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Exhibit 1
August 6, 0000
Xxxx Xxx Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
CONFIDENTIALITY AGREEMENT
Gentlemen:
In connection with your interest in the proposed transaction (the "Transaction")
involving Rawlings Sporting Goods Company, Inc. (the "Company"), you have
requested that we or our representatives furnish you or your representatives
with certain information relating to the Company. All information (whether
written or oral) furnished (whether before or after the date hereof) by us or
our directors, officers, employees, affiliates, representatives (including,
without limitation, financial advisors, attorneys and accountants) or agents
(collectively, "our Representatives") to you or your directors, officers,
employees, affiliates, representatives (including, without limitation, financial
advisors, attorneys and accountants) or agents or your potential sources of
financing for the Transaction (collectively, "your Representatives") and all
notes, reports, analyses, compilations, forecasts, studies or other documents
prepared by you or your Representatives in whatever form maintained, whether
documentary, electronically stored or otherwise, in connection with your or
their review of, or your interest in, the Transaction which contain or reflect
any such information is hereinafter referred to as the "Information". The term
Information will not, however, include information which (i) is or becomes
publicly available other than as a result of a disclosure by you or your
Representatives or (ii) is or becomes available to you on a nonconfidential
basis from a source which, to the best of your knowledge after due inquiry, is
not prohibited from disclosing such information to you by a legal, contractual
or fiduciary obligation to us.
Accordingly, you and the Company hereby agree that:
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 3 below), without our
prior written consent, disclose any Information in any manner
whatsoever, and (ii) will not use any Information, directly or
indirectly, other than in connection with evaluating the Transaction;
PROVIDED, HOWEVER, that you may reveal the Information to those of your
Representatives (a) who need to know the Information for the purpose of
evaluating the Transaction, (b) who are informed by you of the
confidential nature of the Information and (c) who agree to be bound by
and act in accordance with the terms of this letter agreement. You will
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cause your Representatives to observe the terms of this letter
agreement, and you will be responsible for any breach of this letter
agreement by any of your Representatives.
2. Neither you or the Company nor our respective Representatives will
(except as required by applicable law, regulation or legal process,
and, in your case, only after compliance with paragraph 3 below),
without the prior written consent of the other party, disclose to any
person the fact that the Information has been made available to you and
your Representatives, that you have entered into this letter agreement,
that you are considering the Transaction or any other transaction
involving the Company, or that discussions or negotiations are taking
or have taken place concerning the Transaction or involving the Company
or any term, condition or other fact relating to the Transaction or
such discussions or negotiations, including, without limitation, the
status thereof. The term "person," as used in this letter agreement,
shall be broadly interpreted to include, without limitation, any
corporation, company, group, entity, trust, partnership or individual;
the term "affiliate" shall have the meaning set forth in Rule 12b-2
under the Securities Exchange Act of 1934, as amended; and the term
"Company" shall include, without limitation, its subsidiaries and
affiliates.
3. In the event that you or any of your Representatives are requested
pursuant to, or required by, applicable law, regulation or legal
process (including by oral questions, interrogatories, requests for
information or 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,
you will immediately notify us 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. In such an event,
you will, and you will cause your Representatives to, consult and
cooperate with the Company in seeking such a protective order or other
appropriate remedy. In the event that no such protective order or other
remedy is obtained, or that the Company fails to waive compliance with
the terms of this letter agreement, you will furnish only that portion
of the Information which in the opinion of your counsel is legally
required and will exercise all reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded the Information.
4. If you determine not to proceed with the Transaction, you will promptly
inform our Representative, BancBoston Xxxxxxxxx Xxxxxxxx Inc. ("BRS"),
of that decision and, in that case, and at any time upon request of the
Company or any of our Representatives, you will either (i) promptly
destroy all copies of the written Information in your or your
Representatives' possession and confirm such destruction to us in
writing or (ii) promptly deliver to the Company at your own expense all
copies of the written Information in your or your Representatives'
possession. Notwithstanding the destruction or delivery of the
materials required by this paragraph, all duties and obligations
existing under this letter agreement (including with respect to any
oral Information) will remain in full force and effect.
5. You acknowledge that neither the Company, nor BRS or its affiliates,
nor our other 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
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amended, makes any express or implied representation or warranty as to
the accuracy or completeness of the Information, and you agree that no
such person will have any liability relating to the Information or for
any errors therein or omissions therefrom. 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.
6. You and the Company are aware, and you and the Company will advise your
and our respective 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 and on the communication
of such information to any other person when it is reasonably
foreseeable that such other person is likely to purchase or sell such
securities in reliance upon such information.
