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Exhibit (d)(3)
HARCOURT GENERAL, INC.
27 Boylston Street
Chestnut Hill, Massachusetts 02467
June 28, 2000
Reed Elsevier PLC
25 Victoria Street
London SW1H OEX
United Kingdom
Attn: Sybella Stanley
Dear Sirs:
You have expressed an interest in a possible negotiated transaction
involving Harcourt General, Inc. (the "Company", which term as used herein shall
include all subsidiaries of the Company). In connection with your analysis of a
possible negotiated transaction with the Company (a "Transaction"), you have
requested certain oral and written information concerning the Company from
directors, officers, employees, representatives and/or agents of the Company and
its subsidiaries (the Company's "Representatives"). All such information
furnished to you or your Representatives (as defined below) by or on behalf of
the Company or its subsidiaries (irrespective of the form of communication and
whether such information is so furnished before, on or after the date hereof),
and all analyses, compilations, data, studies, notes, translations, memoranda or
other documents prepared by you or your Representatives containing or based in
whole or in part on any such furnished information are collectively referred to
herein as the "Information." In consideration of furnishing you with the
Information, the Company requests your agreement to the following:
1. The Information will be used solely for the purpose of evaluating a
Transaction and will not be used in any other way, and the Information
will be kept strictly confidential and will not be disclosed by you or
your Representatives, except (a) as you may be advised in writing by your
outside counsel that it is required by applicable law, regulation or legal
process, and only after compliance with Section 3 below, and (b) that you
may disclose the Information or portions thereof to those of your officers
and employees and representatives of your legal, accounting and financial
advisors (the persons to whom such disclosure is permissible being
collectively referred to herein as your
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"Representatives") who need to know such information for the purpose of
evaluating such Transaction; provided, that your Representatives are
informed of the confidential and proprietary nature of the Information;
and provided, further, that prospective financing sources shall not be
considered "Representatives" to whom Information may be disclosed in
accordance with this paragraph without the prior written consent of the
Company, which consent shall not be unreasonably withheld. You agree to be
responsible for any breach of this agreement by your Representatives (it
being understood that such responsibility shall be in addition to and not
by way of limitation of any right or remedy the Company may have against
such Representatives with respect to any such breach).
2. Except as may be required by law or the applicable rules of any stock
exchange on which your securities may be listed, without the prior written
consent of the Company, neither you nor your Representatives will disclose
to any person (except to the extent otherwise required in the written
opinion of your outside counsel by applicable law, regulation or legal
process, and only after compliance with Section 3 below), either the fact
that any investigations, discussions or negotiations are taking place
concerning a possible Transaction, or that you have received Information
from the Company or Information has been made available by the Company or
any of the terms, conditions or other facts with respect to any such
possible Transaction, including the status thereof. The term "person" as
used in this agreement will be interpreted broadly to include the media
and any corporation, company, group, partnership or other entity or
individual.
3. If you or any of your Representatives become legally compelled (including
by deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process) to disclose any of the
Information or the information referred to in Section 2 above, you shall
provide the Company with prompt prior written notice of such requirement
so that the Company may seek a protective order or other appropriate
remedy. If such protective order or other remedy is not obtained, you and
your Representatives agree to disclose only that portion of the
Information which you are advised in writing by outside counsel is legally
required to be disclosed and to take all reasonable steps to preserve the
confidentiality of the Information and the information referred to in
Section 2 above (including by obtaining an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Information and the information referred to in Section 2 above). In
addition, you and your Representatives will not oppose any action (and
will, if and to the extent requested by the Company, cooperate with,
assist and join with the Company, at the Company's expense, in any
reasonable action) by the Company to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be
accorded the Information and the information referred to in Section 2
above.
4. The term "Information" does not include any information which (i) at the
time of disclosure or thereafter is generally available to the public
(other than as a result of a disclosure directly or indirectly by you or
your Representatives in violation hereof), (ii) is or becomes available to
you on a nonconfidential basis from a source other than the
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Company or its advisors, provided that, to your knowledge after reasonable
inquiry, such source was not prohibited from disclosing such information
to you by a legal, contractual or fiduciary obligation owed to the
Company, (iii) you can establish is already in your possession (other than
information furnished by or on behalf of the Company), or (iv) you can
establish was developed by you or others independently of, and without
reference to, the Information.
