EXHIBIT 10.63
FOURTH AMENDMENT
TO CREDIT AGREEMENT AND WAIVER
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this
"Agreement"), dated as of November 12, 2003, is by and among PRG-SCHULTZ USA,
INC. (formerly The Profit Recovery Group USA, Inc.), a Georgia corporation (the
"Borrower"), PRG-SCHULTZ INTERNATIONAL, INC. (formerly The Profit Recovery
Group International, Inc.), a Georgia corporation (the "Parent"), each of the
Domestic Subsidiaries of the Parent (together with the Parent, the
"Guarantors"), the Lenders party thereto and BANK OF AMERICA, N.A., as
Administrative Agent. All capitalized terms used herein and not otherwise
defined shall have the meanings provided in the Credit Agreement (as defined
below).
WITNESSETH:
WHEREAS, the Borrower, the Guarantors, the Lenders and the
Administrative Agent entered into that certain Credit Agreement dated as of
December 31, 2001 (as amended or modified from time to time, the "Credit
Agreement"); and
WHEREAS, the Borrower has requested and the Lenders have agreed to
amend certain terms of the Credit Agreement as set forth below; and
WHEREAS, the Borrower acknowledges that an Event of Default currently
exists under the Credit Agreement as a result of the failure of the Credit
Parties to comply with the terms of Section 7.11(i) of the Credit Agreement as
of the fiscal quarter ending June 30, 2003 (the "Existing Default");
WHEREAS, the Borrower discovered the Existing Default in the latter
half of the quarter ended September 30, 2003 upon completion of a special
reconciliation analysis requested by the Lenders, and subsequent to such
discovery, the Borrower so advised the Lenders of such discovery; and
WHEREAS, the Borrower has stated, and the Lenders acknowledge, that
the Existing Default resulted from the definitionally appropriate inclusion of
a relatively minor type and amount of rental expense that the Borrower had not
previously considered when making calculations under Section 7.11(i) of the
Credit Agreement; and
WHEREAS, the Borrower has requested that the Lenders waive the
Existing Default and continue to make available to the Borrower the Loans
provided under the Credit Agreement; and
WHEREAS, the Lenders are willing to waive the Existing Default subject
to the terms and conditions specified in this Agreement;
NOW, THEREFORE, in consideration of the agreements contained herein
and other good and valuable consideration, the parties hereby agree as follows:
1. Waiver. Subject to the other terms and conditions of this
Agreement, the Administrative Agent and the Lenders hereby waive the Existing
Default. Except for the waiver contained herein, this Agreement does not modify
or affect the obligations of the Credit Parties to comply fully with all terms,
conditions and covenants contained in the Credit Agreement and the other Credit
Documents. This waiver is limited solely to the Existing Default, and nothing
contained in this Agreement shall be deemed to constitute a waiver of any other
rights or remedies the Administrative Agent or any Lender may have under the
Credit Agreement or any other Credit Documents or under applicable law.
2. Amended Definitions.
(a) The following definitions set forth in Section 1.1
of the Credit Agreement are hereby amended and restated in their
entirety to read as follows:
"Asset Disposition" means the disposition of any or
all of the assets (including without limitation the Capital
Stock of a Subsidiary) of any Consolidated Party whether by
sale, lease, transfer or otherwise (including pursuant to any
casualty or condemnation event).
"Borrowing Base" means, as of any day, an amount
equal to the sum of (a) eighty-five percent (85%) of Eligible
Domestic Receivables plus (b) fifty percent (50%) of Eligible
Foreign Receivables plus (c) $10 million until such time as
the Borrower sells the Communications Division or the
Meridian Business, in each case as set forth in the most
recent Borrowing Base Certificate delivered to the
Administrative Agent and the Lenders in accordance with the
terms of Section 7.1(d). The Credit Parties and the Lenders
agree that the above definition of "Borrowing Base" shall be
deemed to be in full force and effect as of September 30,
2003.
