Exhibit II
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as of August 16,
2002, is made between Xxxx Strategic Partners II, L.P., a Delaware limited
partnership ("Strategic II,"), and each of the entities or individuals listed on
Exhibit A hereto (each a "Seller," and collectively the "Sellers").
WHEREAS, the Sellers are the direct beneficial owners of 13,069,350
shares of common stock, no par value (the "Common Stock"), of PRG-Xxxxxxx
International, Inc. ("PRG").
WHEREAS, Strategic II desires to purchase, and the Sellers desire to
sell, 4,338,507 shares of Common Stock owned by the Sellers (such shares of
Common Stock, the "Shares"), upon the terms set forth herein, at a price of
$8.72 per share.
WHEREAS, certain capitalized terms used herein are defined in Section
5.1 hereof.
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter set forth, intending to be legally bound, the parties hereby agree
as follows:
ARTICLE I.
PURCHASE AND SALE OF THE SHARES; THE CLOSING; REGISTRATION RIGHTS
1.1. Purchase and Sale of Shares. Upon the terms set forth herein, at
the Closing (as defined in Section 1.2) the Sellers shall sell, assign, transfer
and deliver to Strategic II, and Strategic II shall accept and purchase from the
Sellers the Shares, free and clear of all Encumbrances, for $8.72 per Share in
the amount of $37,831,781.
1.2. Closing. Upon the terms contained in this Agreement, the closing
of the purchase and sale of the Shares (the "Closing") shall take place at the
offices of Xxxx Strategic Partners II, L.P., 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, at 2:00 P.M., Pacific time, on August 27, 2002
or at such other time and place as the Sellers and Strategic II shall mutually
agree upon. The date on which the Closing takes place is referred to as the
"Closing Date." This Agreement and the obligations of the parties under it shall
terminate in the event that the Closing has not taken place by 5:00 P.M. on
December 31, 2002, provided, no such right of termination shall be exercisable
by a party who has not complied with or has breached the covenants in this
Agreement.
1.3. Strategic II Closing Conditions. The obligations of Strategic II
to participate in the Closing and make the deliveries specified in Section 1.6
are subject to the satisfaction or waiver of the following conditions at or
prior to the Closing: (a) the representations and warranties of the Sellers in
Article II shall be true and correct on and as of the Closing Date with the same
effect as though such representations and warranties were made as of the Closing
Date, (b) Strategic II shall have received (i) a fully executed Registration
Rights Agreement, between PRG and Strategic II (the "Strategic II Registration
Rights Agreement"), in the form attached as Exhibit B hereto, (ii) a fully
executed Investor Rights Agreement, between PRG, Strategic II, and Berkshire
(US) Fund V Limited Partnership, Berkshire (US) Fund VI Limited Partnership and
Berkshire Investors LLC or their affiliates ("Berkshire Funds") (the "Investor
Rights Agreement"), in the form attached as Exhibit C hereto, (iii) a fully
executed Secured Promissory Note and Pledge Agreement, between one of the
Sellers and Strategic II (the "Note"), in the form attached as Exhibit D hereto,
(iv) a fully executed Subordination Agreement among PRG, Strategic II and one of
the Sellers, in the form attached as Exhibit E hereto (the "Subordination
Agreement") (v) a fully executed Option Agreement in favor of PRG on shares of
common stock of PRG held by one of the Sellers and pledged pursuant to the Note
(the "Company Call Option"), in the form attached as Exhibit F hereto, (vi) a
fully executed Purchase Agreement relating to certain shares of Common Stock to
be purchased hereunder by Strategic II in the form attached as Exhibit G hereto,
(vii) a fully executed waiver or amendment of the Shareholder Agreement, entered
into as of January 24, 2002, by and among Profit Recovery Group International,
Inc., Xxxxxx Xxxxxxx & Associates International, Inc., the Sellers, Xxxx X. Xxxx
and Xxxx X. Xxxx (the "Shareholder Agreement"), (viii), a fully executed
Management Rights Letter addressed from PRG to Strategic II (the "Management
Rights Letter") in the form attached as Exhibit H hereto, and (ix) evidence of
the approval of the Strategic II Registration Rights Agreement, the Investor
Rights Agreement, the Company Call Option, the Subordination Agreement and the
Management Rights Letter by PRG's Board of Directors or a committee thereof; (x)
a fully executed Standstill Agreement between PRG and Strategic II (the
"Standstill Agreement") in the form attached hereto as Exhibit J, and (xi)
evidence of adoption or effectiveness of the amendment to the Company's
Shareholder Protection Rights Agreement, dated as of August 9, 2000, between the
Company and Wachovia Bank National Association f/k/a/ First Union Nation Bank as
rights agent, in the form attached hereto as Exhibit K ("Shareholder Protection
Rights Agreement") and (c) the Sellers shall have made all deliveries required
under Section 1.5. Assuming that the Sellers are in compliance with the terms
and provisions of this Agreement, Strategic II hereby agrees to execute the
documents set forth in this Section 1.3, provided, that they are each in the
form of the applicable attached exhibit. The covenant in the preceding sentence
may not be waived by Sellers without the express written consent of PRG. The
Closing hereunder shall occur concurrently with the Closing of a sale of at
least 4,338,507 shares of Common Stock by Sellers to a third party.
1.4. Sellers' Closing Conditions.
The obligations of the Sellers to participate in the Closing and
make the deliveries specified in Section 1.5 are subject to the satisfaction or
waiver of the following conditions at or prior to the Closing: (a) the
representations and warranties of Strategic II in Article III shall be true and
correct on and as of the Closing Date with the same effect as though such
representations and warranties were made as of the Closing Date, (b) the Sellers
shall have received (i) the fully executed waiver or amendment of the
Shareholder Agreement on or prior to the Closing, (ii) the fully executed
Company Call Option, (iii) the fully executed Note and (iv) the fully executed
Subordination Agreement, and (c) Strategic II shall have made all deliveries
required under Section 1.6. Assuming that Strategic II is in compliance with the
terms and provisions of this Agreement, the applicable Seller hereby agrees to
execute the documents set forth in this Section 1.4. The covenant in the
preceding sentence may not be waived by Strategic II without the express written
consent of PRG. The Closing hereunder shall occur concurrently with the Closing
of a sale of at least 4,338,507 shares of Common Stock by Sellers to a third
party.
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1.5 Deliveries by the Sellers. At the Closing, the Sellers are
delivering to Strategic II the following:
(a) stock certificates representing the Shares, accompanied by
stock powers duly endorsed in blank or accompanied by duly executed
instruments of transfer, with all necessary transfer tax and other
revenue stamps affixed thereto;
(b) a receipt for the payment provided for by Section 1.1
hereof; and
(c) an opinion of Sellers' counsel in the form of Exhibit I
hereto that the sale of Shares to Strategic II hereunder is made in
compliance with the Securities Act or an available exemption therefrom.
1.6. Deliveries by Strategic II. At the Closing, Strategic II is
delivering to the Sellers by wire transfer to the accounts of the Sellers
previously provided in writing to Strategic II the payment provided for in
Section 1.1 hereof.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller represents and warrants to Strategic II as follows:
2.1. Authorization; Binding Obligation. This Agreement has been duly
and validly executed and delivered by the Sellers and, assuming due
authorization, execution and delivery by Strategic II, constitutes a legal,
valid and binding obligation of the Sellers, enforceable against them in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other federal or state laws of general applicability relating to or affecting
creditors' or secured parties' rights and remedies generally and general
principles of equity, whether considered in an action at law or in equity. The
Sellers have the legal capacity and all requisite power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby and to perform its obligations hereunder. Such execution, delivery and
consummation has been duly and validly authorized by all necessary action on the
part of the Sellers, and no other corporate or other proceedings on the part of
the Sellers are necessary to authorize such execution, delivery and
consummation.
2.2. Title to the Shares. At the Closing, the Sellers will be the
record and beneficial owner of, and had good and marketable title to, the Shares
free and clear of all Encumbrances. The Shares owned by the Sellers are validly
issued, duly authorized and free of any preemptive rights; there are no voting
trusts or other agreements or understandings to which the Sellers are a party
with respect to the voting of the Shares. The Shares are not subject to any
restrictions on transferability other than those imposed by the Securities Act
and applicable state securities laws. There are no options, warrants, calls,
commitments or rights of any character to purchase or otherwise acquire Shares
from the Sellers pursuant to which the Sellers may be obligated to sell,
transfer or otherwise dispose of any of the Shares. At the Closing, Strategic II
is acquiring good and marketable title to the Shares, free and clear of all
Encumbrances.
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2.3. Consents and Approvals; No Violation. None of the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, or compliance with any of the provisions hereof, will (i) require any
consent, waiver, approval, authorization or permit of, or filing with or
notification to, or any other action by, any Governmental Authority by the
Sellers, other than necessary filings on Schedule 13D and Form 4 with the
Commission, and those consents, waivers, and approvals obtained under the
Shareholder Agreement, (ii) violate the certificate of incorporation, bylaws or
trust document of the Sellers, or any Law of any Governmental Authority which
may be applicable to the Sellers, or by which any of the Sellers' activities,
properties or assets (including, without limitation, the Shares) may be bound or
affected or (iii) violate, breach, or conflict with, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration or any obligation to pay or
result in the imposition of any Encumbrance upon any of the property of the
Sellers (including, without limitation, the Shares)) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Encumbrance,
contract, agreement, Permit, Order, or other instrument or obligation to which
the Sellers are a party or by which any of the Sellers' activities, properties
or assets (including, without limitation, the Shares) may be bound or affected,
other than the Shareholder Agreement and the instruments by which the Xxxxxx
Xxxx Xxxxxxx HHS (2001) GST Trust, the Xxxxxx Xxxx Xxxxxxx LVS (2001) GST Trust,
the Xxxxxx Xxxxxxx Xxxxxxx HHS (2001) GST Trust, and the Xxxxxx Xxxxxxx Romaner
LVS (2001) GST Trust obtained the purchase money debt used to acquire their
Shares.
2.4. Brokers and Finders. No agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement.
2.5. Termination of Certain Agreements. Each contract or agreement
between the Sellers and PRG or any other party which is binding upon the Sellers
with respect to the Shares has been terminated so far as it relates to the
Shares and is not and will not be binding upon Strategic II or the Shares after
the Closing. There are no other contracts, agreements or understandings, written
or oral, between the Sellers and PRG or any other party with respect to the
Shares.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF STRATEGIC II
Strategic II represents and warrants to the Sellers as follows:
3.1. Authorization; Binding Obligation. Strategic II has all requisite
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and to perform its obligations hereunder. The
execution and delivery of this Agreement by Strategic II and the consummation of
the transactions contemplated hereby by Strategic II have been duly and validly
authorized by Strategic II and no other proceedings on the part of Strategic II
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been validly executed and delivered by
Strategic II and, assuming due authorization, execution and delivery by the
Sellers, constitutes the legal, valid and binding obligation of Strategic II,
enforceable against Strategic II in accordance with
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its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other federal or state
laws of general applicability relating to or affecting creditors' or secured
parties' rights and remedies generally and general principles of equity, whether
considered in an action at law or in equity.
3.2. Consents and Approvals; No Violation. None of the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, or compliance with any of the provisions hereof, will (i) require any
consent, waiver, approval, authorization or permit of, or filing with or
notification to, or any other action by, any Governmental Authority by Strategic
II, other than a filing on Schedule 13D with the Commission and the expiration
of the applicable waiting period or required approval under the Xxxx Xxxxx
Xxxxxx Act, (ii) violate the limited partnership agreement of Strategic II, or
any Law of any Governmental Authority which may be applicable to Strategic II,
or by which any of Strategic II's businesses, properties or assets may be bound
or affected or (iii) violate, breach, or conflict with, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration or any obligation to pay or
result in the imposition of any Encumbrance upon any of the property of
Strategic II) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, Encumbrance, contract, agreement, Permit, Order, or
other instrument or obligation to which Strategic II is a party or by which any
of Strategic II's businesses, properties or assets may be bound or affected.
3.3. Securities Act. Strategic II is acquiring the Shares solely for
its own account for investment purposes and not with a view to, or for sale in
connection with, any distribution or other disposition thereof. Notwithstanding
the foregoing, Strategic II may assign their rights and transfer Shares under
this Agreement pursuant to Section 4.10 hereof. Strategic II acknowledges that
as of the Closing Date the Shares have not been registered under the Securities
Act and are "restricted securities" within the meaning of Rule 144(a)(3) and may
not be sold publicly under Rule 144 until Strategic II meets the holding period
requirements of Rule 144(d). Strategic II did not borrow any of the funds to be
used as payment for the Shares, or, to the extent that such funds were borrowed,
Strategic II has sufficient other means to make required payments on any such
indebtedness without being forced to sell the Shares prematurely to meet its
obligations. Strategic II has sufficient financial means to hold the Shares for
investment.
3.4. Brokers and Finders. No agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement.
3.5. Investment Experience and Accreditation. Strategic II hereby
represents that it is an "accredited investor," as defined in Rule 501(a) of
Regulation D under the Securities Act, and is experienced in evaluating the
transactions contemplated hereby. Strategic II has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its prospective investment in the Shares and has the ability to bear
the economic risks of its prospective investment and can afford the complete
loss of such investment.
3.6. Disclosure of Information. Strategic II has received a copy of
PRG's (i) definitive proxy statement Dated Xxxxx 00, 0000, (xx) PRG's report on
Form 10-K filed with the Commission
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on Xxxxx 00, 0000, (xxx) PRG's reports on Form 10-Q filed with the Commission on
May 14, 2002 and August 9, 2002, (iv) PRG's Reports on Form 8-K filed with the
Commission on January 2, 2002, January 17, 2002, February 5, 2002, February 20,
2002, April 3, 2002, May 2, 2002 and August 1, 2002, respectively, and (v) PRG's
draft registration statement on Form S-3/A received August 15, 2002, and to be
subsequently filed with the Commission (collectively, the "Offering Documents")
and has acknowledged that it has had access to such financial and other
information, and has been afforded the opportunity to ask questions of PRG and
receive answers thereto, as it deemed necessary in connection with its decision
to purchase the Shares.
3.7. Restrictions. Unless as otherwise permitted under any other
contract between PRG and Strategic II, Strategic II agrees that if it should
resell or otherwise transfer the Shares it will do so only:
(a) to PRG, any affiliate thereof, or as specified in Section
4.10 hereof;
(b) to an accredited investor, including to any affiliate of
Strategic II, that, prior to the transfer, furnishes to PRG a signed
letter containing representations and agreements relating to the
restrictions on transfer of the Shares reasonably acceptable to PRG
and, if PRG requests, an opinion of counsel reasonably acceptable to
PRG to the effect that the transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act;
(c) pursuant to another available exemption from registration
provided under the Securities Act, if available, provided that the
representations and agreements and opinion described in (b) above are
delivered, if requested by PRG; or
(d) pursuant to a registration statement which has been declared
effective under the Securities Act and which continues to be effective
at the time of such transfer.
Strategic II agrees that it will give each person to whom it transfers
such Shares notice of any restrictions on transfer of such Shares, if then
applicable. Strategic II acknowledges that PRG will rely upon the truth and
accuracy of the foregoing acknowledgements, representations, warranties and
agreements and agrees that if any of the acknowledgements, representations,
warranties and agreements deemed to have been made by it by its purchase of the
Shares are no longer accurate, it shall promptly notify PRG. Strategic II
acknowledges that none of PRG, the Sellers or any person representing PRG or the
Sellers has made any representation to it with respect to PRG or the offering or
sale of any Shares, other than the information contained in the Offering
Documents, which Offering Documents have been delivered to it and upon which it
is making its investment decision with respect to the Shares.
3.8. Restrictive Legend. Strategic II acknowledges that each
certificate representing a Share will bear a Legend substantially to the
following effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER
JURISDICTION, IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SUCH LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES
WITHIN THE MEANING OF RULE
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144(A)(3) AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED, NOR WILL AN ASSIGNEE OR
ENDORSEE HEREOF BE RECOGNIZED AS AN OWNER OF THE SHARES BY THE ISSUER, UNLESS:
(I) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO THE SHARES AND THE TRANSFER
SHALL THEN BE IN EFFECT, OR (II) IN THE OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER, THE SHARES ARE TRANSFERRED IN A TRANSACTION WHICH IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH LAWS."
ARTICLE IV.
MISCELLANEOUS
4.1. Survival of Representation and Warranties. All representations,
warranties and covenants made by any party contained in this Agreement, or any
certificate delivered pursuant hereto or made in writing to, by or on behalf of
Strategic II or the Sellers, as the case may be, in connection with the
transactions contemplated by this Agreement shall survive the Closing.
4.2. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
4.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
(a) If to Strategic II, to:
Xxxx Strategic Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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(b) If to the Sellers, to:
HSAT, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
With a copy to:
Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000 (direct dial)
Telecopy: (000) 000-0000 (direct fax)
Attention: Xxxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
4.4. Expenses. Each party hereto shall be solely responsible for all
expenses incurred by it or on its behalf in connection with the preparation and
execution of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, the fees and expenses of its
counsel, accountants, brokers, finders, financial advisors and other
representatives.
4.5. Specific Performance. Without limiting the rights of each party hereto
to pursue all other legal and equitable rights available to such party for the
other parties' failure to perform their obligations under this Agreement, the
parties hereto acknowledge and agree that the remedy at law for any failure to
perform their obligations hereunder would be inadequate and that each of them,
respectively, shall be entitled to specific performance, injunctive relief or
other equitable remedies in the event of any such failure.
4.6. Descriptive Headings; Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. References in this Agreement to
Sections mean Sections of this Agreement, unless otherwise indicated. The term
"person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, a governmental entity or an unincorporated organization.
The parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law,
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regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
4.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
4.8. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
4.9. Entire Agreement; Third-Party Beneficiaries. This Agreement (a)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and (b) except for PRG and Strategic II's permitted assignees, is not intended
to confer upon any person other than the parties hereto and their permitted
assigns any rights or remedies hereunder.
4.10. Assignment. No party hereto may assign its rights or obligations
under this Agreement, provided, that
(a) No party hereto may assign its rights or obligations under this
Agreement.
(b) Up to 45,872 of the Shares may be acquired by Strategic II on
behalf of a third party and subsequently transferred to such third party
after the Closing. Notwithstanding the provisions of Section 4.10(a), if
such third party is duly authorized to acquire such Shares prior to the
Closing, Strategic II may assign its right under this Agreement to purchase
up to an aggregate of 45,872 Shares to such third party. Sellers agree to
use their best efforts to assist and cooperate with Strategic II in order
to assign or transfer its rights to purchase such Shares, including
entering into separate purchase or other agreements with such third party,
including representations and warranties by such third party materially
consistent with the representations and warranties contained in Article III
of this Agreement.
(c) Notwithstanding the foregoing, Strategic II may assign its rights
to purchase Shares hereunder to any one or more of its affiliates,
including Xxxx Strategic Partners II GMBH & Co. KG, and may assign and
transfer any Shares so purchased to any one or more of such affiliates.
4.11. Further Assurances. The Sellers and Strategic II agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or desirable in order to implement
the transactions contemplated by this Agreement.
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ARTICLE V.
DEFINITIONS
5.1. Definitions. Unless otherwise defined herein, for purposes of this
Agreement, the following terms shall have the meanings set forth below (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Encumbrance" shall mean any lien, encumbrance, proxy, voting trust
arrangement, pledge, security interest, collateral security agreement, financing
statement (and similar notices) filed with any Governmental Authority, claim
(including any claim as defined in the Code), charge, equities, mortgage,
pledge, objection, title defect, option, restrictive covenant or restriction on
transfer of any nature whatsoever, and the interest of the lessor in any
property subject to a capital lease, except for restrictions or transferability
imposed by the Securities Act.
"Governmental Authority" shall mean any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency, department,
commission, board, bureau, court, tribunal, body, administrative or regulatory
authority or instrumentality of any such government or political subdivision.
"Law" shall mean any law (including common law), rule, regulation,
restriction (including zoning), code, statute, ordinance, order, writ,
injunction, judgment, decree or other requirement of a Governmental Authority.
"Order" shall mean any order, judgment, injunction, award, decree, writ,
rule or similar action of any Governmental Authority.
"Permit" shall mean any franchise, license, certificate, approval,
identification number, registration, permit, authorization, order or approval
of, and any required registration with, any Governmental Authority.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on
the day and year first above written.
XXXX STRATEGIC PARTNERS II, L.P.
By Xxxx Strategic XX XX, L.L.C., its
General Partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Member
HHS CHARITABLE LEAD ANNUITY TRUST
By: /s/ Xxxxxx Xxxxxxx Romaner
---------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxx
Title: Co-Trustee
By: /s/ Xxxxxx Xxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxx Xxxxxxx
Title: Co-Trustee
By: /s/ Xxxxxx Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx Xxxxxxx
Title: Co-Trustee
LVS CHARITABLE LEAD ANNUITY TRUST
By: /s/ Xxxxxx Xxxxxxx Romaner
---------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxx
Title: Co-Trustee
By: /s/ Xxxxxx Xxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxx Xxxxxxx
Title: Co-Trustee
By: /s/ Xxxxxx Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx Xxxxxxx
Title: Co-Trustee
XXXXXX XXXX XXXXXXX HHS (2001) GST TRUST
By: /s/ Xxxxxx Xxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxx Xxxxxxx
Title: Trustee
XXXXXX XXXX XXXXXXX LVS (2001) GST TRUST
By: /s/ Xxxxxx Xxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxx Xxxxxxx
Title: Trustee
XXXXXX XXXXXXX ROMANER HHS (2001) GST TRUST
By: /s/ Xxxxxx Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx Romaner
Title: Trustee
XXXXXX XXXXXXX XXXXXXX LVS (2001) GST TRUST
By: /s/ Xxxxxx Xxxxxxx Romaner
---------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxx
Title: Trustee
XXXXXXX PRG LIQUIDATING INVESTMENTS,
LTD., a Texas limited Partnership
By: Xxxxxxx PRG Liquidating Investments
GP,
L.L.C., a Texas limited liability company
By: /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Manager/President
THE XXXXXXX XXXXXX XXXXXXX TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
THE XXXXXXXXX XXXXXXX TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
THE XXXXXX XXXX XXXXXXX TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
XXXXXX X. XXXXXXX HHS (2001) GST TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
XXXXXX X. XXXXXXX LVS (2001) GST TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
-5-
THE XXXXXX X. XXXXXXX IRREVOCABLE TRUST
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
XXXXXX X. XXXXXXX
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
XXXXXX X. XXXXXXX
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
XXXXXX XXXXXXX
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
EXHIBIT A
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Number of Shares sold to
NAME Xxxx Strategic Partners II, L.P.
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HHS Charitable Lead Annuity Trust 317,410 shares
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LVS Charitable Lead Annuity Trust 317,409 shares
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Xxxxxx Xxxx Xxxxxxx HHS (2001) GST Trust 288,016 shares
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Xxxxxx Xxxx Xxxxxxx LVS (2001) GST Trust 288,016 shares
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Xxxxxx Xxxxxxx Xxxxxxx HHS (2001) GST Trust 288,016 shares
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Xxxxxx Xxxxxxx Romaner LVS (2001) GST Trust 288,016 shares
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Xxxxxx Xxxxxxx 649,707 shares
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The Xxxxxx X. Xxxxxxx Irrevocable Trust 1,585,001 shares
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Xxxxxx Xxxxxxx HHS (2001) GST Trust 3,451 shares
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Xxxxxx Xxxxxxx LVS (2001) GST Trust 3,450 shares
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The Xxxxxx X. Xxxxxxx Trust 10,194 shares
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The Xxxxxxxxx Xxxxxxx Trust 10,193 shares
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The Xxxxxxx X. Xxxxxxx Trust 10,194 shares
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Xxxxxxx PRG Liquidating Investments, Ltd. 279,058 shares
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Xxxxxx Xxxxxxx 376 shares
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TOTAL Shares 4,338,507 shares
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TOTAL Consideration $37,831,781
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EXHIBIT B
Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the
27th day of August, 2002, by and between PRG-Xxxxxxx International, Inc., a
Georgia corporation ("PRGX") and Xxxx Strategic Partners II, L.P. and its
affiliates that are signatories hereto ("Holder," and with any permitted
transferees thereof, "Holders").
RECITALS:
WHEREAS, concurrently herewith, the Holders, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx
and certain affiliates thereof ("Xxxxxxx Sellers") have entered into a Stock
Purchase Agreement dated August 16, 2002 (the "Xxxxxxx Stock Purchase
Agreement") pursuant to which the Holders have purchased 4,338,507 shares of
PRGX common stock from Xxxxxxx Sellers;
WHEREAS, concurrently herewith, Xxxx Strategic Partners II, L.P. (including
permitted transferees, each a "Xxxx Fund") and an affiliate of the Xxxxxxx
Sellers have entered into promissory notes, dated as of August 27, 2002,
pursuant to which the Xxxx Funds have agreed to lend the Xxxxxxx Sellers an
aggregate of $12,610,584, secured by shares of PRGX common stock held by the
Xxxxxxx Sellers (the "Xxxx Notes");
WHEREAS, as of the date hereof, Xxxx and its affiliates (i) own 4,683,943
shares of PRGX common stock, including 1,603,643 shares purchased from certain
affiliates of the Xxxxxxx Sellers and Xxxxxxx and Xxxxxxxx Xxxxxx (such
1,603,643 shares being referred to herein as the "Purchased Shares"), and (ii)
hold $40,000,000 of the PRGX Convertible Subordinated Notes due 2006
("Convertible Notes") which are convertible into shares of PRGX common stock.
