PRGX Global, Inc. – ‘PRER14A’ on 12/11/01

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Revised Preliminary Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14A     The Profit Recovery Group International, Inc.        282   1.32M 

Document Table of Contents

PRER14A
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) 
OF THE SECURITIES EXCHANGE ACT OF 1934  
 (AMENDMENT NO. 1)

Filed by the Registrant [X]                                                     

Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      

                                                        [Enlarge/Download Table]
                                                                                            
[X]  Preliminary Proxy Statement                [ ]  Confidential, for Use of the Commission
                                                     Only (as permitted by Rule 14a-6(e)(2))
[ ]  Definitive Proxy Statement                                                             
[ ]  Definitive Additional Materials                                                        
[ ]  Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12                      

THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)  

N/A 
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant) 

Payment of Filing Fee (Check the appropriate box):                              

[ ]  No fee required.                                                           

[X]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.   

     (1)  Title of each class of securities to which transaction applies: Common
Stock, no par value, and options to purchase Common Stock   

(2)  Aggregate number of securities to which transaction applies:     
15,353,846 shares of Common Stock and options to purchase an
  indeterminate number of shares, not to exceed 1,678,826 shares

(3)  Per unit price or other underlying value of transaction computed 
         pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
         filing fee is calculated and state how it was determined): Based upon
    the average of the high and low sales prices of the registrant's
    Common Stock on August 30, 2001 as quoted on The Nasdaq National
Market                                                      

(4)  Proposed maximum aggregate value of transaction: $236,583,814.08 

(5)  Total fee paid: $47,316.76                                       

[ ]  Fee paid previously with preliminary materials:                            

[X]  Check box if any part of the fee is offset as provided by Exchange Act Rule
  0-11(a)(2) and identify the filing for which the offsetting fee was paid
    previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                   

(1)  Amount Previously Paid: $59,787.03                               

  (2)  Form, Schedule or Registration Statement No.: Form S-4 Registration
Statement No. 333-69142                                     

(3)  Filing Party: The Profit Recovery Group International, Inc.      

(4)  Date Filed: September 7, 2001                                    

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(PRG LOGO)
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 
2300 WINDY RIDGE PARKWAY
SUITE 100 NORTH 
ATLANTA, GEORGIA 30339-8426 
--------------------- 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 

TO BE HELD ON JANUARY 24, 2002

--------------------- 

To the Shareholders of                                                          
The Profit Recovery Group International, Inc.                                   

     NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of The Profit
Recovery Group International, Inc. ("PRG") will be held on Thursday, January 24,
2002 at 9:00 a.m. local time at PRG's offices, 2300 Windy Ridge Parkway,        
Atlanta, Georgia 30339-8426, for the following purposes:                        

   1. To consider and vote upon the proposed issuance by PRG of an
 aggregate of up to 15,353,846 shares of its common stock and options to
purchase an indeterminate number of shares of its common stock, not to
     exceed 1,678,826 shares, in connection with the proposed acquisition by PRG
of substantially all of the assets of Howard Schultz & Associates     
    International, Inc. ("HSA-Texas") and the concurrent acquisition by PRG of
   substantially all of the outstanding stock of HS&A International Pte Ltd.
and all of the outstanding stock of Howard Schultz & Associates (Asia)
     Limited, Howard Schultz & Associates (Australia), Inc. and Howard Schultz &
    Associates (Canada), Inc., each an affiliated foreign operating company of
HSA-Texas; and pursuant to the terms of the proposed acquisitions, the
   election of Howard Schultz and Andrew Schultz as Class II directors, Nate
     Levine as a Class I director and Arthur Budge, Jr. as a Class III director,
conditioned upon closing of the proposed acquisitions.                

     2. To transact any other matters as may properly come before this
    special meeting, including any motion to adjourn to a later time to permit
   further solicitation of proxies, if necessary to establish a quorum or to
   obtain additional votes in favor of the proposed acquisitions, or for any
postponements or adjournments thereof.                                

The foregoing proposed acquisitions are more fully described in the   
accompanying proxy statement. The PRG board of directors unanimously recommends 
that PRG shareholders vote in favor of the proposed share and option issuances  
described above and the election of the nominated directors.                    

