[Marked to show changes from the form
sent to Revco D.S., Inc. on September 23,
1996. Additions appear surrounded by
[ ]. Deletions appear as endnotes
surrounded by < >.]
BIG B, INC.
0000 Xxxxxx Xxxx X.X.
Bessemer, Alabama 35023
September 23, 1996
Revco D.S., Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Mr. X. Xxxxxx Xxxxx
CONFIDENTIALITY AGREEMENT
Revco D.S., Inc. has requested that Big B, Inc. (the
"Company") furnish it with certain information as it may reasonably
request relating to the Company which is non-public, confidential
and proprietary in nature in connection with its proposed
transaction with the Company (the "Transaction"). All such
information (whether written or oral) furnished (whether before or
after the date hereof) by the Company or its directors, officers,
employees, affiliates, representatives (including, without
limitation, financial advisors, attorneys and accountants) or agents
(collectively, "our Representatives") to you and your directors,
officers, employees, affiliates, representatives (including, without
limitation, financial advisors, attorneys[, proxy solicitors, public
relations consultants] and accountants) or agents (collectively,
"your Representatives") and all analyses, compilations, forecasts,
studies or other notes or documents prepared by your or your
Representatives which contain or reflect, or are generated from, any
such information <1> is hereinafter referred to as the
"Information." The term Information will not, however, include
information which (i) is already in your possession (other than
information provided to you or your Representatives by the Company),
(ii) is or becomes publicly available other than as a result of a
disclosure by you or your Representative in breach of this
Agreement, (iii) is or becomes available to you on a nonconfidential
basis from a source (other than the Company or our Representatives)
which, to the best of your knowledge after due inquiry, is not
prohibited from disclosing such information to you by a legal,
contractual, fiduciary or other obligation to the
Revco D.S., Inc.
September 23, 1996
Page 2
Company <2>[, (iv) is or becomes available to you on a
nonconfidential basis from the Company or its Representatives
pursuant to statutory or other legal rights to inspect or receive
information or (v)] any analysis or other documents prepared by you
or your Representatives from the information described in clauses
(i), (ii) <3>[,] (iii)<4> [or (iv)] above.
As a condition to, and in consideration of the Company providing you
with, Information, you acknowledge and agree as follows:
1. You and your Representatives (i) will keep the Information
confidential and will not (except as required by applicable
law, regulation or legal process, and only after compliance
with paragraph 2 below), without our prior written consent,
disclose any Information in any manner whatsoever, and (ii)
will not use any Information other than in connection with the
Transaction. You further agree to disclose the Information only
to your Representatives (a) who need to know the Information in
connection with negotiating or evaluating the Transaction, (b)
who are informed by you of the confidential nature of the
Information and (c) who have agreed to be bound by the terms of
this letter agreement. You agree to prepare a list of those
individuals and entities to whom any Information has been
disclosed and present the list to the Company promptly upon
request. The Company will keep the list confidential.
Notwithstanding any provision to the contrary contained herein,
you shall be permitted to disclose such of the Information as
you are advised by counsel is legally required to be disclosed
under the United States securities laws[, and paragraph 2 shall
not apply to such disclosure]. You agree that you will be
responsible for any breach of this letter agreement by any of
your Representatives.
2. In the event that you or any of your Representatives are
requested or required (by oral questions, interrogations,
requests for information documents, subpoena, civil
investigative demand, any informal or formal investigation by
any government or governmental agency or authority or
otherwise) to disclose any of the Information [(other than in
any litigation between
Revco D.S., Inc.
September 23, 1996
Page 3
the Company, or any of its Representatives, on the one hand,
and you or any of your Representatives, on the other hand)],
you will notify the Company promptly in writing so that we may
seek a protective order or other appropriate remedy or, in our
sole discretion, waive compliance with the terms of this letter
agreement. You agree not to oppose any action by the Company to
obtain a protective order or other appropriate remedy. In the
event that no such protective order or other remedy is
obtained, or that the Company waives compliance with the terms
of this letter agreement, you agree that you will furnish only
that portion of the Information which you are advised by
counsel is legally required.
