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Exhibit (d)(3)
MUTUAL CONFIDENTIALITY AGREEMENT
THIS MUTUAL CONFIDENTIALITY AGREEMENT (the "Agreement") is entered into as
of November 11, 1999 by and between AmericanGreetings.com, Inc., a Delaware
corporation, having offices and a place of business at One American Road,
Cleveland, Ohio 44144 ("AG"), and Egreetings Network, Inc., a Delaware
corporation, having offices and a place of business at 501 Second Street, Suite
114, San Francisco, CA 94107 ("EGN").
RECITALS:
A. AG and EGN have entered into preliminary discussions concerning the
possibility of a strategic transaction between AG and EGN (the "Transaction");
B. To assist each other in evaluating the Transaction, AG and EGN are
prepared to make available to the other certain business, financial, and
technical information, which the parties regard as proprietary and confidential;
and
C. AG and EGN are willing to furnish such information to the other, and AG
and EGN are willing to receive such information from the other, on the terms and
conditions set forth below.
AGREEMENTS:
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used herein:
(a) "Affiliate" shall mean any Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, AG or EGN, as applicable. "Control" (including
the terms "controlled by" and "under common control with") shall mean the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
(b) "Evaluation Material" shall mean any and all commercial,
financial, technical, or other information concerning the Disclosing Party
that may hereafter be provided by the Disclosing Party to the Receiving
Party; and additionally includes all such information to the extent
included in analyses, compilations, studies, or other materials prepared by
the Receiving Party or any Representatives of the Receiving Party
containing or based in whole or in part on any of the information furnished
by the Disclosing Party.
(c) "Excluded Information" shall mean information, if any, that would
otherwise constitute Evaluation Material and that (i) is or becomes
generally available to or known by the public other than as a result of a
disclosure made by the Receiving Party or its Representatives in breach of
this Agreement; (ii) was available to the Receiving Party on a
nonconfidential basis prior to disclosure to the Receiving Party by the
Disclosing Party; (iii) is or was disclosed to the Receiving Party on a
nonconfidential basis from a source other than the Disclosing Party
provided that the Receiving Party is not, in good faith after reasonable
inquiry, aware that such source is or was then bound by a confidentiality
agreement with the Disclosing Party or otherwise prohibited from
transmitting the information to the Receiving Party by any contractual,
legal, or fiduciary obligation or by any other obligation enforceable by
law or in equity; (iv) was or is hereafter disclosed by the Disclosing
Party to a third party who is not bound by similar restrictions on use and
disclosure as set forth in this Agreement; or (v) is hereafter, or was
heretofore, independently developed or compiled by the Receiving Party
without the aid, application, or use of the Evaluation Material. In the
event of a dispute or litigation between the parties, the Receiving Party
shall have the burden of proving by clear and convincing evidence that any
information disclosed or used by the Receiving Party or its Representatives
and claimed to be excluded under this Subsection (c) is not in fact
Evaluation Material or a derivative of Evaluation Material.
(d) "Representatives" of a party shall mean any or all of the
following representatives of such party: directors, officers, employees,
agents, attorneys, accountants, consultants, bankers, business advisers,
financial advisers, scientific advisers, technical advisers.
Representatives shall also include the Representatives (as defined in the
preceding sentence) of Affiliates of the party.
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(e) "Person," whether or not the term is capitalized, will be
interpreted very broadly and will include, but not be limited to, any
individual, corporation (including a business trust), partnership, joint
stock company, limited liability company, trust, estate, unincorporated
association, joint venture, or other entity, or a government or any
political subdivision or agency thereof, whether or not any such person is
an officer, director, employee, or agent of the Disclosing Party.
(f) "Disclosing Party" shall mean either AG or EGN, as is appropriate
in the context, and means such party that discloses Evaluation Material to
the other.
(g) "Receiving Party" shall mean either AG or EGN, as is appropriate
in the context, and means such party that receives Evaluation Material from
the other.
2. Non-Disclosure. The Receiving Party agrees to safeguard the
confidentiality of the Evaluation Material and not to disclose any part of it to
any Person except to such of the Receiving Party's Representatives as need to
know such information for the purposes of evaluating the Transaction or advising
the Receiving Party with respect to the Transaction and who have obligated
themselves to hold the Evaluation Material in confidence and only as permitted
hereunder. The Receiving Party shall be responsible for breach of this Agreement
by any such Representatives.