     The PRG board of directors fixed the close of business on December 11, 2001
as the record date for the determination of PRG shareholders entitled to notice 
of and to vote at the PRG special meeting and at any postponements or           
adjournments thereof.                                                           

    To ensure that your PRG shares are represented at the PRG special meeting,
please complete, date and sign the enclosed PRG proxy card and return it        
promptly to PRG in the enclosed postage paid envelope whether or not you plan to
attend the PRG special meeting. If you attend the PRG special meeting, you may  
revoke your proxy and vote in person.                                           

                                      By Order of the Board of Directors

                    /s/ John M. Cook
                John M. Cook
                                   Chairman of the Board and Chief
                     Executive Officer

Atlanta, Georgia                                                                

December   , 2001                                                               

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PRELIMINARY COPY, DATED DECEMBER 11, 2001 

                                                                [Download Table]
                                    
(PRG LOGO) The Profit Recovery Group
           International            

   The Profit Recovery Group International, Inc. ("PRG") proposes to acquire
for up to 15,353,846 shares of its common stock substantially all of the assets 
of Howard Schultz & Associates International, Inc. ("HSA-Texas"), substantially 
all of the outstanding stock of HS&A International Pte Ltd. ("HSA-Singapore")   
and all of the outstanding stock of Howard Schultz & Associates (Asia) Limited  
("HSA-Asia"), Howard Schultz & Associates (Australia), Inc. ("HSA-Australia")   
and Howard Schultz & Associates (Canada), Inc. ("HSA-Canada"), each an          
affiliated foreign operating company of HSA-Texas, pursuant to an amended and   
restated agreement and plan of reorganization in connection with the asset      
acquisition and an amended and restated agreement and plan of reorganization in 
connection with the stock acquisition. In addition, PRG expects to issue options
to purchase an indeterminate number of shares of PRG common stock, not to exceed
1,678,826 shares, in connection with the assumption of certain options to       
purchase HSA-Texas common stock.                                                

    The board of directors of PRG has unanimously approved the asset and stock
agreements, the proposed issuance of shares of PRG common stock and options to  
purchase PRG common stock described above, and the nomination of Mr. Howard     
Schultz, Mr. Andrew Schultz, Mr. Arthur Budge, Jr. and Mr. Nate Levine to serve 
as directors of PRG, conditioned upon the closing of the proposed acquisitions, 
and recommends that PRG shareholders vote for approval of the proposed share and
option issuances and in favor of the four director nominees. The board of       
directors of HSA-Texas has approved the final form of the asset agreement, which
has been executed by the parties thereto. The shareholders of HSA-Texas must    
also approve the final form of the asset agreement and the sale of substantially
all of HSA-Texas' assets to PRG. The shareholders of the affiliated foreign     
operating companies who are parties to the stock agreement have executed the    
final form of the stock agreement.                                              

  The proposed acquisitions cannot be completed unless the shareholders of
PRG approve the share and option issuances and elect the four nominees for      
director. PRG has scheduled a special meeting for PRG shareholders to vote on   
the proposed share and option issuances and the election of the director        
nominees. Each Shareholder's Vote Is Very Important.                            

     Only shareholders of record of PRG common stock as of December 11, 2001 are
entitled to attend and vote at the PRG special meeting. The date, time and place
of the PRG meeting are as follows:                                              

January 24, 2002 at 9:00 a.m. 

2300 Windy Ridge Parkway

Atlanta, Georgia 30339-8426 

     Whether or not you plan to attend the meeting, please complete and mail the
enclosed PRG proxy card to PRG. If you sign, date and mail your PRG proxy card  
without indicating how you want to vote, your PRG proxy will be counted as a    
vote in favor of the proposed share and option issuances and for the election of
the director nominees.                                                          

  This proxy statement provides PRG shareholders with detailed information
about the proposed share and option issuances. We encourage PRG shareholders to 
read this entire document carefully. In addition, PRG shareholders may obtain   
information about PRG from documents that PRG has filed with the Securities and 
Exchange Commission. PRG's common stock trades on The Nasdaq National Market    
under the symbol "PRGX."                                                        

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR   
DISAPPROVED OF THE PROPOSED SHARE AND OPTION ISSUANCES DESCRIBED IN THIS PROXY  
STATEMENT, NOR HAVE THEY DETERMINED IF THIS PROXY STATEMENT IS ACCURATE OR      
ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.             

    This proxy statement is dated December   , 2001, and is being first mailed
to PRG shareholders on or about December   , 2001.                              