WHEREAS, in order to facilitate the sales to Holder, PRGX has agreed to
xxxxx Xxxxxx the rights contained herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein and of the mutual benefits to be
derived herefrom, and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I
DEMAND REGISTRATION
(a) If PRGX shall receive, at any time on or after January 24, 2004
with respect to any Registrable Securities, or at any time on or after the date
hereof with respect to the Purchased Securities, a written request from the
Holder(s) of Registrable Securities (as hereinafter defined) that PRGX file a
firm commitment, underwritten registration statement pursuant to the Securities
Act of 1933, as amended (the "Securities Act") on
Form S-1 or a successor form thereto covering the registration of at least $5
million in value of the Registrable Securities (a "Demand Registration"), then
PRGX shall use its reasonable best efforts to effect the registration under the
Securities Act on Form S-1 of all Registrable Securities which such Holder(s)
have requested to be registered. Within ten (10) business days after receipt of
any such request, PRGX shall give written notice of such requested registration
to all other Holders and the Berkshire Holders (as defined below), of
Registrable Securities, if any, in accordance with Section 9.1 hereof, and shall
use its reasonable best efforts to include in such registration all Registrable
Securities with respect to which PRGX has received written requests for
inclusion therein within fifteen (15) days after the mailing of PRGX's notice;
provided, however, that PRGX shall be required to file no more than three (3)
registration statements pursuant to the provisions of this Article I(a),
regardless of whether or not any Holder chooses not to include securities in any
such registration statement. The term "Registrable Securities" means (i) the
4,338,507 shares of PRGX common stock acquired by the Holders pursuant to the
Xxxxxxx Stock Purchase Agreement, (ii) the shares of PRGX common stock
transferred to the Xxxx Funds (or their permitted transferees pursuant to
Article VII(i) or (ii) hereof) upon exercise of the put/call provisions of the
Xxxx Notes, if any, (iii) any other shares of PRGX common stock currently owned
by the Holders, including but not limited to all shares of PRGX common stock
issuable upon conversion of the Convertible Notes, (iv) all shares of PRGX
common stock hereafter acquired by the Holders (or their permitted transferees
pursuant to Article VII(i) or (ii) hereof) and (v) any other securities of PRGX
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for, or in replacement of, the Registrable Securities or
resulting from a subdivision of the outstanding shares of Registrable Securities
into a greater number of shares (by reclassification, stock split or otherwise);
provided, however, that the foregoing definition shall exclude in all cases any
Registrable Securities sold by a person in a transaction in which his or her
rights under this Agreement are not assigned in conformity with the provisions
of Article VII hereof (shares acquired by Holders pursuant to Article I(a)(i) or
(ii) above and any shares issued to Holders in respect of those shares pursuant
to Article I(a)(v) above are referred to herein as the "Xxxx Designated
Shares"). Notwithstanding the foregoing, any particular shares of PRGX common
stock or other securities shall be treated as Registrable Securities only if and
so long as they have not been (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (B)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale. The term "Registrable Securities"
shall not include securities which are eligible for immediate sale under Rule
144(k) or Rule 145 under the Securities Act without the application of volume
restrictions. The foregoing notwithstanding, PRGX shall not be obligated to
cause any registration pursuant to this Article I(a) or Article I(c) to become
effective prior to one hundred eighty (180) days following the effective date of
a PRGX- or stockholder- initiated registration (other than a registration
effected solely to qualify an employee benefit plan or to effect a business
combination pursuant to Rule 145) or such longer period not to exceed one
hundred eighty (180) days as any underwriter thereof shall require, provided
that PRGX shall use its best efforts to achieve such
2
effectiveness promptly following the end of such period and PRGX shall have
complied with Article II hereof with respect to such registration to the extent
applicable;
(b) Each Demand Registration must be an underwritten, full commitment
registration. The underwriter will be selected by PRGX, subject to the approval
of a majority in interest of the Holders including Registrable Securities in the
requested registration, such approval not to be unreasonably withheld or
delayed. The right of any Holder to include its Registrable Securities in the
Demand Registration shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Article I, if the underwriter advises the Holders in writing that marketing
factors require a limitation on the number of shares to be underwritten, then,
subject to the provisions of Article II with respect to Stockholder
Registrations (as defined below), the number of shares of Registrable Securities
that may be included in the offering shall be allocated among all Holders
thereof in proportion (as nearly as practicable) to the amount of Registrable
Securities of PRGX originally requested to be included by each Holder in the
underwriting; provided, however, that the number of shares of Registrable
Securities to be included in such offering shall not be reduced unless all other
securities other than securities included in such registration by Berkshire
Holders pursuant to Article II, if any, are first entirely excluded from the
offering; and provided further, that, if a Holder has to reduce the amount of
Registrable Securities to be included in the offering, the Holders of
Registrable Securities initially requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn and Holders
pay all Registration Expenses (as hereinafter defined) in connection with such
registration, such Demand Registration shall not count as one of the permitted
Demand Registrations hereunder.
(c) Subject to Article I(a), if PRGX shall receive, at any time on or
after January 24, 2004, a written request from the Holder(s) of Registrable
Securities that PRGX effect a registration on Form S-3 (or on any successor form
to Form S-3 regardless of its designation), PRGX will promptly give written
notice of the proposed registration to all other Holders and the Berkshire
Holders and use its reasonable best efforts to effect, as soon as practicable,
such registration (and to keep such registration effective for up to 45 days),
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within fifteen (15) days after receipt of such written notice from PRGX;
provided, however, that PRGX shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Article I(c) if: (1)
Form S-3 (or any successor form to Form S-3 regardless of its designation) is
not available for such offering by the Holders; or (2) the aggregate gross
proceeds (before deduction of underwriting discounts and commissions) of the
Registrable Securities specified in such request is not at least $2,000,000; and
provided, further, that Holders may not exercise a demand right pursuant to this
Article I(c) or Article I(a) within 180 days after the effective date of any
other registration statement filed pursuant to this
3
Agreement or that certain Registration Rights and Lockup Agreement of even date
herewith among PRGX and Berkshire Fund V, Limited Partnership and Berkshire
Investors, LLC (the "August Registration Rights Agreement").
(d) Notwithstanding the foregoing, if PRGX shall furnish to Holders
requesting a registration statement pursuant to this Article I, in accordance
with Section 9.1 hereof, a certificate signed by the General Counsel, Chief
Financial Officer or Chief Executive Officer of PRGX stating that, in his good
faith judgment after consultation with outside legal counsel, it would require
the disclosure of material, nonpublic information and could have a material
adverse effect on the business or operations of PRGX and its stockholders for
such registration statement to be filed pursuant to this Article I or to be
amended or supplemented in accordance with Article III(f) and it is therefore
essential to defer the filing of such registration statement or amendment or
supplement, PRGX shall have the right to defer such filing for a period of not
more than 60 days after receipt of the request of the initiating Holders in the
case of an initial filing, or not more than 60 days after the date of delivery
of such certificate in the case of an amendment or supplement; provided,
however, PRGX may only exercise this twice in any 12-month period and provided
further, however, that if a Demand Registration is delayed hereunder, the
Holders of Registrable Securities initially requesting such Demand Registration
shall be entitled to withdraw such request and, if such request is withdrawn,
such Demand Registration shall not count as one of the permitted Demand
Registrations hereunder and PRGX shall pay Registration Expenses in connection
with such registration.
ARTICLE II
PIGGYBACK REGISTRATION
If there is a PRGX-initiated registration (a "PRGX Registration") or a
registration initiated by the holders of rights under the August Registration
Rights Agreement (the "Berkshire Holders"), or any other stockholder of the
Company with contractual rights to initiate such registration (each a
"Stockholder Registration") (other than a registration effected pursuant to
Article I(a) hereof prior to January 24, 2004 or a registration effected solely
to register an employee benefit or dividend reinvestment plan, to effect a
business combination pursuant to Rule 145 or conduct an exchange offer), PRGX
will give each Holder written notice of such registration. Upon the written
request of each Holder given within ten (10) days after mailing of such notice
by PRGX in accordance with Section 9.1, PRGX shall, subject to the provisions
below regarding underwritten registrations, cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has
requested to be registered. In connection with any offering involving an
underwriting of shares of PRGX's capital stock, PRGX shall not be required under
this Article II to include any of the Holders' securities in such underwriting
unless they accept the terms of the underwriting as agreed upon between PRGX and
the underwriters selected by it, and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success
of the offering. If the total amount of securities, including Registrable
Securities, to be included in such offering exceeds the amount of securities to
be sold that the underwriters determine in their sole discretion is compatible
with the success of the offering, then PRGX
4
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering of the
securities so included. Securities shall be excluded from a PRGX Registration in
the order set forth below:
First, the number of shares requested to be registered for the account of
persons, if any, whose rights to have their shares included in such
registration are subordinate to the rights granted pursuant to this
Agreement shall be reduced as required;
Second, the number of shares eligible to be registered for the account of
the Holders and the number of shares eligible to be registered by the
Berkshire Holders, if any, shall be reduced, as required, so Holders of
registration rights granted pursuant to this Agreement shall be entitled to
sell (i) if such Registrable Securities requested to be included by such
Holders include only Xxxx Designated Shares and any shares requested to be
included by Berkshire Holders pursuant to the August Registration Rights
Agreement include only Berkshire Designated Shares (as defined in the
August Registration Rights Agreement), up to 50% of the total Registrable
Securities allocated for sale in the offering by the Holders and the
Berkshire Holders, in the aggregate, and the Berkshire Holders shall be
entitled to sell up to 50% of the total Registrable Securities allocated
for sale in the offering by Holders and the Berkshire Holders, in the
aggregate, or (ii) if such Registrable Securities requested to be included
by such Holders include any Registrable Securities other than Xxxx
Designated Shares or if any shares requested to be included by Berkshire
Holders pursuant to the August Registration Rights Agreement include shares
other than Berkshire Designated Shares, the Holders shall be entitled to
sell up to 60% of the total Registrable Securities allocated for sale in
the offering by the Holders and the Berkshire Holders, in the aggregate,
and the Berkshire Holders shall be entitled to sell up to 40% of the total
Registrable Securities allocated for sale in the offering by Holders and
the Berkshire Holders, in the aggregate; provided, however, that, to the
extent that the number of shares the Holders or the Berkshire Holders, in
the aggregate, are entitled to register pursuant to this sentence exceeds
the number that such holders actually seek to register, then such excess
shall be added to the number of shares that the Holders or the Berkshire
Holders, respectively, shall be entitled to register;
Third, those shares to be included in satisfaction of any superior
contractual registration rights, if any;
Last, those shares to be included for the account of the Company, if any.
Securities shall be excluded from a Stockholder Registration (other than a
Demand Registration with respect to Purchased Shares prior to January 24, 2004)
in the order set forth below:
5
First, those shares to be included for the account of the Company, if any;
Second, the number of shares requested to be registered for the account of
persons, if any, whose rights to have their shares included in such
registration are subordinate to the rights granted pursuant to this
Agreement shall be reduced as required;
Third, the number of shares eligible to be registered for the account of
the Holders and the number of shares eligible to be registered by the
Berkshire Holders shall be reduced, as required, so the Holders of
registration rights granted pursuant to this Agreement shall be entitled to
sell (i) if such Registrable Securities requested to be included by such
Holders include only Xxxx Designated Shares and any shares requested to be
included by Berkshire Holders pursuant to the August Registration Rights
Agreement include only Berkshire Designated Shares, up to 50% of the total
Registrable Securities allocated for sale in the offering by the Holders
and the Berkshire Holders, in the aggregate, and the Berkshire Holders
shall be entitled to sell up to 50% of the total Registrable Securities
allocated for sale in the offering by Holders and Berkshire Holders, in the
aggregate, or (ii) if such Registrable Securities requested to be included
by such Holders include any Registrable Securities other than Xxxx
Designated Shares or if any shares requested to be included by Berkshire
Holders pursuant to the August Registration Rights Agreement include shares
other than Berkshire Designated Shares, the Holders shall be entitled to
sell up to 60% of the total Registrable Securities allocated for sale in
the offering by the Holders and the Berkshire Holders, in the aggregate,
and the Berkshire Holders shall be entitled to sell up to 40% of the total
Registrable Securities allocated for sale in the offering by Holders and
the Berkshire Holders, in the aggregate; provided, however, that, to the
extent that the number of shares the Holders or the Berkshire Holders, in
the aggregate, are entitled to register pursuant to this sentence exceeds
the number that such holders actually seek to register, then such excess
shall be added to the number of shares that the Holders or the Berkshire
Holders, respectively, shall be entitled to register;
Last, those shares to be included in satisfaction of any superior
contractual registration rights, if any.
For the avoidance of doubt, with respect to a Demand Registration with
respect to Purchased Shares prior to January 24, 2004, all other securities
to be included in such registration shall be reduced in their entirety
prior to any reduction in the number of Purchased Shares requested to be
included by the Holders.
6
ARTICLE III
REGISTRATION PROCEDURES
Whenever the Holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, PRGX will use
its reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto PRGX will as expeditiously as practicable:
(a) Prepare and file with the Securities and Exchange Commission ("SEC") a
registration statement with respect to such Registrable Securities on Form S-1
or Form S-3 (as appropriate) or a successor form if PRGX is eligible to use such
form, or on such substitute form reasonably chosen by PRGX if it is not so
eligible, as soon as practicable, but no later than sixty (60) days from receipt
of the request, and use its reasonable best efforts to cause such registration
statement to become effective as soon as practicable after filing; provided,
however, that PRGX shall have no obligation to include securities in a
registration statement pursuant to Article II if that registration statement is
withdrawn for any reason; and
(b) Notify each Holder of the effectiveness of each registration statement
filed hereunder and prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until that date when all Registrable Securities covered by such registration
statement have been sold (but not before the expiration of the applicable
prospectus delivery period) or such shorter period as PRGX may notify the
Holders in the case of a Registration under Article II, and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement, and furnish, without charge, to each
seller of Registrable Securities, in accordance with Section 9.1 hereof, copies
of all correspondence between PRGX and the SEC relating to such registration;
and
(c) Furnish, without charge, to each seller of Registrable Securities and
each underwriter, if any, in accordance with Section 9.1 hereof, such number of
copies of such registration statement (including all exhibits), each amendment
and supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus) in conformity with the requirements of
the Securities Act and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller; and
(d) Use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
within the United States as the sellers or any managing underwriter shall
request, to keep such registration or qualification in effect for so long as the
registration statement is in effect and do any and all other acts
7
and things which may be reasonably necessary or advisable to enable such sellers
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such sellers (provided that PRGX will not be required to
qualify generally to do business or file any general consent to service of
process in any jurisdiction where it would not otherwise be required to qualify
or file but for this subparagraph); and
(e) Use its best efforts to obtain all other approvals, covenants,
exemptions or authorizations from such governmental agencies or authorities as
may be necessary to enable the sellers of such Registrable Securities to
consummate the disposition of such Registrable Securities; and
(f) Notify each seller of such Registrable Securities promptly at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing, and subject to Article I(c) hereof, prepare and
file as soon as practicable with the SEC, but in no event later than thirty (30)
days after awareness of such event, and promptly notify each Holder of
Registrable Securities of the filing of, a supplement to such prospectus or an
amendment to the registration statement so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made and in the case of an
amendment to the registration statement, use reasonable best efforts to cause it
to become effective as soon as possible; and
(g) Promptly notify each Holder selling Registrable Securities covered by
such registration statement and each managing underwriter, if any: (i) when the
registration statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any state securities authority for amendments
or supplements to the registration statement or the prospectus related thereto
or for additional information; and (iii) of the receipt by PRGX of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose; and
(h) Upon receipt of such confidentiality agreements as PRGX may reasonably
request, make reasonably available for inspection by any seller of such
Registrable Securities covered by such registration statement, by any
underwriter, if any, participating in any disposition to be effected pursuant to
such registration statement and by any attorney, accountant or other agent
retained by any such seller or any such underwriter, all pertinent financial and
other records, pertinent corporate documents and properties of PRGX, and supply
all information reasonably requested by any such seller, underwriter,
8
attorney, accountant or agent in connection with such registration statement in
order to permit them to exercise their due diligence responsibility; and
(i) Promptly prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) and which contains
information regarding the selling Holders, provide copies of such document to
counsel for the selling Holders of Registrable Securities and to each managing
underwriter, and make such changes in such document concerning the selling
Holders prior to the filing thereof as counsel for such selling Holders or
underwriters may reasonably request; and
(j) Furnish to each Holder participating in the offering and the managing
underwriter, without charge, at least one signed copy of the registration
statement and any post-effective amendments thereto (which may be a photocopy or
conformed copy of such signed document), excluding all documents incorporated
therein by reference and all exhibits; and
(k) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Agreement, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Agreement, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective: (i) a copy of an opinion or
opinions, dated such date, of the counsel representing PRGX for the purposes of
such registration, in form and substance as is customarily given by company
counsel to the underwriters in an underwritten public offering, addressed to the
underwriters, if any, and (ii) a letter dated such date, from the independent
certified public accountant of PRGX, in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public officering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities;
(l) Use its best efforts to cooperate with the Holders requesting
registration of Registrable Securities pursuant to this Agreement in the
disposition of the Registrable Securities covered by such registration
statement, including without limitation in the case of an underwritten offering,
causing key executives of the Company and its subsidiaries to participate under
the direction of the managing underwriter in a "road show" scheduled by such
managing underwriter in such locations and of such duration as in the judgment
of such managing underwriter are appropriate for such underwritten offering;
(m) Cooperate with the selling Holders of Registrable Securities and the
managing underwriter, if any, to facilitate the timely preparation and delivery
of certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be issued in
such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in
9
accordance with the written instructions of the selling holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities; and
(n) In the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or the initiation of any proceeding
for such purpose, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any common stock included
in such registration statement for sale in any jurisdiction, PRGX will promptly
notify each seller of such order, and subject to Article I(c) hereof, will use
its reasonable best efforts to promptly obtain the withdrawal of such order; and
(o) If the offering is to be underwritten, enter into any necessary
agreements in connection therewith (including an underwriting agreement
containing customary representations, warranties and agreements); and
(p) Cause all such Registrable Securities registered pursuant hereto to be
listed on each securities exchange or other quotation service on which similar
securities issued by PRGX are then listed; and
(q) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant hereto and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.
ARTICLE IV
REGISTRATION EXPENSES
As used herein, "Registration Expenses" shall mean all expenses incurred in
connection with all registrations, (other than underwriters' commissions and
discounts) filings or qualifications pursuant hereto, whether or not such
registration becomes effective or remains effective for the applicable period
contemplated hereby, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees and fees and disbursements of
counsel for PRGX, excluding the fees and expenses of counsel for the Holders.
All Registration Expenses shall be borne by PRGX.
ARTICLE V
UNDERTAKINGS OF THE HOLDERS OF REGISTRABLE SECURITIES
5.1 Suspension of Sales. If any Registrable Securities are included in a
registration statement pursuant to the terms of this Agreement, the Holder
thereof will not until further notice from PRGX delivered in accordance with
Section 9.1 hereof that a registration statement or prospectus is corrected or
updated in accordance with Article
10
III(f) effect sales thereof after receipt of written notice from PRGX pursuant
to Article III(f) and delivered in accordance with Section 9.1 hereof of the
occurrence of an event specified therein in order to permit PRGX to correct or
update the registration statement or prospectus in accordance with Article
III(f), provided that the obligations of PRGX with respect to maintaining any
registration statement current and effective shall be extended by a period of
days equal to the period said suspension is in effect.
5.2 Compliance. If any Registrable Securities are being registered in any
registration pursuant to this Agreement, the Holder thereof will comply with all
anti-stabilization, manipulation and similar provisions of Section 10 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any rules
promulgated thereunder by the SEC.
5.3 Termination of Effectiveness. At the end of the period during which
PRGX is obligated to keep a registration statement current and effective as
described herein, each Holder of Registrable Securities included in the
registration statement shall discontinue sales thereof pursuant to such
registration statement, unless such Holder has received written notice from PRGX
delivered in accordance with Section 9.1 hereof of its intention to continue the
effectiveness of such registration statement with respect to any of such
securities which remain unsold.
5.4 Furnish Information. It shall be a condition precedent to the
obligations of PRGX to take any action pursuant to this Agreement with respect
to the Registrable Securities of any selling Holder that such Holder shall
furnish to PRGX such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such securities as shall
reasonably be required to effect the registration of such Holder's Registrable
Securities or as shall otherwise reasonably be requested by PRGX, which request
shall be delivered in accordance with Section 9.1 hereof; provided, however,
that this shall not affect the rights of, or the obligations of PRGX under this
Agreement to, any other Holder. Notwithstanding the foregoing, PRGX shall have
no obligation with respect to any registration requested pursuant to Article I
of this Agreement if, as a result of the application of the preceding sentence,
the Registrable Securities of any Holder are excluded from any Demand
Registration and the value of the Registrable Securities to be included in the
registration is therefore reduced below $5 million; provided, however, that in
such event, the remaining Holders requesting such Demand Registration shall be
entitled to (i) add additional securities so that the Registrable Securities to
be included in the registration are increased to $5 million; or (ii) withdraw
such request and, if such request is withdrawn and the Holders pay all
Registration Expenses in connection with such registration, such Demand
Registration shall not count as the permitted Demand Registration hereunder.
PRGX shall only be required to pay the Registration Expenses of such withdrawn
registration if the Holders inform PRGX that such registration shall count as
its one Demand Registration hereunder.
11
ARTICLE VI
UNDERWRITTEN REGISTRATIONS
If requested by the underwriters for a Demand Registration, PRGX shall
enter into a customary underwriting agreement with the underwriters. Such
underwriting agreement shall be reasonably satisfactory in form and substance to
the Holders and shall contain such representations and warranties by, and such
other agreements on the part of, PRGX and such other terms as are generally
included in the underwriting agreements of nationally recognized underwriters,
including, without limitation, indemnities and contribution agreements; provided
however, that PRGX shall not be required to make any representations or
warranties with respect to written information provided by a selling Holder for
inclusion in the registration statement. Such underwriting agreement shall also
contain such representations and warranties by the participating Holders as are
generally included in agreements of that type, including, without limitation,
indemnities and contribution agreements, customary in transactions of that type
(but excluding any representations or warranties with respect to the Company).
Any provisions in any such underwriting agreement with respect to contribution
and indemnity shall supersede and render null and void the indemnification and
contribution provisions of this Agreement with respect to the securities
contained in the underwriting.
ARTICLE VII
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of a Holder of Registrable Securities set forth in this
Agreement (including a Holder who received the Registrable Securities by an
assignment permitted pursuant to this Agreement), including the right to cause
PRGX to register Registrable Securities and pay the Registration Expenses to the
extent set forth in Article IV, may be assigned by such Holder, but only to the
extent that Registrable Securities are concurrently transferred to the assignee,
only to (i) its successors-in-interest by merger, consolidation and similar
transaction, (ii) an Affiliate of such Holder or its successor-in-interest which
acquires Registrable Securities or one non-affiliate of such Holder, in an
aggregate amount not to exceed 45,872 Registrable Securities, (iii) pursuant to
the Purchase Agreement of even date herewith between Xxxx Strategic Partners II,
LP and Berkshire Fund V, Limited Partnership, or (iv) a sale of at least
1,000,000 Registrable Securities to a third party, provided in each instance the
assignee agrees to be bound by the terms of this Agreement. For purposes of this
Agreement, the term "Affiliate" means any person that, directly or indirectly,
controls or is controlled by or is under common control with the Holder or its
successor-in-interest, as applicable. For purposes of this definition, control
of a person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such person, whether by contract or
otherwise and, in any event and without limiting the foregoing, any person
owning fifty percent (50%) or more of the
12
voting securities of another person shall be deemed to control that person.
Notwithstanding the foregoing, other than as provided in parts (i), (ii) and
(iii) of the first sentence, in no event may less than 20% of all Registrable
Securities be transferred at any time.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by PRGX. PRGX shall indemnify and hold harmless, with
respect to any registration statement filed by it, to the fullest extent
permitted by law, each Holder of Registrable Securities covered by such
registration statement, its officers, directors, employees, agents, affiliates
and general or limited partners (and the directors, officers, employees,
affiliates and agents thereof) and each other person, if any, who controls or is
alleged to control such Holder within the meaning of the Securities Act
(collectively, the "Holder Indemnified Parties") against all losses, claims,
damages, liabilities and expenses, joint or several (including reasonable fees
of counsel and any amounts paid in settlement effected with PRGX's consent,
which consent shall not be unreasonably delayed or withheld), to which any such
Holder Indemnified Party may become subject under the Securities Act, the
Exchange Act, any other federal law, any state or common law, any rule or
regulation promulgated thereunder or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions or proceedings, whether commenced
or threatened, in respect thereof) are caused solely by (i) any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement in which such Registrable Securities were included as contemplated
hereby or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary, final or summary prospectus, together with the
documents incorporated by reference therein (as amended or supplemented if PRGX
shall have filed with the SEC any amendment thereof or supplement thereto), or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or (iii)
any violation by PRGX of the Securities Act, the Exchange Act, any other federal
law, any state or common law, or any rule or regulation promulgated thereunder
in connection with any such registration; and in each such case, PRGX shall
reimburse each such Holder Indemnified Party for any reasonable legal or any
other expenses incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability, expense, action or
proceeding, provided, however, that PRGX shall not be liable to any such Holder
Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability or expense (or action or proceeding, whether commenced or
threatened, in respect thereof) arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or amendment thereof or supplement thereto or in any
such preliminary, final or summary prospectus in reliance upon written
information furnished to
13
PRGX by or on behalf of any such Holder Indemnified Party expressly for use in
the preparation thereof, and provided further, that PRGX shall not be liable to
any such Holder Indemnified Party with respect to any preliminary prospectus to
the extent that any such loss, claim, damage, liability or expense of such
Holder Indemnified Party results from the fact that such Holder Indemnified
Party sold Registrable Securities to a person to whom there was not sent or
given, at or before the written confirmation of such sale, a copy of the
prospectus (excluding documents incorporated by reference) or of the prospectus
as then amended or supplemented (excluding documents incorporated by reference)
if PRGX has previously furnished copies thereof to such Holder Indemnified Party
in compliance with this Agreement and the loss, claim, damage, liability or
expense of such Holder Indemnified Party results from an untrue statement or
omission of a material fact contained in such preliminary prospectus which was
corrected in the prospectus (or the prospectus as then amended or supplemented)
and such corrected document provides a defense to the claim upon which such loss
claim, damage, liability or expense was based. Such indemnity and reimbursement
of expenses and obligations shall remain in full force and effect regardless of
any investigation made by or on behalf of the Holder Indemnified Parties and
shall survive the transfer of such securities by such Holder Indemnified
Parties. In connection with an underwritten offering, PRGX shall indemnify such
underwriters, their officers and directors and each person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Holders of Registrable
Securities.
8.2 Indemnification by Holders. Each Holder of Registrable Securities
participating in any registration hereunder shall severally, and not jointly,
indemnify and hold harmless, to the fullest extent permitted by law, PRGX, its
directors, officers, employees, affiliates and agents, and each Person who
controls or is alleged to control PRGX (within the meaning of the Securities
Act) (collectively, "PRGX Indemnified Parties") against all losses, claims,
damages, liabilities and expenses, joint or several (including reasonable fees
of counsel and any amounts paid in settlement effected with such Holder's
consent, which consent shall not be unreasonably delayed or withheld) to which
any PRGX Indemnified Parties may become subject under the Securities Act, the
Exchange Act, any other federal law, any state or common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof) are caused by
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement in which such Holder's Registrable
Securities were included or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary, final or summary prospectus, together with
the documents incorporated by reference therein (as amended or supplemented if
PRGX shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (in the cases described in clauses (i) and (ii) of this Section 8.2,
such indemnification by such Holder of Registrable Securities shall apply only
to the
14
extent that such untrue statement or omission is contained in any information
furnished in writing by such Holder expressly for use in the preparation of the
documents described in such clauses (i) and (ii)), (iii) any violation by such
Holder of the Securities Act, the Exchange Act, any other federal law, any state
or common law, or any rule or regulation promulgated thereunder applicable to
such Holder and relating to action of or inaction by such Holder in connection
with any such registration other than in connection with any such violation
relating to an untrue statement or omission of a material fact relating to
information provided by PRGX contained in a preliminary prospectus or prospectus
hereunder and (iv) with respect to any preliminary prospectus delivered in a
non-underwritten offering, the fact that such Holder sold Registrable Securities
to a person to whom there was not sent or given, at or before the written
confirmation of such sale, a copy of the prospectus (excluding the documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if PRGX has previously furnished
copies thereof to such Holder in compliance with this Agreement and the loss,
claim, damage, liability or expense of such PRGX Indemnified Party results from
an untrue statement or omission of a material fact relating to information
provided by such Holder contained in such preliminary prospectus which was
corrected in the prospectus (or the prospectus as amended or supplemented) and
such corrected document provides a defense to the claim upon which such loss
claim, damage, liability or expense was based. Such indemnity obligation shall
remain in full force and effect regardless of any investigation made by or on
behalf of PRGX Indemnified Parties (except as provided above) and shall survive
the transfer of such securities by such Holder.
8.3 Conduct of Indemnification Proceedings. Promptly after receipt by an
indemnified party under Section 8.1 or 8.2 above of written notice delivered in
accordance with Section 9.1 hereof of the commencement of any action, suit,
proceeding, investigation or threat thereof with respect to which a claim for
indemnification may be made pursuant to this Section, such indemnified party
shall, if a claim in respect thereto is to be made against an indemnifying
party, give written notice delivered in accordance with Section 9.1 hereof to
the indemnifying party of the threat or commencement thereof, provided, however,
that the failure to so notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party except to the extent
that the indemnifying party is actually prejudiced by such failure to give
notice in accordance with Section 9.1 hereof. If any such claim or action
referred to under Section 8.1 or 8.2 above is brought against any indemnified
party and it then notifies the indemnifying party of the threat or commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. After notice delivered in accordance with Section 9.1
hereof from the indemnifying party to such indemnified party of its election so
to assume the defense of any such claim or action, the indemnifying party shall
not be liable to such indemnified party under this Article VIII for any legal
expenses of counsel or any other expenses (other than reasonable costs of
investigation) subsequently incurred by such indemnified party in connection
with the defense thereof, unless the indemnifying party has failed to assume the
defense of such claim or action or to employ counsel reasonably satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party
shall have the
15
right to retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to differing
interests between such indemnified party and any other party represented by such
counsel in such action. The indemnifying party shall not be required to
indemnify the indemnified party with respect to any amounts paid in settlement
of any action, proceeding or investigation entered into without the written
consent of the indemnifying party. No indemnifying party shall consent to the
entry of any judgment or enter into any settlement without the consent of the
indemnified party unless (i) such judgment or settlement does not impose any
obligation or liability upon the indemnified party other than the execution,
delivery or approval thereof, and (ii) such judgment or settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a full release and discharge from all liability in respect
of such claim and a full release of all persons that may be entitled to or
obligated to provide indemnification or contribution under this Article.
The obligations of PRGX and the Holders of Registrable Securities under
this Article VIII shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement and the termination
of this Agreement.
8.4 Contribution. If the indemnification provided for in this Article VIII
is unavailable to or insufficient to hold harmless an indemnified party under
Section 8.1 or 8.2, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages, liabilities or expenses (or actions or proceedings in respect thereof)
referred to in Section 8.1 or 8.2 in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and the
indemnified party on the other in connection with the statements, omissions,
actions or inactions which resulted in such losses, claims, damages, liabilities
or expenses. The relative fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or the indemnified party, any action or inaction by any such
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, omission, action or inaction.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions or proceedings in respect
thereof) pursuant to this Section 8.4 shall be deemed to include any reasonable
legal or other expenses incurred by such indemnified party in connection with
investigating or defending any such action or claim (which shall be limited as
provided in Section 8.3 if the indemnifying party has assumed the defense of any
such action in accordance with the provisions thereof) which is the subject of
this Section 8.4. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
Section 8.4 of written notice delivered in accordance with Section 9.1 hereof of
the commencement of any action, suit, proceeding, investigation or threat
thereof with respect to which a claim for contribution may be made against an
indemnifying party under this Section 8.4, such
16
indemnified party shall, if a claim for contribution in respect thereto is to be
made against an indemnifying party, give written notice in accordance with
Section 9.1 hereof to the indemnifying party of the commencement thereof (if the
notice specified in Section 8.3 has not been given with respect to such action),
provided, however, that the failure to so notify the indemnifying party shall
not relieve it from any obligation to provide contribution which it may have to
any indemnified party under this Section 8.4, except to the extent that the
indemnifying party is actually prejudiced by the failure to give notice in
accordance with Section 9.1 hereof. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 8.4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of equitable considerations referred to in this Section
8.4.
The provisions of this Section 8.4 shall be in addition to any other rights
to indemnification or contribution which any indemnified party may have pursuant
to law or contract, shall remain in full force and effect regardless of any
investigation made by or on behalf of any indemnified party, and shall survive
the transfer of securities by any such party; provided that any indemnification
of similar scope entered into pursuant to an underwriting agreement in
connection with an offering contemplated herein shall supersede this Article
VIII.
8.5 Limitation on Liability of Holders of Registrable Securities. The
liability of each Holder in respect of any indemnification or contribution
obligation of such Holder arising under this Article 8 shall not in any event
exceed an amount equal to the net proceeds to such Holder (after deduction of
all underwriters' discounts and commissions and all other expenses paid by such
Holder in connection with the registration in question) from the disposition of
the Registrable Securities disposed of by such Holder pursuant to such
registration.
8.6 Indemnification and Contribution of Underwriters. In connection with
any underwritten offering contemplated by this Agreement which includes
Registrable Securities, PRGX and all sellers of Registrable Securities included
in any registration statement shall agree to customary provisions for
indemnification and contribution (consistent with the other provisions of this
Article VIII) in respect of losses, claims, damages, liabilities and expenses of
the underwriters of such offering.
17
ARTICLE IX
MISCELLANEOUS
9.1 Notices. All notices, requests and other communications hereunder
shall be in writing and will be deemed to have been duly given and received by
any party hereto and any permitted assignees thereof (i) when personally
delivered to the appropriate Notice Person (as defined below), (ii) when sent by
telefax to the appropriate Notice Person at the number listed below for such
Notice Person, (iii) two (2) business days after the day on which the same has
been delivered prepaid to an international courier service for delivery to the
appropriate Notice Person, or (iv) five (5) business days after the deposit in
the United States mail, registered or certified, return receipt requested,
postage prepaid, for delivery to the appropriate Notice Person, in each case
addressed to the following addresses:
(i) if to PRGX: PRG-Xxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx XxXxxxxx, Xx., Esq.
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
copy to: Xxxxxx Xxxxxx Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to any Xxxx Fund, to Xxxx Capital Partners, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
18
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
PRGX or any Holder (collectively, the "Notice Persons") from time to time may
change its or his or her address, telefax number or other information for the
purpose of notices to the specified parties by giving notice specifying such
change to the other Notice Persons.
9.2 Assignment. Subject to and without limiting the provisions of Article
VII hereof, neither this Agreement nor any right, interest or obligation
hereunder may be assigned by any party hereto without the prior written consent
of the other parties hereto and any attempt to do so will be void. Subject to
the preceding sentence, this Agreement is binding upon, inures to the benefit
of, and is enforceable by the parties hereto and their respective successors and
permitted assigns.
9.3 Waiver. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion.
9.4 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
9.5 Remedies. Each party hereto will be entitled to enforce any right
granted to such party by any provision of this Agreement specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
9.6 Entire Agreement. This Agreement supersedes all prior discussions and
agreements among the parties hereto with respect to the subject matter hereof
and contains the sole and entire agreement among the parties hereto with respect
to the subject matter hereof.
9.7 Captions. The captions used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
19
9.8 Exhibits and Schedules. All exhibits and schedules, if any, referred
to in this Agreement, all attachments to such exhibits or schedules, and any
other attachment to this Agreement are hereby incorporated by reference into
this Agreement and hereby are made a part of this Agreement as if set out in
full herein.
9.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
9.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
9.11 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.12 No Third Party Beneficiary. This Agreement shall not confer any rights
or remedies upon any person other than the parties hereto and their respective
successors and permitted assigns.
9.13 Termination of Previous Registration Rights. That certain Amended and
Restated Registration Rights Agreement with the Company dated as of March 2002
and all rights of Holders under Section 4.2 of that certain Note Purchase
Agreement between the Company and Xxxx Strategic Partners II, L.P. dated as of
December 3, 2001 are hereby terminated in their entirety and neither the Holders
nor any affiliates or transferees thereof shall have any further rights
thereunder.
IN WITNESS WHEREOF, the parties have executed 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
------------------------------
[signatures continued on following page]
20
XXXX CAPITAL PARTNERS, L.P.
By: Xxxxxxx X. Xxxx & Associates, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Partner, General
Counsel and Secretary
XXXXXXX X. XXXX & ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Partner, General
Counsel and Secretary
XXXX STRATEGIC GP, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Member
XXXX STRATEGIC XX XX, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Member
21
XXXX STRATEGIC PARTNERS, L.P.
By: XXXX STRATEGIC GP, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx, Member
XXXX STRATEGIC PARTNERS II, L.P.
By: XXXX STRATEGIC XX XX, LLC,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx, Member
XXXXXXX X. XXXX
/s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxx, Attorney-in-Fact
THE COMMON FUND FOR NONPROFIT
ORGANIZATIONS MULTI-STRATEGY EQUITY FUND
By: XXXX CAPITAL PARTNERS, LP,
Its Investment Advisor
By: XXXXXXX X. XXXX & ASSOCIATES, INC.,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Partner and General Counsel
22
BK CAPITAL PARTNERS IV, X.X.
XXXXXXX CAPITAL PARTNERS, X.X.
XXXXXXX CAPITAL PARTNERS II, X.X.
XXXXXXX CAPITAL PARTNERS III, L.P.
By: XXXX CAPITAL PARTNERS, L.P.,
its general partner
By: Xxxxxxx X. Xxxx & Associates, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx, Partner, General Counsel
and Secretary
CARPENTERS PENSION TRUST FOR SOUTHERN
CALIFORNIA
UNITED BROTHERHOOD OF CARPENTERS
PENSION PLAN
XXXXXXX CAPITAL FUND (CAYMAN), LTD.
By: XXXX CAPITAL PARTNERS, L.P.,
its investment advisor
By: Xxxxxxx X. Xxxx & Associates, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx, Partner, General Counsel
and Secretary
23
EXHIBIT C
Investor Rights Agreement
INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT (the "Agreement"), made as of August 27, 2002
by and among PRG-Xxxxxxx International, Inc., a Georgia corporation (the
"Company"), Berkshire Fund V, Limited Partnership, a Massachusetts limited
partnership, Berkshire Investors LLC, a Massachusetts limited liability company
(collectively, "Berkshire") and Xxxx Strategic Partners II, L.P., a Delaware
limited partnership ("Xxxx"), each a holder of shares of common stock, no par
value, of the Company (the "Common Stock").
WHEREAS, pursuant to the stock purchase agreement dated August 16, 2002
between the Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, HHS Charitable Lead Annuity
Trust, LVS Charitable Lead Annuity Trust, Xxxxxx Xxxx Xxxxxxx HHS (2001) GST
Trust, Xxxxxx Xxxx Xxxxxxx LVS (2001) GST Trust, Xxxxxx Xxxxxxx Romaner HHS
(2001) GST Trust, Xxxxxx Xxxxxxx Xxxxxxx LVS (2001) GST Trust, The Xxxxxx X.
Xxxxxxx Irrevocable Trust (collectively, the "Xxxxxxx Shareholders") and
Berkshire (the "Berkshire Stock Purchase Agreement"), the Xxxxxxx Shareholders
are selling 4,338,507 shares of their Common Stock to Berkshire in a private
placement;
WHEREAS, pursuant to the stock purchase agreement dated August 16, 2002
between the Xxxxxxx Shareholders and Xxxx (the "Xxxx Stock Purchase Agreement"),
the Xxxxxxx Shareholders are selling 4,338,507 shares of their Common Stock to
Xxxx in a private placement; and
WHEREAS, in connection with the Berkshire Stock Purchase Agreement and
the Xxxx Stock Purchase Agreement, the Company, Berkshire and Xxxx agree to
enter into this Agreement.
NOW THEREFORE, in consideration of the premises and agreements set
forth herein, the parties agree with each other as follows:
1. Nomination of Berkshire Director. Immediately after the date hereof,
the Company shall utilize reasonable efforts to cause its Board Nominating
Committee or the full Board to designate Xxxxx X. Xxxxxxxx as a nominee for
election to the Board of Directors of the Company (the "Board") for so long as
Berkshire or their affiliates hold in excess of 2,000,000 shares of Common Stock
(subject to adjustment for stock splits, stock dividends and reclassifications).
In the event Xxxxx X. Xxxxxxxx shall cease to serve as a member of the Board for
any reason, the Company shall utilize reasonable efforts to cause its Board
Nominating Committee or the full Board to designate Xxxx X. Xxxxx or another
person designated by Berkshire as a nominee for election to the Board.
2. Nomination of Xxxx Director. Immediately after the date hereof, the
Company shall utilize reasonable efforts to cause its Board Nominating Committee
or the full Board to designate N. Xxxxx Xxxx as a nominee for election to the
Board for so long as Xxxx or their affiliates hold in excess of 2,000,000 shares
of Common Stock (subject to adjustment for stock
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splits, stock dividends and reclassifications). In the event N. Xxxxx Xxxx shall
cease to serve as a member of the Board for any reason, the Company shall
utilize reasonable efforts to cause its Board Nominating Committee or the full
Board to designate Xxxx X. Xxxxxxxx or another person designated by Xxxx as a
nominee for election to the Board.
3. Berkshire Observer Rights. For so long as Berkshire and its affiliates
beneficially own or control any shares of Common Stock (subject to adjustment
for stock splits, stock dividends and reclassifications), the Company shall
permit a person designated by Berkshire to attend all meetings of the Board and
its committees, other than executive sessions, and such observer shall have the
right to receive all written information provided by the Company's management to
the Board. Such observer shall initially be Xxxx X. Xxxxx. Such observer shall
have no right to vote on any matter presented to the Board, but otherwise shall
have (i) the right to examine books and records of the Company, (ii) the right
to review and participate in all discussions of the Board including, without
limitation, discussions regarding capital or equity programs, other than
executive sessions, (iii) the right to receive, upon request, any information
relating to the Company and (iv) the right to meet and consult with the
management of the Company on a regular basis; provided, that any such designee
shall agree to be bound by all policies relating to confidentiality and material
non-public information which are applicable to the directors and senior
executive officers of the Company.
4. Xxxx Observer Rights. For so long as Xxxx and its affiliates
beneficially own or control any shares of Common Stock (subject to adjustment
for stock splits, stock dividends and reclassifications), the Company shall
permit a person designated by Xxxx to attend all meetings of the Board and its
committees, other than executive sessions, and such observer shall have the
right to receive all written information provided by the Company's management to
the Board. Such observer shall initially be Xxxx X. Xxxxxxxx. Such observer
shall have no right to vote on any matter presented to the Board, but otherwise
shall have (i) the right to examine books and records of the Company, (ii) the
right to review and participate in all discussions of the Board including,
without limitation, discussions regarding capital or equity programs, other than
executive sessions, (iii) the right to receive, upon request, any information
relating to the Company and (iv) the right to meet and consult with the
management of the Company on a regular basis; provided, that any such designee
shall agree to be bound by all policies relating to confidentiality and material
non-public information which are applicable to the directors and senior
executive officers of the Company. All rights of Xxxx under Section 4.1 of that
certain Note Purchase Agreement with the Company dated as of December 3, 2001,
are hereby terminated.
5. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
6. Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, telecopied (with confirmation of receipt), delivered by
nationally-recognized
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overnight express service or sent by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the following addresses:
a. If to the Company, to:
PRG-Xxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. XxXxxxxx, Esq.
With a copy to:
Xxxxxx Xxxxxx Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
b. If to Berkshire, to:
Berkshire Partners LLC
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxxx, Esq.
c. If to the Xxxx, to:
Xxxx Strategic Partners II, L.P.
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000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
7. Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for the other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
8. Descriptive Headings; Interpretation. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. References in this Agreement to
Sections mean Sections of this Agreement, unless otherwise indicated. The term
"person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, a governmental entity or an unincorporated organization.
The parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
10. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the
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validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
11. Entire Agreement; Third-Party Beneficiaries. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and is not intended to confer upon any person other than the parties hereto and
their permitted assigns any rights or remedies hereunder.
12. Assignment. No party hereto may assign its rights or obligations
under this Agreement, provided that Berkshire and Xxxx may assign its rights
hereunder to any one or more of its affiliates.
13. Further Assurances. The Company, Berkshire and Xxxx each agree to
execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable in
order to implement the actions contemplated by this Agreement.
[The rest of this page has been intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed 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
BERKSHIRE FUND V, LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC
its General Partner
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
BERKSHIRE INVESTORS LLC
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
XXXX STRATEGIC PARTNERS II, L.P.
By: Xxxx Strategic XX XX, L.L.C.
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Member
EXHIBIT D
Secured Promissory Note
Xxxxxxx PRG Liquidating Investments, Ltd
Secured Promissory Note due May 14, 2003
$12,335,556.16 August 27, 2002
FOR VALUE RECEIVED, the undersigned Xxxxxxx PRG Liquidating Investments,
Ltd., a Texas limited partnership (the "Borrower"), hereby promises to pay to
Xxxx Strategic Partners II, L.P., a Delaware limited partnership, (or its
permitted assignees, collectively, "Xxxx") at the address specified in Section
8.3 hereof, or at such other place as Xxxx shall from time to time have
designated to Borrower in writing, on or before May 14, 2003 (the "Stated
Maturity Date"), the amount of twelve million three hundred and thirty-five
thousand five hundred and fifty-six dollars and sixteen cents ($12,335,556.16)
(the "Principal Amount"), in cash on the terms and conditions set forth in
Article 3 hereof, and with interest as provided in Article 2 hereof. Xxxx and
Borrower also hereby agree to the put and call of the shares of common stock, no
par value, (the "Common Stock") of PRG-Xxxxxxx International, Inc., a Georgia
corporation ("PRG") on the terms and conditions set forth in Article 5 hereof.
ARTICLE I
GENERAL
1.1. The Note. This Note is as contemplated by the Stock Purchase
Agreement, dated as of August 16, 2002, among the Borrower, Xxxx and certain
other parties thereto (the "Stock Purchase Agreement"), the Second Option
Agreement, dated as of August 27, 2002, among the Borrower and PRG (the "Option
Agreement") and the Subordination Agreement, dated as of August 27, 2002, among
the Borrower, Xxxx and PRG (the "Subordination Agreement"). Terms defined in the
Stock Purchase Agreement and the Option Agreement and not otherwise defined
herein are used herein as so defined in those agreements.
1.2. Acceleration. In case an Event of Default (as defined in Section 7.1
hereof) shall occur, the entire Principal Amount of this Note may become or be
declared to be due and payable in the manner and with the effect provided
herein.
ARTICLE II
INTEREST
2.1. Interest. This Note shall accrue daily interest from the date hereof
on the Principal Amount from time to time unpaid at a rate of eight percent (8%)
per annum, said interest being payable upon any prepayment, at the Stated
Maturity Date or any accelerated maturity hereof.
Page 1
2.2. Manner of Payment. All interest on the Principal Amount shall be
payable in cash, unless otherwise provided for herein.
ARTICLE III
PAYMENT OF PRINCIPAL AMOUNT
3.1. Payments. The outstanding Principal Amount of this Note will be
payable on the Stated Maturity Date in cash, unless and to the extent otherwise
provided in this Section 3.1 or Article 5 hereof.
3.1.1. Full Exercise of Options. Within five (5) days of the notice of
exercise in full of the options granted pursuant to the Option Agreement
(the "Options") by PRG and, in any event, no later than simultaneously with
the Option Closing, the Borrower will repay the entire Principal Amount
(plus accrued interest pursuant to Section 2.1 hereof) in cash on such
date, and on such date Xxxx will release the shares of common stock of PRG
(the "Pledged Shares") which are the subject of the Pledge Agreement dated
as of August 27, 2002 and between the parties to this Note, in the form
attached as Exhibit A hereto (the "Pledge Agreement"), to Borrower pursuant
to Article IV of the Pledge Agreement.
3.1.2. Partial Exercise and Non-Exercise of Options.
(a) Within five (5) days of the notice of exercise and, in any
event, no later than simultaneously with and in the same amount as the
payment by PRG under the Option Agreement for a portion of the Pledged
Shares, the Borrower will repay to Xxxx the portion of the Principal
Amount relating to the number of Pledged Shares sought to be released
to the Borrower (plus accrued interest pursuant to Section 2.1 hereof)
in cash on such date (a "Settlement Date"), and Xxxx will release on
the Settlement Date pursuant to Article IV of the Pledge Agreement
such number of Pledged Shares as Borrower is required to deliver to
PRG pursuant to the exercise of the Options.
(b) To the extent the Options are not exercised by the date of
expiration thereof and on such date any unpaid Principal Amount
remains outstanding, the provisions of Article 5 hereof will apply.
3.2. Notices; Documents. For the purpose of verifying and calculating the
payments due pursuant to Section 3.1 and Article 5 hereof and as a condition to
the release of any Pledged Shares pursuant to Article IV of the Pledge
Agreement, the Borrower agrees to provide copies of all documents relating to
the exercise of the Options to Xxxx, pursuant to the provisions of Section 8.3
hereof, upon the date of any exercise of the Options.
Page 2
ARTICLE IV
COVENANTS
4.1. Subject to Article V hereof, this Note and the obligations hereunder
are secured by the 1,414,628 Pledged Shares in accordance with the Pledge
Agreement.
4.2. Borrower shall at all times, until this Note is indefeasibly paid in
full, hold 1,000,000 shares of Common Stock of PRG, free and clear of any liens
or other encumbrances.
ARTICLE V
5.1. First Xxxx Call Option. For a period of five (5) days after the
termination of the First Option Agreement, dated the date hereof, between
Borrower and PRG (the "First Option Agreement") in accordance with its terms
(the "First Call Period") or, subject to the Subordination Agreement in case of
an acceleration hereunder, Xxxx will have the right to purchase from Borrower
such number of Pledged Shares ("Excess Pledged Shares") equal to the difference
between (i) the number of Pledged Shares remaining under the Pledge Agreement
and (ii) the aggregate number of shares of Common Stock released to PRG pursuant
to the First Option Agreement (the "First Xxxx Option"), for a price equal to
$9.05 per share (the "First Exercise Price"). The First Xxxx Option may be
exercised by Xxxx, only for the entire number of Excess Pledged Shares remaining
under the Pledge Agreement, on any business day on or prior to the last day of
the First Call Period, by notice of exercise in accordance with Section 8.3, in
substantially the form attached hereto as Exhibit B (or a reasonable facsimile
thereof) duly executed by Xxxx and accompanied by payment, in cash or wire
transfer of immediately available funds, or by offset of amounts then due by
Borrower under this Note, in the amount obtained by multiplying (a) the number
of Excess Pledged Shares designated in such notice by (b) the First Exercise
Price, and Borrower shall thereupon transfer the number of Excess Pledged Shares
purchased pursuant to the First Xxxx Option to Xxxx.
5.2 Second Xxxx Call Option. For a period of five (5) days after the
termination of the Second Option Agreement (the "Second Call Period") or,
subject to the Subordination Agreement in case of an acceleration hereunder,
Xxxx will have the right to purchase from Borrower such number of Pledged Shares
remaining under the Pledge Agreement (the "Second Xxxx Option"), for a price
equal to $9.24 per share (the "Second Exercise Price"). The Second Xxxx Option
may be exercised by Xxxx, only for the entire number of Pledged Shares remaining
under the Pledge Agreement, on any business day on or prior to the last day of
the Second Call Period, by notice of exercise in accordance with Section 8.3, in
substantially the form attached hereto as Exhibit B (or a reasonable facsimile
thereof) duly executed by Xxxx and accompanied by payment, in cash or wire
transfer of immediately available funds, or by offset of amounts then due by
Borrower under this Note, in the amount obtained by multiplying (a) the number
of Pledged Shares designated in such notice by (b) the Second Exercise Price,
and Borrower shall thereupon transfer the number of Pledged Shares purchased
pursuant to the Second Xxxx Option to Xxxx.
Page 3
5.3 Borrower Put Option. If the Second Xxxx Option is not exercised by the
end of the Second Call Period, for a period of five (5) days thereafter (the
"Put Period") or, subject to the Subordination Agreement in case of an
acceleration hereunder or in the case of an Event of Default after 269 days,
Borrower will have the right to sell the number of Pledged Shares remaining
under the Pledge Agreement (the "Borrower Put"), to Xxxx at the Second Exercise
Price. The Borrower Put may be exercised by Borrower, only for the entire number
of Pledged Shares remaining under the Pledge Agreement, on any business day on
or prior to the last day of the Put Period, by notice of exercise in accordance
with Section 8.3, in substantially the form attached hereto as Exhibit C (or a
reasonable facsimile thereof) duly executed by Borrower and accompanied by
instructions to release the number of Pledged Shares purchased by Xxxx pursuant
to the Borrower Put to Xxxx in return for payment, in cash or wire transfer of
immediately available funds, or by offset of amounts then due by Borrower under
this Note, in the amount obtained by multiplying (a) the number of Pledged
Shares designated in such notice by (b) the Second Exercise Price.
5.4 Cash Payment. In the event neither the Second Xxxx Option nor the
Borrower Put is exercised, the Note shall be due and payable in cash on the
Stated Maturity Date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF the BORROWER
The Borrower represents and warrants to Xxxx as follows:
6.1. Authorization; Binding Obligation. This Note has been duly and validly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other federal or state laws of general applicability relating to or affecting
creditors' or secured parties' rights and remedies generally and general
principles of equity, whether considered in an action at law or in equity. The
Borrower has the legal capacity and all requisite power and authority to execute
and deliver this Note and to consummate the transactions contemplated hereby and
to perform its obligations hereunder. Such execution, delivery and consummation
has been duly and validly authorized by all necessary action on the part of the
Borrower, and no other corporate or other proceedings on the part of the
Borrower are necessary to authorize such execution, delivery and consummation.
6.2. Title to the Pledged Shares. Immediately prior to the pledge of the
Pledged Shares, the Borrower was the record and beneficial owner of, and had
good and marketable title to, the Pledged Shares free and clear of all
Encumbrances. The Pledged Shares owned by the Borrower are validly issued, duly
authorized and free of any preemptive rights. There are no voting trusts or
other agreements or understandings to which the Borrower is a party with respect
to the voting of the Pledged Shares. The Pledged Shares are not subject to any
restrictions on transferability other than those imposed by the Securities Act
and applicable state securities laws. Except for the Option Agreement, there are
no options, warrants, calls, commitments or rights of any character to purchase
or otherwise acquire the Pledged Shares from the Borrower pursuant to
Page 4
which the Borrower may be obligated to sell, transfer or otherwise dispose of
any of the Pledged Shares. Subject to the Subordination Agreement, in the event
that (i) the Pledgor defaults under this Note and Xxxx enforces the provisions
of the Pledge Agreement or (ii) the provisions of Article 5 hereof apply, Xxxx
will acquire good and marketable title to the Pledged Shares, free and clear of
all Encumbrances.
6.3. Consents and Approvals; No Violation. None of the execution and
delivery of this Note, the consummation of the transactions contemplated hereby,
or compliance with any of the provisions hereof, will (i) require any consent,
waiver, approval, authorization or permit of, or filing with or notification to,
or any other action by, any Governmental Authority by the Borrower, other than
necessary filings on Form 4 with the Commission, (ii) violate the certificate of
formation or operating agreement of the Borrower, or any Law of any Governmental
Authority which may be applicable to the Borrower, or by which any of the
Borrower's activities, properties or assets (including, without limitation the
Pledged Shares) may be bound or affected or (iii) violate, breach, or conflict
with, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or any obligation to pay or result in the imposition of any Encumbrance upon any
of the property of the Borrower (including, without limitation, the Pledged
Shares)) under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, Encumbrance, contract, agreement, or other instrument or
obligation to which the Borrower is a party or by which any of the Borrower's
activities, properties or assets (including, without limitation, the Pledged
Shares) may be bound or affected.
ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default; Remedies. If any of the following events (each such
event herein termed an "Event of Default") shall happen, that is to say:
7.1.1. the Borrower shall fail to make any payment of Principal Amount
of this Note when due, whether at maturity by acceleration or otherwise;
7.1.2. the Borrower shall fail to perform or observe any of the other
covenants, agreements or provisions set forth herein or in the Option
Agreement, Stock Purchase Agreement or Pledge Agreement; or
7.1.3. The Borrower shall:
(a) commence a voluntary case under Title 11 of the United
States Code as from time to time in effect, or authorize, by
appropriate proceedings of its board of managers or other governing
body, the commencement of such a voluntary case;
(b) have filed against it a petition under said Title 11 which
shall not have been dismissed within 30 days after the date on which
said petition is filed, or file an answer or other pleading within
said 30-day period admitting or failing
Page 5
to deny the material allegations of such a petition, or seeking,
consenting to or acquiescing in the relief therein provided, or
fail to controvert timely the material allegations of any such
petition;
(c) have entered against it an order for relief in any
involuntary case commenced under said Title 11;
(d) seek relief as a debtor under any applicable law, other
than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors, or consent to or
acquiesce in such relief;
(e) have entered against it any order by a court of
competent jurisdiction (i) finding it to be bankrupt or
insolvent, (ii) ordering or approving its liquidation,
reorganization or any modification or alteration of the rights
of its creditors or (iii) assuming custody of, or appointing a
receiver or other custodian for, all or a substantial part of
its property; or
(f) make an assignment for the benefit of, or enter into a
composition with, its creditors or appoint or consent to the
appointment of a receiver or other custodian for all or a
substantial part of its property.
then and in each and every such case, Xxxx shall notify the Borrower of such
Event of Default and, in the event such Event of Default is not cured by
Borrower within thirty (30) days of the date of such notice, Xxxx may declare
all or any part of the unpaid Principal Amount to be forthwith due and payable
(unless there shall have occurred an Event of Default under Section 7.1.3
hereof, in which case the unpaid balance of this Note shall automatically become
due and payable), and thereupon such unpaid Principal Amount or part thereof,
together with interest accrued thereon and all other sums, if any, payable under
this Note, shall become so due and payable without presentation, presentment,
protest or further demand or notice of any kind, all of which are hereby
expressly waived to the extent not prohibited by applicable law that cannot be
waived, and Xxxx, subject to the Subordination Agreement, may proceed to enforce
payment of such amount or part thereof in such manner as it or they may elect,
including the transfer the Pledged Shares to its own account, with the Principal
Amount and interest due under this Note being reduced by the amount equal to (i)
the number of Pledged Shares transferred to Xxxx, multiplied by (ii) the Second
Exercise Price, and if additional Principal Amount and interest remain
outstanding under this Note, Xxxx may proceed to protect and enforce its or
their rights by suit in equity, action at law and/or other appropriate
proceeding either for specific performance of any covenant, provision or
condition contained or incorporated by reference in this Note or the Pledge
Agreement, or in aid of the exercise of any power granted in this Note or the
Pledge Agreement; provided; however, that it is agreed and acknowledged that
Xxxx'x recourse hereunder shall be limited to the Pledged Shares and after 269
days Borrower may only cure such default by exercise of the Borrower Put right
referred to in Section 5.3 hereof.
7.2. Annulment of Defaults. An Event of Default shall not be deemed
to be in existence for any purpose of this Note if Xxxx shall have waived such
event in writing or stated
Page 6
in writing that the same has been cured to its or their reasonable satisfaction.
No waiver or statement of satisfactory cure pursuant to this Section 7.2 shall
extend to or affect any subsequent or other Event of Default not specifically
identified in such waiver or statement of satisfactory cure or impair any of the
rights of Xxxx upon the occurrence thereof.
7.3. Waivers. The Borrower hereby waives to the extent not prohibited by
provisions of applicable law which cannot be waived (a) all presentments,
demands for performance and notices of nonperformance (except to the extent
specifically required by the provisions hereof), (b) any requirement of
diligence or promptness on the part of Xxxx in the enforcement of its rights
under the provisions of this Note or the Pledge Agreement, (c) any and all
notices of every kind and description which may be required to be given by any
legal requirement, and (d) any defense of any kind (other than payment) which it
may now or hereafter have with respect to its obligations and liability under
this Note, the Option Agreement or the Pledge Agreement.
7.4. Course of Dealing. No course of dealing between the Borrower on the
one hand, and Xxxx on the other hand, shall operate as a waiver of the parties'
rights under this Note or the Pledge Agreement. No delay or omission in
exercising any right under this Note or the Pledge Agreement shall operate as a
waiver of such right or any other right. A waiver on any one occasion shall not
be construed as a waiver of or bar to any right or remedy on any other occasion.
No waiver or statement of satisfactory cure or consent shall be binding upon
Xxxx unless it is in writing and signed by Xxxx as may be required by the
provisions of this Note.
ARTICLE VIII
MISCELLANEOUS
8.1. Survival of Representation and Warranties. All representations,
warranties and covenants made by the Borrower, in connection with the
transactions contemplated by this Note shall survive the pledge of the Pledged
Shares, and transfer of ownership of the same to Xxxx under Article 5 or Section
7.1 hereof, or the provisions of the Pledge Agreement.
8.2. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
8.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
Page 7
8.3.1. If to Xxxx, to:
Xxxx Strategic Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
8.3.2. If to the Borrower, to:
Xxxxxxx PRG Liquidating Investments, Ltd.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
With a copy to:
Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000 (direct dial)
Telecopy: (000) 000-0000 (direct fax)
Attention: Xxxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
or to such other address as the person to whom notice is to be given may have
previou sly furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
8.4. Expenses. Each party hereto shall be solely responsible for all
expenses incurred by it or on its behalf in connection with the preparation and
execution of this Note and the consummation of the transactions contemplated
hereby, including, without limitation, the fees and expenses of its counsel,
accountants, brokers, finders, financial advisors and other representatives.
Page 8
8.5. Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for the other parties' failure to perform their obligations under this Note, the
parties hereto acknowledge and agree that the remedy at law for any failure to
perform their obligations hereunder would be inadequate and that each of them,
respectively, shall be entitled to specific performance, injunctive relief or
other equitable remedies in the event of any such failure.
8.6. Descriptive Headings; Interpretation. The headings contained in this
Note are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Note. References in this Note to Sections mean
Sections of this Note, unless otherwise indicated. The term "person" shall mean
and include an individual, a partnership, a joint venture, a corporation, a
trust, a governmental entity or an unincorporated organization. The parties
hereto agree that they have been represented by counsel during the negotiation
and execution of this Note and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in a
document will be construed against the party drafting the document.
8.7. Counterparts. This Note may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.8. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
8.9. Entire Agreement; Third-Party Beneficiaries. This Note constitutes
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, and is not intended
to confer upon any person other than the parties hereto and their permitted
assigns any rights or remedies hereunder.
8.10. Assignment. No party hereto may assign its rights or obligations
under this Note, provided, that Xxxx may assign and transfer this Note and its
rights hereunder to any one or more of its affiliates, and may assign and
transfer any Pledged Shares obtained hereunder to any one or more of such
affiliates.
8.11. Further Assurances. The Borrower and Xxxx agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or desirable in order to implement
the transactions contemplated by this Note.
[The remainder of this page is intentionally blank]
Page 9
The undersigned has caused this Note to be executed and delivered by its
duly authorized officer as of the date first written above.
XXXXXXX PRG LIQUIDATING INVESTMENTS,
LTD., a Texas limited partnership
By: Xxxxxxx PRG Liquidating Investments GP,
L.L.C., a Texas limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
XXXX STRATEGIC PARTNERS II, L.P.
By Xxxx Strategic XX XX, L.L.C., its
General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Member
Page 10
EXHIBIT A
PLEDGE AGREEMENT
XXXXXXX PRG LIQUIDATING INVESTMENTS, LTD.
PLEDGE AGREEMENT
This Agreement, dated as of August 27, 2002, is between Xxxxxxx PRG
Liquidating Investments, Ltd., a Texas limited partnership (the "Pledgor"), and
Xxxx Strategic Partners II, L.P., a Delaware limited partnership (together with
its permitted assignees, collectively, "Xxxx"). The parties agree as follows:
ARTICLE I
GENERAL
1.1. Note. Xxxx is providing extensions of credit to the Pledgor pursuant
to a Secured Promissory Note dated as of the date hereof, as from time to time
in effect (the "Note"), between the Pledgor and Xxxx. As a condition to
providing the loans under the Note, Xxxx is requiring the Pledgor to pledge the
stock contemplated hereby to secure and satisfy the Pledgor's payment
obligations under the Note (the "Credit Obligations").
1.2. Certain Rules of Construction. Capitalized terms defined in the Note
and not otherwise defined herein are used herein with the meanings so defined.
Certain other capitalized terms are used in this Agreement as specifically
defined below in this Section 1. Except as the context otherwise explicitly
requires, (a) terms defined in the UCC and not otherwise defined herein have the
meaning provided under the UCC and (b) references to a particular person include
such person's successors and assigns to the extent not prohibited by this
Agreement and the Note. References to "the date hereof" mean the date first set
forth above.
1.3. Definitions. The following definitions apply herein:
(a) "Agreement" means this Pledge Agreement as amended, modified
and from time to time in effect.
(b) "Governmental Authority" means any government or political
subdivision thereof, whether federal, state, local or foreign, or any
agency, department, commission, board, bureau, court, tribunal, body,
administrative or regulatory authority or instrumentality of any such
government or political subdivision.
(c) "Law" means any law (including common law), rule,
regulation, restriction, code, statute, ordinance, order, writ,
injunction, judgment, decree or other requirement of a Governmental
Authority.
(d) "Lien" means any lien, encumbrance, proxy, voting trust
arrangement, pledge, security interest, collateral security
agreement, financing statement (and similar notices) filed with any
Governmental Authority, claim
(including any claim as defined in the Internal Revenue Code of 1986,
as amended), charge, equities, mortgage, pledge, objection, title
defect, option, restrictive covenant or restriction on transfer of
any nature whatsoever, and the interest of the lessor in any property
subject to a capital lease, except for restrictions or
transferability imposed by the Securities Act.
(e) "Subordination Agreement" means that certain Subordination
Agreement dated as of the date hereof between the Pledgor, Xxxx and
PRG-Xxxxxxx International, Inc. ("PRG").
(f) "UCC" means the Uniform Commercial Code as in effect in
Delaware on the date hereof; provided, however, that with respect to
the perfection of Xxxx'x Xxxx on the Pledged Shares and the effect of
nonperfection thereof, the term "UCC" means the Uniform Commercial
Code as in effect in any jurisdiction the laws of which are made
applicable by section 9-305 of the Uniform Commercial Code as in
effect in Delaware.
ARTICLE II
Security
2.1. Pledged Shares. As security for the payment and performance of the
Credit Obligations, the Pledgor mortgages, pledges and collaterally grants and
assigns to Xxxx, and creates a security interest in favor of Xxxx in, all of the
Pledgor's right, title and interest in and to (but none of its obligations or
liabilities with respect to) the 1,446,168 shares of common stock of PRG set
forth in Exhibit A (subject to reduction pursuant to the First Xxxx Option (as
defined in the Note), being collectively referred to as the "Pledged Shares."
2.2. Covenants with Respect to Pledged Shares. The Pledgor covenants that:
2.2.1. Pledged Shares. The Pledged Shares shall be at all times duly
authorized, validly issued, fully paid and nonassessable. The Pledgor will
deliver to Xxxx certificates representing the Pledged Shares held by the
Pledgor, accompanied by stock transfer powers executed in blank and in form
and manner satisfactory to Xxxx. Upon the occurrence and during the
continuance of an Event of Default but subject always to the provisions of
the Subordination Agreement so long as it is in effect, Xxxx may transfer
into its name or the name of its nominee any Pledged Shares. All Pledged
Shares shall be listed on Exhibit A hereto.
2.2.2. No Liens or Restrictions on Transfer. The Pledged Shares
shall be free and clear of any Liens and restrictions on the transfer
thereof. Except for the arrangements set out in the Option Agreement, none
of the Pledged Shares shall be subject to any option to purchase or similar
rights of any Person.
2
2.2.3. No Sale of Pledged Shares. The Pledgor will not sell,
transfer or otherwise dispose of all or any portion of its interests in the
Pledged Shares except in connection with the Option Agreement and except to
Xxxx as contemplated under the Note or this Agreement.
2.2.4. Perfection of Pledged Shares. This Agreement shall create in
favor of Xxxx, a legal, valid and enforceable first priority security
interest in the Pledged Shares. When stock certificates representing such
Pledged Shares and stock transfer powers related thereto duly executed in
blank by the Pledgor are delivered to Xxxx, this Agreement shall provide a
fully perfected, first priority Lien on, and security interest in, all
right, title and interest of the Pledgor in the Pledged Shares, in each
case prior and superior in right to any other Person, except as provided
pursuant to the Option Agreement. Upon Xxxx'x reasonable request from time
to time, the Pledgor will execute and deliver, and file and record in the
proper filing and recording places, all such instruments, including UCC
financing statements, and will take all such other action, as Xxxx deems
reasonably necessary for confirming to it the Pledged Shares, or to carry
out any other purpose of this Agreement or the Note.
2.3. Administration of Pledged Shares. Subject to the provisions of the
Subordination Agreement and in accordance with Section 7.1 of the Note, the
Pledged Shares shall be administered as follows, and if an Event of Default
shall have occurred and be continuing, Section 2.4 shall also apply.
2.3.1. Segregated Proceeds. All sums collected or received and all
property recovered or possessed by the Pledgor in connection with any
Pledged Shares shall be received and held by the Pledgor in trust for and
on Xxxx'x behalf, shall be segregated from the assets and funds of the
Pledgor, and shall be delivered to Xxxx.
2.3.2. Distributions. All distributions on or with respect to the
Pledged Shares, including additional Pledged Shares or other distributions
by way of a dividend or otherwise will be retained by Xxxx (or if received
by the Pledgor shall be held by the Pledgor in trust and shall be
immediately delivered by the Pledgor to Xxxx in the original form received,
endorsed in blank) and held by Xxxx as part of the Pledged Shares or
applied by Xxxx to the payment of the Credit Obligations.
2.3.3. Voting.
(a) Until an Event of Default shall occur and be
continuing, the Pledgor shall be entitled to vote or consent with
respect to the Pledged Shares in any manner not inconsistent with the
terms of the Note or the Option Agreement, and Xxxx will (if so
requested) execute appropriate revocable proxies therefor.
(b) If an Event of Default shall have occurred and be
continuing, only Xxxx shall be entitled to vote or consent or take
any other action with respect to
3
the Pledged Shares, and the Pledgor will (if so requested) execute or
cause to be executed appropriate proxies therefor.
2.4. Right to Realize upon Pledged Shares. Except to the extent prohibited
by applicable Law that cannot be waived and subject to the provisions of the
Subordination Agreement, this Section 2.4 shall govern Xxxx'x right to realize
upon the Pledged Shares if any Event of Default shall have occurred and be
continuing.
2.4.1. Additional Rights. The provisions of this Section 2.4 are in
addition to any rights and remedies available at law or in equity and in
addition to the provisions of the Note.
2.4.2. General Authority. The Pledgor grants Xxxx full and exclusive
power and authority, subject to the other terms hereof and applicable law,
to take any of the following actions (for the sole benefit of Xxxx, but at
the Pledgor's expense):
(a) To sell, transfer, assign or otherwise deal in or with
any Pledged Shares or the proceeds thereof, as fully as the Pledgor
otherwise could do.
(b) To ask for, demand, take, collect, xxx for and receive
all payments in respect of any Pledged Shares which the Pledgor could
otherwise ask for, demand, take, collect, xxx for and receive for its
own use.
(c) To settle, compromise, prosecute or defend any action
or proceeding with respect to any Pledged Shares and to enforce all
rights and remedies thereunder which the Pledgor could otherwise
enforce.
ARTICLE III
Representations and Warranties
The Pledgor represents and warrants to Xxxx as follows:
3.1. Authorization; Binding Obligation. This Agreement has been duly and
validly executed and delivered by the Pledgor and, assuming due authorization,
execution and delivery by Xxxx, constitutes a legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other federal or state
laws of general applicability relating to or affecting creditors' or secured
parties' rights and remedies generally and general principles of equity, whether
considered in an action at law or in equity. The Pledgor has the legal capacity
and all requisite power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby and to perform its
obligations hereunder. Such execution, delivery and consummation has been duly
and validly authorized by all necessary action on the part of the Pledgor, and
no other corporate or other proceedings on the part of the Pledgor are necessary
to authorize such execution, delivery and consummation.
4
3.2. Title to the Pledged Shares. Immediately prior to the pledge of the
Pledged Shares the Pledgor was the record and beneficial owner of, and had good
and marketable title to, the Pledged Shares free and clear of all Liens. The
Pledged Shares owned by the Pledgor are validly issued, duly authorized and free
of any preemptive rights. There are no voting trusts or other agreements or
understandings to which the Pledgor is a party with respect to the voting of the
Pledged Shares. The Pledged Shares are not subject to any restrictions on
transferability other than those imposed by the Securities Act and applicable
state securities laws. Except for the Option Agreement, there are no options,
warrants, calls, commitments or rights of any character to purchase or otherwise
acquire the Pledged Shares from the Pledgor pursuant to which the Pledgor may be
obligated to sell, transfer or otherwise dispose of any of the Pledged Shares.
In the event that (i) the Pledgor defaults under the Note and Xxxx enforces the
provisions of this Agreement, or (ii) the provisions of Section 3.1 of the Note
apply, Xxxx will acquire good and marketable title to the Pledged Shares, free
and clear of all Liens.
3.3. Consents and Approvals; No Violation. None of the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, or compliance with any of the provisions hereof, will (i) require any
consent, waiver, approval, authorization or permit of, or filing with or
notification to, or any other action by, any Governmental Authority by the
Pledgor, other than necessary filings on Form 4 with the Securities and Exchange
Commission, (ii) violate the certificate of formation or limited partnership
agreement of the Pledgor, or any Law of any Governmental Authority which may be
applicable to the Pledgor, or by which any of the Pledgor's activities,
properties or assets (including, without limitation the Pledged Shares) may be
bound or affected or (iii) violate, breach, or conflict with, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration or any obligation to pay
or result in the imposition of any Lien upon any of the property of the Pledgor
(including, without limitation, the Pledged Shares)) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Lien, contract,
agreement, or other instrument or obligation to which the Pledgor is a party or
by which any of the Pledgor's activities, properties or assets (including,
without limitation, the Pledged Shares) may be bound or affected.
ARTICLE IV
DEFEASANCE
If the Option Agreement is exercised, in whole or in part, and all
corresponding Credit Obligations have been paid, performed and reasonably
determined by Xxxx to have been indefeasibly discharged in full, at the
Pledgor's written request (if appropriate), accompanied by a copy of the written
exercise of the Option Agreement and such certificates and other items as Xxxx
shall reasonably deem necessary, the number of Pledged Shares required to be
delivered by the Pledgor upon the exercise, in whole or in part, of the Option
Agreement shall revert to the Pledgor and the right, title and interest of Xxxx
therein shall terminate. Thereupon, on the Pledgor's demand and at its cost and
expense, Xxxx shall execute proper instruments, acknowledging satisfaction of
and discharging this Agreement with respect to the Pledged Shares to be
transferred, and shall redeliver to the Pledgor, for delivery to PRG, the number
of Pledged Shares required to be delivered by the Pledgor to PRG upon the
exercise of the Option Agreement.
