EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), is entered into as
of March 17, 2006,
by and among
PRG-Schutlz
International,
Inc., a Georgia
corporation (the
"COMPANY"), and the
holders listed on the Schedule of Holders
attached hereto as Exhibit A (each, an "AFFILIATE HOLDER" and,
collectively, the
"AFFILIATE HOLDERS").
THE
PARTIES TO THIS AGREEMENT enter into this agreement on the basis of
the
following facts, intentions and understanding:
A.
The Company and certain of the holders of 4 3/4% Convertible
Subordinated Notes due
2006 of the Company (the "EXISTING NOTES") entered into
that certain Restructuring Support Agreement, dated as of December
23, 2005 (the
"RESTRUCTURING SUPPORT
AGREEMENT"),
and, upon the terms and subject to the
conditions of the
Restructuring Support
Agreement,
the Company has agreed
to
issue to the holders of the Existing Notes in exchange for the Existing Notes
held by such holders (the "EXCHANGE") an aggregate of (A)
Fifty Million Dollars
($50,000,000) of the
Company's 11% Senior Notes due 2011,
plus an additional
principal amount
equal to the
aggregate accrued and unpaid interest on the
Existing Notes (such 11% Senior Notes, as the same may be amended,
modified or
supplemented from time to time in accordance with the terms thereof
(the "SENIOR
NOTES")), (B) Sixty
Million Dollars
($60,000,000) of the
Company's 10% Senior
Convertible Notes due 2011 (such 10% Senior Convertible Notes, as the same may
be amended, modified
or supplemented
from time to time in
accordance with the
terms thereof (the "CONVERTIBLE NOTES" and, together with the
Senior Notes, the
"NOTES")), which shall be convertible into shares of Senior Series
B Convertible
Participating
Preferred Stock (the "SERIES B PREFERRED STOCK") of the Company,
which shall be convertible into shares of Common Stock,
without par value
(the
"COMMON STOCK") of the Company, and (C) Fifteen Million Dollars
($15,000,000) of
Senior Series A
Convertible
Participating
Preferred Stock (the "SERIES A
PREFERRED STOCK" and, together with the Series B Preferred Stock,
the "PREFERRED
Stock") of the Company, which shall be convertible
into shares of Common
Stock
(such Common Stock, together with the Common Stock issued upon
conversion of the
Series B Preferred Stock, the "CONVERSION SHARES").
B.
To induce the Affiliate Holders to consummate the Exchange,
the Company
has agreed to provide certain registration rights to the Affiliate
Holders under
the Securities
Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the
"1933 Act"), and
applicable state securities laws.
NOW,
THEREFORE,
in consideration of
the promises and the mutual covenants
contained herein and
other good and
valuable
consideration, the
receipt and
sufficiency of which
are hereby acknowledged, the Company and each of the
Affiliate Holders hereby agree as follows:
Section 1. Definitions As used in this Agreement, the following
terms shall
have the following meanings:
"AFFILIATE" means a person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with, the
Company.
<PAGE>
"BUSINESS DAY" means any day other than Saturday, Sunday or any other day
on which commercial
banks in The City of New York are required by law to remain
closed.
"CLOSING DATE" means the date upon which the Exchange has been
completed.
"COMMISSION" means the Securities and Exchange Commission.
"INVESTOR" means each
Affiliate Holder and any transferee or assignee
thereof to whom an Affiliate Holder assigns its rights under
this Agreement and
who agrees to become bound by the provisions of this Agreement in accordance
with Section 9 of this
Agreement, and any
subsequent
transferee
or assignee
thereof to whom a transferee or assignee assigns its rights under
this Agreement
and who agrees to become bound by the provisions of this Agreement
in accordance
with Section 9 of this Agreement.
"PERSON" means an individual, a limited liability company, a
partnership, a
joint venture,
a corporation, a trust, an unincorporated organization or
association and governmental or any department or agency
thereof.
"REGISTER,"
"REGISTERED," and "REGISTRATION" means a registration effected
by preparing and filing one or more Registration Statements (as defined below)
in compliance
with the 1933 Act and
pursuant to Rule 415 under the 1933 Act or
any successor rule providing for offering securities on a continuous or
delayed
basis ("RULE 415"),
and the declaration or
ordering of
effectiveness of
such
Registration Statements by the Commission.
"REGISTRABLE
SECURITIES" means (i)
the Senior Notes, (ii) the Convertible
Notes, (iii) the
Series A Preferred
Stock, (iv) the Series
B Preferred stock,
(v) the Conversion
Shares issued or issuable upon conversion of the Convertible
Notes, the Series A Preferred Stock and the Series B Preferred
Stock, (vi) any
shares of capital stock issued or issuable with respect to the
Conversion Shares
as a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise, without regard to any limitations
on conversions of
the Series A Preferred
Stock or the Series B
Preferred Stock, and (vii) any
shares of capital
stock of any entity
issued in respect of the capital stock
referenced in the immediately preceding clauses (i), (ii),
(iii), (iv), (v) and
(vi) as a result of a merger, consolidation, sale of assets, sale
or exchange of
capital stock or other
similar transaction; provided, that any Registrable
Securities that (A) have been sold pursuant to a Registration
Statement or Rule
144 promulgated
under the 1933 Act or (B) are eligible to be sold without
restriction under the 1933 Act, shall no longer be Registrable
Securities.
"REGISTRATION
STATEMENT" means a
registration statement
or registration
statements of the
Company filed under the 1933 Act and
covering all of the
Registrable Securities.
"REQUIRED HOLDERS"
means the holders of a majority of the value of the
outstanding
Registrable
Securities, which
value, in the case of
Registrable
Securities that are shares of Common Stock, shall be determined by
the last sale
price of such Common
Stock on the trading
date prior to the date for which the
Required Holders approval is relevant, and otherwise shall be determined
as the
outstanding principal or face amount of the Registrable
Securities.
2
<PAGE>
Section 2. Registration
(a)
Mandatory Registration. The Company shall prepare and not
later than
the earlier of 60 calendar days after the Closing Date or May 15,
2006 (assuming
that the Closing Date
has occurred)
(the "FILING DEADLINE"), file with the
Commission a
Registration
Statement on Form S-3
covering the resale of all of
the Registrable
Securities of the Affiliate Holders. In the event that Form S-3
is unavailable
for such a
registration,
the Company shall comply with the
provisions of
Section 2(c) of this Agreement. The Registration Statement
prepared pursuant
hereto shall register all of the Registrable Securities for
resale in accordance
with the methods of
distribution elected
by the Required
Holders. The Registration Statement shall contain (except if
otherwise directed
by the Required Holders) the "Selling Securityholders"
and "Plan of
Distribution" sections
in the form and substance substantially similar to
Exhibit B hereto. The
Company shall use
reasonable
best efforts to have the
Registration
Statement declared
effective by the Commission as soon as
practicable, but not
later than 150
calendar days after
the Closing Date (the
"EFFECTIVENESS DEADLINE").
(b)
Legal Counsel.
Subject to Section 5
of this Agreement,
the Required
Holders shall have the
right to select one legal counsel to review and comment
upon any registration
pursuant to this Agreement (the "LEGAL COUNSEL"), which
the Investors
agree shall be Schulte
Roth & Zabel LLP or such other counsel as
thereafter designated
in writing by the Required Holders. Schulte Roth & Zabel
LLP, or any other counsel designated in writing by the
Required Holders,
shall
not represent
any Investor
that sends such
counsel written
notice that such
Investor does not wish
such counsel to
represent it in connection with the
matters discussed in
this Section 2(b). The Investors, other than any Investor
that delivers the notice discussed in the preceding sentence, hereby waive any
conflict of
interest or
potential conflict of interest that may arise as a
result of the
representation of such
Investors by Schulte
Roth & Zabel LLP in
connection with the subject matter of this Agreement.
(c)
Ineligibility
for Form S-3. If Form S-3 is not available for the
registration of the
resale of the Registrable Securities hereunder or the
Company is not permitted by the 1933 Act or the Commission to use
Form S-3, then
the Company shall (i)
register the resale of the Registrable Securities on
another appropriate form reasonably acceptable to the Required
Holders, and (ii)
undertake to register
the Registrable
Securities
on Form S-3 as soon as
such
form is available; provided, however, that the Company shall use
reasonable best
efforts to maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3 covering all
of
the Registrable
Securities has been declared effective by the Commission or, if
earlier, until the end of the Registration Period (as defined in
Section 3(a)).
