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[LOGO OF NEEDHAM]
Needham & Company, Inc. 3000 Sand Hill Road, Building 2 Suite 190, Menlo Park,
CA 94025 (650) 854-9111
October 27, 1999
Mr. Jorn Kildegaard
Executive Vice President and Chairman
GN Netcom
Kgs Nytorv 26
PO Box 2167
1016 Copenhagen
Denmark
Dear Mr. Jorn Kildegaard:
In connection with your consideration of a possible transaction with Hello
Direct, Inc. and/or its subsidiaries of affiliates (collectively, with such
subsidiaries or affiliates, the "Company"), the Company is prepared to make
available to you certain information concerning the business, financial
condition, operations, assets and liabilities of the Company. As a condition to
such information being furnished to you and your directors, officers, agents or
advisors (including, without limitation, attorneys, accountants,
consultants, bankers and financial advisors) (collectively, "Representatives"),
you agree to treat any information concerning the Company (whether prepared by
the Company, its advisors or otherwise and irrespective of the form of
communication) which has been or will be furnished to you or to your
Representatives by or on behalf of the Company (herein collectively referred to
as the "Evaluation Material") in accordance with the provisions of this letter
agreement, and to take or abstain from taking certain other actions hereinafter
set forth.
The term "Evaluation Material" shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents prepared by
you or your Representatives which contain, reflect or are based upon, in whole
or in part, the information furnished to you or your Representatives pursuant
hereto. The term "Evaluation Material" does not include information which (i) is
or becomes generally available to the public other than as a result of a
disclosure by you or your Representatives, (ii) was within your possession, and
which you can show through written documentation was in your possession, prior
to its being furnished to you by or on behalf of the Company pursuant hereto,
provided that the source of such on information was not known by you to be bound
by a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to
such information or (iii) becomes available to you on a non-confidential basis
from a a source other than the Company or any of its Representatives, provided
that such source is not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any other party with respect to such information.
You hereby agree that you and your Representatives shall use the Evaluation
Material solely for the purpose of evaluating a possible transaction between the
Company and you, that the Evaluation Material will be kept confidential and that
you and your Representatives will not disclose any of the Evaluation Material in
any manner whatsoever; provided, however, that (i) you may make any disclosure
of such information to which the Company gives its prior written consent and
(ii) any
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GN Netcom
October 27, 1999
Page 2
of such information may be disclosed to your Representatives who need to know
such information for the sole purpose of evaluating a possible transaction with
the Company, who agree to keep such information confidential and who are
provided with a copy of this letter agreement and agree to be bound by the terms
hereof to the same extent as if they were parties hereto. In any event, you
shall be responsible for any breach of this letter agreement by any of your
Representatives and you agree at your sole expense, to take all reasonable
measures (including but not limited to court proceedings) to restrain your
Representatives from prohibited or unauthorized disclosure or use of the
Evaluation Material.
In addition, your agree that, without the prior written consent of the
Company, you and your Representatives will not disclose to any other person the
fact that the Evaluation Material has been made available to you, that
discussions or negotiations are taking place concerning a possible transaction
involving the Company or any of the terms, conditions or other facts with
respect thereto (including the status thereof), unless in the written opinion of
your counsel such disclosure is required by law and then only with as much prior
written notice to the company as is practical under the circumstances. Without
limiting the generality of the foregoing, you further agree that, without the
prior written consent of the Company, you will not directly or indirectly, enter
into any agreement, arrangement or understanding or any discussions which might
lead to such agreement, arrangement or understanding, with any other person
regarding a possible transaction involving the Company. The term "person" as
used in this letter agreement shall be broadly interpreted to include the media
and any corporation, partnership, group individual or other entity.
You further agree that, without the prior consent of Needham & Company, Inc
("Needham & Company"), all communications regarding the proposed transaction,
requests for additional information, and discussions or questions regarding
procedures, will be submitted or directed only to Needham & Company and not to
the Company or any of its affiliates or any of their respective directors,
officers or employees.
In the event that you or any of your Representatives are requested or
required (by deposition, interrogatories, requests for information or documents
in legal proceedings, subpoena, civil investigative demand or other similar
process) to disclose any of the Evaluation Material, you shall provide the
Company with prompt written notice of any such request or requirement so that
the Company may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this letter agreement. If, in the absence of a
protective order or other remedy or the receipt of a waiver by the Company, you
or any of your Representatives are nonetheless, in the written opinion of your
counsel, legally compelled to disclose Evaluation Material to any tribunal or
else stand liable for contempt or suffer other censure or penalty, you or your
Representative may, without liability hereunder, disclose to such tribunal only
that portion of the Evaluation Material which such counsel advises you is
legally required to be disclosed, provided that you exercise your best efforts
to preserve the confidentiality of the Evaluation Material, including, without
limitation, by cooperating with the Company to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
the Evaluation Material by such tribunal.
