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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the
____ day of __________, 2001, by and among The Profit Recovery Group
International, Inc., a Georgia corporation ("PRGX"), and the persons listed on
Exhibit A attached hereto, being the holders of substantially all of the issued
and outstanding shares of ______________ immediately prior to the consummation
of the transactions contemplated by the Acquisition Agreements (as defined
below). Such persons listed on Exhibit A, together with any permitted assignees
thereof are hereinafter individually referred to as a "Holder" and collectively
"Holders".
RECITALS:
WHEREAS, PRGX and certain of the Holders have entered into those
certain Asset Purchase and Share Purchase Agreements (collectively, the
"Acquisition Agreements") dated ________, 2001 that provide for the acquisition
of substantially all of the issued and outstanding shares of capital stock of
____________, the acquisition of substantially all of the assets of Xxxxxx
Xxxxxxx & Associates International, Inc., a Texas corporation, by PRGX and the
issuance by PRGX to the persons named on Exhibit A attached hereto of certain
shares of PRGX common stock that are subject to the provisions of Rule 145 under
the Securities Act of 1933, as amended (the "Securities Act");
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein and of the mutual benefits to be
derived herefrom, and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I
DEMAND REGISTRATION
(a) If PRGX shall receive, at any time after the date
hereof, a written request from the Holder(s) of Registrable Securities (as
hereinafter defined) that PRGX file a firm commitment, underwritten registration
statement pursuant to the Securities Act on Form S-3 or a successor form thereto
covering the registration of at least $5 million in value of the Registrable
Securities then outstanding (each a "Demand Registration"), then PRGX shall use
its reasonable best efforts to effect the registration under the Securities Act
on Form S-3 or a successor form thereto of all Registrable Securities which such
Holder(s) have requested to be registered. If PRGX is not eligible to use Form
S-3 to register the Registrable Securities at the time such request is made,
PRGX shall be obligated to utilize such substitute form as it shall reasonably
choose. Within ten (10) business days after receipt of any such request, PRGX
shall give written notice of such requested registration to all other Holders of
Registrable Securities in accordance with Section 7.1 hereof, and shall use its
reasonable best efforts to include in such registration all Registrable
Securities
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with respect to which PRGX has received written requests for inclusion therein
within 20 days after the mailing of PRGX's notice; provided, however, that PRGX
shall not be required to file any registration statement pursuant to the
provisions of this Article I (a) until six months have passed from the effective
date of the last registration statement previously filed hereunder, if any. The
term "Registrable Securities" means (i) the shares of PRGX common stock issued
to the Holders pursuant to the Acquisition Agreements, (ii) any other securities
of PRGX issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for, or in replacement of, the Registrable
Securities or resulting from a subdivision of the outstanding shares of
Registrable Securities into a greater number of shares (by reclassification,
stock split or otherwise); provided, however, that the foregoing definition
shall exclude in all cases any Registrable Securities sold by a person in a
transaction in which his or her rights under this Agreement are not assigned in
conformity with the provisions of Article VI hereof. Notwithstanding the
foregoing, any particular shares of PRGX common stock or other securities shall
be treated as Registrable Securities only if and so long as they have not been
(A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof so that all transfer restrictions, and
restrictive legends with respect thereto, if any, are removed upon the
consummation of such sale. The term "Registrable Securities" shall not include
securities which are eligible for immediate sale under Rule 144 or Rule 145
under the Securities Act. The foregoing notwithstanding, and regardless of
whether or not PRGX shall have postponed the filing, amendment or updating of a
registration statement or prospectus pursuant to Article I(c) hereunder, PRGX
shall not be obligated to cause a registration hereunder to become effective or
to amend or update an already effective registration prior to one hundred twenty
(120) days following the effective date of a PRGX-initiated registration (other
than a registration effected solely to qualify an employee benefit plan, to
effect a business combination pursuant to Rule 145 or to satisfy contractual
rights of other security holders, to the extent such registration is not
underwritten) or such longer period not to exceed one hundred eighty (180) days
as any underwriter thereof shall require, provided that PRGX shall use its best
efforts to achieve such effectiveness promptly following the end of such period;
(b) PRGX shall only be required to file a registration
statement pursuant to Article I(a) in connection with a firm commitment,
underwritten offering. The underwriter will be selected by PRGX, subject to the
approval of a majority in interest of the Holders including Registrable
Securities in the requested registration, such approval not to be unreasonably
withheld or delayed; provided, however, that PRGX shall have no liability or
further obligation with respect to a specific request hereunder if it, in good
faith, is unable to obtain an acceptable underwriter. If such an underwriter is
obtained, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting. Notwithstanding any other provision of this Article I, if the
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underwriter advises the Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, then the number of shares
of Registrable Securities that may be included in the offering shall be
allocated among all Holders thereof in proportion (as nearly as practicable) to
the amount of Registrable Securities of PRGX originally requested to be included
by each Holder in the underwriting; provided, however, that the number of shares
of Registrable Securities to be included in such offering shall not be reduced
unless all other securities, if any, are first entirely excluded from the
offering; and provided further, that, if a Holder has to reduce the amount of
Registrable Securities to be included in the offering, the Holders of
Registrable Securities initially requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn and the
Holders pay all Registration Expenses (as hereinafter defined) in connection
with such registration, such Demand Registration shall not count as one of the
permitted Demand Registrations hereunder.
