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SAVANE
March 20, 1998
Xx. Xxxxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
Tropical Sportswear International Corporation
0000 X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Dear Xx. Xxxxxxx:
In connection with your consideration of a possible acquisition of, or
investment in, Farah Incorporated, a Texas corporation (the "Company"), the
Company has agreed to provide you certain information regarding the Company
which is non-public, confidential and proprietary in nature.
1. As a condition to the Company furnishing information to you, the
Company is requiring that you agree, as set forth below, to treat "Evaluation
Materials" confidentially. As used in this Agreement, the term "Evaluation
Materials" should, except as otherwise provided herein, mean any information
that either the Company or its financial advisor, or its other representatives
furnish to you and your directors, officers, partners, employees, agents and
representatives (including without limitation, financial advisors, counsel,
persons contemplating providing financing for any transaction, accountants,
experts and consultants) (collectively, the "Representatives") in connection
with a possible transaction involving the Company, whether furnished orally or
in writing or gathered by inspection and regardless of whether specifically
identified as "confidential," together with analyses, compilations, studies or
other documents prepared by you or by your Representatives which contain or
otherwise reflect or are derived from such information.
The term "Evaluation Materials" does not include information which (a)
is or becomes generally available to the public other than as a result of a
disclosure by you or any of your Representatives, or (b) was within your
possession prior to its being furnished to you by the Company or its financial
advisor or representative or was or becomes available to you on a
non-confidential basis from a source other than the Company or its financial
advisor or representatives, provided that such source is not known by you, after
reasonable inquiry, to be prohibited from disclosing such information to you by
a contractual, legal or fiduciary obligation to the Company or its financial
advisor or representatives.
2. You agree that the Evaluation Materials will be used solely
for the purpose of evaluating a possible transaction with the Company and that
such Evaluation Materials will be
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March 20, 1998
Page 2
kept confidential by you; provided, however, that you may disclose any
Evaluation Materials to your Representatives who need to know such information
for the purpose of evaluating the transaction (it being understood that they
shall be informed by you of the confidential nature of such information and that
you shall undertake reasonable efforts to cause them to treat such information
on a confidential basis). You will be responsible for any breach of this
Agreement by your Representatives. You agree, at your sole expense, to take all
reasonable measures, including but not limited to court proceedings, to restrain
your Representatives from unauthorized disclosure or use of the Evaluation
Materials.
3. The public disclosure of your possible interest in
consummating a transaction involving the Company could have a material adverse
effect on the Company's business if for any reason a definitive agreement with
respect to such transaction is not consummated. In addition, any disclosure by
you or any of your Representatives of your possible interest in consummating a
transaction involving the Company to any shareholder could have a material
adverse effect on the Company's business. Accordingly, you agree that without
the prior written consent of the Company, you will not, and you will direct your
Representatives not to, disclose to any person either the fact that discussions
or negotiations are taking place concerning a possible transaction between you
and the Company or any of the terms, conditions or other facts with respect to
any such possible transaction, including the status thereof and no Evaluation
Materials will be provided to any such persons; provided, however, that you may
make such disclosure as you determine may be required by any applicable law,
regulation or rule based upon advice of legal counsel. You agree to provide the
Company reasonable prior notice of any such disclosure. The term "person" as
used in this letter shall be broadly interpreted to include, without limitation,
any corporation, company, governmental agency or body, partnership or
individual.
4. You acknowledge that you are aware, and that you will advise
your Representatives who are informed as to the matters which are the subject of
this letter, that certain laws prohibit any person who has received material,
non-public information concerning the matters which are the subject of this
letter from purchasing or selling securities of the Company or from
communicating such information to any person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities.
5. In the event that you are requested in any proceeding to
disclose any Evaluation Materials, you will give the Company prompt notice of
such request so that the Company may seek an appropriate protective order. It is
further agreed that, if in the absence of a protective order you are nonetheless
compelled to disclose Evaluation Materials, you may disclose such information
without liability hereunder; provided, however, that you give the Company
written notice of the information to be disclosed as far in advance of its
disclosure as is practicable.
6. Upon the Company's request, you shall promptly deliver to the
Company all written Evaluation Materials furnished to you or your
Representatives by the Company or its financial advisor or representative, and
any other written materials containing or reflecting any
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March 20, 1998
Page 3
information in the Evaluation Materials (whether prepared by the Company, its
advisors or otherwise) and will not retain any copies, extracts or other
reproductions in whole or in part of such written materials. Upon the Company's
request, all documents, memoranda, notes and other writings whatsoever prepared
by you or your advisors based on the information in the Evaluation Materials
shall be destroyed, and such destruction shall be certified in writing to the
Company by an authorized officer supervising such destruction.
7. During the course of your evaluation, all inquiries and other
communications with respect to a possible transaction are to be made only to
directors, officers and employees of the Company who are specifically designated
by Xxxxxxx X. Xxxxxxxx, on behalf of the Company. Accordingly, you agree not to
directly or indirectly contact or communicate with any shareholder, director,
officer or other employee of the Company with respect to a possible transaction
without the express written consent of the Company.
