EXHIBIT 10.41
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of
December 31, 2001 among THE PROFIT RECOVERY GROUP USA, INC., a Georgia
corporation (the "Borrower"), THE PROFIT RECOVERY GROUP INTERNATIONAL, INC., a
Georgia corporation (the "Parent"), certain of the Domestic Subsidiaries of the
Parent (such Domestic Subsidiaries, together with the Parent, individually a
"Guarantor", and collectively the "Guarantors"; the Guarantors together with the
Borrower, individually a "Pledgor", and collectively the "Pledgors") and BANK OF
AMERICA, N.A., in its capacity as administrative agent (in such capacity, the
"Administrative Agent") for the lenders from time to time party to the Credit
Agreement described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "Credit Agreement") among the Borrower, the Guarantors, the Lenders and the
Administrative Agent, the Lenders have agreed to make Loans and issue Letters of
Credit upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Pledgors shall
have executed and delivered this Pledge Agreement to the Administrative Agent
for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to such terms in the Credit
Agreement. In addition, the following terms, which are defined in the UCC as in
effect in the State of Georgia on the date hereof, are used herein as so
defined: Accession, Financial Asset, Proceeds and Security. For purposes of this
Pledge Agreement, the term "Lender" shall include any Affiliate of any Lender
which has entered into a Hedging Agreement with any Credit Party in connection
with the Loans.
2. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Pledgor Obligations (as
defined in Section 3 hereof), each Pledgor hereby pledges and assigns to the
Administrative Agent, for the benefit of the Lenders, and grants to the
Administrative Agent, for the benefit of the Lenders, a continuing security
interest in, and a right to set-off against, any and all right, title and
interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral"):
(a) Pledged Shares. (i) 100% (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding shares of
capital stock owned by such Pledgor of each Domestic Subsidiary of such
Pledgor set forth on Schedule 2(a) attached hereto and (ii) 66% of the
issued and outstanding shares of each class of capital stock or other
ownership interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) ("Voting Equity") and 100% (or, if less, the
full amount owned by such Pledgor) of the issued and outstanding shares
of each class of capital stock or other ownership interests not
entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) ("Non-Voting Equity") owned by such Pledgor of each
Material Foreign Subsidiary set forth on Schedule 2(a) attached hereto,
in each case together with the certificates (or other agreements or
instruments), if any, representing such shares, and all options and
other rights, contractual or otherwise, with respect thereto
(collectively, together with the shares of capital stock described in
Section 2(b) and 2(c) below, the "Pledged Shares"), including, but not
limited to, the following:
(y) all shares or securities representing a
dividend on any of the Pledged Shares, or representing a
distribution or return of capital upon or in respect of the
Pledged Shares, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Shares; and
(z) without affecting the obligations of the
Pledgors under any provision prohibiting such action hereunder
or under the Credit Agreement, in the event of any
consolidation or merger involving the issuer of any Pledged
Shares and in which such issuer is not the surviving
corporation, all shares of each class of the capital stock of
the successor corporation formed by or resulting from such
consolidation or merger.
(b) Additional Shares. 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of capital
stock owned by such Pledgor of any Person which hereafter becomes a
Domestic Subsidiary of such Pledgor and 66% of the Voting Equity and
100% (or, if less, the full amount owned by such Pledgor) of the
Non-Voting Equity owned by such Pledgor of any Person which hereafter
becomes a Material Foreign Subsidiary of such Pledgor, including,
without limitation, the certificates (or other agreements or
instruments) representing such shares.
(c) Other Equity Interests. Any and all other capital
stock, membership interests or other equity interests owned by such
Pledgor in any Domestic Subsidiary or any Material Foreign Subsidiary
of such Pledgor.
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(d) Accessions and Proceeds. All Accessions and Proceeds
of the foregoing, however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock to the Administrative Agent as
collateral security for the Pledgor Obligations. Upon delivery to the
Administrative Agent, such additional shares of stock shall be deemed to be part
of the Pledged Collateral of such Pledgor and shall be subject to the terms of
this Pledge Agreement whether or not Schedule 2(a) is amended to refer to such
additional shares.