(d)
Effect of Failure
to File, Obtain, and Maintain Effectiveness of
Registration Statement. Subject to any elections made
pursuant to Section 4(b),
if (i) a Registration
Statement covering all the Registrable Securities is not
filed with the
Commission on or
before the Filing
Deadline or is not declared
effective by the Commission on or before the Effectiveness
Deadline, (ii) on any
day after such Registration Statement has been declared effective by the
Commission, sales of
all of the Registrable
Securities required to be included
on such Registration
Statement cannot be made as a matter of law
(other than
during an Allowable
Grace Period (as defined in Section 3(m) of this Agreement)
pursuant to such Registration Statement (including, without limitation, because
of a failure to keep such Registration Statement effective, to disclose such
information as is
necessary for sales to be made pursuant to such Registration
3
<PAGE>
Statement or to register a sufficient number of shares of Common
Stock), or (iv)
a Grace Period (as defined in Section 3(m) of this Agreement)
exceeds the length
of an Allowable Grace
Period (each of the items described in clauses (i), (ii)
and (iii) above
shall be referred to as a "REGISTRATION DELAY"), then, as
damages to any
Affiliate Holder by
reason of any such delay in or reduction of
its ability to sell the Registrable Securities, then liquidated damages (the
"REGISTRATION DELAY
PAYMENTS")
will accrue
(with respect to each Affiliate
Holder, based on the
principal amount of the Notes or Convertible Notes or
liquidation preference
on the Preferred Stock or, in the event of
Conversion
Shares, the
liquidation
preference
of the Preferred Stock from which the
Conversion Shares were converted) on Registrable Securities (in addition to the
stated interest or
dividends on the Notes, Convertible Notes and Preferred
Stock) from and
including the date on which any such Registration Delay shall
occur to but excluding
the date on which
all Registration Delays have been
cured. During the
continuation
of a Registration
Delay, Registration Delay
Payments will
accrue at a rate of
0.05% per month during
the 90-day period
immediately following
the occurrence of such Registration Default and shall
increase by 0.05% per month at the end of each subsequent 90-day
period, but in
no event shall such rate exceed 3.00% per annum. The Registration
Delay Payments
shall be due and payable (1) with respect to the Notes, on the next scheduled
interest payment
date, (2) with respect to Preferred Stock, upon the next
scheduled dividend
payment date and (3) with respect to Conversion Shares, on
the 30th day following the Registration Delay (and, if such Registration
Delay
is continuing,
each 30th day thereafter so long as any Registration Delay
Payments remain due and payable. Following the cure of all
Registration Delays,
the accrual of Registration Delay Payments shall cease. The
Registration Delay
Payments under this
Section 2(d) shall be the sole and exclusive remedy of the
Affiliate Holders
of Registrable Securities under this Agreement for a
Registration Delay.
Notwithstanding
the foregoing, no Registration Delay
Payments will be due
hereunder to any Affiliate Holder with respect to any
Notes, Preferred Stock or Conversion Shares that are not
Registrable Securities.
