-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ke6145FsUFlNVzEvonEG4xs4p4UDcAardfXcNIPZOZJMEMZ4+N6eT4zxcHKHD6hK ecz0oQyJRleGUEwkhLtJ8w== 0000902664-05-002297.txt : 20051130 0000902664-05-002297.hdr.sgml : 20051130 20051130145420 ACCESSION NUMBER: 0000902664-05-002297 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20051130 DATE AS OF CHANGE: 20051130 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PRG SCHULTZ INTERNATIONAL INC CENTRAL INDEX KEY: 0001007330 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 582213805 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-48923 FILM NUMBER: 051234156 BUSINESS ADDRESS: STREET 1: 600 GALLERIA PARKWAY STREET 2: STE 100 CITY: ATLANTA STATE: GA ZIP: 30339-5949 BUSINESS PHONE: 7707793311 MAIL ADDRESS: STREET 1: 600 GALLERIA PARKWAY STREET 2: STE 100 CITY: ATLANTA STATE: GA ZIP: 30339-5949 FORMER COMPANY: FORMER CONFORMED NAME: PROFIT RECOVERY GROUP INTERNATIONAL INC DATE OF NAME CHANGE: 19960207 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BLUM CAPITAL PARTNERS LP CENTRAL INDEX KEY: 0000938775 IRS NUMBER: 943205364 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 909 MONTGOMERY STREET # 400 CITY: SAN FRANCISCO STATE: CA ZIP: 94133 BUSINESS PHONE: 4154341111 MAIL ADDRESS: STREET 1: 909 MONTGOMERY STREET STREET 2: SUITE 400 CITY: SAN FRANCISCO STATE: CA ZIP: 94133 FORMER COMPANY: FORMER CONFORMED NAME: BLUM RICHARD C & ASSOCIATES L P DATE OF NAME CHANGE: 19970219 SC 13D 1 sc13d.txt BLUM CAPITAL PARTNERS, L.P.
- --------------------- ----------------------------------------------------------------------------------- SEC POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION 1746 (11-02) CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. - --------------------- ----------------------------------------------------------------------------------- ------------------------------- ------------------------------- OMB APPROVAL ------------------------------- UNITED STATES ------------------------------- SECURITIES AND EXCHANGE COMMISSION OMB Number: WASHINGTON, D.C. 20549 ------------------------------- ------------------------------- Expires: ------------------------------- ------------------------------- Estimated average burden hours per response . . . . . 11 -------------------------------
SCHEDULE 13D (AMENDMENT NO. 11) Under the Securities Exchange Act of 1934 PRG-SCHULTZ INTERNATIONAL, INC. - -------------------------------------------------------------------------------- (Name of Company) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 69357C107 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Andre Weiss, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2431 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 28, 2005 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 2 OF 10 PAGES - ----------------------------------- ----------------------------------- - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) BLUM CAPITAL PARTNERS, L.P. I.R.S. ID: 94-3205364 - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - ------------------ ------- ----------------------------------------------------- 7 SOLE VOTING POWER 0 ------- ----------------------------------------------------- Number of 8 SHARED VOTING POWER Shares Beneficially 13,939,012 shares (including 4,651,939 shares Owned by issuable upon conversion of notes and payable as Each shares of interest under the notes) (see Item 5) Reporting ------- ----------------------------------------------------- Person With 9 SOLE DISPOSITIVE POWER 0 ------- ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 20.8% (see Item 5) - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN, IA - --------- ---------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 3 OF 10 PAGES - ----------------------------------- ----------------------------------- - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) RICHARD C. BLUM & ASSOCIATES, INC. I.R.S. ID: 94-2967812 - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - ------------------ ------- ----------------------------------------------------- 7 SOLE VOTING POWER 0 ------- ----------------------------------------------------- Number of 8 SHARED VOTING POWER Shares Beneficially 13,939,012 shares (including 4,651,939 shares Owned by issuable upon conversion of notes and payable as Each shares of interest under the notes) (see Item 5) Reporting ------- ----------------------------------------------------- Person With 9 SOLE DISPOSITIVE POWER 0 ------- ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.8% (see Item 5) - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - --------- ---------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 4 OF 10 PAGES - ----------------------------------- ----------------------------------- - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) BLUM STRATEGIC GP, L.L.C. I.R.S. ID: 94-3303831 - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------ ------- ----------------------------------------------------- 7 SOLE VOTING POWER 0 ------- ----------------------------------------------------- Number of 8 SHARED VOTING POWER Shares Beneficially 13,939,012 shares (including 4,651,939 shares Owned by issuable upon conversion of notes and payable as Each shares of interest under the notes) (see Item 5) Reporting ------ ----------------------------------------------------- Person With 9 SOLE DISPOSITIVE POWER 0 ------- ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 20.8% (see Item 5) - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - --------- ---------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 5 OF 10 PAGES - ----------------------------------- ----------------------------------- - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) BLUM STRATEGIC PARTNERS II, L.P. I.R.S. ID: 94-3395151 - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - ------------------ ------- ----------------------------------------------------- 7 SOLE VOTING POWER 0 ------- ----------------------------------------------------- Number of 8 SHARED VOTING POWER Shares Beneficially 13,939,012 shares (including 4,651,939 shares Owned by issuable upon conversion of notes and payable as Each shares of interest under the notes) (see Item 5) Reporting ------- ---------------------------------------------------- Person With 9 SOLE DISPOSITIVE POWER 0 ------- ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 20.8% (see Item 5) - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - --------- ---------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 6 OF 10 PAGES - ----------------------------------- ----------------------------------- - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) BLUM STRATEGIC GP II, L.L.C. I.R.S. ID: 94-3395150 - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------ ------- ----------------------------------------------------- 7 SOLE VOTING POWER 0 ------- ----------------------------------------------------- Number of 8 SHARED VOTING POWER Shares Beneficially 13,939,012 shares (including 4,651,939 shares Owned by issuable upon conversion of notes and payable as Each shares of interest under the notes) (see Item 5) Reporting ------- ----------------------------------------------------- Person With 9 SOLE DISPOSITIVE POWER 0 ------- ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 13,939,012 shares (including 4,651,939 shares issuable upon conversion of notes and payable as shares of interest under the notes) (see Item 5) - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.8% (see Item 5) - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - --------- ---------------------------------------------------------------------- - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 7 OF 10 PAGES - ----------------------------------- ----------------------------------- This Amendment No. 11 amends the Statement on Schedule 13D (the "Schedule 13D") filed with the Securities and Exchange Commission (the "Commission") on September 2, 2003 by Blum Capital Partners, L.P., a California limited partnership, ("Blum L.P."); Richard C. Blum & Associates, Inc., a California corporation ("RCBA Inc."); Blum Strategic GP, L.L.C., a Delaware limited liability company ("Blum GP"); Blum Strategic GP II, L.L.C., a Delaware limited liability company ("Blum GP II"); Blum Strategic Partners II, L.P., a Delaware limited partnership ("Blum Strategic II") (collectively, the "Reporting Persons"); and Richard C. Blum. This amendment to the Schedule 13D relates to the shares of Common Stock (the "Shares") of PRG-Schultz International, Inc., a Georgia corporation (the "Company"). The following amendments to the Schedule 13D are hereby made. Unless otherwise defined herein, all capitalized terms shall have the meanings ascribed to them in the Schedule 13D. ITEM 4. PURPOSE OF TRANSACTION. Item 4 of the Schedule 13D is hereby supplemented by the following: On November 14, 2005, the Reporting Persons entered into a 2005 Amended and Restated Standstill Agreement with the Company which amends and supersedes the Amended and Restated Standstill Agreement by and among the Reporting Persons and the Company dated as of August 21, 2002. A copy of the Amended and Restated Standstill Agreement is attached as an exhibit hereto and incorporated into this Item 4 by reference. On November 25, 2005, the Reporting Persons and the Company executed a Confidentiality Agreement relating to the Reporting Persons membership on the ad hoc committee of holders of the Company's 4 3/4% Convertible Subordinated Notes due 2006 (the "Notes" and such committee the "Ad Hoc Committee"), which amends and supersedes the Confidentiality Agreement by and among the Reporting Persons and the Company dated November 14, 2005. A copy of the Confidentiality Agreement is attached as an exhibit hereto and incorporated into this Item 4 by reference. On November 28, 2005, the Ad Hoc Committee entered into a Commitment Letter with the Company with respect to a proposed $8 million financing facility to permit an interest payment on the Notes and to provide additional working capital to the Company (the "Commitment Letter"). A copy of the Commitment Letter is attached as an exhibit hereto and incorporated into this Item 4 by reference. Except as set forth above, the Reporting Persons have no oral or written agreements, understandings or arrangements with each other or any other person relating to acquiring, holding, voting or disposing of any securities of the Company or otherwise with respect to the Company. Although the foregoing represents the range of activities presently contemplated by the Reporting Persons with respect to the Company, it should be noted that the possible activities of the Reporting Persons are subject to change at any time. Except to the extent the foregoing may be deemed a plan or proposal, none of the Reporting Persons has any plans or proposals which - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 8 OF 10 PAGES - ----------------------------------- ----------------------------------- relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D. Subject to the Commitment Letter, the Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE COMPANY. The Commitment Letter, the Amended and Restated Standstill Agreement and the Confidentiality Agreement are incorporated by reference into this Item 6. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 1. Joint Filing Agreement dated November 30, 2005. 2. 2005 Amended and Restated Standstill Agreement, dated November 14, 2005, among the Reporting Persons and the Company. 3. Confidentiality Agreement dated November 25, 2005, among the Reporting Persons and the Company. 4. Commitment Letter, dated November 28, 2005 among the Reporting Persons and the Company. - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 9 OF 10 PAGES - ----------------------------------- ----------------------------------- SIGNATURES After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: November 30, 2005 BLUM CAPITAL PARTNERS, L.P. By: Richard C. Blum & Associates, Inc. its General Partner By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Counsel and Secretary RICHARD C. BLUM & ASSOCIATES, INC. By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Counsel and Secretary BLUM STRATEGIC GP, L.L.C. By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Member and General Counsel BLUM STRATEGIC PARTNERS II, L.P. By: Blum Strategic GP II, L.L.C., Its General Partner By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Member and General Counsel BLUM STRATEGIC GP II, L.L.C. By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Member and General Counsel - ----------------------------------- ----------------------------------- CUSIP NO. 69357C107 PAGE 10 OF 10 PAGES - ----------------------------------- ----------------------------------- EXHIBIT INDEX 1. Joint Filing Agreement dated November 30, 2005. 2. 2005 Amended and Restated Standstill Agreement, dated November 14, 2005, among the Reporting Persons and the Company. 3. Confidentiality Agreement dated November 25, 2005, among the Reporting Persons and the Company. 4. Commitment Letter, dated November 28, 2005 among the Reporting Persons and the Company. EX-99 2 exhibit991.txt EXHIBIT 1- JOINT FILING AGREEMENT EXHIBIT 1 JOINT FILING UNDERTAKING The undersigned, being duly authorized thereunto, hereby execute this agreement as an exhibit to this Schedule 13D to evidence the agreement of the below-named parties, in accordance with the rules promulgated pursuant to the Securities Exchange Act of 1934, to file this Schedule jointly on behalf of each such party. Dated as of November 30, 2005 BLUM CAPITAL PARTNERS, L.P. By: Richard C. Blum & Associates, Inc. its General Partner By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Counsel and Secretary RICHARD C. BLUM & ASSOCIATES, INC. By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Counsel and Secretary BLUM STRATEGIC GP, L.L.C. By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Member and General Counsel BLUM STRATEGIC PARTNERS II, L.P. By: Blum Strategic GP II, L.L.C., Its General Partner By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Member and General Counsel BLUM STRATEGIC GP II, L.L.C. By: /S/ GREGORY D. HITCHAN ---------------------- Name: Gregory D. Hitchan Title: Member and General Counsel EX-99 3 exhibit992.txt EXHIBIT 2 - STANDSTILL AGREEMENT EXHIBIT 2 2005 AMENDED AND RESTATED STANDSTILL AGREEMENT THIS 2005 AMENDED AND RESTATED STANDSTILL AGREEMENT (this "Agreement"), dated as of November 14, 2005, is by and among PRG-SCHULTZ INTERNATIONAL, INC., a Georgia corporation (the "Company"), and each of the other parties identified on the signature pages hereto (collectively, the "Investors"). W I T N E S S E T H: WHEREAS, the Investors are the Beneficial Owners of shares of the Common Stock of the Company and desire to acquire additional shares of such Common Stock; WHEREAS, the Company has adopted that certain Shareholder Protection Rights Agreement (the "Rights Agreement") dated as of August 9, 2000, as amended effective on May 15, 2002, August 16, 2002 and November 7, 2005, between the Company and First Union National Bank, as Rights Agent; WHEREAS, the Investors and the Company entered into an Amended and Restated Standstill Agreement with the Company as of August 21, 2002 (the "2002 Standstill Agreement"); WHEREAS, in order to induce the Company's Board of Directors to amend the definition of "Voting Stock" under the 2002 Standstill Agreement to exclude the Company's 4 3/4% Convertible Subordinated Notes due 2006 (the "Convertible Notes"), Blum Capital Partners, L.P. has agreed to consider in good faith and analyze whether it or one of its affiliates could provide additional short-term financing to the Company upon such terms as may be determined Blum Capital Partners, L.P. in its sole discretion; and WHEREAS, the parties to the 2002 Standstill Agreement have agreed to enter into this 2005 Amended and Restated Standstill Agreement to amend certain provisions thereof and intend that this Agreement supersede the 2002 Standstill Agreement in its entirety. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows: 1. DEFINITIONS. Capitalized terms used in this Agreement which are not otherwise defined by this Agreement are used with the same meaning ascribed to such terms in the Rights Agreement. In addition, unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement: (a) "13D Group" means any "group" (within the meaning of Section 13(d) of the Exchange Act) formed for the purpose of acquiring, holding, voting or disposing of Voting Stock of Company. (b) "Acquisition Proposal" shall mean a bona fide, written proposal which includes all material terms of a proposed transaction received by the Board of Directors of the Company from any Person proposing to enter into a transaction which, if consummated, would constitute a Change of Control of the Company. (c) "Change of Control" shall mean (i) the acquisition by a Third Party of more than 50% of the Company's then outstanding Voting Stock, excluding however, a purchase agreement with an underwriter or group of underwriters in a registered public offering to the public; (ii) the consummation of a merger, acquisition, consolidation or reorganization or series of such related transactions involving the Company, unless immediately after such transaction or transactions, the shareholders of the Company immediately prior to such transaction shall Beneficially Own at least 50% of the outstanding Voting Stock of the Company (or, if the Company shall not be the surviving company in such merger, consolidation or reorganization, the Voting Stock of the surviving corporation issued in such transaction or transactions in respect of Voting Stock of the Company shall represent at least 50% of the Voting Stock of such surviving corporation); (iii) a change or changes in the membership of the Company's Board of Directors which represents a change of a majority of such membership during any twelve-month period (unless such change or changes in membership are caused by the actions of the then-existing Board of Directors); or (iv) the consummation of a sale of all or substantially all of the Company's assets unless immediately after such transaction, the shareholders of the Company immediately prior to such transaction shall Beneficially Own at least 50% of the Voting Stock of the acquiring company. (d) "Common Stock" shall mean the common stock, no par value per share, of the Company. (e) "Controlled Affiliate" shall mean any Investor or any Person that is directly or indirectly, controlling, controlled by or under common interest with any Investor. (f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (g) "Investor Tender Offer" shall mean a bona fide public tender offer subject to the provisions of Regulation l4D under the Exchange Act, by an Investor (or any 13D Group that includes an Investor) to purchase or exchange for cash or other consideration all of the outstanding shares of Common Stock (other than Common Stock owned by the Investors or their Controlled Affiliates) and which has a minimum condition of such number of shares of Common Stock that would result in the Investors or their Controlled Affiliates Beneficially Owning not less than 51% of the shares of outstanding Common Stock on a fully-diluted basis (including all shares of Common Stock issuable upon exercise of any option, warrant, conversion right or other right to acquire Common Stock, whether or not then exercisable). (h) "Registration Rights Agreement" shall mean the Registration Rights Agreement in the form of Annex "A" to the 2002 Standstill Agreement between the Company and the Investors, as it may be amended, supplemented or otherwise modified from time to time. 2 (i) "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. (j) "Stock Purchase Agreements" shall mean that certain Stock Purchase Agreement dated August 21, 2002, among Blum Strategic Partners II, L.P. and certain others, and any document contemplated therein. (k) "Third Party" shall mean any Person other than any Investor or any Affiliate or Associate of an Investor. (l) "Third Party Tender Offer" shall mean a bona fide public offer subject to the provisions of Regulation 14D under the Exchange Act, by a Person (which is not made by and does not include any of the Investors or their Controlled Affiliates or any 13D Group that includes the Investors or their Controlled Affiliates) to purchase or exchange for cash or other consideration any Voting Stock of the Company and which consists of an offer to acquire 30% or more of the then Total Current Voting Power of the Company, as the case may be. (m) "Total Current Voting Power" shall mean, with respect to any corporation, the total number of votes that may be cast in the election of members of the board of directors of the corporation if all securities entitled to vote in the election of such directors (excluding shares of preferred stock that are entitled to elect directors only upon the occurrence of customary events of default) are present and voted. (n) "Voting Stock" of any Person shall mean any securities entitled to vote generally in the election of directors of such Person, or any direct or indirect rights or options or warrants to acquire any such securities or any securities convertible or exercisable into or exchangeable for such securities, whether or not such securities are so convertible, exercisable or exchangeable at the time of determination, except that the Convertible Notes shall not be included as part of the Voting Stock. 2. AMENDMENT TO RIGHTS PLAN. With the goal of ensuring that Investors shall not be deemed to be an Acquiring Person for so long as they have not breached any of the representations, warranties or covenants contained in this Agreement, concurrently herewith the Company's Board of Directors has amended the Rights Plan to provide that the Investors shall not be deemed an Acquiring Person thereunder for so long as this Agreement is in effect and so long as the Investors have increased their beneficial ownership of Common Stock above that shown in the Investors' amendment to Schedule 13D filed with the SEC on June 17, 2002 by no more than 5,784,675 shares in the aggregate (without giving effect to any stock split, share dividend, recapitalization, reclassification or similar transactions effected by or with the approval of the Board of Directors of the Company after the date of the 2002 Standstill Agreement) plus any additional Convertible Notes hereafter acquired by the Investors (the "Limit"); provided, however, that the Limit shall be reduced, on a share for share basis, by any shares sold or otherwise disposed of by any Investor otherwise than to another Investor and by that number of shares that are acquired by the Company pursuant to that certain Second Option Agreement to be entered into between Schultz PRG Liquidating Investments Ltd. and the Company in the Form of Annex B to the 2002 Standstill Agreement (the "Option Agreement"); provided, further, 3 however, that the amendment to the Rights Plan provides that any termination of this Agreement by the Company or delivery of any notice of termination by Investors, in each case pursuant to Section 16 hereof, shall rescind the amendment and cause the Investors' full beneficial ownership of Common Stock to be considered for purposes of determining whether or not Investors are an Acquiring Person; provided, further, however, that the Investors shall not be deemed to beneficially own any shares of Company Common Stock owned by any other persons that are not Controlled Affiliates, solely by reason of any Investor and such other persons (or their permitted assigns) entering into the Stock Purchase Agreements (or any similar stock purchase agreement entered into by such other person (or its permitted assigns) on or about August 21, 2002), by reason of the performance of such Investor's and any other persons' (or their permitted assigns') obligations thereunder or solely by reason of the Investors' membership on the Ad Hoc Noteholders Committee (as defined in Section 5(c) hereof). 3. REPRESENTATION AND WARRANTIES BY INVESTORS. Each of the Investors hereby severally represents and warrants to the Company as follows: (a) Such Investor has all requisite corporate and other power and authority (if applicable) to execute, deliver and perform their respective obligations under this Agreement. The execution, delivery and performance of this Agreement by such Investor and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate and other action (if applicable) on the part of such Investor. (b) This Agreement has been duly executed and delivered by such Investor and constitutes a legal, valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors rights generally or by general principles of equity. (c) No governmental consent, approval, authorization, license or clearance, or filing or registration with any governmental or regulatory authority, is required in order to permit such Investor to perform its respective obligations under this Agreement, except for such as have been obtained. (d) The shares of Common Stock set forth on Schedule 1 attached hereto represent all of the shares of capital stock of the Company, if any, which are Beneficially Owned by such Investor on the date hereof. Such shares are owned free and clear of any charge, claim, equitable interest, lien, option, pledge, security interest, right of first refusal, encumbrance or similar restriction. Such Investor does not have the right to vote shares of capital stock of the Company other than those set forth on Schedule 1 with respect to such Investor, and such Investor has not granted any other Person the right to vote such shares. 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Investors as follows: 4 (a) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Company. (b) This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or similar laws affecting creditors rights generally or by general principles of equity. (c) No governmental consent, approval, authorization, license or clearance, or filing or registration with any governmental or regulatory authority, is required in order to permit the Company to perform its obligations under this Agreement, except for such as have been obtained. 5. STANDSTILL PROVISIONS. Each of the Investors hereby severally agrees that neither it nor any Controlled Affiliate of such Investor will singularly or together with any other Person directly or indirectly, in each case unless specifically requested to do so in writing in advance by the Board of Directors of the Company: (a) Acquire or offer, make a proposal or agree to acquire (whether publicly or otherwise) in any manner, any material assets of the Company or its subsidiaries or any Voting Stock of the Company or its subsidiaries (or Beneficial Ownership thereof), in addition to the Voting Stock currently owned by such Investor as set forth in Schedule 1 hereof, except (i) not more than an additional 5,784,675 shares of Common Stock which may be acquired after the date of the 2002 Standstill Agreement by all of the Investors, in the aggregate, which number shall be reduced on a share for share basis by any shares of Common Stock sold or otherwise disposed of by any Investor and by that number of shares that are acquired by the Company pursuant to the Option Agreement, (ii) securities acquired pursuant to a stock split, share dividend, recapitalization, reclassification or similar transaction effected by or with the approval of the Board of Directors of the Company; provided that the execution by any Investor of the Stock Purchase Agreements and the performance by such Investor of its obligations thereunder shall not violate this subparagraph (a) or (iii) any shares of Common Stock acquired by any of the Investors or their affiliates upon conversion of any of the Convertible Notes currently held or hereafter acquired by such persons. (b) Make or in any way propose or participate in any "solicitation" of "proxies" to vote (as such terms are defined in Rule 14a-1 of the Exchange Act), solicit any consent, or communicate with in any material respect, or seek to advise or influence any Person (other than the Investors and their Controlled Affiliates) with respect to the solicitation or voting of any Voting Stock of the Company in opposition to any matter that has been recommended by the Board of Directors of the Company or in favor of any matter that has not been approved by the Board of Directors of the Company, or become a "participant" (as defined in Instruction 3 to Item 4 of Rule 5 14a-101 under the Exchange Act) in any contested election of directors of the Company, or threaten or propose to do the same or publicly announce an intention to do the same. (c) Form, or be a member of, join or encourage the formation of any Person (other than the group consisting solely of the Investors and their Controlled Affiliates) with respect to any Voting Stock of the Company or the acquisition of any assets of the Company or any of its subsidiaries; provided that the execution by any Investor of the Stock Purchase Agreements and the performance by such Investor of its obligations thereunder shall not violate this subparagraph (c); provided that nothing herein shall restrict any of the Investors from joining the ad hoc committee of holders of the Convertible Notes (the "Ad Hoc Noteholders Committee") from proposing, negotiating or discussing a possible transaction involving the restructuring of the Convertible Notes with the other members of the Ad Hoc Noteholders Committee and the Company. (d) Deposit any Voting Stock of the Company into a voting trust or subject any Voting Stock to an arrangement or agreement with respect to the voting thereof (other than this Agreement or an arrangement solely concerning the Investors and their Controlled Affiliates). (e) Seek election to or seek to place a representative on the Board of Directors of the Company or seek the removal of any member of the Board of Directors of the Company except as provided in that certain Investor Rights Agreement to be entered into among the Company and the investors named therein in the form of Annex C to the 2002 Standstill Agreement. (f) Call or seek to have called any meeting of the shareholders of the Company other than through participation as a director of the Company and with the prior approval of the Board. (g) Initiate, propose or otherwise solicit shareholders of the Company for the approval of any shareholder proposal with respect to the Company as described in Rule 14a-8 under the Exchange Act, or induce or attempt to induce any Person to initiate any such shareholder proposal, in opposition to any matter that has been recommended by the Board or in favor of any matter that has not been approved by the Board. (h) Without the prior written permission of the Board of Directors of the Company, solicit, seek to effect, negotiate with or provide any non-public information to any Person with respect to, or make any statement or proposal, whether written or oral, or otherwise make any public announcement or proposal whatsoever with respect to (i) a merger or acquisition of the Company or any other business combination involving the Company, (ii) the sale of all or a substantial portion of the assets of the Company and its subsidiaries, (iii) the purchase of equity securities of the Company (except as permitted in Section 5(a)) or any of its subsidiaries, whether by tender offer, exchange offer or otherwise, (iv) the liquidation of the Company, (v) the recapitalization of the Company, (vi) any other extraordinary business transaction with respect to the 6 Company, or (vii) any other matter involving the Company, or take any action which might require or result in a public announcement by or with respect to the Company or with respect to any such matters (except that the foregoing shall not restrict communications among the Investors and their Controlled Affiliates). (i) Instigate or assist, or enter into any arrangements with, any Third Party to do any of the actions described in this Section 5. (j) Transfer any securities of the Company to any Person that would be required, as a result of such transfer, to file or amend a Schedule l3D or 13G; provided that the limitation contained in this clause (j) shall not apply to transfers (i) to or among the Investors and any of their Controlled Affiliates who are or agree to become bound by this Agreement, (ii) that have been consented to in writing by the Company in advance and without any violation of any provisions of this Section 5 by any Investors or Controlled Affiliates, (iii) pursuant to a Third Party Tender Offer that is recommended by the Board of Directors of the Company, (iv) pursuant to a merger, consolidation or reorganization to which the Company is a party, (v) in a bona fide underwritten public offering conducted in connection with rights exercised under the Registration Rights Agreement, provided that in no event may any shares acquired pursuant to the Stock Purchase Agreements be transferred pursuant to this clause (v) prior to January 24, 2004; (vi) pursuant to transfers to withdrawing limited partners or managed accounts; provided that such limited partners or managed accounts are not a part of the Investors' 13D Group (unless they are Investors or Controlled Affiliates) and do not become a part of such 13D Group immediately following the transfer; (vii) pursuant to public sales in the open market in compliance with the volume and manner of sale requirements of Rule 144(e) and (f) under the Securities Act; (viii) of up to 9.9% of the Company's outstanding voting securities, provided that the purchaser does not beneficially own 10% or more of the voting power of the Company's outstanding securities immediately subsequent to the transfer; (ix) pursuant to that certain Purchase Agreement in the form attached as Annex D to the 2002 Standstill Agreement (the "Investor Purchase Agreement"); or (x) pursuant to a Third Party Tender Offer that is not recommended by the Board of Directors of the Company; provided that only a number of shares that is equal to or less than 15% of the Company's outstanding Common Stock as of the record date for the Third Party Tender Offer may be tendered by all Investors, in the aggregate, and if 50% or less of the Company's outstanding voting securities, on a fully diluted basis, are acquired pursuant to the Third Party Tender Offer, the remaining shares of Common Stock held by the Investors may not be tendered in the Third Party Tender Offer or otherwise transferred to any party participating in the Third Party Tender Offer for one year following such tender, regardless of whether or not this Agreement has been terminated under Section 17. (k) At any time prior to January 24, 2004, sell, gift, transfer or otherwise dispose of to any Person, or enter into any collar, swap, prepaid forward, other hedging transaction that would reduce the risk of ownership of, any securities of the Company acquired pursuant to the Stock Purchase Agreements, regardless of whether or not any such Person, as a result of thereof, is required to file or amend a Schedule 13D or 13G; provided, however, that the limitation contained in this clause (k) shall not apply to 7 transfers (i) to or among the Investors and any of their Controlled Affiliates who are or agree to become bound by this Agreement, (ii) that have been consented to in writing by the Company in advance and without any violation of any provisions of this Section 5 by any Investors or Controlled Affiliates, (iii) pursuant to a Third Party Tender Offer that is recommended by the Board of Directors of the Company, (iv) pursuant to a merger, consolidation or reorganization to which the Company is a party, (v) pursuant to the Investor Purchase Agreement, (vi) to one non-affiliate of the Investors, in an aggregate amount not to exceed 45,872 shares of Common Stock, or (vii) pursuant to the Option Agreement and the related Secured Promissory Note and Pledge Agreement between Schultz PRG Liquidating Investments Ltd. and Blum Strategic Partners II, L.P. (l) Voluntarily take any actions, other than execution of the Stock Purchase Agreements and performance of such Investor's obligations thereunder, that would cause the Investors to be members of the same 1 3D Group as any other persons (or their permitted assigns) entering into the Stock Purchase Agreements (or any similar stock purchase agreement entered into by such other person (or its permitted assigns). (m) Request the Company or its Board of Directors, directly or indirectly, to amend or waive any provision of this Section 5. Anything in this Section 5 to the contrary notwithstanding, this Section 5 shall not prohibit or restrict (i) any Investor affiliate serving as a director of the Company from acting in compliance with his fiduciary duties to the Company in such capacity, and (ii) any disclosure pursuant to Section 13(d) of the Exchange Act which an Investor reasonably believes, based on the advise of outside counsel, is required in connection with any action taken by such Investor that is otherwise in compliance with this agreement. 6. VOTING. Notwithstanding anything in this Agreement to the contrary, the Investors collectively shall vote any and all shares owned by them (whether of record, in street name, through a nominee or otherwise) as follows: (a) any and all shares so owned by Investors in the aggregate that exceed 15% of the outstanding shares of Common Stock of the Company on the record date for such vote shall be voted consistently with the recommendations of the Company's Board of Directors on all matters placed before the Company's shareholders, whether at a special or annual meeting, by written consent, or otherwise, and (b) all other shares so owned by the Investors may be voted in their discretion. The general counsel of Blum Strategic Partners II, L.P. shall provide a certification as to compliance with Subsection (a) of this Section 6 at least one week prior to any special or annual meeting of the Company's shareholders. 7. SUSPENSION OF RESTRICTIONS. The limitations provided in Section 5 shall immediately be suspended upon the earliest occurrence of any of the following events: (a) The occurrence of a "Change of "Control of the Company". (b) The public announcement by the Company that it is for sale or that it has accepted an offer from any party, other than an offer accepted and endorsed by 8 the Ad Hoc Noteholders Committee, for any business combination, sale or similar extraordinary transaction involving the Company or all or substantially all of its assets. (c) The execution of a definitive agreement by the Company which, if consummated, would result in a Change of Control of the Company. (d) The adoption by the Board of Directors of a plan of complete liquidation or dissolution or the filing by the Company, or commencement against the Company, of any petition for relief under Title 11 of the Unites States Code or the filing by the Company, or commencement against the Company, of any petition for relief under Title 11 of the United States Code. To the extent a widely disseminated public announcement thereof has not already been made, the Company shall provide the Investors with prompt written notice of the occurrence of any of the events set forth in this Section. Upon any (i) public withdrawal of any "for sale" notice referred to in Section 7(b), (ii) termination of any agreement referred to in Section 7(c) without consummation thereof, or (iii) termination of the plan of liquidation referenced in Section 7(d), as the case may be, the limitations provided in this Agreement (except to the extent then suspended as a result of any other event specified in this Section) shall again be applicable to the extent provided herein; provided, however, that, in the case of clauses (i), (ii) or (iii) above, prior to such public withdrawal or auction termination, agreement termination or plan termination, as the case may be, (A) the Investors and their Controlled Affiliates have not acquired actual ownership of Voting Stock of the Company representing in the aggregate a majority of the Total Current Voting Power of the Company and (B) no Investor or its Controlled Affiliate has commenced a Investor Tender Offer. 8. ENFORCEMENT. Each of the Investors, on the one hand, and the Company, on the other, acknowledge and agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically its provisions in any court having jurisdiction, this being in addition to any other remedy to which they may be entitled at law or in equity. 9. ENTIRE AGREEMENT; WAIVERS. This Agreement and that certain letter dated August 21, 2002 from the Company to the Investors constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties with respect to such subject matter (including the 2002 Standstill Agreement), provided that that certain confidentiality agreement of even date herewith between Blum Capital Partners, L.P. and the Company shall not be affected hereby and shall remain in full force and effect until terminated in accordance with its terms and provided further that to the extent there is any conflict between the provisions of such confidentiality agreement and this Agreement, the provisions of the confidentiality agreement shall apply until such agreement is terminated in accordance with its terms. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof or thereof (whether or not similar), shall constitute a continuing waiver unless otherwise expressly provided nor shall be 9 effective unless in writing and executed (i) in the ease of a waiver by the Company, by the Company and (ii) in the case of a waiver by the Investors, by the Investors against which enforcement of such waiver is sought. 10. AMENDMENT OR MODIFICATION. The parties hereto may not amend or modify this Agreement except in such manner as may be agreed upon by a written instrument executed by the Company and the Investors against which enforcement of such amendment is sought. 11. SUCCESSORS AND ASSIGNS. All the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, and each successor shall be deemed to be a party hereto for all purposes hereof. The terms and provisions of this Agreement shall not be binding upon any transferee (other than an Investor or a Controlled Affiliate of an Investor) that purchases any securities subject to this Agreement without violation of any provision of this Agreement. An Investor may not assign or transfer any of its rights or obligations hereunder (whether to a transferee of shares of Common Stock or otherwise) without the prior written consent of the Company, and no transfer or assignment by any party shall relieve such party of any of its obligations hereunder. 12. SEVERABILITY. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable, the remaining provisions shall remain in full force and effect. It is declared to be the intention of the parties that they would have executed the remaining provisions without including any that may be declared unenforceable. 13. HEADING. Descriptive headings are for convenience only and will not control or affect the meaning or construction of any provision of this Agreement. 14. COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties, and each such executed counterpart will be an original instrument. 15. NOTICES. Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing (including telecopy or similar teletransmission), addressed as follows: If to the Company, to: PRG-Schultz International, Inc. 600 Galleria Parkway Suite 100 Atlanta, Georgia 30339 Attention: Clint McKellar, Jr. Telephone No.: (770) 779-3051 Facsimile No.: (770) 779-3034 with a copy to: Arnall Golden Gregory LLP 2800 One Atlantic Center 10 1201 West Peachtree Street Atlanta, Georgia 30309-3450 Attention: Jonathan Golden, Esq. Telephone No.: (404) 873-8700 Facsimile No.: (404) 873-8701 If to the Investors, to: Blum Capital Partners, L.P. 909 Montgomery Street Suite 400 San Francisco, California 94113 Attention: Gregory Hitchan Facsimile No.: (415) 283-0653 with a copy to: Wilner Cutler Pickering Hale and Dorr LLP 399 Park Avenue New York, NY 10022 Attention: Andrew Goldman Telephone: 212-230-8800 Facsimile: 212-230-8888 Unless otherwise specified herein, such notices or other communications shall be deemed received (a) in the case of any notice or communication sent other than by mail, on the date actually delivered to such address (evidenced, in the case of delivery by overnight courier, by confirmation of delivery from the overnight courier service making such delivery, and in the case of a telecopy, by receipt of a transmission confirmation form or the addressee's confirmation of receipt), or (b) in the case of any notice or communication sent by mail, three business days after being sent, if sent by registered or certified mail, with first-class postage prepaid. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto. 16. TERMINATION. This Agreement shall remain in full force and effect until terminated in accordance with this Section. Subject to Section 5(j)(x) hereof, this Agreement may be terminated by 2/3's of the Investors, at any time the Investors' aggregate Beneficial Ownership of Common Stock is below 15%, by giving 30 days' advance written notice to the Company. Except as set forth in the following two sentences, all of the provisions of this Agreement shall remain in full force and effect for 30 days following receipt of such notice by the Company, regardless of whether or not Investors shall thereafter become an Acquiring Person pursuant to the Rights Agreement during such 30 day period. Sections 5(a) and 5(k) shall terminate upon the Company's receipt of such notice; provided, however, that in no event shall Section 5(k) terminate prior to January 24, 2004. Section 5(j) shall terminate upon the Company's receipt of such notice except for the proviso to Section 5(j)(x), which shall remain in full force and effect in accordance with its terms. This Agreement may be immediately terminated by the Company by written notice to Investors following any material breach by any 11 Investor of any provision hereof, including without limitation any breach of Section 5 hereof. Such termination will immediately terminate all provisions of this Agreement except for Section 5(k) and the proviso to Section 5(j)(x), which shall remain in effect in accordance with their terms. 17. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the domestic substantive law of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the law of any other jurisdiction. 18. NON-EXCLUSIVE SUBMISSION TO JURISDICTION. Any disputes arising out of or in connection with this Agreement may be adjudicated in the United States District Court for the Northern District of Georgia or in a court of competent civil jurisdiction in the State of Georgia. Each party hereto irrevocably submits to the personal jurisdiction of such courts for the purposes of any such suit, action, counterclaim or proceeding arising out of this Agreement (collectively, a "Suit"). Each of the parties hereto hereby waives and agrees not to assert by way of motion, as a defense or otherwise in any such Suit, any claim that it is not subject to jurisdiction of the above courts, that such Suit is brought in an inconvenient forum, or the venue of such Suit is improper; provided, however, that nothing herein shall be contained as a waiver of any right that any party hereto may have to remove a suit from a court sitting in the State of Georgia to the United States District for the Northern District of Georgia. Each of the parties hereby agrees that service of all writs, process and summonses in any Suit may be made upon such party by mail to the address as provided in this Agreement. Nothing herein shall anyway be deemed to limit the ability of any party to serve any such writs, process or summonses in any other matter permitted by applicable law, IN WITNESS WHEREOF, the Company and the Investors have caused this Agreement to be executed as of the date first above written by their respective duly authorized representatives. The Company: PRG-SCHULTZ INTERNATIONAL, INC. By: /s/ Clinton McKellar, Jr. -------------------------------------------- Name: Clinton McKellar, Jr. -------------------------------------------- Title: Senior Vice President, General Counsel -------------------------------------------- and Secretary -------------------------------------------- [SIGNATURES CONTINUED ON FOLLOWING PAGE] 12 BLUM CAPITAL PARTNERS, L.P. By: Richard C. Blum & Associates, Inc., Its General Partner By: /s/ Gregory Hitchan --------------------------------------------- Gregory Hitchan, General Counsel and Secretary RICHARD C. BLUM & ASSOCIATES, INC. By: /s/ Gregory Hitchan --------------------------------------------- Gregory Hitchan, General Counsel and Secretary BLUM STRATEGIC GP, L.L.C. By: /s/ Gregory Hitchan --------------------------------------------- Gregory Hitchan, Member BLUM STRATEGIC GP II, L.L.C. By: /s/ Gregory Hitchan --------------------------------------------- Gregory Hitchan, Member 13 BLUM STRATEGIC PARTNERS, L.P. By: BLUM STRATEGIC GP, L.L.C. By: /s/ Gregory Hitchan -------------------------------------------- Gregory Hitchan, Member BLUM STRATEGIC PARTNERS II, L.P. By: BLUM STRATEGIC GP II, LLC Its General Partner By: /s/ Gregory Hitchan -------------------------------------------- Gregory Hitchan, Member RICHARD C. BLUM By: /s/ Gregory Hitchan -------------------------------------------- Gregory Hitchan, Attorney-in-Fact 14 BK CAPITAL PARTNERS IV, L.P. STINSON CAPITAL PARTNERS, L.P. STINSON CAPITAL PARTNERS II, L.P. STINSON CAPITAL PARTNERS QP, L.P. STINSON CAPITAL PARTNERS S, L.P. By: BLUM CAPITAL PARTNERS, L.P., Its General Partner By: Richard C. Blum & Associates, Inc., Its General Partner By: /s/ Gregory Hitchan -------------------------------------------- Gregory Hitchan, General Counsel and Secretary STINSON CAPITAL FUND (CAYMAN), LTD. By: BLUM CAPITAL PARTNERS, L.P., Its Investment Advisor By: Richard C. Blum & Associates, Inc., Its General Partner By: /s/ Gregory Hitchan -------------------------------------------- Gregory Hitchan, General Counsel and Secretary BLUM STRATEGIC PARTNERS II GMBH & CO. KG By: Blum Strategic GP II, L.L.C., its managing limited partner By: /s/ Gregory Hitchan -------------------------------------------- Name: Gregory Hitchan, Title: Member and General Counsel 15 SCHEDULE 1 - ----------------------------------------- --------- ---------- ---------- SHARES OTHER INVESTOR OWNED DERIVATIVE ATTRIBUTED DIRECTLY SHARES SHARES - ----------------------------------------- --------- ---------- ---------- BK Capital Partners IV, L.P. 83,000 0 0 - ----------------------------------------- --------- ---------- ---------- Blum Capital Partners, L.P. 225 775 0 - ----------------------------------------- --------- ---------- ---------- Blum Strategic Partners, L.P. 117,700 0 0 - ----------------------------------------- --------- ---------- ---------- Blum Strategic Partners II, L.P. 8,276,400 1,898,838 0 - ----------------------------------------- --------- ---------- ---------- Blum Strategic Partners II GmbH & Co. KG 170,648 39,147 0 - ----------------------------------------- --------- ---------- ---------- Stinson Capital Fund (Cayman), LTD. 61,700 0 0 - ----------------------------------------- --------- ---------- ---------- Stinson Capital Partners, L.P. 195,286 949,225 0 - ----------------------------------------- --------- ---------- ---------- Stinson Capital Partners II, L.P. 178,700 775,194 0 - ----------------------------------------- --------- ---------- ---------- Stinson Capital Partners QP, L.P. 173.754 844,574 0 - ----------------------------------------- --------- ---------- ---------- Stinson Capital Partners S, L.P. 29,660 144,186 0 - ----------------------------------------- --------- ---------- ---------- EX-99 4 exhibit993.txt EXHIBIT 3 - CONFIDENTIALITY AGREEMENT EXHIBIT 3 STRICTLY CONFIDENTIAL November 25, 2005 Blum Capital Partners, L.P. 909 Montgomery Street Suite 400 San Francisco, California 94113 Ladies and Gentlemen: PRG-Schultz International, Inc. (together with all of its affiliates, the "Company") and Blum Capital Partners, L.P. are currently parties to that certain confidentiality agreement, dated November 14, 2005 (the "Confidentiality Agreement") pertaining to the Company's provision of Evaluation Material (as defined herein) to you and other members of the ad hoc committee of holders of the Company's 4 3/4% Convertible Subordinated Notes due 2006 (the "Notes" and such committee, the "Ad Hoc Noteholders Committee") for use in connection with discussions between the Company and the Ad Hoc Noteholders Committee regarding a possible transaction (a "Possible Transaction") involving the restructuring of the Notes. The purpose of this letter is to memorialize the amendments to the Confidentiality Agreement as set forth herein. CONFIDENTIALITY OF EVALUATION MATERIALS: As a condition to your being furnished with such information, you agree to treat any information concerning the Company furnished to you by or on behalf of the Company after November 14, 2005 and regardless of the manner in which it is furnished, together with analyses, compilations, studies or other documents or records prepared by you or any of your directors, officers, employees, affiliates, agents or advisors (including, without limitation, attorneys, accountants, consultants, bankers, financial advisors and any representatives of your advisors) (collectively, "Representatives") to the extent that such analyses, compilations, studies, documents or records contain or otherwise reflect or are generated from such information (hereinafter collectively referred to as the "Evaluation Material"), in accordance with the provisions of this agreement. The term "Evaluation Material" does not include information which (i) was or becomes generally available to the public other than as a result of a disclosure by you or your Representatives in violation of this agreement, (ii) was or becomes available to you on a non-confidential basis from a source other than the Company or its advisors provided that such source is not known to you to be bound by a confidentiality agreement with the Company or otherwise not known to you to be prohibited from transmitting the information to you by a contractual, legal or fiduciary obligation, (iii) was within your possession prior to its being furnished to you by or on behalf of the Company, provided that the source of such information was not known to you to be bound by a confidentiality agreement with the Company or otherwise not known to you to be prohibited from transmitting the information to you by a contractual, legal or fiduciary obligation, or (iv) was independently developed by you using information that is not known to otherwise constitute Evaluation Material. Any combination of information shall not be deemed to be within the foregoing exceptions because individual features of the information are in the public domain. RESTRICTIONS ON DISCLOSURE AND USE: You agree that the Evaluation Material will be used solely for the purpose of evaluating and/or participating in a Possible Transaction, and not used for any other purpose, and that such Evaluation Material will be kept confidential by you and your Representatives; provided, however, that (a) such Evaluation Material may be disclosed to your Representatives who need to know such information for the purpose of evaluating any such Possible Transaction (it being understood that such Representatives shall have been informed by you of the confidential and proprietary nature of the Evaluation Material and shall have been advised by you of this agreement and whom you shall cause to comply with the provisions hereof), and (b) any disclosure of such Evaluation Material may be made to which the Company consents in writing prior to disclosure. In any event, you shall be responsible for any breach of this agreement by any of your Representatives and you agree, at your sole expense, to take all reasonable measures (including but not limited to court proceedings) to restrain your Representatives from prohibited or unauthorized disclosure or use of the Evaluation Material. You further agree that the Evaluation Material that is in written form shall not be copied or reproduced at any time without the prior written consent of the Company, except for distribution to your Representatives in accordance with and subject to the provisions of this agreement. You acknowledge that you are aware, and will advise each of your Representatives who is informed as to the matters that are the subject of this agreement, that the securities laws of the United States prohibit any person who or that has received from an issuer of securities material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. In addition, except as required by any applicable law, rule or regulation, without the prior written consent of the Company, you will not, and will direct your Representatives not to, disclose to any person other than other members of the Ad Hoc Noteholders Committee, (i) the existence of this agreement and that the