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EXHIBIT (e)(3)
CONFIDENTIAL
August 11, 2000
Cemex, S.A. de C.V.
Ave. Constituction 444 Pte.
6400 Monterrey, N.L., Mexico
Gentlemen:
In connection with the consideration by Cemex, S.A. de C.V. and Southdown,
Inc. of a possible business combination or other transaction involving both
corporations and/or their respective subsidiaries or affiliates (a
"Transaction")(each corporation, together with its subsidiaries or affiliates
being referred to singly as a "Company" and collectively as the "Companies"),
each Company is prepared to make available to the other certain information
concerning its business, financial condition, operations, prospects, assets and
liabilities. As a condition to such information being furnished to a Company
and its directors, officers, employees, agents or advisors (including, without
limitation, attorneys, accountants, consultants, bankers and financial advisors)
(collectively, "Representatives"), each Company agrees to treat any information
concerning the other Company (whether prepared by the other Company, its
advisors or otherwise and irrespective of the form of communication) which has
been or will be furnished to a Company through its Representatives (duly
authorized to receive such information by a written communication addressed to
the other Company) by or on behalf of the other Company (herein collectively
referred to as the "Evaluation Material") in accordance with the provisions of
this letter agreement, and to take or abstain from taking certain other actions
hereinafter set forth.
The term "Evaluation Material" shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents or materials
prepared by a Company or its Representatives which contain, reflect or are based
upon, in whole or in part, the information furnished to such Company or its
Representatives pursuant hereto. 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 Company to which it was provided
(a "Recipient") or its Representatives, (ii) was within the possession of a
Recipient prior to its being furnished to the Recipient by or on behalf of the
other Company pursuant hereto, provided that the source of such information was
not known by the Recipient or any of its Representatives to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the other Company or any other party with
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Cemex, S.A. de C.V.
August 11, 2000
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respect to such information, (iii) becomes available to the Recipient on a non-
confidential basis from a source other than the other Company or any of its
Representatives, provided that such source is not known by the Recipient or any
of its Representatives to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the other
Company or any other party with respect to such information, or (iv) was
independently developed by a Recipient without reference to the information
furnished by the other Company.
Each Company hereby agrees that it and its Representatives shall use the
Evaluation Material solely for the purpose of evaluating a possible transaction
between the Companies, that the Evaluation Material will be kept confidential by
each Company and its Representatives and that neither Company not its
Representatives will disclose any of the Evaluation Material in any manner
whatsoever; provided, however, that (i) a Company may make any disclosure of
such information to which the other Company gives its prior written consent and
(ii) any of such information may be disclosed to a Company's Representatives who
need to know such information for the sole purpose of evaluating a possible
transaction between the Companies, who agree to keep such information
confidential in accordance with this letter agreement. In any event, each
Company shall be responsible for any breach of this letter agreement by any of
its Representatives, and each Company agrees, at its sole expense, to take all
reasonable measures (including but not limited to court proceedings) to restrain
its Representatives from prohibited or unauthorized disclosure or use of the
Evaluation Material.
In addition, each Company agrees that, without the prior written consent of
the other Company, it and its Representatives will not disclose to any other
person the fact that the Evaluation Material has been made available to it, that
discussions or negotiations are taking place concerning a possible transaction
involving the Companies or any of the terms, conditions or other facts with
respect thereto (including the status thereof), unless in the written opinion of
either Company's counsel such disclosure is required by law and then only with
as much prior written notice to the other Company as is practical under the
circumstances. The term "person" as used in this letter agreement shall be
broadly interpreted to include the media and any corporation, partnership,
group, individual or other entity.
In the event that a Recipient or any of its Representatives are requested
or required (by deposition, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative demand or other
similar process) to disclose any of the Evaluation Material, the Recipient shall
provide the other Company with prompt written notice of any such request or
requirement so that the other Company may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this letter
agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver
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Cemex, S.A. de C.V.
August 11, 2000
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by the other Company, a Recipient or any of its Representatives are nonetheless,
in the written opinion of the Recipient's counsel, legally compelled to disclose
Evaluation Material to or at the direction of any tribunal or else stand liable
for contempt or suffer other censure or penalty, the Recipient or its
Representatives may, without liability hereunder, disclose to or at the
direction of such tribunal only that portion of the Evaluation Material which
such counsel advises the Recipient or its Representatives is legally required to
be disclosed, provided that the Recipient or its Representatives cooperate with
the other Company to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Evaluation Material
by such tribunal.
If either Company decides that it does not wish to proceed with a
transaction with the other Company, it will promptly inform the other Company of
that decision. In that case, or at any time upon the request of either Company
for any reason or for no reason, each Recipient will promptly deliver to the
other Company all Evaluation Material (and all copies thereof) furnished to it
or its Representatives by or on behalf of the other Company pursuant hereto. In
the event of such a decision or request, all other Evaluation Material prepared
by a Recipient or its Representatives shall be destroyed and no copy thereof
shall be retained, and each Recipient agrees to certify in writing that such
destruction has occurred. Notwithstanding the return or destruction of the
Evaluation Material, each Company and its Representatives will continue to be
bound by the obligations of confidentiality and other obligations hereunder.
