STRICTLY CONFIDENTIAL
October 26, 2005
Xxxxx Investments, Inc.
0000 Xxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Ladies and Gentlemen:
The purpose of this agreement is to set forth the basis upon which
PRG-Xxxxxxx International, Inc. (together with all of its affiliates, the
"Company") proposes to provide to you and other members of the ad hoc committee
of holders of the Company's 4 3/4% Convertible Subordinated Notes due 2006 (the
"Notes" and such committee, the "Ad Hoc Noteholders Committee") with Evaluation
Material (as defined herein) for use in connection with contemplated discussions
between the Company and the Ad Hoc Noteholders Committee regarding a possible
transaction (a "Possible Transaction") involving the restructuring of the Notes.
CONFIDENTIALITY OF EVALUATION MATERIALS: As a condition to your being
furnished with such information, you agree to treat any information concerning
the Company that is furnished to you by or on behalf of the Company after the
date of this agreement and regardless of the manner in which it is furnished,
together with analyses, compilations, studies or other documents or records
prepared by you or any of your directors, officers, employees, affiliates,
agents or advisors (including, without limitation, attorneys, accountants,
consultants, bankers, financial advisors and any representatives of your
advisors) (collectively, "Representatives") to the extent that such analyses,
compilations, studies, documents or records contain or otherwise reflect or are
generated from such information (hereinafter collectively referred to as the
"Evaluation Material"), in accordance with the provisions of this agreement. The
term "Evaluation Material" does not include information which (i) was or becomes
generally available to the public other than as a result of a disclosure by you
or your Representatives in violation of this agreement, (ii) was or becomes
available to you on a non-confidential basis from a source other than the
Company or its advisors provided that such source is not known to you to be
bound by a confidentiality agreement with the Company or otherwise not known to
you to be prohibited from transmitting the information to you by a contractual,
legal or fiduciary obligation, (iii) was within your possession prior to its
being furnished to you by or on behalf of the Company, provided that the source
of such information was not known to you to be bound by a confidentiality
agreement with the Company or otherwise not known to you to be prohibited from
transmitting the information to you by a contractual, legal or fiduciary
obligation, or (iv) was independently developed by you using information that is
not known to otherwise constitute Evaluation Material. Any combination of
information shall not be deemed to be within the foregoing exceptions because
individual features of the information are in the public domain.
RESTRICTIONS ON DISCLOSURE AND USE: You agree that the Evaluation
Material will be used solely for the purpose of evaluating and/or participating
in a Possible Transaction, and not used for any other purpose, and that such
Evaluation Material will be kept confidential by you and your Representatives;
provided, however, that (a) such Evaluation Material may be disclosed
to your Representatives who need to know such information for the purpose of
evaluating any such Possible Transaction (it being understood that such
Representatives shall have been informed by you of the confidential and
proprietary nature of the Evaluation Material and shall have been advised by you
of this agreement and whom you shall cause to comply with the provisions
hereof), and (b) any disclosure of such Evaluation Material may be made to which
the Company consents in writing prior to disclosure. In any event, you shall be
responsible for any breach of this agreement by any of your Representatives and
you agree, at your sole expense, to take all reasonable measures (including but
not limited to court proceedings) to restrain your Representatives from
prohibited or unauthorized disclosure or use of the Evaluation Material. You
further agree that the Evaluation Material that is in written form shall not be
copied or reproduced at any time without the prior written consent of the
Company, except for distribution to your Representatives in accordance with and
subject to the provisions of this agreement.
You acknowledge that you are aware, and will advise each of your
Representatives who is informed as to the matters that are the subject of this
agreement, that the securities laws of the United States prohibit any person who
or that has received from an issuer of securities material, non-public
information from purchasing or selling securities of such issuer or from
communicating such information to any person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities.
In addition, except as required by any applicable law, rule or
regulation, without the prior written consent of the Company, you will not, and
will direct your Representatives not to, disclose to any person other than other
members of the Ad Hoc Noteholders Committee, (i) the existence of this agreement
and that the Evaluation Material has been made available to you or your
Representatives, (ii) that discussions or negotiations are taking place
concerning a Possible Transaction between the Company and you or (iii) any
terms, conditions or other facts with respect to any such Possible Transaction,
including the status thereof. For these purposes, it is understood and agreed
that the members of the Ad Hoc Noteholders Committee may make securities filings
under Section 13(d) of the Securities Exchange Act of 1934 in which the matters
set forth in clauses (i) and (ii) above may be disclosed to the extent counsel
for the Ad Hoc Noteholders Committee believes such disclosure is required by
law.
