CONFIDENTIALITY AND STANDSTILL AGREEMENT
April 8, 1997
Xx. Xxxxx X. Xxxxxxxxx
Xxxxxxxxx, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxxxx:
Delchamps, Inc. ("DLCH"), Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc. and
Jitney-Jungle Stores of America, Inc. (Bruckmann, Xxxxxx, Xxxxxxxx & Co.,
Inc. and Jitney-Jungle Stores of America, Inc., together, "BRS") are prepared
to engage in discussions with respect to a possible negotiated business
combination involving BRS and DLCH (the "Transaction"), and during the course
of such discussions DLCH may disclose and make available to BRS certain
information concerning DLCH's business, prospects, financial condition,
operations, assets and liabilities. All such information furnished to BRS or
its Representatives (as defined below) by or on behalf of DLCH (irrespective
of the form of communication and whether such information is so furnished on
or after the date hereof), and all analyses, compilations, data, studies,
notes, interpretations, memoranda or other documents prepared by BRS or its
Representatives containing or based in whole or in part on any such furnished
information are collectively referred to herein as the "Confidential
Information." As a condition to being furnished with the Confidential
Information, BRS agrees as follows:
1. Non-Disclosure of Confidential Information. (a) BRS shall (i) use the
Confidential Information solely for the purpose of evaluating a possible
Transaction and for no other competitive or other purpose; (ii) not disclose
the Confidential Information to any third party, except for disclosures to
its directors, officers, employees and representatives of its advisors (such
as independent accountants, investment bankers, attorneys and financing
sources) acting on its behalf (such directors, officers, employees and
representatives being referred to hereinafter collectively as its
"Representatives") who in each case, in its reasonable judgment, need to know
such information for the purpose of evaluating a possible Transaction; (iii)
inform its Representatives of the confidential nature of the Confidential
Information and direct its Representatives to treat the Confidential
Information confidentially; (iv) take all additional reasonable precautions
necessary to prevent the disclosure of the Confidential Information by its
Representatives to any third party; and (v) be responsible for any breach of
this Agreement by its respective Representatives who have not entered into a
written agreement with DLCH to be bound by the terms hereof.
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April 8, 1997
Page 2
(b) If BRS or its Representatives is requested (by interrogatories,
requests for information or documents, subpoena, civil investigative demand
or similar process) to disclose any Confidential Information, it is agreed
that BRS will provide DLCH with prompt notice of such request so that DLCH
may seek an appropriate protective order and/or waive BRS's compliance with
the provisions of this Agreement. BRS and its Representatives may disclose
without liability hereunder only that portion of the Confidential Information
that BRS is advised by written opinion of counsel is legally required to be
disclosed; provided that BRS gives to DLCH written notice of the information
to be disclosed as far in advance of its disclosure as is practicable and,
upon DLCH's request and at DLCH's expense, uses reasonable efforts to obtain
assurances that confidential treatment will be accorded to such information.
2. Non-Disclosure of Negotiations or Agreements. Except as required by
law, or in circumstances where the law is unclear as advisable in the written
opinion of counsel in order to protect the disclosing party, neither BRS or
its Representatives, on the one hand, nor DLCH or its Representatives, on the
other hand, shall disclose to any person the existence, status or terms of
any discussions, negotiations or agreements concerning a possible
Transaction, including without limitation any offer, letter of intent,
proposal, price, value or valuation, or any similar terms, agreements or
understandings between BRS and DLCH with respect thereto, or that BRS has
received from DLCH Confidential Information, without obtaining the prior
written consent of DLCH or BRS, as the case may be, which consent will not be
unreasonably withheld.
3. Return of Confidential Information. All written Confidential
Information delivered by or on behalf of DLCH to BRS pursuant to this
Agreement shall be and remain the property of DLCH, and upon the written
request of DLCH, BRS shall (i) promptly return such Confidential Information
and shall not retain any copies or other reproductions or extracts thereof,
(ii) destroy or have destroyed all memoranda, notes, reports, analyses,
compilations, studies, interpretations, or other documents derived from or
containing Confidential Information, and all copies and other reproductions
and extracts thereof, and (iii) provide a certificate to DLCH certifying that
the foregoing materials have, in fact, been destroyed or returned, signed by
an authorized officer supervising such destruction or return. Notwithstanding
the return or destruction of the Confidential Information, BRS and its
Representatives will continue to be bound by the confidentiality and other
obligations hereunder.