Each Company understands and acknowledges that neither it nor any of its
Representatives (including without limitation its financial or other advisors)
makes any representation or warranty, express or implied, as to the accuracy or
completeness of its Evaluation Material. Each Company agrees that neither the
other Company nor any of its Representatives (including without limitation its
financial or other advisors) shall have any liability to such Company or to any
of its Representatives relating to or resulting from the use of the Evaluation
Material. Only those representations or warranties which are made in a final
definitive agreement regarding the transactions contemplated hereby, when, as
and if executed, and subject to such limitations and restrictions as may be
specified therein, will have any legal effect.
In consideration of the Evaluation Material being furnished pursuant to
this letter agreement, each Company hereby agrees that, for a period of one year
from the date hereof, neither it nor any of its affiliates will solicit to
employ any of the current officers or employees of the other Company who were
directly involved with the other Company in connection with the evaluation of a
transaction hereunder, so long as they are employed by the other Company,
without obtaining the prior written consent of the other Company. The preceding
sentence shall not apply to general solicitations not aimed at specific
employees.
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Cemex, S.A. de C.V.
August 11, 2000
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In consideration of the Evaluation Material being furnished pursuant to
this letter agreement, each Company hereby further agrees that, without the
prior written consent of the Board of Directors of the other Company, for a
period of two years from the date hereof, it shall not (i) in any manner
acquire, agree to acquire or make any proposal to acquire, directly or
indirectly, any equity securities, or any direct or indirect rights to acquire
any equity securities or any property, of the other Company; (ii) propose to
enter into, directly or indirectly, any merger, business combination or other
extraordinary transaction involving the other Company or to purchase, directly
or indirectly, a material portion of the assets of the other Company; (iii)
make, or in any way participate, in any "solicitation" of "proxies" to vote (as
those terms are used in the rules of the Securities and Exchange Commission) any
voting securities of the other Company or act, alone or in concert with others,
to seek to control or influence the management, Board of Directors or policies
of the other Company; (iv) form, join or in any way participate in a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
in connection with any of the foregoing; (v) enter into or disclose any
intention, plan or arrangement inconsistent with the foregoing; or (vi) advise,
assist or encourage any other persons in connection with any of the foregoing.
The restrictions in this paragraph shall not be applicable (i) to ordinary
brokerage or trading transactions by or on behalf of a Company solely for
investment purposes and aggregating no more than five percent of the other
Company's outstanding voting securities, (ii) if the other Company shall enter
into or publicly announce, or receive approval from its Board of Directors with
respect to, a definitive agreement that, upon its consummation, would involve a
change of control of the other Company, or if there shall be a change of control
of such other Company, or (iii) if a Company has requested that the Recipient
return the Evaluation Material without the Recipient having informed such
Company that it does not intend to proceed with a Transaction; provided that if
the Recipient does not inform such Company within 90 days of its receipt of the
Evaluation Material that it intends to proceed with a Transaction, for purposes
of this sentence the Recipient shall be deemed to have informed such Company
that it does not intend to proceed with a Transaction.
Each Company agrees that unless and until a final definitive agreement
regarding a transaction between the Companies has been executed and delivered,
neither Company will be under any legal obligation of any kind whatsoever with
respect to such a transaction by virtue of this letter agreement except for the
rights and obligations specifically agreed to herein. Each Company further
acknowledges and agrees that the other Company reserves the right, in its sole
discretion, to reject any and all proposals regarding a transaction between the
Companies and to terminate discussions and negotiations between the Companies at
any time.
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Cemex, S.A. de C.V.
August 11, 2000
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It is understood and agreed that no failure or delay by either 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 or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
It is further understood and agreed that any breach of this letter
agreement by either Company or any of its Representatives would result in
irreparable harm to the other Company, that money damages would not be a
sufficient remedy for any such breach of this letter agreement and that each
Company shall be entitled to equitable relief, including injunction and specific
performance, as a remedy for any such breach. Each Company further agrees to
waive, and to use its best efforts to cause its Representatives to waive, any
requirement for the securing or posting of any bond in connection with any such
remedy. Such remedies shall not be deemed to be the exclusive remedies for a
breach by a Company of this letter agreement but shall be in addition to all
other remedies available at law or equity to the other Company. In the event of
litigation relating to this letter agreement, if a court of competent
jurisdiction determines that a Company or any of its Representatives have
breached this letter agreement, then such Company shall be liable and pay to the
other Company the reasonable legal fees incurred by that Company in connection
with such litigation, including any appeal therefrom.
This letter agreement shall be governed by and construed in accordance with
the laws of the State of Texas and may not be amended or terminated except
pursuant to a written agreement duly executed by each Company. Each Company
hereby irrevocably submits to the exclusive jurisdiction of the United States
District Court for the Southern District of Texas, or any state court of the
State of Texas located in the City of Houston, in any action, suit or proceeding
arising in connection with this letter agreement, and agrees that any such
action, suit or proceeding shall be brought only in such court (and waives any
objection based on forum non conveniens or any other objection to venue
therein); provided, however, that such consent to jurisdiction is solely for the
purpose referred to in this sentence and shall not be deemed to be a general
submission to the jurisdiction of the foregoing courts or in the State of Texas
other than for such purpose. EACH COMPANY HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR PROCEEDING.
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Cemex, S.A. de C.V.
August 11, 2000
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Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned, whereupon this letter agreement
shall become a binding agreement between the Companies to the extent expressly
noted herein.
Very truly yours,
Southdown, Inc.
By: /s/ PATRICK S. BULLARD
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Name: Patrick S. Bullard
Title: Senior Vice President - General
Counsel & Secretary
Accepted and agreed as of
the date first written above:
Cemex, S.A. de C.V.
By: /s/
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Name:
Title:
