BIG B, INC.
0000 Xxxxxx Xxxx X.X.
Xxxxxxxx, Xxxxxxx 00000
October 3, 1996
Revco D.S., Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Mr. D. 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 you or your Representatives which contain or reflect,
or are generated from, any such information is hereinafter referred
to as the "Information." The term Information will not, however,
include (i) information which is already in your possession (other
than information provided to you or your Representatives by the
Company), (ii) information which is or becomes publicly available
other than a result of a disclosure by you or your Representative
in breach of this Agreement, (iii) information which 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 Company, (iv) is or
Revco D.S., Inc.
October 3, 1996
Page 2
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), (iii) 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
investigation 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 the Company, or any of its
Representatives, on the one hand, and you or any of your
Representatives, on other hand), you will notify the Company
promptly in writing so that we may seek a protective order or
other
Revco D.S., Inc.
October 3, 1996
Page 3
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 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 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 review
of the Company, the use of the Information by you or your
representatives, or any errors therein or omission from the
Information. Nothing in the
Revco D.S., Inc.
October 3, 1996
Page 4
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 the
Termination Date (as defined below), 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; (ii) make, or in any way
participate in, directly or indirectly, any "solicitation" of
"proxies" (as such 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; (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
Revco D.S., Inc.
October 3, 1996
Page 5
redemption of the rights issued thereunder; or (vi) induce any
other person or entity to do any of the foregoing; provided,
however, that 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 any other action or
legal proceeding not restricted pursuant to clause (v) above.
In furtherance of the agreement set forth in clause (v) above,
the Company and you agree to seek from the relevant courts a
stay of the proceedings in the action entitled Big B, Inc. v.
Revco D.S., Inc. and RDS Acquisition Inc. in the Circuit Court
of Jefferson County, Alabama, Bessemer Division as removed to
the United States District Court for the Northern District
Court of Alabama, Southern Division, and to take no action to
seek a lifting of such stay until the Termination Date. For
purposes of this Agreement, "Termination Date" shall mean the
earliest to occur of (w) November 30, 1996, (x) the execution
by the Company of a definitive and binding agreement providing
for the acquisition of the Company, (y) the adoption of any
amendment to the Company's existing shareholder rights plan in
any manner adverse to you or the adoption of any new
shareholder rights plan, or (z) any public announcement by the
Company of any proposal to amend its articles of
incorporation.
7. The Company represents that it is the Company's intention to
conduct an orderly process with a goal of maximizing value to
its shareholders. To the extent consistent with its conduct of
the orderly process developed by it and with the Company's
preservation of its attorney client, work product and other
privileges, the Company will afford to you, and to your
Representatives, reasonable access prior to the Termination
Date to the Company's properties, books, management, records,
counsel and accountants for the purpose of evaluating a
Transaction and will furnish to you such information
concerning the Company's business, assets and liabilities as
you may reasonably request.
8. (a) You agree that either party will be irreparably
injured by a breach of this letter agreement by the other
party or its Representatives, that
Revco D.S., Inc.
October 3, 1996
Page 6
monetary remedies are inadequate to protect against any
actual or threatened breach of this letter agreement by
either party or by its Representatives, and that 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 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.
(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.
Revco D.S., Inc.
October 3, 1996
Page 7
(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, 0000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxx 00000,
telecopier: (000) 000-0000.
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:
