EXHIBIT H
DART GROUP CORPORATION
0000 00XX XXXXXX
XXXXXXXX, XXXXXXXX 00000
CONFIDENTIALITY AGREEMENT
You, the undersigned, have expressed an interest in a possible purchase of,
merger with or similar transaction involving, Dart Group Corporation and/or one
or more of its subsidiaries (collectively, the "Company"). In connection with
your analysis of a possible negotiated transaction with the Company, you have
requested certain oral and written information concerning the Company from
officers, directors, employees, representatives, advisors and/or agents of the
Company. In consideration of furnishing you with such information, you agree
to, and agree to cause your affiliates to comply with, the following terms of
this Confidentiality Agreement:
(1) The Evaluation Material (as defined below) will be used solely for the
purpose of evaluating a possible transaction between the Company and you
relating to the purchase by you of the Company, and will not be used in any
way directly or indirectly detrimental to the Company or for any other
purpose. All the Evaluation Material will be kept confidential by you and
your legal and financial advisors, except that you may disclose the
Evaluation Material or portions thereof to those of your directors,
officers, employees, representatives and agents and to those
representatives of your legal and financial advisors (the persons to whom
such disclosure is permissible being collectively called "Representatives")
who need to know such information for the purpose of evaluating your
possible acquisition of the Company (it being understood that each such
Representative will be informed of the confidential nature of the
Evaluation Material and will agree to be bound by this agreement). You
agree to be responsible for any breach of this agreement by any of the
Representatives. You will keep a list of all persons (indicating their
position and affiliation) who have received any of it. In the event that
you or any of the Representatives is requested or required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand
or similar process or by law or rule of a stock exchange or similar entity)
to disclose any of the Evaluation Material, you or such Representative, as
the case may be, shall provide the Company with prompt prior notice of such
request or requirement so that the Company may seek a protective order or
other appropriate remedy or, if appropriate, waive compliance with the
terms of this agreement. In the event that such protective order or other
remedy is not obtained, or that the Company waives compliance with the
provisions hereof, (i) you or such Representative, as the case may be, may
disclose to any tribunal only that portion of the Evaluation Material which
you are advised by written opinion of
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your counsel is legally required to be disclosed or else stand liable for
contempt or suffer other censure or penalty, and shall exercise reasonable
efforts to obtain assurance that confidential treatment will be accorded
such Evaluation Material and (ii) you shall not be liable for such
disclosure unless such disclosure to such tribunal was caused by or
resulted from a previous disclosure by you or any Representative not
permitted by this agreement. The term "person" as used in this agreement
with be interpreted broadly to include, without limitation, any
corporation, company, partnership or individual.
(2) The term "Evaluation Material" as used in this agreement shall mean all
information and documents, whether in written or oral form, which have been
furnished by the Company, or any employee, officer, or financial or legal
advisor to the Company (the "Disclosing Party"), to you or any of the
Representatives, whether furnished or otherwise disclosed before or after
the date of this agreement, together with all analyses, compilations,
studies or other documents, records or data prepared by you or any of the
Representatives which contain or otherwise reflect or are generated from
such information and documents. The term "Evaluation Material" does not
include any information which (i) at the time of disclosure is generally
available to and known by the public (other than as a result of a
disclosure directly or indirectly by you or any of the Representatives not
permitted by this agreement), (ii) was available to you on a
nonconfidential basis from a source that is not known by you to be bound by
a confidentiality agreement with any Disclosing Party or otherwise
prohibited from transmitting or disclosing the information by a
contractual, legal or fiduciary obligation, (iii) has been independently
developed by you without violation of any obligation under this agreement
or use of any Evaluation Material or (iv) became available to you on a non-
confidential basis or has been independently developed by you in your
capacity as wholesale supplier to Shoppers Food Warehouse Corp.
("Shoppers").
(3) If you determine not to seek to proceed with a transaction with the
Company, you will promptly inform the Company, and you and your
Representatives shall promptly either (i) destroy all copies of the written
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Evaluation Material in your or their possession or under your or their
custody or control (including that stored in any computer, word processor
or similar device) and confirm such destruction to the Company in writing
or (ii) return to the Company all copies of the Evaluation Material
furnished to you by or on behalf of the Company in your possession or in
the possession of your Representatives. Any oral Evaluation Material will
continue to be held subject to the terms of this agreement.
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(4) Except as required by law or by the rules and regulations of any stock
exchange on which your stock is listed and only to the extent required by
such law or rules and regulations as so advised in writing by counsel, you
will not, and will direct and cause the Representatives not to, without the
prior written consent of the Company, disclose to any person (i) that the
Company is contemplating a sale, (ii) that any investigations, discussions
or negotiations are taking place concerning a possible transaction between
the Company and you, (iii) that you have requested or received Evaluation
Material from any Disclosing Party, or (iv) any of the terms, conditions or
other facts with respect to any such possible transaction, including the
status thereof.
