Exhibit (d)(2)
XXXXXXX SHOE COMPANY INC.
000 XXXXXXX XXXXXX, X.X. XXX 00
XXXXXXXXX (XXXXXX), XX 00000-0000
June 8, 2004
Xxxxx Apparel Group, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
MUTUAL CONFIDENTIALITY AGREEMENT
Ladies and Gentlemen:
This confidentiality agreement (this "Agreement") is entered into as of the
date set forth above between Xxxxxxx Shoe Company Inc., a Delaware corporation
(the "Xxxxxxx"), and Xxxxx Apparel Group, Inc. ("Xxxxx"), a Pennsylvania
corporation.
In connection with the consideration by each party hereto of a possible
negotiated transaction, including, without limitation, a possible business
combination or other business transaction (a "Transaction"), with the other
party hereto and/or its subsidiaries, affiliates or divisions (references
herein to each "party" shall include subsidiaries, affiliates and divisions of
such party), each party is prepared to make available to the other party
certain information concerning its business, financial condition, operations,
assets and liabilities. As a condition to such information being furnished to
the other party and the other party's directors, officers, employees, agents,
representatives or advisors (including, without limitation, attorneys,
accountants, consultants, bankers and financial advisors) (collectively,
"Representatives"), each party agrees to treat any information concerning the
other party (whether prepared by the other party, its advisors or otherwise
and irrespective of the form of communication) which is or has been furnished
to the party or its Representatives by the other party or by the other party's
Representatives (herein collectively referred to as the "Evaluation Material")
in accordance with the provisions of this Agreement, and to take or abstain
from taking certain other actions hereinafter set forth.
Accordingly, each party hereby agrees that:
1. The term "Evaluation Material" shall include, without limitation, all
financial, business, operating and other data, reports, interpretations,
forecasts and records provided by each party or its Representatives
concerning such party and all notes, analyses, compilations, studies,
interpretations and other documents prepared by the other party or its
Representatives that contain, reflect or are based upon, in whole or in
part, such information. The term "Evaluation Material" shall not include
information that (i) is or becomes publicly known other than as a result
of a disclosure by the receiving party or its
Representatives in breach of this Agreement, (ii) was in the receiving
party's possession prior to its being furnished to the receiving party by
the disclosing party or any of its Representatives, (iii) became
available to the receiving party on a non-confidential basis from a
source other than the disclosing party or any of its Representatives, or
(iv) consists of information furnished or obtained pursuant to and in
accordance with the license agreement, dated as of July 9, 1999 (as
amended to date), between XXXX XXXXX, a division of Xxxxxx, A.S.L., Ltd.,
and Xxxxxxx and to which Xxxxx Investment Co. Inc. is currently a party
(it being understood that such information shall be subject to the
provisions of such license agreement), provided that in the case of (ii)
and (iii) above, the source of the information is not, to the knowledge
of the receiving party, bound by a confidentiality agreement with, or any
other contractual, legal or fiduciary obligation of confidentiality to,
the disclosing party or any other person with respect to the information.
2. The Evaluation Material shall be kept confidential by each party and its
Representatives and shall be used by each party and its Representatives
solely for the purpose of evaluating a Transaction. Except as provided
in, and in compliance with, paragraph 4 below, each party and its
Representatives shall not disclose any of the Evaluation Material to any
person (including, without limitation, any joint-venturer or provider of
equity or debt financing, prospective or otherwise, or any of their
subsidiaries, affiliates or divisions or any directors, officers,
employees, agents, representatives or advisors of any of them
(collectively, "Providers")) in any manner whatsoever, provided that each
party may disclose the Evaluation Material (i) to the extent that the
other party gives its prior written consent (provided that, upon the
execution and delivery of a definitive agreement between the parties
regarding a Transaction, such prior written consent shall not be required
with respect to any disclosure to a Provider of debt financing) and (ii)
to such party's Representatives that need to know information in the
Evaluation Material for the sole purpose of evaluating a Transaction, so
long as such Representatives agree to keep that information confidential
in accordance with the terms of this Agreement. In any event, each party
shall be responsible for a breach of this Agreement by its
Representatives and, at its sole expense, shall take all reasonable
actions, including court proceedings, to restrain its Representatives
from prohibited or unauthorized disclosure or use of the Evaluation
Material.
