EXECUTION COPY
RESTRUCTURING SUPPORT AGREEMENT
This RESTRUCTURING SUPPORT AGREEMENT is made and entered into as of
December 23, 2005 (the "Agreement") by and among PRG-Schultz International,
Inc., a Georgia corporation ("PRG" or the "Company"), and (i) each of the
undersigned beneficial owners (or investment managers or advisors for the
beneficial owners) of the Notes (as defined below) and (ii) each other
beneficial owner (or investment manager or advisor for such beneficial owner) of
the Notes that executes a counterpart signature page to this Agreement after the
date of this Agreement, as provided herein (each, a "Noteholder" and
collectively, the "Noteholders").
RECITALS:
A. PRG has issued and outstanding $125,000,000 aggregate principal amount
of its 4-3/4% Convertible Subordinated Notes due 2006 (the "Notes") pursuant to
that certain indenture, dated as of November 26, 2001 (the "Indenture"), between
PRG (as successor in interest to The Profit Recovery Group International, Inc.)
and SunTrust Bank, as trustee.
B. The Noteholders are beneficial owners of the Notes (and/or are serving
as the investment advisors or managers or in a similar capacity for the
beneficial owners of such Notes, having the power to enter into this Agreement
on behalf of such beneficial owners) in the respective aggregate principal
amounts separately disclosed to PRG on a confidential basis (provided that the
aggregate principal amount of the holdings of all the Noteholders shall not be
deemed confidential).
C. Exhibit A hereto (the "Term Sheet") and the provisions hereof set forth
the basic terms of a financial restructuring of the Notes to be realized through
an exchange offer (the "Exchange Offer" and, collectively with any transactions
substantially as contemplated by the Term Sheet or this Agreement, the
"Restructuring").
D. The parties have agreed to the terms of the Restructuring and the
Noteholders each have agreed to support the Restructuring on the terms and
conditions set forth herein.
E. The Company intends to (i) conduct the Exchange Offer as soon as
practicable and (ii) use commercially reasonable efforts to obtain acceptance of
the Exchange Offer by the holders of 99% of the outstanding Notes.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. General.
(a) The Company agrees and covenants that, subject to the conditions
set forth on the Term Sheet, it will use its commercially reasonable best
efforts to complete the Restructuring through the Exchange Offer.
(b) The parties shall negotiate in good faith (i) the documentation
regarding the Restructuring contemplated by the Term Sheet, (ii) the Exchange
Offer, and (iii) the other documents contemplated hereby and thereby
(collectively, the "Restructuring Documents").
(c) The parties hereto shall not (i) object to, delay, impede, or
commence any proceeding pertaining to, or take any other action to interfere,
directly or indirectly, in any material respect with the acceptance or
implementation of, the Restructuring provided that the terms of the final
Restructuring Documents are materially consistent with the Term Sheet and
otherwise in form and substance satisfactory to the Company and the Noteholders
in their reasonable discretion, (ii) encourage or support any person or entity
to do any of the foregoing, (iii) in the case of the Noteholders, exercise any
rights under any indenture or other agreement with the Company or instruct any
trustee to exercise any such rights except as consistent with this Agreement, or
(iv) seek or solicit, propose, file, support, encourage, vote for, consent to,
instruct, or engage in discussions with any person or entity, other than PRG,
concerning any restructuring, workout, plan of reorganization, dissolution,
winding up, acquisition or liquidation of PRG and/or its affiliates, other than
the Exchange Offer, provided that the Company may, upon one Business Day's
notice to the other parties hereto, respond to and engage in discussions
concerning unsolicited offers that the Company's board of directors believes in
good faith will lead to an alternative transaction that would provide more value
to the holders of the Notes and to PRG's current shareholders than the
Restructuring.
(d) The parties agree nothing in this Agreement shall limit, modify or
otherwise effect any of the Lenders' rights under that certain Credit Agreement
among PRG-Schultz USA, Inc as Borrower, PRG and certain of its other affiliates,
as Guarantors and certain of the Noteholders, as Lenders, dated December 23,
2005 (the "Bridge Loan Credit Agreement"), or any documents related thereto
(collectively, the "Bridge Loan Documents").
Section 2. Support for the Restructuring.