(5) Until the earliest of (i) the execution by you of a definitive purchase and
sale agreement (the "Sale Agreement"); (ii) an 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) with any officer, director, employee,
representative, or agent of the Company or any of its subsidiaries
regarding its business, assets, operations, prospects or finances, except
with the express written permission of the Company. It is understood that
the Company will arrange for appropriate contacts for due diligence
purposes. It is further understood that all (a) communications regarding
this possible transaction, (b) requests for additional information, (c)
requests for facility tours or management meetings and (d) discussions or
questions regarding procedures will be submitted or directed to Senator
Xxxxxxx Xxxxx. You further agree that for a period of one year from the
date hereof, you will not solicit for hire any of the employees of the
Company with whom you have had contact during the period of your
investigation or who became known to you in the course of your
consideration of a possible transaction with the Company, provided,
however, that the foregoing will not be deemed to prevent you from (1)
conducting general solicitations of employment published in a journal,
newspaper or other publication of general circulation or in trade
publications or other similar media and which, in any case, are not
directed specifically toward such employees, or (2) negotiating with or
employing any such employee who initiates contacts with you on an
unsolicited basis.
(6) You understand and acknowledge that the Company is not making any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material, and the Company, its officers,
directors, employees, stockholders, owners, affiliates, advisors or agents
expressly disclaims any and all liability to you or any other person that
may be
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based upon or relate to (i) the use of the Evaluation Material by you or
any of the Representatives or (ii) any errors therein or omissions
therefrom. Only those particular representations or warranties, if any,
that are made to a purchaser 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 Sale Agreement, will have any legal effect.
(7) For a period of two years from the date hereof, unless specifically
requested or permitted in writing in advance by the Company, you and your
affiliates (as defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are under your control will not
(and you and they will not advise, assist, participate with or encourage
others to), directly or indirectly, in any manner, effect or seek, offer,
propose (whether publicly or otherwise) to:
(i) make any public announcement with respect to, or submit any proposal
for, a transaction between the Company or any of its security
holders and you (and/or any of your affiliates), whether or not any
other parties are also involved, directly or indirectly, in such
proposal or transaction, unless such proposal is directed and
disclosed solely to the Board of Directors of the Company or its
designated representatives, and the Company shall have requested in
writing in advance the submission of such proposal (and shall have
consented in writing, in advance, in the case of any such proposal
from or involving parties in addition to or other than you, to the
involvement of such additional or other parties);
(ii) by purchase or otherwise, through your affiliates or otherwise,
alone or with others, acquire, offer to acquire, or agree to
acquire, ownership (including, but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Exchange Act) of any
assets or business of the Company (other than in the ordinary course
of your business as wholesale supplier to Shoppers) or of any voting
or other securities or direct or indirect rights (including
convertible securities) or options to acquire such ownership (or
otherwise act in concert with any person which so acquires, offers
to acquire, or agrees to acquire);
(iii) make, or in any way participate directly or indirectly 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
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person with respect to the voting of, any voting securities of the
Company or any of its affiliates;
(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 the Company or any of its affiliates;
(v) otherwise, alone or in concert with others, seek to influence or
control the management or policies of the Company or any of its
affiliates (other than in the ordinary course of your business as
wholesale supplier to Shoppers);
(vi) deposit securities of the Company or any of its subsidiaries into a
voting trust;
(vii) except as required by law or by the rules and regulations of any
stock exchange on which your stock is listed and only to the extent
required by such law or rules and regulations as so advised in
writing by counsel, take any action which might require the Company
to make a public announcement regarding (A) the possibility of a
business combination or merger involving, or a sale or other
disposition of, the Company or its subsidiaries or any of its voting
securities or a material portion of its assets or any
recapitalization, restructuring, liquidation, dissolution, purchase
or sale of a substantial portion of the assets of, or other
extraordinary transaction with respect to the Company or any of its
subsidiaries or (B) any of the types of matters set forth in (i)-
(vi) above;
(viii) except as required by law or by the rules and regulations of any
stock exchange on which your stock is listed and only to the extent
required by such law or rules and regulations as so advised in
writing by counsel, disclose to any third party any intention, plan
or arrangement inconsistent with the foregoing; or
(ix) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing. You and your affiliates agree not to approach or request
the Company or its subsidiaries (or any of their respective
directors, officers, employees or agents), directly or indirectly,
to amend or waive any provision of this paragraph (7) (including
this sentence).