5
ARTICLE V
MISCELLANEOUS
5.1. Survival of Representation and Warranties. All representations,
warranties and covenants made in this Agreement, or made in writing to Xxxx, by
or on behalf of the Pledgor, in connection with the transactions contemplated by
this Agreement shall survive the pledge of the Pledged Shares, and transfer of
ownership of the same to Xxxx under the Note or this Agreement.
5.2. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
5.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
5.3.1. If to Xxxx, to:
Xxxx Strategic Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
6
5.3.2. If to the Pledgor, to:
Xxxxxxx PRG Liquidating Investments, Ltd.
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telefax: (000) 000-0000
With a copy to:
Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000 (direct dial)
Telecopy: (000) 000-0000 (direct fax)
Attention: Xxxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
5.4. Expenses. Each party hereto shall be solely responsible for all
expenses incurred by it or on its behalf in connection with the preparation and
execution of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, the fees and expenses of its
counsel, accountants, brokers, finders, financial advisors and other
representatives.
5.5. Specific Performance. Without limiting the rights of each party hereto
to pursue all other legal and equitable rights available to such party for the
other parties' failure to perform their obligations under this Agreement, the
parties hereto acknowledge and agree that the remedy at law for any failure to
perform their obligations hereunder would be inadequate and that each of them,
respectively, shall be entitled to specific performance, injunctive relief or
other equitable remedies in the event of any such failure.
5.6. Descriptive Headings; Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. References in this Agreement to
Sections mean Sections of this Agreement, unless otherwise indicated. The term
"person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, a governmental entity or an unincorporated organization.
The parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law,
7
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
5.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
5.8. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
5.9. Entire Agreement; Third-Party Beneficiaries. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and is not intended to confer upon any person other than the parties hereto and
their permitted assigns any rights or remedies hereunder.
5.10. Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of Xxxx and its successors and assigns and shall be binding upon
the Pledgor. Xxxx may assign its rights and obligations under this Agreement,
including the right to receive or hold Pledged Shares, to its affiliates,
without the consent of the Pledgor. The Pledgor may not assign its rights or
obligations under this Agreement without the written consent of Xxxx.
5.11. Further Assurances. The Pledgor and Xxxx agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or desirable in order to implement
the transactions contemplated by this Agreement.
5.12. Termination. This Agreement will terminate upon the full
satisfaction of the Credit Obligations by Borrower.
[The remainder of this page is intentionally blank]
8
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first written above.
XXXXXXX PRG LIQUIDATING INVESTMENTS, LTD.,
a Texas limited partnership
By: Xxxxxxx PRG Liquidating Investments GP,
L.L.C., a Texas limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
XXXX STRATEGIC PARTNERS II, L.P.
By Xxxx Strategic XX XX, L.L.C., its
General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Member
9
EXHIBIT A
PLEDGED SHARES
Shares of
Holder Common Stock Certificate No.
------ ------------ ---------------
Xxxxxxx PRG Liquidating 1,414,628 PRGX 0221
Investments, Ltd.
10
Xxxxxxx PRG Liquidating Investments, Ltd
Secured Promissory Note due May 14, 2003
$275,028.80 August 27, 2002
FOR VALUE RECEIVED, the undersigned Xxxxxxx PRG Liquidating
Investments, Ltd., a Texas limited partnership (the "Borrower"), hereby promises
to pay to Xxxx Strategic Partners II GMBH & Co. KG, a German limited
partnership, (or its permitted assignees, collectively, "Xxxx") at the address
specified in Section 8.3 hereof, or at such other place as Xxxx shall from time
to time have designated to Borrower in writing, on or before May 14, 2003 (the
"Stated Maturity Date"), the amount of two hundred and seventy five thousand
twenty eight dollars and eighty cents ($275,028.80) (the "Principal Amount"), in
cash on the terms and conditions set forth in Article 3 hereof, and with
interest as provided in Article 2 hereof. Xxxx and Borrower also hereby agree to
the put and call of the shares of common stock, no par value, (the "Common
Stock") of PRG-Xxxxxxx International, Inc., a Georgia corporation ("PRG") on the
terms and conditions set forth in Article 5 hereof.
ARTICLE I
GENERAL
1.1. The Note. This Note is as contemplated by the Stock Purchase
Agreement, dated as of August 16, 2002, among the Borrower, Xxxx and certain
other parties thereto (the "Stock Purchase Agreement"), the Second Option
Agreement, dated as of August 27, 2002, among the Borrower and PRG (the "Option
Agreement") and the Subordination Agreement, dated as of August 27, 2002, among
the Borrower, Xxxx and PRG (the "Subordination Agreement"). Terms defined in the
Stock Purchase Agreement and the Option Agreement and not otherwise defined
herein are used herein as so defined in those agreements.
1.2. Acceleration. In case an Event of Default (as defined in Section
7.1 hereof) shall occur, the entire Principal Amount of this Note may become or
be declared to be due and payable in the manner and with the effect provided
herein.
ARTICLE II
INTEREST
2.1. Interest. This Note shall accrue daily interest from the date
hereof on the Principal Amount from time to time unpaid at a rate of eight
percent (8%) per annum, said interest being payable upon any prepayment, at the
Stated Maturity Date or any accelerated maturity hereof.
Page 1
2.2. Manner of Payment. All interest on the Principal Amount shall be
payable in cash, unless otherwise provided for herein.
ARTICLE III
PAYMENT OF PRINCIPAL AMOUNT
3.1. Payments. The outstanding Principal Amount of this Note will be
payable on the Stated Maturity Date in cash, unless and to the extent otherwise
provided in this Section 3.1 or Article 5 hereof.
3.1.1. Full Exercise of Options. Within five (5) days of the
notice of exercise in full of the options granted pursuant to the
Option Agreement (the "Options") by PRG and, in any event, no later
than simultaneously with the Option Closing, the Borrower will repay
the entire Principal Amount (plus accrued interest pursuant to Section
2.1 hereof) in cash on such date, and on such date Xxxx will release
the shares of common stock of PRG (the "Pledged Shares") which are the
subject of the Pledge Agreement dated as of August 27, 2002 and between
the parties to this Note, in the form attached as Exhibit A hereto (the
"Pledge Agreement"), to Borrower pursuant to Article IV of the Pledge
Agreement.
3.1.2. Partial Exercise and Non-Exercise of Options.
(a) Within five (5) days of the notice of exercise and, in
any event, no later than simultaneously with and in the same
amount as the payment by PRG under the Option Agreement for a
portion of the Pledged Shares, the Borrower will repay to Xxxx the
portion of the Principal Amount relating to the number of Pledged
Shares sought to be released to the Borrower (plus accrued
interest pursuant to Section 2.1 hereof) in cash on such date (a
"Settlement Date"), and Xxxx will release on the Settlement Date
pursuant to Article IV of the Pledge Agreement such number of
Pledged Shares as Borrower is required to deliver to PRG pursuant
to the exercise of the Options.
(b) To the extent the Options are not exercised by the date
of expiration thereof and on such date any unpaid Principal Amount
remains outstanding, the provisions of Article 5 hereof will
apply.
3.2. Notices; Documents. For the purpose of verifying and calculating
the payments due pursuant to Section 3.1 and Article 5 hereof and as a condition
to the release of any Pledged Shares pursuant to Article IV of the Pledge
Agreement, the Borrower agrees to provide copies of all documents relating to
the exercise of the Options to Xxxx, pursuant to the provisions of Section 8.3
hereof, upon the date of any exercise of the Options.
Page 2
ARTICLE IV
COVENANTS
4.1. Subject to Article V hereof, this Note and the obligations
hereunder are secured by the 31,540 Pledged Shares in accordance with the Pledge
Agreement.
4.2. Borrower shall at all times, until this Note is indefeasibly paid
in full, hold 1,000,000 shares of Common Stock of PRG, free and clear of any
liens or other encumbrances.
ARTICLE V
5.1. First Xxxx Call Option. For a period of five (5) days after the
termination of the First Option Agreement, dated the date hereof, between
Borrower and PRG (the "First Option Agreement") in accordance with its terms
(the "First Call Period") or, subject to the Subordination Agreement in case of
an acceleration hereunder, Xxxx will have the right to purchase from Borrower
such number of Pledged Shares ("Excess Pledged Shares") equal to the difference
between (i) the number of Pledged Shares remaining under the Pledge Agreement
and (ii) the aggregate number of shares of Common Stock released to PRG pursuant
to the First Option Agreement (the "First Xxxx Option"), for a price equal to
$9.05 per share (the "First Exercise Price"). The First Xxxx Option may be
exercised by Xxxx, only for the entire number of Excess Pledged Shares remaining
under the Pledge Agreement, on any business day on or prior to the last day of
the First Call Period, by notice of exercise in accordance with Section 8.3, in
substantially the form attached hereto as Exhibit B (or a reasonable facsimile
thereof) duly executed by Xxxx and accompanied by payment, in cash or wire
transfer of immediately available funds, or by offset of amounts then due by
Borrower under this Note, in the amount obtained by multiplying (a) the number
of Excess Pledged Shares designated in such notice by (b) the First Exercise
Price, and Borrower shall thereupon transfer the number of Excess Pledged Shares
purchased pursuant to the First Xxxx Option to Xxxx.
5.2 Second Xxxx Call Option. For a period of five (5) days after the
termination of the Second Option Agreement (the "Second Call Period") or,
subject to the Subordination Agreement in case of an acceleration hereunder,
Xxxx will have the right to purchase from Borrower such number of Pledged Shares
remaining under the Pledge Agreement (the "Second Xxxx Option"), for a price
equal to $9.24 per share (the "Second Exercise Price"). The Second Xxxx Option
may be exercised by Xxxx, only for the entire number of Pledged Shares remaining
under the Pledge Agreement, on any business day on or prior to the last day of
the Second Call Period, by notice of exercise in accordance with Section 8.3, in
substantially the form attached hereto as Exhibit B (or a reasonable facsimile
thereof) duly executed by Xxxx and accompanied by payment, in cash or wire
transfer of immediately available funds, or by offset of amounts then due by
Borrower under this Note, in the amount obtained by multiplying (a) the number
of Pledged Shares designated in such notice by (b) the Second Exercise Price,
and Borrower shall thereupon transfer the number of Pledged Shares purchased
pursuant to the Second Xxxx Option to Xxxx.
Page 3
5.3 Borrower Put Option. If the Second Xxxx Option is not exercised by
the end of the Second Call Period, for a period of five (5) days thereafter (the
"Put Period") or, subject to the Subordination Agreement in case of an
acceleration hereunder or in the case of an Event of Default after 269 days,
Borrower will have the right to sell the number of Pledged Shares remaining
under the Pledge Agreement (the "Borrower Put"), to Xxxx at the Second Exercise
Price. The Borrower Put may be exercised by Borrower, only for the entire number
of Pledged Shares remaining under the Pledge Agreement, on any business day on
or prior to the last day of the Put Period, by notice of exercise in accordance
with Section 8.3, in substantially the form attached hereto as Exhibit C (or a
reasonable facsimile thereof) duly executed by Borrower and accompanied by
instructions to release the number of Pledged Shares purchased by Xxxx pursuant
to the Borrower Put to Xxxx in return for payment, in cash or wire transfer of
immediately available funds, or by offset of amounts then due by Borrower under
this Note, in the amount obtained by multiplying (a) the number of Pledged
Shares designated in such notice by (b) the Second Exercise Price.
5.4 Cash Payment. In the event neither the Second Xxxx Option nor the
Borrower Put is exercised, the Note shall be due and payable in cash on the
Stated Maturity Date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower represents and warrants to Xxxx as follows:
6.1. Authorization; Binding Obligation. This Note has been duly and
validly executed and delivered by the Borrower and constitutes a legal, valid
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other federal or state laws of general applicability relating to or affecting
creditors' or secured parties' rights and remedies generally and general
principles of equity, whether considered in an action at law or in equity. The
Borrower has the legal capacity and all requisite power and authority to execute
and deliver this Note and to consummate the transactions contemplated hereby and
to perform its obligations hereunder. Such execution, delivery and consummation
has been duly and validly authorized by all necessary action on the part of the
Borrower, and no other corporate or other proceedings on the part of the
Borrower are necessary to authorize such execution, delivery and consummation.
6.2. Title to the Pledged Shares. Immediately prior to the pledge of
the Pledged Shares, the Borrower was the record and beneficial owner of, and had
good and marketable title to, the Pledged Shares free and clear of all
Encumbrances. The Pledged Shares owned by the Borrower are validly issued, duly
authorized and free of any preemptive rights. There are no voting trusts or
other agreements or understandings to which the Borrower is a party with respect
to the voting of the Pledged Shares. The Pledged Shares are not subject to any
restrictions on transferability other than those imposed by the Securities Act
and applicable state securities laws. Except for the Option Agreement, there are
no options, warrants, calls, commitments or rights of any character to purchase
or otherwise acquire the Pledged Shares from the Borrower pursuant to
Page 4
which the Borrower may be obligated to sell, transfer or otherwise dispose of
any of the Pledged Shares. Subject to the Subordination Agreement, in the event
that (i) the Pledgor defaults under this Note and Xxxx enforces the provisions
of the Pledge Agreement or (ii) the provisions of Article 5 hereof apply, Xxxx
will acquire good and marketable title to the Pledged Shares, free and clear of
all Encumbrances.
6.3. Consents and Approvals; No Violation. None of the execution and
delivery of this Note, the consummation of the transactions contemplated hereby,
or compliance with any of the provisions hereof, will (i) require any consent,
waiver, approval, authorization or permit of, or filing with or notification to,
or any other action by, any Governmental Authority by the Borrower, other than
necessary filings on Form 4 with the Commission, (ii) violate the certificate of
formation or operating agreement of the Borrower, or any Law of any Governmental
Authority which may be applicable to the Borrower, or by which any of the
Borrower's activities, properties or assets (including, without limitation the
Pledged Shares) may be bound or affected or (iii) violate, breach, or conflict
with, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or any obligation to pay or result in the imposition of any Encumbrance upon any
of the property of the Borrower (including, without limitation, the Pledged
Shares)) under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, Encumbrance, contract, agreement, or other instrument or
obligation to which the Borrower is a party or by which any of the Borrower's
activities, properties or assets (including, without limitation, the Pledged
Shares) may be bound or affected.
ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default; Remedies. If any of the following events (each
such event herein termed an "Event of Default") shall happen, that is to say:
7.1.1. the Borrower shall fail to make any payment of Principal
Amount of this Note when due, whether at maturity by acceleration or
otherwise;
7.1.2. the Borrower shall fail to perform or observe any of the
other covenants, agreements or provisions set forth herein or in the
Option Agreement, Stock Purchase Agreement or Pledge Agreement; or
7.1.3. The Borrower shall:
(a) commence a voluntary case under Title 11 of the United
States Code as from time to time in effect, or authorize, by
appropriate proceedings of its board of managers or other
governing body, the commencement of such a voluntary case;
(b) have filed against it a petition under said Title 11
which shall not have been dismissed within 30 days after the date
on which said petition is filed, or file an answer or other
pleading within said 30-day period admitting or failing
Page 5
to deny the material allegations of such a petition, or seeking,
consenting to or acquiescing in the relief therein provided, or
fail to controvert timely the material allegations of any such
petition;
(c) have entered against it an order for relief in any
involuntary case commenced under said Title 11;
(d) seek relief as a debtor under any applicable law, other
than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to or acquiesce
in such relief;
(e) have entered against it any order by a court of
competent jurisdiction (i) finding it to be bankrupt or insolvent,
(ii) ordering or approving its liquidation, reorganization or any
modification or alteration of the rights of its creditors or (iii)
assuming custody of, or appointing a receiver or other custodian
for, all or a substantial part of its property; or
(f) make an assignment for the benefit of, or enter into a
composition with, its creditors or appoint or consent to the
appointment of a receiver or other custodian for all or a
substantial part of its property.
then and in each and every such case, Xxxx shall notify the Borrower of such
Event of Default and, in the event such Event of Default is not cured by
Borrower within thirty (30) days of the date of such notice, Xxxx may declare
all or any part of the unpaid Principal Amount to be forthwith due and payable
(unless there shall have occurred an Event of Default under Section 7.1.3
hereof, in which case the unpaid balance of this Note shall automatically become
due and payable), and thereupon such unpaid Principal Amount or part thereof,
together with interest accrued thereon and all other sums, if any, payable under
this Note, shall become so due and payable without presentation, presentment,
protest or further demand or notice of any kind, all of which are hereby
expressly waived to the extent not prohibited by applicable law that cannot be
waived, and Xxxx, subject to the Subordination Agreement, may proceed to enforce
payment of such amount or part thereof in such manner as it or they may elect,
including the transfer the Pledged Shares to its own account, with the Principal
Amount and interest due under this Note being reduced by the amount equal to (i)
the number of Pledged Shares transferred to Xxxx, multiplied by (ii) the Second
Exercise Price, and if additional Principal Amount and interest remain
outstanding under this Note, Xxxx may proceed to protect and enforce its or
their rights by suit in equity, action at law and/or other appropriate
proceeding either for specific performance of any covenant, provision or
condition contained or incorporated by reference in this Note or the Pledge
Agreement, or in aid of the exercise of any power granted in this Note or the
Pledge Agreement; provided; however, that it is agreed and acknowledged that
Xxxx'x recourse hereunder shall be limited to the Pledged Shares and after 269
days Borrower may only cure such default by exercise of the Borrower Put right
referred to in Section 5.3 hereof.
7.2. Annulment of Defaults. An Event of Default shall not be deemed to
be in existence for any purpose of this Note if Xxxx shall have waived such
event in writing or stated
Page 6
in writing that the same has been cured to its or their reasonable satisfaction.
No waiver or statement of satisfactory cure pursuant to this Section 7.2 shall
extend to or affect any subsequent or other Event of Default not specifically
identified in such waiver or statement of satisfactory cure or impair any of the
rights of Xxxx upon the occurrence thereof.
7.3. Waivers. The Borrower hereby waives to the extent not prohibited
by provisions of applicable law which cannot be waived (a) all presentments,
demands for performance and notices of nonperformance (except to the extent
specifically required by the provisions hereof), (b) any requirement of
diligence or promptness on the part of Xxxx in the enforcement of its rights
under the provisions of this Note or the Pledge Agreement, (c) any and all
notices of every kind and description which may be required to be given by any
legal requirement, and (d) any defense of any kind (other than payment) which it
may now or hereafter have with respect to its obligations and liability under
this Note, the Option Agreement or the Pledge Agreement.
7.4. Course of Dealing. No course of dealing between the Borrower on
the one hand, and Xxxx on the other hand, shall operate as a waiver of the
parties' rights under this Note or the Pledge Agreement. No delay or omission in
exercising any right under this Note or the Pledge Agreement shall operate as a
waiver of such right or any other right. A waiver on any one occasion shall not
be construed as a waiver of or bar to any right or remedy on any other occasion.
No waiver or statement of satisfactory cure or consent shall be binding upon
Xxxx unless it is in writing and signed by Xxxx as may be required by the
provisions of this Note.
ARTICLE VIII
MISCELLANEOUS
8.1. Survival of Representation and Warranties. All representations,
warranties and covenants made by the Borrower, in connection with the
transactions contemplated by this Note shall survive the pledge of the Pledged
Shares, and transfer of ownership of the same to Xxxx under Article 5 or Section
7.1 hereof, or the provisions of the Pledge Agreement.
8.2. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
8.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
Page 7
8.3.1. If to Xxxx, to:
Xxxx Strategic Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
8.3.2. If to the Borrower, to:
Xxxxxxx PRG Liquidating Investments, Ltd.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
With a copy to:
Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000 (direct dial)
Telecopy: (000) 000-0000 (direct fax)
Attention: Xxxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
8.4. Expenses. Each party hereto shall be solely responsible for all
expenses incurred by it or on its behalf in connection with the preparation and
execution of this Note and the consummation of the transactions contemplated
hereby, including, without limitation, the fees and expenses of its counsel,
accountants, brokers, finders, financial advisors and other representatives.
Page 8
8.5. Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for the other parties' failure to perform their obligations under this Note, the
parties hereto acknowledge and agree that the remedy at law for any failure to
perform their obligations hereunder would be inadequate and that each of them,
respectively, shall be entitled to specific performance, injunctive relief or
other equitable remedies in the event of any such failure.
8.6. Descriptive Headings; Interpretation. The headings contained in
this Note are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Note. References in this Note to Sections mean
Sections of this Note, unless otherwise indicated. The term "person" shall mean
and include an individual, a partnership, a joint venture, a corporation, a
trust, a governmental entity or an unincorporated organization. The parties
hereto agree that they have been represented by counsel during the negotiation
and execution of this Note and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in a
document will be construed against the party drafting the document.
8.7. Counterparts. This Note may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.8. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
8.9. Entire Agreement; Third-Party Beneficiaries. This Note
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and is not intended to confer upon any person other than the parties hereto and
their permitted assigns any rights or remedies hereunder.
8.10. Assignment. No party hereto may assign its rights or obligations
under this Note, provided, that Xxxx may assign and transfer this Note and its
rights hereunder to any one or more of its affiliates, and may assign and
transfer any Pledged Shares obtained hereunder to any one or more of such
affiliates.
8.11. Further Assurances. The Borrower and Xxxx agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or desirable in order to implement
the transactions contemplated by this Note.
[The remainder of this page is intentionally blank]
Page 9
The undersigned has caused this Note to be executed and delivered by
its duly authorized officer as of the date first written above.
XXXXXXX PRG LIQUIDATING INVESTMENTS,
LTD., a Texas limited partnership
By: Xxxxxxx PRG Liquidating Investments GP,
L.L.C., a Texas limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
XXXX STRATEGIC PARTNERS II GMBH & CO. KG
By: XXXX STRATEGIC XX XX, L.L.C.,
Its: Managing Limited Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------
Its: Member
--------------------------------------
Page 10
EXHIBIT A
PLEDGE AGREEMENT
XXXXXXX PRG LIQUIDATING INVESTMENTS, LTD.
PLEDGE AGREEMENT
This Agreement, dated as of August 27, 2002, is between Xxxxxxx PRG
Liquidating Investments, Ltd., a Texas limited partnership (the "Pledgor"), and
Xxxx Strategic Partners II GMBH & Co. KG, a German limited partnership (together
with its permitted assignees, collectively, "Xxxx"). The parties agree as
follows:
ARTICLE I
GENERAL
1.1. Note. Xxxx is providing extensions of credit to the Pledgor pursuant
to a Secured Promissory Note dated as of the date hereof, as from time to time
in effect (the "Note"), between the Pledgor and Xxxx. As a condition to
providing the loans under the Note, Xxxx is requiring the Pledgor to pledge the
stock contemplated hereby to secure and satisfy the Pledgor's payment
obligations under the Note (the "Credit Obligations").
1.2. Certain Rules of Construction. Capitalized terms defined in the Note
and not otherwise defined herein are used herein with the meanings so defined.
Certain other capitalized terms are used in this Agreement as specifically
defined below in this Section 1. Except as the context otherwise explicitly
requires, (a) terms defined in the UCC and not otherwise defined herein have the
meaning provided under the UCC and (b) references to a particular person include
such person's successors and assigns to the extent not prohibited by this
Agreement and the Note. References to "the date hereof" mean the date first set
forth above.
1.3. Definitions. The following definitions apply herein:
(a) "Agreement" means this Pledge Agreement as amended, modified and
from time to time in effect.
(b) "Governmental Authority" means any government or political
subdivision thereof, whether federal, state, local or foreign, or any
agency, department, commission, board, bureau, court, tribunal, body,
administrative or regulatory authority or instrumentality of any such
government or political subdivision.
(c) "Law" means any law (including common law), rule, regulation,
restriction, code, statute, ordinance, order, writ, injunction, judgment,
decree or other requirement of a Governmental Authority.
(d) "Lien" means any lien, encumbrance, proxy, voting trust
arrangement, pledge, security interest, collateral security agreement,
financing statement (and similar
notices) filed with any Governmental Authority, claim (including any claim
as defined in the Internal Revenue Code of 1986, as amended), charge,
equities, mortgage, pledge, objection, title defect, option, restrictive
covenant or restriction on transfer of any nature whatsoever, and the
interest of the lessor in any property subject to a capital lease, except
for restrictions or transferability imposed by the Securities Act.
(e) "Subordination Agreement" means that certain Subordination
Agreement dated as of the date hereof between the Pledgor, Xxxx and
PRG-Xxxxxxx International, Inc. ("PRG").
(f) "UCC" means the Uniform Commercial Code as in effect in Delaware
on the date hereof; provided, however, that with respect to the perfection
of Xxxx'x Xxxx on the Pledged Shares and the effect of nonperfection
thereof, the term "UCC" means the Uniform Commercial Code as in effect in
any jurisdiction the laws of which are made applicable by section 9-305 of
the Uniform Commercial Code as in effect in Delaware.
ARTICLE II
SECURITY
2.1. Pledged Shares. As security for the payment and performance of the
Credit Obligations, the Pledgor mortgages, pledges and collaterally grants and
assigns to Xxxx, and creates a security interest in favor of Xxxx in, all of the
Pledgor's right, title and interest in and to (but none of its obligations or
liabilities with respect to) the 31,540 shares of common stock of PRG set forth
in Exhibit A (subject to reduction pursuant to the First Xxxx Option (as defined
in the Note), being collectively referred to as the "Pledged Shares."
