EXECUTION COPY
AMENDED AND RESTATED
RESTRUCTURING SUPPORT AGREEMENT
This AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT is made and
entered into as of February 1, 2006 (the "AGREEMENT") by and among PRG-Xxxxxxx
International, Inc., a Georgia corporation ("PRG" or the "COMPANY"), and (i)
each of the undersigned beneficial owners (or investment managers or advisors
for the beneficial owners) of the Notes (as defined below) and (ii) each other
beneficial owner (or investment manager or advisor for such beneficial owner) of
the Notes that executes a counterpart signature page to this Agreement after the
date of this Agreement, as provided herein (each, a "NOTEHOLDER" and
collectively, the "NOTEHOLDERS").
RECITALS:
A. PRG has issued and outstanding $125,000,000 aggregate principal amount
of its 4-3/4% Convertible Subordinated Notes due 2006 (the "NOTES") pursuant to
that certain indenture, dated as of November 26, 2001 (the "INDENTURE"), between
PRG (as successor in interest to The Profit Recovery Group International, Inc.)
and SunTrust Bank, as trustee.
B. The Noteholders are beneficial owners of the Notes (and/or are serving
as the investment advisors or managers or in a similar capacity for the
beneficial owners of such Notes, having the power to enter into this Agreement
on behalf of such beneficial owners) in the respective aggregate principal
amounts separately disclosed to PRG on a confidential basis (provided that the
aggregate principal amount of the holdings of all the Noteholders shall not be
deemed confidential).
C. The Company and the Noteholders are currently parties to that certain
Restructuring Support Agreement dated as of December 23, 2005 (the "ORIGINAL
RSA") setting forth the terms of a proposed financial restructuring of the
Notes.
D. The Company and the Noteholders desire to modify and amend the terms of
the Original RSA as set forth herein.
E. Exhibit A hereto (the "TERM SHEET") and the provisions hereof set forth
the basic terms of a financial restructuring of the Notes to be realized through
an exchange offer (the "EXCHANGE OFFER" and, collectively with any transactions
substantially as contemplated by the Term Sheet or this Agreement, the
"RESTRUCTURING").
F. The parties have agreed to the terms of the Restructuring and the
Noteholders each have agreed to support the Restructuring on the terms and
conditions set forth herein.
G. The Company intends to (i) conduct the Exchange Offer as soon as
practicable and (ii) use commercially reasonable efforts to obtain acceptance of
the Exchange Offer by the holders of 99% of the outstanding Notes.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. GENERAL.
(a) The Company agrees and covenants that, subject to the conditions
set forth on the Term Sheet, it will use its commercially reasonable best
efforts to complete the Restructuring through the Exchange Offer.
(b) The parties shall negotiate in good faith (i) the documentation
regarding the Restructuring contemplated by the Term Sheet, (ii) the Exchange
Offer, and (iii) the other documents contemplated hereby and thereby
(collectively, the "RESTRUCTURING DOCUMENTS").
(c) The parties hereto shall not (i) object to, delay, impede, or
commence any proceeding pertaining to, or take any other action to interfere,
directly or indirectly, in any material respect with the acceptance
or implementation of, the Restructuring provided that the terms of the final
Restructuring Documents are materially consistent with the Term Sheet and
otherwise in form and substance satisfactory to the Company and the Noteholders
in their reasonable discretion, (ii) encourage or support any person or entity
to do any of the foregoing, (iii) in the case of the Noteholders, exercise any
rights under any indenture or other agreement with the Company or instruct any
trustee to exercise any such rights except as consistent with this Agreement, or
(iv) seek or solicit, propose, file, support, encourage, vote for, consent to,
instruct, or engage in discussions with any person or entity, other than PRG,
concerning any restructuring, workout, plan of reorganization, dissolution,
winding up, acquisition or liquidation of PRG and/or its affiliates, other than
the Exchange Offer, provided that the Company may, upon one Business Day's
notice to the other parties hereto, respond to and engage in discussions
concerning unsolicited offers that the Company's board of directors believes in
good faith will lead to an alternative transaction that would provide more value
to the holders of the Notes and to PRG's current shareholders than the
Restructuring.
(d) The parties agree nothing in this Agreement shall limit, modify or
otherwise effect any of the Lenders' rights under that certain Credit Agreement
among PRG-Xxxxxxx USA, Inc as Borrower, PRG and certain of its other affiliates,
as Guarantors and certain of the Noteholders, as Lenders, dated December 23,
2005 (the "BRIDGE LOAN CREDIT AGREEMENT"), or any documents related thereto
(collectively, the "BRIDGE LOAN DOCUMENTS").
Section 2. SUPPORT FOR THE RESTRUCTURING.
