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EXHIBIT 3
CIBC CIBC World Markets Corp.
World Markets One World Financial Center
200 Liberty Street
New York, NY 10281
Tel: 212-667-7000
CONFIDENTIAL
July 19, 1999
Mr. David Wisen
Textron Financial Corporation
40 Westminster Street
Providence, RI 02903
Dear Mr. Wisen:
CONFIDENTIALITY AGREEMENT
1. You have requested, or may request in the future, certain information from
Litchfield Financial Corporation (the "Company") or CIBC World Markets Corp.
("CIBC World Markets") (collectively, the "Disclosing Parties"), the Company's
financial advisor, regarding the Company's business, operations and financial
condition (the "Information") for the sole purpose of determining whether you
wish to pursue a transaction involving the Company (a "Transaction"). You
hereby agree, subject to the further provisions hereof, for a period of two
years from the date of this letter to treat confidentially the Information the
Disclosing Parties furnishes to you or your officers, directors, agents,
representatives (including, without limitation, attorneys, accountants, experts,
consultants, financial advisors and persons contemplating providing financing
for any Transaction) or employees (collectively, "Representatives").
2. The term "Information" shall include any and all reports, analyses,
compilations, studies and information developed or prepared by the Disclosing
Parties (including the Confidential Memorandum), or by or for you that include,
incorporate, refer to, reflect or are based (in whole or in part) upon the
Information, but shall not include information, if any, that (a) becomes
generally available to the public in a manner other than as a result of a
disclosure by you or your Representatives; (b) was available to you on a
non-confidential basis prior to its disclosure to you by the Disclosing Parties;
or (c) becomes available to you on a non-confidential basis from a source other
than the Disclosing Parties if you have no reason to believe such source is
bound by or subject to a confidentiality agreement with the Company, or is
otherwise prohibited from transmitting the information to you.
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CIBC World Markets Corp.
3. You agree that the Information supplied by the Disclosing Paries will not be
used by you or your Representatives in any way directly or indirectly except to
evaluate or implement a Transaction, that the Information supplied by the
Disclosing Parties shall be kept strictly confidential for the term set forth
above by you and your Representatives and that the information shall not be used
in any manner that is detrimental or adverse to the Company; provided, however,
that (a) any of the Information supplied by the Disclosing Parties may be
disclosed to such of your Representatives who need to know the Information for
the purpose of evaluating or implementing a Transaction, who shall be informed
by you of the confidential and proprietary nature of the Information and who
shall agree to be bound by the confidentiality provisions of this letter, and
(b) any disclosure of the Information may be made upon the prior written consent
of the Company. You further agree to be fully responsible for any breach of this
letter by your Representatives.
4. If you or anyone to whom you transmit the Information pursuant to this letter
becomes compelled by applicable law or securities exchange regulation to
disclose any of the Information, you will provide the Company with prompt notice
of such requirement so that the Company may seek a protective order or other
appropriate remedy or waive compliance with the provisions of this letter. In
the event that such protective order or other remedy is not obtained, or that
the Company waives compliance with the provisions of this letter, you will
furnish only that portion of the Information that you are advised by written
opinion of legal counsel at the Disclosing Parties' sole cost is required by
applicable law or securities exchange regulation, and such disclosure will not
result in any liability hereunder unless such disclosure was caused by or
resulted from a previous disclosure by you or by your Representatives that was
not permitted by this letter. Additionally, you will exercise your best efforts
to obtain a protective order or other reliable assurance that confidential
treatment will be accorded any such Information that is disclosed.
5. Until the earlier of (i) the consummation by you of a Transaction, or (ii)
one year from the date of this letter, those to whom you have furnished
Information agree not to initiate or maintain contact (except for those contacts
made in the ordinary course of business or during course of agreed upon "due
diligence") with any officer, director, or employee of the Company regarding the
business, operations, prospects or finances of the Company or solicit (apart
from a general solicitation undertaken in the ordinary course of business) the
employment of any officer or director, except with the express permission of the
Company. CIBC World Markets will be informed of all communications with the
Company regarding any possible Transaction.
