CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (the "Agreement") is made as of the 1st
day of August, 2005 by and between SOURCECORP, Incorporated ("SOURCECORP") and
XXXX Partners LLC ("XXXX", and together with SOURCECORP, the "Parties").
1. BACKGROUND. SOURCECORP is prepared to furnish to XXXX and to JANA's
directors, officers, members, employees and agents, as applicable (collectively,
"Representatives"), certain of its confidential or proprietary information. The
Parties are entering into this Agreement in order to assure the confidentiality
of the Confidential Information (as defined below) in accordance with the terms
of this Agreement.
2. CONFIDENTIAL INFORMATION. As used in this Agreement, the term
"Confidential Information" shall mean all information and data of SOURCECORP or
any of its affiliates furnished to XXXX or any of its Representatives pursuant
to this Agreement by or on behalf of SOURCECORP, but does not include
information that (i) was known by XXXX or available to the public prior to the
time of its disclosure, (ii) becomes available to the public through no act or
omission of XXXX or (iii) becomes available to XXXX from a third party not known
by XXXX to be under any obligation of confidentiality to SOURCECORP with respect
thereto. In addition, the term "Confidential Information" shall be deemed to
include any notes, analyses, compilations, studies, interpretations, memoranda
or other documents prepared by XXXX or its Representatives that contain, reflect
or are based upon, in whole or in part, or recollections or memorizations of,
any Confidential Information furnished to XXXX or its Representatives pursuant
hereto.
3. USE AND DISCLOSURE OF CONFIDENTIAL INFORMATION. XXXX and its
Representatives shall use the Confidential Information only with respect to
evaluating JANA's investment in SOURCECORP, including to provide feedback to a
XXXX designee appointed to the board of directors of SOURCECORP (the "Board") in
his capacity as a member of the Board. The Confidential Information shall not be
used or exploited for any other purpose without the prior written consent of
SOURCECORP. XXXX and its Representatives shall hold in strict confidence, and
shall not use or disclose any Confidential Information, except as is required by
law in the written legal opinion, provided to XXXX, of JANA's outside counsel
(it being agreed that such exception shall not permit XXXX to disclose
Confidential Information otherwise in violation of this Agreement merely by
virtue of its desire to trade in SOURCECORP securities). XXXX shall provide a
copy of such opinion to SOURCECORP upon request. In the event of any such
disclosure pursuant to court order or governmental request, XXXX will provide
SOURCECORP with reasonable prior written notice so that SOURCECORP may seek a
protective order or other appropriate remedy, and XXXX shall exercise reasonable
best efforts to assist SOURCECORP at SOURCECORP's expense in obtaining such
order or remedy. XXXX shall disclose Confidential Information to its
Representatives only on a need to know basis for the purpose specified herein.
In any event, XXXX shall be responsible for any breach of this Agreement by any
of its Representatives, and agrees, at its sole expense, to use reasonable best
efforts to safeguard the Confidential Information and restrain its
Representatives from any prohibited or unauthorized disclosure or use of the
Confidential Information. In addition, XXXX hereby acknowledges that the federal
securities laws, including Regulation FD thereof, may impose restrictions on its
ability to purchase, sell, trade or otherwise transfer securities of SOURCECORP
until such time as the material, non-public information provided by SOURCECORP
to XXXX becomes publicly available or is no longer material and XXXX further
agrees hereby to comply with all such restrictions. Nothing herein shall prevent
a XXXX designee appointed to the Board from using Confidential Information in
his capacity as a member of the Board. Nothing herein shall restrict
communications between XXXX and a XXXX designee
appointed to the Board, and no such communication shall be deemed a violation of
SOURCECORP's policies applicable to its directors.
4. RETURN OF CONFIDENTIAL INFORMATION. XXXX shall, upon conclusion of
discussions between the Parties hereto, or at any earlier time upon SOURCECORP's
request, return to SOURCECORP all documents furnished to XXXX by or on behalf of
SOURCECORP containing Confidential Information, and XXXX shall destroy all
copies, electronic or otherwise, of such material together with any notes,
extracts and other materials prepared by XXXX or JANA's Representatives
containing or based upon any Confidential Information. In addition, upon the
written request of SOURCECORP, XXXX shall deliver an officer's certificate
certifying that it has complied with the provisions of this Section 4.
5. ACCURACY AND COMPLETENESS. Neither SOURCECORP nor its
Representatives makes any representations or warranties as to the accuracy or
completeness of the Confidential Information. XXXX agrees that neither
SOURCECORP nor any of its Representatives shall have any liability to XXXX
resulting from JANA's disclosure or use of the Confidential Information, whether
or not permitted hereby.
6. NO WAIVER. No failure or delay by either Party in exercising any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial waiver thereof preclude any other or further exercise thereof
or the exercise of any other right or remedy hereunder.
7. INJUNCTIVE RELIEF. Each party acknowledges and agrees that, because
of the unique nature of this Agreement, the other party would suffer irreparable
harm in the event of a breach by such party of any of its obligations under this
Agreement, such that monetary damages would be inadequate to compensate the
non-breaching party for such a breach. Each party agrees that under such
circumstances the other party shall be entitled to seek injunctive relief, in
addition to any other appropriate relief at law to which such party shall be
entitled, and waives any requirement for the securing or posting of any bond in
connection with such remedy.
8. TERMINATION. This Agreement and each provision herein shall
terminate two years from the date hereof.
9. COSTS; DAMAGES. In the event of an improper disclosure or use of
Confidential Information by XXXX or its Representatives, XXXX shall assume and
discharge liability for all costs, damages and expenses sustained by SOURCECORP
as may be caused or compounded thereby. If any suit or other action is commenced
to construe or enforce any provision of this Agreement, the prevailing Party, in
addition to all other amounts such Party shall be entitled to receive from the
non-prevailing Party to such action, shall be awarded reasonable attorney's fees
and court costs.
10. MISCELLANEOUS. This Agreement (i) shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts entered into and to be performed wholly within said State, (ii)
constitutes the entire agreement of the Parties hereto with respect to the
subject matter hereof, superseding all prior agreements, written or oral, (iii)
may not be amended, except in writing, (iv) may be executed in counterparts, (v)
shall be binding upon and inure to the benefit of each Party's successors and
permitted assigns, (vi) may not be assigned without the prior written consent of
the other Party and (vii) shall be enforceable, notwithstanding the
unenforceability of any particular provision hereof, with respect to all other
provisions hereof.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
SOURCECORP, INCORPORATED
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Managing Director
XXXX PARTNERS LLC
By: /s/ Xx X. Xxxxxx, Xx.
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Name: Xx X. Xxxxxx, Xx.
Title: Chief Executive Officer
and President
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