Exhibit (d)(4)
[LOGO OF EFFICIENT NETWORKS]
November 16, 2000
Siemens Corporation
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000
Confidentiality Agreement
Ladies and Gentlemen:
In connection with the possible transaction ("Proposed Transaction")
between Efficient Networks, Inc. ("Efficient") and Siemens Corporation or one of
its affiliates ("Siemens"), and in order to allow Efficient and Siemens to
evaluate the Proposed Transaction, each of Efficient and Siemens have and will
deliver to the other party certain information about its properties, employees,
finances, businesses and operations (such party when disclosing such information
being the "Disclosing Party" and when receiving such information being the
"Receiving Party"). All information (i) about the Disclosing Party or (ii) about
any third party (which information was provided to the Disclosing Party subject
to an applicable confidentiality obligation to such third party), furnished by
the Disclosing Party or its Representatives (as defined below) to the Receiving
Party or its Representatives regardless of the manner in which it is furnished,
is referred to in this letter agreement as "Proprietary Information."
Proprietary Information shall not include, however, information which (i) is or
becomes generally available to the public other than as a result of a disclosure
by the Receiving party or its Representatives in violation of this letter
agreement; (ii) was available to the Receiving Party on a nonconfidential basis
prior to its disclosure by the Disclosing Party or its Representatives; (iii)
becomes available to the Receiving Party on a nonconfidential basis from a
person other than the Disclosing Party or its Representatives who is not
otherwise known to the Receiving Party to be bound by a confidentiality
agreement with the Disclosing Party or any or its Representatives, or is
otherwise not known to the Receiving Party to be under an obligation to the
Disclosing Party or any of its Representatives not to transmit the information
to the Receiving Party; or (iv) was independently developed by the Receiving
Party without reference to or use of the Proprietary Information. Proprietary
Information shall also mean any analyses, compilations or the like prepared by
the Receiving Party or its Representatives that is based upon or includes
Proprietary Information of the Disclosing Party. For purposes of this letter
agreement, (i) "Representative" shall mean, as to any person, its directors,
officers, employees, agents and advisors (including without limitation,
financial advisors, attorneys and accountants and those of its affiliates); and
(ii) "person" shall be broadly interpreted to include, without limitation, any
corporation, company, partnership, other entity or individual.
Subject to the immediately succeeding paragraph, unless otherwise agreed to
in writing by the Disclosing Party, the Receiving Party (i) except as required
by law, shall keep all Proprietary Information confidential, shall not disclose
or reveal any Proprietary Information to
November 16, 2000
Page 2
any person other than its Representatives who are actively and directly
participating in its evaluation of the Proposed Transaction or who otherwise
need to know the Proprietary Information for the purpose of evaluating the
Proposed Transaction and shall cause those persons to observe the terms of this
letter agreement; (ii) shall not use Proprietary Information for any purpose
other than in connection with its evaluation of the Proposed Transaction or the
consummation of the Proposed Transaction; and (iii) except as required by law,
shall not disclose to any person (other than those of its Representatives who
are actively and directly participating in its evaluation of the Proposed
Transaction or who otherwise need to know for the purpose of evaluating the
Proposed Transaction) any information about the Proposed Transaction, or the
terms or conditions or any other facts relating thereto, including, without
limitation, the fact that discussions are taking place with respect thereto or
the status thereof, or the fact that Proprietary Information has been made
available to the Receiving Party or its Representatives. The Receiving Party
shall be responsible for any breach of the terms of this letter agreement by it
or its Representatives.
In the event that the Receiving Party or any of its Representatives are
requested pursuant to, or required by, applicable law or regulation (including,
without limitation, any rule, regulation or policy statement of any national
securities exchange, market or automated quotation system on which any of the
Receiving Party's securities are listed or quoted) or by legal process to
disclose any Proprietary Information or any other information concerning the
Disclosing Party or the Proposed Transaction, the Receiving Party shall provide
the Disclosing Party with prompt notice of such request or requirement in order
to enable the Disclosing Party (i) to seek an appropriate protective order or
other remedy, (ii) to consult with the Receiving Party with respect to the
Disclosing Party's taking steps to resist or narrow the scope of such request or
legal process or (iii) to waive compliance, in whole or in part, with the terms
of this letter agreement. In the event that such protective order or other
remedy is not obtained, or the Disclosing Party waives compliance, in whole or
in part, with the terms of this letter agreement, the Receiving Party or its
Representative shall use commercially reasonable efforts to disclose only that
portion of the Proprietary Information which is legally required to be disclosed
and to ensure that all Proprietary Information that is so disclosed will be
accorded confidential treatment. In the event that the Receiving Party or its
Representatives shall have complied fully with the provisions of this paragraph,
such disclosure may be made by the Receiving Party or its Representatives
without any liability hereunder.
