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Exhibit 17
BEAR XXXXXXX Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
January 2, 1997
Xx. Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Compass Group USA, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Re: Confidentiality Agreement (the "Agreement")
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Dear Xx. Xxxxxx:
In connection with your consideration of a possible acquisition (the
"Transaction") of Daka, Inc., ("Daka") the food service subsidiary of DAKA
International, Inc. (together with its subsidiaries, affiliates and division the
"Company"), Compass Group USA, Inc. (together with its parents, subsidiaries and
affiliates, "you") has requested the right to review certain non-public
information regarding Daka and the Company. In consideration of, and as a
condition to, furnishing you with such information and any other information in
respect to Daka in connection with the Transaction (whether communicated in
writing or communicated orally) delivered to you by us or by your respective,
directors, officers, employees, advisors, agents or "controlling persons"
designated as such by us to you and your Representatives (within the meaning of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) (such
designated persons or entities being herein referred to collectively as our
"representatives") in connection with your consideration of a Transaction in
respect of Daka (such information being herein referred to as "Evaluation
Material"), the Company hereby requests your agreement as follows:
1. The Evaluation Material will be used solely for the purpose of
evaluating a possible Transaction in respect of Daka with the Company
involving your or your affiliates, and unless and until you have
completed such Transaction pursuant to a definitive agreement between
you or any such affiliate and the Company, such Evaluation Material
will be kept strictly confidential by you or your affiliates,
directors, officers, employees, advisors, agents or controlling
persons (such affiliates and other persons being herein referred to
collectively as "your Representatives"), except that the Evaluation
Material or portions thereof may be disclosed to those of your
Representatives who need to know such information for the purpose of
evaluating a possible Transaction in respect of Daka with the Company
or for such other purpose as the Company may specifically authorize in
writing (it being understood that prior to such disclosure your
Representatives will be informed of the confidential nature of
the Evaluation Material and shall agree to be bound by this
Agreement). You
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agree to be responsible for any breach of this Agreement by your
Representatives.
2. The term "Evaluation Material" means any and all information
concerning the Company (whether prepared by the Company, its advisors
or otherwise and irrespective of the form of communication) that is
furnished to you or to your Representatives now or in the future by or
on behalf of the Company. The term "Evaluation Material" does not
include information which (a) is or becomes available to the public
generally (other than as a result of a disclosure by your or one of
your Representatives), (b) was within your possession prior to the
date hereof or prior to its being furnished to you by or on behalf of
the Company, provided that the source of such information was not
bound by a confidentiality agreement of which you have actual
knowledge with or other contractual, legal or fiduciary obligation of
confidentiality to the Company of which you have actual knowledge or
any other party with respect to such information of which you have
actual knowledge, (c) becomes available to you on a non-confidential
basis from a source other than the Company or one of its
Representatives, provided that such sources is not bound by a
confidentiality agreement of which you have actual knowledge with or
other contractual, legal or fiduciary obligation of confidentiality to
the Company of which you have actual knowledge or any other party with
respect to such information of which you have actual knowledge, or (d)
was independently developed by you without reference to the Evaluation
Material.
3. In the event that you or any of your Representatives are requested or
required (by oral questions, 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 or waive compliance with
the provisions of this Agreement. If the absence of a protective order
or other remedy or a waiver by the Company, you or one of your
Representatives is nonetheless legally compelled to disclose
Evaluation Material to any tribunal or else stand liable for contempt
or suffer other censure or penalty, your or such Representative may,
without liability hereunder, disclose to such tribunal that portion of
the Evaluation Material which your counsel advises you is legally
required to be disclosed, provided that you shall exercise your
reasonable 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.
4. Unless otherwise required by law in the opinion of your counsel,
neither you nor your Representatives will, without our prior written
consent, disclose to any person either the fact that discussions or
negotiations are taking place concerning a possible Transaction in
respect of Daka between the Company
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and you, or any of the terms, conditions or other facts with respect
to any such possible Transaction, including the status thereof and the
fact that the Evaluation Material has been made available to you
provided, however, you may, without the prior written consent of the
Company, make such disclosure as it has been advised by your legal
counsel is required by applicable law, if you have used all reasonable
efforts to consult with the Company and to obtain the Company's
consent, but have been unable to do so in a timely manner. The term
"person" as used in this letter agreement shall be interpreted broadly
to include the media and any corporation, limited liability
corporation, partnership, group, individual or other entity.
