EXHIBIT 5
April 11, 1997
Xxxx X. Xxxx, Senior Vice President
and General Manager, Communications
Products Group
Compaq Computer Corporation
20555 SH249
Xxxxxxx, Xxxxx 00000
CONFIDENTIALITY AGREEMENT
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Dear Xxxx:
In connection with your possible interest in the acquisition of all or part of
the equity or assets as contemplated by that certain draft Agreement and Plan of
Merger, (any, a "Transaction") of Microcom, Inc. (the "Company"), you have
requested that we or our representatives furnish you or your representatives
with certain information relating to the Company or the Transaction. All such
information (whether written or oral) furnished (whether before or after the
date hereof) by us or our directors, officers, employees, affiliates,
representatives (including, without limitation, financial advisors, attorneys
and accountants) or agents (collectively, "our Representatives") to you or your
directors, officers, employees, affiliates, representatives (including, without
limitation, financial advisors, attorneys and accountants) or agents or your
potential sources of financing for the Transaction (collectively, "your
Representatives") and all analyses, compilations, forecasts, studies or other
documents prepared by you or your Representatives in connection with your or
their review of, or your interest in, the Transaction which contain or reflect
any such information is hereinafter referred to as the "Information". The term
Information will not, however, include information which (i) is or becomes
publicly available other than as a result of a disclosure by you or your
Representatives or (ii) is or becomes available to you on a nonconfidential
basis from a source (other than us or our Representatives) which, to the best of
your knowledge after due inquiry, is not prohibited from disclosing such
information to you by a legal, contractual or fiduciary obligation to us.
Accordingly, you hereby agree that:
1. You and your Representatives (i) will keep the Information confidential and
will not (except as required by applicable law, regulation or legal
process, and only after compliance with
paragraph 3 below), without our prior written consent, disclose any
Information in any manner whatsoever, and (ii) will not use any Information
other than in connection with the Transaction; provided, however, that you
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may reveal the Information to your Representatives (a) who need to know the
Information for the purpose of evaluating the Transaction, (b) who are
informed by you of the confidential nature of the Information and (c) who
agree to act in accordance with the terms of this letter agreement. You
will cause your Representatives to observe the terms of this letter
agreement, and you will be responsible for any breach of this letter
agreement by any of your Representatives.
2. In the event that you or any of your Representatives are requested pursuant
to, or required by, applicable law, regulation or legal process to disclose
any of the Information, you will notify us promptly so that we may seek a
protective order or other appropriate remedy or, in our sole discretion,
waive compliance with the terms of this letter agreement. In the event
that no such protective order or other remedy is obtained, or that the
Company waives compliance with the terms of this letter agreement, you will
furnish only that portion of the Information which you are advised by
counsel is legally required and will exercise all reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded the
Information.
3. If you determine not to proceed with the Transaction, you will promptly
inform our Representative, Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx"), of that decision and, in that case, and at any time upon the
request of the Company or any of our Representatives, you will either (i)
promptly destroy all copies of the written Information in your or your
Representatives' possession and confirm such destruction to us in writing,
or (ii) promptly deliver to the Company at your own expense all copies of
the written Information in your or your Representatives' possession. Any
oral Information will continue to be subject to the terms of this letter
agreement.
4. You acknowledge that neither we, nor Xxxxxx Xxxxxxx or its affiliates, nor
our other Representatives, nor any of our or their respective officers,
directors, employees, agents or controlling persons within the meaning of
Section 20 of the Securities Exchange Act of 1934, as amended, makes any
express or implied representation or warranty as to the accuracy or
completeness of the Information, and you agree that no such person will
have any liability relating to the Information or for any errors therein or
omissions therefrom. You further agree that you are not entitled to rely on
the accuracy or completeness of the Information and that you will be
entitled to rely solely on such representations and warranties as may be
included in any definitive agreement with respect to the Transaction,
subject to such limitations and restrictions as may be contained therein.
5. You are aware, and you will advise your 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.
6. You agree that, for a period of two years from the date of this letter
agreement, you will not, directly or indirectly, solicit for employment or
hire any employee of the Company or any of its subsidiaries with whom you
have had contact or who were discussed with you in connection with your
consideration of the Transaction; provided, however, that the foregoing
provision will not prevent you from employing any such person who (i)
contacts you on his or her own initiative without any direct or indirect
solicitation by you (it being understood that any public general
solicitation not directed toward any particular individual or group of
individuals will not constitute solicitation for these purposes) or (ii)
who is terminated by such person's employer prior to commencement of
discussions with you.
7. Prior to execution of any definitive agreement with respect to the
Transaction, you agree that all (i) communications regarding the
Transaction, (ii) requests for additional information, facility tours or
management meetings, and (iii) discussions or questions regarding
procedures with respect to the Transaction, will be first submitted or
directed to Xxxxxx Xxxxxxx and not to the Company. You acknowledge and
agree that (a) we may, without limitation, negotiate with any prospective
buyer and enter into a preliminary or definitive agreement without prior
notice to you or any other person, (b) we reserve the right, in our sole
discretion, to change the procedures relating to our consideration of the
Transaction at any time without prior notice to you or any other person, to
reject any and all proposals made by you or any of your Representatives
with regard to the Transaction, and to terminate discussions and
negotiations with you at any time and for any reason, and (c) unless and
until a written definitive agreement concerning the Transaction has been
executed, neither we nor any of our Representatives will have any liability
to you with respect to the Transaction, whether by virtue of this letter
agreement, any other written or oral expression with respect to the
Transaction or otherwise.
8. You acknowledge that remedies at law may be inadequate to protect us
against any actual or threatened breach of this letter agreement by you or
by your Representatives, and, without prejudice to any other rights and
remedies otherwise available to us, you agree to the granting of injunctive
relief in our favor without proof of actual damages. In the event of
litigation relating to this letter agreement, if a court of competent
jurisdiction determines in a final, nonappealable order that this letter
agreement has been breached by you or by your
Representatives, then you will reimburse the Company for its costs and
expenses (including, without limitation, legal fees and expenses) incurred
in connection with all such litigation.
9. You agree that no failure or delay by us 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.
10. This letter agreement will be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts applicable to contracts
between residents of that State and executed in and to be performed in that
State.
11. This letter agreement contains the entire agreement between you and us
concerning the confidentiality of the Information, and no modifications of
this letter agreement or waiver of the terms and conditions hereof will be
binding upon you or us, unless approved in writing by each of you and us.
Please confirm your agreement with the foregoing by signing and returning to the
undersigned the duplicate copy of this letter enclosed herewith.
Very truly yours,
MICROCOM, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: Executive Vice President, CFO and
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Treasurer
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Accepted and Agreed as of the date
first written above:
COMPAQ COMPUTER CORPORATION
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: Senior Vice President
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