2.2. Covenants with Respect to Pledged Shares. The Pledgor covenants that:
2.2.1. Pledged Shares. The Pledged Shares shall be at all times duly
authorized, validly issued, fully paid and nonassessable. The Pledgor will
deliver to Xxxx certificates representing the Pledged Shares held by the
Pledgor, accompanied by stock transfer powers executed in blank and in form
and manner satisfactory to Xxxx. Upon the occurrence and during the
continuance of an Event of Default but subject always to the provisions of
the Subordination Agreement so long as it is in effect, Xxxx may transfer
into its name or the name of its nominee any Pledged Shares. All Pledged
Shares shall be listed on Exhibit A hereto.
2.2.2. No Liens or Restrictions on Transfer. The Pledged Shares shall
be free and clear of any Liens and restrictions on the transfer thereof.
Except for the arrangements set out in the Option Agreement, none of the
Pledged Shares shall be subject to any option to purchase or similar rights
of any Person.
2.2.3. No Sale of Pledged Shares. The Pledgor will not sell, transfer
or otherwise dispose of all or any portion of its interests in the Pledged
Shares except in connection
-2-
with the Option Agreement and except to Xxxx as contemplated under the Note
or this Agreement.
2.2.4. Perfection of Pledged Shares. This Agreement shall create in
favor of Xxxx, a legal, valid and enforceable first priority security
interest in the Pledged Shares. When stock certificates representing such
Pledged Shares and stock transfer powers related thereto duly executed in
blank by the Pledgor are delivered to Xxxx, this Agreement shall provide a
fully perfected, first priority Lien on, and security interest in, all
right, title and interest of the Pledgor in the Pledged Shares, in each
case prior and superior in right to any other Person, except as provided
pursuant to the Option Agreement. Upon Xxxx'x reasonable request from time
to time, the Pledgor will execute and deliver, and file and record in the
proper filing and recording places, all such instruments, including UCC
financing statements, and will take all such other action, as Xxxx deems
reasonably necessary for confirming to it the Pledged Shares, or to carry
out any other purpose of this Agreement or the Note.
2.3. Administration of Pledged Shares. Subject to the provisions of the
Subordination Agreement and in accordance with Section 7.1 of the Note, the
Pledged Shares shall be administered as follows, and if an Event of Default
shall have occurred and be continuing, Section 2.4 shall also apply.
2.3.1. Segregated Proceeds. All sums collected or received and all
property recovered or possessed by the Pledgor in connection with any
Pledged Shares shall be received and held by the Pledgor in trust for and
on Xxxx'x behalf, shall be segregated from the assets and funds of the
Pledgor, and shall be delivered to Xxxx.
2.3.2. Distributions. All distributions on or with respect to the
Pledged Shares, including additional Pledged Shares or other distributions
by way of a dividend or otherwise will be retained by Xxxx (or if received
by the Pledgor shall be held by the Pledgor in trust and shall be
immediately delivered by the Pledgor to Xxxx in the original form received,
endorsed in blank) and held by Xxxx as part of the Pledged Shares or
applied by Xxxx to the payment of the Credit Obligations.
2.3.3. Voting.
(a) Until an Event of Default shall occur and be continuing, the
Pledgor shall be entitled to vote or consent with respect to the Pledged
Shares in any manner not inconsistent with the terms of the Note or the
Option Agreement, and Xxxx will (if so requested) execute appropriate
revocable proxies therefor.
(b) If an Event of Default shall have occurred and be continuing, only
Xxxx shall be entitled to vote or consent or take any other action with
respect to the Pledged Shares, and the Pledgor will (if so requested)
execute or cause to be executed appropriate proxies therefor.
-3-
2.4. Right to Realize upon Pledged Shares. Except to the extent prohibited
by applicable Law that cannot be waived and subject to the provisions of the
Subordination Agreement, this Section 2.4 shall govern Xxxx'x right to realize
upon the Pledged Shares if any Event of Default shall have occurred and be
continuing.
2.4.1. Additional Rights. The provisions of this Section 2.4 are in
addition to any rights and remedies available at law or in equity and in
addition to the provisions of the Note.
2.4.2. General Authority. The Pledgor grants Xxxx full and exclusive
power and authority, subject to the other terms hereof and applicable law,
to take any of the following actions (for the sole benefit of Xxxx, but at
the Pledgor's expense):
(a) To sell, transfer, assign or otherwise deal in or with any Pledged
Shares or the proceeds thereof, as fully as the Pledgor otherwise could do.
(b) To ask for, demand, take, collect, xxx for and receive all
payments in respect of any Pledged Shares which the Pledgor could otherwise
ask for, demand, take, collect, xxx for and receive for its own use.
(c) To settle, compromise, prosecute or defend any action or
proceeding with respect to any Pledged Shares and to enforce all rights and
remedies thereunder which the Pledgor could otherwise enforce.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants to Xxxx as follows:
3.1. Authorization; Binding Obligation. This Agreement has been duly and
validly executed and delivered by the Pledgor and, assuming due authorization,
execution and delivery by Xxxx, constitutes a legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other federal or state
laws of general applicability relating to or affecting creditors' or secured
parties' rights and remedies generally and general principles of equity, whether
considered in an action at law or in equity. The Pledgor has the legal capacity
and all requisite power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby and to perform its
obligations hereunder. Such execution, delivery and consummation has been duly
and validly authorized by all necessary action on the part of the Pledgor, and
no other corporate or other proceedings on the part of the Pledgor are necessary
to authorize such execution, delivery and consummation.
3.2. Title to the Pledged Shares. Immediately prior to the pledge of the
Pledged Shares the Pledgor was the record and beneficial owner of, and had good
and marketable title to, the
-4-
Pledged Shares free and clear of all Liens. The Pledged Shares owned by the
Pledgor are validly issued, duly authorized and free of any preemptive rights.
There are no voting trusts or other agreements or understandings to which the
Pledgor is a party with respect to the voting of the Pledged Shares. The Pledged
Shares are not subject to any restrictions on transferability other than those
imposed by the Securities Act and applicable state securities laws. Except for
the Option Agreement, there are no options, warrants, calls, commitments or
rights of any character to purchase or otherwise acquire the Pledged Shares from
the Pledgor pursuant to which the Pledgor may be obligated to sell, transfer or
otherwise dispose of any of the Pledged Shares. In the event that (i) the
Pledgor defaults under the Note and Xxxx enforces the provisions of this
Agreement, or (ii) the provisions of Section 3.1 of the Note apply, Xxxx will
acquire good and marketable title to the Pledged Shares, free and clear of all
Liens.
3.3. Consents and Approvals; No Violation. None of the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, or compliance with any of the provisions hereof, will (i) require any
consent, waiver, approval, authorization or permit of, or filing with or
notification to, or any other action by, any Governmental Authority by the
Pledgor, other than necessary filings on Form 4 with the Securities and Exchange
Commission, (ii) violate the certificate of formation or limited partnership
agreement of the Pledgor, or any Law of any Governmental Authority which may be
applicable to the Pledgor, or by which any of the Pledgor's activities,
properties or assets (including, without limitation the Pledged Shares) may be
bound or affected or (iii) violate, breach, or conflict with, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration or any obligation to pay
or result in the imposition of any Lien upon any of the property of the Pledgor
(including, without limitation, the Pledged Shares)) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Lien, contract,
agreement, or other instrument or obligation to which the Pledgor is a party or
by which any of the Pledgor's activities, properties or assets (including,
without limitation, the Pledged Shares) may be bound or affected.
ARTICLE IV
DEFEASANCE
If the Option Agreement is exercised, in whole or in part, and all
corresponding Credit Obligations have been paid, performed and reasonably
determined by Xxxx to have been indefeasibly discharged in full, at the
Pledgor's written request (if appropriate), accompanied by a copy of the written
exercise of the Option Agreement and such certificates and other items as Xxxx
shall reasonably deem necessary, the number of Pledged Shares required to be
delivered by the Pledgor upon the exercise, in whole or in part, of the Option
Agreement shall revert to the Pledgor and the right, title and interest of Xxxx
therein shall terminate. Thereupon, on the Pledgor's demand and at its cost and
expense, Xxxx shall execute proper instruments, acknowledging satisfaction of
and discharging this Agreement with respect to the Pledged Shares to be
transferred, and shall redeliver to the Pledgor, for delivery to PRG, the number
of Pledged Shares required to be delivered by the Pledgor to PRG upon the
exercise of the Option Agreement.
-5-
ARTICLE V
MISCELLANEOUS
5.1. Survival of Representation and Warranties. All representations,
warranties and covenants made in this Agreement, or made in writing to Blum, by
or on behalf of the Pledgor, in connection with the transactions contemplated by
this Agreement shall survive the pledge of the Pledged Shares, and transfer of
ownership of the same to Xxxx under the Note or this Agreement.
5.2. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
5.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
5.3.1. If to Xxxx, to:
Xxxx Strategic Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
-6-
5.3.2. If to the Pledgor, to:
Xxxxxxx PRG Liquidating Investments, Ltd.
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telefax: (000) 000-0000
With a copy to:
Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000 (direct dial)
Telecopy: (000) 000-0000 (direct fax)
Attention: Xxxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
5.4. Expenses. Each party hereto shall be solely responsible for all
expenses incurred by it or on its behalf in connection with the preparation and
execution of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, the fees and expenses of its
counsel, accountants, brokers, finders, financial advisors and other
representatives.
5.5. Specific Performance. Without limiting the rights of each party hereto
to pursue all other legal and equitable rights available to such party for the
other parties' failure to perform their obligations under this Agreement, the
parties hereto acknowledge and agree that the remedy at law for any failure to
perform their obligations hereunder would be inadequate and that each of them,
respectively, shall be entitled to specific performance, injunctive relief or
other equitable remedies in the event of any such failure.
5.6. Descriptive Headings; Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. References in this Agreement to
Sections mean Sections of this Agreement, unless otherwise indicated. The term
"person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, a governmental entity or an unincorporated organization.
The parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
5.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
-7-
5.8. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
5.9. Entire Agreement; Third-Party Beneficiaries. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and is not intended to confer upon any person other than the parties hereto and
their permitted assigns any rights or remedies hereunder.
5.10. Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of Xxxx and its successors and assigns and shall be binding upon
the Pledgor. Xxxx may assign its rights and obligations under this Agreement,
including the right to receive or hold Pledged Shares, to its affiliates,
without the consent of the Pledgor. The Pledgor may not assign its rights or
obligations under this Agreement without the written consent of Xxxx.
5.11. Further Assurances. The Pledgor and Xxxx agree to execute and deliver
such other documents, certificates, agreements and other writings and to take
such other actions as may be necessary or desirable in order to implement the
transactions contemplated by this Agreement.
5.12. Termination. This Agreement will terminate upon the full satisfaction
of the Credit Obligations by Borrower.
[The remainder of this page is intentionally blank]
-8-
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first written above.
XXXXXXX PRG LIQUIDATING INVESTMENTS,
LTD., a Texas limited partnership
By: Xxxxxxx PRG Liquidating Investments GP,
L.L.C., a Texas limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
XXXX STRATEGIC PARTNERS II GMBH &
CO. KG
By: XXXX STRATEGIC XX XX, L.L.C.,
Its: Managing Limited Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------
Its: Member
--------------------------------------
-9-
EXHIBIT A
PLEDGED SHARES
Shares of
Holder Common Stock Certificate No.
------ ------------ ---------------
Xxxxxxx PRG Liquidating 31,540 PRGX 0222
Investments, Ltd.
-10-
EXHIBIT E
Subordination Agreement
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("Agreement") is made this 27th day of
August, 2002, by and among PRG-Xxxxxxx International, Inc., a Georgia
corporation ("PRGX"), Xxxx Strategic Partners II, L.P. and Xxxx Strategic
Partners II GMBH & Co. KG (collectively with their permitted assignees, "Xxxx")
and Xxxxxxx PRG Liquidating Investments, Ltd., a Texas limited partnership
("LP").
WITNESSETH:
WHEREAS, on the date hereof, LP granted to PRGX an option (the
"Option") to purchase 1,446,168 shares of Common Stock of PRGX ("Option Shares")
pursuant to that certain Second Option Agreement of even date herewith ("Option
Agreement");
WHEREAS, on the date hereof, Xxxx loaned $12,610,584.96 to LP as
evidenced by secured promissory notes of even date herewith ("Notes") and, as
security for its payment obligations under the Notes, the LP has granted a
security interest in and pledged the Option Shares (hereafter, the "Pledged
Shares") to Xxxx, pursuant to Pledge Agreements of even date herewith ("Pledge
Agreements");
WHEREAS, on the date hereof, the LP and its affiliates sold an
aggregate of 4,338,507 shares of PRGX Common Stock to affiliates of Xxxx;
WHEREAS, PRGX has granted registration rights to Xxxx with respect to
shares of PRGX Common Stock pursuant to a registration rights agreement, without
which Xxxx would not have acquired the 4,338,507 PRGX Shares referred to above;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Xxxx'x right to realize upon the Pledged Shares upon an Event of
Default under the Pledge Agreements and/or the Notes shall be subordinate to the
rights of PRGX to such Pledged Shares (but not to the proceeds thereof) under
the Option Agreement.
2. Xxxx hereby agrees (i) that until the expiration of the Option
Agreement it will take no action with respect to the Pledged Shares or any
portion thereof pursuant to the Pledge Agreements, nor will it take any action
against the LP to interfere with or impair PRGX's ability to obtain full right,
title, and interest in the Pledged Shares or any portion thereof pursuant to the
exercise of the Option Agreement and purchase of the Pledged Shares thereunder
and (ii) that, upon the full exercise of the Option under the Option Agreement,
the Pledge Agreements will be cancelled and terminated, provided that
notwithstanding anything herein to the contrary, Xxxx shall at all times be
permitted to exercise the First Xxxx Option (as defined in the Notes) in
accordance with its terms.
3. Upon repayment of the Notes in whole or in part by LP to Xxxx in
accordance with Section 3.1 of the Notes, Xxxx shall release the number of
Pledged Shares relating to such repayment to the LP, as agent on behalf of the
parties to deliver such shares to PRGX. In the event an Event of Default occurs
(as defined in the Notes) and is continuing, and notice thereof is given to PRGX
prior to payment under the Option Agreement, PRGX shall, if it exercises the
Option, hold the Purchase Price therefor in trust for the benefit of Xxxx and/or
LP in accordance
with the terms of the Option Agreement. The parties hereto hereby acknowledge
that PRGX shall have no liability to any party on account of its failure to
disburse the Purchase Price for the Pledged Shares in the event of any dispute
as to whom is entitled to receive such Purchase Price. In such event, PRGX shall
have the right to retain the funds and disburse them (a) in accordance with
joint instructions from Xxxx and LP, (b) in accordance with the final order of a
court of competent jurisdiction, or (c) by deposit by PRGX of the Purchase Price
for the Pledged Shares with said court, pending a final decision of such
controversy. The parties hereto further agree that PRGX shall not be liable for
failure of the depository and shall only be liable otherwise in the event of its
gross negligence or willful misconduct.
4. Collection of Proceeds. Nothing herein contained shall limit or
restrict the right of Xxxx to collect any proceeds paid to LP upon the exercise
of the Option Agreement.
5. Miscellaneous.
(A) GOVERNING LAW. THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW.
(b) Modifications. No modification of or amendment to this Agreement,
nor any waiver or any rights under this Agreement, shall be effective unless in
writing signed by all of the parties to this Agreement. The failure by any party
to enforce any rights under this Agreement shall not be construed as a waiver of
any rights of such party.
(c) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
If to Xxxx, to:
Xxxx Strategic Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
-2-
If to the PRGX, to:
PRG-Xxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx XxXxxxxx, Xx.
Senior Vice President and General Counsel
With a copy to:
Xxxxxx Xxxxxx Xxxxxxx LLP
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Telephone: 404 (873)-8700
Telecopy: 404 (873)-8701
Attention: Xxxxxxxx Xxxxxx
If to LP: Xxxxxxx PRG Liquidating Investments, Ltd
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telefax: (000) 000-0000
With a copy to:
Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telefax: (000) 000-0000
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(e) Successors and Assigns. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by PRGX's and Xxxx'x
respective successors and assigns and any assignee of the Notes held by Xxxx
shall be bound by this Agreement.
(f) Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for the other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
-3-
(g) Further Assurances. PRGX and Xxxx agree to execute and deliver such
other documents, certificates, agreements and other writings and to take such
other actions as may be reasonably necessary or desirable in order to implement
the transactions contemplated by this Agreement and the transfer of any shares
of PRGX Common Stock under that certain Purchase Agreement dated as of the date
hereof between Xxxx and Berkshire Fund V Investment Corp.
(h) Termination. This Agreement will terminate upon the earlier of the
expiration of the Option Agreement or indefeasible payment of the Note by LP in
accordance with the terms thereof.
(i) Capitalized Terms. Capitalized terms defined in the Note and not
otherwise defined herein shall have the meanings set forth in the Note.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRG-XXXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx XxXxxxxx, Xx.
---------------------------------------------
Name: Xxxxxxx XxXxxxxx, Xx.
-------------------------------------------
Its: Senior Vice President, General Counsel and
--------------------------------------------
Secretary
--------------------------------------------
XXXX STRATEGIC PARTNERS II, L.P.
By: XXXX STRATEGIC XX XX, L.L.C.,
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------------
Its: Member
--------------------------------------------
LP:
XXXXXXX PRG LIQUIDATING
INVESTMENTS, LTD.
By: XXXXXXX PRG LIQUIDATING
INVESTMENTS GP, LLC
Its: General Partner
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx, Vice President
XXXX STRATEGIC PARTNERS II GMBH & CO. KG
By: XXXX STRATEGIC XX XX, L.L.C.,
Its: Managing Limited Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------------
Its: Member
--------------------------------------------
-4-
EXHIBIT F
Second Option Agreement
SECOND
OPTION AGREEMENT
THIS SECOND OPTION AGREEMENT (this "Agreement") is made and entered
into effective this 27th day of August, 2002 (the "Effective Date"), by and
among Xxxxxxx PRG Liquidating Investments, Ltd., a Texas limited partnership
("Grantor") and PRG-Xxxxxxx International, Inc., a Georgia corporation
("Grantee").
Background
A. Grantor and its affiliates own shares of common stock, no par value
per share, of Grantee ("PRGX Shares").
B. Effective on the date hereof, Grantor and its affiliate sold
4,338,507 PRGX Shares to affiliates of Xxxx Strategic Partners II, LP
(collectively, "Xxxx Buyer").
C. On the date hereof, Grantor has granted to Grantee another option to
purchase 1,446,168 PRGX Shares pledged to affiliates of Berkshire Partners LLC
(the "First Option") pursuant to an option agreement of even date herewith.
D. Grantee has assisted the Grantor to facilitate the sale of PRGX
Shares by Grantor to the Xxxx Buyer, which Grantor acknowledges that Grantee was
not required to do. Grantee has agreed to amend its Shareholder Protection
Rights Plan dated as of August 9, 2000 in order to permit such sale of PRGX
Shares and has granted certain registration rights, pursuant to a registration
rights agreement, to Xxxx Buyer, without which rights Xxxx Buyer would not have
acquired the 4,338,507 PRGX Shares referred to above.
Agreement
NOW, THEREFORE, for and in consideration of the foregoing premises and
the mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Option.
1.1 Grant of Option. Grantor hereby grants to Grantee an
irrevocable option (the "Option") to purchase all right, title and interest in
up to 1,446,168 PRGX Shares (the "Option Shares") in exchange for the payment of
a purchase price equal to $8.72 per share for each share which is the subject of
the Option exercise, together with interest (as additional purchase price) on
such amount from the date hereof until the date of payment at a rate equal to
eight percent (8%) per annum, computed on the basis of the actual number of days
elapsed (the "Purchase Price"), free and clear of all liens and encumbrances.
The Grantee acknowledges that the Option Shares are currently pledged to the
Xxxx Buyer in connection with a Secured Promissory Note ("Note") and Pledge
Agreement between Grantor and the Xxxx Buyer (the "Xxxx Loan"), which pledge is
subordinate to the rights of the Grantee under this Option
1.2 Exercise of Option. Subject to Section 1.3, Grantee may,
at any time and from time to time during the term of this Agreement, exercise
the Option in one or more increments of at least a number of shares such that
the Grantor's ownership of common stock of PRGX is reduced so as to satisfy the
requirements of Section 302(b)(2) of the Internal Revenue Code of 1986, as
amended,
taking into account any attribution rules applicable in determining Grantor's
ownership of such stock, by delivering written notice of exercise to Grantor
(the "Exercise Notice") on or before a date 255 days after the date hereof,
setting forth the number of Option Shares that Grantee is acquiring and
designating a time and place at which the closing of such purchase shall occur
(the "Option Closing"), provided that the Option Closing shall occur not later
than five (5) days after the date of the Option Notice.
1.3 Manner of Purchase.
(a) At the Option Closing, Grantee shall pay to Grantor the
Purchase Price for the Option Shares to be purchased by cash, wire transfer or
other immediately available funds. If Grantee has received Notice of an Event of
Default (as defined in the Note) that is continuing, Grantee shall be entitled
to hold the Purchase Price in trust for the benefit of Xxxx and/or Grantor until
(a) Grantee has received joint instructions from Xxxx and Grantor as to the
payment of the Purchase Price, (b) there is a final order of a court of
competent jurisdiction directing the parties as to payment of the Purchase
Price, or (c) Grantee deposits the Purchase Price for the Option Shares with
said court, pending a final decision of such controversy. In any such event, the
Option shall be deemed fully and properly exercised and all rights to the Option
Shares shall be vested in Grantee.
(b) Upon the receipt of the Purchase Price, Grantor shall
execute and deliver to Grantee such instruments as are necessary and proper or
may be required by Grantee's transfer agent to transfer full and complete title
to the Option Shares to be transferred to the Grantee, free and clear of all
liens and encumbrances. Grantor hereby agrees that upon receipt of the Purchase
Price, it shall promptly take all actions necessary or appropriate as may be
reasonably requested by Grantee or its transfer agent to effect the transfer of
record and beneficial ownership to such Option Shares so purchased on the books
and records of Grantee.
2. Limitation. Grantee hereby covenants that it will not purchase a
greater number of Option Shares hereunder upon exercise of the Option granted
herein than the number of PRGX Shares purchased upon exercise of the First
Option.
3. Restrictions on Transfer and Acquisition.
3.1 Option Shares. Grantor hereby covenants that, until the expiration
of the Option, it will make no transfer of any interest in the Option Shares,
other than the grant of the security interest under the Pledge Agreement in
connection with the Xxxx Loan. Grantor represents that there are no contractual
or other restrictions on the Grantor's ability to transfer the Option Shares
(other than those imposed by the Shareholder Agreement, as amended, and
applicable state and federal securities laws).
3.2 Additional Shares. Subject to Section 4.1 hereof, Grantor covenants
that it will not acquire any additional shares of PRGX Common Stock prior to a
date 271 days after the date hereof.
3.3 No Assignment. The Option granted hereunder may not be transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise), nor shall any such rights be subject to execution, attachment or
similar process.
4. Term and Termination. This Agreement shall terminate and be of no
force and effect, unless extended in writing by all of the parties hereto, on
the date which is 270 days after the date hereof; provided that the provisions
of the second sentence of Section 1.3(a) and Section 5 shall survive.
2
5. General Provisions.
5.1 Adjustment to Option Shares. If the outstanding shares of common
stock of PRGX are changed into or exchanged for a different number or kind of
shares or other securities of PRGX by reason of any recapitalization,
reclassification, stock split, stock dividend, combination, subdivision or
similar transaction, then, subject to any required action by the stockholders of
the PRGX, the number and kind of Option Shares subject to this Option and the
price per share of the Shares subject to the Option shall be proportionately
adjusted.
5.2 GOVERNING LAWS. THIS AGREEMENT SHALL BE CONSTRUED, ADMINISTERED AND
ENFORCED ACCORDING TO THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
5.3 Assignment; Successors. This Agreement and the rights and
obligations of the Grantor hereunder may not be transferred or assigned by the
Grantor to any other person or entity without the prior written consent of the
Grantee. This Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors and assigns.
5.4 Notice. All notices, requests, demands, claims or other
communications hereunder will be in writing and shall be deemed duly given if
personally delivered, sent by telefax, sent by a recognized overnight delivery
service which guarantees next-day delivery ("Overnight Delivery") or mailed by
certified mail, return receipt requested, postage prepaid and addressed to the
intended recipient, as set forth below:
If to Grantor: Xxxxxxx PRG Liquidating Investments, Ltd.
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telefax: (000) 000-0000
with a copy to: Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telefax: (000) 000-0000
If to Grantee: PRG-Xxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx XxXxxxxx, Xx.
Senior Vice President & General Counsel
Telefax: (000) 000-0000
with a copy to: Xxxxxx Xxxxxx Xxxxxxx LLP
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
3
Telefax: (000) 000-0000
or at such other address as any party hereto notifies the other parties hereof
in writing. The parties hereto agree that notices or other communications that
are sent in accordance herewith (i) by personal delivery or telefax, will be
deemed received on the day sent or on the first business day thereafter if not
sent on a business day (with written confirmation of receipt), (ii) by Overnight
Delivery, will be deemed received on the first business day immediately
following the date sent, and (iii) by certified U.S. Mail, return receipt
requested, will be deemed received three (3) business days immediately following
the date sent. For purposes of this Agreement, a "business day" is a day on
which U.S. national banks are open for business and shall not include a Saturday
or Sunday or legal holiday. Notwithstanding anything to the contrary in this
Agreement, no action shall be required of the parties hereto except on a
business day and in the event an action is required on a day which is not a
business day, such action shall be required to be performed on the next
succeeding day which is a business day.