6. In consideration of your being furnished the Information and in view of the
fact that the Information consists and will consist of confidential, non-public
and proprietary information, you agree that for a period of two (2) years from
the date of this agreement, that, without the prior written consent of the
Company, you will not, directly or indirectly, (unless following an attempted
solicitation by unrelated third parties to purchase assets or securities of the
Company) (i) purchase, offer or agree to purchase, or announce an intention to
purchase any securities or assets of the Company or any subsidiary or rights or
options to acquire the same (excluding any purchase in the
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CIBC WORLD MARKETS CORP.
ordinary course of business by your pension plan or funds held by your pension
plan); (ii) make, or in any way participate in any "solicitation" of "proxies"
to vote or "consents" (as such terms are used in the rules and regulations of
the Securities and Exchange Commission), or seek to advise or influence any
person with respect to the voting of any voting securities of the Company; (iii)
initiate or support any stockholder proposal with respect to the Company; (iv)
make any public statements and/or announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction involving the Company or its securities, assets or business or any
subsidiary or division thereof, or of any successor thereto or any controlling
person thereof; (v) seek or propose to influence or control the Company's
management, board of directors, policies or affairs; (vi) disclose any
intention, plan or arrangement inconsistent with the foregoing; (vii) form, join
or in any way participate in a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act") in connection with any of
the foregoing; (viii) take any action that, is the sole judgement of the
Company, may require the Company to make a public announcement concerning any of
the foregoing, or (ix) encourage any of the foregoing.
7. If you determine that you do not wish to proceed with the Transaction, you
will promptly advise us of that decision. In that case or in the event that the
Transaction is not consummated by you or upon the request of the Disclosing
Parties, all of the Information will immediately be destroyed or returned to
CIBC World Markets, and no copies shall be retained by you or your
Representatives; provided, however, that, notwithstanding the foregoing, any
portion of the Information that consists of reports, analyses, compilations,
studies or information developed or prepared by or for you or your
Representatives that include, incorporate, refer to, reflect or are based upon
(in whole or in part) the information will be destroyed immediately.
8. You agree and will cause your Representatives not to disclose to any person
either the fact that discussions or negotiations are taking place concerning a
possible Transaction between the Company and you, or any of the terms,
conditions or other facts with respect to any such possible Transaction,
including the status thereof and the fact that the Information has been made
available to you; provided, however, that you may make such a disclosure upon
written notice to the Company, if it is advised by written opinion of legal
counsel that you are required to make such a disclosure by applicable law or
securities exchange regulation.
9. You understand that the Disclosing Parties make no representation or
warranty as to the accuracy or completeness of any information furnished by the
Disclosing Parties to you or your Representatives. You agree that the
Disclosing Parties shall not have any liability to you or any of your
Representatives resulting from the use of the Information by you or by them.
Solely for the purposes of this paragraph, the term "information" is deemed to
include all information furnished by the Disclosing Parties to you or your
Representatives, regardless of whether such information is or continues to be
subject to the confidentiality provisions hereof.
10. This letter sets forth the entire understanding and agreement of the
parties hereto and supersedes
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all previous communications, negotiations and agreements, whether oral or
written, with respect to the subject matter hereof. The parties hereto further
agree that unless and until a definitive agreement containing mutually
satisfactory provisions has been executed and delivered, neither the Company nor
you have any legal obligation of any kind whatsoever with respect to any such
Transaction by virtue of this letter or any other written or oral expression
with respect to such Transaction, except, in the case of this letter, for the
matters specifically agreed to herein. For purposes of this paragraph, 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 an offer or bid by any party hereto.
11. You acknowledge that the Company would not have an adequate remedy at law
for money damages if any of the covenants in this letter were not performed in
accordance with its terms and therefore agree that the Company may be entitled
to specific enforcement of such covenants in addition to any other remedy to
which it may be entitled, at law or in equity. The Company shall not be
required to post a bond or other security in connection therewith.
12. You understand and agree that no failure or delay by the Disclosing
Parties 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 right, power or
privilege hereunder.
13. This agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to principles of
conflicts-of-law.
14. This agreement represents the entire understanding and agreement of the
parties hereto and may be modified or waived only by a separate letter
executed by the Company and you expressly so modifying or waiving such
agreement.
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CIBC World Markets Corp.
If you are in agreement with the foregoing, please so indicate by signing,
dating and returning one copy of this letter to CIBC World Markets (World
Financial Center, New York, NY 10281, Attn: Christopher DeWinter, Telephone:
(212) 667-7978, Facsimile: (212) 571-4663), which will constitute our agreement
with respect to the matters set forth herein.
Very truly yours,
By: /s/ Michael R. McClintock
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Michael R. McClintock
Managing Director
Agreed to and Accepted by:
TEXTRON FINANCIAL CORPORATION
By: /s/ David Wisen
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Date: 7/20/99