5. If you determine not to pursue a Transaction, you will promptly notify the
Company of your determination. At the time of such notice, or if, at any
earlier time, the Company so directs (whether or not you determine to
pursue a Transaction), you and your Representatives will, at your expense,
promptly return to the Company or destroy, all Information and all copies,
extracts or other reproductions in whole or in part thereof, as well as
any analyses, compilations, studies or other documents prepared by you or
for your use containing or reflecting Information. Compliance by you and
your Representatives with any direction of the Company or election by you
to destroy Information pursuant to this Section 5 shall be certified in
writing to the Company by your authorized officer supervising such
destruction. Notwithstanding the return or destruction of the Information,
you and your Representatives will continue to be bound by your
confidentiality and other obligations hereunder.
6. You agree that, for a period of two years from the date of this letter
agreement, neither you nor any of your affiliates will, unless invited to
do so (on an unsolicited basis) by the Board of Directors of the Company
in writing: (i) acquire, offer or propose to acquire, or agree or seek to
acquire, directly or indirectly, by purchase or otherwise, any securities
or direct or indirect rights or options to acquire any securities of the
Company or any subsidiary thereof, or of any successor to or person in
control of the Company, or any assets of the Company or any subsidiary or
division thereof or of any such successor or controlling person; (ii)
enter into or agree, offer, propose or seek to enter into, or otherwise be
involved in or part of, directly or indirectly, any acquisition
transaction, merger or other business combination relating to all or part
of the Company or any of its subsidiaries or any acquisition transaction
for all or part of the assets of the Company or any subsidiary of the
Company or any of their respective businesses; (iii) make, or in any way
participate in, directly or indirectly, any "solicitation" of "proxies"
(as such terms are defined under Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) to vote, or seek to
advise or influence any person or entity with respect to the voting of,
any voting securities of the Company or any of its subsidiaries; (iv)
form, join or in any way participate in a "group" (within the meaning of
Section 13(d)(3) of the Exchange Act and the rules and regulations
thereunder) with respect to any voting securities of the Company or any of
its subsidiaries; (v) seek, propose or otherwise act alone or in concert
with others, to influence or control the management, board of directors or
policies of the Company or any of its subsidiaries; (vi) directly or
indirectly enter into any discussions, negotiations, arrangements or
understandings with any other person with respect to any of the foregoing
activities or propose any of such activities to any other person; (vii)
advise, assist, encourage, act as a financing source for or otherwise
invest in any other person in connection with any of the
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foregoing activities; or (viii) disclose any intention, plan or
arrangement inconsistent with any of the foregoing. You will promptly
advise the Company of any inquiry or proposal made to you with respect to
any of the foregoing. You also agree that, during the two-year period
referred to in the second preceding sentence, neither you nor any of your
affiliates will: (i) request the Company or its Representatives, directly
or indirectly, to (1) amend or waive any provision of this paragraph
(including this sentence) or (2) otherwise consent to any action
inconsistent with any provision of this paragraph (including this
sentence); or (ii) take any initiative with respect to the Company or any
of its subsidiaries which could require the Company to make a public
announcement regarding (1) such initiative, (2) any of the activities
referred to in the second preceding sentence, (3) the possibility of a
Transaction or any similar transaction or (4) the possibility of you or
any other person acquiring control of the Company, whether by means of a
business combination or otherwise. This paragraph shall also apply with
respect to any of the foregoing activities with respect to any holding
company that may subsequently be formed to hold the Company and/or its
assets.
7. You agree that, for a period of two years from the date of this letter
agreement, without the prior written consent of the Company, you will not,
directly or indirectly, solicit to hire or hire (or cause or seek to cause
to leave the employ of the Company): (a) any management-level employee of
the Company; or (b) any other employee of the Company or any subsidiary of
the Company with whom you have had contact or who (or whose performance)
became known to you in connection with the process contemplated by this
agreement; provided, however, that the foregoing provision will not
prevent you from hiring any such person (i) who contacts you on his or her
own initiative without any direct or indirect solicitation by or
encouragement from you (it being understood that a bona fide public
advertisement for employment placed by you and not specifically targeted
at the Company's employees shall not constitute direct or indirect
solicitation or encouragement), (ii) who has been terminated by the
Company or (iii) who has not been employed by the Company during the
preceding six months.
8. You understand and acknowledge that neither the Company nor any of its
Representatives is making any representation or warranty, express or
implied, as to the accuracy or completeness of the Information, and
neither the Company nor any of its Representatives will have any liability
to you or any other person resulting from your use of the Information.
Only those representations or warranties that are made to you in a
definitive agreement executed by the Company regarding a Transaction (a
"Definitive Agreement") when, as, and if it is executed, and subject to
such limitations and restrictions as may be specified in such Definitive
Agreement, will have any legal effect. 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 on your part.