3. Security for Pledgor Obligations. The security interest
created hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Pledgor Obligations"):
(a) In the case of the Borrower, the prompt
performance and observance by the Borrower of all obligations of the
Borrower under the Credit Agreement, the Notes, this Pledge Agreement
and the other Credit Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt
performance and observance by such Guarantor of all obligations of such
Guarantor under the Credit Agreement, this Pledge Agreement and the
other Credit Documents to which such Guarantor is a party, including,
without limitation, its guaranty obligations arising under Section 4 of
the Credit Agreement; and
(c) All other indebtedness, liabilities and
obligations of any kind or nature, now existing or hereafter arising,
owing from any Pledgor to any Lender or the Administrative Agent,
howsoever evidenced, created, incurred or acquired, whether primary,
secondary, direct, contingent, or joint and several, including, without
limitation, all liabilities arising under any Hedging Agreement between
any Credit Party and any Lender in connection with the Loans and all
obligations and liabilities incurred in connection with collecting and
enforcing the Pledgor Obligations.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees
that:
(a) Each Pledgor shall deliver to the Administrative
Agent (i) simultaneously with or prior to the execution and delivery of
this Pledge Agreement, all certificates representing the Pledged Shares
of such Pledgor and (ii) promptly upon the receipt thereof by or on
behalf of a Pledgor, all other certificates and instruments
constituting Pledged Collateral of a Pledgor. Prior to delivery to the
Administrative Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by
such Pledgor for the benefit of the Administrative Agent pursuant
hereto. All such certificates shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, substantially in the
form provided in Exhibit 4(a) attached hereto.
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(b) Additional Securities. If such Pledgor shall receive
by virtue of its being or having been the owner of any Pledged
Collateral, any (i) stock certificate, including without limitation,
any certificate representing a stock dividend or distribution in
connection with any increase or reduction of capital, reclassification,
merger, consolidation, sale of assets, combination of shares, stock
splits, spin-off or split-off, promissory notes or other instruments;
(ii) option or right, whether as an addition to, substitution for, or
an exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or (iv) distributions of securities in
connection with a partial or total liquidation, dissolution or
reduction of capital, capital surplus or paid-in surplus, then such
Pledgor shall receive such stock certificate, instrument, option, right
or distribution in trust for the benefit of the Administrative Agent,
shall segregate it from such Pledgor's other property and shall deliver
it forthwith to the Administrative Agent in the exact form received
together with any necessary endorsement and/or appropriate stock power
duly executed in blank, substantially in the form provided in Exhibit
4(a), to be held by the Administrative Agent as Pledged Collateral and
as further collateral security for the Pledgor Obligations.
(c) Financing Statements. Each Pledgor shall authorize
and deliver to the Administrative Agent such UCC or other applicable
financing statements as may be reasonably requested by the
Administrative Agent in order to perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to the Administrative Agent, for the benefit of the Lenders, that
so long as any of the Pledgor Obligations remain outstanding or any Credit
Document or Hedging Agreement between any Credit Party and any Lender in
connection with the Loans is in effect or any Letter of Credit shall remain
outstanding, and until all of the Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares
are duly authorized and validly issued, are fully paid and
nonassessable and are not subject to the preemptive rights of any
Person. All other shares of stock constituting Pledged Collateral will
be duly authorized and validly issued, fully paid and nonassessable and
not subject to the preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title
to the Pledged Collateral of such Pledgor and will at all times be the
legal and beneficial owner of such Pledged Collateral free and clear of
any Lien, other than Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-102 of the Uniform Commercial Code as
in effect in the State of Georgia (the "UCC") with respect to the
Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the
Administrative Agent of its rights and remedies hereunder will not
violate any law or governmental regulation or any material contractual
restriction binding on or affecting a Pledgor or any of its property.
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(d) Pledgor's Authority. No authorization, approval or
action by, and no notice or filing with any Governmental Authority or
with the issuer of any Pledged Shares is required either (i) for the
pledge made by a Pledgor or for the granting of the security interest
by a Pledgor pursuant to this Pledge Agreement (except as have already
been obtained) or (ii) for the exercise by the Administrative Agent or
the Lenders of their rights and remedies hereunder (except as may be
required by laws affecting the offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement
creates a valid security interest in favor of the Administrative Agent
for the benefit of the Lenders, in the Pledged Collateral. The taking
possession by the Administrative Agent of the certificates representing
the Pledged Shares and all other certificates and instruments
constituting Pledged Collateral will perfect and establish the first
priority of the Administrative Agent's security interest in the Pledged
Shares and, when properly perfected by filing or registration, in all
other Pledged Collateral represented by such Pledged Shares and
instruments securing the Pledgor Obligations. Except as set forth in
this Section 5(e), no action is necessary to perfect or otherwise
protect such security interest.
(f) Partnership and Membership Interests. Except as
previously disclosed to the Administrative Agent, none of the Pledged
Shares consisting of partnership or limited liability company interests
(i) is dealt in or traded on a securities exchange or in a securities
market, (ii) by its terms expressly provides that it is a security
governed by Article 8 of the UCC, (iii) is an investment company
security, (iv) is held in a securities account or (v) constitutes a
Security or a Financial Asset.
(g) No Other Shares. No Pledgor owns any shares of stock
other than as set forth on Schedule 2(a) attached hereto.
6. Covenants. Each Pledgor hereby covenants, that so long as any
of the Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement between any Credit Party and any Lender in connection with the Loans
is in effect or any Letter of Credit shall remain outstanding, and until all of
the Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and
shall cause the issuer of the Pledged Shares of such Pledgor to xxxx
its books and records) to reflect the security interest granted to the
Administrative Agent, for the benefit of the Lenders, pursuant to this
Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or
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otherwise dispose of Pledged Collateral of such Pledgor or any interest
therein, except as permitted under the Credit Agreement and the other
Credit Documents.
(c) Further Assurances. Promptly execute and deliver at
its expense all further instruments and documents and take all further
action that may be reasonably necessary and desirable or that the
Administrative Agent may reasonably request in order to (i) perfect and
protect the security interest created hereby in the Pledged Collateral
of such Pledgor (including without limitation any and all action
necessary to reasonably satisfy the Administrative Agent that the
Administrative Agent has obtained a first priority perfected security
interest in any capital stock, membership interests or other equity
interests); (ii) enable the Administrative Agent to exercise and
enforce its rights and remedies hereunder in respect of the Pledged
Collateral of such Pledgor; and (iii) otherwise effect the purposes of
this Pledge Agreement, including, without limitation and if requested
by the Administrative Agent, delivering to the Administrative Agent
irrevocable proxies in respect of the Pledged Collateral of such
Pledgor upon the occurrence of and during the continuation of an Event
of Default.
(d) Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged
Collateral of such Pledgor or enter into any agreement or allow to
exist any restriction with respect to any of the Pledged Collateral of
such Pledgor other than pursuant hereto.
(e) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by such Pledgor
with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Pledged Collateral of such Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not,
without executing and delivering, or causing to be executed and
delivered, to the Administrative Agent such agreements, documents and
instruments as the Administrative Agent may reasonably require, issue
or acquire any capital stock consisting of an interest in a partnership
or a limited liability company that (i) is dealt in or traded on a
securities exchange or in a securities market, (ii) by its terms
expressly provides that it is a security governed by Article 8 of the
UCC, (iii) is an investment company security, (iv) is held in a
securities account or (v) constitutes a Security or a Financial Asset.
(g) Authorization. Authorize the Administrative Agent to
prepare and file such financing statements (including renewal
statements), amendments and supplements or such other instruments as
the Administrative Agent may from time to time reasonably deem
necessary, appropriate or convenient in order to perfect and maintain
the security interests granted hereunder in accordance with the UCC.