(c) Notwithstanding the foregoing, if PRGX shall furnish
to Holders requesting a registration statement pursuant to this Article I, or to
Holders who have included securities in a registration statement that has been
or is to be filed, in accordance with Section 7.1 hereof, a certificate signed
by the General Counsel, Chief Financial Officer or Chief Executive Officer of
PRGX stating that, in his good faith judgment, it would require the disclosure
of material, nonpublic information and would be seriously detrimental to PRGX
and its stockholders for such registration statement to be filed or to be
amended or supplemented in accordance with Article II(f) and it is therefore
essential to defer the filing of such registration statement or amendment or
supplement, PRGX shall have the right to defer such filing for a period of not
more than 135 days after receipt of the request of the initiating Holders in the
case of an initial filing, or not more than 135 days after the date of delivery
of such certificate in the case of an amendment or supplement; provided,
however, that if a Demand Registration is delayed hereunder, the Holders of
Registrable Securities initially requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn, such Demand
Registration shall not count as one of the permitted Demand Registrations
hereunder and PRGX shall pay all Registration Expenses in connection with such
registration.
ARTICLE II
REGISTRATION PROCEDURES
Whenever the Holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, PRGX will use
its reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto PRGX, will as expeditiously as practicable:
(a) Prepare and file with the Securities and Exchange Commission
("SEC") a registration statement with respect to such Registrable Securities as
soon as practicable, but no sooner than forty-five (45) days from the receipt of
the request, on Form S-3 or a successor form thereto if PRGX is eligible to use
such form, or on such substitute form
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reasonably chosen by PRGX if it is not so eligible, and use its reasonable best
efforts to cause such registration statement to become effective as soon as
practicable after filing; and
(b) Notify each Holder of the effectiveness of each registration
statement filed hereunder and prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not less than ninety (90) consecutive days, or such shorter period
which will terminate upon the earlier to occur of that date when all Registrable
Securities covered by such registration statement have been sold (but not before
the expiration of the applicable prospectus delivery period), and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement; and
(c) Furnish, without charge, to each seller of Registrable
Securities and each underwriter in accordance with Section 7.1 hereof, such
number of copies of such registration statement (including all exhibits), each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) in conformity with the
requirements of the Securities Act and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller; and
(d) Use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
within the United States as the sellers or any managing underwriter shall
request, to keep such registration or qualification in effect for so long as the
registration statement is in effect and do any and all other acts and things
which may be reasonably necessary or advisable to enable such sellers to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such sellers (provided that PRGX will not be required to qualify
generally to do business or file any general consent to service of process in
any jurisdiction where it would not otherwise be required to qualify or file but
for this subparagraph); and
(e) Use its best efforts to obtain all other approvals, covenants,
exemptions or authorizations from such governmental agencies or authorities as
may be necessary to enable the sellers of such Registrable Securities to
consummate the disposition of such Registrable Securities; and
(f) Notify each seller of such Registrable Securities promptly at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and subject to Article I(c) hereof, prepare and
file as soon as practicable with the SEC and promptly notify each Holder of
Registrable
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Securities of the filing of, a supplement to such prospectus or an amendment to
the registration statement so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made and in the case of an
amendment to the registration statement, use reasonable best efforts to cause it
to become effective as soon as possible; and
(g) Promptly notify each Holder selling Registrable Securities
covered by such registration statement and each managing underwriter: (i) when
the registration statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any state securities authority for amendments
or supplements to the registration statement or the prospectus related thereto
or for additional information; and (iii) of the receipt by PRGX of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose; and
(h) Upon receipt of such confidentiality agreements as PRGX may
reasonably request, make reasonably available for inspection by any seller of
such Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by any such seller or any such underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of PRGX, and supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement in order to
