Exhibit 99.8
FIRST
OPTION AGREEMENT
THIS FIRST OPTION AGREEMENT (this "Agreement") is made and entered into
effective this 27th day of August, 2002 (the "Effective Date"), by and among
Xxxxxxx PRG Liquidating Investments, Ltd., a Texas limited partnership
("Grantor") and PRG-Xxxxxxx International, Inc., a Georgia corporation
("Grantee").
Background
A. Grantor and its affiliates own shares of common stock, no par value per
share, of Grantee ("PRGX Shares").
B. Effective on the date hereof, Grantor and its affiliate sold 4,338,507
PRGX Shares to affiliates of Berkshire Partners LLC (collectively, "Berkshire
Buyer").
C. Grantee has assisted the Grantor to facilitate the sale of PRGX Shares
by Grantor to the Berkshire Buyer, which Grantor acknowledges that Grantee was
not required to do. Grantee has granted registration rights, pursuant to a
registration rights agreement, to Berkshire Buyer without which the Berkshire
Buyer would not have acquired the 4,338,507 PRGX Shares referred to above.
Agreement
NOW, THEREFORE, for and in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Option.
1.1 Grant of Option. Grantor hereby grants to Grantee an irrevocable
option (the "Option") to purchase all right, title and interest in up to
1,446,168 PRGX Shares (the "Option Shares") in exchange for the payment of a
purchase price equal to $8.72 per share for each share which is the subject of
the Option exercise, together with interest (as additional purchase price) on
such amount from the date hereof until the date of payment at a rate equal to
eight percent (8%) per annum, computed on the basis of the actual number of days
elapsed (the "Purchase Price"), free and clear of all liens and encumbrances.
The Grantee acknowledges that the Option Shares are currently pledged to the
Berkshire Buyer in connection with a Secured Promissory Note (the "Note") and
Pledge Agreement between Grantor and the Berkshire Buyer (the "Berkshire Loan"),
which pledge is subordinate to the rights of the Grantee under this Option.
1.2 Exercise of Option. Subject to Section 1.3, Grantee may, at any
time and from time to time during the term of this Agreement, exercise the
Option in one or more increments of at least a number of shares such that the
Grantor's ownership of common stock of PRGX is reduced so as to satisfy the
requirements of Section 302(b)(2) of the Internal Revenue Code of 1986, as
amended, taking into account any attribution rules applicable in determining
Grantor's ownership of such stock, by delivering written notice of exercise to
Grantor (the "Exercise Notice") on or before a date 165 days after the date
hereof, setting forth the number of Option Shares that Grantee is acquiring and
designating a time and place at which the closing of such purchase shall occur
(the "Option Closing"), provided that the Option Closing shall occur not later
than five (5) days after the date of the Option Notice.
1.3 Manner of Purchase.
(a) At the Option Closing, Grantee shall pay to Grantor the
Purchase Price for the Option Shares to be purchased by cash, wire transfer or
other immediately available funds. If Grantee has received Notice of an Event of
Default (as defined in the Note) that is continuing, Grantee shall be entitled
to hold the Purchase Price in trust for the benefit of Berkshire and/or Grantor
until (a) Grantee has received joint instructions from Berkshire and Grantor as
to the payment of the Purchase Price, (b) there is a final order of a court of
competent jurisdiction directing the parties as to payment of the Purchase
Price, or (c) Grantee deposits the Purchase Price for the Option Shares with
said court, pending a final decision of such controversy. In any such event, the
Option shall be deemed fully and properly exercised and all rights to the Option
Shares shall be vested in Grantee.
(b) Upon the receipt of the Purchase Price, Grantor shall execute
and deliver to Grantee such instruments as are necessary and proper or may be
required by Grantee's transfer agent to transfer full and complete title to the
Option Shares to be transferred to the Grantee, free and clear of all liens and
encumbrances. Grantor hereby agrees that upon receipt of the Purchase Price, it
shall promptly take all actions necessary or appropriate as may be reasonably
requested by Grantee or its transfer agent to effect the transfer of record and
beneficial ownership to such Option Shares so purchased on the books and records
of Grantee.
2. Restrictions on Transfer and Acquisition.
2.1 Option Shares. Grantor hereby covenants that, until the expiration
of the Option, it will make no transfer of any interest in the Option Shares,
other than the grant of the security interest under the Pledge Agreement in
connection with the Berkshire Loan. Grantor represents that there are no
contractual or other restrictions on the Grantor's ability to transfer the
Option Shares (other than those imposed by the Shareholder Agreement, as
amended, and applicable state and federal securities laws).
