UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 30, 2010
Date of Report (Date of earliest event reported)
PRGX Global, Inc.
(Exact Name of Registrant as Specified in Its Charter)
         
Georgia   0-28000   58-2213805
         
(State or Other Jurisdiction of Incorporation)   (Commission File Number)   (IRS Employer Identification No.)
     
600 Galleria Parkway, Suite 100
Atlanta, Georgia
 
30339-5949
     
(Address of Principal Executive Offices)   (Zip Code)
(Registrant’s Telephone Number, Including Area Code): 770-779-3900
Not Applicable
 
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 1.01. Entry into a Material Definitive Agreement .
     On September 30, 2010, PRGX Global, Inc. (the “ Company ”) and its wholly-owned subsidiary PRGX USA, Inc. (the Company and PRGX USA, Inc. are collectively referred to as the “ Borrowers ”), entered into a Second Loan Documents Modification Agreement (the “ Amendment ”) with SunTrust Bank as Administrative Agent, the sole Lender and Issuing Bank, which amends that certain Revolving Credit and Term Loan Agreement, dated as of January 19, 2010 by and among the Borrowers and the Lender (the “ Credit Agreement ”).
     Under the terms of the Amendment, the Borrowers agreed to maintain (a) as of the last day of each Fiscal Quarter, commencing with the Fiscal Quarter ending September 30, 2010, a Fixed Charge Coverage Ratio of not less than 1.25 : 1.00 and Consolidated Adjusted EBITDA for the four Fiscal Quarters then ended of not less than $20,900,000, and (b) as of the last day of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2011, a Fixed Charge Coverage Ratio of not less than 1.50 : 1.00 and Consolidated Adjusted EBITDA for the four Fiscal Quarters then ended of not less than $22,500,000. In consideration of the Administrative Agent agreeing to the terms of this Amendment, the Borrowers agreed to pay to the Administrative Agent an amendment fee plus all reasonable, out-of-pocket costs and expenses of the Administrative Agent incurred in connection with the preparation and execution of the Amendment.
     A copy of the Amendment is attached to this Current Report as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant .
     The information set forth in Item 1.01 of this Current Report on Form 8-K concerning the Company’s obligations under the Amendment is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits
The following exhibits are filed herewith:
     
Exhibit 10.1
  Second Loan Documents Modification Agreement, dated September 30, 2010, by and among the Borrowers and the Lender

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SIGNATURES
     Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  PRGX Global, Inc.
 
 
  By:   /s/ Victor A. Allums    
    Victor A. Allums   
    Senior Vice President, Secretary and General Counsel   
 
Dated: October 1, 2010

 


 

EXHIBIT INDEX
     
Exhibit Number   Description
 
10.1
  Second Loan Documents Modification Agreement, dated September 30, 2010, by and among the Borrowers and the Lender

 

Exhibit 10.1
SECOND LOAN DOCUMENTS MODIFICATION AGREEMENT
     THIS SECOND LOAN DOCUMENTS MODIFICATION AGREEMENT (this “ Amendment ”) is made and entered into as of the 30 th day of September, 2010, by and among PRGX GLOBAL, INC., a Georgia corporation formerly known as PRG-Schultz International, Inc. (“ PRGX ”), PRGX USA, INC., a Georgia corporation formerly known as PRG-Schultz USA, Inc. (“ PRG-USA ”) (PRGX and PRG-USA are each individually, a “ Borrower ”, and collectively, the “ Borrowers ”), and SUNTUST BANK, as Administrative Agent, the sole Lender and Issuing Bank.
BACKGROUND STATEMENT
     WHEREAS, Borrowers have entered into that certain Revolving Credit and Term Loan Agreement, dated as of January 19, 2010 (as may be subsequently amended, restated, supplemented or otherwise modified from time-to-time, the “ Credit Agreement ”; all capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement), with the Administrative Agent, the issuing bank thereunder and the lenders from time to time party thereto (the “ Lenders ”); and
     WHEREAS, Borrowers, Administrative Agent, the sole Lender and Issuing Bank have agreed to amend the Credit Agreement and the other Loan Documents.
     NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, Borrowers, Administrative Agent, the sole Lender and Issuing Bank agree as follows:
     1.  Modification of Credit Agreement and Loan Documents . The Credit Agreement is hereby amended, effective as of the date hereof, as follows:
A. By deleting Section 6.2 in its entirety and replacing it with the following:
Section 6.2 Fixed Charge Coverage Ratio . (a) The Borrowers will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending September 30, 2010, a Fixed Charge Coverage Ratio of not less than 1.25 : 1.00, and (b) the Borrowers will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2011, a Fixed Charge Coverage Ratio of not less than 1.50 : 1.00.”
B. By deleting Section 6.3 in its entirety and replacing it with the following:
Section 6.3 Minimum Consolidated Adjusted EBITDA . (a) The Borrowers will maintain, as of the last day of each Fiscal Quarter, commencing with the Fiscal Quarter ending September 30, 2010, Consolidated Adjusted EBITDA for the four Fiscal Quarters then ended of not less than $20,900,000, and (b) the Borrowers will maintain, as of the last day of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2011, Consolidated Adjusted EBITDA for the four Fiscal Quarters then ended of not less than $22,500,000.”
Without limiting the generality of clause (i) of the sixth sentence of Section 1.4 of the Credit Agreement (or any corresponding provision of any other Loan Document), the terms of the Loan Documents are hereby amended, effective as of the date hereof, so that all references therein to the Credit Agreement shall refer to Credit Agreement as amended herein.

