Exhibit (c)(2)
[Letterhead of Catherines Stores Corporation]
October 12, 1999
Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxx
Gentlemen:
Catherines Stores Corporation (the "Company") and Charming Shoppes, Inc.
("Charming") intend to enter into good faith negotiations for the purpose of
exploring a possible transaction between the Company or its stockholders and
Charming. In connection therewith, Xxxxxxxx has requested and the Company will
furnish certain non-public information about the business and operations of the
Company. As a condition to your being furnished such information, you agree to
treat any information (whether prepared by the Company, its advisors or
otherwise, and whether oral or written) that is furnished to you or your
representatives (which term shall include your directors, officers, partners,
employees, agents and advisors) by or on behalf of the Company (herein
collectively referred to as the "Evaluation Material") in accordance with the
provisions of this letter and to take or abstain from taking certain other
actions herein set forth. The term "Evaluation Material" does not include
information that (i) is already in your possession, provided that such
information is not known by you to be subject to another confidentiality
agreement with or other obligation of secrecy to the Company or (ii) becomes
generally available to the public other than as a result of a disclosure by you
or your representatives or (iii) becomes available to you on a non-confidential
basis from a source other than the Company or its advisors, provided that such
source is not known by you to be bound by a confidentiality agreement with or
other obligation of secrecy to the Company.
A. Confidentiality and Non-Disclosure.
Charming Shoppes, Inc.
October 12, 1999
Page 2
You hereby agree that the Evaluation Material will be used solely for the
purpose of evaluating a possible transaction between the Company or its
stockholders and you, and will be kept confidential by you and your
representatives; provided, however, that any of such information may be
disclosed to your representatives who need to know such information solely for
the purpose of evaluating any such possible transaction between the Company or
its stockholders and you and who agree to keep such information confidential
and to be bound by this agreement to the same extent as if they were parties
hereto. You will be responsible for any breach of this agreement by your
representatives.
You hereby 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 the United States securities laws prohibit any person who has
received from an issuer material, non-public information concerning the matters
which are the subject of this letter from purchasing or selling securities of
such issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
In the event that you or your representatives receive a request to
disclose all or any part of the information contained in the Evaluation
Material under the terms of a valid and effective subpoena or order issued by a
court of competent jurisdiction or by a governmental or regulatory body, you
agree to (i) promptly notify the Company about such a request, so that it may
seek an appropriate protective order and/or waive your compliance with the
provisions of this agreement (and, if the Company seeks such an order, to
provide such cooperation as the Company shall reasonably request) and (ii) if
disclosure of such information is required in the opinion of your counsel,
exercise your reasonable best efforts to obtain an order or other reliable
assurance that confidential treatment will be accorded to such of the disclosed
information which the Company so designates.
In addition, without the prior written consent of the Company, you will
not, and will cause your representatives not to, disclose to any person either
the fact that discussions or negotiations are taking place concerning a
possible transaction between the Company or its stockholders and you or any of
the terms, conditions or other facts with respect to any such possible
transaction, including the status thereof, except that disclosure of such
information may be made if required by legal or regulatory process to the
extent, in the opinion of your counsel, you are required to make such
disclosure; provided that prior to any such disclosure,
Charming Shoppes, Inc.
October 12, 1999
Page 3
you shall first give the Company a reasonable opportunity to review the
proposed disclosure and to comment xxxxxxx.
Although the Company has endeavored to include in the Evaluation Material
information which it believes to be relevant for the purpose of your
investigation, you acknowledge and agree that neither the Company nor any of
its representatives or advisors have made or make any representation or
warranty as to the accuracy or completeness of the Evaluation Material. You
agree that neither the Company nor its representatives or advisors shall have
any liability to you or any of your representatives resulting from the use or
contents of the Evaluation Material or from any action taken or any inaction
occurring in reliance on the Evaluation Material.
Upon the request of the Company, you and your representatives shall
promptly redeliver to the Company all written Evaluation Material and any other
written material containing or reflecting any information in the Evaluation
Material (whether prepared by the Company, its advisors, agents or otherwise)
and will not retain any copies, extracts or other reproductions in whole or in
part of such written material. All documents, memoranda, notes, and other
writings whatsoever prepared by you or your representatives based on this
information in the Evaluation Material shall be destroyed, and such destruction
shall be certified in writing to the Company by an authorized officer.
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October 12, 1999
Page 4
B. Exclusive Period.
In consideration of Charming commencing due diligence and entering into
good faith negotiations with the Company regarding a possible transaction, the
Company agrees to deal exclusively with Charming in connection with the sale of
the Company or any of its subsidiaries or assets such that, until the date
which is four weeks from the date hereof (so long as Charming's due diligence
inquiry and negotiation of a definitive agreement are continuing in good faith
during that period), neither the Company nor any of its subsidiaries, nor any
of its or their officers, employees, representatives or agents, will, directly
or indirectly, solicit, encourage, or initiate any offer or proposal from, or
initiate any discussion or negotiations with, or offer to provide any
information to, any person or group, other than Charming or its employees,
representatives or agents concerning any transaction involving the sale of the
Company or any of its subsidiaries or assets, and that if the Company does
receive any proposal in respect of any such transaction, the Company will
promptly communicate to Charming (unless prohibited by the terms of such
proposal) the material terms of and the name of the person making such
proposal. Charming agrees that it shall use its reasonable best efforts to
complete its due diligence during such four week period and that, for a period
of one year from the date hereof, neither Charming nor its affiliates (as
defined in Rule 12b-2 under the Securities and Exchange Act of 1934, as
amended) will, directly or indirectly, acting alone or in concert with others,
solicit for employment or employ (as an employee, consultant or in any other
capacity), or encourage the termination of employment by, any person who is or
has been from and after the date hereof a Vice President or other executive
officer of the Company or any of its affiliates.
C. Miscellaneous.
You further acknowledge and agree that no failure or delay by the Company
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.
You agree that unless and until a definitive agreement between the Company
and you with respect to any transaction referred to in the first paragraph of
this letter has been executed and delivered, neither the Company nor you will
be under any legal obligation of any kind whatsoever with respect to such 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, agents or any
other representatives or its advisors except for the matters
Charming Shoppes, Inc.
October 12, 1999
Page 5
specifically agreed to in this letter. The agreements set forth in this letter
may be modified or waived only by a separate writing by the Company and you
expressly modifying or waiving such agreements.
The parties hereto acknowledge that money damages are an inadequate remedy
for breach of this letter agreement because of the difficulty of ascertaining
the amount of damage that will be suffered by the Company in the event that
this agreement is breached. Therefore, you agree that the Company may obtain
specific performance of this agreement and injunctive relief against any breach
hereof. If any term, provision, covenant, or restriction of this letter
agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Unless otherwise provided, this letter agreement shall be binding upon the
parties hereto for a period of two years from the date hereof.
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October 12, 1999
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This letter shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Pennsylvania without regard to principles of
conflicts of laws.
Very truly yours,
CATHERINES STORES CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx,
Executive Vice President
Accepted and Agreed to:
CHARMING SHOPPES, INC.
By: /s/ Xxxxxx X. Xxxx
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Its: President and Chief Executive Officer
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