In the event that you or your Representatives are requested or required
pursuant to any applicable law, rule or regulation (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or other process) to disclose any Evaluation Material or
any other information regarding the existence of this agreement or discussions
or negotiations concerning a Possible Transaction between the Company and you,
it is agreed that you will provide the Company with prompt notice of any such
request or requirement (written if practical) so that the Company may seek an
appropriate protective order or waive your compliance with the provisions of
this agreement. If, failing the entry of a protective order or the receipt of a
waiver hereunder, you or your Representatives are legally compelled to disclose
Evaluation Material, you or your Representatives may disclose only that portion
of the Evaluation Material which you or your Representatives are legally
compelled to disclose and will exercise reasonable efforts to obtain assurance
that confidential treatment will be accorded to that portion of the Evaluation
Material which is being disclosed. In any event, you or your Representatives
will not oppose action by the Company to obtain an appropriate protective order
or other reliable assurance that confidential treatment will be accorded the
Evaluation Material. In the event that you or your Representatives shall have
complied with the provisions of this paragraph, the Company agrees that such
disclosure may be made by you or your Representatives without any liability
hereunder.
STANDSTILL: In consideration of your being furnished the Evaluation
Materials and in view of the fact that the Evaluation Materials consist and will
consist of confidential, non-public and proprietary information, you agree that
during the term of this agreement, without the prior written consent of the
Company, neither you nor any of your affiliates will, directly or indirectly,
alone or in concert with others: (i) purchase, offer or agree to purchase, or
announce an intention to purchase any securities or assets of the Company or any
subsidiary or any derivative securities that derive value by reference to
securities or assets of the Company or any subsidiary or any rights or options
to acquire the same (provided, however, that you and your affiliates may convert
into the common stock of the Company any Notes that you or your affiliates
currently hold); (ii) make, or in any way participate in any "solicitation" of
"proxies" to vote or "consents" (as such terms are used in the rules and
regulations of the Securities and Exchange Commission), or seek to advise or
influence any person (other than your current affiliates who currently
beneficially own any of the Company's securities) with respect to the voting of
any voting securities of the Company; (iii) initiate or support any stockholder
proposal with respect to the Company; (iv) except as required by any applicable
law, rule or regulation make any public statement and/or announcement with
respect to, or submit a proposal for, or make an offer (with or without
conditions) of any extraordinary transaction involving the Company or its
securities, assets or business or any subsidiary or division thereof, or of any
successor thereto or any controlling person thereof; or (v) form, join or in any
way participate in a "group" as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934 in connection with any of the foregoing (except
to the extent you and certain of your affiliates previously have identified
yourselves, and are currently acting as, such a group), provided that the
prohibition against taking any action listed in this paragraph shall lapse in
the event that (a) the Company files, or there is commenced against the Company,
any petition for relief under Title 11 of the United States Code, (b) the
Company announces the acceptance of an offer from any party, other than an offer
accepted or endorsed by the Ad Hoc Noteholders Committee, for any business
combination, sale or similar extraordinary transaction involving the Company or
all or substantially all of its assets (a "Significant Transaction"), (c) the
failure to make the November 26, 2005, interest payment on the Notes or
announcement of a default under the Notes and/or their related Indenture between
the Company and SunTrust Bank, dated November 26, 2001, or (d) the Company
announces its intent to conduct, or initiates the conduct of, an auction or
similar process involving a Significant Transaction (provided that this
provision shall not apply to a limited market check involving prior participants
in the Company's previously conducted auction), and provided further that
nothing herein shall restrict you from proposing, negotiating or discussing a
Possible Transaction with the members of the Ad Hoc Noteholders Committee and
the Company or forming a "group" for that purpose.
