Exhibit 99.1
2005 AMENDED AND RESTATED
STANDSTILL AGREEMENT
THIS 2005 AMENDED AND RESTATED STANDSTILL AGREEMENT (this "Agreement"),
dated as of November 14, 2005, is by and among PRG-SCHULTZ 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;
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, August 16, 2002 and November 7, 2005, between the
Company and First Union National Bank, as Rights Agent;
WHEREAS, the Investors and the Company entered into an Amended and Restated
Standstill Agreement with the Company as of August 21, 2002 (the "2002
Standstill Agreement");
WHEREAS, in order to induce the Company's Board of Directors to amend the
definition of "Voting Stock" under the 2002 Standstill Agreement to exclude the
Company's 4 3/4% Convertible Subordinated Notes due 2006 (the "Convertible
Notes"), Blum Capital Partners, L.P. has agreed to consider in good faith and
analyze whether it or one of its affiliates could provide additional short-term
financing to the Company upon such terms as may be determined Blum Capital
Partners, L.P. in its sole discretion; and
WHEREAS, the parties to the 2002 Standstill Agreement have agreed to enter
into this 2005 Amended and Restated Standstill Agreement to amend certain
provisions thereof and intend that this Agreement supersede the 2002 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) "Registration Rights Agreement" shall mean the Registration Rights
Agreement in the form of Annex "A" to the 2002 Standstill Agreement between
the Company and the Investors, as it may be amended, supplemented or
otherwise modified from time to time.
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(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(j) "Stock Purchase Agreements" shall mean that certain Stock Purchase
Agreement dated August 21, 2002, among Blum Strategic Partners II, L.P. and
certain others, and any document contemplated therein.
(k) "Third Party" shall mean any Person other than any Investor or any
Affiliate or Associate of an Investor.
(l) "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.
(m) "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.
(n) "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, whether or not such securities are so convertible, exercisable
or exchangeable at the time of determination, except that the Convertible
Notes shall not be included as part of the Voting Stock.
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 of the 2002 Standstill Agreement) plus any additional
Convertible Notes hereafter acquired by the Investors (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 by the Company pursuant
to that certain Second Option Agreement to be entered into between Schultz PRG
Liquidating Investments Ltd. and the Company in the Form of Annex B to the 2002
Standstill Agreement (the "Option Agreement"); provided, further, however, that
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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 16 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 August 21, 2002), by reason of the
performance of such Investor's and any other persons' (or their permitted
assigns') obligations thereunder or solely by reason of the Investors'
membership on the Ad Hoc Noteholders Committee (as defined in Section 5(c)
hereof).
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:
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(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 of the 2002 Standstill Agreement 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, (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) or (iii) any shares of
Common Stock acquired by any of the Investors or their affiliates upon
conversion of any of the Convertible Notes currently held or hereafter
acquired by such persons.
(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
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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.
(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); provided that nothing
herein shall restrict any of the Investors from joining the ad hoc
committee of holders of the Convertible Notes (the "Ad Hoc Noteholders
Committee") from proposing, negotiating or discussing a possible
transaction involving the restructuring of the Convertible Notes with the
other members of the Ad Hoc Noteholders Committee and the Company.
(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 to the 2002 Standstill Agreement.
(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
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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.
(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
to the 2002 Standstill Agreement (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 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
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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 Schultz PRG
Liquidating Investments Ltd. and Blum Strategic Partners II, L.P.
(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 Blum 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 or that
it has accepted an offer from any party, other than an offer accepted and
endorsed by the Ad Hoc Noteholders Committee, for any business combination,
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sale or similar extraordinary transaction involving the Company or all or
substantially all of its assets.
(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 or the filing by the Company, or commencement
against the Company, of any petition for relief under Title 11 of the
Unites States Code or the filing by the Company, or commencement against
the Company, of any petition for relief under Title 11 of the United States
Code.
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 consummation
thereof, or (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 or auction termination, 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. 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.
9. Entire Agreement; Waivers. This Agreement and that certain letter dated
August 21, 2002 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 (including the 2002 Standstill Agreement),
provided that that certain confidentiality agreement of even date herewith
between Blum Capital Partners, L.P. and the Company shall not be affected hereby
and shall remain in full force and effect until terminated in accordance with
its terms and provided further that to the extent there is any conflict between
the provisions of such confidentiality agreement and this Agreement, the
provisions of the confidentiality agreement shall apply until such agreement is
terminated in accordance with its terms. 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
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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.
10. 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.
11. 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 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.
12. Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to 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.
13. Headings. Descriptive headings are for convenience only and will not
control or affect the meaning or construction of any provision of this
Agreement.
14. 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.
15. 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-Schultz International, Inc.
600 Galleria Parkway
Suite 100
Atlanta, Georgia 30339
Attention: Clint McKellar, Jr.
Telephone No.: (770) 779-3051
Facsimile No.: (770) 779-3034
with a copy to:
Arnall Golden Gregory LLP
2800 One Atlantic Center
10
1201 West Peachtree Street
Atlanta, Georgia 30309-3450
Attention: Jonathan Golden, Esq.
Telephone No.: (404) 873-8700
Facsimile No.: (404) 873-8701
If to the Investors, to:
Blum Capital Partners, L.P.
909 Montgomery Street
Suite 400
San Francisco, California 94113
Attention: Gregory Hitchan
Facsimile No.: (415) 283-0653
with a copy to:
Wilmer Cutler Pickering Hale and Dorr LLP
399 Park Avenue
New York, NY 10022
Attention: Andrew Goldman
Telephone: 212-230-8800
Facsimile: 212-230-8888
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.
16. 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
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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.
17. 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.
18. 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 the 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.
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-SCHULTZ INTERNATIONAL, INC.
By: /s/ Clinton McKellar, Jr.
----------------------------------------
Name: Clinton McKellar, Jr.
--------------------------------------
Title: General Counsel and Secretary
-------------------------------------
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
12
BLUM CAPITAL PARTNERS, L.P.
By: Richard C. Blum & Associates, Inc.,
Its General Partner
By: /s/ Gregory Hitchan
-----------------------------------------
Gregory Hitchan,
General Counsel and Secretary
RICHARD C. BLUM & ASSOCIATES, INC.
By: /s/ Gregory Hitchan
-----------------------------------------
Gregory Hitchan,
General Counsel and Secretary
BLUM STRATEGIC GP, L.L.C.
By: /s/ Gregory Hitchan
-----------------------------------------
Gregory Hitchan, Member
BLUM STRATEGIC GP II, L.L.C.
By: /s/ Gregory Hitchan
------------------------------------------
Gregory Hitchan, Member
13
BLUM STRATEGIC PARTNERS, L.P.
By: BLUM STRATEGIC GP, L.L.C.
By: /s/ Gregory Hitchan
-----------------------------------------
Gregory Hitchan, Member
BLUM STRATEGIC PARTNERS II, L.P.
By: BLUM STRATEGIC GP II, LLC,
Its General Partner
By: /s/ Gregory Hitchan
-----------------------------------------
Gregory Hitchan, Member
RICHARD C. BLUM
/s/ Gregory Hitchan
---------------------------------------------
Gregory Hitchan, Attorney-in-Fact
14
BK CAPITAL PARTNERS IV, L.P.
STINSON CAPITAL PARTNERS, L.P.
STINSON CAPITAL PARTNERS II, L.P.
STINSON CAPITAL PARTNERS QP, L.P.
STINSON CAPITAL PARTNERS S, L.P.
By: BLUM CAPITAL PARTNERS, L.P.,
Its General Partner
By: Richard C. Blum & Associates, Inc.,
Its General Partner
By: /s/ Gregory Hitchan
------------------------------------------
Gregory Hitchan,
General Counsel and Secretary
STINSON CAPITAL FUND (CAYMAN), LTD.
By: BLUM CAPITAL PARTNERS, L.P.,
Its Investment Advisor
By: Richard C. Blum & Associates, Inc.,
Its General Partner
By: /s/ Gregory Hitchan
-----------------------------------------
Gregory Hitchan,
General Counsel and Secretary
BLUM STRATEGIC PARTNERS II GMBH
& CO. KG
By: Blum Strategic GP II, L.L.C., its managing
limited partner
By: /s/ Gregory Hitchan
----------------------------------------
Name: Gregory Hitchan
Title: Member and General Counsel
15
SCHEDULE L
Shares Other
Investor Owned Derivative Attributed
Directly Shares Shares
- ---------------------------------------------------------------------------------------
BK Capital Partners IV, L.P. 83,000 0 0
- ---------------------------------------------------------------------------------------
Blum Capital Partners, L.P. 225 775 0
- ---------------------------------------------------------------------------------------
Blum Strategic Partners, L.P. 117,700 0 0
- ---------------------------------------------------------------------------------------
Blum Strategic Partners II, L.P. 8,276,400 1,898,838 0
- ---------------------------------------------------------------------------------------
Blum Strategic Partners II GmbH & Co. KG 170,648 39,147 0
- ---------------------------------------------------------------------------------------
Stinson Capital Fund (Cayman), LTD. 61,700 0 0
- ---------------------------------------------------------------------------------------
Stinson Capital Partners, L.P. 195,286 949,225 0
- ---------------------------------------------------------------------------------------
Stinson Capital Partners II, L.P. 178,700 775,194 0
- ---------------------------------------------------------------------------------------
Stinson Capital Partners QP, L.P. 173,754 844,574 0
- ---------------------------------------------------------------------------------------
Stinson Capital Partners S, L.P. 29,660 144,186 0
- ---------------------------------------------------------------------------------------