3. Use of Evaluation Material. Neither the Receiving Party or its
Representatives will use the Evaluation Material, directly or indirectly, for
any purpose other than evaluating a possible Transaction between AG and EGN
without the prior written consent of the Disclosing Party. Such use shall cease
at any time when AG notifies EGN that AG is no longer interested in evaluating a
Transaction, or EGN notifies AG that EGN is no longer interested in evaluating a
Transaction.
4. Return of Evaluation Material. Promptly upon the request of the
Disclosing Party, the Receiving Party will return to the Disclosing Party all
copies of the Evaluation Material furnished to the Receiving Party by the
Disclosing Party, together with all copies of any of the same, or any part
thereof, made by the Receiving Party or its Representatives. All notes, studies,
reports, memoranda, and other documents prepared by the Receiving Party or its
Representatives that contain or reflect the Evaluation Material shall also be
returned to the Disclosing Party or destroyed and certified as such to the
Disclosing Party, to the extent they contain Evaluation Material.
5. Non-Disclosure of Existence of Negotiations. Without the prior written
consent of the Disclosing Party, the Receiving Party shall not, and shall direct
its Representatives not to, disclose to any person, other than as provided in
Section 2 and Section 6, (i) the fact that the Receiving Party has received the
Evaluation Material, (ii) that discussions or negotiations are taking place
concerning a possible Transaction, or (iii) any of the terms, conditions, or
other facts with respect to any such possible Transaction, including the status
of discussions or negotiations.
6. Subpoena; Court Order; Other Legal Requirement. If a court of competent
jurisdiction or any other governmental agency serves the Receiving Party or its
Representatives with a subpoena or order or other compulsory instrument, or with
respect to clause (b) or (c) below, counsel for any such party advises such
party that such party has a legal obligation to disclose (a) all or any part of
the Evaluation Information, (b) the fact that the Evaluation Information has
been made available to the Receiving Party, or (c) any of the terms, conditions,
or other facts with respect to any such possible Transaction, including the
status of discussions or negotiations, the Receiving Party and its
Representatives, as the case may be, will: (i) provide the Disclosing Party with
prompt written notice of the existence, terms, and circumstances surrounding
such request or requirement; (ii) consult with the Disclosing Party on the
advisability of taking steps to resist or narrow that request; (iii) if
disclosure of Evaluation Information is required, furnish only such portion of
the Evaluation Information as the Receiving Party counsel advises in writing
that the Receiving Party is legally required to disclose; and (iv) cooperate
with the Disclosing Party, at the request of the Disclosing Party and at the
Disclosing Party's expense, in the Disclosing Party's efforts to obtain an order
excusing the Evaluation Information from disclosure, or an order or other
reliable assurance that confidential treatment will be accorded to that portion
of the Evaluation Information that is required to be disclosed.
7. Disclaimer of Warranty. Neither AG nor EGN nor their Representatives
has made or makes any representation or warranty as to the accuracy,
completeness, or value of the Evaluation Material. THE RECEIVING PARTY AGREES
THAT NEITHER THE DISCLOSING PARTY NOR ANY OF ITS REPRESENTATIVES SHALL HAVE ANY
LIABILITY TO THE RECEIVING PARTY OR ANY OF ITS REPRESENTATIVES RESULTING FROM
THE RECEIVING PARTY'S USE OF THE EVALUATION MATERIAL, EXCEPT AS PROVIDED IN A
FURTHER AGREEMENT BETWEEN THE PARTIES HERETO.
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8. Definitive Agreement. Unless and until a definitive written agreement
between the Disclosing Party and the Receiving Party with respect to a
Transaction has been executed and delivered, neither the Disclosing Party nor
the Receiving Party will be under any legal obligation of any kind whatsoever
with respect to such a Transaction by virtue of this or any other written or
oral expression by either of them or their Representatives except, in the case
of this Agreement or any other written agreement, for the matters specifically
agreed to herein or therein.
9. Assignability. This Agreement shall be binding upon and inure to the
benefit of the parties, their legal representatives, successors, and assigns.
Except as otherwise expressly provided herein, neither this Agreement nor any
rights granted hereunder may be assigned, transferred, conveyed, or encumbered,
whether voluntarily or by operation of law, by AG or EGN without the prior
written consent of the other, and any attempt to do so will be deemed null and
void.