Evaluation Material has been made available to you or your Representatives, (ii) that discussions or negotiations are taking place concerning a Possible Transaction between the Company and you or (iii) any terms, conditions or other facts with respect to any such Possible Transaction, including the status thereof. For these purposes, it is understood and agreed that the members of the Ad Hoc Noteholders Committee may make securities filings under Section 13(d) of the Securities Exchange Act of 1934 in which the matters set forth in clauses (i) and (ii) above may be disclosed to the extent counsel for the Ad Hoc Noteholders Committee believes such disclosure is required by law. In the event that you or your Representatives are requested or required pursuant to any applicable law, rule or regulation (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or other process) to disclose any Evaluation Material or any other information regarding the existence of this agreement or discussions or negotiations concerning a Possible Transaction between the Company and you, it is agreed that you will provide the Company with prompt notice of any such request or requirement (written if practical) so that the Company may seek an appropriate protective order or waive your compliance with the provisions of this agreement. If, failing the entry of a protective order or the receipt of a waiver hereunder, you or your Representatives are legally compelled to disclose Evaluation Material, you or your Representatives may disclose only that portion of the 2 Evaluation Material which you or your Representatives are legally compelled to disclose and will exercise reasonable efforts to obtain assurance that confidential treatment will be accorded to that portion of the Evaluation Material which is being disclosed. In any event, you or your Representatives will not oppose action by the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Evaluation Material. In the event that you or your Representatives shall have complied with the provisions of this paragraph, the Company agrees that such disclosure may be made by you or your Representatives without any liability hereunder. NO WARRANTY: Subject to the terms and conditions of any definitive agreement providing for a transaction and without prejudice thereto, you understand and acknowledge that any and all information contained in the Evaluation Material is being provided without any representation or warranty, express or implied, as to the accuracy or completeness of the Evaluation Material, on the part of the Company. It is understood that the scope of any representations and warranties to be given by the Company will be negotiated along with other terms and conditions in arriving at a mutually acceptable form of definitive agreement should discussions between you and the Company progress to such a point. Notwithstanding anything in this agreement to the contrary, we represent and warrant that we may rightfully disclose or make available Evaluation Material to you without the violation of any contractual, legal, fiduciary or other obligation to any person. OWNERSHIP AND RETURN OF THE EVALUATION MATERIAL: All Evaluation Material disclosed by the Company shall be and shall remain the property of the Company. Upon the request of the Company, you shall, at your election, either return or destroy all documents thereof furnished to you by the Company, except one copy of such documents may be kept in your legal department for compliance purposes. Except to the extent a party is advised by counsel such destruction is prohibited by law, you will also, at your election, either return to the Company or destroy all written material, memoranda, notes, copies, excerpts and other writings or recordings whatsoever prepared by you or your Representatives based upon, containing or otherwise reflecting any Evaluation Material except one copy of such documents may be kept in your legal department or with your legal counsel for compliance purposes. Any destruction of materials shall be verified by you in writing by one of your duly authorized officers. Any Evaluation Material that is not returned or destroyed, including without limitation, any oral Evaluation Material, shall remain subject to the confidentiality obligations set forth in this agreement. NO OBLIGATION: You agree that unless and until a definitive agreement regarding a Possible Transaction between the Company and you has been executed, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to such a transaction by virtue of this agreement except for the matters specifically agreed to herein. You further acknowledge and agree that the Company reserves the right, in its sole discretion, to reject any and all proposals made by you or any of your Representatives with regard to a Possible Transaction, to terminate discussions and negotiations with you or your Representatives at any time and to conduct any process for a transaction involving the Company as it may determine. REMEDIES: It is understood and agreed that money damages would not be a sufficient remedy for any breach of this agreement and each party shall be entitled to seek specific 3 performance and injunctive or other equitable relief as a remedy for any such breach and you further agree to waive any requirement for the security or posting of any bond in connection with such remedy. Such remedy shall not be deemed to be the exclusive remedy for breach of this agreement but shall be in addition to all other remedies available at law or equity. In the event of litigation relating to this agreement, if a court of competent jurisdiction determines in a final, non-appealable order that either party or its Representatives have breached this agreement, then such party shall reimburse the other party for its reasonable legal fees and expenses incurred in connection with such litigation, including any appeals therefrom. GOVERNING LAW; JURISDICTION: This agreement shall be governed and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. You agree, on behalf of yourself and your Representatives, to submit to the jurisdiction of any state or federal court of competent jurisdiction located in the state of Delaware to resolve any dispute relating to this agreement and waive any right to move to dismiss or transfer any such action brought in any such court on the basis of any objection to personal jurisdiction or venue. ENTIRE AGREEMENT: This agreement constitutes the entire agreement, and supersedes the Confidentiality Agreement (which is hereby terminated) and any and all other prior agreements, representations and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof, provided that the Amended and Restated Standstill Agreement dated November 14, 2005, among the Company and the investors named therein shall remain in effect and provided further that to the extent there is any conflict between the provisions of the Amended and Restated Standstill Agreement and this agreement during the term of this agreement, the provisions of this agreement shall apply. TERM: Your obligations under this agreement shall expire on the earliest of (i) December 23, 2005, (ii) the date on which the Company files, or there is commenced against the Company, any petition for relief under Title 11 of the United States Code, (iii) the date on which the Company announces the acceptance of an offer from any party, other than an offer accepted or endorsed by the Ad Hoc Noteholders Committee, for any business combination, sale or similar extraordinary transaction involving the Company or all or substantially all of its assets (a "Significant Transaction"), and (iv) the date on which the Company announces its intent to conduct, or initiates the conduct of, an auction or similar process involving a Significant Transaction (provided that the provisions of this clause (iv) shall not apply to a limited market check involving prior participants in the Company's previously conducted auction) (the earliest of such dates, the "Termination Date"). Within five business days after the Termination Date, the Company shall publicly disclose, by press release, Securities and Exchange Commission filing or otherwise, an appropriate summary of the Evaluation Material that the Company believes, in its reasonable judgment, constitutes the then material non-public information contained in the Evaluation Material. If the Company fails to make such disclosure prior to such date, the Company, recognizing that time is of the essence, agrees that, at the Company's sole expense, you are authorized to make the Evaluation Material or any portion thereof available to the public generally, without any liability to the Company for such disclosure. 4 This agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Please confirm that the foregoing is in accordance with your understanding of our agreement by signing and returning to us a copy of this letter. Very truly yours, PRG-SCHULTZ INTERNATIONAL, INC. By: /s/ Clinton McKellar Jr. --------------------------------------- Name: Clinton McKellar Jr. Title: Senior Vice President and General Counsel Accepted and agreed as of the date first written above: BLUM CAPITAL PARTNERS, L.P.. By: /s/ Greg Hitchan -------------------------------- Name: Greg Hitchan Title: General Counsel and Secretary 5 EX-99 5 exhibit994.txt EXHIBIT 4 - COMMITMENT LETTER EXHIBIT 4 EXECUTION COPY PETRUS SECURITIES L.P. BLUM STRATEGIC PARTNERS II, L.P. PARK CENTRAL GLOBAL HUB LIMITED BLUM STRATEGIC PARTNERS II GMBH & CO. KG. November 28, 2005 PRG-Schultz International, Inc. 600 Galleria Parkway Suite 100 Atlanta, Georgia 30339 Attention: James B. McCurry Re: FINANCING COMMITMENT Dear Mr. McCurry: PRG-Schultz International, Inc., a Georgia corporation (the "PARENT"), and its domestic subsidiaries (together with the Parent, each a "COMPANY" and collectively, the "COMPANIES") have advised each of Petrus Securities L.P. ("PETRUS"), Parkcentral Global Hub Limited (together with Petrus, collectively, the "PETRUS ENTITIES"), Blum Strategic Partners II GmbH & Co. KG. ("BLUM") and Blum Strategic Partners II, L.P. (together with Blum, collectively, the "BLUM ENTITIES" and, together with the Petrus Entities, each a "LENDER" and collectively, the "LENDERS"), that the Companies require financing (i) to fund certain of the Companies' working capital needs, (ii) to fund an interest payment due under the 4-3/4% Convertible Subordinated Notes due November 26, 2006 (the "CONVERTIBLE NOTES"), issued by the Parent pursuant to the Indenture, dated as of November 26, 2001, between the Parent and SunTrust Bank, as trustee and (iii) to pay transaction fees and expenses related to the Financing Facility referred to below. We are pleased to advise you that the Lenders, or one or more of their affiliates, are willing to provide the Companies with a credit facility in the aggregate principal amount of $8,000,000 (the "FINANCING FACILITY"), substantially on the terms and conditions set forth in the Outline of Terms and Conditions attached hereto as Exhibit A (the "TERM SHEET"). The Blum Entities will provide 60% of the Financing Facility and Petrus Entities will provide 40% of the Financing Facility. The obligations of each Lender to provide its portion of the Financing Facility shall be several, not joint and several, and will be subject to each other Lender providing its portion of the Financing Facility. The obligations of the Companies under the Financing Facility will be