"Consolidated EBITDA" means, for any period, the sum
of (i) Consolidated Net Income for such period, plus (ii) an
amount which, in the determination of Consolidated Net Income
for such period, has been deducted for (A) Consolidated
Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes and (C) depreciation
and amortization expense plus (iii) for the period from
January 1, 2002 until December 31, 2002, all cash charges up
to $10 million in the aggregate directly related to the
Howard Schultz Acquisition made during such period plus (iv)
from July 1, 2003 through December 31, 2004, all charges up
to $12 million in the aggregate directly related to the
Borrower's corporate restructuring plan made during such
period, in each case of the Parent and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP
"Consolidated EBIT" means, for any period, the sum
of (i) Consolidated Net Income for such period, plus (ii) an
amount which, in the determination of Consolidated Net Income
for such period, has been deducted for (A) Consolidated
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Interest Expense and (B) total federal, state, local and
foreign income, value added and similar taxes, plus (iii) for
the period from January 1, 2002 until December 31, 2002, all
cash charges up to $10 million in the aggregate directly
related to the Howard Schultz Acquisition made during such
period plus (iv) from July 1, 2003 through December 31, 2004,
all charges up to $12 million in the aggregate directly
related to the Borrower's corporate restructuring plan made
during such period, in each case of the Parent and its
Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.
"Consolidated Net Income" means, for any period, net
income (excluding any extraordinary items) after taxes for
such period of the Consolidated Parties on a consolidated
basis, as determined in accordance with GAAP; provided that,
for purposes of determining compliance with the Fixed Charge
Coverage Ratio covenant in Section 7.11(i), the Leverage
Ratio covenant in Section 7.11(ii), the Senior Leverage Ratio
covenant in Section 7.11(iii) and the Net Worth covenant in
Section 7.11(iv), there shall be excluded from Consolidated
Net Income the effects of (a) any net book loss realized in
such period from the sale of the Logistics Division, the
Groupe Alma Business, the Communications Division or the
Meridian Business, (b) any "mark to market" net book losses
or gains in such period required in accordance with GAAP to
be recorded prior to the sale of the Logistics Division and
any Discontinued Operation or non-cash charges or gains in
such period related to the reclassification of any such
Discontinued Operation as "continuing" or "operating", (c)
the amount of accelerated amortization of goodwill required
under FASB 142 for such period, (d) the amount of the
write-off of all capitalized loan fees made during the period
in which the Closing Date occurs and (e) the amount of
expenses incurred during such period to repurchase employee
stock options (to the extent permitted hereunder).
"Foreign Currency Commitment Percentage" means, for
any Lender, the percentage identified as its Foreign Currency
Commitment Percentage on Schedule 2.1(a), as such percentage
may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Material Foreign Subsidiary" means, at any time,
any First Tier Foreign Subsidiary of a Credit Party that is
not an Immaterial Foreign Subsidiary.
"Revolving Commitment Percentage" means, for any
Lender, the percentage identified as its Revolving Commitment
Percentage on Schedule 2.1(a), as such percentage may be
modified in connection with any assignment made in accordance
with the provisions of Section 11.3.
"Revolving Committed Amount" means Fifty Five
Million Dollars ($55,000,000), as such amount may be reduced
pursuant to Section 3.4.
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(b) The following sentence is hereby added at the end of
the definition of "Applicable Percentage" set forth in Section 1.1 of
the Credit Agreement and shall read as follows:
Notwithstanding the foregoing, until the Borrower sells the
Communications Division or the Meridian Business in accordance with
the terms hereof, the Applicable Percentages shall remain at Pricing
Level III.
3. New Definitions. The following new definitions are hereby
added in the appropriate alphabetical order in Section 1.1 of the Credit
Agreement and shall as follows:
"Fourth Amendment Effective Date" means November 12, 2003.
"Immaterial Foreign Subsidiary" means, at any time, any First
Tier Foreign Subsidiary (i) for which the portion of Consolidated
EBITDA attributable to such First Tier Foreign Subsidiary does not
exceed 5% of Consolidated EBITDA for the most recently ended four
fiscal quarter period and (ii) for which the portion of Consolidated
EBITDA attributable to such First Tier Foreign Subsidiary, together
with the portion of Consolidated EBITDA attributable to all other
First Tier Foreign Subsidiaries with respect to which the
Administrative Agent has not received a pledge of 66% of Capital Stock
of such First Tier Foreign Subsidiaries, does not exceed 10% of
Consolidated EBITDA for the most recently ended four fiscal quarter
period.
4. Deleted Definitions. The following definitions set forth in
Section 1.1 of the Credit Agreement are hereby deleted in their entirety:
"Additional Revolving Commitment" and "New Commitment Agreement".
