill Period as set forth in the preceding two
paragraphs if (i) any person or group of persons acting in concert acquires,
announces or commences a tender or exchange offer to acquire, or otherwise
announces its intent to commence or commences a form of business combination
which would result in the acquisition of 50% or more of the then outstanding
voting stock of ChiRex, or (ii) ChiRex enters into or announces its intent to
enter into any merger, sale or business combination which would result in the
sale of all or substantially all of ChiRex's assets, or 50% or more of ChiRex's
then outstanding voting shares being owned by persons other than ChiRex's
current shareholders immediately prior to the consummation of such transaction.
Upon ChiRex's request, all copies of the Evaluation Material (except for
that portion of the Evaluation Material that consists of notes, analyses,
compilations, studies, interpretations or other documents prepared by Rhodia or
Rhodia's Representatives) will be promptly returned to ChiRex. That portion of
the Evaluation Material that consists of such notes, analyses, compilations,
studies, interpretations or other documents will be destroyed upon
ChiRex's request, such destruction to be confirmed in writing to ChiRex.
Rhodia acknowledges that neither ChiRex nor Chase (i) makes any
representation or warranty as to the accuracy or completeness of the Evaluation
Material or (ii) incurs any obligation to inform Rhodia of any change in ChiRex
or the information provided to Rhodia. Rhodia agrees that neither ChiRex nor
any of its directors, officers, employees, agents or advisors nor Chase shall
have any liability to Rhodia or to any of Rhodia's Representatives relating to
or resulting from use of the Evaluation Material. Each party hereby agrees
that no contract or agreement providing for a Transaction shall be deemed to
exist unless and until a definitive agreement has been executed and delivered,
and each party hereby waives, in advance, any claims (including, without
limitation, claims for breach of contract) in connection with any
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ChiRex Inc., 300 Atlantic St., Suite 402, Stamford, CT 06901 USA
Voice: (203) 351-2300 Facsimile: (203) 425-9996
Transaction unless and until a definitive agreement has been executed and
delivered. Each party also agrees that unless and until a definitive agreement
has been executed and delivered, neither party nor its stockholders or its
affiliates will be under any legal obligation of any kind whatsoever with
respect to any Transaction except for the manners specifically agreed to in this
agreement. For purposes of this agreement, the term definitive agreement does
not include an executed letter of intent or any other preliminary written
agreement, nor does it include any written or oral acceptance of any offer or
bid.
It is understood and agreed that no failure or delay by ChiRex 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
further exercise thereof or the exercise of any other right, power or privilege
hereunder. Rhodia agrees that money damages would not be a sufficient remedy
for any breach of this agreement by Rhodia or Rhodia's Representatives and that
in addition to all other remedies ChiRex shall be entitled to equitable relief,
including injunction and specific performance, for any breach of the provisions
of this agreement. Rhodia further agrees to waive, and use Rhodia's best
efforts to cause Rhodia's Representatives to waive, any requirement for the
securing or posting of any bond in connection with such remedy.
This agreement will inure to the benefit and may be enforced by
ChiRex and its successors or assigns and will be binding upon Rhodia and
Rhodia's Representatives and their respective successors in interest; provided,
however, that any assignment by Rhodia or Rhodia's Representatives of their
respective rights and obligations hereunder without ChiRex's prior consent will
be void.
This agreement embodies the entire understanding and agreement between
the parties with respect to the Evaluation Material and supersedes any prior
understandings and agreements relating thereto. In the event that any provision
of this agreement is held invalid or unenforceable by a court of competent
jurisdiction, then such provision will be considered separate and apart from the
remainder of this agreement which will remain in full force and effect. In the
event any provision is held to be overbroad as written, then such provision will
be deemed amended to narrow its application to the extent necessary to make the
provision enforceable in accordance with applicable law and enforced as so
amended. This agreement may be signed in counterparts, each of which shall
constitute an original and all of which together shall constitute one and the
same instrument.
______________________________________________________________________________
ChiRex, Inc., 300 Atlantic St., Suite 402, Stamford, CT 06901 USA
Voice: (203) 351-2300 Facsimile: (203) 425-996
This agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to its conflicts of
laws principles or rules. Rhodia and ChiRex irrevocably agree that the courts of
the State of New York are to have exclusive jurisdiction to settle any dispute
which may arise in connection with the validity, effect, interpretation or
performance of, or the legal relationships established by, this agreement or
otherwise in connection with this agreement and either party may apply to such
courts for ancillary relief. For such purposes, each party irrevocably submits
to the jurisdiction of any such court, waives any objections to the jurisdiction
of any such court and agrees that a judgement or order of any such court shall
be conclusive and binding on it and may be entered against it in the courts of
any other jurisdiction.
Please confirm Rhodia's agreement with the foregoing by signing and
returning one copy of this letter to ChiRex.
Very truly yours,
CHIREX INC.
By: /s/ Thomas I. H. Dubin
--------------------------------------
Name: Thomas I. H. Dubin
Title: VP, General Counsel & Secretary
Accepted and agreed as of
the date first written above:
RHODIA
By: /s/ J.C. Bravard
---------------------------
Name: J.C. Bravard
Title: Deputy President
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ChiRex, Inc., 300 Atlantic St., Suite 402, Stamford, CT 06901 USA
Voice: (203) 351-2300 Facsimile: (203) 425-9996