(a) PRG agrees and covenants that it will use commercially reasonable
best efforts to take or cause to be taken all actions commercially reasonably
necessary and appropriate in furtherance of the Exchange Offer, including as
promptly as practicable to:
(1) prepare the solicitation materials relating to the Exchange
Offer (the "SOLICITATION MATERIALS") in form and substance consistent with the
Term Sheet, except to the extent otherwise consented to by the Noteholders;
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(2) commence the Exchange Offer and disseminate the Solicitation
Materials in a manner customary for comparable transactions;
(3) seek satisfaction of all conditions precedent to the
Restructuring;
(4) defend in good faith any suit or other legal or
administrative proceeding seeking to interfere with, impair or impede the
Restructuring;
(5) promptly amend the Solicitation Materials, as necessary and
as may be required by applicable law and provide a draft of such amended
Solicitation Materials to the Ad Hoc Committee prior to the distribution of such
materials to holders of the Notes;
(6) not solicit or encourage others to formulate any other tender
offer, settlement offer, or exchange offer for the Notes other than the Exchange
Offer;
(7) so long as this Agreement is effective and has not been
terminated in accordance with Section 5 or 6, hereof, and except to the extent
necessary for the fulfillment of the fiduciary duties of the Company's board of
directors as referred to in Section 6(c) hereof, not object to, nor otherwise
commence any proceeding to oppose, the Restructuring, it being understood and
agreed that the Company shall not seek, solicit, support, consent to,
participate in the formulation of, or encourage any other plan, sale, proposal,
or offer of winding up, liquidation, reorganization, merger, consolidation,
dissolution, or restructuring of the Company;
(8) subject to the satisfaction or waiver of any conditions
precedent to the Exchange Offer, consummate the Exchange Offer, including
delivery of all securities required to be issued thereunder (within the time
that is customary for transactions of this type) and the other transactions that
are part of the Restructuring; and
(9) prior to consummation of the Restructuring, take all action
necessary to exempt, in a manner reasonably acceptable to the Noteholders, the
proposed Restructuring transactions and the acquisition of New Securities (as
defined in the Term Sheet) or common stock issuable on conversion thereof by
any holder of Notes.
(b) PRG agrees and covenants that it will not, and will cause each of
its direct and indirect subsidiaries not to, sell, liquidate, or dispose of
any assets, outside the ordinary course of business consistent with past
practices, prior to the date on which the Exchange Offer closes other than as
permitted by the Section 8.5 of the Bridge Loan Credit Agreement as in effect on
the Closing Date (as defined under the Bridge Loan Credit Agreement), without
the prior written consent of the holders of a majority of the Notes subject to
this Agreement.
(c) Each of the Noteholders agrees and covenants that it shall, as
long as this Agreement is in effect:
(1) no later than 15 days prior to the first date scheduled for
the closing of the Exchange Offer, (i) tender all Notes beneficially owned
by it and (ii) cause the beneficial owner of all Notes for which the Noteholder
is the investment advisor or manager having the power to vote and dispose of
such Notes on behalf of such beneficial owner, to tender all such Notes together
with properly completed and duly executed letter or letters of transmittal
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with respect to such Notes as required by the instructions to the letter of
transmittal pursuant to and in accordance with the Exchange Offer;
(2) not revoke any of the foregoing unless and until this
Agreement is terminated in accordance with its terms;
(3) not vote for, consent to, provide any support for,
participate in the formulation of, or solicit or encourage others to
formulate any other tender offer, settlement offer, or exchange offer
for the Notes other than the Exchange Offer; and
(4) so long as this Agreement is effective and has not been
terminated in accordance with Section 5 or 6 hereof and the final
Restructure Documents are materially consistent with the Term Sheet, not object
to, nor otherwise commence any proceeding to oppose, the Restructuring, it being
understood and agreed that each Noteholder shall not (i) directly or indirectly
seek, solicit, support, or encourage any other plan, sale, proposal, or offer of
winding up, liquidation, reorganization, merger, consolidation, dissolution, or
restructuring of the Company or (ii) commence an involuntary bankruptcy case
against the Company.
Section 3. REPRESENTATIONS AND WARRANTIES.
(a) Each of the parties severally represents and warrants to each of
the other parties that the following statements are true and correct as of
the date hereof:
(1) POWER AND AUTHORITY. It has all requisite power and authority
to enter into this Agreement and to carry out the transactions contemplated
by, and perform its respective obligations under, this Agreement.
(2) AUTHORIZATION. The execution and delivery of this Agreement
and the performance of its obligations hereunder have been duly authorized
by all necessary action on its part.
(3) NO CONFLICTS. The execution, delivery, and performance by it
of this Agreement do not and shall not (i) violate any provision of law,
rule, or regulation applicable to it or its certificate of incorporation or
by-laws (or other organizational documents) or (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation to which it is a party or under its
certificate of incorporation or by-laws (or other organizational documents),
except, with respect to the Company, for any contractual obligation that would
not have a material adverse effect on the business, assets, financial condition,
or results of operations of PRG and its subsidiaries, taken as a whole.
(4) GOVERNMENTAL CONSENTS. The execution, delivery, and
performance by it of this Agreement do not and shall not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with, or by, any Federal, state, or other governmental authority or
regulatory body, except (i) such filings as may be necessary and/or required for
disclosure by the Securities and Exchange Commission and (ii) filings with
NASDAQ in connection with the Restructuring.