10. Injunctive Relief. The Receiving Party acknowledges that if this
Agreement is breached, the Disclosing Party could not be made whole by monetary
damages. Accordingly, the Disclosing Party, in addition to any other remedy to
which it may be entitled by law or in equity, shall be entitled to seek an
injunction to prevent breaches of this Agreement, and to an order compelling
specific performance of this Agreement. The Receiving Party acknowledges and
agrees that: (a) the Evaluation Material is proprietary to and valuable
information of the Disclosing Party; (b) the Disclosing Party derives economic
value from the Evaluation Information not being generally known to other persons
who can obtain economic value from its disclosure or use; (c) any disclosure or
unauthorized use of the Evaluation Material could cause irreparable harm and
loss to the Disclosing Party; (d) monetary damages would be inadequate to
compensate the Disclosing Party for a breach of this Agreement; and (e) in
addition to any other remedy available in law or in equity, the Disclosing Party
shall be entitled to injunctive relief in order to enforce the terms of this
Agreement. The Receiving Party shall reimburse the Disclosing Party for all
costs and expenses, including attorney's fees, incurred by the Disclosing Party
in enforcing the obligations of the Receiving Party and its Representatives
hereunder.
11. Notices, Etc. All notices, demands, and other communications provided
for hereunder shall be in writing (including facsimile or similar transmission)
and mailed (by U.S. certified mail, return receipt requested, postage prepaid),
sent, or delivered (including by way of overnight courier service), (a) if to
AG, to AmericanGreetings.com, Inc., One American Road, Cleveland, Ohio 44144,
and in the case of facsimile transmission, to telecopy no. (216) 252-4567, in
each case to the attention of Josef Mandelbaum, with a copy to Stephen Gold,
Esq., Gordon & Glickson LLC, 444 North Michigan Avenue, Suite 3600, Chicago, IL
60611; and (b) if to EGN, to Egreetings Network, Inc., 501 Second Street, Suite
114, San Francisco, CA 94107, and in the case of facsimile transmission, to
telecopy no. (415) 375-4665, in each case to the attention of Andrew Moley, or,
as to each party, to such other person and/or at such other address or number as
shall be designated by such party in a written notice to the other party. All
such notices, demands, and communications, if mailed, shall be effective upon
the earlier of (i) actual receipt by the addressee, (ii) the date shown on the
return receipt of such mailing, or (iii) five (5) days after deposit in the
mail. All such notices, demands, and communications, if not mailed, shall be
effective upon the earlier of (a) actual receipt by the addressee, or (b) with
respect to facsimile and similar electronic transmission, the time that
electronic confirmation of a successful transmission is receipted as received.
12. Entire Agreement. This Agreement constitutes the entire understanding
and agreement between the parties and supersedes all previous understandings,
agreements, communications, and representations, whether written or oral,
concerning the treatment of information and other matters to which this
Agreement relates. The rights and obligations provided by this Agreement shall
take precedence over, and shall be applied in addition to, any specific legends
or statements associated with the Evaluation Material when received.
13. Amendments, Etc. No modification, amendment, or waiver of any
provision of this Agreement shall be effective unless the same shall be in
writing and signed by each of the parties hereto. Any waiver of any provision of
this Agreement shall be effective only in the specific instance and for the
specific purpose for which given.
14. No Waiver; Remedies. No failure on the part of either party to
exercise, and no delay in exercising, any right, power, or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
15. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the state of Ohio and no action involving this
Agreement may be brought except in the state and federal courts located in
Cuyahoga County, Ohio.
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16. Severability. Any provision of this Agreement which is prohibited,
unenforceable, or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability, or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability, or legality of such
provision in any other jurisdiction.
17. No License. Except for the limited right to use the information
disclosed under this Agreement granted herein, no right or license, either
express or implied, under any patent, copyright, trade secret, or proprietary
information is granted hereunder.
18. Survival. The obligations of the Receiving Party under the terms of
this Agreement shall continue for so long as any Evaluation Material continues
to exist.
19. Captions. The captions contained in this Agreement are for convenience
only and shall not affect the construction or interpretation of any provisions
of this Agreement.
20. Securities Law Acknowledgement. The parties acknowledge that each is
aware and that their Representatives have been advised that the United States
securities laws prohibit any person who has material, non-public information
from purchasing or selling securities of such company or from communicating the
information to any other person.
21. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same instrument. One or more
counterparts of this Agreement may be delivered via telecopier with the
intention that they shall have the same effect as an original executed
counterpart hereof.
IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
representatives of the parties to become effective as of the date first
referenced above.
AG:
AMERICANGREETINGS.COM, INC.
By: /s/ JOSEF A. MANDELBAUM
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Josef A. Mandelbaum
Senior Vice President of Sales, Business
Development and Strategic Planning
November 11, 1999
EGN:
EGREETINGS NETWORK, INC.
By: /s/ ANDREW MOLEY
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Andrew Moley
Chief Financial Officer
Date: November 16, 1999