CONFIDENTIALITY AGREEMENT
AGREEMENT between Alba-Waldensian, Inc. ("Alba") and Tefron Ltd., its directors,
officers, employees and affiliates (collectively, the "Company") entered into as
of August 25, 1999.
WHEREAS, the Company has requested Alba to furnish the Company with confidential
or proprietary information relating to Alba (the "Confidential Information") for
the sole purpose of determining the Company's interest in entering into a joint
venture, business combination or other transaction with Alba or with its
shareholders.
WHEREAS, the Company agrees to review, examine, inspect and use the Confidential
Information only for the purposes described above, and only in accordance with
the terms of this AGREEMENT.
NOW, THEREFORE, in consideration of the premises, the parties hereby agree:
1. The Confidential Information, including, but not limited to, any
information or materials not available under the Securities Exchange
Act of 1934, as amended, of Alba, has been prepared from information
furnished by Alba and from other sources deemed reliable; however, Alba
makes no representation or warranty, expressed or implied, as to the
accuracy or completeness of the information contained therein and shall
not be liable in any manner for the loss or injury resulting from
reliance thereon.
2. The Company agrees to hold the Confidential Information, including the
identity of Alba, and the fact that information has been provided
(collectively known as "Information") in trust and confidence. The
obligation of the Company hereunder to hold the Information
confidential does not apply to: (a) information which is published or
otherwise becomes available to the general public through no act or
failure on the part of the company; (b) information which is
proprietary to the Company at the time of disclosure; or (c)
information which is subsequently acquired by the Company from a third
party who has a bona fide right to make such information available
without restriction. The Company agrees that the information shall be
used only for the purposes stated above and shall not be used for any
other purpose or disclosed to any third party except as expressly
provided herein. Notwithstanding the foregoing, in the event that the
Company is required by law or legal process to disclose any of the
Information, the Company will (i) provide Alba with prompt notice of
such requirement prior to the disclosure, and (ii) give Alba all
available information, assistance and authority to enable Alba to take
the measures that Alba, in its sole discretion, may deem appropriate or
necessary to protect the Information from disclosure.
3. Alba and the Company acknowledge that they are aware of the
restrictions imposed by securities laws and regulations on a person
possessing certain
material non-public information. The Company also acknowledges that the
possibility of a transaction with Alba and the Company is material
non-public information. The Company also acknowledges that the
possibility of a transaction with Alba and the Company is material
non-public information.
4. The Company agrees to share the Confidential Information only with a
limited number of the company's employees, on a need-to-know basis
only.
5. The Company agrees to reimburse, indemnify and hold harmless Alba and
its officers, directors, employees, representatives and agents from any
damage, loss and expense incurred by them as a result of any use by
Company of the information contrary to the terms of the AGREEMENT.
6. Upon demand by Alba, all Confidential Information, including copies,
notes or memoranda, prepared by the Company in connection with its
investigation of Alba, shall be destroyed or returned to Alba at Alba's
expense, unless otherwise authorized in writing by Alba's Chairman.
7. The Information shall not be disclosed to any agent, consultant or
third party, other than the Company's legal and financial advisors,
unless they agree to be bound by the terms of this AGREEMENT and have
been previously approved by Alba's Chairman in writing.
8. Without the written consent of Alba's Chairman, the Company, its
officers, directors, employees, representatives and agents, shall not
for a period of one year from the date hereof directly or indirectly
solicit for employment any person who is employed by Alba or any of its
affiliates. Without the prior consent of Alba's Chairman, the Company
agrees that they will not contact any employee, director or agent of
Alba directly, but will instead conduct all correspondence through
Alba's Chairman.
9. This AGREEMENT and its validity, construction, effect and performance
shall be governed by the laws of the State of North Carolina, United
States of America, without giving effect to the principles of conflict
of laws thereof. Each party hereto consents to personal jurisdiction in
such State and voluntarily submits to the jurisdiction of the courts of
such State in any action or proceeding with respect to this AGREEMENT,
including the federal district courts located in such State. The
Company agrees that it may be served with process at the address of its
corporate headquarters. A facsimile transmission of this document
(including a facsimile of the signatures) is legally binding.
10. The Company agrees that money damages would not be a sufficient remedy
for any breach of this AGREEMENT by the Company, and that in addition
to all other remedies for a breach of this AGREEMENT, Alba shall be
entitled to specific performance and injunctive or other equitable
relief without posting any
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bond, as well as being entitled to collect all legal fees incurred to
enforce this AGREEMENT.
