Exhibit 99.7
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("Agreement") is made this __ day of
August, 2002, by and among PRG-Xxxxxxx International, Inc., a Georgia
corporation ("PRGX"), and Berkshire Fund V, Limited Partnership, a Massachusetts
limited partnership and Berkshire Investors LLC, a Massachusetts limited
liability company (collectively with their permitted assignees, "Berkshire") and
Xxxxxxx PRG Liquidating Investments, Ltd., a Texas limited partnership ("LP").
W I T N E S S E T H:
WHEREAS, on the date hereof, LP granted to PRGX an option (the
"Option") to purchase 1,446,168 shares of Common Stock of PRGX ("Option Shares")
pursuant to that certain First Option Agreement of even date herewith ("Option
Agreement");
WHEREAS, on the date hereof, Berkshire loaned $12,610,584.96 to LP as
evidenced by secured promissory notes of even date herewith ("Notes") and, as
security for its payment obligations under the Notes, the LP has granted a
security interest in and pledged the Option Shares (hereafter, the "Pledged
Shares") to Berkshire, pursuant to Pledge Agreements of even date herewith
("Pledge Agreements");
WHEREAS, on the date hereof, the LP and its affiliates sold an
aggregate of 4,338,507 shares of PRGX Common Stock to affiliates of Berkshire;
WHEREAS, PRGX has granted registration rights to Berkshire with respect
to shares of PRGX Common Stock pursuant to a registration rights agreement,
without which Berkshire would not have acquired the 4,338,507 PRGX Shares
referred to above;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Berkshire's right to realize upon the Pledged Shares upon an
Event of Default under the Pledge Agreements and/or the Notes shall be
subordinate to the rights of PRGX to such Pledged Shares (but not to the
proceeds thereof) under the Option Agreement.
2. Berkshire hereby agrees (i) that until the expiration of the
Option Agreement it will take no action with respect to the Pledged Shares or
any portion thereof pursuant to the Pledge Agreements, nor will it take any
action against the LP to interfere with or impair PRGX's ability to obtain full
right, title, and interest in the Pledged Shares or any portion thereof pursuant
to the exercise of the Option Agreement and purchase of the Pledged Shares
thereunder and (ii) that, upon the full exercise of the Option under the Option
Agreement, the Pledge Agreements will be cancelled and terminated.
3. Upon repayment of the Notes in whole or in part by LP to
Berkshire in accordance with Section 3.1 of the Notes, Berkshire shall release
the number of Pledged Shares relating to such repayment to the LP, as agent on
behalf of the parties to deliver such shares to PRGX. In the event an Event of
Default occurs (as defined in the Notes) and is continuing, and notice
thereof is given to PRGX prior to payment under the Option Agreement, PRGX
shall, if it exercises the Option, hold the Purchase Price therefor in trust for
the benefit of Berkshire and/or LP in accordance with the terms of the Option
Agreement. The parties hereto hereby acknowledge that PRGX shall have no
liability to any party on account of its failure to disburse the Purchase Price
for the Pledged Shares in the event of any dispute as to whom is entitled to
receive such Purchase Price. In such event, PRGX shall have the right to retain
the funds and disburse them (a) in accordance with joint instructions from
Berkshire and LP, (b) in accordance with the final order of a court of competent
jurisdiction, or (c) by deposit by PRGX of the Purchase Price for the Pledged
Shares with said court, pending a final decision of such controversy. The
parties hereto further agree that PRGX shall not be liable for failure of the
depository and shall only be liable otherwise in the event of its gross
negligence or willful misconduct.
4. COLLECTION OF PROCEEDS. Nothing herein contained shall limit or
restrict the right of Berkshire to collect any proceeds paid to LP upon the
exercise of the Option Agreement.
5. MISCELLANEOUS.
(a) GOVERNING LAW. THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW.
(b) MODIFICATIONS. No modification of or amendment to this Agreement,
nor any waiver or any rights under this Agreement, shall be effective unless in
writing signed by all of the parties to this Agreement. The failure by any party
to enforce any rights under this Agreement shall not be construed as a waiver of
any rights of such party.
(c) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation of receipt),
delivered by nationally-recognized overnight express service or sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
If to Berkshire, to:
Berkshire Partners LLC
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxx
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With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxxx, Esq.
If to the PRGX, to:
PRG-Xxxxxxx International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx XxXxxxxx, Xx.
Senior Vice President and General Counsel
With a copy to:
Xxxxxx Xxxxxx Xxxxxxx LLP
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Telephone: 404 (873)-8700
Telecopy: 404 (873)-8701
Attention: Xxxxxxxx Xxxxxx
If to LP: Xxxxxxx PRG Liquidating Investments, Ltd
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telefax: (000) 000-0000
With a copy to:
Malouf, Lynch, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telefax: (000) 000-0000
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
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(d) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(e) SUCCESSORS AND ASSIGNS. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by PRGX's and Berkshire's
respective successors and assigns and any assignee of the Notes held by
Berkshire shall be bound by this Agreement.
(f) SPECIFIC PERFORMANCE. Without limiting the rights of each party
hereto to pursue all other legal and equitable rights available to such party
for the other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
(g) FURTHER ASSURANCES. PRGX and Berkshire agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be reasonably necessary or desirable in order to
implement the transactions contemplated by this Agreement and the transfer of
any shares of PRGX Common Stock under that certain Agreement dated as of the
date hereof between Berkshire and Xxxx Strategic Partners II, LP.
(h) TERMINATION. This Agreement will terminate upon the earlier of
the expiration of the Option Agreement or indefeasible payment of the Notes by
LP in accordance with the terms thereof.
(i) CAPITALIZED TERMS. Capitalized terms defined in the Note and not
otherwise defined herein shall have the meanings set forth in the Note.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRG-XXXXXXX INTERNATIONAL, INC.
By:
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Name:
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Its:
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BERKSHIRE FUND V, LIMITED PARTNERSHIP
By: Fifth Berkshire
Associates LLC
Its: General Partner
By:
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Name:
----------------------------
Its:
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BERKSHIRE INVESTORS LLC
By:
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Name:
----------------------------
Its:
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XXXXXXX PRG LIQUIDATING
INVESTMENTS, LTD.
By: XXXXXXX PRG LIQUIDATING
INVESTMENTS GP, LLC
Its: General Partner
By:
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Name: Xxxx Xxxxxxx, Vice President
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