(a) PRG agrees and covenants that it will use commercially reasonable
best efforts to take or cause to be taken all actions commercially reasonably
necessary and appropriate in furtherance of the Exchange Offer, including as
promptly as practicable to:
(1) prepare the solicitation materials relating to the Exchange
Offer (the "Solicitation Materials") in form and substance consistent with the
Term Sheet, except to the extent otherwise consented to by the Noteholders;
(2) commence the Exchange Offer and disseminate the Solicitation
Materials in a manner customary for comparable transactions;
(3) seek satisfaction of all conditions precedent to the
Restructuring;
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(4) defend in good faith any suit or other legal or
administrative proceeding seeking to interfere with, impair or impede the
Restructuring;
(5) promptly amend the Solicitation Materials, as necessary and
as may be required by applicable law and provide a draft of such amended
Solicitation Materials to the Ad Hoc Committee prior to the distribution of such
materials to holders of the Notes;
(6) not solicit or encourage others to formulate any other tender
offer, settlement offer, or exchange offer for the Notes other than the Exchange
Offer;
(7) so long as this Agreement is effective and has not been
terminated in accordance with Section 5 or 6, hereof, and except to the extent
necessary for the fulfillment of the fiduciary duties of the Company's board of
directors as referred to in Section 6(c) hereof, not object to, nor otherwise
commence any proceeding to oppose, the Restructuring, it being understood and
agreed that the Company shall not seek, solicit, support, consent to,
participate in the formulation of, or encourage any other plan, sale, proposal,
or offer of winding up, liquidation, reorganization, merger, consolidation,
dissolution, or restructuring of the Company; and
(8) subject to the satisfaction or waiver of any conditions
precedent to the Exchange Offer, consummate the Exchange Offer, including
delivery of all securities required to be issued thereunder (within the time
that is customary for transactions of this type) and the other transactions that
are part of the Restructuring.
(b) PRG agrees and covenants that it will not, and will cause each of
its direct and indirect subsidiaries not to, sell, liquidate, or dispose of any
assets, outside the ordinary course of business consistent with past practices,
prior to the date on which the Exchange Offer closes other than as permitted by
the Section 8.5 of the Bridge Loan Credit Agreement as in effect on the Closing
Date (as defined under the Bridge Loan Credit Agreement), without the prior
written consent of the holders of a majority of the Notes subject to this
Agreement.
(c) Each of the Noteholders agrees and covenants that it shall, as
long as this Agreement is in effect:
(1) no later than 15 days prior to the first date scheduled for
the closing of the Exchange Offer, (i) tender all Notes beneficially owned by it
and (ii) cause the beneficial owner of all Notes for which the Noteholder is the
investment advisor or manager having the power to vote and dispose of such Notes
on behalf of such beneficial owner, to tender all such Notes together with
properly completed and duly executed letter or letters of transmittal with
respect to such Notes as required by the instructions to the letter of
transmittal pursuant to and in accordance with the Exchange Offer within 5
business days after receipt of the relevant letters of transmittal;
(2) not revoke any of the foregoing unless and until this
Agreement is terminated in accordance with its terms;
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(3) not vote for, consent to, provide any support for,
participate in the formulation of, or solicit or encourage others to formulate
any other tender offer, settlement offer, or exchange offer for the Notes other
than the Exchange Offer; and
(4) so long as this Agreement is effective and has not been
terminated in accordance with Section 5 or 6 hereof and the final Restructure
Documents are materially consistent with the Term Sheet, not object to, nor
otherwise commence any proceeding to oppose, the Restructuring, it being
understood and agreed that each Noteholder shall not (i) directly or indirectly
seek, solicit, support, or encourage any other plan, sale, proposal, or offer of
winding up, liquidation, reorganization, merger, consolidation, dissolution, or
restructuring of the Company or (ii) commence an involuntary bankruptcy case
against the Company.
Section 3. Representations and Warranties.
(a) Each of the parties severally represents and warrants to each of
the other parties that the following statements are true and correct as of the
date hereof:
(1) Power and Authority. It has all requisite power and authority
to enter into this Agreement and to carry out the transactions contemplated by,
and perform its respective obligations under, this Agreement.
(2) Authorization. The execution and delivery of this Agreement
and the performance of its obligations hereunder have been duly authorized by
all necessary action on its part.