8. Although the Company has endeavored to include in the
Evaluation Materials information known to it which it believes to be relevant
for the purpose of your investigation, you understand that neither the Company
nor any of its financial advisors or representatives have made or make any
representation or warranty as to the accuracy or completeness of the Evaluation
Materials. You agree that neither the Company nor any of its financial advisors
or representatives shall have any liability to you or any of your
Representatives resulting from the use of the Evaluation Materials. Only those
representations or warranties that are made to you in a definitive sale
agreement when, as, and if, it is executed, and subject to such limitations and
restrictions as may be specified in such definitive sale agreement, will have
legal effect.
9. You agree that money damages would not be a sufficient remedy
for any breach of this Agreement by you or your Representatives, and that in
addition to all other remedies the Company shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach, and you further agree to waive and to use your reasonable efforts to
cause your Representatives to waive any requirement for the securing or posting
of any bond in connection with such remedy.
10. (a) You agree that, for a period of two (2) years after the
date hereof, unless and until you shall have been specifically invited or
authorized in writing by the Company, you will not, and will cause each of your
Affiliates (as defined below) not to, directly or indirectly, solicit, seek or
offer to effect, negotiate with or provide any information to any person with
respect to, or make any statement, proposal or inquiry, whether written or oral,
either alone or in concert with others, to the Board of Directors of the
Company, to any director or officer of the Company or to any shareholder or
securityholder of the Company or otherwise make any public announcement or
proposal or offer whatsoever with respect to, (i) any form of business
combination or other acquisition transaction involving the Company, including,
without limitation, a merger, consolidation, tender or exchange offer, sale or
purchase of assets or securities, or dissolution or liquidation of the Company,
(ii) any form of restructuring, recapitalization or similar transaction
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March 20, 1998
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with respect to the Company, (iii) any request or proposal to amend, waive or
terminate any provision of this Agreement or (iv) any proposal or other
statement inconsistent with the terms of this Agreement. The term "Affiliates"
shall mean a person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with
you.
(b) You agree that, for a period of two (2) years after the date
hereof, without the prior written consent of the Company, you will not, and will
cause each of your Affiliates not to, singly or as part of a "partnership,
limited partnership, syndicate or other group" (as those terms are used within
the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which meanings shall apply for all purposes of
this Agreement), directly or indirectly, through one or more intermediaries or
otherwise:
(i) acquire, offer or propose to acquire, or agree to
acquire, by purchase or otherwise, (A) any securities entitled to, or
that may be entitled to, vote generally in the election of the
Company's Board of Directors (collectively; "Voting Securities"), or
(B) any direct or indirect rights or options to acquire (through
purchase, exchange, conversion or otherwise) any Voting Securities or
(C) any assets or securities of the Company;
(ii) make, or in any way participate in, any
"solicitation" of "proxies" (as such terms are defined or used in
Regulation 14A of the Exchange Act) with respect to the Voting
Securities (including by the execution of action by written consent),
become a "participant" in any "election contest" (as such terms are
defined or used in Rule 14a-11 of the Exchange Act) with respect to the
Company, seek to advise, encourage or influence any person or entity
with respect to the voting of any Voting Securities or demand a copy of
the Company's stock ledger, list of its shareholders or other books and
records;
(iii) participate in or encourage the formation of any
group which owns or seeks or offers to acquire beneficial ownership of
securities of the Company or any assets of the Company or rights to
acquire such securities or which seeks or offers to effect control of
the Company or for the purpose of circumventing any provisions of this
Agreement; or
(iv) otherwise act, alone or in concert with others
(including by providing financing to another party), to seek or offer
to control, in any manner, the management, Board of Directors or
policies of the Company.
(c) Without the Company's prior written consent, those of your
employees who have received Evaluation Materials will not for a period of two
(2) years from the date hereof directly induce or cause others to induce any
person who is either an officer of the Company or any of its subsidiaries or
involved in any of the negotiations or due diligence review in respect of a
transaction to leave the employment of the Company.
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March 20, 1998
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11. This Agreement shall be governed and construed in accordance
with the laws of the State of Texas without giving effect to its conflict of
laws, principles or rules.
12. If at any time you consider a transaction which would involve
participation, directly or indirectly by a third party, you agree to cause such
third party to execute a confidentiality agreement .satisfactory to the Company
prior to the disclosure to such party of any Evaluation Materials.
13. If you are in agreement with the foregoing, please so indicate
by signing, dating and returning one copy of this Agreement, which will
constitute your agreement with respect to the matters set forth herein.
Very truly yours,
FARAH INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Board, President and
Chief Executive Officer
Confirmed and agreed to:
TROPICAL SPORTSWEAR
INTERNATIONAL CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xx. Xxxxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
Dated: 3/26/98
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