3. Except as required by law, rule, regulation, court order, subpoena or
other legal process, each party and its Representatives shall not,
without the prior written consent of the other party, disclose to any
other person (including, without limitation, any Providers), other than
such party's Representatives that need to know such information for the
sole purpose of evaluating a Transaction, so long as such Representatives
agree to keep that information confidential in accordance with the terms
of this Agreement, (i) the fact that the Evaluation Material exists or
has been made available to it or its Representatives, (ii) that
discussions or negotiations are taking place concerning a Transaction or
involving the other party with respect thereto or (iii) any of the terms,
conditions or other facts with respect to a Transaction, including,
without limitation, the status thereof or the subject matter of this
Agreement. For purposes of this Agreement, the term "person" shall be
broadly interpreted to include the media and any individual, corporation,
partnership, group or other entity. Notwithstanding anything in this
Agreement to the contrary, the
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parties agree and acknowledge that (a) a party may disclose matters that
are described in clauses (i), (ii) and (iii) of this paragraph 3 if, upon
the advice of and after consultation with outside legal counsel, the
party determines in good faith that such matters are required to be
disclosed pursuant to the requirements of applicable Federal securities
laws, including the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder,
and (b) the parties may disclose, and file with the Securities and
Exchange Commission, this Agreement.
4. If either party or any of its Representatives are requested by, or
required by, court order, subpoena or other similar legal process, to
disclose any of the Evaluation Material, it shall provide the other party
with prompt written notice of any such request or requirement so that the
other party may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Agreement, and in the
absence of such protective order or other remedy or the receipt of a
waiver from the disclosing party, if the receiving party or any of its
Representatives are, based upon the advice of legal counsel and in
connection with any such request or requirement, legally obligated to
disclose any of the Evaluation Material, the receiving party or its
Representatives may, without liability hereunder, disclose only such
portion of the Evaluation Material that such legal counsel advises is
legally required to be disclosed, provided that in that connection the
receiving party shall use its reasonable best efforts to preserve the
confidentiality of such portion of the Evaluation Material, including,
without limitation, cooperating with the disclosing party to obtain an
appropriate protective order or other reliable assurance that
confidential treatment will be accorded such portion of the Evaluation
Material.
5. If either party decides that it does not wish to proceed with a
Transaction, it shall promptly inform the other party of that decision.
In that case, or at any time upon the request of the disclosing party for
any reason, the receiving party and its Representatives shall promptly
destroy or deliver to the disclosing party all Evaluation Material in its
or its Representatives' possession. Compliance by a receiving party and
its Representatives with the preceding provisions regarding the
destruction or return of Evaluation Material shall, upon the disclosing
party's request, be confirmed in writing to the disclosing party.
Notwithstanding the destruction or return of the Evaluation Material,
each party and its Representatives shall continue to be bound by its
confidentiality and other obligations hereunder.
6. Each party understands and acknowledges that neither party nor any of
their Representatives or stockholders makes any representation or
warranty, express or implied, concerning the accuracy or completeness of
the Evaluation Material. Each party agrees that neither party nor any of
their Representatives or stockholders shall have any liability to the
other party or to any of the other party's Representatives or
stockholders relating to or resulting from the use of the Evaluation
Material or any errors therein or omissions therefrom. Only those
representations or warranties that are made in a final definitive
agreement regarding a Transaction, when, as and if executed and
delivered, and subject to such limitations and restrictions as may be
specified therein, will have any legal effect.