5.5 Severability. In the event that any one or more of the provisions or
portion thereof contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, the same shall not invalidate
or otherwise affect any other provisions of this Agreement, and this Agreement
shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.
5.6 Entire Agreement; Amendment. This Agreement expresses the entire
understanding and modified except as set forth in writing and signed by all of
the parties hereto.
5.7 Headings. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
5.8 Specific Enforcement. Each of the parties hereto expressly agrees that
the other parties will be irreparably damaged if this Agreement is not
specifically performed. Upon a breach of the terms, covenants and/or conditions
of this Agreement by any party, the other parties shall, in addition to any and
all other rights and remedies at law or in equity, be entitled to a temporary or
permanent injunction, without showing any actual damage, and/or a decree for
specific performance, in accordance with the provisions hereof. All such rights
and remedies shall be cumulative.
5.9 Counterparts. This Agreement may be executed in two or more
counterparts, and delivered by facsimile transmission or otherwise, each of
which shall be deemed an original and all of which shall constitute one and the
same instrument.
[Remainder of page intentionally left blank. Signatures on
following page.]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first set forth above.
GRANTOR:
XXXXXXX PRG LIQUIDATING
INVESTMENTS, LTD.
By: XXXXXXX PRG LIQUIDATING
INVESTMENTS GP, LLC
Its: General Partner
By: /s/ Xxxxxx Xxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxx
Its: Manager
GRANTEE:
PRG-XXXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx XxXxxxxx, Xx.
------------------------------------
Its: Senior Vice President, General
----------------------------------
Counsel and Secretary
----------------------------------
5
EXHIBIT G
Purchase Agreement
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement"), dated as of August 27, 2002,
is made between Berkshire Fund V, Limited Partnership, a Massachusetts limited
partnership, Berkshire Investors LLC, a Massachusetts limited liability company
(collectively, together with their permitted assignees, "Berkshire"), Blum
Strategic Partners II, L.P., a Delaware limited partnership ("Strategic II"),
and Blum Strategic Partners II GMBH & Co. KG, a German limited partnership
("Xxxx GMBH" and collectively with Strategic II and their permitted assignees,
"Blum").
WHEREAS, Berkshire has entered into promissory notes (the "Berkshire
Notes"), dated as of August 27, 2002, with Xxxxxxx PRG Liquidating Investments,
Ltd., a Texas limited partnership ("Xxxxxxx Limited") pursuant to which
Berkshire has agreed to lend Xxxxxxx Limited an aggregate of $12,610,584.96,
secured by 1,446,168 shares of common stock, no par value, (the "Common Stock")
of PRG-Xxxxxxx International, Inc., a Georgia corporation ("PRG") held by
Xxxxxxx Limited and the Pledge Agreements associated thereunder (the "Berkshire
Pledge Agreements");
WHEREAS, PRG has entered into an option agreement with Xxxxxxx Limited,
dated as of August 27, 2002, pursuant to which PRG has the right to purchase the
Common Stock held by Xxxxxxx Limited and pledged to Berkshire pursuant to the
Berkshire Notes (the "First Option");
WHEREAS, Blum has entered into promissory notes, dated as of August 27,
2002, with Xxxxxxx Limited pursuant to which Blum has agreed to lend Xxxxxxx
Limited an aggregate of $12,610,584.96, secured by 1,446,168 shares of Common
Stock held by Xxxxxxx Limited (the "Blum Notes") and the Pledge Agreements
associated thereunder (the "Blum Pledge Agreements);
WHEREAS, PRG has entered into an option agreement with Xxxxxxx Limited,
dated as of August 27, 2002, pursuant to which PRG has the right to purchase the
Common Stock held by Xxxxxxx Limited and pledged to Blum pursuant to the Blum
Notes, with a limit equal to the shares purchased by PRG pursuant to the First
Option (the "Second Option"); and
WHEREAS, Berkshire desires to purchase and Blum desires to sell the
Subject Shares (as defined below) subject to the terms and conditions provided
in this Agreement.
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter set forth, intending to be legally bound, the parties hereby agree
as follows:
ARTICLE I.
RIGHT TO PURCHASE
1.1. Notice of Actions. For the purpose of making the calculations of
Subject Shares and Purchase Price under Section 1.2, up and until the later of
the Notice Date or the Closing (as defined below) and pursuant to the notice
provisions of Section 2.3.: (i) promptly after each notice to Berkshire by
Xxxxxxx Limited of the exercise (in whole or in part) of the First Option by PRG
and the corresponding repayment of all or a portion of the Berkshire Notes by
Xxxxxxx
Limited in cash in return for the release of shares of Common Stock pledged by
Xxxxxx Limited pursuant to the Berkshire Notes, Berkshire will provide written
notice ("Berkshire Note Repayment Notice") to Blum in the form of Exhibit A
hereto of (a) the number of shares of Common Stock released to Xxxxxxx Limited
in connection with a cash repayment ("Berkshire Shares") and (b) the total
payment of principal and interest made by Xxxxxxx Limited under the Berkshire
Notes at the at the time of repayment and transfer of Common Stock (a "Berkshire
Payment Amount"), (ii) promptly after each notice to Blum by Xxxxxxx Limited of
the exercise (in whole or in part) of the Second Option by PRG and the
corresponding repayment of all or a portion of the Blum Notes by Xxxxxxx Limited
in cash in return for the release of shares of Common Stock pledged by Xxxxxx
Limited pursuant to the Blum Notes, Blum will provide written notice to
Berkshire in the form of Exhibit A hereto of (a) the number of shares of Common
Stock released to Xxxxxxx Limited in connection with a cash repayment and (b)
the total payment of principal and interest made by Xxxxxxx Limited under the
Blum Notes at the time of repayment and transfer of Common Stock and (iii) each
of Blum and Berkshire agree to promptly provide copies of all documents relating
to the repayment of the Blum Notes and the Berkshire Notes to the other parties.
1.2. Exercise; Amount. Berkshire shall have the right to purchase from
Blum (the "Purchase Right"), such number of duly authorized, validly issued,
fully paid and nonassessable shares of PRG Common Stock as is determined by
multiplying (i) the excess, if any of (a) the number of shares of Common Stock
transferred by Xxxxxxx Limited to Blum pursuant to the put/call under the Blum
Notes over (b) the number of shares of Common Stock transferred by Xxxxxxx
Limited to Berkshire pursuant to the put/call under the Berkshire Notes, by (ii)
0.5 (the "Subject Shares"). The price per share to be paid by Berkshire for the
Subject Shares upon the exercise of the Purchase Right shall be equal to (i) the
sum of the Berkshire Payment Amounts set forth in all of the Berkshire Note
Repayment Notices divided by (ii) the total number of Berkshire Shares set forth
in all Berkshire Note Repayment Notices (the "Per Share Purchase Price").
The number of Subject Shares each Berkshire Fund may purchase and the Per Share
Purchase Price will be subject to adjustment to account for any stock splits,
stock dividends or reclassifications affecting PRG's Common Stock, which are
effected or declared after the date hereof and prior to the Closing (as defined
below). The amount of Subject Shares each Berkshire Fund may purchase shall not
include any fractional shares and shall be rounded up to the nearest whole share
of Common Stock.
1.3. Manner of Exercise. Notice of the exercise of the Purchase Right
may be made by Berkshire on any business day after the expiration of the Second
Option and on or prior to 260 days (the "Notice Date"), by written exercise
notice to Blum in substantially the form attached as Exhibit B to this Agreement
(or a reasonable facsimile thereof), duly executed by Berkshire.
1.4. Payment; Delivery of Stock Certificates, etc. As soon as
practicable after the exercise of the Purchase Right, and in any event within
three (3) days thereafter, upon receipt of payment by wire transfer of
immediately available funds to Blum in the amount obtained by multiplying (a)
the number of Subject Shares elected to be purchased (the "Purchased Shares") by
(b) the Per Share Purchase Price, Blum will deliver to Berkshire a certificate
or certificates for
2
the number of duly authorized, validly issued, fully paid and nonassessable
Purchased Shares to which Berkshire is entitled, free and clear of all
Encumbrances, with duly executed stock transfer powers in the names designated
by Berkshire (the "Closing"). At the Closing, Blum will deliver to Berkshire a
written representation that the Purchased Shares so delivered are free and clear
of any lien, encumbrance, proxy, voting trust arrangement, pledge, security
interest, collateral security agreement, financing statement (and similar
notices) filed with any governmental authority, claim (including any claim as
defined in the Internal Revenue Code of 1986, as amended), charge, equities,
mortgage, pledge, objection, title defect, option, restrictive covenant or
restriction on transfer of any nature whatsoever, except for restrictions or
transferability imposed by applicable Securities Laws or any Registration Rights
and Lock-Up Agreement existing on the date hereof ("Encumbrances").
1.5. Transaction Agreements. Berkshire represents and warrants to Blum
that the only agreements it has entered into with PRG, Xxxxxxx Limited or
otherwise in connection with the transactions contemplated by this Agreement
are: (i) a Stock Purchase Agreement, dated August 16, 2002, between Berkshire,
Xxxxxxx Limited and certain other parties, (ii) a Registration Rights Agreement,
dated the date hereof, between PRG and Berkshire, (iii) an Investor Rights
Agreement, dated the date hereof, between PRG, Strategic II and Berkshire, (iv)
the Berkshire Notes (v) a Subordination Agreement between PRG, Berkshire and
Xxxxxxx Limited, (vi) the Berkshire Pledge Agreements, (vii) this Agreement,
(viii) a letter regarding execution of documents dated the date hereof between
PRG and Berkshire, and (ix) a Management Rights Letter, dated the date hereof,
between PRG and Berkshire. Blum represents and warrants to Berkshire that the
only agreements it has entered into with PRG, Xxxxxxx Limited or otherwise in
connection with the transactions contemplated by this Agreement are: (i) a Stock
Purchase Agreement, dated August 16, 2002, between Strategic II, Xxxxxxx Limited
and certain other parties, (ii) a Registration Rights Agreement, dated the date
hereof, between PRG and Strategic II, (iii) an Investor Rights Agreement, dated
the date hereof, between PRG, Strategic II and Berkshire, (iv) the Blum Notes,
(v) a Subordination Agreement between PRG, Blum and Xxxxxxx Limited, (vi) the
Blum Pledge Agreements, (vii) this Agreement, (viii) a letter regarding
execution of documents dated August 16, 2002, between PRG and Strategic II, (ix)
a Standstill Agreement, dated August 16, 2002, between PRG and Strategic II, (x)
an Amended and Restated Standstill Agreement, dated August 21, 2002, between PRG
and Strategic II, (xi) a Second Amendment to Shareholder Protection Rights
Agreement, dated August 16, 2002, between PRG and Wachovia Bank, National
Association f/k/a First Union National Bank, and (xii) a Management Rights
Letter, dated the date hereof, between PRG and Strategic II.
ARTICLE II.
MISCELLANEOUS
2.1. No Impairment; Other Actions. The parties hereto will not avoid
or seek to avoid the observance or performance of any of the terms of this
Agreement, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the parties hereto against
dilution or impairment.
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2.2. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
2.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
(a) If to Berkshire, to:
Berkshire Partners LLC
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxxx, Esq.
(b) If to Blum, to:
Blum Strategic Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
4
or to such other address as the person to whom notice is to be given
may have previously furnished to the other in writing in the manner set forth
above, provided that notice of a change of address shall be deemed given only
upon receipt.
2.4. Expenses. Each party hereto shall be solely responsible for all
expenses incurred by it or on its behalf in connection with the preparation and
execution of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, the fees and expenses of its
counsel, accountants, brokers, finders, financial advisors and other
representatives.
2.5. Specific Performance. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for the other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
2.6. Descriptive Headings; Interpretation. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. References in this Agreement to
Sections mean Sections of this Agreement, unless otherwise indicated. The term
"person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, a governmental entity or an unincorporated organization.
The parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
2.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
2.8. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith with a view to the substitution therefor of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision, provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
5
2.9. Entire Agreement; Third-Party Beneficiaries. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and is not intended to confer upon any person other than the parties hereto and
their permitted assigns any rights or remedies hereunder.
2.10. Assignment. No party hereto may assign its rights or obligations
under this Agreement, provided that each Berkshire Fund may assign its rights to
purchase Subject Shares hereunder to any one or more of its affiliates, and may
assign and transfer any Purchased Shares so purchased to any one or more of such
affiliates so long as such affiliate agrees to be bound hereunder; provided,
further that Blum may assign its rights to sell Subject Shares hereunder to any
one of its affiliates, and may assign and transfer any Subject Shares to be
purchased by Berkshire to any one or more of such affiliates so long as such
affiliate agrees to be bound hereunder.
2.11. Termination. Berkshire's Purchase Right under this Agreement will
terminate upon the earlier of (i) the failure of Berkshire to exercise its
Purchase Right by midnight on the Notice Date, (ii) the failure of PRG to
exercise the First Option by the relevant exercise date, or (iii) the exercise,
in their entirety, of the First Option and the Second Option by PRG, provided,
that Sections 1.5 and Article II shall survive any such termination.
[Remainder of Page Intentionally Left Blank]
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on
the day and year first above written.
BERKSHIRE FUND V, LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC
its General Partner
By: /s/ Xxxx X. Xxxxx
------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
BERKSHIRE INVESTORS LLC
By: /s/ Xxxx X. Xxxxx
------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
BLUM STRATEGIC PARTNERS II, L.P.
By: Blum Strategic XX XX, L.L.C.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Member
BLUM STRATEGIC PARTNERS II GMBH & CO. KG
By: Blum Strategic XX XX, L.L.C.,
its Managing Limited Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Member
Exhibit A
FORM OF NOTE REPAYMENT NOTICE
To [_____]:
The undersigned party (or permitted assignee) to the Purchase
Agreement, dated August __, 2002 between Berkshire Fund V, Limited Partnership,
Berkshire Investors LLC and Blum Strategic Partners II, L.P.(the "Agreement"),
hereby provides this Note Repayment Notice to [_____] pursuant to Section 1.1 of
the Agreement such that (i) the number of shares of Common Stock released to
Xxxxxxx Limited in connection with a cash repayment on [______] of the
Promissory Note issued by [___] is [____] shares and (ii) the total payment of
principal and interest made by Xxxxxxx Limited under the Promissory Note issued
by [___ ] at the at the time of repayment and transfer of Common Stock is
$______ .
Dated: __________ [Name Entity]
By:________________________________
Name:
Title:
Exhibit B
FORM OF EXERCISE
To Blum Strategic Partners II, L.P.:
The undersigned party (or permitted assignee) to the Purchase
Agreement, dated August __, 2002 between Berkshire Fund V, Limited Partnership,
Berkshire Investors LLC and Blum Strategic Partners II, L.P., hereby irrevocably
exercises its Purchase Right for _______ shares of PRG Common Stock and upon
payment of $______ therefor, requests that the certificates for such shares be
transferred in the name of, and delivered to ________, whose address is
_________.
Dated: _______, 2003 [Name of Berkshire Entity]
By:________________________________
Name:
Title:
EXHIBIT H
Management Rights Letter
(Exhibit Not Included)
EXHIBIT I
Opinion of Sellers' Counsel
(Exhibit Not Included)
EXHIBIT J
Amended and Restated Standstill Agreement
AMENDED AND RESTATED
STANDSTILL AGREEMENT
THIS AMENDED AND RESTATED STANDSTILL AGREEMENT (this "Agreement"),
dated as of August 21, 2002, is by and among PRG-XXXXXXX INTERNATIONAL, INC., a
Georgia corporation (the "Company"), and each of the other parties identified on
the signature pages hereto (collectively, the "Investors").
W I T N E S S E T H:
WHEREAS, the Investors are the Beneficial Owners of shares of the
Common Stock of the Company and desire to acquire additional shares of such
Common Stock; and
WHEREAS, the Company has adopted that certain Shareholder Protection
Rights Agreement (the "Rights Agreement") dated as of August 9, 2000, as amended
effective on May 15, 2002, between the Company and First Union National Bank, as
Rights Agent; and
WHEREAS, in order to induce the Company's Board of Directors to act to
amend the Rights Agreement to exclude, in certain circumstances, the Investors
from the definition of "Acquiring Person" under clause (iii) of such definition
appearing in the Rights Agreement, the Investors entered into a Standstill
Agreement with the Company as of August 16, 2002 (the "Standstill Agreement").
WHEREAS, the parties to the Standstill Agreement have agreed to enter
into this Amended and Restated Standstill Agreement to correct and clarify
certain provisions thereof and intend that this Agreement supersede the
Standstill Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Agreement which are
not otherwise defined by this Agreement are used with the same meaning ascribed
to such terms in the Rights Agreement. In addition, unless the context otherwise
requires, the following terms shall have the following meanings for purposes of
this Agreement:
(a) "13D Group" means any "group" (within the meaning of
Section 13(d) of the Exchange Act) formed for the purpose of acquiring, holding,
voting or disposing of Voting Stock of Company.
(b) "Acquisition Proposal" shall mean a bona fide, written
proposal which includes all material terms of a proposed transaction received by
the Board of Directors of the Company from any Person proposing to enter into a
transaction which, if consummated, would constitute a Change of Control of the
Company.
(c) "Change of Control" shall mean (i) the acquisition by a
Third Party of more than 50% of the Company's then outstanding Voting Stock,
excluding however, a purchase
agreement with an underwriter or group of underwriters in a registered public
offering to the public; (ii) the consummation of a merger, acquisition,
consolidation or reorganization or series of such related transactions involving
the Company, unless immediately after such transaction or transactions, the
shareholders of the Company immediately prior to such transaction shall
Beneficially Own at least 50% of the outstanding Voting Stock of the Company
(or, if the Company shall not be the surviving company in such merger,
consolidation or reorganization, the Voting Stock of the surviving corporation
issued in such transaction or transactions in respect of Voting Stock of the
Company shall represent at least 50% of the Voting Stock of such surviving
corporation); (iii) a change or changes in the membership of the Company's Board
of Directors which represents a change of a majority of such membership during
any twelve-month period (unless such change or changes in membership are caused
by the actions of the then-existing Board of Directors); or (iv) the
consummation of a sale of all or substantially all of the Company's assets
unless immediately after such transaction, the shareholders of the Company
immediately prior to such transaction shall Beneficially Own at least 50% of the
Voting Stock of the acquiring company.
(d) "Common Stock" shall mean the common stock, no par value
per share, of the Company.
(e) "Controlled Affiliate" shall mean any Investor or any
Person that is directly or indirectly, controlling, controlled by or under
common interest with any Investor.
(f) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(g) "Investor Tender Offer" shall mean a bona fide public
tender offer subject to the provisions of Regulation 14D under the Exchange Act,
by an Investor (or any 13D Group that includes an Investor) to purchase or
exchange for cash or other consideration all of the outstanding shares of Common
Stock (other than Common Stock owned by the Investors or their Controlled
Affiliates) and which has a minimum condition of such number of shares of Common
Stock that would result in the Investors or their Controlled Affiliates
Beneficially Owning not less than 51% of the shares of outstanding Common Stock
on a fully-diluted basis (including all shares of Common Stock issuable upon
exercise of any option, warrant, conversion right or other right to acquire
Common Stock, whether or not then exercisable).
(h) Proprietary Information" shall mean all confidential
information of the Company other than information that (i) is or becomes
publicly available other than as a result of a breach by an Investor of its
obligations hereunder or under the Confidentiality Agreement referenced in
Section 7 below, (ii) is or becomes available to an Investor on a
nonconfidential basis from a source that is, to the Investor's knowledge, not
prohibited from disclosing such information, (iii) is known to an Investor prior
to disclosure by the Company, or (iv) has been independently developed by an
Investor without reference to confidential information of the Company.
2
(i) "Registration Rights Agreement" shall mean the Registration
Rights Agreement in the form of Annex "A" hereto between the Company and the
Investors, as it may be amended, supplemented or otherwise modified from time to
time.
(j) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(k) "Stock Purchase Agreements" shall mean that certain Stock
Purchase Agreement of even date herewith among Blum Strategic Partners II, L.P.
and certain others, and any document contemplated therein.
(l) "Third Party" shall mean any Person other than any Investor
or any Affiliate or Associate of an Investor.
(m) "Third Party Tender Offer" shall mean a bona fide public
offer subject to the provisions of Regulation 14D under the Exchange Act, by a
Person (which is not made by and does not include any of the Investors or their
Controlled Affiliates or any 13D Group that includes the Investors or their
Controlled Affiliates) to purchase or exchange for cash or other consideration
any Voting Stock of the Company and which consists of an offer to acquire 30% or
more of the then Total Current Voting Power of the Company, as the case may be.
(n) "Total Current Voting Power" shall mean, with respect to
any corporation, the total number of votes that may be cast in the election of
members of the board of directors of the corporation if all securities entitled
to vote in the election of such directors (excluding shares of preferred stock
that are entitled to elect directors only upon the occurrence of customary
events of default) are present and voted.
(o) "Voting Stock" of any Person shall mean any securities
entitled to vote generally in the election of directors of such Person, or any
direct or indirect rights or options or warrants to acquire any such securities
or any securities convertible or exercisable into or exchangeable for such
securities, including without limitation, the Company's currently outstanding
convertible notes, whether or not such securities are so convertible,
exercisable or exchangeable at the time of determination.
2. Amendment to Rights Plan. With the goal of ensuring that Investors shall
not be deemed to be an Acquiring Person for so long as they have not breached
any of the representations, warranties or covenants contained in this Agreement,
concurrently herewith the Company's Board of Directors has amended the Rights
Plan to provide that the Investors shall not be deemed an Acquiring Person
thereunder for so long as this Agreement is in effect and so long as the
Investors have increased their beneficial ownership of Common Stock above that
shown in the Investors' amendment to Schedule 13D filed with the SEC on June 17,
2002 by no more than 5,784,675 shares in the aggregate (without giving effect to
any stock split, share dividend, recapitalization, reclassification or similar
transactions effected by or with the approval of the Board of Directors of the
Company after the date hereof) (the "Limit"); provided, however, that the Limit
shall be reduced, on a share for share basis, by any shares sold or otherwise
disposed of by any Investor otherwise than to another Investor and by that
number of shares that are acquired
3
by the Company pursuant to that certain Second Option Agreement to be entered
into between Xxxxxxx PRG Liquidating Investments Ltd. and the Company in the
Form of Annex B hereto (the "Option Agreement"); provided, further, however,
that the amendment to the Rights Plan provides that any termination of this
Agreement by the Company or delivery of any notice of termination by Investors,
in each case pursuant to Section 17 hereof, shall rescind the amendment and
cause the Investors' full beneficial ownership of Common Stock to be considered
for purposes of determining whether or not Investors are an Acquiring Person;
provided, further, however, that the Investors shall not be deemed to
beneficially own any shares of Company Common Stock owned by any other persons
that are not Controlled Affiliates, solely by reason of any Investor and such
other persons (or their permitted assigns) entering into the Stock Purchase
Agreements (or any similar stock purchase agreement entered into by such other
person (or its permitted assigns) on or about the date hereof) or by reason of
the performance of such Investor's and any other persons' (or their permitted
assigns') obligations thereunder.
3. Representations and Warranties by Investors. Each of the
Investors hereby severally represents and warrants to the Company as follows:
(a) Such Investor has all requisite corporate and other power
and authority (if applicable) to execute, deliver and perform their respective
obligations under this Agreement. The execution, delivery and performance of
this Agreement by such Investor and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite corporate and
other action (if applicable) on the part of such Investor.
(b) This Agreement has been duly executed and delivered by
such Investor and constitutes a legal, valid and binding obligation of such
Investor, enforceable against such Investor in accordance with its terms, except
to the extent that enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors rights generally or by general principles
of equity.
(c) No governmental consent, approval, authorization, license
or clearance, or filing or registration with any governmental or regulatory
authority, is required in order to permit such Investor to perform its
respective obligations under this Agreement, except for such as have been
obtained.
(d) The shares of Common Stock set forth on Schedule 1 attached
hereto represent all of the shares of capital stock of the Company, if any,
which are Beneficially Owned by such Investor on the date hereof. Such shares
are owned free and clear of any charge, claim, equitable interest, lien, option,
pledge, security interest, right of first refusal, encumbrance or similar
restriction. Such Investor does not have the right to vote shares of capital
stock of the Company other than those set forth on Schedule 1 with respect to
such Investor, and such Investor has not granted any other Person the right to
vote such shares.
4. Representations and Warranties of the Company. The Company
represents and warrants to the Investors as follows:
4
(a) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement.
The execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency or similar
laws affecting creditors rights generally or by general principles of equity.
(c) No governmental consent, approval, authorization, license
or clearance, or filing or registration with any governmental or regulatory
authority, is required in order to permit the Company to perform its obligations
under this Agreement, except for such as have been obtained.
