1
CONFIDENTIALITY AGREEMENT
AGREEMENT made as of February 2, 1998, between Koninklijke Ahold N.V.,
a public company with limited liability, incorporated under the laws of The
Netherlands with its corporate seat in Zaandam (municipality Zaanstad), The
Netherlands ("Ahold"), and 1224 Corporation, a Delaware corporation ("1224
Corp.") (each, a "Party" and collectively, the "Parties").
WHEREAS, the Parties have expressed an interest in discussing the
possibility of an acquisition from 1224 Corp. of outstanding shares of capital
stock of Giant Food Inc., a Delaware corporation ("Giant") (the "Transaction");
WHEREAS, in connection therewith Ahold has requested oral and written
information with respect to Giant's business, assets, financial condition,
operations and prospects which Giant will provide to Ahold; and
WHEREAS, as conditions to the exchange of such information, Ahold is
required to agree, as set forth below, (i) to treat confidentially such
information and any other information that Ahold or any representative thereof
receives from 1224 Corp., Giant or any of their respective representatives,
whether received before or after the date of this Agreement, together with all
analyses, compilations, studies or other documents or records prepared by Ahold
or any of its representatives which contain or otherwise reflect or are
generated from such information (collectively, "Received Material") and (ii) to
take or abstain from taking certain other actions as set forth below. As used
herein with respect to any Party, the term "representatives" means its
affiliates, directors, officers, employees, agents and representatives,
including financial advisors, consultants and counsel and the term "affiliate"
has the meaning provided in Rule 12b-2 promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in any event, shall
include any person who on the date hereof or at the time of determination
thereof, directly or indirectly, owns 10% or more of such Party.
NOW, THEREFORE, in consideration of the mutual convenants and
agreements set forth herein, the Parties agree as follows:
1. Ahold acknowledges and agrees that Received Material is a valuable
and proprietary asset, has competitive value and is of a confidential nature.
2. Ahold agrees that, except as 1224 Corp. may otherwise agree in
writing in advance, it will, and each of its representatives will, treat
confidentially, preserve and protect with the same standard of care afforded by
Ahold to any of its documents and not disclose any Received Material and will
use Received Material solely to evaluate the Transaction; provided, however,
that Ahold may disclose Received Material or portions thereof only to those
representatives who need to know such information solely for the purpose
described above (it being understood that (a) each such representative shall be
informed of the confidential nature of Received Material and shall be directed
to treat Received Material confidentially, not to use it other than for the
purpose described above and to otherwise comply with the provisions hereof
applicable to representatives and (b) that, in any event, Ahold shall be
responsible for any actions
2
taken by any of its representatives which if such representative was a party
hereto would breach a provision of this Agreement applicable to
representatives).
3. The term "Received Material" shall not include information (i) which
was or becomes generally available to the public other than as a result of a
disclosure by Ahold or by any representative thereof in breach of this
Agreement, (ii) which was or becomes available on a non-confidential basis from
a source other than 1224 Corp. or Giant or any representative thereof, provided
that such source is not and was not known to Ahold to be bound by a
confidentiality agreement with 1224 Corp. or Giant or any representative thereof
or by any other contractual, legal or fiduciary obligation to 1224 Corp. or
Giant which would prohibit the disclosure of such information to Ahold, or (iii)
which was within the possession of Ahold or any affiliate thereof prior to such
receipt. The term "Received Material" shall also not include any analyses,
compilations, studies or other documents or records that have been prepared by
Ahold or its representatives solely from information of the nature described in
any of clauses (i), (ii) or (iii) of this paragraph 3.
4. Each Party agrees that, without the prior written consent of the
other Party, it will not, and will direct its representatives not to, disclose
to any person the fact that discussions regarding the Transaction (or any other
discussions between or involving the Parties) are taking or have taken place or
other facts with respect to such discussions, including the status thereof, or
the fact (if such becomes the case) that any confidential information has been
exchanged, nor otherwise make any public disclosure (whether written or oral)
with respect to this Agreement or the matters contemplated hereby, except and
only to the extent that such Party has been advised by legal counsel that such
disclosure is required by law and then, to the extent practicable, only after
prior notice to the other Party. The term "person" as used in this Agreement
shall be broadly defined to include, without limitation, any corporation,
partnership, company or individual, but shall not include (i) those officers of
Giant who are informed of the Transaction in order to provide the information
requested by Ahold, (ii) those directors of Giant who are members of the Special
Committee of the Board of Directors of Giant and (iii) with the prior written
consent of Ahold, the remaining members of the Board of Directors of Giant.