5. Amendment to Section 1.3. The following sentence is hereby
added at the end of Section 1.3 of the Credit Agreement and shall read as
follows:
Notwithstanding the foregoing, following the disposition of the
Communications Division or Meridian Business, the income statement
items (whether positive or negative) attributable to such division or
business shall be included in the calculation of the financial
covenants set forth in Section 7.11 to the extent related to any
period applicable in such calculation.
6. Amendment to Section 3.3(b)(ii). Section 3.3(b)(ii) of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
(ii) Asset Disposition. The Borrower shall immediately
prepay the Loans in an aggregate amount equal to one hundred percent
(100%) of the Net Cash Proceeds of any Asset Disposition (other than
any Asset Disposition permitted by Section 8.5(i), (ii), (iii), (iv)
or (v)) (to be applied as set forth in Section 3.3(c) below).
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7. Amendment to Section 3.3(c). The following sentence is hereby
added after the first sentence in Section 3.3(c) and shall read as follows:
Notwithstanding the foregoing, the aggregate permanent reduction in
the Revolving Committed Amount in connection with the prepayment of
the Loans with Net Cash Proceeds from the Communications Division and
Meridian Business shall not exceed $20 million.
8. Amendment to Section 3.4. Subsection (d) of Section 3.4 of
the Credit Agreement is hereby deleted in its entirety.
9. New Section 6.24. A new Section 6.24 is hereby added to the
Credit Agreement and shall read as follows:
6.24 Tax Shelter Regulations.
The Credit Parties do not intend to treat the Loans and/or
Letters of Credit as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4). In the event any
Credit Party determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof.
If a Credit Party so notifies the Administrative Agent, the Borrower
acknowledges that one or more of the Lenders may treat its Loans
and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such
Treasury Regulation.
10. Amendment to Section 7.1(l). Section 7.1(l) of the Credit
Agreement is hereby renumbered as Section 7.1(m) and a new Section 7.1(l) is
hereby added to the Credit Agreement and shall read as follows:
(l) Tax Shelter Regulations. Promptly after any Credit
Party has notified the Administrative Agent of any intention by a
Credit Party to treat the Loans and/or Letters of Credit as being a
"reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4), a duly completed copy of IRS Form 8886 or any
successor form.
11. Amendment to Section 7.11(i). Section 7.11(i) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
(i) Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties during the periods set forth below, shall be
greater than or equal to:
(a) From September 30, 2003 to and including December
31, 2003, 1.74 to 1.0;
(b) From January 1, 2004 to and including March 31,
2004, 1.38 to 1.0;
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(c) From April 1, 2004 to and including June 30, 2004,
1.05 to 1.0;
(d) From July 1, 2004 to and including September 30,
2004, 1.20 to 1.0; and
(e) From October 1, 2004 to and including December 31,
2004, 1.50 to 1.0.
12. Amendment to Section 7.11(ii). Section 7.11(ii) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
(ii) Leverage Ratio. The Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties during the
periods set forth below, shall be less than or equal to:
(a) From September 30, 2003 to and including December
31, 2003, 3.75 to 1.0;
(b) From January 1, 2004 to and including March 31,
2004, 4.45 to 1.0;
(c) From April 1, 2004 to and including June 30, 2004,
5.40 to 1.0;
(d) From July 1, 2004 to and including September 30,
2004, 4.25 to 1.0; and
(e) From October 1, 2004 to and including December 31,
2004, 3.50 to 1.0.
13. Amendment to Section 7.11(iv). The last sentence of Section
7.11(iv) of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
For purposes of determining compliance with the Net Worth covenant set
forth above, the base number of $200,000,000 set forth above shall be
(a) reduced by the amount of any net book losses realized from the
sale of the Logistics Division, the Groupe Alma Business, the
Communications Division or the Meridian Business, (b) reduced (or
increased) by the amount of any "mark to market" net book losses (or
gains) required in accordance with GAAP to be recorded prior to the
sale of the Logistics Division or any Discontinued Operation or
non-cash charges (or gains) related to the reclassification of any
such Discontinued Operation as "continuing" or "operating", (c)
reduced by the amount of accelerated amortization of goodwill required
under FASB 142, in each case occurring or incurred subsequent to
September 30, 2001, (d) reduced by the amount of the write-off of all
capitalized loan fees made during the period in which the Closing Date
occurs, (e) reduced by the amount of any repurchases by the Parent of
shares of its Capital Stock in accordance with Section 8.7 in an
amount not to exceed $25,000,000 in the aggregate for all such
repurchases occurring after September 12, 2002 but prior to the Fourth
Amendment Effective Date, (f) reduced by all charges up to $12 million
in the aggregate taken during the period from July 1, 2003 through
December 31, 2004 directly related to the Borrower's corporate
restructuring plan and (g) reduced by the amount of expenses incurred
to repurchase employee stock options (to the extent permitted
hereunder).