 


 

     2.  Ratification and Reaffirmation . Except as herein expressly modified or amended, all the terms and conditions of the Credit Agreement and the other Loan Documents are hereby ratified, affirmed, and approved. As of the date hereof, Borrowers hereby reaffirm and restate each and every warranty and representation set forth in any Loan Document, in each case except to the extent such warranty or representation expressly relates to an earlier date. In consideration of Administrative Agent agreeing to the transactions contemplated by this Amendment, Borrowers agree to pay to Administrative Agent an amendment fee in the amount of $42,750.00, plus all reasonable, out-of-pocket costs and expenses of the Administrative Agent incurred in connection with the preparation and execution of this Amendment and consummation of the transactions contemplated hereby.
     3.  No Novation . The parties hereto hereby acknowledge and agree that this Amendment shall not constitute a novation of the indebtedness evidenced by any of the Loan Documents, and further that the terms and provisions of the Loan Documents shall remain valid and in full force and effect except as be herein modified and amended.
     4.  No Defenses; Release . For purposes of this Paragraph 4, the term “ Borrower Parties ” shall mean Borrowers collectively and the term “ Lender Parties ” shall mean Administrative Agent, Lenders and Issuing Bank, and shall include each of their respective predecessors, successors and assigns, and each past and present, direct and indirect, parent, subsidiary and affiliated entity of each of the foregoing, and each past and present employee, agent, attorney-in-fact, attorney-at-law, representative, officer, director, shareholder, partner and joint venturer of each of the foregoing, and each heir, executor, administrator, successor and assign of each of the foregoing; references in this paragraph to “any” of such parties shall be deemed to mean “any one or more” of such parties; and references in this sentence to “each of the foregoing” shall mean and refer cumulatively to each party referred to in this sentence up to the point of such reference. Each Borrower hereby acknowledges, represents and agrees: that, as of the date hereof, Borrowers have no defenses, setoffs, claims, counterclaims or causes of action of any kind or nature whatsoever with respect to the Credit Agreement, the other Loan Documents or the Obligations, or with respect to any other documents or instruments now or heretofore evidencing, securing or in any way relating to the Obligations (all of said defenses, setoffs, claims, counterclaims or causes of action being hereinafter referred to as “ Loan Related Claims ”); that, to the extent that Borrowers may be deemed to have any Loan Related Claims as of the date hereof, Borrowers do hereby expressly waive, release and relinquish any and all such Loan Related Claims, whether or not known to or suspected by Borrowers; that Borrowers shall not institute or cause to be instituted any legal action or proceeding of any kind based upon any Loan Related Claims; and that Borrowers shall indemnify, hold harmless and defend all Lender Parties from and against any and all Loan Related Claims and any and all losses, damages, liabilities and related reasonable expenses (including reasonable fees, charges and disbursements of any counsel for any Lender Parties) suffered or incurred by any Lender Parties as a result of any assertion or allegation by any Borrower Parties of any Loan Related Claims or as a result of any legal action related thereto, provided that such indemnity shall not , as to any Lender Parties, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (i) the gross negligence or willful misconduct of such Lender Parties or (ii) a claim brought by any Borrower against any Lender Parties for breach in bad faith of such Lender Parties’ obligations under any Loan Document. Notwithstanding the foregoing provisions of this Paragraph 4, Borrowers make no such releases, representations, warranties, standstills or agreements with respect to any future Loan Related Claims.
     5.  No Waiver or Implication . Borrowers hereby agree that nothing herein shall constitute a waiver by Administrative Agent or any Lender of any default, whether known or unknown, which may now exist under the Credit Agreement or any other Loan Document. Borrowers hereby further agree that no action, inaction or agreement by Administrative Agent or any Lender, including, without limitation, any extension, indulgence, waiver, consent or agreement of modification which may have occurred or

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have been granted or entered into (or which is now occurring or is being granted or entered into hereunder or otherwise) with respect to nonpayment of the Loans or any portion thereof, or with respect to matters involving security for the Loans, or with respect to any other matter relating to the Loans, shall require or imply any future extension, indulgence, waiver, consent or agreement by Administrative Agent or any Lender. Borrowers hereby acknowledge and agree that Administrative Agent has made no agreement, and is in no way obligated, to grant any future extension, indulgence, waiver or consent with respect to the Loans or any matter relating to the Loans.
     6.  No Release of Collateral . Borrowers further acknowledge and agree that this Amendment shall in no way occasion a release of any collateral held by Administrative Agent as security to or for the Loans, and that all collateral held by Administrative Agent as security to or for the Loans shall continue to secure the Loans.
     7.  Counterparts . This Amendment may be executed in one or more counterparts, each of which shall be deemed an original hereof and submissible into evidence and all of which together shall constitute one instrument.
     8.  Heading s. The headings of the paragraphs and other provisions hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Amendment.
     9.  Successors and Assigns . This Amendment shall be binding upon and inure to the benefit of Borrowers, Administrative Agent, Lenders, Issuing Bank and their respective heirs, successors and assigns, whether voluntary by act of the parties or involuntary by operation of law.
(Signatures on following page)

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     IN WITNESS WHEREOF, this Amendment has been duly executed by the parties hereto as of the day and year first above written.
         
  PRGX GLOBAL, INC., a Georgia corporation, formerly
known as PRG-Schultz International, Inc.
 
 
  By:   /s/ Robert B. Lee   
    Name:   Robert B. Lee   
    Title:   Chief Financial Officer   
 
       [CORPORATE SEAL]   
 
  PRGX USA, INC., a Georgia corporation, formerly known
as PRG-Schultz USA, Inc.
 
 
  By:   /s/ Robert B. Lee   
    Name:   Robert B. Lee   
    Title:   Chief Financial Officer    
 
       [CORPORATE SEAL]   
 
         
  SUNTRUST BANK, as Administrative Agent, the sole
Lender and Issuing Bank
 
 
  By:   /s/ D. Scott Cathcart   
    Name:   D. Scott Cathcart   
    Title:   FVP