Exhibit (d)(4)
eMachines, Inc.
00000 Xxxxxx Xxxx, Xxxxxxxx 000
Xxxxxx, XX 00000
November 12, 2001
EM Holdings, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Mr. Lap Xxxx Xxx
C/o EM Holdings, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Re: Amended and Restated Confidentiality Agreement
Ladies and Gentlemen:
In connection with a possible board-approved transaction ("Proposed
Transaction") between eMachines, Inc. ("eMachines"), on the one hand, and EM
Holdings, Inc. and Mr. Lap Xxxx Xxx (collectively, "Company"), on the other
hand, and in order to allow eMachines and Company to evaluate the Proposed
Transaction, each of eMachines and Company have delivered and will deliver to
the other party hereto 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"). This letter agreement shall serve as an amendment and
restatement of the letter agreement dated November 4, 2001 among the parties
hereto, which had been entered into so as to allow the delivery of Proprietary
Information by Company to eMachines. All information (i) about the Disclosing
Party that the Disclosing Party has designated in writing as Confidential at or
prior to delivery of the information to the Receiving Party (eMachines hereby so
designating as confidential, all information to be provided by eMachines to
Company's debt and equity financing sources and to any firm retained by Company
to provide a solvency opinion or analysis) or (ii) about any third party that
the Disclosing Party has designated in writing as Confidential at or prior to
delivery of that information to the Receiving 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
and 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 bound by a confidentiality agreement with
the Disclosing Party or any or its Representatives, or is otherwise not 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.
For purposes of this letter agreement, (i) "Representative" shall mean, as to
any person, its directors, officers, employees, agents, stockholders,
affiliates, sources of debt or equity financing and advisors (including, without
limitation, financial advisors, attorneys and accountants for such person and
its sources of debt or equity financing); 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 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, subject, however, to any
limitation that the Disclosing Party may provide written notice of to the
Receiving Party, and shall cause those persons to observe the terms of this
letter agreement; and (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. 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.
For a period commencing with the date of this letter agreement and ending at
12:00 midnight (California time) on November 28, 2001, neither Company nor any
of Company's Representatives shall, without the prior written consent of (or the
prior adoption of a resolution to such effect by) the board of directors of
eMachines (or the advisory committee thereof appointed in connection with the
Proposed Transaction):
(a) acquire, offer to acquire, or agree to acquire, directly or indirectly,
by purchase or otherwise, any voting securities or direct or indirect rights to
acquire any voting securities of eMachines or any subsidiary thereof, or of any
successor to or person in control of eMachines, or any assets of eMachines or
any subsidiary or division thereof or of any such successor or controlling
person;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the rules of the
Securities and Exchange Commission ("SEC"));
(c) make any public announcement with respect to, or submit a proposal for,
or offer of (with or without conditions) any extraordinary transaction involving
eMachines or any of its securities or assets (other than the issuing of a press
release in response to identifiable false public information (made available to
the public by a person other than the Company or its Representatives) which
press release is solely intended to correct such false information);
(d) 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 (the "Exchange
Act"), in connection with any of the foregoing; or
(e) otherwise publicly act or seek to control or influence the management,
Board of Directors or policies of eMachines in connection with any of the
matters discussed in clauses (a) through (d) above.
Notwithstanding any provision of the preceding standstill provisions to the
contrary, Company and its affiliates and agents may (a) make any disclosures
required by law or regulation, (b) file amendments to Company's Schedule 13D
filed with respect to eMachines to the extent Company has been advised by
counsel that it is more likely than not that such filing is necessary, (c)
continue to negotiate (in a non-public manner) with eMachines, its board of
directors (or the advisory committee thereof appointed in connection with the
Proposed Transaction), its Representatives and Company's sources of equity and
debt financing, for the purpose of enhancing, modifying or consummating a
Proposed Transaction, (d) announce extensions and/or modification, termination
or expiration of the offer made by Company and modifications in the
price offered by Company for the stock of eMachines and respond publicly to
public announcements relating to the Proposed Transaction made by eMachines and
its agents without the prior approval of Company, (e) actively and publicly
(through media announcements and other available means) oppose any transaction
publicly announced or proposed by eMachines or others (other than Company and
its Representatives), or that otherwise becomes publicly known (other than as a
result of the actions of Company or its Representatives) as an alternative or
definitive measure to the Proposed Transaction, and (f) continue to negotiate
(in a non-public manner) with Idealab, TriGem and Korea Data Systems (and their
respective trustees, agents, affiliates and pledgees) for the purposes of (i)
entering into and/or amending and/or performing the support agreements entered
or to be entered into between Company and each of these parties in connection
with the Proposed Transaction (which support agreements, if executed, shall be
similar to the support agreement entered into between Company and Idealab on
October 30, 2001, a true and correct copy of which agreement has been provided
to eMachines (the "Idealab Agreement"), it being understood and agreed by
Company and eMachines that deviations in any material respect of the provisions
relating to superior proposals and approval by the board of directors of
eMachines shall cause any such support agreements to not be similar to the
Idealab Agreement) and (ii) negotiating with Idealab, TriGem and Korea Data
Systems (and their respective agents, affiliates and pledgees) with respect to
the terms and conditions of a definitive agreement between eMachines and
Company.
Company agrees that neither it nor its Representatives will at any time from the
date of this letter agreement until the two-year anniversary of such date,
directly or indirectly, solicit for employment any employee of eMachines who is
identified by you as a result of your evaluation or otherwise in connection with
the Proposed Transaction.
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 letter 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.
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, delete 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.
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.
Until a definitive agreement regarding the Proposed Transaction has been
executed by the parties hereto, neither party hereto shall be under any legal
obligation or have any liability to the other party of any nature whatsoever
with respect to the Proposed Transaction by virtue of this letter agreement or
otherwise (other than with respect to the confidentiality and other matters set
forth herein).
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.
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.
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 single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any right, power or
privilege hereunder.
This letter agreement shall be governed by and construed in accordance with the
laws of the State of California, without giving effect to its principles or
rules regarding conflicts of laws, other than such principles directing
application of California law. Each party hereby consents to the institution and
resolution of any action or proceeding of any kind or nature with respect to or
arising out of this letter agreement brought by any party hereto in the federal
or state courts located within the State of California.
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.
This letter agreement has no effect on the roles, responsibilities, rights or
duties of Lap Xxxx Xxx as a director of eMachines, including, without
limitation, his confidentiality obligations and fiduciary duties to Company.
Please confirm your agreement with the foregoing by signing and returning to the
undersigned the duplicate copy of this letter enclosed herewith.
EMACHINES, INC.
By:/s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Vice President and
Chief Operating Officer
ACCEPTED AND AGREED as of
the date first written above:
EM HOLDINGS, INC.
By: /s/ Lap Xxxx Xxx
------------------------------------
Name: Lap Xxxx Xxx
Title: President and Chief Executive Officer
/s/ Lap Xxxx Xxx
---------------------------------------
Lap Xxxx Xxx