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(5) BINDING OBLIGATION. This Agreement is the legally valid and
binding obligation of it, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
(6) PROCEEDINGS. No litigation or proceeding before any court,
arbitrator, or administrative or governmental body is pending against it that
would adversely affect its ability to enter into this Agreement or perform its
obligations hereunder.
(b) Each of the Noteholders represents and warrants, severally and not
jointly, to each of the other parties that the following statements are true,
correct, and complete as of the date hereof:
(1) OWNERSHIP. It has disclosed to PRG on a confidential basis
the aggregate principal amount of the Notes for which (i) it is the sole
beneficial owner and (ii) it is the investment advisor or manager for the
beneficial owners of such Notes, having the power to vote and dispose of such
Notes on behalf of such beneficial owners. It is entitled (for its own account
or for the account of other persons claiming through it) to all of the rights
and economic benefits of such Notes.
(2) TRANSFERS. It has made no prior assignment, sale,
participation, grant, conveyance, or other transfer of, and has not entered
into any other agreement to assign, sell, participate, grant, or otherwise
transfer, in whole or in part, any right, title, or interests in (or portion
thereof) the Notes referred to in Subsection 3(b)(1), except as permitted by
Section 4 hereto.
(3) LAWS. It (i) is a sophisticated investor with respect to the
transactions described herein with knowledge and experience in financial and
business matters sufficient to evaluate the merits and risks of owning and
investing in securities similar to the Notes (including any securities that may
be issued in connection with the Restructuring), making an informed decision
with respect thereto, and evaluating properly the terms and conditions of this
Agreement, and it has made its own analysis and decision to enter in this
Agreement, (ii) is, and any person for which it is the investment advisor or
manager and which is the beneficial owner of Notes is, an "accredited investor"
within the meaning of Rule 501 of the Securities Act of 1933, as amended, and
(iii) it has had the opportunity to meet with management of PRG and to ask
questions and review information with respect to PRG's business, financial
condition, results of operations and financial and operational outlook, and it
has obtained all information it deems necessary or appropriate in order to enter
into this agreement and make the investment decision contemplated hereby.
Section 4. RESTRICTION ON THE SALE OF THE NOTES. Each Noteholder
individually covenants that, from the date hereof until the termination of this
Agreement, such party shall not, directly or indirectly, sell, pledge,
hypothecate, or otherwise transfer any Notes or any option, right to acquire, or
voting, participation, or other interest therein, except to a purchaser or other
entity who executes and delivers to PRG, concurrently or prior to any binding
commitment with respect to such transfer, an agreement in writing to be bound by
all the terms of this Agreement
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with respect to the relevant Notes or other interests being transferred to
such purchaser (which agreement shall include the representations and warranties
set forth in Section 3 hereof). This Agreement shall in no way be construed to
preclude a party from acquiring additional Notes or other interests in PRG. All
Notes held by a Noteholder, including Notes acquired after the date hereof,
shall be subject to all the terms of this Agreement.
Section 5. TERMINATION BY THE NOTEHOLDERS. This Agreement may be terminated
by Noteholders that beneficially own or act as the investment advisor or manager
with respect to at least a majority of the Notes subject to the terms of this
Agreement on the occurrence of any of the following events (each a "NOTEHOLDER
TERMINATION EVENT"), by delivering written notice of the occurrence of such
event in accordance with Section 13 below to the other parties:
(a) the Exchange Offer has not been commenced by February 1, 2006 or
completed by March 31, 2006;
(b) after the date hereof there shall have occurred any event or
circumstance that individually or in the aggregate reflect a material adverse
change in the financial condition, business, or operations of the Company and
its subsidiaries;
(c) the failure to repay all obligations under the facility
contemplated by the Bridge Loan Documents (the "Bridge Loan"), in full, in
cash, concurrent with the closing of the Exchange Offer;
(d) the exercise of any remedies under the Bridge Loan Documents
following an Event of Default (as defined therein) arising from any the
following: (i) the failure to make any scheduled payment of principal or
interest as and when required under the Bridge Loan Documents; (ii) the failure
by the Company to make any Mandatory Prepayments or Payment of Taxes; (iii) a
default under any Other Indebtedness, unless otherwise permitted by the Bridge
Loan Documents; (iv) the failure to maintain Insurance required by the Bridge
Loan Documents; (v) the incurrence of any Debt or Indebtedness in excess of the
limitations in the Bridge Loan Documents; (vi) any Consolidation, Dissolution or
Merger in violation of the Bridge Loan Documents; (vii) making any Restricted
Payments in violation of the Bridge Loan Documents; (viii) any Transactions with
Affiliates in violation of the Bridge Loan Documents; (ix) taking any Restricted
Action in violation of the Bridge Loan Documents; (x) making any Negative Pledge
in violation of the Bridge Loan Documents; or (xi) occurrence of any Bankruptcy
Event or Change of Control;(1)
(e) the exercise of any remedies under that certain Amended and
Restated Credit Agreement among PRG-Xxxxxx USA, Inc., as Borrower, PRG, and
certain of its other affiliates, as Guarantors, and Bank of America, N.A., dated
as of November 30, 2004, and any documents related thereto;
(f) the Restructuring or the final Restructuring Documents do not
conform to the Term Sheet with respect to the treatment of the Notes, except as
modified in any non-
-----------------------
(1) All capitalized terms used in this Section 5(d) shall have the meaning
given such terms in the Bridge Loan Credit Agreement.