Section 3. Related
Obligations At such time as the Company is obligated to
file a Registration
Statement with the Commission pursuant to Section 2 of this
Agreement, the
Company will use reasonable best efforts to effect the
registration of
all of the
Registrable
Securities
in accordance with the
intended method of disposition thereof and, pursuant thereto,
the Company shall
have the following obligations:
(a)
The Company
shall promptly prepare and file with the
Commission
a
Registration Statement with respect to all of the Registrable
Securities (but in
no event later than the applicable Filing Deadline) and use reasonable best
efforts to cause such Registration Statement relating to all of the
Registrable
Securities required
to be covered thereby to become effective as soon as
practicable after
such filing (but in no event later than the applicable
Effectiveness Deadline). The Company shall submit to the
Commission, within five
(5) Business
Days after the Company learns that no review of a particular
Registration Statement
will be made by the
staff of the Commission or that the
staff has no further
comments on a particular Registration Statement, as the
case may be, a request for acceleration of effectiveness of such Registration
Statement to a time
and date not later than 48 hours after the submission of
such request. The
Company shall, subject
to the terms of this Agreement, keep
each Registration
Statement effective
pursuant to Rule 415 at all times during
4
<PAGE>
the period from the date it is initially declared effective until
the earlier of
(i) the fifth
anniversary of the date such Registration Statement is declared
effective, and (ii)
the date as of which all of the Investors no longer hold
Registrable
Securities (the
"REGISTRATION
PERIOD"),
which
Registration
Statement, as of its
filing and effective
dates (including
all amendments or
supplements thereto,
as of their respective filing and effective dates), shall
not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the
statements therein,
not misleading, and
the prospectus contained in such Registration Statement, as
of its filing date
(including all
amendments and
supplements thereto,
as of
their respective
filing dates), shall not contain any untrue
statement of a
material fact or omit to state a material fact required to be
stated thereon, or
necessary to make the statements therein, in light of the
circumstances in which
they were made, not misleading.
(b)
Subject to Section 3(m) of this Agreement, the Company shall prepare
and file with the Commission such amendments (including post-effective
amendments) and
supplements to the
Registration
Statement and the
prospectus
used in connection with such Registration Statement, which prospectus is to be
filed pursuant to Rule 424 (or any successor rule thereto)
promulgated under the
1933 Act, as may be necessary to keep such Registration
Statement effective at
all times during the Registration Period, and, during such period,
comply with
the provisions of the 1933 Act. In the case of amendments
and supplements to a
Registration
Statement and
the prospectus used in connection with such
Registration Statement which are required to be filed pursuant to
this Agreement
(including pursuant to
this Section
3(b)) by reason of the
Company filing a
report on Form 10-K,
Form 10-Q or Form 8-K or any analogous report under the
Securities Exchange
Act of 1934,
as amended, and the rules and regulations
thereunder, or any similar successor statute (the "1934 ACT"), the
Company shall
have incorporated such report by reference into such Registration
Statement, if
applicable, or shall
file such amendments or supplements with the Commission on
the same day on which the 1934 Act report is filed which created
the requirement
for the Company to amend or supplement such Registration Statement and
prospectus.
(c)
The Company shall
permit Legal Counsel,
or if no Legal Counsel
shall
have been chosen by the Investors, the Investors, to review and
provide written
comment upon each
Registration
Statement, prospectus
and all amendments and
supplements thereto at
least three (3) Business Days prior to their filing with
the Commission,
except for any
amendment or
supplement or document (a copy of
which has been
previously furnished
to the Investors and Legal Counsel) which
counsel to the Company
shall advise the
Company is required to be filed sooner
in order to comply
with applicable
law. The Company shall furnish to the
Investors and Legal Counsel, without charge, (i) promptly after
receipt of such
correspondence, copies of all correspondence from the Commission or
the staff of
the Commission
to the Company or its representatives relating to each
Registration
Statement, prospectus
and all amendments and supplements thereto,
(ii) promptly after the same is prepared and filed with the
Commission, one
(1)
copy of each Registration Statement, prospectus and all amendments and
supplements thereto,
including all exhibits
and financial
statements related
thereto, and
(iii) promptly upon the effectiveness of each Registration
Statement and
each amendment and supplement thereto, one (1) copy of the
prospectus included in
each such Registration
Statement and all amendments and
supplements thereto.
The Company
agrees that it will, and it will cause its
counsel to,
consider in good faith any comments or objections from Legal
5
<PAGE>
Counsel, or if no Legal Counsel shall have been selected,
the Investors,
as to
the form or content of each Registration Statement, prospectus and all
amendments or
supplements
thereto or any request for acceleration of the
effectiveness of each Registration Statement, prospectus and all amendments
or
supplements thereto.
(d)
The Company shall furnish to each Investor whose Registrable
Securities
are included in any Registration Statement, without charge to such
Investor, (i)
upon the effectiveness of each Registration Statement, such number of copies of
the prospectus
included in such
Registration Statement
and all amendments and
supplements thereto as
such Investor may
reasonably
request, and (iii) such
other documents,
including copies of
any preliminary or final prospectus, as
such Investor may
reasonably
request from time to
time in order to facilitate
the disposition of the Registrable Securities.