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14. New Section 7.11(v). A new Section 7.11(v) is hereby added to
the Credit Agreement following Section 7.11(iv) of the Credit Agreement and
shall read as follows:
(v) Consolidated EBITDA. Until such time as the Borrower
sells the Communications Division or the Meridian Business in
accordance with the terms hereof, Consolidated EBITDA of the
Consolidated Parties shall not be less than (a) $6,600,000 for the
three month period ending December 31, 2003, (b) $14,000,000 for the
six month period ending March 31, 2004, (c) $23,500,000 for the nine
month period June 30, 2004, (d) $36,000,000 for the twelve month
period ending September 30, 2004 and (e) $44,500,000 for the twelve
month period ending December 31, 2004.
15. New Section 7.16. A new Section 7.16 is hereby added to
Credit Agreement and shall read as follows:
7.16 Unencumbered Cash.
The Credit Parties will cause Meridian to maintain at least $10
million of cash that is not subject to any Lien until such time as the Borrower
sells the Communications Division or the Meridian Business.
16. Amendment to Section 8.5. A new subclause (vi) is hereby
added after subclause (v) in Section 8.5 of the Credit Agreement and shall read
as follows:
(vi) (a) the sale of the Communications Division;
provided that (A) the Borrower receives at least $12 million in Net
Cash Proceeds from the sale of such division and (B) the Borrower
immediately prepays the Loans with such Net Cash Proceeds in
accordance with the terms of Section 3.3(b)(ii) and (b) the sale of
the Meridian Business; provided that (A) the Borrower receives at
least $15 million in Net Cash Proceeds from the sale of such business
and (B) the Borrower immediately prepays the Loans with such Net Cash
Proceeds in accordance with the terms of Section 3.3(b)(ii).
17. Amendment to Section 8.6. The following sentence is hereby
added at the end of Section 8.6 of the Credit Agreement and shall read as
follows:
Notwithstanding the foregoing and any other provision to the contrary
contained herein, from and after the Fourth Amendment Effective Date,
none of the Consolidated Parties shall be permitted to make any
Acquisitions; provided, however, the Consolidated Parties shall
continue to be permitted to make any of the Permitted Investments
identified in the definition of "Permitted Investments" set forth in
Section 1.1 (other than Permitted Acquisitions).
18. Amendment to Section 8.7. Section 8.7 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
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8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to the Borrower (directly or indirectly through
Subsidiaries), (c) the repurchase by the Borrower of employee stock options
from any employee of the Borrower provided that the aggregate price paid for
all such employee stock options from and after the Fourth Amendment Effective
Date shall not exceed $1,000,000 and (d) the Borrower may make distributions to
the Parent in an amount necessary to pay interest on the Subordinated Debt.
19. Amendment to Section 9.1(c)(i). Clause (i) of Section 9.1(c)
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.4, 7.9, 7.11,
7.12, 7.14, 7.16 or 8.1 through 8.17, inclusive;
20. Amendment to Section 11.14. The following sentence is hereby
added at the end of Section 11.14 of the Credit Agreement and shall read as
follows:
Notwithstanding anything to the contrary contained herein, the
Borrower acknowledges and agrees that the Administrative Agent and
each Lender may disclose, without limitation of any kind (other than
limitations under applicable law), any information with respect to the
"tax treatment" and "tax structure" (in each case, within the meaning
of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions
or other tax analyses) that are provided to the Administrative Agent
and each Lender relating to such tax treatment and tax structure;
provided that with respect to any document or similar item that
contains information concerning the tax treatment or tax structure of
the transaction as well as other information, this sentence shall only
apply to such portions of such document or similar item that relate to
the tax treatment or tax structure of the Loans and transactions
contemplated hereby.
21. Amendment to Exhibit 3.4(d). Exhibit 3.4(d) to the Credit
Agreement is hereby deleted in its entirety.
22. Amendment to Schedule 6.13. Schedule 6.13 to the Credit
Agreement is hereby amended to read as provided on Schedule 6.13 attached
hereto.
