EXHIBIT 10.1
WAIVER AGREEMENT
THIS WAIVER AGREEMENT (the "Agreement"), dated as of October 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).
W I T N E S S E T H:
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");
WHEREAS, the Borrower acknowledges that an Event of Default exists
under the Credit Agreement as a result of the failure of the Credit Parties to
comply with the terms of Section 7.11(ii) of the Credit Agreement as of the
fiscal quarter ending September 30, 2004 (the "Existing Default");
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 until December 31, 2004 (the "Waiver Termination Date"). Accordingly,
from the date hereof through and including the Waiver Termination Date, the
Administrative Agent and the Lenders shall, subject to the terms and conditions
set forth herein, forbear exercising their rights and remedies arising
exclusively as a result of the Existing Default; provided, however, that the
Administrative Agent and the Lenders shall be free to exercise any or all of
their rights and remedies arising on account of the Existing Default at any
time after the occurrence of any Default or Event of Default under the Credit
Agreement or any other Credit Document other than the Existing Default. This
limited waiver shall not modify or affect (a) the Credit Parties' obligation to
comply fully with Section 7.11(ii) of the Credit Agreement at all times
after the Waiver Termination Date and (b) the Credit Parties' obligations to
comply fully with any other duty, term, condition or covenant contained in the
Credit Agreement and the other Credit Documents. This limited 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. 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:
(a) counterparts of this Agreement duly executed by the Borrower,
the Guarantors, the Administrative Agent and the Required Lenders; and
(b) for the account of each Lender who executes and delivers this
Agreement to the Administrative Agent on or before October 25, 2004, an
amendment fee equal to 0.05% of such Lender's Revolving Commitment.
3. Miscellaneous.
(a) The obligations of the Credit Parties under the Credit
Agreement and 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) 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 unwaived 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 (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) 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.
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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.
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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.
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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.
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Name: James E. Moylan, Jr.
Title: Executive Vice President - Finance
PRGRS, INC., a Delaware Corporation
By: /s/ John Cook
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Name: John Cook
Title: CEO
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.
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Name: James E. Moylan, Jr.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRG-SCHULTZ USA, INC.
WAIVER AGREEMENT
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.,
PRG-SCHULTZ 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.
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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
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.
By: /s/ Michael Brachler
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Name: Michael Brachler
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Title: Vice President
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LENDERS: BANK OF AMERICA, N.A.
By: /s/ Nancy S. Goldman
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Name: Nancy S. Goldman
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Title: Senior Vice President
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LASALLE BANK, NATIONAL ASSOCIATION
By: /s/ Sara A. Huizinga
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Name: Sara A. Huizinga
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Title: Assistant Vice President
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WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as Wachovia Bank, N.A.)
By: /s/ Michael J. Romano
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Name: Michael J. Romano
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Title: Vice President
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