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material respect or as approved by the Ad Hoc Committee of
the Noteholders (the members of which are identified on the signature pages
hereto); or
(g) a material breach of this Agreement by the Company that is not, by
its terms, curable or that is, by its terms, curable and is not cured by the
fifth calendar day after notice of such breach (for the purposes of this
Agreement, the term "material breach" includes a breach of the covenant in
Section 2(b)).
Section 6. TERMINATION BY THE COMPANY. The Company shall have the right to
terminate this Agreement on the occurrence of any of the following events (each
a "COMPANY TERMINATION EVENT") by giving written notice in accordance with
Section 13 below to the other parties:
(a) the exercise of any remedies under the Bridge Loan Documents;
(b) a material breach of this Agreement by any of the Noteholders that
is not, by its terms, curable or that is, by its terms, curable and is not
cured by the fifth calendar day after notice of such breach; or
(c) a good faith determination by the Company's board of directors
(following consultation with its reputable outside legal counsel and its
financial advisor of national recognized reputation) that such termination is
required by its fiduciary duty to the Company, its then current shareholders,
and its creditors in order to enter into an alternative transaction (whether in
the form of a merger, consolidation or combination with a third party or the
sale of all, substantially all, or a significant portion of, the assets or
businesses of the Company) that will be at least as favorable to each of such
parties but more favorable to the parties as a whole, from a financial
perspective, than the Restructuring and is reasonably capable of being
consummated, taking into account, among other things, all legal, financial,
regulatory and other aspects of the alternative transaction and the person or
group making such proposal (a "SUPERIOR PROPOSAL"); provided that (i) the Bridge
Loan has been paid in full, in accordance with the Bridge Loan Documents, (ii)
the Company provides the Noteholders five (5) business days prior notice of the
Company's intent to terminate this Agreement under this Section 6(c) and the
terms and conditions of such Superior Proposal (including the identity of the
person or group making such Superior Proposal), and (iii) the Company provides
the Noteholders and their representatives a good faith opportunity during such
five (5) business day notice period and prior to any such termination to revise
the terms of the Restructuring.
Section 7. TERMINATION OF AGREEMENT. Notwithstanding anything to the
contrary in this Agreement, the Term Sheet or any other agreement, this
Agreement shall terminate on the earliest of (a) the occurrence of a Noteholder
Termination Event, after expiration of any cure periods and satisfaction of any
conditions set forth in Section 5 of this Agreement, (b) the occurrence of a
Company Termination Event, after expiration of any cure periods and satisfaction
of any conditions set forth in Section 6 of this Agreement, and (c) if the
Restructuring has not been consummated prior to such date, 5:00 pm on June 15,
2006.
Section 8. EFFECT OF TERMINATION AND OF WAIVER OF TERMINATION EVENT. On the
delivery of the written notice referred to in Sections 5 or 6 in connection with
the valid
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termination of this Agreement, the obligations of each of the parties hereunder
shall thereupon terminate and be of no further force and effect. Prior to
the delivery of such notice the Noteholders may waive the occurrence of a
Noteholder Termination Event and PRG may waive the occurrence of a Company
Termination Event. No such waiver shall affect any subsequent termination event
or impair any right consequent thereon. Upon termination of this Agreement, no
party shall have any continuing liability or obligation to the other parties
hereunder; PROVIDED, HOWEVER, that no such termination shall relieve any party
from liability for its breach or non-performance of its obligations hereunder
prior to the date of such termination.
Section 9. AMENDMENTS. This Agreement may be modified, amended, or
supplemented by a written agreement executed by the Company and the Noteholders
that beneficially own or act as the investment advisors or managers with respect
to at least a majority of the aggregate principal face amount of the Notes
subject to this Agreement, PROVIDED, HOWEVER, that in the event of a material
change to the Term Sheet, or a change of any of the economic terms of the Term
Sheet, any Noteholder that does not consent shall have no further obligations
under the Agreement.
Section 10. FURTHER ASSURANCES. Each of the parties to this Agreement
hereby further covenants and agrees to cooperate in good faith to execute and
deliver all further documents and agreements and take all further action that
may be commercially reasonably necessary or desirable in order to enforce and
effectively implement the terms and conditions of this Agreement. Each
Noteholder agrees to advise the Company of any changes in the amount of Notes
beneficially owned by it and the amount of Notes for which such Noteholder is
the investment manager or advisor for beneficial owners.