7. You agree that, for a period of one year from the date of this letter
agreement, neither you nor any of your affiliates will, without the
prior written consent of the Company or its Board of Directors: (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 or any
subsidiary thereof, or any successor to or person in control of the
Company, or any assets of the Company, or any subsidiary or division
thereof or of any such successor or controlling person, (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
Exchange Commission) to vote, or seek to advise or influence any person
or entity with respect to the voting of, any voting securities of the
Company, (iii) make any public announcement with respect to, or submit
a proposal for, or offer of (with or without conditions) any
extraordinary transaction involving the Company or its securities or
assets, (iv) form, join or in any way participate in a "group" (as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) in connection with any of the foregoing or (v) request the
Company or any of our Representatives, directly or indirectly, to amend
or waive any provision of this paragraph. You will promptly advise the
Company of any inquiry or proposal made to you with respect to any of
the foregoing. You and the Company acknowledge and agree that the
restrictions applicable to you and set forth in this paragraph 7 are in
addition to, and are not intended to amend or otherwise modify, the
restrictions applicable to you and set forth in the Standstill
Agreement dated as of November 21, 1997 between the Company and you, as
amended (as so amended, the "Standstill Agreement").
8. You agree that, for a period of three years from the date of this
letter agreement, you will not, directly or indirectly, solicit for
employment or hire any officer or other key employee of the Company or
any of its subsidiaries with whom you have had contact, or who became
known to you in connection with your consideration of the Transaction,
or encourage any such officer or employee to terminate his or her
employment with the Company; PROVIDED, HOWEVER, that the foregoing
provision will not prevent you from employing any such person who
contacts you on his or her own initiative without any direct or
indirect solicitation by or encouragement from you.
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9. You agree that all (i) communications regarding the Transaction, (ii)
requests for additional information, facility tours or management
meetings and (iii) discussions or questions regarding procedures with
respect to the Transaction, will be first submitted or directed to BRS
and not to the Company, provided that the restrictions set forth in
this sentence shall not, and are not intended to, restrict any actions
taken by any person designated by you to serve on the Company's Board
of Directors in such person's capacity as a director of the Company.
Subject to the last sentence of this paragraph 9, you acknowledge and
agree that (a) we and our Representatives are free to conduct the
process leading up to a possible Transaction as we and our
Representatives, in our sole discretion, determine (including, without
limitation, by negotiating with any prospective buyer and entering into
a preliminary or definitive agreement without prior notice to you or
any other person), (b) we reserve the right, in our sole discretion, to
change the procedures relating to our consideration of the Transaction
at any time without prior notice to you or any other person, to reject
any and all proposals made by you or any of your Representatives with
regard to the Transaction, and to terminate discussions and
negotiations with you or any other person at any time and for any
reason and (c) unless and until a written definitive agreement
concerning the Transaction has been executed and delivered, neither we
nor any of our Representatives will have any liability to you with
respect to the Transaction, whether by virtue of this letter agreement,
any other written or oral expression with respect to the Transaction or
otherwise. You and the Company acknowledge and agree that no provision
set forth in the immediately preceding sentence shall, or is intended
to, limit the Company's obligations set forth in Section 3A.1 of the
Standstill Agreement, subject to the terms and conditions thereof.
10. You and the Company acknowledge that remedies at law would be
inadequate to protect us against any actual or threatened breach of
this letter agreement by either party or such party's Representatives,
and, without prejudice to any other rights and remedies otherwise
available, you and the Company agree to the granting of injunctive
relief in favor of the non-breaching party without proof of actual
damage. In the event of litigation relating to this letter agreement,
if a court of competent jurisdiction determines in a final, nonappeable
order that this letter agreement has been breached by any party or any
party's Representatives, then such party will reimburse the
non-breaching party for its costs and expenses (including, without
limitation, legal fees and expenses) incurred in connection with all
such litigation.
11. If any term or provision of this letter agreement, or any application
thereof to any circumstances, shall, to any extent and for any reason,
be held to be invalid or unenforceable, the remainder of this letter
agreement, or the application of such term or provision to
circumstances other than those to which it is held invalid or
unenforceable, shall not be affected thereby and shall be construed as
if such invalid or unenforceable provision had never been contained
herein and each term and provision of this letter agreement shall be
valid and enforceable to the fullest extent permitted by law. You and
the Company agree that no failure or delay by the other party 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.
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12. This letter agreement will be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts between
residents of that State and executed in and to be performed in that
State, without giving effect to principles of conflicts of law.
13. Your obligations of confidentiality under paragraphs 1 and 2, and our
obligations under paragraph 2, of this letter agreement shall expire
three years from the date of this letter agreement.
14. Any notice required to be given under this letter agreement shall be
deemed received on the day when personally delivered or confirmed
facsimile transmission, and on the next business day after being
deposited with a nationally recognized overnight courier.
15. This letter agreement contains the entire agreement between you and the
Company concerning the confidentiality of the Information and
supersedes all prior written and oral communications and agreements
relating to the subject matter hereof. No amendment or other
modifications of this letter agreement or waiver of the terms and
conditions hereof will be binding upon you or the Company, unless
approved in writing by each of you and the Company. This letter
agreement shall inure to the benefit of any successor in interest to
the
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Company, as well as of any person that may acquire, after the date
hereof, any subsidiary or division of the Company with respect to
Information concerning the business or affairs of such subsidiary or
division. This letter agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
Very truly yours
Rawlings Sporting Goods Company, Inc.
BY: BANCBOSTON XXXXXXXXX XXXXXXXX INC.
ON BEHALF OF RAWLINGS
By: ______________________________
Name: ___________________________
Title: ____________________________
Agreed and accepted:
BULL RUN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Pres CEO
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