To the extent that any Proprietary Information may include material subject
to the attorney-client privilege, work product doctrine or any other applicable
privilege concerning pending or threatened legal proceedings or governmental
investigations, the parties understand and agree that they have a commonality of
interest with respect to such matters and it is their desire, intention and
mutual understanding that the sharing of such material is not intended to, and
shall not, waive or diminish in any way the confidentiality of such material or
its continued protection under the attorney-client privilege, work product
doctrine or other applicable privilege. All Proprietary Information provided by
a party that is entitled to protection under the attorney-client privilege, work
product doctrine or other applicable privilege shall remain entitled to such
protection under these privileges, this agreement, and under the joint defense
doctrine. Nothing in this letter agreement obligates any party to reveal
material subject to the attorney-client privilege, work product doctrine or any
other applicable privilege.
November 16, 2000
Page 3
Notwithstanding anything in this letter agreement to the contrary, the
Disclosing Party hereby represents and warrants that such party may
rightfully disclose or make available the Proprietary Information to the
Receiving Party without the violation of any contractual, legal, fiduciary
or other obligation to any person, and the Disclosing Party shall indemnify
and hold harmless in full the Receiving Party and its Representatives
against any and all damages, costs and expenses of any nature whatsoever
(including, without limitation, attorneys' fees) incurred by the Receiving
Party or its Representatives in connection with the breach of such
representation and warranty.
If either party hereto shall determine that it does not wish to
proceed with the Proposed Transaction, such party shall promptly advise the
other party of that decision. In that case, or in the event that the
Disclosing Party, in its sole discretion, so requests or the Proposed
Transaction is not consummated by the Receiving Party, the Receiving Party
shall, upon the Disclosing Party's written request, promptly deliver to the
Disclosing Party all Proprietary Information, and, at the Receiving Party's
election, return or destroy (provided that any such destruction shall be
certified by a duly authorized Representative of the Receiving Party) all
copies, reproductions, summaries, analyses or extracts thereof or based
thereon (whether in hard-copy form or on intangible media, such as
electronic mail or computer files) in the Receiving Party's possession or
in the possession of any Representative of the Receiving Party; provided,
however, that if a legal proceeding has been instituted to seek disclosure
of the Proprietary Information, such material shall not be destroyed until
the proceeding is settled or a final judgment with respect thereto has been
rendered.
The parties agree that because proprietary information regarding each
party's employees will be disclosed to the other party in connection with
the Proposed Transaction, without the other party's prior written consent,
neither party will (1) for a period beginning on the date hereof and ending
ninety days following termination of discussions regarding a Proposed
Transaction, directly or indirectly employ any person who is now employed
by the other party, nor (2) for a period of one year from the date hereof
directly or indirectly solicit to employ any person who is now employed by
the other party. The term "solicit to employ" shall not be deemed to
include general solicitations of employment not specifically directed
towards employees of the other party; provided, however, that the foregoing
shall not prohibit either party from employing a person who contracts such
party on his or her own.
Subject to the terms and conditions of a definitive agreement
regarding the Proposed Transaction and without prejudice thereto, each
party hereto acknowledges that neither it nor its Representatives nor any
of the officers, directors, employees, agents or controlling persons of
such Representatives makes any express or implied representation or
warranty as to the completeness of the Proprietary Information. The
Receiving Party shall not be entitled to rely on the completeness of any
Proprietary Information, but shall be entitled to rely solely on such
representations and warranties regarding the completeness of the
Proprietary Information as may be made to it in any definitive agreement
relating to the Proposed Transaction, subject to the terms and conditions
of such agreement.
Each party is aware, and will advise its Representatives who are
informed of the matters that are the subject of this letter agreement, of
the restrictions imposed by the United States
securities laws on the purchase or sale of securities by any person who has
received material, non-public information from the issuer of such securities and
on the communication of such information to any other person when it is
reasonably foreseeable that such other person is likely to purchase or sell such
securities in reliance upon such information.