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
SUMMARY TERM SHEET..........................................    1 
  QUESTIONS AND ANSWERS ABOUT THE PROPOSED ACQUISITIONS.....    1 
  ADDITIONAL SUMMARY TERM SHEET INFORMATION.................    5 
     The Companies..........................................    5 
     Reasons for the Proposed Acquisitions..................    7 
     Recommendation of the Board of Directors...............    7 
     Opinion of Financial Advisor to PRG....................    7 
     Shareholder Approval...................................    7 
     The Special Meeting....................................    7 
     Accounting Treatment...................................    8 
     Regulatory Approvals...................................    8 
     Dissenters' Rights.....................................    8 
     Limitation on Considering Other Acquisition                  
      Proposals.............................................    8 
     Lender Approvals.......................................    8 
     Conditions to the Asset Agreement......................    9 
     Termination of the Asset Agreement.....................    9 
     Termination Fees.......................................    9 
     Expenses...............................................   10 
     Comparative Per Share Market Price.....................   10 
     Unaudited Comparative Per Share Data...................   10 
     Historical Market Prices of PRG Common Stock...........   12 
     PRG Selected Consolidated Financial Information........   13 
     HSA-Texas Selected Combined Financial Information......   17 
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. SUMMARY             
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL                   
INFORMATION.................................................   18 
SPECIAL CONSIDERATIONS......................................   19 
  Special Considerations Relating to the Proposed                 
     Acquisitions...........................................   19 
  Special Considerations Relating to PRG's Business               
     Following the Proposed Acquisitions....................   23 
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE.............   27 
THE PRG SPECIAL MEETING.....................................   29 
  Purpose, Time and Place...................................   29 
  Record Date; Voting Power.................................   29 
  Share Ownership of Management.............................   29 
  Voting of Proxies.........................................   30 
  Revocability of Proxies...................................   30 
  Solicitation of Proxies...................................   30 
  Recommendation of the Board of Directors..................   31 
THE PROPOSED ACQUISITIONS...................................   32 
  Background of the Proposed Acquisitions...................   32 
  Reasons for the Proposed Acquisitions.....................   32 
  Opinion of PRG's Financial Advisor........................   34 
  Interests of Directors and Officers of HSA-Texas in the         
     Proposed Acquisitions..................................   39 
  Effective Date............................................   40 
  Regulatory Approvals......................................   40 
  Lender Approvals..........................................   40 
  Assumption of HSA-Texas Indebtedness......................   41 
  Material U.S. Federal Income Tax Consequences Relating to       
     the Proposed Acquisitions..............................   41 
  Accounting Treatment......................................   41 
  PRG Rights Plan...........................................   41 
  Dissenters' and Appraisal Rights Related to the Proposed        
     Acquisitions...........................................   41 

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                                                              PAGE
                                                              ----
                                                                  
  Board of Directors and Management Following Proposed            
     Acquisitions...........................................   41 
  Nasdaq Listing............................................   42 
  Federal Securities Law Consequences.......................   42 
MATERIAL TERMS OF THE ASSET AGREEMENT.......................   43 
  Assets to be Acquired.....................................   43 
  Excluded Assets...........................................   43 
  Assumed Liabilities.......................................   43 
  Retained Liabilities......................................   44 
  Purchase Price............................................   45 
  HSA-Texas Stock Options and SARs..........................   46 
  Shareholder Representative................................   47 
  Expected Closing of the Proposed Acquisition..............   47 
  Representations and Warranties............................   47 
  Covenants and Agreements..................................   49 
  Indemnification by HSA-Texas and PRG......................   50 
  Conditions to Closing.....................................   53 
  Limitation on HSA-Texas' and PRG's Ability to Consider          
     Other Acquisition Proposals............................   54 
  Termination of the Asset Agreement........................   55 
  Termination Fees..........................................   57 
  Expenses..................................................   58 
  Amendment; Waiver.........................................   59 
MATERIAL TERMS OF THE STOCK AGREEMENT.......................   60 
  Purchase Price; Closing...................................   60 
  Shareholder Representative................................   60 
  Representations and Warranties............................   60 
  Covenants and Agreements..................................   61 
  Indemnification...........................................   62 
  Conditions to Closing.....................................   63 
  Termination of the Stock Agreement........................   64 
  Amendment; Waiver.........................................   65 
OTHER RELATED AGREEMENTS....................................   66 
  Shareholder Agreement.....................................   66 
  Registration Rights Agreement.............................   67 
  Indemnification Agreement.................................   68 
  Employment Agreements.....................................   69 
  Noncompetition Agreement..................................   70 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION       
  AND RESULTS OF OPERATIONS OF HSA-TEXAS....................   71 
  Overview..................................................   71 
  Results of Operations.....................................   71 
  Liquidity and Capital Resources...........................   73 
BUSINESS OF HSA-TEXAS.......................................   75 
  The Business..............................................   75 
  History...................................................   75 
  Audit Services............................................   77 
  Technology................................................   78 
  Seasonality...............................................   79 
  Sales and Marketing.......................................   79 
  Proprietary Rights........................................   79 
  Competition...............................................   79 
  Employees and Contractors.................................   80 

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                                                              PAGE
                                                              ----
                                                                  