IN WITNESS WHEREOF, the undersigned have executed this Confidentiality
Agreement as of the date first set forth above.
ALBA-WALDENSIAN, INC. TEFRON LTD
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------ ------------------------
Its: Chairman Its: Chief Financial Officer
------------------------ ------------------------
Date: 8/25/99 Date: 8/25/99
------------------------ ------------------------
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Execution Copy
INTEGRATION CONSULTING/NONCOMPETITION AGREEMENT
THIS INTEGRATION CONSULTING/NONCOMPETITION AGREEMENT ("Consulting
Agreement") is made and entered into on November 8, 1999 between Tefron U.S.
Holdings Corp., Delaware corporation (the "Parent"), and ▇▇▇▇▇ ▇▇. ▇▇▇▇▇, an
individual who resides in the State of Illinois (the "Consultant"). Terms not
otherwise defined herein shall have the meanings assigned to them in the Merger
Agreement (as defined below).
WHEREAS, the Consultant is a principal stockholder and director of
Alba-Waldensian, Inc., a Delaware corporation (the "Company");
WHEREAS, concurrently herewith the Parent and AWS Acquisition Corp., a
Delaware corporation and the Parent's wholly-owned subsidiary ("Purchaser"), and
the Company are entering into an Agreement and Plan of Merger of even date
herewith (the "Merger Agreement") pursuant to which the Purchaser agrees to make
a tender offer (the "Offer") for all outstanding Shares of the Company, to be
followed by a merger (the "Merger") of the Purchaser or a wholly-owned
subsidiary thereof with and into the Company;
WHEREAS, the Parent desires to avail itself of the Consultant's
experience and expertise on the terms and conditions hereinafter set forth; and
WHEREAS, the Consultant is willing to render consulting services to the
Parent to assist in the integration of the business of the Company with the
business of Parent and its affiliates (such businesses, collectively, the
"Businesses") on the terms and conditions hereinafter set forth and to refrain
from certain activities in competition with the Businesses;
NOW, THEREFORE, in consideration of the premises, the mutual promises
of the parties, and other good and valuable consideration, it is hereby agreed
as follows:
1. Consulting Period. The Parent shall retain the Consultant, and the
Consultant shall serve the Parent, in an advisory and consulting capacity for
the period commencing on the Takedown Date (the "Initial Date") and ending on
the effective date of the Merger (such period being hereinafter referred to as
the "Consulting Period").
2. Consulting Services. The Consultant agrees to render such advisory
and consulting services during the Consulting Period with respect to the
integration of the Businesses as the Parent may reasonably request from time to
time. The Parent and the Consultant shall mutually agree upon the time and place
where the services shall be performed. During the Consulting Period, the
Consultant will from time to time, at the request of the Parent, consult with
and advise the officers of the Parent and the Company with respect to the
integration of the Businesses.
Nothing in this Consulting Agreement shall preclude the Consultant from
engaging for compensation in any business, employment, occupation or other
activity (either as an employee or on his own behalf) not prohibited by the
provisions of Section 6 hereof.
3. Compensation for Consulting Services and Noncompetition Agreement.
For the Consultant's services to the Parent during the Consulting Period, and
the Consultant's observance of his agreements set forth in this agreement, the
Parent shall pay the Consultant a fee of $200,000 (the "Consulting Fee") for
services requested by the Parent as described herein. Consultant shall be paid
the Consulting Fee in two equal installments of $100,000. The first installment
shall be paid on the date on which Purchaser pays for Shares tendered pursuant
to the Offer and the second installment shall be paid upon the effective date of
the Merger. The Consultant will be reimbursed by the Parent for all reasonable
travel, food, lodging or similar expenses incurred in connection with his duties
hereunder which are approved by Parent in advance of the incurrence of such
expenses. In consideration of the Consultant's agreement to enter into the
covenant not to compete set forth in paragraph 6 below, Consultant shall be paid
$100,000 (the "Noncompetition Payment") which payment shall be made to the
Consultant on March 31, 2001.
4. Disability During Consulting Period. In the event the Consultant
shall, in the opinion of competent medical authority, become disabled prior to
the expiration of the Consulting Period and as a result of such disability shall
be substantially unable to perform the services required of him hereunder, the
Consultant shall thereupon be relieved of any further obligation to perform such
services and the Parent shall pay to the Consultant a pro rata portion of the
Consulting Fee through the date of disability.