3. You shall keep a record of each location of the Information.
You agree, immediately upon a request from the Company, to
return to the Company all Information, and no copies, extracts
or other reproductions of the Information shall be retained by
you or your Representatives. Any portion of the Information
that consists solely of analyses, compilations, forecasts,
schedules or other notes or documents prepared by you or your
Representatives, in lieu of being returned to the Company, may
be destroyed by you [or such Representative], in which <5>
[event] one of your authorized officers shall provide
certification to the Company that materials have in fact been
so destroyed[; provided, however, that your financial advisors
and legal advisors may retain for their files, in accordance
with their usual practice, one copy of any Information prepared
by them]. Any oral Information that is retained by you or your
Representatives will continue to be subject to this letter
agreement.
4. You acknowledge that none of the Company, nor our
Representatives, nor any of our or their respective officers,
directors, employees, agents or controlling persons within the
meaning of Section 20 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), makes any express or implied
representation or warranty as to the accuracy or completeness
of the Information, and you agree, to the fullest extent
permitted by law, that no such person
Revco D.S., Inc.
September 23, 1996
Page 4
will have any liability to you or any of your Representatives
on any basis (including, without limitation, in contract or
tort, under federal or state securities laws or otherwise) with
respect to the Transaction as a result of this letter
agreement, your participation in evaluating the Transaction,
your review of the Company, the use of the Information by you
or your representatives<6> [or] any errors therein or omission
from the Information<7>. Nothing in the foregoing provision
shall be deemed to waive or limit in any respect any rights or
claims you may have based on any actual or alleged breaches of
the fiduciary duties owed by the Company's Board of Directors
to the Company and its shareholders. You further agree that you
are not entitled to rely on the accuracy or completeness of the
Information and that you will be entitled to rely solely on
such representations and warranties as may be included in any
definitive agreement with respect to the Transaction, subject
to such limitations and restrictions as may be contained
therein.
5. You acknowledge that you are aware, and you will advise your
Representatives who are informed of the matters that are the
subject of this letter agreement, of the restrictions imposed
by the United States securities laws on the purchase or sale of
securities by any person who has received material, non-public
information from the issuer of such securities, which may
include certain portions of the Information, and on the
communication of such information to any other person.
6. You agree that, from the date of this Agreement through <8>
[the earlier of November 15, 1996, and the execution by the
Company of a definitive agreement for the acquisition of the
Company (the "Termination Date")], neither you nor any of your
affiliates will, without the prior written consent of the
Company: (i) acquire, offer to acquire, or agree to acquire,
directly or indirectly, by purchase or otherwise, any voting
securities or direct or indirect rights to acquire any voting
securities of the Company <9>; (ii) make, or in any way
participate in, directly or indirectly, any "solicitation" of
"proxies" (as such
Revco D.S., Inc.
September 23, 1996
Page 5
terms are used in the rules of the Securities and Exchange
Commission) whether before or after the formal commencement of
any such solicitation, or seek to advise or influence any
person or entity with respect to the voting of, any voting
securities of the Company; (iii) call, or seek to call, a
meeting of the Company's shareholders or execute any written
consent or initiate any shareholder proposal for action by
shareholders of the Company; (iv) otherwise act, alone or in
concert with others, to seek to acquire control of the Company
or influence the Board of Directors, management or policies of
the Company; <10> [or (v) ]induce any other person or entity to
do any of the foregoing; provided, however, that <11> [the
foregoing shall not prevent (x) any cash tender offer for all
the outstanding shares of common stock, par value $0.001 per
share, of the Company at a price of not less than $15 per
share, and any filings required in connection therewith, (y)
any transaction approved by the Company's Board of Directors or
(z) any action or other legal proceeding to enforce this
Agreement or to contest the validity of the Company's
shareholder rights plan.]
<12> [7. (a) Until the Termination Date, the Company
shall not (i) amend its shareholder rights plan
in any manner adverse to you, (ii) adopt any
new shareholder rights plan or (iii) take,
adopt, implement or enter into any other
action, plan, measure, agreement or
arrangement with a view to making, or a
primary effect of which is to make, an
acquisition of the Company materially more
difficult or costly (any matter described in
this paragraph (a), together with the
Company's shareholder rights plan, a
"Defensive Measure").
(b) Until the Termination Date, the Company shall
give you access to the same Company-produced
Information as is given to all other bidders for
the Company (taken together), and shall give you
the same opportunity to make proposals to acquire
the Company as is given to any other bidder.
(c) If, following November 15, 1996, you continue to
own over 6% of the Company's outstanding common
Revco D.S., Inc.