9. You and the Company understand and agree 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 by the Company and
you, and each of you hereby waives, in
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advance, any claims (including breach of contract) in connection with a
Transaction unless and until you shall have entered into a Definitive
Agreement. You also agree that unless and until a Definitive Agreement
between the Company and you with respect to a Transaction has been
executed and delivered, neither the Company, you or any of its or your
subsidiaries, stockholders, affiliates or Representatives has any legal
obligation of any kind whatsoever with respect to such Transaction by
virtue of this agreement or any other written or oral expression with
respect to such Transaction except, in the case of this agreement, for the
matters specifically agreed to herein. You understand that (i) the Company
and its Representatives shall be free to conduct any process for any
Transaction as they in their sole discretion shall determine (including
negotiating with any of the prospective parties to such Transaction and
entering into a Definitive Agreement without prior notice to you or any
other person) and (ii) any procedures relating to such Transaction may be
changed at any time without notice to you or any other person. You hereby
confirm that you are not acting as a broker for or Representative of any
person and are considering the Transaction only for your own account.
Except as set forth in Section 16, neither this paragraph nor any other
provision in this agreement can be waived, amended or assigned except by
written consent of the Company, which consent shall specifically refer to
this paragraph (or such other provision) and explicitly make such waiver
or amendment.
10. You hereby acknowledge that you are aware, and that you will advise your
affiliates and Representatives, that the United States securities laws
prohibit any person who has material, non-public information concerning
the matters which are the subject of this agreement from purchasing or
selling securities of a company which may be a party to a transaction of
the type contemplated by this agreement 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.
11. You agree that money damages would not be a sufficient remedy for any
breach of this agreement by you and that the Company shall be entitled to,
and you shall not oppose the granting of, equitable relief, including
injunction and specific performance, in the event of any such breach, in
addition to all other remedies available to the Company at law or in
equity. You further agree to waive, and to use your best efforts to cause
your officers, employees and agents to waive, any requirement for the
securing or posting of any bond in connection with such remedy. You agree
to indemnify the Company for, and to hold the Company harmless against,
any and all liabilities, costs, expenses, losses, damages and claims
(collectively, "Costs") arising out of your or any of your
Representatives' breach of this agreement.
12. The parties hereby irrevocably and unconditionally consent to submit to
the exclusive jurisdiction of the courts of the Southern District of New
York and of the United States of America located in the Southern District
of New York for any actions, suits or proceedings arising out of or
relating to this agreement and the transactions contemplated hereby (and
the parties agree not to commence any action, suit or proceeding relating
thereto except in such courts), and further agree that service of any
process, summons,
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notice or document by U.S. registered mail to the respective addresses set
forth above, in your case, and to 27 Boylston Street, Chestnut Hill,
Massachusetts 02467, in the case of the Company shall be effective service
of process for any action, suit or proceeding brought against the parties
in any such court. The parties hereby irrevocably and unconditionally
waive any objection to the laying of venue of any action, suit or
proceeding arising out of this agreement or the transactions contemplated
hereby, in the courts of the Southern District of New York or the United
States of America located in the Southern District of New York, and hereby
further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum.
13. You agree that no failure or delay by the Company in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege
hereunder.
14. If any provision of this agreement is found to violate any statute,
regulation, rule, order or decree of any governmental authority, court,
agency or exchange, such invalidity shall not be deemed to affect any
other provision hereof or the validity of the remainder of this agreement,
and such invalid provision shall be deemed deleted herefrom to the minimum
extent necessary to cure such violation.
15. You agree that all (a) contacts by you or your Representatives with the
Company regarding the Information or the Transaction, (b) requests for
additional Information, (c) requests for facility tours or management
meetings and (d) discussions or questions regarding procedures shall be
made through Goldman, Sachs & Co., or as any representative of such firm
may otherwise direct.
16. This agreement is for the benefit of the Company and its directors,
officers, employees, representatives and agents and their respective
successors and assigns and will be governed by and construed in accordance
with the laws of the State of New York. This agreement may be assigned to
any person that acquires all or any portion of the Company to the extent
it relates to such portion of the Company.
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If you agree with the foregoing, please sign and return a copy of this
letter, which will constitute our agreement with respect to the subject matter
of this letter.
Very truly yours,
HARCOURT GENERAL, INC.
By: /s/ Erik P. Geller
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Name: Erik P. Geller
Title: Senior VP and General Counsel
CONFIRMED AND AGREED as of the date first above written:
REED ELSEVIER PLC
By: /s/ Sybella Stanley
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Name: Sybella Stanley
Title: Director of Corporate Finance