23. Conditions Precedent. This Agreement shall become effective
immediately upon receipt by the Administrative Agent of each of the following,
each in form and substance satisfactory to the Administrative Agent:
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(a) counterparts of this Agreement duly executed by the
Borrower, the Guarantors, the Administrative Agent and the Lenders;
(b) a favorable legal opinion from counsel to the Credit
Parties;
(c) copies of resolutions of the Board of Directors of
each Credit Party approving and adopting this Agreement and
authorizing execution and delivery hereof, certified by a secretary or
assistant secretary of such Credit Party to be true and correct and in
full force and effect as of the date hereof; and
(d) for the account of each Lender who executes and
delivers this Agreement to the Administrative Agent on or before
November 12, 2003, an amendment fee equal to 0.35% of such Lender's
Revolving Commitment.
24. Miscellaneous.
(a) The term "Credit Agreement" as used in each of the
Credit Documents shall hereafter mean the Credit Agreement as amended
by this Agreement. Except as herein specifically agreed, the Credit
Agreement, and the obligations of the Credit Parties thereunder and
under the other Credit Documents, are hereby ratified and confirmed
and shall remain in full force and effect according to their terms.
(b) The Credit Parties acknowledge and confirm (i) that
the Administrative Agent, on behalf of the Lenders, has a valid and
enforceable first priority security interest in the Collateral, (ii)
that the Borrower's obligation to repay the outstanding principal
amount of the Loans and reimburse the Issuing Lender for any drawing
on a Letter of Credit is unconditional and not subject to any offsets,
defenses or counterclaims, (iii) that the Administrative Agent and the
Lenders have performed fully all of their respective obligations under
the Credit Agreement and the other Credit Documents, and (iv) by
entering into this Agreement, the Lenders do not waive (except as
specifically provided in Section 1 hereof) or release any term or
condition of the Credit Agreement or any of the other Credit Documents
or any of their rights or remedies under such Credit Documents or
applicable law or any of the obligations of any Credit Party
thereunder.
(c) The Credit Parties represent and warrant to the
Lenders that (i) as of the date hereof, the Credit Parties have made
Investments in Foreign Subsidiaries in an aggregate amount of
$21,906,719 since the Closing Date, (ii) the representations and
warranties of the Credit Parties set forth in Section 6 of the Credit
Agreement are true and correct as of the date hereof and (ii) no event
has occurred and is continuing which constitutes a Default or an Event
of Default.
(d) This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same
instrument. It shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.
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(e) This Agreement shall be governed by and construed in
accordance with, the laws of the State of Georgia.
(f) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns.
(g) The Borrower and the Guarantors, as applicable,
affirm the liens and security interests created and granted in the
Collateral Documents and agree that this Agreement shall in no manner
adversely affect or impair such liens and security interests.
(h) Each Credit Party hereby represents and warrants as
follows:
(i) Each Credit Party has taken all necessary
action to authorize the execution, delivery and performance
of this Agreement.
(ii) This Agreement has been duly executed and
delivered by the Credit Parties and constitutes each of the
Credit Parties' legal, valid and binding obligations,
enforceable in accordance with its terms, except as such
enforceability may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium
or similar laws affecting creditors' rights generally and (B)
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity).
(iii) No consent, approval, authorization or
order of, or filing, registration or qualification with, any
court or governmental authority or third party is required in
connection with the execution, delivery or performance by any
Credit Party of this Agreement.
(i) The Guarantors (i) acknowledge and consent to all of
the terms and conditions of this Agreement, (ii) affirm all of their
obligations under the Credit Documents and (iii) agree that this
Agreement and all documents executed in connection herewith do not
operate to reduce or discharge the Guarantors' obligations under the
Credit Agreement or the other Credit Documents.
(j) This Agreement together with the other Credit
Documents represent the entire agreement of the parties and supersedes
all prior agreements and understandings, oral or written if any,
relating to the Credit Documents or the transactions contemplated
herein and therein.
[remainder of page intentionally left blank]
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Each of the parties hereto has caused a counterpart of this Agreement
to be duly executed and delivered as of the date first above written.
BORROWER: PRG-SCHULTZ USA, INC. (formerly The Profit
Recovery Group USA, Inc.), a Georgia
corporation
By: /s/ Donald E. Ellis, Jr.