permit them to exercise their due diligence responsibility; and
(i) Promptly prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) and which contains
information regarding the selling Holders, provide copies of such document to
counsel for the selling Holders of Registrable Securities and to each managing
underwriter, and make such changes in such document concerning the selling
Holders prior to the filing thereof as counsel for such selling Holders or
underwriters may reasonably request; and
(j) Furnish to each Holder participating in the offering and the
managing underwriter, without charge, at least one signed copy of the
registration statement and any post-effective amendments thereto (which may be a
photocopy or conformed copy of such signed document), excluding all documents
incorporated therein by reference and all exhibits; and
(k) Cooperate with the selling Holders of Registrable Securities
and the managing underwriter to facilitate the timely preparation and delivery
of certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause
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such Registrable Securities to be issued in such denominations and registered in
such names in accordance with the underwriting agreement prior to any sale of
Registrable Securities to the underwriters; and
(l) In the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or the initiation of any proceeding
for such purpose, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any common stock included
in such registration statement for sale in any jurisdiction, PRGX will promptly
notify each seller of such order, and subject to Article I(c) hereof, will use
its reasonable best efforts to promptly obtain the withdrawal of such order; and
(m) If requested by the underwriters for any underwritten offering
by the Holders pursuant to a registration requested under Article I hereof, PRGX
shall enter into any necessary agreements in connection with the underwriting,
including a customary underwriting agreement with the underwriters. Such
underwriting agreement shall be reasonably satisfactory in form and substance to
the Holders and shall contain such representations and warranties by, and such
other agreements on the part of, PRGX and such other terms as are generally
included in the underwriting agreements of nationally recognized underwriters,
including, without limitation, indemnities and contribution agreements. Such
underwriting agreement shall also contain such representations and warranties by
the participating Holders as are generally included in agreements of that type,
including, without limitation, indemnities and contribution agreements;
provided, however, that PRGX shall not be required to make any representations
or warranties with respect to written information provided by a selling Holder
for inclusion in the registration statement; and
(n) Cause all such Registrable Securities registered pursuant
hereto to be listed on each securities exchange or other quotation service on
which similar securities issued by PRGX are then listed; and
(o) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereto and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
ARTICLE III
REGISTRATION EXPENSES
As used herein, "Registration Expenses" shall mean all expenses (other
than underwriting discounts and commissions) incurred in connection with all
registrations, filings or qualifications pursuant hereto, whether or not such
registration becomes effective
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or remains effective for the applicable period contemplated hereby, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees and fees and disbursements of counsel for PRGX. All
Registration Expenses (but specifically excluding the fees and expenses of
counsel for the Holders) shall be borne by PRGX; provided, however, that PRGX
shall not be required to pay any Registration Expenses of any registration
proceeding begun pursuant to Article I if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all participating Holders
shall bear such expenses), unless all Holders agree that such request shall
count as one Demand Registration pursuant to Article I.
ARTICLE IV
UNDERTAKINGS OF THE HOLDERS OF REGISTRABLE SECURITIES
4.1 Suspension of Sales. If any Registrable Securities are
included in a registration statement pursuant to the terms of this Agreement,
the Holder thereof will not (until further notice delivered in accordance with
Section 7.1 hereof) effect sales thereof after receipt of written notice from
PRGX pursuant to Article II(f) and delivered in accordance with Section 7.1
hereof of the occurrence of an event specified therein in order to permit PRGX
to correct or update the registration statement or prospectus in accordance with
Article II(f), provided that the obligations of PRGX with respect to maintaining
any registration statement current and effective shall be extended by a period
of days equal to the period said suspension is in effect.
4.2 Compliance. If any Registrable Securities are being registered
in any registration pursuant to this Agreement, the Holder thereof will comply
with all anti-stabilization, manipulation and similar provisions of Section 10
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any
rules promulgated thereunder by the SEC. Without limiting the foregoing, each
Holder agrees that at any time that he, she or it is in possession of material,
inside information regarding PRGX, such Holder will immediately cease all sales
pursuant to any then-effective registration statement hereunder.