Within five business days after the earliest to occur of an event
described in clause (a), (b), (c), or (d) of the preceding paragraph and the
Termination Date (as defined below), the Company shall publicly disclose, by
press release, Securities and Exchange Commission filing or otherwise, an
appropriate summary of the Evaluation Material that the Company believes, in its
reasonable judgment, constitutes the then material non-public information
contained in the Evaluation Material. If the Company fails to make such
disclosure prior to such date, the Company, recognizing that time is of the
essence, agrees that, at the Company's sole expense, you are authorized to make
the Evaluation Material or any portion thereof available to the public
generally, without any liability to the Company for such disclosure.
NO WARRANTY: Subject to the terms and conditions of any definitive
agreement providing for a transaction and without prejudice thereto, you
understand and acknowledge that any and all information contained in the
Evaluation Material is being provided without any representation or warranty,
express or implied, as to the accuracy or completeness of the Evaluation
Material, on the part of the Company. It is understood that the scope of any
representations and warranties to be given by the Company will be negotiated
along with other terms and conditions in arriving at a mutually acceptable form
of definitive agreement should discussions between you and the Company progress
to such a point. Notwithstanding anything in this agreement to the contrary, we
represent and warrant that we may rightfully disclose or make available
Evaluation Material to you without the violation of any contractual, legal,
fiduciary or other obligation to any person.
OWNERSHIP AND RETURN OF THE EVALUATION MATERIAL: All Evaluation
Material disclosed by the Company shall be and shall remain the property of the
Company. Upon the request of the Company, you shall, at your election, either
return or destroy all documents thereof furnished to you by the Company, except
one copy of such documents may be kept in your legal department for compliance
purposes. Except to the extent a party is advised by counsel such destruction is
prohibited by law, you will also, at your election, either return to the Company
or destroy all written material, memoranda, notes, copies, excerpts and other
writings or recordings whatsoever prepared by you or your Representatives based
upon, containing or otherwise reflecting any Evaluation Material except one copy
of such documents may be kept in your legal department or with your legal
counsel for compliance purposes. Any destruction of materials shall be verified
by you in writing by one of your duly authorized officers. Any Evaluation
Material that is not returned or destroyed, including without limitation, any
oral Evaluation Material, shall remain subject to the confidentiality
obligations set forth in this agreement.
NO OBLIGATION: You agree that unless and until a definitive agreement
regarding a Possible Transaction between the Company and you has been executed,
neither the Company nor you will be under any legal obligation of any kind
whatsoever with respect to such a transaction by virtue of this agreement except
for the matters specifically agreed to herein. You further acknowledge and agree
that the Company reserves the right, in its sole discretion, to reject any and
all proposals made by you or any of your Representatives with regard to a
Possible Transaction, to terminate discussions and negotiations with you or your
Representatives at any time and to conduct any process for a transaction
involving the Company as it may determine.
REMEDIES: It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this agreement and each party shall be
entitled to seek specific performance and injunctive or other equitable relief
as a remedy for any such breach and you further agree to waive any requirement
for the security or posting of any bond in connection with such remedy. Such
remedy shall not be deemed to be the exclusive remedy for breach of this
agreement but shall be in addition to all other remedies available at law or
equity. In the event of litigation relating to this agreement, if a court of
competent jurisdiction determines in a final, non-appealable order that either
party or its Representatives have breached this agreement, then such party shall
reimburse the other party for its reasonable legal fees and expenses incurred in
connection with such litigation, including any appeals therefrom.
GOVERNING LAW; JURISDICTION: This agreement shall be governed and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof. You agree, on behalf of yourself and your Representatives, to
submit to the jurisdiction of any state or federal court of competent
jurisdiction located in the state of Delaware to resolve any dispute relating to
this agreement and waive any right to move to dismiss or transfer any such
action brought in any such court on the basis of any objection to personal
jurisdiction or venue.
ENTIRE AGREEMENT: This agreement constitutes the entire agreement, and
supersedes any and all other prior agreements, representations and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
TERM: Your obligations under this agreement shall expire on December
31, 2005 (the "Termination Date").
This agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement. Please confirm that the foregoing is in accordance with
your understanding of our agreement by signing and returning to us a copy of
this letter.
Very truly yours,
PRG-XXXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx XxXxxxxx Xx.
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Name: Xxxxxxx XxXxxxxx Xx.
Title: Senior Vice President and General
Counsel
Accepted and agreed as of the
date first written above:
Xxxxx Investments, Inc.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