---------------------------------------
Name: Donald E. Ellis, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and
Treasurer
GUARANTORS: PRG-SCHULTZ INTERNATIONAL, INC. (formerly
The Profit Recovery Group International,
Inc.), a Georgia corporation
By: /s/ Donald E. Ellis, Jr.
---------------------------------------
Name: Donald E. Ellis, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and
Treasurer
PRGFS, INC.,
PRGLS, INC., each a Delaware corporation
By: /s/ Donald E. Ellis, Jr.
---------------------------------------
Name: Donald E. Ellis, Jr.
Title: Executive Vice President - Finance
PRGRS, INC., a Delaware corporation
By: /s/ John M. Cook
---------------------------------------
Name: John M. Cook
-------------------------------------
Title: President
------------------------------------
PRG HOLDING CO. (FRANCE) NO. 1, LLC,
PRG HOLDING CO. (FRANCE) NO. 2, LLC, each a
Delaware limited liability company
By: /s/ Donald E. Ellis, Jr.
---------------------------------------
Name: Donald E. Ellis, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and
Treasurer
FOURTH AMENDMENT TO
THE CREDIT AGREEMENT
PRG-SCHULTZ USA, INC.
GUARANTORS: THE PROFIT RECOVERY GROUP ASIA, INC.,
PRG-SCHULTZ CANADA, INC. (formerly The
Profit Recovery Group Canada, Inc.),
THE PROFIT RECOVERY GROUP NEW ZEALAND,
INC.,
THE PROFIT RECOVERY GROUP NETHERLANDS,
INC.,
THE PROFIT RECOVERY GROUP BELGIUM, INC.,
THE PROFIT RECOVERY GROUP MEXICO, INC.,
PRG-SCHULTZ FRANCE, INC. (formerly The
Profit Recovery Group France, Inc.)
PRG-SCHULTZ AUSTRALIA, INC. (formerly The
Profit Recovery Group Australia, Inc.),
THE PROFIT RECOVERY GROUP GERMANY, INC.,
PRG INTERNATIONAL, INC.,
THE PROFIT RECOVERY GROUP SWITZERLAND,
INC.,
THE PROFIT RECOVERY GROUP SOUTH AFRICA,
INC.,
THE PROFIT RECOVERY GROUP SPAIN, INC.,
THE PROFIT RECOVERY GROUP ITALY, INC.,
PRG-SCHULTZ NORWAY, INC.
THE PROFIT RECOVERY GROUP PORTUGAL, INC.,
PRG-SCHULTZ JAPAN, INC. (formerly Payment
Technologies, Inc.)
THE PROFIT RECOVERY GROUP COSTA RICA, INC.,
PRG-SCHULTZ PUERTO RICO, INC. (formerly
PRG, INC.,)
PRG USA, INC., each a Georgia corporation
By: /s/ Donald E. Ellis, Jr.
---------------------------------------
Name: Donald E. Ellis, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and
Treasurer
HS&A ACQUISITION - UK, INC.,
a Texas corporation
By: /s/ Donald E. Ellis, Jr.
---------------------------------------
Name: Donald E. Ellis, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and
Treasurer
FOURTH AMENDMENT TO
THE CREDIT AGREEMENT
PRG-SCHULTZ USA, INC.
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.
By: /s/ Laura B. Schmuck
---------------------------------------
Name: Laura B. Schmuck
-------------------------------------
Title: Agency Officer
------------------------------------
Assistant Vice President
------------------------------------
LENDERS: BANK OF AMERICA, N.A.
By: /s/ Nancy S. Goldman
---------------------------------------
Name: Nancy S. Goldman
-------------------------------------
Title: Senior Vice President
------------------------------------
LASALLE BANK, NATIONAL ASSOCIATION
By: /s/ Sara A. Huizinga
---------------------------------------
Name: Sara A. Huizinga
-------------------------------------
Title: Assistant Vice President
------------------------------------
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as Wachovia Bank, N.A.)
By: /s/ Michael J. Romano
---------------------------------------
Name: Michael J. Romano
-------------------------------------
Title: Vice President
------------------------------------
FOURTH AMENDMENT TO
THE CREDIT AGREEMENT
PRG-SCHULTZ USA, INC.
Schedule 6.13
SUBSIDIARIES
The following Subsidiaries are wholly-owned Subsidiaries of PRG-Schultz
International, Inc. and each is incorporated in the State of Georgia:
PRG-Schultz USA, Inc.