(3) No Conflicts. The execution, delivery, and performance by it
of this Agreement do not and shall not (i) violate any provision of law, rule,
or regulation applicable to it or its certificate of incorporation or by-laws
(or other organizational documents) or (ii) conflict with, result in a breach
of, or constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it is a party or under its certificate
of incorporation or by-laws (or other organizational documents), except, with
respect to the Company, for any contractual obligation that would not have a
material adverse effect on the business, assets, financial condition, or results
of operations of PRG and its subsidiaries, taken as a whole.
(4) Governmental Consents. The execution, delivery, and
performance by it of this Agreement do not and shall not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with, or by, any Federal, state, or other governmental authority or
regulatory body, except (i) such filings as may be necessary and/or required for
disclosure by the Securities and Exchange Commission and (ii) filings with
NASDAQ in connection with the Restructuring.
(5) Binding Obligation. This Agreement is the legally valid and
binding obligation of it, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other
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similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
(6) Proceedings. No litigation or proceeding before any court,
arbitrator, or administrative or governmental body is pending against it that
would adversely affect its ability to enter into this Agreement or perform its
obligations hereunder.
(b) Each of the Noteholders represents and warrants, severally and not
jointly, to each of the other parties that the following statements are true,
correct, and complete as of the date hereof:
(1) Ownership. It has disclosed to PRG on a confidential basis
the aggregate principal amount of the Notes for which (i) it is the sole
beneficial owner and (ii) it is the investment advisor or manager for the
beneficial owners of such Notes, having the power to vote and dispose of such
Notes on behalf of such beneficial owners. It is entitled (for its own account
or for the account of other persons claiming through it) to all of the rights
and economic benefits of such Notes.
(2) Transfers. It has made no prior assignment, sale,
participation, grant, conveyance, or other transfer of, and has not entered into
any other agreement to assign, sell, participate, grant, or otherwise transfer,
in whole or in part, any right, title, or interests in (or portion thereof) the
Notes referred to in Subsection 3(b)(1), except as permitted by Section 4
hereto.
(3) Laws. It (i) is a sophisticated investor with respect to the
transactions described herein with knowledge and experience in financial and
business matters sufficient to evaluate the merits and risks of owning and
investing in securities similar to the Notes (including any securities that may
be issued in connection with the Restructuring), making an informed decision
with respect thereto, and evaluating properly the terms and conditions of this
Agreement, and it has made its own analysis and decision to enter in this
Agreement, (ii) is, and any person for which it is the investment advisor or
manager and which is the beneficial owner of Notes is, an "accredited investor"
within the meaning of Rule 501 of the Securities Act of 1933, as amended, and
(iii) it has had the opportunity to meet with management of PRG and to ask
questions and review information with respect to PRG's business, financial
condition, results of operations and financial and operational outlook, and it
has obtained all information it deems necessary or appropriate in order to enter
into this agreement and make the investment decision contemplated hereby.
Section 4. Restriction On the Sale Of the Notes. Each Noteholder
individually covenants that, from the date hereof until the termination of this
Agreement, such party shall not, directly or indirectly, sell, pledge,
hypothecate, or otherwise transfer any Notes or any option, right to acquire, or
voting, participation, or other interest therein, except to a purchaser or other
entity who executes and delivers to PRG, concurrently or prior to any binding
commitment with respect to such transfer, an agreement in writing to be bound by
all the terms of this Agreement with respect to the relevant Notes or other
interests being transferred to such purchaser (which agreement shall include the
representations and warranties set forth in Section 3 hereof). This Agreement
shall in no way be construed to preclude a party from acquiring additional Notes
or
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other interests in PRG. All Notes held by a Noteholder, including Notes acquired
after the date hereof shall be subject to all the terms of this Agreement.