4.3 Blackout Periods. Each Holder acknowledges and agrees that for
so long as such Holder is either an executive officer or a director of PRGX or
is controlled by an executive officer or director of PRGX, such Holder shall be
subject to PRGX's "blackout period" policy and as a result shall be prohibited
from engaging in certain transfers of PRGX securities during the periods
beginning on the fifteenth day before the end of each quarter and ending on the
third business day following PRGX's announcement of earnings with respect to
such quarter. Prohibited transfers include, without limitation, sales, pledges
and xxxxxx. Each Holder hereby acknowledges that a copy of PRGX's blackout
period policy has been made available to such Holder.
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4.4 Termination of Effectiveness. At the end of the period during
which PRGX is obligated to keep a registration statement current and effective
as described herein, each Holder of Registrable Securities included in the
registration statement shall discontinue sales thereof pursuant to such
registration statement, unless such Holder has received written notice from PRGX
delivered in accordance with Section 7.1 hereof of its intention to continue the
effectiveness of such registration statement with respect to any of such
securities which remain unsold.
4.5 Furnish Information. It shall be a condition precedent to the
obligations of PRGX to take any action pursuant to this Agreement with respect
to the Registrable Securities of any selling Holder that such Holder shall
furnish to PRGX such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such securities as shall
reasonably be required to effect the registration of such Holder's Registrable
Securities or as shall otherwise reasonably be requested by PRGX, which request
shall be delivered in accordance with Section 7.1 hereof; provided, however,
that this shall not affect the rights of, or the obligations of PRGX under this
Agreement to, any other Holder. Notwithstanding the foregoing, PRGX shall have
no obligation with respect to any registration requested pursuant to Article I
of this Agreement if, as a result of the application of the preceding sentence,
the Registrable Securities of any Holder are excluded from any Demand
Registration and the value of the Registrable Securities to be included in the
registration is therefore reduced below $5 million; provided, however, that in
such event, the remaining Holders requesting such Demand Registration shall be
entitled to (i) add additional securities so that the Registrable Securities to
be included in the registration is raised to $5 million; or (ii) withdraw such
request and, if such request is withdrawn and the Holders pay all Registration
Expenses in connection with such registration, such Demand Registration shall
not count as one of the permitted Demand Registrations hereunder. PRGX shall
only be required to pay the Registration Expenses of such withdrawn registration
if the Holders inform PRGX that such registration shall count as one of its
Demand Registrations hereunder.
4.6 Shareholder Agreement. The Holders and others have entered
into that certain Shareholder Agreement of even date herewith that contains,
among other things, certain restrictions on the ability of the Holders to
transfer shares of PRGX common stock owned by them. Each of the Holders hereby
acknowledges and agrees that neither this Agreement nor any provision hereof
shall in any way modify or waive any provisions of the Shareholder Agreement,
including without limitation, any of the transfer restrictions contained
therein.
4.7 Lock-Up. Each Holder agrees that, as required by the
underwriter of any primary underwritten offering of PRGX securities by PRGX, for
a period of up to 180 days from the closing date of such offering, such Holder
will not sell, transfer, assign, exchange (by merger or otherwise), or grant any
lien, pledge, security interest, encumbrance, restriction (voting or otherwise),
claim or other similar right with respect to, PRGX common stock or any
securities exchangeable or exercisable for or any right to acquire
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PRGX common stock. For purposes hereof, "transfer" shall include any short sale,
the sale of any option or contract to purchase, the purchase of any option or
contract to sell, the grant of any option, right or warrant to purchase or
otherwise transfer or dispose of such securities, and entering into any hedge,
swap, straddle, collar, single pay contract, prepaid forward contract or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of any such securities, whether such transaction is to be settled
by delivery of securities, in cash or otherwise. "Transfer" shall not include
bona fide gifts made for no consideration where the transferee agrees to be
bound by the provisions of this Section 4.7. If requested by the underwriter,
each Holder agrees that it shall enter into an agreement with substantially
similar terms as those contained in this Section 4.7.