5. If Ahold or any representative thereof is requested or required (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process) to disclose any Received Material, it will, to the
extent permitted by applicable law, notify 1224 Corp. promptly and, to the
extent practicable, prior to any disclosure, so that 1224 Corp. or Giant, as the
case may be, may seek any appropriate protective order and/or take any other
appropriate action. In the event such protective order is not obtained, or that
1224 Corp. waives compliance with the provisions hereof, (i) Ahold or its
representative, as the case may be, may disclose to any tribunal or regulatory
or administrative body with jurisdiction only that portion of the Received
Material which it is required to be disclosed, and shall exercise reasonable
best efforts to obtain assurance that confidential treatment will be accorded
such Received Material and (ii) Ahold shall not be liable for such disclosure
unless such disclosure to such tribunal or regulatory or administrative body was
caused by or resulted from a previous disclosure by Ahold or any representative
thereof not permitted by this Agreement.
2
3
6. Each Party hereby acknowledges to the other Party that it is aware,
and will advise its representatives who are informed as to the matters which are
the subject of this Agreement, that the United States securities laws prohibit
any persons who are in possession of material, non-public information with
respect to an issuer from purchasing or selling securities of such issuer or,
subject to certain limited circumstances, from communicating such information to
any other person.
7. In the event that the Parties do not agree to a Transaction within
90 days of the date hereof (which period may be extended by the Parties by
mutual written agreement), or if either Party terminates discussions prior to
such 90-day period, Ahold and its representatives will, as promptly as practical
following a request from 1224 Corp., deliver to 1224 Corp. all Received Material
and any other material (whether in written, electronic, magnetic or other form)
containing or reflecting any information in the Received Material (whether
prepared by Ahold, its representatives or otherwise) and will not retain any
copy or other extract or reproduction in whole or in part thereof; except that,
all Received Material whether in written, electronic, magnetic or other form
whatsoever, prepared by Ahold or any representative thereof containing or
reflecting information in the Received Material may be destroyed and such
destruction shall be certified in writing to 1224 Corp. by an authorized officer
supervising such destruction.
8. Ahold understands that except as may be provided for in such
definitive agreement or agreements, if any, as may be entered into in connection
with a Transaction, none of 1224 Corp., Giant or any of their respective
representatives makes any representation or warranty as to the accuracy or
completeness of any Received Material and no liability (on any basis including,
without limitation, in contract, tort or otherwise) to Ahold or any
representative thereof shall result from its use.
9. Each party agrees that unless and until a definitive agreement
between the parties hereto with respect to a Transaction has been executed and
delivered, neither party will be under any legal obligation of any kind
whatsoever with respect to a Transaction by virtue of this or any written or
oral expression with respect to such a Transaction by any of its directors,
officers, employees, or other representatives or its advisors or representative
thereof except of the matters specifically agreed to in this letter.
10. It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement and that the Parties shall be
entitled to specific performance and injunctive relief as remedies for any such
breach and neither the Parties nor their representatives will oppose the
granting of such relief. Such remedies shall not be deemed to be the exclusive
remedies for breach of this Agreement but shall be in addition to all other
remedies available at law or in equity to the Parties.
11. This Agreement shall inure to the benefit of and be enforceable by
the Parties and their successors.
12. The Parties agree and acknowledge that nothing contained herein
shall limit, restrict or otherwise affect the rights of the Parties to compete
with each other, provided that the
3
4
Received Material will be used by Ahold solely to evaluate the Transaction and
not for any operating or other purpose.
13. It is further understood that no failure or delay by either Party
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.
14. This Agreement shall remain in effect until the earlier of (i)
three years from the date hereof and (ii) consummation of the Transaction.
15. This Agreement (a) shall be governed and construed in accordance
with the laws of the State of Delaware applicable to agreements made and to be
performed within such State and (b) may not be terminated or modified nor any of
its provisions waived, except in a writing signed by a duly authorized officers
of both Parties.
16. Each of the Parties agrees that any legal action or proceeding with
respect to this Agreement may be brought in the Courts of the State of Delaware
or the United States District Court for the District of Delaware, by execution
and delivery of this Agreement, each Party hereby irrevocably submits itself in
respect of its property, generally and unconditionally to be the non-exclusive
jurisdiction of the aforesaid courts in any legal action or proceeding arising
out of this Agreement. Each of the Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement brought in the courts referred to in the preceding sentence. Each
Party consents to process being served in any action or proceeding by the
mailing of a copy thereof to the address set forth opposite its name below and
agrees that such service upon receipt shall constitute good and sufficient
service of process or notice thereof. Nothing in this paragraph shall affect or
eliminate any right to serve process in any other matter permitted by law.
17. This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which shall be deemed the same instrument.
4
5
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Address: KONINKLIJKE AHOLD N.V.
Xxxxxx Xxxxxxxx 0
0000 XX Xxxxxxx, Xxx Xxxxxxxxxxx
By: /s/ A. M. Meurs
-------------------------------
Name: A. M. Meurs
Title: Executive Vice President
0000 Xxxxxx Xxxx, 0000 XXXXXXXXXXX
Xxxxxxxxxx, XX 00000
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Chairman and President
5