Section 5. Termination by the Noteholders. This Agreement may be terminated
by Noteholders that beneficially own or act as the investment advisor or manager
with respect to at least a majority of the Notes subject to the terms of this
Agreement on the occurrence of any of the following events (each a "Noteholder
Termination Event"), by delivering written notice of the occurrence of such
event in accordance with Section 11 below to the other parties:
(a) the Exchange Offer has not been commenced by January 31, 2006 or
completed by March 31, 2006;
(b) after the date hereof there shall have occurred any event or
circumstance that individually or in the aggregate reflect a material adverse
change in the financial condition, business, or operations of the Company and
its subsidiaries; or
(c) the failure to repay all obligations under the facility
contemplated by the Bridge Loan Documents (the "Bridge Loan"), in full, in cash,
concurrent with the closing of the Exchange Offer
(d) the exercise of any remedies under the Bridge Loan Documents
following an Event of Default (as defined therein) arising from any the
following: (i) the failure to make any scheduled payment of principal or
interest as and when required under the Bridge Loan Documents; (ii) the failure
by the Company to make any Mandatory Prepayments or Payment of Taxes; (iii) a
default under any Other Indebtedness, unless otherwise permitted by the Bridge
Loan Documents; (iv) the failure to maintain Insurance required by the Bridge
Loan Documents; (v) the incurrence of any Debt or Indebtedness in excess of the
limitations in the Bridge Loan Documents; (iv) any Consolidation, Dissolution or
Merger in violation of the Bridge Loan Documents; (vii) making any Restricted
Payments in violation of the Bridge Loan Documents; (viii) any Transactions with
Affiliates in violation of the Bridge Loan Documents; (ix) taking any Restricted
Action in violation of the Bridge Loan Documents; (x) making any Negative Pledge
in violation of the Bridge Loan Documents; (xi) occurrence of any Bankruptcy
Event or Change of Control.(1)
(e) the exercise of any remedies under that certain Amended and
Restated Credit Agreement among PRG-Schulz USA, Inc., as Borrower, PRG, and
certain of its other affiliates, as Guarantors, and Bank of America, N.A., dated
as of November 30, 2004, and any documents related thereto;
(f) the Restructuring or the final Restructuring Documents do not
conform to the Term Sheet with respect to the treatment of the Notes, except as
modified in any non-material respect or as approved by the Ad Hoc Committee of
the Noteholders (the members of which are identified on the signature pages
hereto); or
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(1) All capitalized terms used in this Section 5(c) shall have the meaning
given such terms in the Bridge Loan Credit Agreement.
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(g) a material breach of this Agreement by the Company that is not, by
its terms, curable or that is, by its terms, curable and is not cured by the
fifth calendar day after notice of such breach (for the purposes of this
Agreement, the term "material breach" includes a breach of the covenant in
Section 2(b)).
Section 6. Termination by the Company. The Company shall have the right to
terminate this Agreement on the occurrence of any of the following events (each
a "Company Termination Event") by giving written notice in accordance with
Section 11 below to the other parties:
(a) the exercise of any remedies under the Bridge Loan Documents; or
(b) a material breach of this Agreement by any of the Noteholders that
is not, by its terms, curable or that is, by its terms, curable and is not cured
by the fifth calendar day after notice of such breach; or
(c) a good faith determination by the Company's board of directors
(following consultation with its reputable outside legal counsel and its
financial advisor of national recognized reputation) that such termination is
required by its fiduciary duty to the Company, its then current shareholders,
and its creditors in order to enter into an alternative transaction (whether in
the form of a merger, consolidation or combination with a third party or the
sale of all, substantially all, or a significant portion of the assets or
businesses of the Company) that will be at least as favorable to each of such
parties but more favorable to the parties as a whole, from a financial
perspective, than the Restructuring and is reasonably capable of being
consummated, taking into account, among other things, all legal, financial,
regulatory and other aspects of the alternative transaction and the person or
group making such proposal (a "Superior Proposal"); provided that (i) the Bridge
Loan has been paid in full, in accordance with the Bridge Loan Documents, (ii)
the Company provides the Noteholders five (5) business days prior notice of the
Company's intent to terminate this Agreement under this Section (c) and the
terms and conditions of such Superior Proposal (including the identity of the
person or group making such Superior Proposal), and (iii) the Company provides
the Noteholders and their representatives a good faith opportunity during such 5
day notice period and prior to any such termination to revise the terms of the
Restructuring.
Section 7. Termination of Agreement. Notwithstanding anything to the
contrary in this Agreement, the Term Sheet or any other agreement, this
Agreement shall terminate on the earlier of (a) the occurrence of a Noteholder
Termination Event after expiration of any cure periods and satisfaction of any
conditions set forth in Section 5 of this Agreement, (b) the occurrence of a
Company Termination Event, after expiration of any cure periods and satisfaction
of any conditions set forth in Section 6 of this Agreement, and (c) 5:00 pm on
June 15, 2006.
Section 8. Effect of Termination and of Waiver of Termination Event. On the
delivery of the written notice referred to in Sections 5 or 6 in connection with
the valid termination of this Agreement, the obligations of each of the parties
hereunder shall thereupon terminate and be of no further force and effect. Prior
to the delivery of such notice the Noteholders may waive the occurrence of a
Noteholder Termination Event and PRG may waive
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the occurrence of a Company Termination Event. No such waiver shall affect any
subsequent termination event or impair any right consequent thereon. Upon
termination of this Agreement, no party shall have any continuing liability or
obligation to the other parties hereunder; provided, however, that no such
termination shall relieve any party from liability for its breach or
non-performance of its obligations hereunder prior to the date of such
termination.
Section 9. Amendments. This Agreement may be modified, amended, or
supplemented by a written agreement executed by the Company and the Noteholders
that beneficially own or act as the investment advisors or managers with respect
to at least a majority of the aggregate principal face amount of the Notes
subject to this Agreement, provided, however, that in the event of a material
change to the Term Sheet, or a change of any of the economic terms of the Term
Sheet, any Noteholder that does not consent shall have no further obligations
under the Agreement.
Section 10. Further Assurances. Each of the parties to this Agreement
hereby further covenants and agrees to cooperate in good faith to execute and
deliver all further documents and agreements and take all further action that
may be commercially reasonably necessary or desirable in order to enforce and
effectively implement the terms and conditions of this Agreement. Each
Noteholder agrees to advise the Company of any changes in the amount of Notes
beneficially owned by it and the amount of Notes for which such Noteholder is
the investment manager or advisor for beneficial owners.
Section 11. Governing Law; Jurisdiction. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflict of laws of the State of New York. By its execution and delivery of
this Agreement, each of the parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit, or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit, or proceeding, shall be brought in a federal court of
competent jurisdiction in the Southern District of New York. By execution and
delivery of this Agreement, each of the parties hereto hereby irrevocably
accepts and submits to the jurisdiction of such court, generally and
unconditionally, with respect to any such action, suit, or proceeding.
Section 12. Notices. All demands, notices, requests, consents, and
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or by courier service, messenger, facsimile,
telecopy, or if duly deposited in the mails, by certified or registered mail,
postage prepaid-return receipt requested, and shall be deemed to have been duly
given or made (i) upon delivery, if delivered personally or by courier service,
or messenger, in each case with record of receipt, (ii) upon transmission with
confirmed delivery, if sent by facsimile or telecopy, or (iii) two business days
after being sent by certified or registered mail, postage pre-paid, return
receipt requested, to the following addresses, or such other addresses as may be
furnished hereafter by notice in writing, to the following parties:
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If to PRG, or any of its subsidiaries, to:
PRG-Schultz International, Inc.
600 Galleria Parkway, Suite 600
Atlanta, GA 30339
Facsimile: (770) 779-3133
Attn: Clint McKellar, Esq.
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Facsimile: (212) 310-8007
Attn: Michael F. Walsh, Esq.
If to the Noteholders, or any one Noteholder, to:
Houlihan Lokey Howard & Zukin
685 Third Avenue, 15th Floor
New York, NY 10017
Facsimile: (212) 497-3070
Attn: David Hilty
with a copy to:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Facsimile: (212) 593-5955
Attn: Jeffrey S. Sabin, Esq.
Section 13. Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement among the parties with regard to the subject
matter hereof, and supersedes all prior agreements with respect to the subject
matter hereof.
Section 14. Headings. The headings of the paragraphs and subparagraphs of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
Section 15. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of the parties and their respective permitted successors
and assigns, provided, however, that nothing contained in this paragraph shall
be deemed to permit sales, assignments, or transfers other than in accordance
with Section 4.
Section 16. Specific Performance. Each party hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause other parties to sustain damages for which such
parties would not have an adequate remedy at law for
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money damages, and therefore each party hereto agrees that in the event of any
such breach, such other parties shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which such parties may be entitled, at
law or in equity.
Section 17. Several, Not Joint, Obligations. The agreements,
representations, and obligations of the parties under this Agreement are, in all
respects, several and not joint.