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. AND                 
  SUBSIDIARIES PRO FORMA COMBINED FINANCIAL STATEMENTS            
  (UNAUDITED)...............................................   81 
PRG/HSA-TEXAS STOCK OPTION PLAN.............................   90 
PRG DIRECTOR AND EXECUTIVE OFFICER INFORMATION..............   95 
  Election of Directors.....................................   95 
  Information About the Board of Directors and Committees of      
     the Board..............................................   98 
  March 2001 Report of the Compensation Committee on              
     Executive Compensation.................................   99 
  Executive Compensation....................................  102 
  Certain Transactions......................................  108 
  Section 16(a) Beneficial Ownership Reporting Compliance...  109 
  Ownership of Directors, Director Nominees, Principal            
     Shareholders and Certain Executive Officers of PRG.....  110 
  Executive Officers........................................  113 
  Performance Graph.........................................  114 
SHAREHOLDER PROPOSALS.......................................  114 
INDEPENDENT AUDITORS........................................  114 
WHERE YOU CAN FIND MORE INFORMATION.........................  115 
HSA-TEXAS INDEX TO COMBINED FINANCIAL STATEMENTS............  F-1 
ANNEX A -- ASSET AGREEMENT..................................  A-1 
ANNEX B -- STOCK AGREEMENT..................................  B-1 
ANNEX C -- OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH       
  INCORPORATED..............................................  C-1 

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SUMMARY TERM SHEET

     The following information, together with the "Additional Summary Term Sheet
Information" below, highlights the material information contained in this       
document and may not contain all of the information that is important to you. To
understand the proposed acquisitions fully, you should read carefully this      
entire document and the other available information referred to in "Where You   
Can Find More Information" at page 115 of this proxy statement. The asset       
agreement is attached to this proxy statement as Annex A and the stock agreement
is attached to this proxy statement as Annex B. You are encouraged to read these
agreements, as they are the main legal documents governing the proposed         
acquisitions.                                                                   

QUESTIONS AND ANSWERS ABOUT THE PROPOSED ACQUISITIONS 

Q:   WHAT TRANSACTIONS DO PRG AND HSA-TEXAS PROPOSE? (SEE PAGES 43-45; 60)      

A:   PRG proposes to acquire substantially all of the assets of HSA-Texas in    
  exchange for PRG's assumption of certain HSA-Texas liabilities and PRG's
    issuance of 14,724,338 shares of PRG common stock, less a number of shares
     of PRG common stock having a value equal to the "in the money" value of the
  options to purchase shares of HSA-Texas common stock and HSA-Texas stock
   appreciation rights, or SARs, outstanding at the closing, as described in
the asset agreement attached as Annex A to this proxy statement.      

    In addition to issuing shares of its common stock to acquire the assets of
HSA-Texas, PRG will also issue:                                       

- 1,535 shares of PRG common stock to acquire substantially all of the
outstanding stock of HSA-Singapore;                               

     - 75,234 shares of PRG common stock to acquire all of the outstanding stock
of HSA-Asia;                                                      

- 245,662 shares of PRG common stock to acquire all of the outstanding
stock of HSA-Australia; and                                       

- 307,077 shares of PRG common stock to acquire all of the outstanding
stock of HSA-Canada;                                              

    each an affiliated foreign operating company of HSA-Texas, as described in
the stock agreement attached as Annex B to this proxy statement. The  
 aggregate number of shares to be issued pursuant to the asset and stock
    agreements will not exceed 15,353,846 shares. PRG will also assume certain
 outstanding liabilities of HSA-Texas and certain outstanding options to
purchase shares of HSA-Texas common stock. The number of shares of PRG
common stock subject to the assumed options will not exceed 1,678,826 
shares. The closings of the transactions contemplated by the stock    
agreement and the asset agreement are contingent on each other. See   
  "Material Terms of the Asset Agreement" and "Material Terms of the Stock
Agreement" for a detailed discussion of other closing conditions.     

Q:   WHY IS PRG ACQUIRING THE ASSETS OF HSA-TEXAS AND THE STOCK OF THE FOUR     
AFFILIATED FOREIGN OPERATING COMPANIES? (SEE PAGE 32-34)              

A:   PRG's board of directors anticipates that after the completion of the      
   proposed acquisitions, PRG should have the potential to realize long-term
improved operating and financial results and should be in a stronger  
competitive position in the recovery audit and expense containment    
marketplace. PRG's board of directors believes that the proposed      
acquisitions represent a unique, strategic fit between companies with 
similar business strategies and complementary recovery audit service  
   offerings, and that the proposed acquisitions are in the best interest of
PRG and its shareholders.                                             

Q:   HOW MUCH DEBT DOES PRG EXPECT TO INCUR IN CONNECTION WITH THE PROPOSED     
ACQUISITIONS? (SEE PAGE 43-44)                                        

A:   PRG expects to incur or assume between $59.7 million and $69.5 million of  
HSA-Texas net debt in connection with the proposed acquisitions.      

