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 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, (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), (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 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 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
Revco D.S., Inc.
September 23, 1996
Page 4
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 or any errors therein or
omission from the Information. 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
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; (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)
Revco D.S., Inc.
September 23, 1996
Page 5
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; or (v) 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
to contest the validity of the Company's shareholder
rights plan.
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
stock and you issue a written demand for a special
meeting of the Company's shareholders pursuant to
Revco D.S., Inc.
September 23, 1996
Page 6
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 either party will be irreparably
injured by a breach of this letter agreement by
the other party or its Representatives, that
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
Revco D.S., Inc.
September 23, 1996
Page 7
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:
