EXHIBIT 99.3
PURCHASE OPTION AGREEMENT
THIS PURCHASE OPTION AGREEMENT (this "Agreement"), is made as
of November 11, 2002, by and among (x) Personnel Group of America, Inc. (the
"Company") and the undersigned holders (collectively, the "Noteholders") of the
5-3/4% Convertible Subordinated Notes, due 2004, of the Company (the Company and
the Noteholders, collectively, the "Optionees") and (y) the undersigned original
lenders (the "Senior Lenders") and agent (the "Senior Agent") under Amendment
No. 4 dated as of February 8, 2002 to the Amended and Restated Credit Agreement,
dated as of June 23, 1997 (as amended, the "Existing Senior Credit Facility"),
between the Company, Bank of America, N. A. as Agent, and the Lenders as defined
therein. Capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Existing Senior Credit Facility.
W I T N E S S E T H :
WHEREAS, the Senior Lenders desire to grant to the Optionees a
Purchase Option (as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties hereto agree as follows:
1. Grant of the Purchase Option.
Each of the Senior Lenders hereby irrevocably grants to the Optionees
the right to purchase (each, a "Purchase Option"), at the option of such
Optionees and on the terms and subject to the conditions hereinafter set forth,
all of such Senior Lender's rights and obligations arising under the Existing
Senior Credit Facility, exclusive only of its obligations to fund any drawings
with respect to any Letters of Credit (the "Optioned Rights") held or otherwise
beneficially owned by such Senior Lender as of the date of exercise. The
Optionees may exercise the Purchase Option in accordance with the provisions of
this Agreement at any time beginning on the Payment Date (as defined below) and
ending at 5:00 p.m. (New York time) on June 30, 2003 (the "Expiration Date").
The exercise price of each of the Purchase Options shall be 75% of the face
amount of each Senior Lender's pro rata share of the funded Loans (excluding
outstanding but undrawn Letters of Credit) according to the records of the
Senior Agent (the "Exercise Price").
As used in this Agreement, the term "Payment Date" shall mean the date
upon which the Company repays to the Senior Agent, for the ratable benefit of
all of the Lenders (based on their respective Commitment Percentages) under the
Existing Senior Credit Facility, in U.S. dollars, by wire transfer of
immediately available funds, the $22
million (the "Repayment Amount") drawn by the Company on October 28, 2002.
Failure of the Company to remit the Repayment Amount to the Senior Agent by 5:00
p.m. (New York time) on or before November 12, 2002 shall render this Agreement
null and void. The Company hereby agrees that, as of November 12, 2002, the
Committed Amount shall be reduced to $114,000,000 (the "Reduced Committed
Amount"). By its execution of this Agreement, subject only to the execution of
this Agreement by each of the Senior Lenders and the Noteholders, the Company
hereby irrevocably provides the Senior Agent notice of the Company's election
pursuant to Section 3.4 of the Existing Senior Credit Facility to reduce
voluntarily the Committed Amount to the Reduced Committed Amount as of November
12, 2002. Each of the Lenders hereby waives the requirement under Section 3.4 of
the Existing Senior Credit Facility that the Company provide five Business Days'
notice of any such reduction.
2. Exercise of an Option; Payment.
(a) On the terms and subject to conditions of this Agreement,
an Optionee may, at any time on or after the Payment Date and on or prior to the
close of business on the Expiration Date, exercise all, but not less than all,
of the Purchase Option with respect to all of the Senior Lenders by delivery of
written notice to each respective Senior Lender. Any such notice shall state
that such Optionee (the "Exercising Optionee") is electing to exercise the
Purchase Option. For the avoidance of doubt, an Optionee shall not be permitted
to exercise the Purchase Option with respect to any Senior Lender without
simultaneously exercising the Purchase Option with respect to all of the Senior
Lenders. The Exercising Optionee shall provide written notice to the other
Optionees of its election to exercise the Purchase Option, such notice being
delivered contemporaneously with the notice delivered to the Senior Lenders.
(b) Upon receipt of a notice of exercise pursuant to Section
2(a) above, the Company, the Senior Lenders and the Senior Agent shall take any
and all actions as may be reasonably necessary or advisable to effect the valid
and legally binding transfer and assignment to the Exercising Optionee of the
Optioned Rights to which such Purchase Option relates, including, but not
limited to, delivering or causing to be delivered any supplement, amendments,
waivers or instruments of transfer under the Existing Senior Credit Facility and
executing any customary trade claim purchase agreements to reflect the transfer
of the Optioned Rights and, if appropriate, the admission of the Purchasing
Optionee as a Lender under the Existing Senior Credit Facility with respect to
the Optioned Rights so acquired.
3. The Option Closing
(a) Any closing of the purchase of the Optioned Rights
hereunder (an "Option Closing") shall take place on the same business day that
the conditions set forth below have been fulfilled or waived (except those that
by their nature are to be satisfied or waived at the Option Closing, but subject
to the fulfillment or waiver of such conditions) at 10:00 A.M., local time, at
the offices of Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx
Xxxx, or at such other time and place as the parties hereto may agree (the
"Option Closing Date").
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(b) At the Option Closing, each Senior Lender will deliver to
the Exercising Optionee satisfactory evidence that its Optioned Rights have been
transferred, free and clear of any Encumbrances (as defined below). Each Senior
Lender's execution and delivery of an Assignment and Acceptance Agreement, in
the form specified in Schedule 11.3(b) of the Existing Senior Credit Facility,
shall in all events constitute satisfactory evidence of such transfer. At the
Option Closing, such Exercising Optionee will purchase such Optioned Rights from
each Senior Lender by paying the Exercise Price to each Senior Lender in U.S.
dollars, by wire transfer of immediately available funds.
(c) At the Option Closing, (i) the Company shall cause to be
deposited with the Issuing Lender cash collateral in the amount equal to 105% of
the outstanding face amount of any Letters of Credit, and (ii) upon the Issuing
Lender's receipt of such cash collateral, the Lenders shall be released of their
obligations under the Existing Senior Credit Facility with respect to funding
draws on the Letters of Credit. The Issuing Lender shall hold such cash
collateral, for the ratable benefit of the Lenders, in a segregated
interest-bearing deposit account, to secure the LOC Obligations in respect of
any drawings under all then outstanding Letters of Credit, the Letter of Credit
Fees and the Issuing Lender fees. Upon any drawing under any Letter of Credit,
the Issuing Lender shall be authorized to debit the cash collateral account in
the full amount of such drawing plus the amount of any applicable commissions or
other standard charges of the Issuing Lender in relation to such drawing. Upon
the Company's full satisfaction of the LOC Obligations, in a manner and to the
extent reasonably satisfactory to the Issuing Lender, the Issuing Lender shall
remit to the Company the remaining balance in the cash collateral account.
(d) At Option Closing, the Senior Agent shall be deemed to
have resigned as Agent pursuant to Section 10.9 of the Existing Senior Credit
Facility. In accordance therewith, the Company and each of the Lenders waives
the 30-day prior notice otherwise applicable to any such resignation.
(e) At the Option Closing, the Company shall issue to each of
the Senior Lenders warrants (the "Senior Lender Warrants") entitling the Senior
Lenders to purchase up to 3% of the common stock of the Company in the
aggregate. The principal terms and conditions of Senior Lender Warrants are
described on Exhibit "A" attached hereto and incorporated herein by reference.
The Senior Lender Warrants shall be in such form and content, consistent with
the terms described on Exhibit "A", as is reasonably satisfactory to the Company
and the Senior Lenders.
(f) As used in this Agreement, the term "Encumbrances" shall
mean any mortgages, pledges, liens, charges, encumbrances, security interests,
options, rights of subscription or purchase or other restrictions or third party
rights.
4. Representations and Warranties of the Parties. Each of the
parties represents and warrants to each of the other parties as of the date
hereof and as of each Option Closing Date that:
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(a) It is duly organized, validly existing and in good
standing under the laws of the state or country of its organization and has the
requisite power and authority to enter into this Agreement and perform the
transactions contemplated hereby.
(b) The execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby have been duly
authorized by it, and this Agreement has been duly executed and delivered by a
duly authorized officer of it and constitutes a valid and binding obligation of
it enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
5. Representations and Warranties of each of the Senior Lenders.
Each of the Senior Lenders represents and warrants to each of the Optionees as
of the date hereof and as of the Option Closing Date that:
(a) All of the Optioned Rights beneficially owned by it are
set forth opposite its name on the signature page hereto and all such Optioned
Rights shall be beneficially owned by it as of the Option Closing.
(b) The Optioned Rights, when sold by it pursuant to the
exercise of a Purchase Option, will be free and clear of all Encumbrances.
6. Conditions
(a) Conditions to Parties' Obligations. The respective
obligations of each party hereunder to effect the sale and transfer and/or
purchase of the Optioned Rights upon exercise of the Purchase Option are subject
to the satisfaction or waiver at or prior to the Option Closing of the condition
that no court or governmental entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any law, statute, ordinance,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the Option Closing (collectively, an
"Order"), and no governmental entity shall have instituted any proceeding
seeking any such Order. In the event that the Company files a voluntary petition
commencing a case under Title 11 of the United States Code, or in the event that
an involuntary petition is filed against the Company under Section 303 of Title
11 of the United States Code which is not dismissed within 45 days after such
petition is filed, the Purchase Option shall automatically terminate.
(b) Conditions to the Exercising Optionee's Obligations. The
obligation of an Exercising Optionee to effect the purchase of the Optioned
Rights upon exercise of the Purchase Option is subject to the satisfaction of or
waiver by such Exercising Optionee at or prior to the Option Closing of the
condition that the deliveries to be made to the Exercising Optionee at the
Option Closing as contemplated by Sections 2(b) and 3(b) shall have been made.
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(c) Conditions to a Senior Lender's Obligations. The
obligation of each Senior Lender to effect the sale and transfer of its
Optioned Rights upon exercise of the Purchase Option is subject to the
satisfaction of the conditions that (i) the payments to be made to it
at the Option Closing as contemplated by Section 3(b) shall have been
made, (ii) the Senior Lender Warrants shall have been issued and
delivered to the Senior Lenders as contemplated by Section 3(e), and
(iii) the Company shall have deposited with the Issuing Lender cash
collateral for the LOC Obligations as required by Section 3(c).
7. Proposed Restructuring; Company Agreement; Forebearance;
Public Announcement.
(a) The Optionees agree that they shall use all reasonable efforts to
consummate the Proposed Restructuring substantially as defined and described in,
and on the timelines contemplated by, the attached Exhibit "B" (Form of
Agreement in Principle).
(b) The Company agrees with the Noteholders that it shall not exercise
the Purchase Option without the written consent of the Noteholders. Until this
Agreement is terminated pursuant to Section 8, the Senior Lenders may not sell
or assign their respective Optioned Rights, including without limitation their
respective interests in the Loans, to (i) the Noteholders or any Affiliate or
agent for any of the Noteholders, or (ii) any other Person unless such Person,
in each instance, has executed an agreement, in form and content reasonably
satisfactory to the Optionees, unconditionally agreeing to be bound by the terms
of this Agreement.
(c) Subject to the occurrence of the Payment Date, each of the Senior
Lenders and the Noteholders, in their capacity as Lenders under the Existing
Senior Credit Facility, and the Company, hereby agree that the Existing Senior
Credit Agreement shall be amended in the following respects:
(i) Subclause (E) in the definition of "Consolidated EBITDA"
shall be amended to read in its entirety as follows: "(E) for any
period during the Borrower's fiscal year 2002 and beyond, Restructuring
Charges taken by the Borrower and its Subsidiaries (but in no event
shall all of the add-backs pursuant to this clause (E) exceed
$5,000,000 (plus the amount of any Restructuring Charges consisting of
(x) expenses that may be incurred in connection with the hiring of
investment advisers to address the Borrower's capital structure and (y)
other fees and expenses not to exceed $5,000,000 in the aggregate
incurred by the Borrower after September 30, 2002 in connection with
any financial restructuring transaction)). . ."
(ii) Section 7.8 shall be amended to read in its entirety as:
"The Borrower will, and will cause each of its subsidiaries to, perform
in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or
other debt instruments to which it
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is a party or by which it is bound; provided, however, that to the
extent the Borrower is not in compliance with the Subordinated Note
Documents due to the de-listing of the Borrower's stock or any related
Repurchase Event, such non-compliance shall be deemed not to
constitute a violation of this Section 7.8."
(iii) Section 7.11 shall be amended to provide that, from the
Payment Date through the Expiration Date, the financial covenants
measured by Sections 7.11(a), (b), (c) and (d) shall be waived, and
Section 7.11(e) shall be amended to read in its entirety as: "Minimum
Rolling Consolidated EBITDA. Consolidated EBITDA, calculated monthly on
a three-month rolling basis, shall not be less the amount shown below:
FISCAL MONTH ENDING NEAREST MINIMUM 3-MONTH ROLLING
CONSOLIDATED EBITDA
-------------------------- ------------------------
November 30, 2002 $3,449,000
-------------------------- ------------------------
December 31, 2002 $2,851,000
-------------------------- ------------------------
January 31, 2003 $2,029,000
-------------------------- ------------------------
February 28, 2003 $1,771,000
-------------------------- ------------------------
March 31, 2003 $2,737,000
-------------------------- ------------------------
April 30, 2003 $2,997,000
-------------------------- ------------------------
May 31, 2003 $3,713,000
-------------------------- ------------------------
June 30, 2003 $3,679,000
-------------------------- ------------------------
(iv) Section 9.1(g)(i) shall be amended to read in its
entirety as follows: "The Borrower or any of its Subsidiaries shall
default in the performance or observance (beyond the applicable grace
period with respect thereto, if any) or any material obligation or
condition of any contract or lease material to the Borrower and its
Subsidiaries taken as a whole; provided, however, that to the extent
the Borrower is not in compliance with the Subordinated Note Documents
due to the de-listing of the Borrower's stock or any related Repurchase
Event, such non-compliance, default or non-performance shall be deemed
not to constitute a Default or Event of Default hereunder; or".
(v) Section 9.1(k) shall be amended to read in its entirety as
follows: "Subordinated Note Indentures. (i) There shall occur and be
continuing any Event of Default or Repurchase Event under, and in each
case, as defined in the Subordinated Note Indenture, and the
Subordinated Noteholders have caused the Subordinated Indebtedness to
be accelerated and such acceleration is not
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rescinded within 30 days, or (ii) any of the Borrower's Obligations
for any reason shall cease to be "Senior Indebtedness" under and as
defined in the Subordinated Note Indenture; or".
The Company, the Senior Lenders, and the Noteholders in their capacity
as Lenders shall, if requested by the Senior Agent, execute a form of amendment
to the Existing Senior Credit Facility to incorporate formally these
modifications to the Existing Senior Credit Facility.
(d) The Company will consult with the representative of the other
parties before issuing any press release or making any filing with respect to
the initial announcement of this Agreement and shall not issue any such press
release or make any such filing prior to such consultation except as may be
required by law.
8. Termination; Survival. This Agreement, other than Sections 4, 5,
7(c), and 8-16, shall automatically and without notice terminate and become null
and void on the earliest of (a) the consummation of all of the Option Closings,
(b) the failure of the Payment Date to occur prior to 5:00 p.m. on November 12,
2002, and (c) the close of business on the Expiration Date; provided that, if
the Purchase Option cannot be exercised or the Optioned Rights cannot be
delivered upon such exercise by reason of any applicable judgment, decree or
order or because the condition relating thereto has not yet been satisfied, the
Expiration Date of the Purchase Option shall be extended until ten days after
such impediment to exercise has been removed but in no event beyond 30 days
after the original Expiration Date. Upon the consummation of an Option Closing,
all obligations and all rights of the relevant Exercising Optionee and the
Senior Lenders under this Agreement, other than those set forth in Sections 4,
5, 7(c) and 8-16, shall automatically and without notice terminate and be of no
effect and shall not survive the Option Closing. Notwithstanding any other term
or provision hereof, the reduction of the Committed Amount to the Reduced
Committed Amount pursuant to Section 1(d) shall be permanent and irrevocable,
and the termination of this Agreement for any reason whatsoever shall not result
in any increase in the Committed Amount above the Reduced Committed Amount.
9. Governing Law. This Agreement and any rights arising hereunder
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to the principles of conflict of law thereof.
10. Successors and Assigns; Third-Party Beneficiaries. The provisions
of this Agreement shall be binding upon, and inure to the benefit of, the
respective successors and permitted assigns of the parties hereto. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned in whole or in part, by operation of law or otherwise, by any party
without the prior written consent of the other parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto and their respective successors and permitted assigns any
rights, remedies or obligations under or by reason of this Agreement.
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11. Amendment and Waiver. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by each Optionee and each Senior Lender, or
in the case of a waiver, by the party against whom the waiver is to be
effective. No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
12. Further Assurances. Each party agrees that it will cure promptly
any defects in the execution and delivery of this Agreement and will promptly
execute and deliver to each of the Senior Lenders and Optionees upon the
reasonable request of each of such party all such other documents, agreements
and instruments, and will take any and all other reasonable actions, to comply
with or accomplish the covenants and agreements in this Agreement, or to further
evidence and more fully describe the Purchase Option granted herein, or to make
any recordings, to file any notices or obtain any consents, all as may be
reasonably necessary or appropriate in connection therewith. The provisions of
this Section shall survive the exercise of any or all of the Purchase Options.
13. Notices. Any notice, demand or document that either party is
required or may desire to give hereunder shall be in writing and given by
messenger, telex, telecopier or other electronic transmission, or United States
registered or certified mail, postage prepaid, return receipt requested,
addressed to such party as follows:
if to the Senior Agent:
to:
Bank of America, N.A. as Agent
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
(i) if to a Senior Lender:
to:
HBV LLC
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Komonos
Telecopier: (000) 000-0000
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to:
Banque Paribas
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telecopier: (000) 000-0000
to:
Bank One, N.A.
1 Bank Xxx Xxxxx
Xxxx Xxxxx 0XX-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopier: (000) 000-0000
In each case with a copy to the Senior Agent.
(ii) if to the Company:
Personnel Group of America, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxx Xxxxxxxx, Xx.
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopier: 000-000-0000
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(iii) if to any Noteholder:
to:
MatlinPatterson Global Advisers LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxxx
Telecopier: (000) 000-0000
and to:
Inland Partners, L.P. and Links Partners L.P.
c/o Xxxxx X. Xxxx
The Compass Group
0 Xxxx Xxxxx, Xxxxx 0000
Xxxxxx XX 00000
Telecopier: (000) 000-0000
with a copy in each case to:
Stroock & Stroock & Xxxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopier: 000-000-0000
and to:
I. Xxxxxx Xxxxxxx
The Compass Group
00 Xxxxxx Xxxx, Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
or at such other address as either party shall have furnished to the other by
notice given in accordance with this provision. Any notice delivered or made by
messenger, telex, telescope, or United States mail shall be deemed to be given
on the date of actual delivery as shown by messenger receipt, the addressee's
telex confirmation, the addressor's telescope machine confirmation or other
verifiable electronic receipt, or the registry or certification receipt.
14. Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Agreement; provided that the Company shall pay or cause to
be paid any fees, expenses or transfer taxes relating to or arising out of the
consummation of an Option Closing; provided further, the Company shall pay all
expenses of the Senior Agent (including, without limitation, reasonable legal
and other professional fees) in connection with the negotiation and execution of
this Agreement as required by Section 11.5 of the Existing Senior Credit
Facility.
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15. Severability; Counterparts. Should any provision of this Agreement
be held by a court of competent jurisdiction to be unenforceable or invalid for
any reason, the remaining provisions of this Agreement shall not be affected by
such holding and shall continue in full force in accordance with their terms.
This Agreement may be executed in one or more counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
but one agreement.
16. Specific Performance. Each of the parties hereto acknowledges that
if it fails to perform any of its obligations under this Agreement immediate and
irreparable harm or injury would be caused to the other parties hereto for which
money damages would not be an adequate remedy and that, in such event, the party
seeking to enforce obligations hereunder shall have the right, in addition to
any other rights it may have, to specific performance of this Agreement.
Accordingly, if any party hereto should institute an action or proceeding
seeking specific enforcement of the provisions hereof, each of the other parties
hereto hereby waives the claim or defense that such instituting party has an
adequate remedy at law and hereby agrees not to assert in any such action
proceeding the claim or defense that such a remedy at law exists. The parties
further agree to waive any requirements for the securing or posting of any bond
in connection with obtaining any such equitable relief.
17. Exercise of Option by Company. In the event that the Company is the
Exercising Optionee in accordance with the terms hereof, then the Noteholders,
in their capacities as Lenders under the Existing Senior Credit Facility,
acknowledge and agree that they have no right or claim whatsoever to share in
the payment of the Exercise Price to any of the Senior Lenders.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed and delivered as of the date first above written.
Senior Lenders and Senior Agent:
BANK OF AMERICA, N.A. AS ADMINISTRATOR
AGENT AND AS A SENIOR LENDER
By: /s/ H. Xxxxxxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
Title: Managing Director
Existing Senior Credit
Facility: 27.50%
BNP PARIBAS
By: /s/ Xxxxxxx X. XxXxxxx
------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Director
By: /s/ Xxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
Existing Senior Credit
Facility: 10.00%
BANK ONE, N.A.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: First Vice President
Existing Senior Credit
Facility: 10.00%
HBV LLC
By: /s/ Xxxxxx X. Komonos
------------------------------------
Name: Xxxxxx Komonos
Title: Portfolio Manager
Existing Senior Credit
Facility: 10.00%
Noteholders:
INLAND PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Attorney-in-Fact
LINKS PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Attorney-in-Fact
MATLINPATTERSON GLOBAL
OPPORTUNITIES PARTNERS L.P.
By: MatlinPatterson Global Advisers LLC,
its Investment Manager, by:
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Authorized Officer
COMPANY:
PERSONNEL GROUP OF AMERICA, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
EXHIBIT "A"
PRINCIPAL TERMS OF SENIOR LENDER WARRANTS
HOLDERS: Senior Lenders
SECURITIES: Warrants to purchase shares of Common Stock
EXERCISE PRICE: The Senior Lender Warrants shall be exercisable at
price per share assuming aggregate post-exercise
equity value on the issue date of $60 million.
EXERCISE: Each Senior Lender Warrant shall be exercisable
beginning on October 1, 2004; provided, that each
Senior Lender Warrant shall be immediately
exercisable upon a Change of Control or a sale of all
or substantially all of the assets of the Company.
ADJUSTMENTS: The number of shares to be received upon exercise and
the exercise price shall be subject to customary
anti-dilution adjustments for dividends,
distributions, stock splits and similar
recapitalization transactions.
POST-EXERCISE
PERCENTAGE: The Senior Lender Warrants will entitle the holders
to purchase in the aggregate Common Stock
representing 3% of the Common Stock of the Borrower
on a fully diluted basis as of the issue date of the
Senior Lender Warrants.
TERM: Each Warrant will expire ten years from the date of
issuance.
TRANSFER
RESTRICTIONS: The Senior Lender Warrants may be transferred in
whole or in part, but not in fractional amounts.
VOTING RIGHTS: The Senior Lender Warrants will contain no voting
or similar rights. Any amendment to the warrant
agreement for the Senior Lender Warrants may be
approved by the holders of a majority of shares
issuable upon exercise of the Senior Lender Warrants.
SUCCESSORS: Any successor of the Borrower shall succeed to all
rights and obligations of the Borrower under the
Senior Lender Warrants.