5. Until the earliest of (i) the consummation by you or a third party of
a Transaction, (ii) the acquisition of the Company by a third party,
or (iii) two years from the date of this Agreement, you agree not to
initiate or maintain contact (except for those contacts made in the
ordinary course of business consistent with your past practice) with
any officer, director, employee of the district manager level or above
of the Company or employees employed at the Company's corporate
headquarters regarding the business, operations, prospects or finances
of the Company and you agree not to actively solicit the employment of
any such officer, director, employee of the district manager level or
above of the Company, employees employed at the Company's corporate
headquarters or agent except with the express written permission of
the Company, other than those persons contacted in the ordinary course
of business consistent with your past practice. Unless otherwise
agreed to by the Company in writing, all (i) communications regarding
any possible Transaction, (ii) requests for additional information,
(iii) requests for facility tours or management meetings, and (iv)
discussions or questions regarding procedures, will be submitted or
directed to Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx").
6. For a period of two years from the date of this Agreement, you and
your affiliates shall not directly or indirectly, and you shall cause
any person or entity controlled by you not to, without the prior
written consent of the Board of Directors of the Company, (i) in any
manner, acquire, agree to acquire or make any proposal to acquire,
directly or indirectly, any securities or property of the Company,
(ii) propose to enter into, directly or indirectly, any merger,
consolidation, recapitalization, business combination or other similar
transaction involving the Company or Daka, (iii) make, or in any way
participate in any "solicitation" of "proxies" (as such terms are used
in the proxy rules of the Securities and Exchange Commission) to vote,
or seek to advise or influence any person with respect to the voting
of any voting securities of the Company, (iv) form, join or in any way
participate in a "group" (within the meaning of Section 13(d)(3) of
the 1934 Act with respect to any voting securities of the Company, (v)
otherwise act, alone or in concert with others, to seek to control or
influence the management, Board of
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Directors or policies of the Company, (vi) disclose any intention,
plan or arrangement inconsistent with the foregoing, or (vii) advise,
assist or encourage any other persons in connection with any of the
foregoing. You also agree during such period not to (x) request the
Company (or its Representatives), directly or indirectly, to amend or
waive any provision of this paragraph (including this sentence), (y)
take any action which might require the Company or any of its
affiliates to make a public announcement regarding this Agreement or
the possibility of a merger, consolidation, business combination or
other similar transaction, including, without limitation, the
Transaction, or (z) communicate with the Company's shareholders
regarding the subject matter of this Agreement.
7. In addition, you hereby acknowledge that you are aware, and that you
will advise your Representatives who receive the Evaluation Material,
that the United States securities laws prohibit any person who has
material, non-public information concerning the matters which are the
subject of this Agreement from purchasing or selling securities of the
Company (and options, warrants and rights relating thereto) from
communicating such information to any other person under circumstances
in which it is reasonably foreseeable that such person (including,
without limitation any of your Representatives) is likely to purchase
or sell such securities.
8. You understand and acknowledge that neither the Company nor Bear
Xxxxxxx is making any representation or warranty, express or implied,
as to the accuracy or completeness of the Evaluation Material or any
other information provided to you by the Company or Bear Xxxxxxx.
Neither the Company nor Bear Xxxxxxx nor our respective affiliates or
Representatives, nor any of our respective officers, directors,
employees, agents or controlling persons (within the meaning of the
0000 Xxx) shall have any liability to you or any other person
(including, without limitation, any of your Representatives) resulting
from your use of the Evaluation Material.
9. You and the company agree that unless and until a definitive agreement
between the Company and you with respect to any Transaction has been
executed and delivered, neither you nor the Company will be under any
legal obligation of any kind whatsoever with respect to such a
Transaction by virtue of (i) this Agreement or (ii) any written or
oral expression with respect to such a Transaction by you or your
Representatives, any of the Company's directors, officers, employees,
agents, advisors or Representatives except, in the case of this
letter, for the matters specifically agreed to herein.
10. You agree that the Company has not granted you any license, copyright,
or similar right with respect to any of the Evaluation Material or any
other information provided to you by the Company or Bear Xxxxxxx.