7. Advances by Lenders. On failure of any Pledgor to perform any
of the covenants and agreements contained herein, the Administrative Agent may,
at its sole option and in its sole discretion, perform the same and in so doing
may expend such sums as the Administrative Agent
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may reasonably deem advisable in the performance thereof, including, without
limitation, the payment of any insurance premiums, the payment of any taxes, a
payment to obtain a release of a Lien or potential Lien, expenditures made in
defending against any adverse claim and all other expenditures which the
Administrative Agent or the Lenders may make for the protection of the security
hereof or which may be compelled to make by operation of law. All such sums and
amounts so expended shall be repayable by the Pledgors on a joint and several
basis promptly upon timely notice thereof and demand therefor, shall constitute
additional Pledgor Obligations and shall bear interest from the date said
amounts are expended at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Administrative Agent or the Lenders on behalf
of any Pledgor, and no such advance or expenditure therefor, shall relieve the
Pledgors of any default under the terms of this Pledge Agreement, the other
Credit Documents or any Hedging Agreement between any Credit Party and any
Lender in connection with the Loans. The Lenders may make any payment hereby
authorized in accordance with any xxxx, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such xxxx, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Pledgor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event which under the
Credit Agreement would constitute an Event of Default shall be an Event of
Default hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuation thereof, the Administrative Agent
and the Lenders shall have, in respect of the Pledged Collateral of any
Pledgor, in addition to the rights and remedies provided herein, in the
Credit Documents, in any Hedging Agreement between any Credit Party and
any Lender in connection with the Loans or by law, the rights and
remedies of a secured party under the UCC or any other applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an
Event of Default and during the continuation thereof, without limiting
the generality of this Section and without notice, the Administrative
Agent may, in its sole discretion, sell or otherwise dispose of or
realize upon the Pledged Collateral, or any part thereof, in one or
more parcels, at public or private sale, at any exchange or broker's
board or elsewhere, at such price or prices and on such other terms as
the Administrative Agent may deem commercially reasonable, for cash,
credit or for future delivery or otherwise in accordance with
applicable law. To the extent permitted by law, any Lender may in such
event, bid for the purchase of such securities. Each Pledgor agrees
that, to the extent notice of sale shall be required by law and has not
been waived by such Pledgor, any requirement of reasonable notice shall
be met if notice, specifying the place of any public sale or the time
after which any private sale is to be made, is personally served on or
mailed, postage prepaid, to such Pledgor, in accordance with the notice
provisions of
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Section 11.1 of the Credit Agreement at least 10 days before the time
of such sale. The Administrative Agent shall not be obligated to make
any sale of Pledged Collateral of such Pledgor regardless of notice of
sale having been given. The Administrative Agent may adjourn any public
or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of
Default and during the continuation thereof, the Pledgors recognize
that the Administrative Agent may deem it impracticable to effect a
public sale of all or any part of the Pledged Shares or any of the
securities constituting Pledged Collateral and that the Administrative
Agent may, therefore, determine to make one or more private sales of
any such securities to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such securities for
their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller
than the prices and other terms which might have been obtained at a
public sale and, notwithstanding the foregoing, agrees that such
private sale shall be deemed to have been made in a commercially
reasonable manner and that the Administrative Agent shall have no
obligation to delay sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act of 1933. Each
Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis
in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such
offer may be advertised without prior registration under the Securities
Act of 1933), or (ii) made privately in the manner described above
shall be deemed to involve a "public sale" under the UCC,
notwithstanding that such sale may not constitute a "public offering"
under the Securities Act of 1933, and the Administrative Agent may, in
such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. In addition to the
rights and remedies hereunder, upon the occurrence of an Event of
Default, the Administrative Agent may, after providing the notices
required by Sections 9-620 and 9-621 of the UCC or otherwise complying
with the requirements of applicable law of the relevant jurisdiction,
accept or retain all or any portion of the Pledged Collateral in
satisfaction of the Pledgor Obligations. Unless and until the
Administrative Agent shall have provided such notices, however, the
Administrative Agent shall not be deemed to have accepted or retained
any Pledged Collateral in satisfaction of any Pledgor Obligations for
any reason.
(e) Deficiency. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to
which the Administrative Agent or the Lenders are legally entitled, the
Pledgors shall be jointly and severally liable for the deficiency,
together with interest thereon at the default rate specified in Section
3.1 of the Credit Agreement for Revolving Loans that are Base Rate
Loans, together with the costs of collection and the reasonable fees of
any attorneys employed by the Administrative
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Agent to collect such deficiency. Any surplus remaining after the full
payment and satisfaction of the Pledgor Obligations shall be returned
to the Pledgors or to whomsoever a court of competent jurisdiction
shall determine to be entitled thereto.