ARTICLE V
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of a Holder of Registrable Securities set forth in this
Agreement (including a Holder who received the Registrable Securities by an
assignment permitted pursuant to this Agreement), including the right to cause
PRGX to register Registrable Securities and pay the Registration Expenses
incurred in connection therewith, to the extent set forth herein, may be
assigned by such Holder, but only to the extent that Registrable Securities are
concurrently transferred to the assignee, only to (i) its successors-in-interest
by merger, consolidation and similar transaction or (ii) an Affiliate of such
Holder or its successor-in-interest which acquires Registrable Securities. For
purposes of this Agreement, the term "Affiliate" means any person that, directly
or indirectly, controls or is controlled by or is under common control with the
Holder or its successor-in-interest, as applicable. For purposes of this
definition, control of a person means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such person,
whether by contract or otherwise and, in any event and without limiting the
foregoing, any person owning fifty percent (50%) or more of the voting
securities of another person shall be deemed to control that person.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by PRGX. PRGX shall indemnify and hold
harmless, with respect to any registration statement filed by it, to the fullest
extent permitted by law, each Holder of Registrable Securities covered by such
registration statement, its officers, directors, employees, agents, affiliates
and general or limited partners (and the directors, officers, employees,
affiliates and agents thereof) and each other person, if any, who controls such
Holder within the meaning of the Securities Act (collectively, the "Holder
Indemnified Parties") against all losses, claims, damages, liabilities and
expenses, joint or several (including reasonable fees of counsel and any amounts
paid in settlement effected with PRGX's consent, which consent shall not be
unreasonably delayed or withheld), to
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which any such Holder Indemnified Party may become subject under the Securities
Act, the Exchange Act, any other federal law, any state or common law, any rule
or regulation promulgated thereunder or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings, whether
commenced or threatened, in respect thereof) are caused solely by (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement in which such Registrable Securities were included as
contemplated hereby or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus,
together with the documents incorporated by reference therein (as amended or
supplemented if PRGX shall have filed with the SEC any amendment thereof or
supplement thereto), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (iii) any violation by PRGX of the Securities Act, the
Exchange Act, any other federal law, any state or common law, or any rule or
regulation promulgated thereunder in connection with any such registration; and
in each such case, PRGX shall reimburse each such Holder Indemnified Party for
any reasonable legal or any other expenses incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding, provided, however, that PRGX shall not be liable
to any such Holder Indemnified Party in any such case to the extent that any
such loss, claim, damage, liability or expense (or action or proceeding, whether
commenced or threatened, in respect thereof) arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or amendment thereof or supplement thereto
or in any such preliminary, final or summary prospectus in reliance upon written
information furnished to PRGX by or on behalf of any such Holder Indemnified
Party for use in the preparation thereof, and provided further, that PRGX shall
not be liable to any such Holder Indemnified Party with respect to any
preliminary prospectus to the extent that any such loss, claim, damage,
liability or expense of such Holder Indemnified Party results from the fact that
such Holder Indemnified Party sold Registrable Securities to a person to whom
there was not sent or given, at or before the written confirmation of such sale,
a copy of the prospectus (excluding documents incorporated by reference) or of
the prospectus as then amended or supplemented (excluding documents incorporated
by reference) if PRGX has previously furnished copies thereof to such Holder
Indemnified Party in compliance with this Agreement and the loss, claim, damage,
liability or expense of such Holder Indemnified Party results from an untrue
statement or omission of a material fact contained in such preliminary
prospectus which was corrected in the prospectus (or the prospectus as then
amended or supplemented) and such corrected document provides a defense to the
claim upon which such loss, claim, damage, liability or expense was based. Such
indemnity and reimbursement of expenses and obligations shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Holder Indemnified Parties and shall survive the transfer of such securities by
such Holder Indemnified Parties. In connection with an underwritten offering,
PRGX shall indemnify such underwriters, their officers and directors and each
person who controls such underwriters (within the meaning of the
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Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities.