secured by a lien on, and security interest in, all of the assets and properties of the Companies as described in the collateral and security documents of the BOA Credit Facility (as defined in the Term Sheet) as in effect on the date of this letter. Each Lender's commitment to provide the Financing Facility is subject in all respects to the satisfaction of the terms and conditions contained in this commitment letter and in the Term Sheet. The Parent, on behalf of itself and the Companies, acknowledges that the Term Sheet is intended as an outline only and does not purport to summarize all the conditions, covenants, representations, warranties and other provisions which would be contained in definitive legal documentation for the Financing Facility. The loan documentation for the Financing Facility will include, in addition to the provisions that are summarized in this PRG-Schultz International, Inc. November 28, 2005 Page 2 commitment letter and the Term Sheet, provisions that, in the opinion of each Lender, are customary or typical for this type of financing transaction and other provisions that such Lender determines to be appropriate in the context of the proposed transaction. By its execution hereof and its acceptance of the commitments contained herein, the Parent agrees to indemnify and hold harmless each Lender and each of its assignees, its affiliates and its directors, officers, members, employees and agents (each an "INDEMNIFIED PARTY") from and against any and all losses, claims, damages, liabilities or other expenses to which such Indemnified Party may become subject, insofar as such losses, claims, damages, liabilities (or actions or other proceedings commenced or threatened in respect thereof) or other expenses arise out of or in any way relate to or result from, this commitment letter, the commitments made herein or the extension of the Financing Facility contemplated by this commitment letter, or in any way arise from any use or intended use of this commitment letter or the proceeds of the Financing Facility contemplated by this commitment letter, and the Parent agrees to reimburse each Indemnified Party for any legal or other out-of-pocket expenses incurred in connection with investigating, defending or participating in any such loss, claim, damage, liability or action or other proceeding (whether or not such Indemnified Party is a party to any action or proceeding out of which indemnified expenses arise), but excluding therefrom all expenses, losses, claims, damages and liabilities which are finally determined in a non-appealable decision of a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of the Indemnified Party. In the event of any litigation or dispute involving this commitment letter or the Financing Facility, no Lender shall be responsible or liable to any Company, or any other person for any special, indirect, consequential, incidental or punitive damages. In addition, the Parent agrees to reimburse each Lender for all reasonable fees and out-of-pocket expenses (the "EXPENSES") incurred by or on behalf of such Lender in connection with the negotiation, preparation, execution and delivery of this commitment letter, the Term Sheet and any and all definitive documentation relating to the Financing Facility, including, but not limited to, the reasonable fees and expenses of counsel to such Lender and the reasonable fees and expenses incurred by such Lender in connection with any due diligence, appraisals, collateral reviews and field examinations. The obligations of the Parent under this paragraph shall remain effective notwithstanding any termination of this commitment letter, but shall terminate upon the execution of definitive loan documentation by the Companies and the Lenders. Upon the Parent's execution of this commitment letter, the Parent shall pay to the Lenders based on their ratable portion of the Financing Facility, in immediately available funds, a non-refundable commitment fee equal to $100,000 (the "COMMITMENT FEE"), which fee shall be earned in full and payable on the date hereof. Notwithstanding anything contained in this commitment letter or the Term Sheet to the contrary, the Companies agree to use their best efforts to obtain an alternative financing arrangement from a third party that is not an affiliate of any Lender for the purposes of funding the use of proceeds as described in the Term Sheet. PRG-Schultz International, Inc. November 28, 2005 Page 3 The commitment by each Lender to provide the Financing Facility shall be subject to (i) the negotiation, execution and delivery of definitive loan documentation in form and substance satisfactory to such Lender and its counsel, (ii) the satisfaction of each Lender that since the date hereof there has not occurred or become known to any Company or any Lender any material adverse change with respect to the financial condition, business, operations, assets, liabilities or prospects of the Parent or the Companies (taken as a whole), as determined by each Lender in its reasonable discretion (a "MATERIAL ADVERSE CHANGE"), and (iii) such other customary conditions as set forth in the Term Sheet. If at any time any Lender shall determine (in its sole discretion) that either (A) the Companies will be unable to fulfill any condition set forth in this commitment letter or in the Term Sheet or (B) any Material Adverse Change has occurred, the Lenders may terminate this commitment letter by giving notice thereof to the Parent (subject to the obligation of the Parent to pay all fees, reasonable costs and expenses and other payment obligations expressly assumed by the Parent hereunder, which shall survive the termination of this commitment letter or any commitment contained herein). The Parent represents and warrants that (i) all written information and other materials concerning the Parent and the other Companies (collectively, the "INFORMATION") which has been, or is hereafter, made available to the Lenders by, or on behalf of the Parent or any other Company is, or when delivered will be, when considered as a whole, complete and correct in all material respects and does not, or will not when delivered, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statement has been made and (ii) any projections (which have been, or are hereafter, made available to the Lenders by or on behalf of the Parent or any other Company) were prepared in good faith on the basis of (A) assumptions, methods and tests stated therein which are believed by the Parent and the other Companies to be reasonable and (B) information believed by the Parent and the other Companies to have been accurate based upon the information available to the Parent and the other Companies, in the case of both clauses (A) and (B), at the time such projections were furnished to the Lenders. This commitment letter is delivered to the Parent upon the condition that, prior to its acceptance of this offer and the payment of the Commitment Fee, neither the existence of this commitment letter or the Term Sheet, nor any of their contents, shall be disclosed by the Parent or any other Company, except as may be compelled to be disclosed in a judicial or administrative proceeding or as otherwise required by law or, on a confidential and "need to know" basis, solely to the directors, officers, employees, lenders, advisors and agents of the Parent. In addition, the Parent agrees that it will (i) consult with the Lenders prior to the making of any filing in which reference is made to any Lender or the commitment of any Lender contained herein, and (ii) obtain the prior approval of the Lenders before releasing any public announcement in which reference is made to any Lender or to the commitment of any Lender contained herein. The Parent acknowledges that the Lenders and their respective affiliates may now or hereafter provide financing or obtain other interests in other companies in respect of which the Parent or its affiliates may be business competitors, and that the Lenders and their respective affiliates will PRG-Schultz International, Inc. November 28, 2005 Page 4 have no obligation to provide to the Parent or any of its affiliates any confidential information obtained from such other companies. The offer made by the Lenders in this commitment letter shall expire, unless otherwise agreed by the Lenders in writing, at 9:30 a.m. (New York City time) on November 28, 2005, unless prior thereto (A) each Lender has received a copy of this commitment letter, signed by each other Lender and the Parent accepting the terms and conditions of this commitment letter and the Term Sheet and (B) the Lenders have received the Commitment Fee, in immediately available funds. The commitment by the Lenders to provide the Financing Facility shall expire at 5:00 p.m. (New York City time) on December 9, 2005, unless prior thereto, definitive loan documentation shall have been agreed to in writing by all parties and the conditions set forth therein shall have been satisfied (it being understood that the Parent's obligation to pay all amounts in respect of indemnification and Expenses shall survive termination of this commitment letter). Should the terms and conditions of the offer contained herein meet with your approval, please indicate your acceptance by signing and returning a copy of this commitment letter to the Lenders. PRG-Schultz International, Inc. November 28, 2005 Page 5 This commitment letter, including the attached Term Sheet (i) supersedes all prior discussions, agreements, commitments, arrangements, negotiations or understandings, whether oral or written, of the parties with respect thereto, (ii) shall be governed by the law of the State of New York, (iii) shall be binding upon the parties and their respective successors and assigns, (iv) may not be relied upon or enforced by any other person or entity, and (v) may be signed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. If this commitment letter becomes the subject of a dispute, each of the parties hereto hereby waives trial by jury. This commitment letter may be amended, modified or waived only in a writing signed by the parties hereto. Very truly yours, BLUM STRATEGIC PARTNERS II, L.P. By: /s/ Gregory Hitchan ---------------------------------------- Name: Gregory Hitchan Title: General Counsel and Secretary BLUM STRATEGIC PARTNERS II GMBH & CO. KG. By: /s/ Gregory Hitchan ---------------------------------------- Name: Gregory Hitchan Title: General Counsel and Secretary PARKCENTRAL GLOBAL HUB LIMITED By: /s/ Steven Blasnik ---------------------------------------- Name: Steven Blasnik Title: President PETRUS SECURITIES L.P. By: /s/ Steven Blasnik ---------------------------------------- Name: Steven Blasnik Title: President PRG-Schultz International, Inc. November 28, 2005 Page 6 Agreed and accepted on this ___ day of November 2005: PRG-SCHULTZ INTERNATIONAL, INC. By: /s/ James B. McCurry -------------------------------------------- Name: James B. McCurry Title: President and Chief Executive Officer EXHIBIT A PRG-SCHULTZ INTERNATIONAL, INC. OUTLINE OF TERMS AND CONDITIONS FOR FINANCING FACILITY This Outline of Terms and Conditions is part of the Commitment Letter, dated November 28, 2005 (the "COMMITMENT LETTER"), addressed to PRG-Schultz International, Inc. (the "PARENT") by Petrus Securities L.P. ("PETRUS"), Parkcentral Global Hub Limited (together with Petrus, collectively, the "PETRUS ENTITIES"), Blum Strategic Partners II GmbH & Co. KG. ("BLUM") and Blum Strategic Partners II, L.P. (together with Blum, collectively, the "BLUM ENTITIES" and, together with the Petrus Entities, each a "LENDER" and collectively, the "LENDERS") and is subject to the terms and conditions of the Commitment Letter. Capitalized terms used herein shall have the meanings set forth in the Commitment Letter unless otherwise defined herein. BORROWER: PRG-Schultz USA, Inc. GUARANTORS: The Parent and all domestic subsidiaries of the Parent other than the Borrower (each a "GUARANTOR" and collectively, the "GUARANTORS" and, together with the Borrower, each a "COMPANY" and collectively, the "COMPANIES"). LENDERS: The Lenders and their respective affiliates and such other lenders designated by the Lenders. FINANCING FACILITY: A term loan facility in the aggregate principal amount of $8,000,000 (the "FINANCING FACILITY"). The term loan (the "TERM LOAN") will be made on the Closing Date. TERM: The Financing Facility will terminate on the earlier of (x) May 15, 2006 and (y) the date on which the "Transactions" as described in the Summary of Financial Restructuring Term Sheet, dated November __, 2005 shall have been substantially consummated (the "MATURITY DATE"). The Term Loan and all other obligations outstanding under the Financing Facility will be payable on the Maturity Date. MANDATORY AND OPTIONAL Subject to the intercreditor arrangements PREPAYMENTS: with the Existing Lender, mandatory prepayments to be included in the Loan Documents, including, without limitation, upon the issuance of indebtedness or stock, non-ordinary course sales or other dispositions of assets, casualty and condemnation events, tax refunds, proceeds of judgments and settlements, with exceptions to be mutually agreed upon. The Borrower may repay the Term Loan in whole or in part at A-1 any time without penalty or premium, provided that, in the case of a partial prepayment, such prepayment shall be in an amount which is an integral multiple of $1,000,000 (unless the amount of Term Loan outstanding immediately prior to such prepayment is less than $1,000,000). CLOSING DATE: The first date on which all definitive loan documentation satisfactory to each Lender (the "LOAN DOCUMENTS") is executed by the Companies and each Lender, which date shall not be later than December 9, 2005, unless otherwise agreed in writing by the Lenders and the Parent (the "CLOSING Date"). COLLATERAL: All obligations of the Companies to each Lender shall be secured by a perfected lien on and security interest in all assets and properties of the Companies as described in the collateral and security documents under the Companies' existing revolver credit facility (the "BOA CREDIT FACILITY") with Bank of America, N.A. (the "EXISTING LENDER"), which, in general, is substantially all of the Companies' now owned and hereafter acquired properties and assets, provided, that (x) the collateral securing such obligations of the Companies to the Lenders shall be the collateral as described in the collateral and security documents entered into as of November 30, 2004 in favor of the Existing Lender and without regard to any lien releases or terminations on or after the date of the Commitment Letter (except as otherwise agreed to by the Lenders), and (y) such liens shall be junior in priority solely to the liens granted by the Companies in favor of the Existing Lender, and the Existing Lender and the Lenders shall enter into an intercreditor agreement (in form and substance satisfactory to the Lenders) to evidence such lien subordination (the "INTERCREDITOR AGREEMENT"). All borrowings by the Borrower, all interest on the foregoing, all costs, fees and expenses owed to the Lenders and all other obligations owed to the Lenders shall be secured as described above and shall be charged to the loan account to be established under the Financing Facility. INTEREST: The Term Loan shall bear interest at a rate per annum equal to 12%. Interest shall be due and payable monthly in arrears. All interest and fees shall be computed on the basis of a year of 360 days for the actual days elapsed. If any event of default shall occur and be continuing, interest shall accrue at a rate per annum equal to fourteen percent (14%). A-2 FEES: Commitment Fee: $100,000, earned in full, non-refundable and payable in accordance with the terms of the Commitment Letter. Closing Fee: 1.75% of the Financing Facility, earned in full, non-refundable and payable on the Closing Date. USE OF PROCEEDS: The Term Loan under the Financing Facility shall be used (i) to fund certain of the Companies' working capital needs; provided, however, that in no event shall the proceeds of the Term Loan be used to make any severance payments or other similar payments to John Cook or Jack Toma, (ii) to fund interest payments due on the Convertible Notes and (iii) to pay transaction fees and expenses related to the Financing Facility. A-3 CONDITIONS The obligation of the Lenders to make the PRECEDENT: Term Loan under the Financing Facility will be subject to customary conditions precedent including, without limitation, the following special conditions precedent: (a) The Lenders' completion of their legal due diligence, including, without limitation, with respect to regulatory matters, material permits, ERISA, environmental, tax, accounting and labor matters and material contracts, with results reasonably satisfactory to the Lenders. Such due diligence may include, without limitation, a review by the Lenders of the Companies' books and records, the results of which are satisfactory to the Lenders. (b) Execution and delivery of appropriate legal documentation (including, but not limited to, the Intercreditor Agreement) in form and substance satisfactory to the Lenders and the satisfaction of the conditions precedent contained therein. (c) No Material Adverse Change shall have occurred since the date of the Commitment Letter. (d) Each of the Companies shall be in good standing in its state of organization and be duly qualified to do business in any other state where any material portion of the Collateral is located. (e) The Lenders shall have been granted a perfected lien on all Collateral (which lien shall be junior in priority solely to the liens in favor of the Existing Lender thereon), and shall have received UCC, tax and judgment lien searches and other appropriate evidence of the absence of any other liens on the Collateral, except any liens acceptable to the Lenders. (f) Opinions from the Companies' counsel as to such matters as each Lender and its counsel may reasonably request. (g) Insurance reasonably satisfactory to the Lenders; such insurance to include liability insurance for which each Lender will be named as an additional insured and property insurance with respect to the Collateral for which each Lender will be named as loss payee, all as its interests may appear. A-4 (h) All necessary governmental and third party approvals, consents, licenses and permits in connection with the Term Loan and the operations by the Companies of their businesses shall have been obtained and remain in full force and effect. (i) There shall exist no claim, action, suit, investigation, litigation or proceeding, pending or, to the knowledge of any Company, threatened in any court or before any arbitrator or governmental instrumentality which relates to the Financing Facility or which, in the opinion of the Lenders, has a reasonable likelihood of having a material adverse effect on (i) the financial condition, operations, properties, assets, liabilities, business or prospects of the Parent or the Companies, (ii) the ability of any of the Companies to perform their obligations under the Loan Documents or (iii) the ability of the Lenders to enforce the loan documentation. (j) The Lenders shall have been satisfied with an amendment to and/or forbearance under the BOA Credit Facility permitting the transactions contemplated under the Financing Facility (the "BOA AMENDMENT"). (k) No default or event of default, or a forbearance from exercising remedies in respect thereof acceptable to the Lenders, shall exist under the Loan Documents or the BOA Credit Facility, after giving effect to the BOA Amendment. (l) No default or event of default shall exist under the Indenture or other related instrument, agreement or other document, after giving effect to the interest payment to be funded by the proceeds of the Term Loan. (m) The Companies shall have paid to the Lenders all fees and reasonable expenses then owing to the Lenders. REPRESENTATIONS Usual representations and warranties with AND WARRANTIES: materiality limitations and other exceptions reasonably acceptable to the Lenders, including, but not limited to, corporate existence and good standing, authority to enter into loan documentation, governmental approvals, non-violation of other agreements, financial statements, litigation, compliance with environmental, pension and other laws, taxes, insurance, absence of Material Adverse Change, absence of default or unmatured default under the Financing Facility and priority of the Lenders' liens. A-5 COVENANTS: Usual covenants (with materiality limitations and other exceptions reasonably acceptable to the Lenders), including, but not limited to, provision of financial statements, notices of litigation, defaults and unmatured defaults and other information, compliance with laws, permits and licenses, inspection of properties, books and records, maintenance of insurance, limitations with respect to liens and encumbrances, dividends and retirement of capital stock, guarantees, sale and lease back transactions, consolidations and mergers, investments, capital expenditures, loans and advances, indebtedness, compliance with pension, labor, environmental and other laws, transactions with affiliates and prepayment of other indebtedness and amendments to material agreements. Financial reporting to include: (i) annual, audited financial statements, (ii) quarterly, internally prepared, financial statements, (iii) monthly, internally prepared, financial statements, and (iv) other reporting as reasonably required by the Lenders. EVENTS OF DEFAULT: Usual events of default, including, but not limited to, payment, cross-default (including, without limitation, cross-default with the BOA Credit Facility and the Indenture), violation of covenants, breach of representations or warranties, bankruptcy or insolvency, judgment, ERISA, change of control and material adverse change. GOVERNING LAW: All documentation in connection with the Financing Facility shall be governed by the laws of the State of New York. ASSIGNMENTS, PARTICIPATIONS: Any Lender may sell or assign to one or more other persons a portion of its loans or commitments under the Financing Facility without the consent of the Companies. Any Lender may also sell participations in its loans and commitments under the Financing Facility without the consent of the Companies. OUT-OF-POCKET The Borrower shall pay all reasonable EXPENSES: out-of-pocket expenses incurred by the Lenders (including, without limitation, the reasonable fees and expenses of counsel, audit fees, search fees, appraisal fees, consultant fees, filing fees, documentation fees and other third party fees) in connection with the Commitment Letter and this Term Sheet and the transactions contemplated by the Commitment Letter and this Term Sheet, whether or not the transaction closes. A-6 -----END PRIVACY-ENHANCED MESSAGE-----