10. Rights of the Administrative Agent.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, each Pledgor hereby designates and appoints
the Administrative Agent, on behalf of the Lenders, and each of its
designees or agents as attorney-in-fact of such Pledgor, irrevocably
and with power of substitution, with authority to take any or all of
the following actions upon the occurrence and during the continuance of
an Event of Default:
(i) to demand, collect, settle,
compromise, adjust and give discharges and releases concerning
the Pledged Collateral of such Pledgor, all as the
Administrative Agent may reasonably determine;
(ii) to commence and prosecute any
actions at any court for the purposes of collecting any of the
Pledged Collateral of such Pledgor and enforcing any other
right in respect thereof;
(iii) to defend, settle or compromise any
action brought and, in connection therewith, give such
discharge or release as the Administrative Agent may deem
reasonably appropriate;
(iv) to pay or discharge taxes, liens,
security interests, or other encumbrances levied or placed on
or threatened against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for
any payment under any of the Pledged Collateral to make
payment of any and all monies due and to become due thereunder
directly to the Administrative Agent or as the Administrative
Agent shall direct;
(vi) to receive payment of and receipt
for any and all monies, claims, and other amounts due and to
become due at any time in respect of or arising out of any
Pledged Collateral of such Pledgor;
(vii) to sign and endorse any drafts,
assignments, proxies, stock powers, verifications, notices and
other documents relating to the Pledged Collateral of such
Pledgor;
(viii) to settle, compromise or adjust any
suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as the
Administrative Agent may deem reasonably appropriate;
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(ix) to execute and deliver all
assignments, conveyances, statements, financing statements,
renewal financing statements, pledge agreements, affidavits,
notices and other agreements, instruments and documents that
the Administrative Agent may reasonably determine necessary in
order to perfect and maintain the security interests and liens
granted in this Pledge Agreement and in order to fully
consummate all of the transactions contemplated therein;
(x) to exchange any of the Pledged
Collateral of such Pledgor or other property upon any merger,
consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and, in connection
therewith, deposit any of the Pledged Collateral of such
Pledgor with any committee, depository, transfer agent,
registrar or other designated agency upon such terms as the
Administrative Agent may reasonably determine;
(xi) to vote for a shareholder
resolution, or to sign an instrument in writing, sanctioning
the transfer of any or all of the Pledged Shares of such
Pledgor into the name of the Administrative Agent or one or
more of the Lenders or into the name of any transferee to whom
the Pledged Shares of such Pledgor or any part thereof may be
sold pursuant to Section 9 hereof; and
(xii) to do and perform all such other
acts and things as the Administrative Agent may reasonably
deem to be necessary or proper in connection with the Pledged
Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable and in effect (i) for so long as any of the Pledgor
Obligations remain outstanding, any Credit Document or any Hedging
Agreement between any Credit Party and any Lender in connection with
the Loans is in effect or any Letter of Credit shall remain outstanding
and (ii) until all of the Commitments shall have been terminated. The
Administrative Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly
or implicitly granted to the Administrative Agent in this Pledge
Agreement, and shall not be liable for any failure to do so or any
delay in doing so. The Administrative Agent shall not be liable for any
act or omission or for any error of judgment or any mistake of fact or
law in its individual capacity or its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Administrative
Agent solely to protect, preserve and realize upon its security
interest in Pledged Collateral.
(b) Performance by the Administrative Agent of Pledgor's
Obligations. If any Pledgor fails to perform any agreement or
obligation contained herein, the Administrative Agent itself may
perform, or cause performance of, such agreement or obligation, and the
expenses of the Administrative Agent incurred in connection therewith
shall be payable by the Pledgors on a joint and several basis pursuant
to Section 26 hereof.
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(c) Assignment by the Administrative Agent. The
Administrative Agent may from time to time assign the Pledgor
Obligations and any portion thereof and/or the Pledged Collateral and
any portion thereof, and the assignee shall be entitled to all of the
rights and remedies of the Administrative Agent under this Pledge
Agreement in relation thereto.