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7. For a period of two years from the date of this Agreement, neither party
shall, without the prior written consent of the other party, directly or
indirectly, solicit for employment any employee of the other party with
whom a party had contact or who became known to such party in connection
with its consideration of a Transaction; provided, however, that the
foregoing provision shall not prevent such party from employing any such
person who (i) initiates discussions regarding such employment without
any direct or indirect solicitation by or encouragement from such party,
(ii) responds to a general media advertisement or non-directed search
inquiry or (iii) has been terminated by the other party prior to
commencement of employment discussions between such party and such
person.
8. Each party understands and agrees that no contract or agreement providing
for any Transaction between them shall be deemed to exist between them
unless and until a final definitive agreement has been executed and
delivered, and each party hereby waives, in advance, any claims
(including, without limitation, breach of contract and tortious
interference claims) in connection with any Transaction involving the
other party unless and until the parties shall have entered into a final
definitive agreement. Each party also agrees that unless and until a
final definitive agreement regarding a Transaction between them has been
executed and delivered, neither party shall be under any legal obligation
of any kind whatsoever with respect to such a Transaction by virtue of
this Agreement except for the matters specifically agreed to herein. Each
party further acknowledges and agrees that the other party reserves the
right, in its sole discretion, to reject any and all proposals made to it
or its Representatives with regard to a Transaction between the parties,
and to terminate discussions and negotiations with the other party at any
time.
9. 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 other right, power or privilege hereunder.
10. Money damages are not an adequate remedy for a breach of this Agreement
by either party or any of their Representatives, and the parties hereto
shall be entitled to equitable relief, including injunction and specific
performance, as a remedy for any such breach. The parties further waive
any requirement for the securing or posting of a bond in connection with
such equitable relief and acknowledge that equitable relief shall not be
deemed to be the exclusive remedy for a breach of this Agreement but
shall be in addition to all other remedies available at law or equity to
the parties.
11. This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and no provision of this Agreement
may be amended, modified, superseded or waived, in whole or in part, nor
any consent given, except by a separate written agreement or instrument
executed by the parties. In the event that any provision of this
Agreement is held to be illegal or contrary to public policy or otherwise
unenforceable, that provision shall be deemed eliminated herefrom or
modified to the extent necessary to make the provision enforceable and
the validity, legality and enforceability of the remaining provisions of
this Agreement (including such provision as modified) shall not in any
way be affected or impaired thereby.
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12. This Agreement shall benefit and bind successors and permitted assigns of
the parties. Neither party may assign any of its rights or delegate any
of its duties under this Agreement, including by operation of law,
without the prior written consent of the other party, and any purported
assignment not consented to shall be absolutely void and of no force and
effect.
13. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to the conflict of law
provisions thereof. Each party hereto irrevocably and unconditionally
submits to the non-exclusive jurisdiction of any State or Federal court
sitting in New York City over any suit, action or proceeding arising out
of or relating to this Agreement. Each party hereby agrees that service
of any process, summons, notice or document by U.S. registered mail
addressed to the address set forth on the first page of this Agreement
shall be effective service of process for any action, suit or proceeding
brought against it in any such court.
14. This Agreement shall terminate upon the earlier of (i) the third
anniversary of the date of this Agreement and (ii) the consummation of a
Transaction.
15. This Agreement may be executed by the parties hereto in counterparts,
both of which, taken together, shall constitute one and the same
Agreement.
16. Nothing in this Agreement shall prevent either party from disclosing any
information required by the proxy rules; provided, however, that this
paragraph 16 shall not apply to financial projections (the disclosure of
which financial projections shall require the prior written consent of
the providing party).
[Signatures on following page.]
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Please confirm your agreement to the foregoing by signing and returning
the accompanying copy of this Agreement, whereupon this Agreement shall
become binding on the parties hereto and on their respective successors
and permitted assignees.
Very truly yours,
XXXXXXX SHOE COMPANY INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Operating Officer,
Executive Vice President,
Secretary
Agreed as of the date
first written above:
XXXXX APPAREL GROUP, INC.
By: /s/ Xxx X. Xxxxxx
-------------------------------------
Name: Xxx X. Xxxxxx
Title: Executive Vice President, General
Counsel and Secretary
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