The Profit Recovery Group Asia, Inc.
PRG-Schultz Australia, Inc.
The Profit Recovery Group Belgium, Inc.
PRG-Schultz Canada, Inc.
The Profit Recovery Group Costa Rica, Inc.
The Profit Recovery Group New Zealand, Inc.
The Profit Recovery Group Netherlands, Inc.
The Profit Recovery Group Mexico, Inc.
PRG-Schultz France, Inc.
The Profit Recovery Group Germany, Inc.
The Profit Recovery Group South Africa, Inc.
The Profit Recovery Group Switzerland, Inc.
The Profit Recovery Group Italy, Inc.
The Profit Recovery Group Spain, Inc.
PRG-Schultz Norway, Inc.
The Profit Recovery Group Portugal, Inc.
PRG-Schultz Japan, Inc.
PRG International, Inc.
PRG USA, Inc.
PRG-Schultz Puerto Rico, Inc.
The Profit Recovery Group Mexico, Inc. owns 100% of The Profit
Recovery Group Holdings Mexico, S de RL de CV, a company incorporated
in Mexico.
The Profit Recovery Group Holdings Mexico S de RL de CV, a company
incorporated in Mexico, has the following wholly-owned subsidiaries,
both of which are incorporated in Mexico: The Profit Recovery Group
Servicios Mexico, S de RL de CV and The Profit Recovery Group de
Mexico S de RL de CV.
The Profit Recovery Group Argentina, S.A., is a wholly-owned
subsidiary of PRG-Schultz International, Inc. and is incorporated in
Argentina.
Profit Recovery Brasil Ltda, is a wholly-owned subsidiary of
PRG-Schultz International, Inc. and is incorporated in Brazil.
PRG International C.R. sro, incorporated in the Czech Republic, is a
wholly-owned subsidiary of PRG-Schultz International, Inc.
PRG-Schultz International PTE Ltd., a Singapore corporation, is a
wholly-owned subsidiary of The Profit Recovery Group Asia, Inc.
PRG-Schultz International PTE Ltd. has a wholly-owned subsidiary,
PRG-Schultz Suzhou Co. Ltd., incorporated in China.
PRGRS, Inc., a Delaware corporation, is a wholly-owned subsidiary of
PRG-Schultz USA, Inc.
PRGLS, Inc., a Delaware corporation, is a wholly-owned subsidiary of
PRGRS, Inc.
PRGFS, Inc., a Delaware corporation, is a wholly-owned subsidiary of
PRG International, Inc.
PRG Holding Company (France) No. 1, LLC., a Delaware limited liability
company, is a wholly-owned subsidiary of PRG-Schultz International,
Inc.
PRG Holding Company (France) No. 2, LLC., a Delaware limited liability
company, is a wholly-owned subsidiary of PRG-Schultz International,
Inc.
Profit Recovery Professionals Pty Ltd. and Cost Recovery Professionals
Pty Ltd., both incorporated in Australia, are wholly-owned
subsidiaries of PRG-Schultz Australia, Inc.
Meridian Corporation Limited, a Jersey (Channel Islands) corporation,
is a wholly-owned subsidiary of PRG-Schultz International, Inc.
Meridian VAT Reclaim Operations Limited, incorporated in Ireland, and
JA Ewing, Inc., incorporated in the State of Delaware, are
wholly-owned subsidiaries of Meridian Corporation Limited
Meridian VAT Processing (International), Limited, incorporated in
Ireland and Meridian VAT Processing (N. America), Limited,
incorporated in Ireland and Meridian VAT Processing (Japan) Limited,
incorporated in Ireland, are wholly-owned subsidiaries of Meridian VAT
Reclaim Operations, Limited
Both Meridian VAT Reclaim, Inc., incorporated in Delaware, and
Meridian VAT Reclaim Canada, Inc., incorporated in Canada, are
wholly-owned subsidiaries of Meridian VAT Processing (N. America)
Limited
The following are wholly-owned subsidiaries of Meridian VAT Processing
(International) Limited: Meridian VAT Reclaim (Hong Kong) Ltd.,
incorporated in Hong Kong; Meridian VAT Reclaim (Proprietary) Limited,
incorporated in South Africa; Meridian VAT Reclaim (India) Private,
Limited, incorporated in India; Meridian VAT Reclaim (UK), Limited,
incorporated in the United Kingdom; Meridian, Inc., incorporated in
Japan; Meridian VAT Reclaim (Schwiez) AG, incorporated in Switzerland;
Meridian VAT Reclaim GmbH, incorporated in Germany; Meridian VAT
Reclaim France
S.A.R.L., incorporated in France; Meridian VAT Reclaim Services
Limited, incorporated in U.K.. Meridian VAT Processing (International)
Limited owns 80% of Meridian Sverige, incorporated in Sweden.