September 23, 1996
Page 6
stock and you issue a written demand for a special
meeting of the Company's shareholders pursuant to
Section 10-2B-7.02 of the Alabama Business
Corporations Act, then the Company shall either (i)
redeem or terminate all Defensive Measures then in
effect or (ii) without regard for the 10%
requirement in such Section, (A) within seven days
of receipt of such demand call the requested
shareholders meeting, (B) set a record date for such
meeting between 10 and 15 days following the calling
of such meeting and (C) set a date for such meeting
between 30 and 40 days following the calling of such
meeting.
8]. (a) You agree that <13> [either party] will be
irreparably injured by a breach of this letter
agreement by <14> [the other party] or <15>
[its] Representatives, that monetary remedies are
inadequate to protect <16> against any actual or
threatened breach of this letter agreement by
<17> [either party] or by <18> [its] Representatives,
and that <19> [either party] shall be entitled to
specific performance or other equitable relief as
a remedy for any breach. Such remedy shall not
be deemed to be the exclusive remedy for a breach
of this letter agreement but shall be in addition
to all other remedies available at law or equity.
(b) It is further agreed 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 right, power or privilege hereunder.
(c) This letter agreement will be governed by and
construed in accordance with the laws of the
State of Alabama, without regard to the principles of
conflict of laws thereof.
(d) This letter agreement contains the entire
agreement between you and us concerning the
subject matter hereof and supersedes all previous
agreements, written or oral, relating to the
subject matter hereof. No modifications of this
Revco D.S., Inc.
September 23, 1996
Page 7
letter agreement or waiver of the terms and
conditions hereof will be binding upon you or us,
unless approved in writing by each of you and us.
(e) If any provision of this letter agreement shall
for any reason, be adjudged by any court of
competent jurisdiction to be invalid or
unenforceable, such judgment shall not affect,
impair or invalidate the remainder of this letter
agreement but shall be confined in its operation
to the provision of this agreement directly
involved in the controversy in which such
judgment shall have been rendered[; provided, however,
that (i) all of paragraph 7 shall automatically
terminate if any portion of paragraph 6 is held
to be invalid and (ii) all of paragraphs 1, 2, 3
and 6 shall automatically terminate if any portion
of paragraph 7 is held to be invalid].
(f) This letter agreement may be executed in
counterparts, each of which shall be deemed to be
an original, but both of which shall constitute
the same agreement.
(g) This letter agreement shall inure to the benefit
of and be binding upon our respective successors
and assigns; provided, however, that neither this
letter agreement nor any of the rights, interests
or obligations hereunder shall be assigned by
either of us without the prior written consent of
the other party.
(h) All notices hereunder shall be made in writing,
by first class mail, by courier or by telecopier
(with a confirming copy sent by first class mail)
to, in the case of the Company, Big B, Inc.,
Attention: Chief Executive Officer, 0000 Xxxxxx
Xxxx X.X., Xxxxxxxx, Xxxxxxx 00000, telecopier:
(000) 000-0000, or, in the case of you, Revco
D.S., Inc., Attention: President and Chief
Executive Officer, 1925 Enterprise Parkway,
Twinsburg, Ohio 44087, telecopier: (216) 487-
1679.
Revco D.S., Inc.
September 23, 1996
Page 8
Please confirm your agreement with the foregoing by
signing and returning to the undersigned the
duplicate copy of this letter enclosed herewith.
Very truly yours,
Big B, Inc.
By: /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President
Accepted and Agreed
as of the date first
written above:
Revco D.S., Inc.
By:____________________
Name:
Title:
Revco D.S., Inc.
September 23, 1996
Page 9
------------------ DELETIONS ------------------
<1> or which reflect you or your Representatives review of, or your
interest in, the Transaction
<2> or (iv)
<3> or
<4> ,
<5> every
<6> ,
<7> , or otherwise
<8> June 30, 1997
<9> other than pursuant to a cash tender offer for all of the
outstanding shares of common stock, par value $0.001 per share, of
the Company at a price of not less than $15.00 per share or pursuant
to a transaction approved by the Company's Board of Directors
<10> (v) bring any action, or otherwise act through judicial
process, to contest the validity of the Company's shareholder rights
plan or to seek the redemption of the rights issued thereunder; or
(vi)
<11> if, by January 31, 1997, the Company has not publicly announced
that it has entered into a definitive agreement relating to the
acquisition of the Company (whether by sale, merger or otherwise),
then all restrictions imposed by this paragraph 6 shall cease to
apply.
<12> 7
<13> the Company
<14> you
<15> your
Revco D.S., Inc.
September 23, 1996
Page 10
<16> us
<17> you
<18> your
<19> the Company