Siemens hereby agrees that, from the date hereof until December 31, 2001,
Siemens will not directly or indirectly: (i) except (a) for de minimis amounts
for benefit plans and the like and (b) that three months after termination of
discussions Siemens may through open-market purchases acquire capital stock of
Efficient such that Siemens holds up to 10% of Efficient's outstanding capital
stock, acquire or make any offer to acquire shares of Efficient capital stock
(other than any shares Efficient may issue in a dividend, stock split or the
like, with respect to the shares of Efficient capital stock owned by Siemens as
of the date hereof); (ii) initiate, propose or otherwise solicit Efficient
stockholders for the approval of one or more stockholder proposals with respect
to Efficient or induce or attempt to induce any other person to initiate any
stockholder proposal; (iii) make, or in any way participate in, any
"solicitation" of "proxies" (as such terms are defined or used in Regulation
14a-1 under the Exchange Act) with respect to any voting securities of
Efficient, or become a "participant" in any "election contest" (as such terms
are used in Rule 14a-11 of Regulation 14A under the Exchange Act), with respect
to Efficient; or (iv) call or seek to have called any meeting of the holders of
Voting Securities of Efficient; in each case without the prior written approval
of the Board of Directors of Efficient. This clause shall be of no further force
or effect in the event of (i) the acquisition by any person or group of
beneficial ownership of any capital stock of Efficient representing 30% or more
of the outstanding capital stock of Efficient; (ii) the announcement or
commencement by any person or group of a tender or exchange offer to acquire any
capital stock of Efficient which, if successful, would result in such person or
group owning 30% or more of the then outstanding capital stock of Efficient and
the Board of Directors of Efficient endorses the tender or exchange offer or
fails within ten days of such announcement or commencement to announce its
opposition to such offer; (iii) Efficient entering into, or otherwise seeking to
enter into, any merger, sale or other business combination transaction pursuant
to which (a) the outstanding capital stock of Efficient would be converted into
cash or securities of another person or group, or (b) 50% or more of the then
outstanding shares of capital stock would be owned by persons other than the
current holders of shares of capital stock, or (c) all or substantially all of
Efficient's assets or business would be sold to any person or group. For
purposes of the preceding sentence, "capital stock" includes any securities
convertible into or exchangeable for shares of capital stock.
Without prejudice to the rights and remedies otherwise available to either
party hereto, each party hereto shall be entitled to equitable relief by way of
injunction or otherwise if the other party or any of its Representatives breach
or threaten to breach any of the provisions of this letter agreement. In the
event of litigation relating to this letter agreement, if a court of competent
jurisdiction determines in a final order from which there is no appeal that this
letter agreement has been breached by a party or by its Representatives, the
breaching party or the party whose Representatives have breached this Agreement,
as the case may be, will reimburse the other party for its costs and expenses
(including, without limitation, reasonable legal fees and expenses) incurred in
connection with the enforcement of this letter agreement and such litigation.
It is further understood and agreed that no failure or delay by either
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any
November 16, 2000
Page 5
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
The confidentiality obligations of the parties hereunder shall survive
until the second anniversary of the date hereof. This letter agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to its principles or rules regarding conflicts of laws,
other than such principles directing application of New York law. The parties
agree that the federal courts situated in New York City in the State of New York
shall have exclusive jurisdiction to resolve any disputes with respect to this
agreement, with each party irrevocably consenting to the jurisdiction thereof
for any actions, suits or proceedings arising out of or relating to this
Agreement. The parties hereto irrevocably waive trial by jury. The parties
hereto irrevocably waive consequential damages. Notwithstanding anything to the
contrary herein Efficient agrees to pursue any claim against Siemens
Aktiengesellschaft or any of its affiliates or subsidiaries organized outside of
the United States arising out of or relating to this Agreement solely in the
courts of the Federal Republic of Germany.
This letter agreement contains the entire agreement between the parties
hereto concerning confidentiality of their respective Proprietary Information,
and no modification of this letter agreement or waiver of the terms and
conditions hereof shall be binding upon either party hereto, unless approved in
writing by each such party.
Please confirm your agreement with the foregoing by signing and returning
to the undersigned the duplicate copy of this letter enclosed herewith.
Efficient Networks, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ACCEPTED AND AGREED as of
the date first written above:
Siemens Corporation
By: /s/ Xxxxxxx Xxxxx
--------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
