EXHIBIT 10.4
SIXTH AMENDMENT
TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this "Agreement"), dated as
of March 25, 2004, 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, as part of a corporate reorganization, HS&A Acquisition-UK,
Inc., a wholly owned Domestic Subsidiary of the Parent ("HS&A") plans to sell
100% of the Capital Stock of Tamebond Limited ("Tamebond") to Meridian Corp-
oration Limited, a wholly owned Foreign Subsidiary of the Parent ("Meridian")
for (i) cash consideration totaling approximately 12,700,000 Euros and (ii)
shares of Capital Stock in Meridian in an amount to be determined. Meridian
intends to borrow up to 12,700,000 Euros from Meridian VAT Processing
(International) Limited, a wholly owned Subsidiary of Meridian ("Meridian
International") to fund the cash portion of the acquisition of the Tamebond
stock. As collateral for such loan, Meridian plans to pledge the Capital Stock
of Tamebond to Meridian International. The transactions described above may be
referred to collectively herein as the "Transaction"; and
WHEREAS, the Borrower has requested and the Lenders have agreed to
amend certain terms of the Credit Agreement to permit the Transaction as set
forth below;
NOW, THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the parties hereby agree as follows:
1. Amended Definitions.
(a) Clause (xii) in the definition of Permitted
Investments is renumbered as clause (xiii) and a new clause (xii) is
hereby added to the definition of Permitted Investments in the
appropriate order and shall read as follows:
and (xii) Investment by Meridian International in Meridian in
the form of the Meridian Loan.
(b) Clause (x) in the definition of Permitted Liens is
renumbered as (xi) and a new clause (x) is hereby added at the end of
the definition of Permitted Liens in the appropriate order and shall
read as follows:
and (x) Lien in favor of Meridian International on the Capital
Stock of Tamebond owned by Meridian which Lien secures the
Meridian Loan and
2. New Definitions. The following definitions are hereby added to
Section 1.1 of the Credit Agreement in the appropriate alphabetical order and
shall read as follows
"HS&A" means HS&A Acquisition UK, Inc., a Texas corporation.
"Meridian Loan" means the loan by Meridian International to
Meridian in an aggregate amount not to exceed approximately 12,700,000
Euros.
"Tamebond" means Tamebond Limited, a U.K. corporation.
3. Amendment to Section 8.1. A new subclause (m) is hereby added
at the end of Section 8.1 of the Credit Agreement and shall read as follows:
and (m) the Meridian Loan
4. Amendment to Section 8.5. A new subclause (vii) is hereby
added at the end of Section 8.5 of the Credit Agreement and shall read as
follows:
and (vii) the sale by HS&A of 100% of the Capital Stock of
Tamebond to Meridian for (a) approximately $16,000,000 in cash and (b)
shares of Capital Stock in Meridian in an amount to be determined;
provided that (i) the Dollar equivalent of the approximately 12,700,000
Euros in cash proceeds received by HS&A from such sale are immediately
used to prepay the Loans in accordance with Section 3.3(b)(ii) and (ii)
within 45 days of such sale, HS&A pledges and assigns to the
Administrative Agent, for the benefit of the Lenders, 66% of such
newly-issued Capital Stock of Meridian pursuant to a pledge agreement
in a form acceptable to the Administrative Agent in its reasonable
discretion and delivers such other documentation to the Administrative
Agent as requested by the Administrative Agent in connection therewith,
including without limitation, favorable opinions of counsel, all in
form and substance reasonably satisfactory to the Administrative Agent.
5. Amendment to Section 8.8. A new sentence is hereby added at
the end of Section 8.8 of the Credit Agreement and shall read as follows:
Notwithstanding the foregoing, HS&A is permitted to sell the Capital
Stock of Tamebond to Meridian in accordance with the terms of Section 8.5(vii)
and Meridian International is permitted to make the Meridian Loan.
6. Meridian Pledge Agreement. The Lenders hereby acknowledge and
agree (a) that the Administrative Agent and the Parent may make any amendments
to the pledge agreement presently governing the pledge of 66% of the Capital
Stock of Meridian to the Administrative Agent necessary to permit the issuance
of shares of Capital Stock of Meridian to HS&A and (b) the Administrative Agent
may release the Administrative Agent's security interest in the Capital Stock of
Tamebond presently held by the Administrative Agent on the date of the
consummation of the Transaction.
7. Revolving Committed Amount. Notwithstanding any provisions
hereof and any other provision in the Credit Agreement to the contrary, the
Lenders hereby agree that the Revolving Committed Amount shall not be reduced by
the amount of the prepayment required to be made by the Borrower pursuant to
Section 8.5(vii).
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8. Conditions Precedent. This Agreement shall become effective
immediately upon receipt by the Administrative Agent of counterparts of this
Agreement duly executed by the Borrower, the Guarantors, the Administrative
Agent and the Required Lenders, in form and substance satisfactory to the
Administrative Agent.
9. 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 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) 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.
(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.
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(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.
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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/ James E. Moylan, Jr.
---------------------------------
Name: James E. Moylan, 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/ James E. Moylan, Jr.
---------------------------------
Name: James E. Moylan, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRGFS, INC.,
PRGLS, INC.,
each a Delaware corporation
By: /s/ James E. Moylan, Jr.
---------------------------------
Name: James E. Moylan, Jr.
Title: Executive Vice President - Finance
PRGRS, INC., a Delaware corporation
By: /s/ Mark L. Henry
---------------------------------
Name: Mark L. Henry
Title: VP Assistant Secretary
PRG HOLDING CO. (FRANCE) NO. 1, LLC,
PRG HOLDING CO. (FRANCE) NO. 2, LLC,
each a Delaware limited liability company
By: /s/ James E. Moylan, Jr.
---------------------------------
Name: James E. Moylan, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRG-SCHULTZ USA, INC.
SIXTH AMENDMENT
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 MEXICO, INC.,
PRG-SCHULTZ FRANCE, INC. (formerly The Profit Recovery
Group France, Inc.)
PRG-SCHULTZ AUSTRALIA, INC. (formerly The Profit Recovery
Group Australia, Inc.),
PRG-SCHULTZ BELGIUM, INC. (formerly The Profit Recovery
Group Belgium, 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/ James E. Moylan, Jr.
---------------------------------
Name: James E. Moylan, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
HS&A ACQUISITION - UK, INC.,
a Texas corporation
By: /s/ James E. Moylan, Jr.
---------------------------------
Name: James E. Moylan, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRG-SCHULTZ USA, INC.
SIXTH AMENDMENT
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.
By: /s/ Michael Brashler
--------------------------------------
Name: Michael Brashler
Title: 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/ J. Michael Wilson
--------------------------------------
Name: J. Michael Wilson
Title: Senior Vice President