Section 18. Remedies Cumulative. All rights, powers, and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power, or remedy thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power, or remedy by such party.
Section 19. No Waiver. The failure of any party hereto to exercise any
right, power, or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power, or remedy or to
demand such compliance.
Section 20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement. Delivery of an executed signature page of
this Agreement by telecopier or email shall be as effective as delivery of a
manually executed signature page of this Agreement.
Section 21. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 22. No Third-Party Beneficiaries. Unless expressly stated herein,
this Agreement shall be solely for the benefit of the parties, and no other
person or entity shall be a third party beneficiary hereof.
Section 23. Additional Parties. Without in any way limiting the provisions
hereof, additional holders of Notes may elect to become parties by executing and
delivering to PRG a counterpart hereof. Each such additional holder shall become
a party to this Agreement as a Noteholder in accordance with the terms of this
Agreement.
Section 24. No Solicitation. This Agreement is not intended to be, and each
signatory to this Agreement acknowledges that this Agreement is not, a
solicitation with respect to the Exchange Offer or with respect to any other
mechanism to accomplish a restructuring of the obligations under the Notes,
whether such mechanism is to be accomplished in or outside a court.
Section 25. Consideration. It is hereby acknowledged by the parties hereto
that, other than the agreements, covenants, representations, and warranties set
forth herein and in the Term
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Sheet, no consideration shall be due or paid to the Noteholders for their
agreement to vote to accept the Exchange Offer in accordance with the terms and
conditions of this Agreement.
Section 26. Receipt of Adequate Information; Representation by Counsel.
Each party acknowledges that it has received adequate information to enter into
this Agreement and that it has been represented by counsel in connection with
this Agreement and the transactions contemplated by this Agreement. Accordingly,
any rule of law or any legal decision that would provide any party with a
defense to the enforcement of the terms of this Agreement against such party
shall have no application and is expressly waived. The provisions of the
Agreement shall be interpreted in a reasonable manner to effect the intent of
the parties.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first above written.
PRG-Schultz International, Inc.
By: /s/
------------------------------------
Name: Clinton McKellar, Jr.
Title: SVP, General Counsel & Secretary
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NOTEHOLDERS:
BLUM CAPITAL PARTNERS LP
By: /s/
------------------------------------
Name: Jose S. Medeiros
Title: Partner
PARKCENTRAL GLOBAL HUB LIMITED
By: /s/
------------------------------------
Name: Steven Blasnik
Title: President
PETRUS SECURITIES LP
By: /s/
------------------------------------
Name: Steven Blasnik
Title: President of General Partner
TENOR OPPORTUNITY MASTER FUND, LTD
By: /s/
------------------------------------
Name: Robin Shah
Title: Partner
THALES FUND MANAGEMENT, LLC
By: /s/
------------------------------------
Name: A. Aadei Shaaban
Title: Senior Analyst
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EXHIBIT A
TERM SHEET
PROPOSED TRANSACTION: The following describes an agreement in principal
between PRG-Schultz International, Inc. and its
subsidiaries (collectively, the "Company") and the Ad
Hoc Committee of Holders of the Company's 4.75%
Convertible Subordinated Notes due 2006 (the "Ad Hoc
Committee") and to restructure the financial obligations
of the Company.
The Transaction will involve the recapitalization of the
Company through:
(i) A Bridge Loan (as defined below) of $10 million
to provide the Company with sufficient funds to
pay the interest payment due on the Notes and
additional working capital, pending the closing
of the Recapitalization (as defined below);
(ii) A credit facility or facilities, consisting of
a minimum revolver of $20 million and total
commitments of no more than $47.5 million,
amending or refinancing (a) the Amended and
Restated Credit Agreement, dated as of November
30, 2004, among (x) PRG-Schultz USA, Inc., the
Company, and certain of the Company's
subsidiaries and (y) Bank of America, N.A. (the
"Existing Credit Facility"), and (b) the Bridge
Loan and
(iii) A pro-rata exchange of the 4.75% Convertible
Subordinated Notes due 2006 issued by the
Company (the "Notes") for three new securities
including: (1) New Senior Notes; (2) New Senior
Convertible Notes; and (3) New Senior Series A
Convertible Participating Preferred Stock
(collectively the "Transaction Securities").
Points (i) through (iii), collectively are defined as
the "Recapitalization".