Section 11. VOTING AGREEMENT. As soon as reasonably practicable following
the consummation of the Restructuring, the Company will call a meeting of
shareholders at which it will seek approval of the Management Incentive Plan and
the amendment of the Company's articles of incorporation to authorize 140
million shares of common stock in order to provide for conversion in full of the
New Senior Convertible Notes, the New Senior Series A Convertible Participating
Preferred Stock, and the New Senior Series B Convertible Participating Preferred
Stock and the distribution of Company common stock under the Management
Incentive Plan, as set forth in the Term Sheet. Each of the Noteholders hereby
agrees to (i) attend (in person or by proxy) such shareholders meeting or
meetings and (ii) cause all Company common stock and other Company capital stock
entitled to vote on any such proposal that are beneficially owned by such
Noteholder to be voted in favor of the approval of such proposal.
Section 12. GOVERNING LAW; JURISDICTION. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflict of laws of the State of New York. By its execution and delivery of
this Agreement, each of the parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit, or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit, or proceeding, shall be brought in a federal court of
competent jurisdiction in the Southern District of New York. By execution and
delivery of this Agreement, each of the parties hereto hereby
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irrevocably accepts and submits to the jurisdiction of such court, generally
and unconditionally, with respect to any such action, suit, or proceeding.
Section 13. NOTICES. All demands, notices, requests, consents, and
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or by courier service, messenger, facsimile,
telecopy, or if duly deposited in the mails, by certified or registered mail,
postage prepaid-return receipt requested, and shall be deemed to have been duly
given or made (i) upon delivery, if delivered personally or by courier service,
or messenger, in each case with record of receipt, (ii) upon transmission with
confirmed delivery, if sent by facsimile or telecopy, or (iii) two business days
after being sent by certified or registered mail, postage pre-paid, return
receipt requested, to the following addresses, or such other addresses as may be
furnished hereafter by notice in writing, to the following parties:
If to PRG, or any of its subsidiaries, to:
PRG-Xxxxxxx International, Inc.
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxx XxXxxxxx, Esq.
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
If to the Noteholders, or any one Noteholder, to:
Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
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Section 14. ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement among the parties with regard to the subject
matter hereof, and supersedes all prior agreements with respect to the subject
matter hereof, including the Original RSA.
Section 15. HEADINGS. The headings of the paragraphs and subparagraphs of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
Section 16. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of the parties and their respective permitted successors
and assigns, PROVIDED, HOWEVER, that nothing contained in this paragraph shall
be deemed to permit sales, assignments, or transfers other than in accordance
with Section 4.
Section 17. SPECIFIC PERFORMANCE. Each party hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause other parties to sustain damages for which such
parties would not have an adequate remedy at law for money damages, and
therefore each party hereto agrees that in the event of any such breach, such
other parties shall be entitled to the remedy of specific performance of such
covenants and agreements and injunctive and other equitable relief in addition
to any other remedy to which such parties may be entitled, at law or in equity.
Section 18. SEVERAL, NOT JOINT, OBLIGATIONS. The agreements,
representations, and obligations of the parties under this Agreement are, in all
respects, several and not joint.
Section 19. REMEDIES CUMULATIVE. All rights, powers, and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power, or remedy thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power, or remedy by such party.
Section 20. NO WAIVER. The failure of any party hereto to exercise any
right, power, or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power, or remedy or to
demand such compliance.
Section 21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement. Delivery of an executed signature page of
this Agreement by telecopier or email shall be as effective as delivery of a
manually executed signature page of this Agreement.
Section 22. SEVERABILITY. Any provision of this Agreement that 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.
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Section 23. NO THIRD-PARTY BENEFICIARIES. Unless expressly stated herein,
this Agreement shall be solely for the benefit of the parties, and no other
person or entity shall be a third party beneficiary hereof.
Section 24. ADDITIONAL PARTIES. Without in any way limiting the provisions
hereof, additional holders of Notes may elect to become parties by executing and
delivering to PRG a counterpart hereof. Each such additional holder shall become
a party to this Agreement as a Noteholder in accordance with the terms of this
Agreement.
Section 25. NO SOLICITATION. This Agreement is not intended to be, and each
signatory to this Agreement acknowledges that this Agreement is not, a
solicitation with respect to the Exchange Offer or with respect to any other
mechanism to accomplish a restructuring of the obligations under the Notes,
whether such mechanism is to be accomplished in or outside a court.
Section 26. CONSIDERATION. It is hereby acknowledged by the parties hereto
that, other than the agreements, covenants, representations, and warranties set
forth herein and in the Term Sheet, no consideration shall be due or paid to the
Noteholders for their agreement to vote to accept the Exchange Offer in
accordance with the terms and conditions of this Agreement.
Section 27. RECEIPT OF ADEQUATE INFORMATION; REPRESENTATION BY COUNSEL.