4. Information Not Deemed Confidential Information. The term
"Confidential Information" does not include information that (i) is or
becomes generally available to the public other than as a result of a
disclosure by BRS or its Representatives in violation of this Agreement; or
(ii) was or becomes available to BRS on a non-confidential basis from a source
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April 8, 1997
Page 3
other than DLCH or its Representatives, provided that such source is not
known by BRS to be bound by an obligation of confidentiality to DLCH or its
Representatives.
5. No Representations or Warranties. Neither DLCH nor any of its
respective officers, directors, employees, representatives or agents makes
any representation or warranty, express or implied, as to the accuracy and
completeness of any Confidential Information provided by it, and no liability
shall result to DLCH from its use, except as set forth in a definitive
agreement for a Transaction. Only the representations and warranties that are
made in a definitive agreement for a Transaction, when, as, and if it is
executed, and subject to such limitations and restrictions as may be
specified therein, shall have any legal effect.
6. No Agreement. DLCH has the absolute right to determine what
information, properties and personnel it wishes to make available to BRS.
Unless a definitive agreement regarding a Transaction between BRS and DLCH
has been executed and delivered, neither DLCH, BRS nor any of their
stockholders or affiliates will be under any legal obligation of any kind
whatsoever with respect to such a Transaction by virtue of this letter
Agreement or any other written or oral expression with respect to such
Transaction except, in the case of this Agreement, matters specifically
agreed to herein. Each party further acknowledges and agrees that each party
reserves the right, in its sole discretion, to reject any and all proposals
made by the other party or any of its Representatives with regard to a
Transaction, and to terminate discussion and negotiations with the other
party at any time.
7. Contact Persons: No Solicitation. All requests by BRS for
Confidential Information, meetings with personnel or inspection of properties
and all other communications regarding a possible Transaction shall be made
only to the contacts designated by DLCH (the "Contact Persons"). BRS agrees
that, for a period of two years from the date of this Agreement, it will not
initiate contact (except in the ordinary course of business and except to the
extent permitted by paragraph 9) with any director, officer, employee,
distributor or customer of DLCH regarding its business operations, prospects
or finances, except as may be permitted by the Contact Persons for due
diligence purposes. It is expressly understood that this Agreement is not
intended to preclude the ability of the companies to compete with one another
in the ordinary course. BRS further agrees that, for a period of two years
from the date hereof, it will not hire any of DLCH's officers, zone managers
and/or district managers without DLCH's written consent and will not solicit
for hire (other than by means of a general advertisement) any of DLCH's
non-store level employees other than clerical and administrative employees.
8. Non-public information. DLCH has outstanding publicly-held securities
and the Confidential Information contains material non-public information.
BRS acknowledges that it is (i) aware, and has advised or will advise its
Representatives, that the United States
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April 8, 1997
Page 4
securities laws prohibit any person in possession of material non-public
information about a company from purchasing or selling securities of such
company, and from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person may
purchase or sell such securities and (ii) familiar with the Securities and
Exchange Act of 1934, as amended, and the rules and regulations thereunder,
and BRS agrees that it will neither use nor permit any of its Representatives
to use any Confidential Information in violation of such Act or rules or
regulations, including without limitation, Rule 10b-5.