(e)
Subject to Section 3(m) of this Agreement, and excluding any
Registrable Securities
held by Investors
electing to exclude their Registrable
Securities from the Registration Statement under Section 4(b), the
Company shall
use commercially reasonable efforts to (i) promptly register and
qualify, unless
an exemption from
registration and
qualification
applies, the resale of the
Registrable Securities
under such other
securities
or "blue sky" laws of
all
applicable
jurisdictions in the
United States as any holder of Registrable
Securities reasonably
requests in writing,
(ii) promptly
prepare and file
in
those jurisdictions,
such amendments (including post-effective amendments) and
supplements to such
registrations
and qualifications as may be necessary to
maintain the
effectiveness
thereof during the Registration Period, (iii)
promptly take such other actions as may be reasonably necessary to
maintain such
registrations and
qualifications in effect at all times during the Registration
Period, and (iv)
promptly take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions;
provided, however,
that the Company shall not be required in connection
therewith or as a condition thereto to (A) file a general
consent to service of
process in any such jurisdiction, except in such jurisdictions
where the Company
is subject to service of process or (B) qualify generally to do business in
any
such jurisdiction,
except in such jurisdictions where the Company would
otherwise be required
to qualify. The Company shall promptly notify each
Investor who holds
Registrable Securities
and Legal Counsel of
the receipt by
the Company
of any notification with respect to the suspension of the
registration or
qualification
of any of the
Registrable
Securities for
sale
under the securities or "blue sky" laws of any jurisdiction in the
United States
or its receipt of notice of the initiation or threatening of any
proceeding for
such purpose.
(f)
Notwithstanding
anything to the contrary set forth herein, as promptly
as practicable after becoming aware of such event, the Company
shall notify each
Investor and Legal
Counsel in writing of the happening of any event as a result
of which (i) the Registration Statement or any amendment or
supplement thereto,
as then in effect,
includes an untrue
statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make
the
statements therein
not misleading or (ii) the prospectus related to such
Registration Statement or any amendment or supplement thereto
includes an untrue
statement of a material fact or omission to state a material fact
required to be
stated therein or
necessary to make the
statements
therein, in light of the
circumstances under
which they were made, not misleading, and, subject to
Section 3(m) of this
Agreement, promptly
prepare a supplement
or amendment to
such Registration
Statement and
prospectus to correct such untrue statement or
omission, and deliver
such number of copies of such supplement or amendment to
each Investor and Legal Counsel as such Investor or Legal Counsel
may reasonably
request. The Company
shall also promptly notify each Investor and Legal Counsel
in writing (i) when a prospectus and each prospectus supplement or amendment
thereto has been filed, and when a Registration Statement and each amendment
6
<PAGE>
(including
post-effective
amendments) has
been declared effective by the
Commission
(notification of such
effectiveness
shall be delivered to each
Investor and Legal
Counsel by facsimile
on the same day of such effectiveness
and by overnight mail), (ii) of any request by the
Commission for amendments or
supplements to a
Registration
Statement or related prospectus or related
information, and
(iii) of the Company's reasonable determination that an
amendment
(including any
post-effective
amendment)
or supplement to a
Registration Statement
or prospectus would be
appropriate (subject
to Section
3(n) hereof).
(g)
Subject to
Section 3(m) of this Agreement, the Company shall use
reasonable best
efforts to (i) prevent
the issuance of any stop order or other
suspension of
effectiveness of a Registration Statement, or the suspension of
the qualification
of any of the Registrable Securities for sale in any
jurisdiction, and (ii)
if such an order or
suspension is
issued, obtain the
withdrawal of such order or suspension at the earliest practicable moment and
notify each holder of
Registrable Securities
and Legal Counsel of the issuance
of such order
and the resolution thereof or its receipt of notice of the
initiation or threat of any proceeding for such purpose.
(h)
The Company
shall use reasonable best efforts to cause all the
Conversion Shares to
be listed on each
securities exchange
or traded on each
securities market on
which securities of the same class or s