Each party acknowledges that it has received adequate information to enter into
this Agreement and that it has been represented by counsel in connection with
this Agreement and the transactions contemplated by this Agreement. Accordingly,
any rule of law or any legal decision that would provide any party with a
defense to the enforcement of the terms of this Agreement against such party
shall have no application and is expressly waived. The provisions of the
Agreement shall be interpreted in a reasonable manner to effect the intent of
the parties.
Section 28. CONSTRUCTION. To the extent that any ambiguity exists between
the descriptions contained in the Offering Circular and the terms set forth in
Exhibit A hereto, the descriptions in the Offering Circular shall control,
except to the extent that any such term or description within the Offering
Circular is inconsistent with the express provisions of this Agreement, in which
case this Agreement shall control.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first above written.
PRG-Xxxxxxx International, Inc.
By: /s/ Xxxxxxx XxXxxxxx, Xx.
-------------------------------------------
Name: Xxxxxxx XxXxxxxx, Xx.
Title: Senior Vice President, General Counsel
and Secretary
[SIGNATURE PAGE TO AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT]
NOTEHOLDERS:
Xxxx Capital Partners, L.P.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Partner
Address:
000 Xxxxxxxxxx Xx., Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn.: Xxxx X. Xxxxxxxx
Parkcentral Global Hub Limited
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
Address:
0000 Xxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn.: Xxxxxx Xxxxxxx
Petrus Securities L.P.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President of General Partner
Address:
0000 Xxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn.: Xxxxxx Xxxxxxx
[SIGNATURE PAGE TO AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT]
Tenor Opportunity Master Fund, Ltd.
By: /s/ Xxxxx Xxxx
-------------------------------------------
Name: Xxxxx Xxxx
Title: Partner
Address:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: 000-000-0000
Attn.:
Thales Fund Management, LLC
By: /s/ A. Xxxxx Xxxxxxx
-------------------------------------------
Name: A. Xxxxx Xxxxxxx
Title: Senior Analyst
Address:
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.:
Attn.:
[SIGNATURE PAGE TO AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT]
EXHIBIT A
TERM SHEET
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PROPOSED The following describes an agreement in
TRANSACTION: principle between PRG-Xxxxxxx International,
Inc. and its subsidiaries (collectively, the
"COMPANY") and the Ad Hoc Committee of Holders of
the Company's 4.75% Convertible Subordinated Notes
due 2006 (the "AD HOC COMMITTEE") and to
restructure the financial obligations of the
Company.
The Transaction will involve the recapitalization
of the Company through:
(i) A Bridge Loan (as defined below) of $10 million
to provide the Company with sufficient funds to
pay the interest payment due on the Notes and
additional working capital, pending the closing
of the Recapitalization (as defined below);
(ii) A credit facility or facilities, consisting of a
minimum revolver of $20 million and total
commitments of no more than $47.5 million,
amending or refinancing (a) the Amended and
Restated Credit Agreement, dated as of
November 30, 2004, among (x) PRG-Xxxxxxx USA,
Inc., the Company, and certain of the Company's
subsidiaries and (y) Bank of America, N.A. (the
"EXISTING CREDIT FACILITY"), and (b) the Bridge
Loan; and
(iii) A pro-rata exchange of the 4.75% Convertible
Subordinated Notes due 2006 issued by the Company
(the "NOTES") for three new securities including:
(1) New Senior Notes; (2) New Senior Convertible
Notes; and (3) New Senior Series A Convertible
Participating Preferred Stock (collectively the
"TRANSACTION SECURITIES").
Points (i) through (iii), collectively, are defined as
the "RECAPITALIZATION".
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CREDIT FACILITIES: BRIDGE LOAN
$10 million second lien loan (the "Bridge Loan") to
be provided by certain holders of the Notes (or
their affiliates). The Bridge Loan will have the
following terms:
(i) Second lien on assets securing the Existing
Credit Facility;
(ii) 12% interest in cash, payable monthly;
(iii) 50 bps closing fee;
(iv) Maturity date: Earlier of closing of the
Recapitalization or August 15, 2006;
(v) Non-refundable commitment fee of 1.25% of $10
million, payable upon signing the Commitment
Letter; an additional
A-1
1.75% Placement Fee of the amount borrowed,
payable upon closing of the Bridge Loan; plus all
out-of-pocket expenses;
(vi) Proceeds will be used for general corporate
purposes to eliminate risk of adverse customer
actions, including paying the interest due on the
existing Notes. Up to $2.5 million may be used to
fund foreign operations, provided that, if
requested by the Ad Hoc Committee, appropriate
promissory note and other documentation evidences
such inter-company transfers and lien is received
on those promissory notes. Proceeds cannot be
used to make severance or similar payments to
Xxxx Xxxx and Xxxx Xxxx.
REVOLVING CREDIT FACILITY/ NEW SECOND LIEN TERM LOAN
The Existing Credit Facility will be either amended
with Bank of America or refinanced with a replacement
lender to provide a minimum commitment of $20 million of
senior secured financing.