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Q:   WHAT ARE PRG SHAREHOLDERS BEING ASKED TO APPROVE? (SEE PAGE 29)            

A:   PRG shareholders are being asked to approve:                               

- the issuance of up to 15,353,846 shares of PRG common stock as      
consideration in connection with the proposed acquisitions;       

    - the issuance of options to purchase up to 1,678,826 shares of PRG common
      stock in connection with the assumption of certain outstanding HSA-Texas
options; and                                                      

    - the election of Howard Schultz and Andrew Schultz as Class II directors,
    Nate Levine as a Class I director and Arthur Budge, Jr. as a Class III
 director, contingent upon the closing of the proposed acquisitions.

     Assuming that holders of a majority of the outstanding shares of PRG common
    stock entitled to vote on the record date of the special meeting, December
11, 2001, are present, either in person or by proxy, at the special   
 meeting, the affirmative vote of a majority of the shares of PRG common
     stock entitled to vote that are actually voted either in person or by proxy
is required to approve the share and option issuances and to elect the
nominated directors.                                                  

Q:   WHEN DOES PRG EXPECT THE PROPOSED ACQUISITIONS TO BE COMPLETED? (SEE PAGE  
47)                                                                   

A:   The parties are working toward completing the transactions as quickly as   
    possible. Closing requires, in addition to approval by the shareholders of
 PRG, that each of PRG, HSA-Texas and the shareholders of the affiliated
    foreign operating companies satisfy or waive all of the closing conditions
    contained in the asset agreement and stock agreement, as applicable. Under
    the asset agreement, the transaction will close on a date no later than 10
     business days after the satisfaction or waiver of the closing conditions or
on the date designated by PRG and HSA-Texas.                          

Q:   WHAT WILL HAPPEN TO THE HSA-TEXAS STOCK OPTIONS AND SARS OUTSTANDING AT    
CLOSING? (SEE PAGES 46-47)                                            

A:   At closing, PRG will assume each outstanding HSA-Texas option held by      
   persons who become employees, directors or independent contractors of PRG
    or any of its affiliates. These assumed options will constitute options to
 acquire PRG common stock, on terms equivalent to those of the HSA-Texas
stock options, in accordance with the 1999 Howard Schultz & Associates
   Stock Option Plan. The exercise price and the number of shares subject to
  each of these HSA-Texas stock options will be adjusted to give effect to
 the proposed acquisition of HSA-Texas, and all of these options will be
 vested and have a term of five years following the closing of the asset
  acquisition. The HSA-Texas SARs and the remaining HSA-Texas options will
not be assumed by PRG.                                                

Q:   HOW WILL THE NUMBER OF HSA-TEXAS OPTIONS AND SARS OUTSTANDING AT THE       
  CLOSING AFFECT THE NUMBER OF SHARES THAT HSA-TEXAS RECEIVES IN THE ASSET
ACQUISITION? (SEE PAGE 45)                                            

A:   The number of shares of PRG common stock that PRG delivers to HSA-Texas in 
    the asset acquisition will be reduced by a number of shares having a value
  equal to the aggregate "in the money" value of all HSA-Texas options and
    SARs outstanding at closing, whether or not assumed by PRG, divided by the
    PRG "average price." The PRG average price is defined to be the average of
  the closing prices of PRG common stock on The Nasdaq National Market for
the five trading days prior to the closing of the asset acquisition.  

  The "in the money" value of each outstanding HSA-Texas option and SAR is
   computed by subtracting the per share exercise price of the option or the
     per share grant price of the SAR, as applicable, from the "per share value"
attributed to each HSA-Texas share in accordance with a formula which:

     - Computes a value for HSA-Texas based on the number of PRG shares proposed
     to be issued in the asset acquisition multiplied by the average closing
price, as defined above; and                                      

- Divides that value by the sum of the number of shares of HSA-Texas  
       outstanding on the closing date, the number of shares of HSA-Texas common
  stock subject to options outstanding on that date, and the number of
       HSA-Texas SARs outstanding on that date. See "Material Terms of the Asset
Agreement -- Purchase Price."                                     

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  The following table generally illustrates the aggregate number of shares
   that PRG expects to issue to HSA-Texas in the asset acquisition and shows
how the number of shares that PRG will issue to HSA-Texas in the asset
acquisition will be reduced by the "in the money" value of outstanding
    options and SARs, based upon a range of hypothetical PRG "average prices."
   The following assumes that at the closing, there will be 2,307,482 shares
     of HSA-Texas voting common stock outstanding, 6,435,383 shares of HSA-Texas
   non-voting common stock outstanding, 1,133,423 shares of HSA-Texas common
     stock underlying outstanding options and 64,569 outstanding HSA-Texas SARs.
   The average price of PRG common stock may be more or less than the ranges
set forth below and the number of shares of HSA-Texas common stock    
outstanding, the number of shares of HSA-Texas common stock underlying
     outstanding options and the number of outstanding HSA-Texas SARs at closing
may be more or less than the numbers set forth above.                 