(d) The Administrative Agent's Duty of Care. Other than
the exercise of reasonable care to assure the safe custody of the
Pledged Collateral while being held by the Administrative Agent
hereunder, the Administrative Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that
the Pledgors shall be responsible for preservation of all rights in the
Pledged Collateral of such Pledgor, and the Administrative Agent shall
be relieved of all responsibility for Pledged Collateral upon
surrendering it or tendering the surrender of it to the Pledgors. The
Administrative Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its
own property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that
the Administrative Agent shall not have responsibility for (i)
ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Pledged
Collateral, whether or not the Administrative Agent has or is deemed to
have knowledge of such matters; or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged
Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default
shall have occurred and be continuing, to the extent permitted
by law, each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such
Pledgor or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit
Agreement; and
(ii) Upon the occurrence and during the
continuance of an Event of Default, all rights of a Pledgor to
exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to paragraph (i) of
this subsection shall cease and all such rights shall
thereupon become vested in the Administrative Agent which
shall then have the sole right to exercise such voting and
other consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
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(i) So long as no Event of Default
shall have occurred and be continuing and subject to Section
4(b) hereof, each Pledgor may receive and retain any and all
dividends (other than stock dividends and other dividends
constituting Pledged Collateral which are addressed
hereinabove) or interest paid in respect of the Pledged
Collateral to the extent they are allowed under the Credit
Agreement.
(ii) Upon the occurrence and during the
continuance of an Event of Default:
(A) all rights of a Pledgor to receive
the dividends and interest payments which it would
otherwise be authorized to receive and retain
pursuant to paragraph (i) of this subsection shall
cease and all such rights shall thereupon be vested
in the Administrative Agent, which shall then have
the sole right to receive and hold as Pledged
Collateral such dividends and interest payments; and
(B) all dividends and interest payments
which are received by a Pledgor contrary to the
provisions of paragraph (A) of this subsection shall
be received in trust for the benefit of the
Administrative Agent, shall be segregated from other
property or funds of such Pledgor, and shall be
forthwith paid over to the Administrative Agent as
Pledged Collateral in the exact form received, to be
held by the Administrative Agent as Pledged
Collateral and as further collateral security for the
Pledgor Obligations.
(g) Release of Pledged Collateral. The Administrative
Agent may release any of the Pledged Collateral from this Pledge
Agreement or may substitute any of the Pledged Collateral for other
Pledged Collateral without altering, varying or diminishing in any way
the force, effect, lien, pledge or security interest of this Pledge
Agreement as to any Pledged Collateral not expressly released or
substituted, and this Pledge Agreement shall continue as a first
priority lien on all Pledged Collateral not expressly released or
substituted.
11. Rights of Required Lenders. All rights of the Administrative
Agent hereunder, if not exercised by the Administrative Agent, may be exercised
by the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Administrative Agent or any of the Lenders in cash or its equivalent, will be
applied in reduction of the Pledgor Obligations in the order set forth in
Section 3.15(b) of the Credit Agreement, and each Pledgor irrevocably waives the
right to direct the application of such payments and proceeds and acknowledges
and agrees that the Administrative Agent shall have the continuing and exclusive
right to apply and reapply any and all such payments and proceeds in the
Administrative Agent's sole discretion, notwithstanding any entry to the
contrary upon any of its books and records.
