Exhibit 18
GERBER CHILDRENSWEAR, INC.
0000 Xxxxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
February 7, 2002
Kellwood Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xx. Xxx X. Xxxxx,
Chairman, President & C.E.O.
Re: No-Shop Agreement
Dear Xx. Xxxxx:
Gerber Childrenswear, Inc. (the "Company") has on the date hereof
received the non-binding proposal from Kellwood Company ("Kellwood") to acquire
all of the outstanding equity securities of the Company (the "Shares") either
directly or through one or more subsidiaries of Kellwood (the "Proposal"). For
reference purposes a copy of the Proposal is attached hereto as Exhibit A.
In consideration of Kellwood's commitment to expend the out-of-pocket
expenses necessary to expeditiously conduct its due diligence investigation of
the Company and evaluate whether to make a binding offer to acquire the Shares
on terms no less favorable to the Company and its stockholders than those
contemplated by the Proposal (the "Transaction"), and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Kellwood and the Company each hereby agree as follows:
1. No Solicitation. The Company does not have any binding obligation,
other than confidentiality obligations, regarding the sale of the Company,
whether through the sale of all or part of its stock or assets or any other
similar transaction. Until the earlier of (x) 30 days after the date of this
letter agreement and (y) the date Kellwood advises the Company in writing that
it is no longer interested in pursuing a transaction with the Company (the
period from the date of this letter until such earlier date, hereinafter the
"No-Shop Term"), the Company shall not, nor shall the Company permit any of its
subsidiaries or affiliates to, authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor, attorney,
accountant or other representative or agent retained by it or any of its or
their subsidiaries or affiliates to, directly or indirectly, (i) solicit,
initiate or knowingly encourage (including by way of furnishing
non-public information or assistance), any inquiries or the making of any
proposal which constitutes an Acquisition Proposal (as hereinafter defined),
(ii) participate in any discussions or negotiations regarding any Acquisition
Proposal other than Kellwood's Proposal or (iii) enter into any agreement with
respect to any Acquisition Proposal other than Kellwood's Proposal; provided,
however, that if, at any time the Company's board of directors determines in
good faith, after consultation with independent legal counsel (who may be the
Company's regularly engaged independent counsel), that the failure to do so
would be inconsistent with its fiduciary duties to the Company's stockholders
under applicable law, the Company may, in response to an unsolicited Acquisition
Proposal, (x) furnish information with respect to the Company to any person
pursuant to a confidentiality agreement in reasonably customary form and (y)
participate in discussions or negotiations regarding such Acquisition Proposal.
In such event, the Company shall promptly notify Kellwood if any inquiry or
Acquisition Proposal is made or any information is requested. For purposes of
this Agreement, "Acquisition Proposal" means any inquiry, proposal or offer (or
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in the foregoing) from any person relating
to any direct or indirect acquisition or purchase of 20% or more of the assets
of the Company and its subsidiaries or 20% or more of any class of equity
securities of the Company or any of its subsidiaries, any tender offer or
exchange offer that if consummated would result in any person beneficially
owning 20% or more of any class of equity securities of the Company or any of
its subsidiaries, or any merger, consolidation, business combination, sale of
all or substantially all the assets, recapitalization, liquidation, dissolution
or similar transaction involving the Company or any of its subsidiaries, other
than the transactions contemplated by this letter agreement.
2. Non-Publicity. Except as and to the extent required by law, neither the
Company nor Kellwood nor any of their respective Advisors (as hereinafter
defined) shall, issue or cause any press release or public or private
announcement or communication with respect to, or otherwise disclose or permit
the disclosure of, the contents or existence of this letter agreement or the
terms of the Proposal without the prior approval of the other parties; provided,
however, each party may disclose the contents or existence of this letter
agreement and the Proposal to its own directors, officers, employees, agents,
affiliates, legal, accounting and financial representatives and advisors
(collectively, the "Advisors") who need to know such information for the purpose
of evaluating the Proposal or pursuing a Transaction. Each party shall inform
its Advisors of the confidential nature of such information and shall direct its
respective Advisors to treat such information confidentially and otherwise to
comply with the terms of this letter agreement. Each of the Company and Kellwood
acknowledges and agrees that, notwithstanding any provision thereof to the
contrary, the Confidentiality Agreement between them dated as of August 31, 2000
attached hereto as Exhibit B (the "Confidentiality Agreement"), remains in full
force and effect as of the date hereof and the provisions thereof shall survive
for a period of one year from the date of this letter agreement.
