EXHIBIT 5
CONFIDENTIALITY AGREEMENT
December 15, 0000
Xxxx Xxxxxxxx, Inc.
000 Xxxx Xxx Xxxxx
Xxxxx, XX 00000
Ladies and Gentlemen:
In connection with our consideration of a possible transaction (the
"Proposed Transaction") between Cray Research, Inc. (the "Company") and Silicon
Graphics, Inc. ("SGI"), each of us expects to make available to the other
certain non-public information about its respective properties, employees,
finances, businesses and operations. As a condition to such information being
furnished by one of us (the "Disclosing Party") to the other (the "Receiving
Party") and its directors, officers, employees, affiliates, representatives
(including, without limitation, financial advisors, attorneys and accountants)
or agents (collectively, "Representatives"), the Receiving Party agrees to treat
any non-public information (whether written or oral) concerning the Disclosing
Party (whether prepared by the Disclosing Party, its Representatives or
otherwise) furnished to it or to its Representatives now or in the future by or
on behalf of the Disclosing Party for the purpose of evaluating the Proposed
Transaction including, without limitation, all copies thereof and all documents
and other information prepared by the Receiving Party or its Representatives
which contain or reflect or are generated from this information (collectively
referred to as the "Information") in accordance with the provisions of this
letter agreement, and to take or abstain from taking certain other actions set
forth below.
The term Information does not include, however, information that (a) is or
becomes available to the public other than as a result of a disclosure by the
Receiving Party or its Representatives, (b) was available to the Receiving Party
on a non-confidential basis (other than from a person prohibited from disclosing
such information to the Receiving Party or its Representatives by a legal,
contractual or fiduciary obligation to the Disclosing Party with regard to such
information) prior to this information being furnished by or on behalf of the
Disclosing Party, (c) is or becomes available to the Receiving Party on a
non-confidential basis from a source other than the Disclosing Party or any of
its Representatives or from a source which is prohibited from disclosing such
information to the Receiving Party or its Representatives by a legal,
contractual or fiduciary obligation to the Disclosing Party or any other person
with respect to such information, (d) is disclosed by the Disclosing Party to a
third party without a duty of confidentially, (e) is developed independently by
the Receiving Party without use or benefit of the Information (the parties
acknowledging that each is actively engaged in research and development programs
in similar areas), (f) is disclosed under operation of law, or (g) is disclosed
by the Receiving Party or its Representatives with the Disclosing Party's prior
written permission.
By signing this letter, we and you mutually agree that:
1. Except as required by law, regulating or legal process, the Receiving
Party will keep the Information confidential, will not without the Disclosing
Party's prior written consent disclose or reveal any of the Disclosing Party's
Information to any person other than its Representatives who need to know that
specific portion of the Information for the purpose of evaluating or negotiating
the Proposed Transaction, and will cause those persons to observe the terms of
this letter agreement. The Receiving Party will be responsible for any breach of
this letter agreement by any of its Representatives. In the event that the
Receiving Party or any of its Representatives is requested pursuant to, or is
required by, applicable law, regulation or legal process to disclose any of the
Disclosing Party's Information, the party requested or required to make the
disclosure will notify the other party promptly to enable it to seek an
appropriate protective order or other remedy, and, in the event that no such
order or remedy is obtained, to consult about taking all responsible steps to
resist or narrow the scope of such request or legal process, or, in the sole
discretion of the Disclosing Party, to waive compliance, in whole or in part,
with the terms of this letter agreement, and in such circumstances, the
Receiving Party and its Representatives agree to furnish only that portion of
the Information which it is advised by legal counsel is legally required and to
exercise all reasonable efforts to obtain a
reliable assurance that confidential treatment will be accorded the Information.
Without prejudice to the foregoing, the parties hereto agree to use all
reasonable efforts to agree on the content and timing of any such disclosure of
Information.
2. Each party agrees that it and its Representatives will not use the
other's Information for any purpose other than in connection with the evaluation
or consummation of the Proposed Transaction.
3. In addition, each party agrees that, without the prior written consent
of the other party, neither it nor its Representatives will disclose to any
person any information about the Proposed Transaction, including without
limitation, (a) that the Information exists or has been made available, (b) that
SGI and the Company are considering the Proposed Transaction, (c) that
discussions or negotiations are taking or have taken place concerning the
Proposed Transaction or involving the Company, or (d) any term, condition or
other fact relating to the Proposed Transaction or such discussions or
negotiations (including the status thereof): PROVIDED that a party may make such
disclosure if in the written opinion of outside legal counsel, such disclosure
is necessary to avoid committing a violation of law. In such event, the party
disclosing the information described in this paragraph 3 will use its best
efforts promptly to give advance notice to the other party and to follow the
procedures set forth in paragraph 1 above.
4. If either party determines that it does not wish to proceed with the
Proposed Transaction, it will promptly advise the other party of that decision.
In such case, or if requested by the Disclosing Party for any reason, each
Receiving Party will, at its own expense, promptly return to the Disclosing
Party or destroy all copies of the Disclosing Party's Information in its
possession or the possession of any of its Representatives and will not retain
any copies or other reproductions of all or part of such material, except that
(i) if a legal proceeding has been instituted to seek disclosure of the
Information, such material shall not be destroyed until the proceeding is
settled or a final judgement has been rendered, and (ii) one copy of any item of
written Information may be retained by legal counsel for record retention
purposes only. Each Receiving Party shall on request confirm to the Disclosing
Party such return or destruction of the Information in writing.
5. Each party agrees that, until the earlier of nine months from the date
of this letter or the public announcement of a proposed transaction to acquire
51% or more of the voting securities of the Company, it will not solicit for
employment any employee of the other party with whom it had direct contact in
the course of considering and negotiating the Proposed Transaction.
6. 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 applicable 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 on such information.
7. Each party acknowledges that neither party nor any of its
Representatives makes any express or implied representation or warranty as to
the accuracy or completeness of the Information made available by it. Each party
agrees that neither party nor any of its Representatives will have any liability
to the other party or to any of its Representatives relating to or arising from
the use of or reliance on the Disclosing Party's Information or for any errors
therein or omissions therefrom. Only those representations and warranties
included in a definitive agreement with respect to the Proposed Transaction,
when, as and if executed, will have any legal effect, subject to the terms and
conditions of such agreement.
8. Without prejudice to the rights and remedies otherwise available to each
party to this letter agreement, each party will be entitled to equitable relief
by way of injunction or otherwise without proof of actual damages if the other
party or any of its Representatives breach or threatens to breach or threatens
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
2
there is no appeal that this letter agreement has been breached by a party or by
its Representatives, the breaching party will reimburse the non-breaching party
for its costs and expenses (including, without limitation, legal fees and
expenses) incurred in connection with such litigation.
9. It is further agreed that no failure or delay by either party 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.
10. This letter agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed in and
to be performed in that state.
11. This letter agreement contains the entire agreement between the Company
and SGI concerning the subject matter hereof, and no modification of this letter
agreement or waiver of the terms and conditions hereof will be binding upon
either party, unless approved in writing by each party.
Please confirm your agreement with the foregoing by signing and returning to
the undersigned the enclosed copy of this letter.
Sincerely,
SILICON GRAPHICS, INC.
/s/ XXXXXXX X. XXXXX
--------------------------------------
Xxxxxxx X. Xxxxx
VICE PRESIDENT, BUSINESS
DEVELOPMENT AND GENERAL COUNSEL
Accepted and Agreed as of
the date first written above:
CRAY RESEARCH, INC.
/s/ XXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: PRESIDENT & CEO
3