12
13. Costs of Counsel. At all times hereafter, the Pledgors agree
to promptly pay upon demand any and all reasonable costs and expenses of (a) the
Administrative Agent or the Lenders, as required under Section 11.5 of the
Credit Agreement and (b) of the Administrative Agent as reasonably necessary to
protect the Pledged Collateral or to exercise any rights or remedies under this
Pledge Agreement or with respect to any Pledged Collateral. All of the foregoing
costs and expenses shall constitute Pledgor Obligations hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement
in every respect and shall remain in full force and effect so long as
any of the Pledgor Obligations remain outstanding or any Credit
Document or Hedging Agreement between any Credit Party and any Lender
in connection with the Loans is in effect or any Letter of Credit shall
remain outstanding, and until all of the Commitments thereunder shall
have terminated (other than any obligations with respect to the
indemnities and the representations and warranties set forth in the
Credit Documents). Upon such payment and termination, this Pledge
Agreement shall be automatically terminated and the Administrative
Agent and the Lenders shall, upon the request and at the expense of the
Pledgors, forthwith promptly release all of its liens and security
interests hereunder and shall execute and deliver all UCC termination
statements and/or other documents reasonably requested by the Pledgors
evidencing such termination. Notwithstanding the foregoing all releases
and indemnities provided hereunder shall survive termination of this
Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective
or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Pledgor Obligations is
rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar
law, all as though such payment had not been made; provided that in the
event payment of all or any part of the Pledgor Obligations is
rescinded or must be restored or returned, all reasonable costs and
expenses (including without limitation any reasonable legal fees and
disbursements) incurred by the Administrative Agent or any Lender in
defending and enforcing such reinstatement shall be deemed to be
included as a part of the Pledgor Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and
the provisions hereof may not be amended, waived, modified, changed, discharged
or terminated except as set forth in Section 11.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Administrative Agent and the Lenders hereunder, to the
benefit of the Administrative Agent and the Lenders and their successors and
permitted assigns; provided, however, that none of the Pledgors may assign its
rights or delegate its duties hereunder without the prior written consent of
each Lender or the Required Lenders, as
13
required by the Credit Agreement. To the fullest extent permitted by law, each
Pledgor hereby releases the Administrative Agent and each Lender, and its
successors and assigns, from any liability for any act or omission relating to
this Pledge Agreement or the Collateral, except as set forth in Section 10
hereof and except for any liability arising from the gross negligence or willful
misconduct of the Administrative Agent, or such Lender, or its officers,
employees or agents.
17. Notices. All notices required or permitted to be given under
this Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA. Any
legal action or proceeding with respect to this Security Agreement may
be brought in the courts of the State of Georgia, or of the United
States for the Northern District of Georgia, Atlanta Division, and, by
execution and delivery of this Security Agreement, each Pledgor hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Pledgor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 11.1 of
the Credit Agreement, such service to become effective 3 Business Days
after such mailing. Nothing herein shall affect the right of the
Administrative Agent to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against
any Pledgor in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Pledge Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY
14
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
22. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents
and any Hedging Agreement between any Credit Party and any Lender in connection
with the Loans represent the entire agreement of the parties hereto and thereto,
and supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents, any Hedging Agreement between any Credit Party and any Lender in
connection with the Loans or the transactions contemplated herein and therein.
24. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and any Hedging Agreement between any Credit Party and
any Lender in connection with the Loans, the delivery of the Notes and the
making of the Loans and the issuance of the Letters of Credit under the Credit
Agreement.
25. Other Security. To the extent that any of the Pledgor
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, real and other personal property
owned by a Pledgor), or by a guarantee, endorsement or property of any other
Person, then the Administrative Agent and the Lenders shall have the right to
proceed against such other property, guarantee or endorsement upon the
occurrence of any Event of Default, and the Administrative Agent and the Lenders
have the right, in their sole discretion, to determine which rights, security,
liens, security interests or remedies the Administrative Agent and the Lenders
shall at any time pursue, relinquish, subordinate, modify or take with respect
thereto, without in any way modifying or affecting any of them or any of the
Administrative Agent's and the Lenders' rights or the Pledgor Obligations under
this Pledge Agreement, under any other of the Credit Documents or under any
Hedging Agreement between any Credit Party and any Lender in connection with the
Loans.
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
Lenders under the Credit Agreement, for the mutual benefit, directly and
indirectly, of each of the Pledgors and in consideration of the undertakings of
each of the Pledgors to accept joint and several liability for the obligations
of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other
15
Pledgors with respect to the payment and performance of all of the Pledgor
Obligations arising under this Pledge Agreement, the other Credit Documents and
any Hedging Agreement between any Credit Party and any Lender in connection with
the Loans, it being the intention of the parties hereto that all the Pledgor
Obligations shall be the joint and several obligations of each of the Pledgors
without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the obligations of a
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers), then the obligations of a
Guarantor under the Credit Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligation subject to
avoidance under applicable law (whether federal or state and including, without
limitation, Section 548 of the Bankruptcy Code).