The Bridge Loan will be repaid upon completion of the
refinancing of the Existing Credit Facility with a
credit facility or facilities, consisting of a minimum
revolver of $20 million and total commitments of no more
than $47.5 million.
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TRANSACTION In exchange for the $125 million principal amount of
SECURITIES: Notes, the Noteholders will receive, upon the closing of
the exchange offer (the "Closing Date"), their pro-rata
share of the following securities with preference
options for the different securities structured, if
possible:
(i) New Senior Notes in a principal amount of $50
million, plus an additional principal amount equal
to accrued and unpaid interest on the Notes to,
but not including, the Closing Date;
(ii) New Senior Convertible Notes in a principal
amount of $60 million; and (iii) New Senior
Series A Convertible Participating Preferred
Stock with an initial liquidation preference of
$15 million.
The interest payment due November 26, 2005 on the
Notes will be paid in cash from the proceeds of the
Bridge Loan during the 30 day grace period as soon
as documentation is completed and Bank of America
agrees to the terms of an Intercreditor and
Subordination Agreement.
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NEW SENIOR NOTES: Issuer: Company
Face Amount: $50 million plus an additional
principal amount equal to accrued
and unpaid interest on the Notes to,
but not including, the Closing Date
A-2
Coupon: 11.0% cash, payable semi-annually
starting six months after the
Closing Date
Maturity: 5 years from the Closing Date
Call Protection: Callable at any time at 104 in year 1
1, 102 in year 2; par in year 3 until
maturity plus all accrued interest
thereon through the date of the
prepayment
Convertible: Not convertible
Ranking: Senior to existing Notes
Security: General unsecured obligations
Covenants: See description thereof contained in
the Offering Circular to be dated
February 1, 2006 (the "OFFERING
CIRCULAR")
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NEW SENIOR Issuer: Company
CONVERTIBLE NOTES:
Face Amount: $60 million
Coupon: 10% cash or PIK, at the option of
the Company, payable semi-annually
starting six months after the
Closing Date
Maturity: Five years from the Closing Date
Redemption Rights: Callable at par plus accrued interest
at any time after both (i) payment of
the New Senior Notes in full and (ii)
increase in the authorized Company
common stock to provide for the
conversion in full of the New Senior
Convertible Notes, the New Senior
Series A Convertible Participating
Preferred Stock and the New Senior
Series B Convertible Participating
Preferred Stock (collectively, the
"NEW SECURITIES") and the
distribution in full of Company
common stock under the Management
Incentive Plan and the effectiveness
of a registration statement
registering the resale of the New
Securities by certain Company
affiliates (the "NEW CONVERSION
RIGHTS DATE")
Ranking: Pari passu with the New Senior Notes
Security: General unsecured obligations
A-3
Convertible: At the option of the holder, the New
Senior Convertible Notes are
convertible into New Senior Series B
Convertible Participating Preferred
Stock only at any time after August
15, 2006 but prior to the new
conversion rights date, at a
conversion price of $480 per share.
At the option of the holder, the New
Senior Convertible Notes are
convertible into Company common stock
only after the new conversion rights
date at a conversion price of $.65
per share.
Covenants: See the description thereof contained
in the Offering Circular
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NEW SENIOR CONVERTIBLE THE NEW SENIOR SERIES B CONVERTIBLE PARTICIPATING
NOTES (CONTINUED): PREFERRED STOCK SHALL HAVE THE FOLLOWING TERMS:
Face Amount: Principal amount of New Senior
Convertible Notes converted plus
accrued and unpaid interest. Initial
liquidation preference of $480 per
share
Dividend: 10% annual dividend rate payable
semi-annually in cash or by accretion
of the liquidation preference of the
shares, at the option of the Company
Maturity: Later of (i) five years after the
Closing Date and (ii) 120th day
following the new conversion rights
date
Convertible: At the option of the holder after the
new conversion rights date, the New
Senior Series B Convertible
Participating Preferred Stock is
convertible into common stock at
$0.65 per share.
Redemption: Optionally redeemable at face amount
plus accrued dividends only after the
new conversion rights date, subject
to prior or simultaneous refinancing
in full of the New Senior Notes and
the New Senior Convertible Notes
Put Rights: During the period from March 15, 2011
to the new conversion rights date,
any holder of the New Senior Series B
Convertible Participating Preferred
Stock may require the Company to
redeem such shares on any semi-annual
dividend payment date by delivering
60 days prior written notice
a-4
Voting: Votes with common stock on all issues
on an as converted basis
Form: Certificated security
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NEW SENIOR SERIES Issuer: Company
A CONVERTIBLE
PARTICIPATING Face Amount: $15 million. Initial liquidation
PREFERRED STOCK: preference of $120 per share.
Dividend: 9% annual dividend rate payable semi-
annually in cash or by accretion of
the liquidation preference of the
shares, at the option of the Company
Maturity: 5 years from the Closing Date
Convertible: Convertible into the common stock of
the Company at any time at $0.28405
per share at the option of the holder
Initial conversion implies 45.9% of
the Common Stock of the Company prior
to the conversion of the New Senior
Convertible Notes into New Senior
Series B Convertible Participating
Preferred Stock or its conversion
into common stock.