                                                                [Download Table]

                                      ESTIMATED TOTAL        ESTIMATED REDUCTION   
ASSUMED AVERAGE                        NUMBER OF PRG          IN NUMBER OF PRG     
PRICE OF PRG                       SHARES TO BE RECEIVED    SHARES TO BE RECEIVED  
COMMON STOCK                           BY HSA-TEXAS             BY HSA-TEXAS       
---------------                    ---------------------  -------------------------
                                                                                   
$ 4.00............................      14,724,338                        0        
$ 5.00............................      14,724,338                        0        
$ 6.00............................      14,699,298                   25,040        
$ 7.00............................      14,473,853                  250,485        
$ 8.00............................      14,283,356                  440,982        
$ 9.00............................      14,135,204                  589,134        
$10.00............................      14,016,671                  707,667        
$11.00............................      13,919,689                  804,649        
$12.00............................      13,838,871                  885,467        
$13.00............................      13,770,486                  953,852        
$14.00............................      13,711,871                1,012,467        
$15.00............................      13,661,071                1,063,267        
$16.00............................      13,616,621                1,107,717        

Changes in the PRG average price do not affect the number of shares,  
629,508 in the aggregate, to be issued to the shareholders of the     
affiliated foreign operating companies.                               

Q:   WHAT DO I NEED TO DO? (SEE PAGES 29-31)                                    

A:   After carefully reading and considering the information contained in this  
     proxy statement, please respond by completing, signing, and dating your PRG
     proxy card and returning it, in the enclosed postage paid envelope, as soon
 as possible so that your PRG shares may be represented at PRG's special
meeting.                                                              

Q:   WHAT HAPPENS IF I DO NOT RETURN MY PRG PROXY CARD? (SEE PAGE 29)           

A:   The failure to return your PRG proxy card increases the risk that a quorum,
   which is a majority of the outstanding voting shares of PRG common stock,
     will not be obtained. If a quorum is not obtained at the special meeting or
any continuation of the special meeting, PRG cannot issue the proposed
  shares and options and the nominated directors will not be elected. As a
result, PRG would be unable to proceed with the proposed acquisitions.

Q:   WHAT HAPPENS IF I RETURN A SIGNED PRG PROXY CARD BUT DO NOT INDICATE HOW TO
VOTE MY PRG PROXY? (SEE PAGE 30)                                      

A:   If you do not include instructions on how to vote your properly signed and 
 dated PRG proxy card, your PRG shares will be voted for approval of the
proposed share and option issuances and the election of the nominated 
directors.                                                            

Q:   MAY I VOTE IN PERSON AT THE PRG SPECIAL MEETING? (SEE PAGE 29)             

A:   You may attend PRG's special meeting and vote your PRG shares in person,   
rather than signing and returning your PRG proxy card. Only PRG       
   shareholders of record as of the record date, December 11, 2001, or their
proxies are eligible to vote in person.                               

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Q:   IF MY PRG SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER    
VOTE MY PRG SHARES FOR ME? (SEE PAGE 29)                              

A:   Your broker will not be able to vote your PRG shares without instructions  
from you. You should instruct your broker to vote your PRG shares by  
  following the procedures provided by your broker. The failure to provide
  such voting instructions to your broker increases the risk that a quorum
     will not be obtained, without which the proposed share and option issuances
will not be approved and the nominated directors will not be elected. 

Q:   CAN I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PRG PROXY? (SEE PAGE 30)    

A:   Yes. You can change your vote at any time before your proxy is voted at    
     PRG's special meeting. You can do this in one of three ways. First, you can
     revoke your proxy. Second, you can submit a new proxy. If you choose either
     of these two methods, you must submit your notice of revocation or your new
   proxy to the secretary of PRG so that it is received before your proxy is
   voted at PRG's special meeting. If your PRG shares are held in an account
     at a brokerage firm or bank, you should contact your brokerage firm or bank
     to change your vote. Third, you can attend the PRG special meeting and vote
   in person. Only PRG shareholders of record as of the record date or their
proxies are eligible to vote in person. Your attendance alone will not
     revoke your proxy. If you have instructed a broker to vote your PRG shares,
you must follow directions received from your broker to change those  
instructions.                                                         