[remainder of page intentionally left blank]
16
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: THE PROFIT RECOVERY GROUP USA, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
GUARANTORS: THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRGFS, INC.,
PRGLS, INC.,
PRGRS, INC.,
each a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance
PRG ACQUISITION, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance
GUARANTORS: THE PROFIT RECOVERY GROUP U.K., INC.,
THE PROFIT RECOVERY GROUP ASIA, INC.,
THE PROFIT RECOVERY GROUP CANADA, INC.,
THE PROFIT RECOVERY GROUP NEW ZEALAND, INC.,
THE PROFIT RECOVERY GROUP NETHERLANDS, INC.,
THE PROFIT RECOVERY GROUP BELGIUM, INC.,
THE PROFIT RECOVERY GROUP MEXICO, INC.,
THE PROFIT RECOVERY GROUP FRANCE, INC.,
THE PROFIT RECOVERY GROUP AUSTRALIA, INC.,
THE PROFIT RECOVERY GROUP GERMANY, INC.,
PRG INTERNATIONAL, INC.,
THE PROFIT RECOVERY GROUP SWITZERLAND, INC.,
THE PROFIT RECOVERY GROUP SOUTH AFRICA, INC.,
THE PROFIT RECOVERY GROUP SPAIN, INC.,
THE PROFIT RECOVERY GROUP ITALY, INC.,
THE PROFIT RECOVERY GROUP GREECE, INC.,
THE PROFIT RECOVERY GROUP PORTUGAL, INC.,
PAYMENT TECHNOLOGIES, INC.,
THE PROFIT RECOVERY GROUP COSTA RICA, INC.,
each a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRG HOLDING CO. (FRANCE) NO. 1 LLC,
PRG HOLDING CO. (FRANCE) NO. 2 LLC,
each a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRG USA, INC.,
PRG, INC.,
each a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
Accepted and Agreed to as of the date first above written:
BANK OF AMERICA, N.A.,
in its capacity as the Administrative Agent
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------
Title: Senior Vice President
----------------------------------
Schedule 2(a)
to
Pledge Agreement
dated as of December 31, 2001
in favor of Bank of America, N.A.
as Administrative Agent
PLEDGED STOCK
PLEDGOR: THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ ------ ------ ---------
Payment Technologies, Inc. 100 1 100
The Profit Recovery Group 500 11 100
Asia, Inc.
The Profit Recovery Group 100 1 100
Australia, Inc.
The Profit Recovery Group 100 2 100
Belgium, Inc.
The Profit Recovery Group 500 11 100
Canada, Inc.
The Profit Recovery Group 100 2 000
Xxxxx Xxxx, Inc.
The Profit Recovery Group 500 11 100
France, Inc.
The Profit Recovery Group 100 1 100
Germany, Inc.
The Profit Recovery Group 100 2 100
Greece, Inc.
The Profit Recovery Group 100 1 100
Italy, Inc.
The Profit Recovery Group 1,000 16 100
Mexico, Inc.
The Profit Recovery Group 100 1 100
Netherlands, Inc.
The Profit Recovery Group 100 1 100
New Zealand, Inc.
The Profit Recovery Group 100 2 100
Porhigal, Inc.
Pledgor: THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. (continued)
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ ------ ------ ---------
The Xxxxx Recovery Group 100 1 000
Xxxxx Xxxxxx, Inc.
The Profit Recovery Group 100 2 100
Spain, Inc.
The Profit Recovery Group 100 1 100
Switzerland, Inc.
The Profit Recovery Group 500 15 100
UK, Inc.
The Xxxxx Recovery Group 5,740,000 B40 100
USA, Inc.
PRG International, Inc. 100 1 100
PRG USA, Inc. 100 1 100
PRG, Inc. 100 1 100
PLEDGOR: THE PROFIT RECOVERY GROUP USA, INC.
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ ------ ------ ---------
PRGRS, Inc. 1,000 1 100
PLEDGOR: PRGRS, INC.
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ ------ ------ ---------
PRGLS, Inc. 1,000 1 100
PLEDGOR: PRG INTERNATIONAL, INC.
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ ------ ------ ---------
PRGFS, Inc. 1,000 1 100
Exhibit 4(a)
to
Pledge Agreement
dated as of December 31, 2001
in favor of Bank of America, N.A.
as Administrative Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to
the following shares of capital stock of , a corporation:
----------- -----------
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
---------------,
a corporation
--------------
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