9. Standstill. BRS agrees that, until the expiration of two years from
the date of this Agreement, without prior written invitation (on an
unsolicited basis) of DLCH's Board of Directors, it and its affiliates will
not (i) in any manner acquire, agree to acquire or make any proposal or offer
or otherwise seek to acquire, directly or indirectly, any securities (or
rights in respect thereof), assets or property of DLCH or any of its
subsidiaries or of any successor thereto or person in control thereof,
whether such agreements or proposals or offers are made with or to DLCH or
any of its subsidiaries (or a successor thereto or person in control thereof)
or a third party; (ii) enter into or agree, offer, seek or propose to enter
into or otherwise be involved in or part of, directly or indirectly, any
merger, acquisition transaction or other business combination relating to
DLCH or any of its subsidiaries or any of their respective assets; (iii)
make, or in any way participate in, directly or indirectly, and
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) to vote,
or seek to advise or influence any person with respect to the voting of, any
voting securities of DLCH or any of its subsidiaries or of any successor
thereto or person in control thereof, (iv) form, join or in any way
participate in a "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) with respect to any voting securities of DLCH or any of its
subsidiaries or of any successor thereto or person in control thereof; (v)
seek or propose, alone or in concert with others, to control or influence the
management, Board of Directors or policies of DLCH; (vi) directly or
indirectly enter into any discussions, negotiations, arrangements or
understandings with any other person (except internal discussions and
planning activities involving its Representatives) with respect to any of the
foregoing activities or propose any of such activities to any other person
(other than its Representatives); (vii) directly or indirectly advise,
encourage, assist, act as a financing source for or otherwise invest in any
other person in connection with any of the foregoing; (viii) publicly
disclose any intention, plan or arrangement inconsistent with the foregoing.
BRS also agrees that, during such two-year period, neither it nor any of its
affiliates will: (i) request DLCH or its advisors, directly or indirectly, to
(1) amend or waive any provision of this paragraph (including this sentence)
or (2) otherwise consent to any action inconsistent with any provision of
this paragraph (including this sentence); or (ii) take any initiative with
respect to DLCH or any of its subsidiaries that could be reasonably be
expected to require DLCH to make
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April 8, 1997
Page 5
a public announcement regarding (1) such initiative, (2) any of the
activities referred to in this paragraph, (3) the possibility of a
Transaction or any similar transaction or (4) the possibility of BRS or any
other person acquiring control of DLCH, whether by means of a business
combination or otherwise. Additionally, BRS's Chief Executive Officer may
contact DLCH's Chief Executive Officer for the purpose of expressing
continuing or renewed interest in a Transaction or in any other business
relationship, provided that, unless invited to do so by DLCH's Chief
Executive Officer, no offer or proposal shall be made that would require
disclosure or formal consideration by DLCH or its Board of Directors.
10. Person. The term "person" as used in this Agreement will be
interpreted broadly to include the media and any corporation, company, group,
partnership, governmental body or other entity or individual,
11. No Waiver. No failure or delay by DLCH or BRS 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.
12. Remedies. It is understood and agreed that money damages would not
be a sufficient remedy for any breach of this Agreement and that the
non-breaking party shall be entitled to equitable relief, including specific
performance and injunction, as a remedy for any such breach or threatened
breach. Each party agrees to waive, and use its best efforts to cause its
directors, officers, employees or agents to waive, any requirement for the
securing or posting of any bond or other security in connection with such
remedy. Such remedies shall not be deemed to be the exclusive remedies for a
breach of this Agreement, but shall be in addition to all other remedies
available at law or in equity, including remedies pursuant to applicable laws
relating to trade secrets.
13. Benefits: Governing Law. This Agreement is for the benefit of DLCH
and its respective directors, officers, employees, representatives and agents
and its respective successors and assigns and shall be governed by and
construed in accordance with the internal substantive laws and not the choice
of law rules of the State of Alabama.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one of the same Agreement.
15. Severability. If any provision of this Agreement is invalid
or unenforceable, such invalidity or unenforceability shall not be deemed to
affect any other provision hereof or
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April 8, 1997
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the validity of the remainder of this Agreement, and such invalid or
unenforceable provision shall be deemed deleted herefrom to the minimum extent
necessary to cure such invalidity or unenforceability.
16. Modifications. No provision of this Agreement may be waived, amended
or modified except by the written agreement of BRS and DLCH.
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 us.
DELCHAMPS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President and
Chief Financial Officer
Accepted and agreed to as of the
____ day of April 1997.
BRUCKMANN XXXXXX, XXXXXXXX & CO., INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxxx
Authorized Signatory
and
JITNEY-JUNGLE STORES OF AMERICA, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------
Name: Xxxxx X. Xxxxx
Title: President