Q:   WHAT ARE THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED 
ACQUISITIONS TO PRG? (SEE PAGE 41)                                    

A:   The proposed acquisition of the assets of HSA-Texas, and subsequent        
liquidation of HSA-Texas, are intended to qualify as a tax-free       
   reorganization under Section 368(a)(1)(C) of the Internal Revenue Code of
    1986, or the Code. PRG will not recognize taxable gain or loss as a result
of the issuance of shares of PRG common stock to acquire the assets of
HSA-Texas.                                                            

     The proposed acquisitions of the affiliated foreign operating companies are
    intended to qualify as tax-free reorganizations under Section 368(a)(1)(B)
     of the Code. PRG will not recognize taxable gain or loss solely as a result
of PRG's acquisition of the stock of the affiliated foreign operating 
companies for PRG common stock.                                       

Q:   WILL THE NAME OF PRG CHANGE FOLLOWING THE CLOSING OF THE PROPOSED          
ACQUISITIONS?                                                         

A:   Yes. As soon as practicable following the closing, PRG will change its     
corporate name to "PRG-Schultz International, Inc."                   

Q:   WHO CAN HELP ANSWER MY QUESTIONS?                                          

A:   If you have any questions about either the proposed acquisitions or how to 
submit your PRG proxy, or if you need additional copies of this proxy 
     statement or the enclosed PRG proxy card or voting instructions, you should
contact:                                                              

The Profit Recovery Group International, Inc. 
2300 Windy Ridge Parkway, Suite 100 North 
Atlanta, Georgia 30339-8426 
Attention: Leslie H. Kratcoski
Phone Number: (770) 779-3900

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ADDITIONAL SUMMARY TERM SHEET INFORMATION 

 The following highlights additional information contained in this proxy
statement but may not contain all of the information that is important to you.  
To understand the proposed acquisitions fully, you should read carefully this   
entire document and the other available information referred to in "Where You   
Can Find More Information" at page 115 of this proxy statement. The asset       
agreement is attached to this proxy statement as Annex A and the stock agreement
is attached to this proxy statement as Annex B. You are encouraged to read these
agreements, as they are the main legal documents governing the proposed         
acquisitions.                                                                   

THE COMPANIES 

THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.                                   
2300 WINDY RIDGE PARKWAY                                                        
SUITE 100 NORTH                                                                 
ATLANTA, GEORGIA 30339-8426                                                     
(770) 779-3900                                                                  

PRG is a leading provider of recovery audit, expense containment and  
knowledge application services to large and mid-size businesses having numerous 
payment transactions with many vendors. These businesses include, but are not   
limited to, the following:                                                      

- retailers such as discount, department, specialty, grocery and drug 
stores;                                                           

 - manufacturers of pharmaceuticals, consumer electronics, chemicals and
aerospace and medical products;                                   

- wholesale distributors of computer components, food products and    
pharmaceuticals; and                                              

- healthcare providers such as hospitals and health maintenance       
organizations.                                                    

PRG currently services approximately 2,500 clients in 34 different    
countries. PRG's continuing operations have one operating segment consisting of 
Accounts Payable Services that offers different types of recovery and cost      
containment services.                                                           

Recent Developments                                                             

Convertible Notes Offering                                                  

  On November 26, 2001, PRG closed on a $95 million offering of its 4 3/4%
convertible subordinated notes due 2006. PRG issued an additional $15 million of
the notes on December 3, 2001, and on December 4, 2001, the initial purchasers  
of the notes issued on November 26, 2001 purchased an additional $15 million of 
the notes to cover over allotments, bringing to $125 million the aggregate      
amount issued. PRG received net proceeds from the offering of approximately     
$121.4 million. The proceeds of the notes were used to pay down PRG's           
outstanding balance under its senior credit facility.                           

  The notes are convertible into PRG common stock at a conversion price of
$7.74 per share, which is equal to a conversion rate of 129.1990 shares per     
$1,000 principal amount of notes, subject to adjustment. PRG may redeem some or 
all of the notes at any time on or after November 26, 2004 at a redemption price
of $1,000 per $1,000 principal amount of notes, plus accrued and unpaid         
interest, if prior to the redemption date the closing price of PRG common stock 
has exceeded $10.836 for at least twenty trading days within a period of thirty 
consecutive days ending on the trading date before the date of mailing of the   
optional redemption notice.                                                     

Discontinued Operations                                                     

   In March 2001, PRG formalized a strategic realignment initiative designed
to enhance PRG's financial position and clarify its investment and operating    
strategy by focusing on its core Accounts Payable Services business. Under this 
strategic realignment initiative, PRG decided to divest the following non-core  
businesses: Meridian, a part of the Taxation Services segment, the Logistics    
Management Services segment, the Communications Services segment and the Ship & 
Debit division within the Accounts Payable Services                             

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segment. As a result, since the first quarter of 2001, these businesses have    
been classified as discontinued operations.                                     