5. Death of Consultant. The Consulting Agreement shall terminate upon
the death of the Consultant. In the event of the Consultant's death, the Parent
shall pay to the Consultant's legal representative a pro rata portion of the
Consulting Fee through the date of death.
6. Restrictive Covenants. In consideration of the Offer, the
transactions contemplated by the Merger Agreement, the Noncompetition Payment
and the other provisions hereof:
(a) Covenant Not to Compete. The Consultant hereby agrees
that, for a minimum of thirty months from the Initial Date (the "Noncompetition
Period"), the Consultant shall not (i) in any geographic area where the Parent
or its controlling shareholder or the Company conducts business during the
Noncompetition Period, engage in or participate in, directly or indirectly
(whether as an officer, director, employee, partner, consultant, holder of an
equity or debt investment, lender or in any other manner or capacity), or lend
his name (or any part or variant thereof) to, any business which is, or as a
result of the Consultant's engagement or participation would be involved in the
industry in which the Parent or the Company operates, (ii) deal, directly or
indirectly, in a competitive manner with any customers doing business with the
Parent or the Company during the Noncompetition Period (except in connection
with the performance of his services hereunder), or (iii) solicit or employ any
officer or employee of the Parent or its controlling shareholder or the Company
to become an officer, director, employee or agent of the Consultant, his
affiliates or anyone else; provided, that, Consultant may continue to employ
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in the same capacity on the same part-time basis as he is
currently employed and may employ him on a full-time or other basis if his
employment with the Company is terminated by or with the consent of the Company.
At no time shall the Consultant engage in or participate in, directly or
indirectly, any business conducted under any name that shall be the same as or
similar to the name of the Parent or the Company or any trade name used by them.
Notwithstanding the foregoing, it is expressly understood and agreed that
ownership by the Consultant, in the aggregate, of less than 5% of the
outstanding shares of capital stock of any
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corporation with one or more classes of its capital stock listed on a national
securities exchange or actively traded in the over-the-counter market that would
otherwise be prohibited by clause (i) above shall not be deemed to constitute a
violation of such provision.
(b) Intellectual Property. During the Consulting Period,
Consultant will disclose to the Parent all ideas, inventions and business plans
developed by Consultant during such period which relate directly or indirectly
to the Businesses, including, without limitation, any process, operation,
product or improvement which may be patentable or copyrightable. Consultant
agrees that such will be the property of the Parent and that Consultant will at
the Parent's request and cost do whatever is necessary to secure the rights
thereto by patent, copyright or otherwise to the Parent. The Consultant shall be
prohibited from making use of or implementing any such ideas, inventions or
business plans in connection with his employment with a business that is
considered a competitor under Section 6(a)(i) hereof.
(c) Confidentiality. During the Consulting Period and at all
times thereafter, Consultant agrees that he will not divulge to anyone (other
than the Parent or the Company or any persons employed or designated by the
Parent or the Company) any knowledge or information of any type whatsoever
whether of a confidential nature or otherwise relating to the business of the
Parent or the Company or any of their respective subsidiaries or affiliates,
including, without limitation, all types of trade secrets (unless readily
ascertainable from public or published information or trade sources) and
customer and supplier information (the foregoing, collectively, the
"Confidential Information"). Consultant further agrees not to disclose, publish
or make use of any Confidential Information without the prior written consent of
the Parent. Upon termination of this Agreement, the Consultant or his personal
representative shall promptly deliver to the Company all books, memoranda,
plans, records and written data of every kind relating to the business and
affairs of the Company or the Confidential Information which are then in the
Consultant's possession. In the event that the Consultant is requested or
required (by oral questions, interrogatories, requests for information or
documents in legal proceedings, subpoenas, civil investigative demand or other
similar process) to disclose any of the Confidential Information, Consultant
shall provide the Parent with prompt written notice of any such request or
requirement so that the Parent may seek a protective order or other appropriate
remedy an/or waive compliance with the provisions of this Section 6(c). If, in
the absence of a protective order or other remedy or the receipt of a waiver by
the Company, the Consultant is, in the opinion of counsel, legally compelled to
disclose Confidential Information, the Consultant may, without liability
hereunder, disclose only that portion of the Confidential Information which such
counsel advises the Consultant is legally required to be disclosed.