Meridian VAT Reclaim Korea Co., Limited, incorporated in South Korea,
is a wholly-owned subsidiary of Meridian, Inc.
VATClaim International (Pty.) Limited, incorporated in South Africa,
is a wholly-owned subsidiary of Meridian VAT Reclaim (Proprietary),
Limited
The following are wholly-owned subsidiaries of Meridian VAT Reclaim
(UK) Limited: Meridian VAT Reclaim (Australia) Pty. Limited,
incorporated in Australia; and VATClaim (International) UK Limited,
incorporated in the United Kingdom.
Meridian VAT Trustees, Limited, incorporated in Ireland is a
separately owned and incorporated company responsible for receiving
VAT refunds from the various VAT authorities and distributes the
proceeds to Meridian's clients. The trustee company has entered into
Trust Deeds with the processing subsidiaries which regulate the terms
of the fiduciary relationship between the parties. As the Meridian
Group exercises control over the financial and operational policies of
the trustee company, its results are consolidated into the Meridian
Group results.
PRG-Schultz Canada Corp., incorporated in Canada, is a wholly-owned
subsidiary of PRG-Schultz Canada, Inc.
PRG-Schultz (Deutschland) GmbH incorporated in Germany, is a
wholly-owned subsidiary of The Profit Recovery Group Germany, Inc.
PRG-Schultz France S.A., incorporated in France, is a wholly-owned
subsidiary of PRG-Schultz France, Inc.
PRG-Schultz Nederland B.V. incorporated in Netherlands, is a
wholly-owned subsidiary of The Profit Recovery Group Netherlands, Inc.
PRG-Schultz Insurance Limited, a Bermuda captive insurance company, is
a wholly-owned subsidiary of PRG-Schultz International, Inc.
PRG-Schultz Italia SRL, incorporated in Italy, is a wholly-owned
subsidiary of The Profit Recovery Group Italy, Inc.
PRG-Schultz Espana, S.A., incorporated in Spain, is a wholly-owned
subsidiary of The Profit Recovery Group Spain, Inc.
HS&A Acquisition-UK, Inc., a Texas company, is a wholly-owned
subsidiary of PRG-Schultz International, Inc. Tamebond Limited,
incorporated in the U.K., is a wholly-owned subsidiary of HS&A
Acquisition-UK, Inc.
PRG-Schultz UK, Ltd. and J&G Associates Limited, both incorporated in
the U.K., are wholly-owned subsidiaries of Tamebond Limited
Howard Schultz & Associates (Asia) Limited, incorporated in Hong Kong,
is a wholly-owned subsidiary of PRG-Schultz International, Inc.
HS&A International PTE Ltd., incorporated in Singapore, is a
wholly-owned subsidiary of PRG-Schultz International, Inc.
PRG-Schultz Svenska A.B., incorporated in Sweden, is a wholly-owned
subsidiary of PRG-Schultz International, Inc.
PRG-Schultz (Thailand) Co., Ltd., incorporated in Thailand, is a
wholly-owned subsidiary of PRG-Schultz International, Inc.
Howard Schultz de Mexico S.A. de C.V., incorporated in Mexico, is a
wholly-owned subsidiary of PRG-Schultz International, Inc.
PRG-Schultz Columbia, Ltda., incorporated in Columbia, is a
wholly-owned subsidiary of PRG-Schultz International, Inc.
PRG-Schultz Venezuela Srl, incorporated in Venezuela, is a
wholly-owned subsidiary of PRG-Schultz International, Inc.
PRG-Schultz Puerto Rico is a Puerto Rico partnership with the
following partners: PRG-Schultz Puerto Rico, Inc. has 99% partnership
interest and The Profit Recovery Group Costa Rica, Inc. has 1%
partnership interest
THERE ARE NO OUTSTANDING OPTIONS, WARRANTS, RIGHTS OF CONVERSION OR PURCHASE OF
SIMILAR RIGHTS WITH RESPECT THERETO.