6.2 Indemnification by Holders. Each Holder of Registrable
Securities participating in any registration hereunder shall severally, and not
jointly, indemnify and hold harmless, to the fullest extent permitted by law,
PRGX, its directors, officers, employees, affiliates and agents, and each Person
who controls PRGX (within the meaning of the Securities Act) (collectively,
"PRGX Indemnified Parties") against all losses, claims, damages, liabilities and
expenses, joint or several (including reasonable fees of counsel and any amounts
paid in settlement effected with such Holder's consent, which consent shall not
be unreasonably delayed or withheld) to which any PRGX Indemnified Parties may
become subject under the Securities Act, the Exchange Act, any other federal
law, any state or common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions or proceedings, whether commenced
or threatened, in respect thereof) are caused by (i) any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement in which such Holder's Registrable Securities were included or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if PRGX shall have
filed with the Commission any amendment thereof or supplement thereto), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (in the
cases described in clauses (i) and (ii) of this Section 6.2, such
indemnification by such Holder of Registrable Securities shall apply only to the
extent that such untrue statement or omission is contained in any information
furnished in writing by such Holder for use in the preparation of the documents
described in such clauses (i) and (ii)), (iii) any violation by such Holder of
the Securities Act, the Exchange Act, any other federal law, any state or common
law, or any rule or regulation promulgated thereunder applicable to such Holder
and relating to action of or inaction by such Holder in connection with any such
registration other than in connection with any such violation relating to an
untrue statement or omission of a material fact relating to information provided
by PRGX contained in a preliminary prospectus or prospectus hereunder, and (iv)
with respect to any preliminary prospectus delivered in a non-underwritten
offering, the fact that such Holder sold Registrable Securities to a person to
whom there was not sent or given, at or before the written confirmation of such
sale, a copy of the prospectus (excluding the documents incorporated by
reference) or of the prospectus as then amended or supplemented (excluding
documents incorporated by reference) if PRGX has previously furnished copies
thereof to such Holder in compliance with this Agreement and the loss, claim,
damage, liability or expense of such PRGX Indemnified Party results from an
untrue statement or omission of a material fact relating to information provided
by such Holder contained in such preliminary prospectus which was corrected in
the prospectus (or the prospectus as amended or supplemented) and such corrected
document provides a defense to the claim upon which such loss, claim, damage,
liability or expense was based. Such indemnity
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obligation shall remain in full force and effect regardless of any investigation
made by or on behalf of PRGX Indemnified Parties (except as provided above) and
shall survive the transfer of such securities by such Holder.
6.3 Conduct of Indemnification Proceedings. Promptly after receipt
by an indemnified party under Section 6.1 or 6.2 above of written notice
delivered in accordance with Section 7.1 hereof of the commencement of any
action, suit, proceeding, investigation or threat thereof with respect to which
a claim for indemnification may be made pursuant to this Section, such
indemnified party shall, if a claim in respect thereto is to be made against an
indemnifying party, give written notice delivered in accordance with Section 7.1
hereof to the indemnifying party of the threat or commencement thereof,
provided, however, that the failure to so notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice in accordance with Section 7.1 hereof. If any such claim
or action referred to under Section 6.1 or 6.2 above is brought against any
indemnified party and it then notifies the indemnifying party of the threat or
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other indemnifying
party similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice delivered in accordance
with Section 7.1 hereof from the indemnifying party to such indemnified party of
its election so to assume the defense of any such claim or action, the
indemnifying party shall not be liable to such indemnified party under this
Article VI for any legal expenses of counsel or any other expenses (other than
reasonable costs of investigation) subsequently incurred by such indemnified
party in connection with the defense thereof, unless the indemnifying party has
failed to assume the defense of such claim or action or to employ counsel
reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to differing interests between
such indemnified party and any other party represented by such counsel in such
action. The indemnifying party shall not be required to indemnify the
indemnified party with respect to any amounts paid in settlement of any action,
proceeding or investigation entered into without the written consent of the
indemnifying party. No indemnifying party shall consent to the entry of any
judgment or enter into any settlement without the consent of the indemnified
party unless (i) such judgment or settlement does not impose any obligation or
liability upon the indemnified party other than the execution, delivery or
approval thereof, and (ii) such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a full release and discharge from all liability in respect
of such claim and a full release of all persons that may be entitled to or
obligated to provide indemnification or contribution under this Article.
The obligations of PRGX and the Holders of Registrable Securities under
this Article VI shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement and the termination
of this Agreement.