(d) Business Goodwill. During the Consulting Period and at all
times thereafter, Consultant will make only positive comments about the Parent
and the Company and their respective affiliates, directors, officers, employees
and agents, and shall make no comments or take any other actions, direct or
indirect, that will reflect adversely on any of the foregoing or adversely
affect their business reputation or good will.
(e) Remedy for Breach. The Parent shall be entitled to seek a
restraining order or injunction in any court of competent jurisdiction to
prevent any continuation of any violation of the provisions of this Section 6
and the Consultant hereby consents that such restraining order or injunction may
be granted without the necessity of the Parent's posting any bond.
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7. Miscellaneous. (a) Independent Contractor Status. Consultant
acknowledges and agrees that, from and after the Initial Date, his status at all
times shall be that of an independent contractor, and that he may not, at any
time, act as a representative for or on behalf of the Parent or the Company for
any purpose or transaction, and may not bind or otherwise obligate the Parent or
the Company in any manner whatsoever without obtaining the prior written
approval of the Parent therefor. The parties hereby acknowledge and agree that
all Consulting Fees paid during the Consulting Period shall represent fees for
his consulting services as an independent contractor, and shall therefor be paid
without any deductions or withholdings taken therefrom for taxes or any other
purpose. The Consultant further acknowledges that the Parent makes no warranties
as to any tax consequences regarding payment of such Consulting Fees, and
specifically agrees that the determination of any tax liability or other
consequences of the payment set forth above is his sole and complete
responsibility and that he will pay all federal, state and local taxes, if any,
assessed on such payments, but will not be responsible for any taxes or
penalties imposed by any taxing authority against the Parent or the Company for
its failure to properly report the Consultant's earnings under this Agreement.
(b) Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person or by courier, telegraphed, telexed or by facsimile
transmission (with a printed confirmation) or mailed by certified or registered
mail, postage prepaid, addressed as follows:
If to the Consultant: If to the Parent:
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ c/o Tefron Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Bnei-Brak 51371
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Israel
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇,
Chief Executive Officer
Any party may, by written notice to the others, change the address to
which notices to such party are to be delivered or mailed, provided, that any
such change of address shall only be effective upon receipt.
(c) General. No party hereto may assign his or its rights or delegate
his or its duties hereunder without the prior written consent of the other
party. To the extent any provision of this Consulting Agreement shall be invalid
or unenforceable, it shall be considered deleted herefrom and the remainder of
such provision and of this Consulting Agreement shall be unaffected and shall
continue in full force and effect. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business activities
covered by, any provision of this Consulting Agreement be in excess of that
which is valid and enforceable under applicable law, then such provision shall
be construed to cover only that duration, extent or activities which may be
validly and enforceably covered. This Consulting Agreement (i) contains the
entire agreement between the parties with respect to the subject matter hereof
(other than the Purchase Agreement), and supersedes all previous negotiations,
commitments and writings, (ii) may be amended, modified, altered or terminated,
and any of its provisions waived, only in a writing
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signed on behalf of the parties hereto, (iii) shall be governed by and construed
and enforced in accordance with the laws of the State of New York without regard
to the applicable conflicts of laws and (iv) shall terminate with no further
obligation of either party hereto to the other upon the termination of the
transactions contemplated by the Merger Agreement pursuant to the terms thereof.
All actions and proceedings arising out of or relating to this Agreement shall
be heard and determined in any Illinois state or federal court sitting in the
City of Chicago for the purpose of any action or proceeding arising out of or
relating to this Agreement and each of the parties hereto irrevocably agrees
that all claims in respect to such action or proceeding may be heard and
determined exclusively in any Illinois state or federal court sitting in the
City of Chicago. Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the state of Illinois, for the purpose of any action or
proceeding arising out of or relating to this Agreement and each of the parties
hereto irrevocably agrees that all claims in respect to such action or
proceeding may be heard and determined exclusively in any Illinois or federal
court sitting in the City of Chicago. Each of the parties hereto agrees to
reimburse the other for any reasonable costs and expenses, including reasonable
legal fees incurred by such party in connection with the collection of any
amounts payable by the other party hereunder which are not paid in a timely
manner.
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IN WITNESS WHEREOF, the parties have executed this Consulting Agreement
as of the day and year first above written.
TEFRON U.S. HOLDINGS CORP.:
By:
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Name:
Title:
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▇▇▇▇▇ ▇▇. ▇▇▇▇▇