Redemption: Redeemable at face amount plus
accrued dividends only after the
operative conversion date, subject to
prior or simultaneous refinancing in
full of the New Senior Notes and the
outstanding New Senior Convertible
Notes
Votes with Common Stock on all
issues on an as converted basis
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EXISTING COMMON The Company's existing common shareholders will retain
SHAREHOLDERS: their existing shares representing approximately 54.1%
of the Common Stock following the initial dilution from
the New Senior Series A Convertible Participating
Preferred Stock (30% assuming the full and
immediate conversion of the New Senior Convertible
Notes into Common Stock).
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GOVERNANCE: BOARD OF DIRECTORS:
The board will consist of seven members, four of whom
will be designated by the Noteholders Committee, two of
whom will be designed by the members of the current
board, and one of whom shall be the Company's
A-5
CEO.
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MANAGEMENT INCENTIVE Shares Phantom shares representing 10% of
PLAN: the Common Stock
Recordkeeping A notional account shall be
established as to each participating
executive to which the phantom shares
awarded to such executive shall be
credited ("PHANTOM STOCK ACCOUNT")
Vesting 1/3 on the effective date of the
Recapitalization ("EFFECTIVE DATE"),
with the remainder vesting monthly
over the two years following the
Effective Date
Vesting schedule for executives hired
after the Effective Date will be as
determined by Company compensation
committee.
100% vesting on a change in control.
Conversion of the New Senior
Convertible Notes, the New Senior
Series A Convertible Participating
Preferred Stock, and/or the New
Senior Series B Convertible
Participating Preferred Stock into
Common Stock is not a change in
control.
Allocation To be determined by the Compensation
Committee of the new board of
directors upon the recommendation of
the CEO; PROVIDED, HOWEVER, that the
Company's CEO will receive a minimum
of 40% of amount allocated to
Management Incentive Plan
Prior to the last distribution from
the Phantom Stock Accounts under the
Management Incentive Plan, the
compensation committee, after
consultation with the Company's CEO,
will allocate any unallocated and/or
forfeited phantom shares to one or
more of the Management Incentive
Plan participants.
Anti-Dilution
Provisions Standard anti-dilution provisions
PLUS dilution protection against
conversion of the New Senior
Convertible Notes, the New Senior
Series A Convertible Participating
Preferred Stock, and/or the New
Senior Series B Convertible
Participating Preferred Stock into
Common Stock will apply to
A-6
the Phantom Stock Account, but will
not apply to shares of Common Stock
actually distributed to the executive
from such account.
Distribution
Events Distribution of the Phantom Stock
Account shall be made, at the
individual election of each
executive, not earlier than the dates
and in the cumulative amounts set
forth below.
2d anniversary of
Effective Date 25%
3d anniversary of
Effective Date 50%
4th anniversary of
Effective Date 75%
5th anniversary of
Effective Date 100%
Distribution of the undistributed
vested amount of an executive's
Phantom Stock Account shall be made
upon the executive's death,
disability, or termination of
employment, or a change in control
(see "Vesting" above) of the
Company.
Form of Payment Following the consummation of the
Restructuring, the Management
Incentive Plan will be submitted
to the Company shareholders for
approval.
In the event the Company shareholders
decline to approve the Management
Incentive Plan, the value of an
executive's Phantom Stock Account
will be distributed in cash based
upon the cash payment formula set
forth below.
Following the receipt of such
shareholder approval, the value of
an executive's Phantom Stock Account
will be distributed to the executive
in cash to the extent required to
satisfy any applicable taxes (based
on the 30-day average trading price
of the Common Stock at the time of
distribution) and the balance in
shares of Common Stock.
Cash Payment
Formula The distributable cash value of an
executive's Phantom Stock Account
shall be equal to (a) the number of
shares of Common Stock that would
have been distributed to such
executive on the applicable
distribution date multiplied by (b)
the average closing price of the
Common Stock for the 30-day period
ending on such date.
A-7
Other Incentive
Payments This Management Incentive Plan is in
addition to an annual cash bonus
program based on EBITDA or other
targets implemented by the
Compensation Committee of the new
board of directors.
409A The Management Incentive Plan shall
comply with the requirements of
Section 409A of the Tax Code, as
applicable.
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CONDITIONS: (i) Acceptance of the proposed exchange offer by a
minimum amount of 99% of Notes;
(ii) The Restructuring Documents are materially
consistent herewith and are otherwise are in form
and substance satisfactory to the Company and the
Noteholders in their reasonable discretion;
(iii) Renewal of the Company's D&O policy or the
purchase of an extended claims' notice period for
such policy, in either case, on terms reasonably
satisfactory to the current board of directors of
the Company; and
(iv) Renegotiation or settlement of the
severance agreements with Xxxx Xxxx
and Xxxx Xxxx on terms reasonably
satisfactory to the Noteholders.
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A-8