5. Standstill Provisions. Each of the Investors hereby severally
agrees that neither it nor any Controlled Affiliate of such Investor will
singularly or together with any other Person directly or indirectly, in each
case unless specifically requested to do so in writing in advance by the Board
of Directors of the Company:
(a) Acquire or offer, make a proposal or agree to acquire
(whether publicly or otherwise) in any manner, any material assets of the
Company or its subsidiaries or any Voting Stock of the Company or its
subsidiaries (or Beneficial Ownership thereof), in addition to the Voting Stock
currently owned by such Investor as set forth in Schedule 1 hereof, except (i)
not more than an additional 5,784,675 shares of Common Stock which may be
acquired after the date hereof by all of the Investors, in the aggregate, which
number shall be reduced on a share for share basis by any shares of Common Stock
sold or otherwise disposed of by any Investor and by that number of shares that
are acquired by the Company pursuant to the Option Agreement, or (ii) securities
acquired pursuant to a stock split, share dividend, recapitalization,
reclassification or similar transaction effected by or with the approval of the
Board of Directors of the Company; provided that the execution by any Investor
of the Stock Purchase Agreements and the performance by such Investor of its
obligations thereunder shall not violate this subparagraph (a).
(b) Make or in any way propose or participate in any
"solicitation" of "proxies" to vote (as such terms are defined in Rule 14a-1 of
the Exchange Act), solicit any consent, or communicate with in any material
respect, or seek to advise or influence any Person (other than the Investors and
their Controlled Affiliates) with respect to the solicitation or voting of any
Voting Stock of the Company in opposition to any matter that has been
recommended by the Board of Directors of the Company or in favor of any matter
that has not been approved by the Board of Directors of the Company, or become a
"participant" (as defined in Instruction 3 to Item 4 of Rule 14a-101 under the
Exchange Act) in any contested election of directors of the Company, or threaten
or propose to do the same or publicly announce an intention to do the same.
5
(c) Form, or be a member of, join or encourage the formation
of any Person (other than the group consisting solely of the Investors and their
Controlled Affiliates) with respect to any Voting Stock of the Company or the
acquisition of any assets of the Company or any of its subsidiaries; provided
that the execution by any Investor of the Stock Purchase Agreements and the
performance by such Investor of its obligations thereunder shall not violate
this subparagraph (c).
(d) Deposit any Voting Stock of the Company into a voting
trust or subject any Voting Stock to an arrangement or agreement with respect to
the voting thereof (other than this Agreement or an arrangement solely
concerning the Investors and their Controlled Affiliates).
(e) Seek election to or seek to place a representative on the
Board of Directors of the Company or seek the removal of any member of the Board
of Directors of the Company except as provided in that certain Investor Rights
Agreement to be entered into among the Company and the investors named therein
in the form of Annex C hereto.
(f) Call or seek to have called any meeting of the
shareholders of the Company other than through participation as a director of
the Company and with the prior approval of the Board.
(g) Initiate, propose or otherwise solicit shareholders of the
Company for the approval of any shareholder proposal with respect to the Company
as described in Rule 14a-8 under the Exchange Act, or induce or attempt to
induce any Person to initiate any such shareholder proposal, in opposition to
any matter that has been recommended by the Board or in favor of any matter that
has not been approved by the Board.
(h) Without the prior written permission of the Board of
Directors of the Company, solicit, seek to effect, negotiate with or provide any
non-public information to any Person with respect to, or make any statement or
proposal, whether written or oral, or otherwise make any public announcement or
proposal whatsoever with respect to (i) a merger or acquisition of the Company
or any other business combination involving the Company, (ii) the sale of all or
a substantial portion of the assets of the Company and its subsidiaries, (iii)
the purchase of equity securities of the Company (except as permitted in Section
5(a)) or any of its subsidiaries, whether by tender offer, exchange offer or
otherwise, (iv) the liquidation of the Company, (v) the recapitalization of the
Company, (vi) any other extraordinary business transaction with respect to the
Company, or (vii) any other matter involving the Company, or take any action
which might require or result in a public announcement by or with respect to the
Company or with respect to any such matters (except that the foregoing shall not
restrict communications among the Investors and their Controlled Affiliates).
(i) Instigate or assist, or enter into any arrangements with,
any Third Party to do any of the actions described in this Section 5.
6
(j) Transfer any securities of the Company to any Person that
would be required, as a result of such transfer, to file or amend a Schedule 13D
or 13G; provided that the limitation contained in this clause (j) shall not
apply to transfers (i) to or among the Investors and any of their Controlled
Affiliates who are or agree to become bound by this Agreement, (ii) that have
been consented to in writing by the Company in advance and without any violation
of any provisions of this Section 5 by any Investors or Controlled Affiliates,
(iii) pursuant to a Third Party Tender Offer that is recommended by the Board of
Directors of the Company, (iv) pursuant to a merger, consolidation or
reorganization to which the Company is a party, (v) in a bona fide underwritten
public offering conducted in connection with rights exercised under the
Registration Rights Agreement, provided that in no event may any shares acquired
pursuant to the Stock Purchase Agreements be transferred pursuant to this clause
(v) prior to January 24, 2004; (vi) pursuant to transfers to withdrawing limited
partners or managed accounts; provided that such limited partners or managed
accounts are not a part of the Investors' 13D Group (unless they are Investors
or Controlled Affiliates) and do not become a part of such 13D Group immediately
following the transfer; (vii) pursuant to public sales in the open market in
compliance with the volume and manner of sale requirements of Rule 144(e) and
(f) under the Securities Act; (viii) of up to 9.9% of the Company's outstanding
voting securities, provided that the purchaser does not beneficially own 10% or
more of the voting power of the Company's outstanding securities immediately
subsequent to the transfer; (ix) pursuant to that certain Purchase Agreement in
the form attached as Annex D hereto (the "Investor Purchase Agreement"); or (x)
pursuant to a Third Party Tender Offer that is not recommended by the Board of
Directors of the Company; provided that only a number of shares that is equal to
or less than 15% of the Company's outstanding Common Stock as of the record date
for the Third Party Tender Offer may be tendered by all Investors, in the
aggregate, and if 50% or less of the Company's outstanding voting securities, on
a fully diluted basis, are a acquired pursuant to the Third Party Tender Offer,
the remaining shares of Common Stock held by the Investors may not be tendered
in the Third Party Tender Offer or otherwise transferred to any party
participating in the Third Party Tender Offer for one year following such
tender, regardless of whether or not this Agreement has been terminated under
Section 17.
(k) At any time prior to January 24, 2004, sell, gift,
transfer or otherwise dispose of to any Person, or enter into any collar, swap,
prepaid forward, other hedging transaction that would reduce the risk of
ownership of, any securities of the Company acquired pursuant to the Stock
Purchase Agreements, regardless of whether or not any such Person, as a result
of thereof, is required to file or amend a Schedule 13D or 13G; provided,
however, that the limitation contained in this clause (k) shall not apply to
transfers (i) to or among the Investors and any of their Controlled Affiliates
who are or agree to become bound by this Agreement, (ii) that have been
consented to in writing by the Company in advance and without any violation of
any provisions of this Section 5 by any Investors or Controlled Affiliates,
(iii) pursuant to a Third Party Tender Offer that is recommended by the Board of
Directors of the Company, (iv) pursuant to a merger, consolidation or
reorganization to which the Company is a party; (v) pursuant to the Investor
Purchase Agreement; (vi) to one non-affiliate of the Investors, in an aggregate
amount not to exceed 45,872 shares of Common Stock, or (vii) pursuant to the
Option Agreement and the related Secured Promissory Note and Pledge Agreement
between Xxxxxxx PRG Liquidating Investments Ltd. and Xxxx Strategic Partners II,
L.P.
7
(l) Voluntarily take any actions, other than execution of the
Stock Purchase Agreements and performance of such Investor's obligations
thereunder, that would cause the Investors to be members of the same 13D Group
as any other persons (or their permitted assigns) entering into the Stock
Purchase Agreements (or any similar stock purchase agreement entered into by
such other person (or its permitted assigns).
(m) Request the Company or its Board of Directors, directly or
indirectly, to amend or waive any provision of this Section 5.
Anything in this Section 5 to the contrary notwithstanding, this Section 5 shall
not prohibit or restrict (i) any Investor affiliate serving as a director of the
Company from acting in compliance with his fiduciary duties to the Company in
such capacity, and (ii) any disclosure pursuant to Section 13(d) of the Exchange
Act which an Investor reasonably believes, based on the advise of outside
counsel, is required in connection with any action taken by such Investor that
is otherwise in compliance with this agreement.
6. Voting. Notwithstanding anything in this Agreement to the
contrary, the Investors collectively shall vote any and all shares owned by them
(whether of record, in street name, through a nominee or otherwise) as follows:
(a) any and all shares so owned by Investors in the aggregate that exceed 15% of
the outstanding shares of Common Stock of the Company on the record date for
such vote shall be voted consistently with the recommendations of the Company's
Board of Directors on all matters placed before the Company's shareholders,
whether at a special or annual meeting, by written consent, or otherwise, and
(b) all other shares so owned by the Investors may be voted in their discretion.
The general counsel of Xxxx Strategic Partners II, L.P. shall provide a
certification as to compliance with Subsection (a) of this Section 6 at least
one week prior to any special or annual meeting of the Company's shareholders.
7. Suspension of Restrictions. The limitations provided in
Section 5 shall immediately be suspended upon the earliest occurrence of any of
the following events:
(a) The occurrence of a "Change of Control" of the Company.
(b) The public announcement by the Company that it is for
sale.
(c) The execution of a definitive agreement by the Company
which, if consummated, would result in a Change of Control of the Company.
(d) The adoption by the Board of Directors of a plan of
complete liquidation or dissolution.
To the extent a widely disseminated public announcement thereof has not already
been made, the Company shall provide the Investors with prompt written notice of
the occurrence of any of the events set forth in this Section. Upon any (i)
public withdrawal of any "for sale" notice referred to in Section 7(b), (ii)
termination of any agreement referred to in Section 7(c) without
8
consummation thereof, (iii) termination of the plan of liquidation referenced in
Section 7(d), as the case may be, the limitations provided in this Agreement
(except to the extent then suspended as a result of any other event specified in
this Section) shall again be applicable to the extent provided herein; provided,
however, that, in the case of clauses (i) (ii) or (iii) above, prior to such
public withdrawal, agreement termination or plan termination, as the case may
be, (A) the Investors and their Controlled Affiliates have not acquired actual
ownership of Voting Stock of the Company representing in the aggregate a
majority of the Total Current Voting Power of the Company and (B) no Investor or
its Controlled Affiliate has commenced a Investor Tender Offer.
8. Confidentiality.
(a) Each Investor agrees that the Confidentiality and Non-Disclosure
Agreement between Xxxx Strategic XX XX, L.L.C. and the Company (the
"Confidentiality Agreement") remains in full force and effect and shall bind
each Investor to the same extent as it binds Xxxx Strategic XX XX, L.L.C.
9. Enforcement. Each of the Investors, on the one hand, and the Company,
on the other, acknowledge and agree that irreparable damage would occur if any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically its provisions in any court having jurisdiction,
this being in addition to any other remedy to which they may be entitled at law
or in equity.
10. Entire Agreement; Waivers. This Agreement, the Confidentiality
Agreement, and that certain letter of even date herewith from the Company to the
Investors, constitute the entire agreement among the parties hereto pertaining
to the subject matter hereof and thereof and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties with respect to such subject matter. No
waiver of any provision of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof or thereof (whether or not similar), shall
constitute a continuing waiver unless otherwise expressly provided nor shall be
effective unless in writing and executed (i) in the case of a waiver by the
Company, by the Company and (ii) in the case of a waiver by the Investors, by
the Investors against which enforcement of such waiver is sought.
11. Amendment or Modification. The parties hereto may not amend or modify
this Agreement except in such manner as may be agreed upon by a written
instrument executed by the Company and the Investors against which enforcement
of such amendment is sought.
12. Successors and Assigns. All the terms and provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors, and each successor shall be deemed to be a party
hereto for all purposes hereof. The terms and provisions of this Agreement shall
not be binding upon any transferee (other than an Investor or a Controlled
Affiliate of an Investor) that purchases any securities subject to this
Agreement without violation of any provision of this Agreement. An Investor may
not assign or transfer any
9
of its rights or obligations hereunder (whether to a transferee of shares of
Common Stock or otherwise) without the prior written consent of the Company, and
no transfer or assignment by any party shall relieve such party of any of its
obligations hereunder.
13. Severability. If any provision of this Agreement is held by a court of
competent jurisdiction be unenforceable, the remaining provisions shall remain
in full force and effect. It is declared to be the intention of the parties that
they would have executed the remaining provisions without including any that may
be declared unenforceable.
14. Headings. Descriptive headings are for convenience only and will not
control or affect the meaning or construction of any provision of this
Agreement.
15. Counterparts. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties, and each such
executed counterpart will be an original instrument.
16. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing (including telecopy or
similar teletransmission), addressed as follows:
If to the Company, to:
PRG-Xxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx XxXxxxxx, Xx.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Investors, to:
Xxxx Capital Partners, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
10
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three business
days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
17. Termination. This Agreement shall remain in full force and effect
until terminated in accordance with this Section. Subject to Section 5(j)(x)
hereof, this Agreement may be terminated by 2/3's of the Investors, at any time
the Investors' aggregate Beneficial Ownership of Common Stock is below 15%, by
giving 30 days' advance written notice to the Company. Except as set forth in
the following two sentences, all of the provisions of this Agreement shall
remain in full force and effect for 30 days following receipt of such notice by
the Company, regardless of whether or not Investors shall thereafter become an
Acquiring Person pursuant to the Rights Agreement during such 30 day period.
Sections 5(a) and 5(k) shall terminate upon the Company's receipt of such
notice; provided, however, that in no event shall Section 5(k) terminate prior
to January 24, 2004. Section 5(j) shall terminate upon the Company's receipt of
such notice except for the proviso to Section 5(j)(x), which shall remain in
full force and effect in accordance with its terms. This Agreement may be
immediately terminated by the Company by written notice to Investors following
any material breach by any Investor of any provision hereof, including without
limitation any breach of Section 5 hereof. Such termination will immediately
terminate all provisions of this Agreement except for Section 5(k) and the
proviso to Section 5(j)(x), which shall remain in effect in accordance with
their terms.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive law of the State of Delaware, without
giving effect to any choice or conflict of law provision or rule that would
cause the application of the law of any other jurisdiction.
11
19. Non-Exclusive Submission to Jurisdiction. Any disputes arising out of
or in connection with this Agreement may be adjudicated in the United States
District Court for the Northern District of Georgia or in a court of competent
civil jurisdiction in the State of Georgia. Each party hereto irrevocably
submits to the personal jurisdiction of such courts for the purposes of any such
suit, action, counterclaim or proceeding arising out of this Agreement
(collectively, a "Suit"). Each of the parties hereto hereby waives and agrees
not to assert by way of motion, as a defense or otherwise in any such Suit, any
claim that it is not subject to jurisdiction of the above courts, that such Suit
is brought in an inconvenient forum, or the venue of such Suit is improper;
provided, however, that nothing herein shall be construed as a waiver of any
right that any party hereto may have to remove a Suit from a court sitting in
the State of Georgia to the United States District for the Northern District of
Georgia. Each of parties hereby agrees that service of all writs, process and
summonses in any Suit may be made upon such party by mail to the address as
provided in this Agreement. Nothing herein shall anyway be deemed to limit the
ability of any party to serve any such writs, process or summonses in any other
matter permitted by applicable law.
20. To the extent that any provision of the Standstill Agreement dated as
of August 16, 2002 among the parties hereto conflicts with or is contrary to the
provisions of this Amended and Restated Standstill Agreement, the provisions
hereof shall control.
IN WITNESS WHEREOF, the Company and the Investors have caused this
Agreement to be executed as of the date first above written by their respective
duly authorized representatives.
The Company: PRG-XXXXXXX INTERNATIONAL, INC.
/s/ Xxxxxxx XxXxxxxx, Xx.
By:____________________________________
Xxxxxxx XxXxxxxx, Xx.
Name:__________________________________
Senior Vice President, General Counsel &
Secretary
Title:_________________________________
[signatures continued on following page]
12
XXXX CAPITAL PARTNERS, L.P.
By: Xxxxxxx X. Xxxx & Associates, Inc., its general
partner
/s/ Xxxxxx X. Xxxxxx
By: _________________________________________________
Xxxxxx X. Xxxxxx, Partner, General Counsel
and Secretary
XXXXXXX X. XXXX & ASSOCIATES, INC.
/s/ Xxxxxx X. Xxxxxx
By: _________________________________________________
Xxxxxx X. Xxxxxx, Partner, General Counsel
and Secretary
XXXX STRATEGIC GP, L.L.C.
/s/ Xxxxxx X. Xxxxxx
By: _________________________________________________
Xxxxxx X. Xxxxxx, Member
XXXX STRATEGIC XX XX, L.L.C.
/s/ Xxxxxx X. Xxxxxx
By: _________________________________________________
Xxxxxx X. Xxxxxx, Member
13
XXXX STRATEGIC PARTNERS, L.P.
By: XXXX STRATEGIC GP, L.L.C.
/s/ Xxxxxx X. Xxxxxx
By: ___________________________________________
Xxxxxx X. Xxxxxx, Member
XXXX STRATEGIC PARTNERS II, L.P.
By: XXXX STRATEGIC XX XX, LLC,
Its General Partner
/s/ Xxxxxx X. Xxxxxx
By: ___________________________________________
Xxxxxx X. Xxxxxx, Member
XXXXXXX X. XXXX
/s/ Xxxxxx X. Xxxxxx
_______________________________________________
Xxxxxx X. Xxxxxx, Attorney-in-Fact
THE COMMON FUND FOR NONPROFIT
ORGANIZATIONS-MULTI-STRATEGY EQUITY FUND
By: XXXX CAPITAL PARTNERS, LP,
Its Investment Advisor
By: XXXXXXX X. XXXX & ASSOCIATES, INC.,
Its General Partner
/s/ Xxxxxx X. Xxxxxx
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Partner and General Counsel
14
BK CAPITAL PARTNERS IV, X.X.
XXXXXXX CAPITAL PARTNERS, X.X.
XXXXXXX CAPITAL PARTNERS II, X.X.
XXXXXXX CAPITAL PARTNERS III, L.P.
By: XXXX CAPITAL PARTNERS, L.P.,
its general partner
By: Xxxxxxx X. Xxxx & Associates, Inc.,
its general partner
/s/ Xxxxxx X. Xxxxxx
By: ___________________________________________
Xxxxxx X. Xxxxxx, Partner, General Counsel
and Secretary
CARPENTERS PENSION TRUST FOR SOUTHERN
CALIFORNIA
UNITED BROTHERHOOD OF CARPENTERS
PENSION PLAN
XXXXXXX CAPITAL FUND (CAYMAN), LTD.
By: XXXX CAPITAL PARTNERS, L.P.,
its investment advisor
By: Xxxxxxx X. Xxxx & Associates, Inc.,
its general partner
/s/ Murray A. Indick
By: ___________________________________________
Murray A. Indick, Partner, General Counsel
and Secretary
15
Schedule 1
----------
-------------------------------------------------------------------------------------------------------------
Shares Other
------ -----
Investor Owned Derivative Attributed
-------- ----- ---------- ----------
Directly Shares Shares
-------- ------ ------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
BK Capital Partners IV, L.P. 83,000 0 0
-------------------------------------------------------------------------------------------------------------
Blum Strategic Partners, L.P. 117,700 0 0
-------------------------------------------------------------------------------------------------------------
Blum Strategic Partners II, L.P. 2,691,043 1,937,985 0
-------------------------------------------------------------------------------------------------------------
Carpenters Pension Trust for Southern California 776,400 0 0
-------------------------------------------------------------------------------------------------------------
Common Fund 118,800 0 0
-------------------------------------------------------------------------------------------------------------
Stinson Capital Fund (Cayman), LTD. 61,700 0 0
-------------------------------------------------------------------------------------------------------------
Stinson Capital Partners, L.P. 398,700 1,937,985 0
-------------------------------------------------------------------------------------------------------------
Stinson Capital Partners II, L.P. 178,700 775,194 0
-------------------------------------------------------------------------------------------------------------
Stinson Capital Partners III, L.P. 139,700 516,796 0
-------------------------------------------------------------------------------------------------------------
United Brotherhood of Carpenters 118,200 0 0
-------------------------------------------------------------------------------------------------------------
16
EXHIBIT K
Second Amendment to Shareholder Protection Rights Agreement
SECOND AMENDMENT TO
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS SECOND AMENDMENT (this "Amendment"), effective as of August 16,
2002, is between PRG-SCHULTZ INTERNATIONAL, INC., a Georgia corporation (the
"Company"), and WACHOVIA BANK, NATIONAL ASSOCATION f/k/a FIRST UNION NATIONAL
BANK, as Rights Agent (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, in connection with that certain Shareholder Protection Rights
Agreement dated as of August 9, 2000, as amended effective on May 15, 2002,
between the Company and the Rights Agent (the "Agreement"), the Board of
Directors of the Company deems it advisable and in the best interest of the
Company and its shareholders to amend the Agreement in accordance with Section
5.4 of the Agreement;
NOW, THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment, which are not
otherwise defined herein, are used with the same meaning ascribed to such terms
in the Agreement.
2. Amendments.
(a) Section 1.1 is hereby amended to add the following definition:
"Blum Investors" shall mean Blum Capital Partners, L.P., Richard
C. Blum & Associates, Inc., Blum Strategic GP, LLC, Blum
Strategic GP II, LLC, Blum Strategic Partners, LP, Blum Strategic
Partners II, LP, Richard C. Blum, Stinson Capital Partners, L.P.,
Stinson Capital Partners II, L.P., Stinson Capital Partners III,
LP, Stinson Capital Fund (Cayman), Ltd., BK Capital Partners IV,
L.P., Carpenters Pension Trust for Southern California, Common
Fund Multi-Strategy Equity Fund, United Brotherhood of Carpenters
and any other affiliates of the above-named Blum Investors that
agree to be bound by the provisions of that certain Standstill
Agreement among the above-named Blum Investors and the Company of
even date herewith.
(b) The definition of "Acquiring Person" in Section 1.1 is hereby
deleted in its entirety and replaced to read as follows:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 15% or more of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not
include any Person (i) who shall become the Beneficial Owner of
15% or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company of shares of Common
Stock, until such time thereafter as such Person shall become the
Beneficial
Owner (other than by means of a stock dividend or stock split) of
any additional shares of Common Stock, (ii) who is the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock
but who acquired Beneficial Ownership of shares of Common Stock
without any plan or intention to seek or affect control of the
Company, if such Person promptly enters into an irrevocable
commitment promptly to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting,
with respect to such shares), sufficient shares of Common Stock
(or securities convertible into, exchangeable into or exercisable
for Common Stock) so that such Person ceases to be the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock,
(iii) who is the Beneficial Owner of shares of Common Stock
consisting solely of shares of Common Stock, the Beneficial
Ownership of which was acquired by such Person pursuant to any
action or transaction or series of related actions or
transactions approved by the Company's Board of Directors before
such person otherwise became an Acquiring Person or (iv) who was
the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock on August 9, 2000 and does not thereafter acquire
Beneficial Ownership of additional shares of Common Stock that in
the aggregate exceed 2% of the outstanding shares of Common
Stock. In addition, notwithstanding any provision of this
Agreement to the contrary, no Blum Investor or Investors shall be
deemed an Acquiring Person for any purpose under this Agreement
for so long as that certain standstill agreement (the "Standstill
Agreement") between the Company and the Blum Investors dated
August 16, 2002 is in effect and so long as the Blum Investors
have increased their Beneficial Ownership of Common Stock above
that shown in the Blum Investors' amendment to Schedule 13D filed
with the Securities and Exchange Commission on June 17, 2002 by
no more than 5,784,675 shares in the aggregate (without giving
effect to any stock split, share dividend, recapitalization,
reclassification or similar transactions effected by or with the
approval of the Board of Directors of the Company after the date
hereof) (the "Limit"); provided, however, that the Limit shall be
reduced, on a share for share basis, by any shares sold or
otherwise disposed of by any Blum Investor otherwise than to
another Blum Investor and by that number of shares that are
acquired by the Company under an Option Agreement in the form
attached hereto as Annex A between the Company and Schultz PRG
Liquidating Investments Ltd.; provided, further, however, that
any termination of the Standstill Agreement by the Company or
delivery of any notice of termination by the Blum Investors, in
each case pursuant to Section 17 of the Standstill Agreement,
shall rescind this Amendment to the Agreement and cause the Blum
Investors' full Beneficial Ownership of Common Stock to be
considered for
purposes of determining whether or not the Blum Investors are an
Acquiring Person. Additionally, the Company, any wholly-owned
Subsidiary of the Company and any employee stock ownership or
other employee benefit plan of the Company or a wholly-owned
Subsidiary of the Company shall not be an Acquiring Person.
3. Counterparts. This Amendment may be executed in any one or more
counterparts, each of which shall be deemed an original and all of which shall
together constitute the same Amendment.
4. Ratification. Except as modified and amended as set forth herein, the
Agreement is hereby adopted, ratified and confirmed without further modification
or amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the date first above written.
PRG-SCHULTZ INTERNATIONAL, INC.
/s/ Clinton McKellar, Jr.
By: __________________________________
Clinton McKellar, Jr.
Name: ________________________________
Senior Vice President,
General Counsel and Secretary
Title: _______________________________
WACHOVIA BANK, NATIONAL ASSOCIATION
f/k/a FIRST UNION NATIONAL BANK
/s/ Johnnie H. Coble
By: ______________________________
Johnnie H. Coble
Name: ____________________________
Corporate Trust Officer
Title: ___________________________