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You and your affiliates under your control agree to notify the Company if
you or one or more of such affiliates is approached by a third party
concerning the participation of you and/or the third party in a transaction
or activity described in this paragraph (7) and you and such affiliates
under your control agree to inform the Company of the nature of each
contact with such third parties and the identities of the third parties
involved.
(8) You and your affiliates under your control hereby acknowledge that you are
aware and that your officers, directors, employees, advisers and/or agents
involved in the possible transaction contemplated herein have been advised
that the United States securities laws prohibit any person who has material
non-public information about a company from purchasing or selling
securities of such company.
(9) You also understand and agree that no contract or agreement providing for
the sale of the Company shall be deemed to exist between you and the
Company unless and until a definitive Sale Agreement has been executed and
delivered by you and the Company, and you hereby waive, in advance, any
claims (including, without limitation, breach of contract) in connection
with the sale of the Company unless and until a definitive Sale Agreement
has been executed and delivered by you and the Company. You also agree
that unless and until a definitive Sale Agreement has been executed and
delivered, neither the Company, nor its stockholders or owners has any
legal obligation of any kind whatsoever with respect to any such
transaction by virtue of this agreement or any other written oral
expression with respect to such transaction except, in the case of this
agreement, for the matters specifically agreed to herein. For purposes of
this paragraph, the term "definitive Sale Agreement" does not include an
executed letter of intent or any other preliminary written agreement, nor
does it include any written or verbal acceptance of an offer or bid on your
part. You further understand that (i) the Company shall be free to conduct
the process for the sale of the Company as it, in its sole discretion shall
determine (including, without limitation, negotiating with any of the
prospective buyers and entering into a definitive Sale Agreement without
prior notice to you or any other person), (ii) any procedures relating to
such sale may be changed at any time without notice to you or any other
person and (iii) you shall not have any claims whatsoever against the
Company, or any of its respective directors, officers, stockholders,
owners, affiliates, representatives, advisors or agents arising out of or
relating to the sale of the Company (other than those as against the
parties to a definitive Sale Agreement with you in accordance with the
terms thereof). Neither this paragraph nor any other provision in this
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agreement can be waived or amended except by written consent of the
Company, which consent shall specifically refer to this paragraph (or such
other provision) and explicitly make such waiver or amendment. Each party
agrees that nothing in this agreement shall in any way affect, or
constitute the waiver of any rights under, any supply agreements that may
be in effect from time to time between you and Shoppers.
(10) You agree that money damages would not be a sufficient remedy for any
breach of this agreement and that the Company shall be entitled to
equitable relief, including injunction and specific performance, in the
event of any breach of the provisions of this agreement, in addition to all
other remedies available to the Company at law or in equity. You also
hereby irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Maryland and of the United
States of America located in the State of Maryland for any actions, suits
or proceedings arising out of or relating to this agreement and the
transactions contemplated hereby (and you agree not to commence any action,
suit or proceeding relating thereto except in such courts), and further
agree that service of any process, summons, notice or document by U.S.
registered mail to your address set forth below shall be effective service
of process for any action, suit or proceeding brought against you in any
such court. You hereby irrevocably and unconditionally waive any objection
to the laying of venue of any action, suit or proceeding arising out of
this agreement or the transactions contemplated hereby in the courts of the
State of Maryland, 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 an
inconvenient forum.
(11) It is further understood that no failure or delay in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
(12) This agreement is for the benefit of the Company and its successors and
assigns. The rights of the Company under this Agreement may be assigned in
whole or in part to any purchaser of the Company, which purchaser shall be
entitled to enforce this Agreement to the same extent and in the same
manner as the Company is entitled to enforce the Agreement. This agreement
and all controversies arising from or relating to performance under this
agreement shall be governed by and construed in accordance with the laws of
the State of
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Maryland, without giving effect to its conflicts of laws and principles.
This agreement supersedes the Confidentiality Agreement, dated as of March
14, 1997, by and among you, the Company and Shoppers, which agreement shall
be of no further force and effect.
(13) If any legal action is brought for the enforcement of the Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the prevailing
party or parties shall be entitled to recover his, its or their reasonable
attorneys' fees and other costs incurred in such legal action, in addition
to any other relief to which he, it or they may be entitled.
If you agree with the foregoing, please sign a copy of this facsimile
letter and return to me. Your return to me of a signed facsimile copy will
thereupon constitute our agreement with respect to the subject matter of this
letter.
Very truly yours,
DART GROUP CORPORATION
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
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AGREED TO and ACCEPTED THIS
_____ DAY OF FEBRUARY, 1998
RICHFOODS HOLDINGS, INC.
By:
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Name:
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Title:
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Address:
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