2.2 Additional Shares. Subject to Section 4.1 hereof, Grantor
covenants that it will not acquire any additional shares of PRGX Common Stock
prior to a date 271 days after the date hereof.
2.3 No Assignment. The Option granted hereunder may not be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise), nor shall any such rights be subject to execution,
attachment or similar process.
3. Term and Termination. This Agreement shall terminate and be of no force
and effect, unless extended in writing by all of the parties hereto, on the date
which is 180 days after the date hereof; provided that the provisions of the
second sentence of Section 1.3(a) and Section 4 shall survive.
4. General Provisions.
4.1 Adjustment to Option Shares. If the outstanding shares of common
stock of PRGX are changed into or exchanged for a different number or kind of
shares or other securities of PRGX by reason of any recapitalization,
reclassification, stock split, stock dividend, combination, subdivision or
similar transaction, then, subject to any required action by the stockholders of
the PRGX, the number and kind of Option Shares subject to this Option and the
price per share of the Shares subject to the Option shall be proportionately
adjusted.
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4.2 GOVERNING LAWS. THIS AGREEMENT SHALL BE CONSTRUED, ADMINISTERED
AND ENFORCED ACCORDING TO THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
4.3 Assignment; Successors. This Agreement and the rights and
obligations of the Grantor hereunder may not be transferred or assigned by the
Grantor to any other person or entity without the prior written consent of the
Grantee. This Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors and assigns.
4.4 Notice. All notices, requests, demands, claims or other
communications hereunder will be in writing and shall be deemed duly given if
personally delivered, sent by telefax, sent by a recognized overnight delivery
service which guarantees next-day delivery ("Overnight Delivery") or mailed by
certified mail, return receipt requested, postage prepaid and addressed to the
intended recipient, as set forth below:
If to Grantor: Xxxxxxx PRG Liquidating Investments, Ltd.
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telefax: (000) 000-0000
with a copy to: Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telefax: (000) 000-0000
If to Grantee: PRG-Xxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx XxXxxxxx, Xx.
Senior Vice President & General Counsel
Telefax: (000) 000-0000
with a copy to: Xxxxxx Xxxxxx Xxxxxxx LLP
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
Telefax: (000) 000-0000
or at such other address as any party hereto notifies the other parties hereof
in writing. The parties hereto agree that notices or other communications that
are sent in accordance herewith (i) by personal delivery or telefax, will be
deemed received on the day sent or on the first business day thereafter if not
sent on a business day (with written confirmation of receipt), (ii) by Overnight
Delivery, will be deemed received on the first business day immediately
following the date sent, and (iii) by certified U.S. Mail, return receipt
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requested, will be deemed received three (3) business days immediately following
the date sent. For purposes of this Agreement, a "business day" is a day on
which U.S. national banks are open for business and shall not include a Saturday
or Sunday or legal holiday. Notwithstanding anything to the contrary in this
Agreement, no action shall be required of the parties hereto except on a
business day and in the event an action is required on a day which is not a
business day, such action shall be required to be performed on the next
succeeding day which is a business day.
4.5 Severability. In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
4.6 Entire Agreement; Amendment. This Agreement expresses the entire
understanding and agreement of the parties with respect to the subject matter
hereof. This Agreement may not be amended or modified except as set forth in
writing and signed by all of the parties hereto.
4.7 Headings. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
4.8 Specific Enforcement. Each of the parties hereto expressly agrees
that the other parties will be irreparably damaged if this Agreement is not
specifically performed. Upon a breach of the terms, covenants and/or conditions
of this Agreement by any party, the other parties shall, in addition to any and
all other rights and remedies at law or in equity, be entitled to a temporary or
permanent injunction, without showing any actual damage, and/or a decree for
specific performance, in accordance with the provisions hereof. All such rights
and remedies shall be cumulative.
4.9 Counterparts. This Agreement may be executed in two or more
counterparts, and delivered by facsimile transmission or otherwise, each of
which shall be deemed an original and all of which shall constitute one and the
same instrument.
[Remainder of page intentionally left blank.
Signatures on following
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first set forth above.
GRANTOR:
XXXXXXX PRG LIQUIDATING
INVESTMENTS, LTD.
By: XXXXXXX PRG LIQUIDATING
INVESTMENTS GP, LLC
Its: General Partner
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Its: Manager
GRANTEE:
PRG-XXXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx XxXxxxxx, Xx.
------------------------------------------
Its: General Counsel and Secretary
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