If you decide that you do not wish to proceed with a transaction with the
Company, you will promptly inform the Company of that decision. In that case, or
at any time upon the request of the Company for any reason, you will promptly
deliver to the Company all documents (and all copies thereof) furnished to you
or your Representatives by or on behalf of the Company pursuant hereto and
provide written documentation that all such documents have been returned. In the
event of such a decision or request, all other Evaluation Material prepared by
your or your Representatives shall be
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GN Netcom
October 27, 1999
Page 3
destroyed and no copy thereof shall be retained, except as required by law.
Notwithstanding the return or destruction of the Evaluation Material, you and
your Representatives will continue to be bound by your obligations of
confidentiality and other obligations hereunder.
You understand and acknowledge that neither the Company nor any of its
Representatives (including without limitation Needham & Company) make any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material. You agree that neither the Company nor
any of its Representatives (including without limitation Needham & Company)
shall have any liability to you or to any of your Representatives relating to or
resulting from the use of the Evaluation Material. The Company warrants its
right to disclose the Evaluation Material to you and to authorize you to use the
same for the purposes set forth herein. Only those representations or warranties
which are made in a final definitive agreement regarding the transactions
contemplated hereby, when, as and if executed, and subject to such limitations
and restrictions as may be specified therein, will have any legal effect.
In consideration of the mutual covenants contained herein, you and the
Company agree that, for a period of 2 years from the date hereof, neither you
nor the Company, nor any of our or your respective affiliates, will solicit to
employ any of the officers or employees of the other party, so long as they are
employed by the other party, without obtaining the prior written consent of the
other party.
In consideration of the Evaluation Material being furnished to you, you
hereby further agree that, without the prior written consent of the Board of
Directors of the Company, for a period of 18 months from the date hereof,
neither you nor any of your affiliates (as such term is defined in Rule 12b-2 of
the Securities Exchange Act of 1934, as amended), acting alone or as part of
a group, will acquire or offer to agree to acquire, directly or indirectly, by
purchase or otherwise, any voting securities (or direct or indirect rights or
options to acquire any voting securities) of the Company, or otherwise seek to
influence or control, in any manner whatsoever, the management or policies of
the Company.
You agree that unless and until a final definitive agreement regarding a
transaction between the Company and you has been executed and delivered, neither
the Company nor you will be under any legal obligation of any kind whatsoever
with respect to such a transaction by virtue of this letter agreement except
the matters specifically agreed to herein. You further acknowledge and agree
that the Company reserves the right, in its sole discretion, to reject any and
all proposals made by you or any of your Representatives with regard to a
transaction between the Company and you, and to terminate discussions and
negotiations with you at any time.
The Company reserves the right to assign all of its rights, powers and
privileges under this letter agreement (including, without limitation, the right
to enforce all of the terms of this letter agreement) to any person who enters
into the transactions contemplated by this letter agreement.
It is understood and agreed that no failure or reasonable delay by the
Company 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 other right, power or
privilege hereunder.
It is further understood and agreed that money damages would not be a
sufficient remedy for any breach of this letter agreement by you or any of your
Representatives and that the Company
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GN Netcom
October 27, 1999
Page 4
shall be entitled to equitable relief, including injunction and specific
performance, as a remedy for any such breach. Such remedies shall not be deemed
to be the exclusive remedies for a breach by you of this letter agreement but
shall be in addition to all other remedies available at law or equity to the
Company. In the event of litigation relating to this letter agreement, if a
court of competent jurisdiction determines that you or any of your
Representatives have breached this letter agreement, then you shall be liable
and pay to the Company the reasonable legal fees incurred by the Company in
connection with such litigation, including any appeal therefrom.
This letter agreement shall be goverened by and construed in accordance
with the laws of the State of California.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned, whereupon this letter agreement
shall become a binding agreement between you and the Company.
ACCEPTED AND AGREED:
Needham & Company as representative
of Hello Direct, Inc. Company's name
By: /s/ Signature appears here By: /s/ Jorn Kildegaard
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Title: Managing Director Title: E.V.P.
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