3. Access; Standstill. Subject to the provisions of paragraph 2 hereof and
the Confidentiality Agreement, during the No-Shop Term, the Company shall
provide toKellwood and its Advisors access to such information and documents
(the "Evaluation Material") regarding the Company, including access to the
Company's places of business and operations, and to the personnel and
representatives of the Company, as Kellwood may reasonably request for purposes
of conducting its due diligence in furtherance of consummating the Transaction.
In consideration of the Evaluation Material being furnished to Kellwood,
Kellwood agrees, except
2
in connection with pursuing the Transaction, that, for a period of one year from
the date of this letter agreement, unless previously invited in writing by the
Company's board of directors, neither Kellwood nor any of its Advisors, or any
person acting in concert with Kellwood or any of its Advisors (collectively, the
"Restricted Parties") will in any manner, directly or indirectly, including,
without limitation, by way of providing financing or information to any other
person seeking to do any of the following: (a) affect or seek, or propose
(whether publicly or otherwise) to affect or cause (i) any acquisition of any
securities (or beneficial ownership thereof) or assets of the Company or any of
its subsidiaries, except pursuant to a stock split, stock dividend or similar
distribution available to the Company's shareholders generally, (ii) any tender
or exchange offer, merger or other business combination involving the Company or
any of its subsidiaries, or (iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company or any of its subsidiaries; (b) otherwise seek to influence or control
the Company's board of directors or seek to influence or control the management
or policies of the Company; (c) make or participate in any "solicitation" of
"proxies" (as such terms are used in the proxy rules of the Securities and
Exchange Commission) or make or participate in any solicitation of consents to
vote any voting securities of the Company; (d) take any action which might force
the Company to make a public announcement regarding any of the types of matters
set forth in (a) above; (e) form, join or in any way participate in a "group"
(as defined under the Securities Exchange Act of 1934) or in any way join,
assist or encourage any other person to effect or seek, offer or propose
(whether publicly or otherwise) to effect or participate in any of the types of
matters set forth in (a) or (b) above; or (f) enter into any negotiations,
discussions or arrangements with, or otherwise facilitate, assist or encourage
the efforts of, any third party with respect to any of the foregoing.
4. Miscellaneous.
(a) This letter agreement, together with the Confidentiality Agreement,
contains the entire agreement among the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto. This letter agreement may be amended, superseded, cancelled,
renewed or extended, and the terms hereof may be waived, only by a written
agreement signed by each of the parties hereto.
(b) No failure or delay by any party hereto in exercising any right, power
or privilege hereunder shall operate or be construed 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.
(c) This letter agreement is governed by the laws of the State of New York
applicable to contracts to be performed entirely within the State of New York,
without regard to its principles of conflicts of law, and any disputes or
actions brought by any party hereto against any other party hereto in connection
with this letter of intent shall only be brought in New York in the federal
courts located in the Southern District or state courts in the Second Department
therein.
(d) The parties understand and agree that money damages would not be an
adequate remedy for any breach of Section 2 by a party or any of its
representatives or agents and that the non-breaching party shall be entitled to
seek equitable relief, including injunctive relief and
3
specific performance (without the posting of a bond in connection therewith), if
the other party or any of its representatives or agents breach or threaten to
breach any provision of Section 2.
(e) The invalidity or unenforceability of any provision of this letter
agreement shall not affect the validity or enforceability of the other
provisions of this letter agreement, which shall remain in full force and effect
provided that the benefits of this Agreement and the intent of the parties is
not frustrated thereby.
5. Counterparts. This letter agreement may be executed in one or more
counterparts, each of which will be deemed to be an original of this letter
agreement and all of which, when taken together, will be deemed to constitute
one and the same instrument.
* * *
[Signature pages follow]
4
Please acknowledge your agreement to the foregoing by signing and returning
to me the enclosed duplicate copy of this letter agreement.
GERBER CHILDRENSWEAR, INC.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chairman & CEO
ACCEPTED AND AGREED TO:
KELLWOOD COMPANY
By: /s/ W. Xxx Xxxxx
-----------------------------
Name: W. Xxx Xxxxx III
Title: Vice President & CFO
5