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6.4 Contribution. If the indemnification provided for in this
Article VI is unavailable to or insufficient to hold harmless an indemnified
party under Section 6.1 or 6.2, then each indemnifying party in the relevant
transaction shall contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions or proceedings in respect thereof) referred to in Section 6.1 or 6.2 in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other in
connection with the statements, omissions, actions or inactions which resulted
in such losses, claims, damages, liabilities or expenses. The relative fault of
the indemnifying party and the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party, any action or inaction by any such party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement, omission, action or inaction. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions or proceedings in respect thereof) pursuant to this Section
6.4 shall be deemed to include any reasonable legal or other expenses incurred
by such indemnified party in connection with investigating or defending any such
action or claim (which shall be limited as provided in Section 6.3 if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof) which is the subject of this Section 6.4. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Promptly after receipt by an
indemnified party under this Section 6.4 of written notice delivered in
accordance with Section 7.1 hereof of the commencement of any action, suit,
proceeding, investigation or threat thereof with respect to which a claim for
contribution may be made against an indemnifying party under this Section 6.4,
such indemnified party shall, if a claim for contribution in respect thereto is
to be made against an indemnifying party, give written notice in accordance with
Section 7.1 hereof to the indemnifying party of the commencement thereof (if the
notice specified in Section 6.3 has not been given with respect to such action),
provided, however, that the failure to so notify the indemnifying party shall
not relieve it from any obligation to provide contribution which it may have to
any indemnified party under this Section 6.4, except to the extent that the
indemnifying party is actually prejudiced by the failure to give notice in
accordance with Section 7.1 hereof. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 6.4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of equitable considerations referred to in this Section
6.4.
The provisions of this Section 6.4 shall be in addition to any other
rights to indemnification or contribution which any indemnified party may have
pursuant to law or contract, shall remain in full force and effect regardless of
any investigation made by or on behalf of any indemnified party, and shall
survive the transfer of securities by any such party; provided that any
indemnification of similar scope entered into pursuant to an underwriting
agreement in connection with an offering contemplated herein shall supersede
this Article VI.
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6.5 Indemnification and Contribution of Underwriters. In
connection with any underwritten offering contemplated by this Agreement which
includes Registrable Securities, PRGX and all sellers of Registrable Securities
included in any registration statement shall agree to customary provisions for
indemnification and contribution (consistent with the other provisions of this
Article VI) in respect of losses, claims, damages, liabilities and expenses of
the underwriters of such offering.
ARTICLE VII
MISCELLANEOUS
7.1 Notices. All notices, requests and other communications
hereunder shall be in writing and will be deemed to have been duly given and
received by any party hereto and any permitted assignees thereof (i) when
personally delivered to the appropriate Notice Person (as defined below), (ii)
when sent by telefax to the appropriate Notice Person at the number listed below
for such Notice Person, (iii) two (2) business days after the day on which the
same has been delivered prepaid to an international courier service for delivery
to the appropriate Notice Person, or (iv) five (5) business days after the
deposit in the United States mail, registered or certified, return receipt
requested, postage prepaid, for delivery to the appropriate Notice Person, in
each case addressed to the following addresses:
(i) if to PRGX: The Profit Recovery Group
International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. XxXxxxxx, Esq.
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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copy to: Xxxxxx Xxxxxx Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to the Holder(s): to the address set forth in the stock
transfer records of PRGX
PRGX or any Holder (collectively, the "Notice Persons") from time to time may
change its or his or her address, telefax number or other information for the
purpose of notices to the specified parties by giving notice specifying such
change to the other Notice Persons.
7.2 Assignment. Subject to and without limiting the provisions of
Article VI hereof, neither this Agreement nor any right, interest or obligation
hereunder may be assigned by any party hereto without the prior written consent
of the other parties hereto and any attempt to do so will be void, except that
in the event of a merger, consolidation, reorganization or similar transaction
of PRGX with a Person where such other Person is the surviving entity, PRGX may
assign its rights and obligations hereunder without the prior consent of, but
with notice to, the Holders. Subject to the preceding sentence, this Agreement
is binding upon, inures to the benefit of, and is enforceable by the parties
hereto and their respective successors and permitted assigns.
7.3 Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.
7.4 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
7.5 Remedies. Each party hereto will be entitled to enforce any
right granted to such party by any provision of this Agreement specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any
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party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
7.6 Entire Agreement. This Agreement supersedes all prior
discussions and agreements among the parties hereto with respect to the subject
matter hereof and contains the sole and entire agreement among the parties
hereto with respect to the subject matter hereof.
7.7 Captions. The captions used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
7.8 Exhibits and Schedules. All exhibits and schedules, if any,
referred to in this Agreement, all attachments to such exhibits or schedules,
and any other attachment to this Agreement are hereby incorporated by reference
into this Agreement and hereby are made a part of this Agreement as if set out
in full herein.
7.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia applicable to a
contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
7.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
7.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7.12 No Third Party Beneficiary. This Agreement shall not confer
any rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.,
a Georgia corporation
By:
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Name:
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Title:
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EXHIBIT A