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11. If you determine that you do not wish to proceed with the Transaction,
you will promptly advise the Company and Bear Xxxxxxx in writing of
that decision. In that case, or in the event that (i) a Transaction is
not consummated by you or (ii) at any time the Company requests, you
will promptly deliver to the Company all of the Evaluation Material,
including all copies, reproductions, summaries, analyses or extracts
thereof or based thereon in your possession or in the possession of
any of your Representatives. In the event of such a request by the
Company for the return of the Evaluation Material, you agree to
destroy all documents, memoranda, notes, studies and analyses prepared
by you or any of your Representatives based on information contained
in the Evaluation Material. Notwithstanding the return or destruction
of the Evaluation Material, you and your Representative will continue
to be bound by your obligations or confidentiality and other
obligations hereunder in accordance with the terms and the duration
specified herein.
12. Without prejudice to the rights and remedies otherwise available to
either party, either party shall be entitled to equitable relief by
way of injunction and specific performance if the other party or the
other party's Representatives breach or threatened to breach any of
the provisions of this Agreement. You agree to waive, and to cause
your Representatives to waive, any requirement for the securing or
posting of any bond in connection with such remedy. In the event of
litigation relating to this Agreement, if a court of competent
jurisdiction determines that a party or any of its Representatives
have materially breached this Agreement, the prevailing party in such
litigation shall be entitled to recover from the non-prevailing party
the reasonable legal fees and expenses incurred by such prevailing
party in connection with such litigation, including any appeal
therefrom.
13. The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Delaware. The
parties hereto hereby irrevocably and unconditionally consent to the
exclusive jurisdiction of the courts of the State of Delaware for any
action, suit or proceeding arising out of or relating to this
agreement or the Transaction, and agree not to commence any action,
suit or proceeding related thereto except in such courts. The parties
hereto further hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding
arising out of or relating to this agreement in the courts of the
State of Delaware, and hereby further irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such
action, suit or proceeding brought in any such court has been brought
in any such court has been brought in an inconvenient forum. You
further agree that service of any process, summons, notice or document
by U.S. registered mail to your address set forth above shall be
effective service of process for any action, suit or proceeding
brought against you in any such court.
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14. Neither the holding of such discussions between the Company and you,
nor the provision by the Company of the Evaluation Material, will be
construed as in obligation of either party to refrain from engaging,
at any time and in any place, in the same business or any business
similar or dissimilar to the business in which the other party is now
engaged.
15. Neither the Company nor you, nor either party's respective directors,
officers, employees, agents or Representatives will, without prior
written consent of the other make any public statements or public
announcement or any release to trade publications or to the press,
with respect to the discussions regarding your possible purchase of
Daka except as may be necessary, in the opinion of the disclosing
party's counsel to comply with the requirements of any law,
governmental order or regulation. Further, neither the Company nor
you, nor either party's respective directors, officers, employees,
agents or Representatives will, without the prior written consent of
the other party, make any statement to any of the other party's
competitors, existing or prospective customers, or any third parties
(except your counsel, accountants, appraisers and investment bankers),
with respect to such discussions.
16. The benefits of this Agreement shall inure to the respective
successors and assigns of the parties hereto and of the indemnified
parties hereunder and their successors and assigns and
representatives, and the obligations and liabilities assumed in this
Agreement by the parties hereto shall be binding upon their respective
successors and assigns.
17. It is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) that any term or provision hereof is
invalid or unenforceable, (i) the remaining terms and provisions
hereof shall be impaired and shall remain in full force and effect and
(ii) the invalid or unenforceable provision or term shall be replaced
by a term or provision that is valid and enforceable and that comes
closest to expressing the intention of such invalid or unenforceable
term or provision.
18. This Agreement embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to the matters provided for
herein. No alteration, waiver, amendment, change or supplement hereto
shall be binding or effective unless the same is set forth in writing
signed by a duly authorized representative
of each party and may be modified or waived only by a separate letter
executed by the Company and you expressly so modifying and waiving
such Agreement.
19. For the convenience of the parties, any number of counterparts of this
Agreement may be executed by the parties hereto. Each such counterpart
shall be, and shall be deemed to be, an original instrument, but all
such counterparts taken together shall constitute one and the same
Agreement.
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This Agreement is being delivered to you in duplicate. Kindly execute and
return one copy of this letter which will constitute our Agreement with respect
to the subject matter of this letter.
Very truly yours,
BEAR, XXXXXXX & CO. INC.
for itself and on behalf of
DAKA International, Inc.
By: /s/ Xxxx Xxxxxxxxxxx
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Xxxx Xxxxxxxxxxx
Vice President
Confirmed and Agreed to
this 2nd day of January 1997
Compass Group USA, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
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Name:
Title:
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