    Owing to the separate and distinct nature of each business to be divested,
PRG and its advisors determined that PRG would be unlikely to sell all of these 
businesses as a whole to one buyer. As a result, during the last several months,
PRG has been engaged in independent divestiture processes for each of these     
businesses. On October 30, 2001, PRG completed the sale of its Logistics        
Management Services segment for approximately $13.0 million. PRG received       
initial gross proceeds from the sale of approximately $10.0 million, and PRG may
receive up to an additional $3.0 million payable in the form of a revenue-based 
royalty over the next four years. The other discontinued operations currently   
remain for sale. However, if current difficult market conditions continue such  
that there is further erosion in the expected net proceeds, PRG, in consultation
with its advisors, may in the future conclude that the sale of the remaining    
discontinued operations is no longer advisable and may revisit the decision to  
sell some or all of these businesses.                                           

    On December 3, 2001, PRG entered into an agreement, subject to approval of
PRG's board of directors, to sell its French Taxation Services business for     
approximately 352 million French francs (approximately $47.8 million at December
3, 2001 exchange rates). On December 10, 2001, the executive committee of PRG's 
board of directors ratified the agreement and authorized the sale of PRG's      
French Taxation Services business. The sale of the French Taxation Services     
business will result in a net loss on the transaction of approximately $54.0    
million in the fourth quarter of 2001 based on December 3, 2001 exchange rates. 
Closing of the transaction is expected to occur in the fourth quarter of 2001.  
As a result of the foregoing, the French Taxation Services business has been    
classified as a discontinued operation for accounting purposes, and all         
historical and pro forma financial information contained herein has been        
restated to remove this business from continuing operations. See "Special       
Considerations -- Special Considerations Relating to PRG's Business Following   
the Proposed Acquisitions -- The sale of PRG's French Taxation Services         
operations will result in a substantial and material net loss."                 

Amendment to Senior Credit Facility                                         

 On November 9, 2001, PRG entered into an amendment to its senior credit
facility, effective September 30, 2001. The amendment waived certain financial  
ratio covenant defaults as of September 30, 2001. Pursuant to the amendment,    
several current and prospective financial ratio covenants were re-established   
and relaxed. The amendment also prospectively increases interest rates and      
effectively limits PRG's borrowing capacity to approximately $50.0 million,     
after application of the net proceeds of the convertible note offering. It also 
provides for additional mandatory reductions of the outstanding balance under   
the senior credit facility equal to the net cash proceeds from future sales of  
the discontinued operations and any future issuance of debt or equity           
securities. As of December 7, 2001, the outstanding amount under PRG's senior   
credit facility was approximately $14.2 million.                                

HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. (SEE PAGES 75-80)               

9241 LBJ FREEWAY, SUITE 100                                                     
DALLAS, TEXAS 75243                                                             
(972) 233-7564                                                                  

Howard Schultz & Associates International, Inc., its subsidiaries and 
licensees are industry pioneers in providing recovery audit services. HSA-Texas 
audits accounts payable records, occupancy costs, vendor statements and direct  
to store delivery records to recover overpayments that are a result of missed   
credits, duplicated payments, overlooked allowances, incorrect invoices and     
other discrepancies.                                                            

     HSA-Texas provides recovery audit services to large and mid-size businesses
having numerous payment transactions with many vendors. These businesses        
include, but are not limited to retailers, manufacturers, wholesale             
distributors, technology companies and healthcare providers.                    

   HSA-Texas has more than 1,000 audit associates working in most major U.S.
cities and several international markets. HSA-Texas and its affiliated operating
companies and licensees operate 25 regional offices in the United States,       
Australia, Belgium, Canada, France, Germany, Hong Kong, Italy, Mexico, the      
Philippines, Portugal, Singapore, Thailand, Taiwan, the Netherlands, Spain and  
the United Kingdom.                                                             
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REASONS FOR THE PROPOSED ACQUISITIONS (SEE PAGES 32-34)                         

    PRG agreed to engage in the proposed acquisitions because of the synergies
and market strength that will result from combining the businesses. The         
completion of the proposed acquisitions will give the combined company an       
enhanced global presence and the opportunity to gain market share.              

In addition, the board of directors of PRG approved the proposed      
acquisitions based on a number of factors, including the belief that the        
proposed acquisitions may allow the combined company to:                        

 - accelerate innovation and audit effectiveness and thereby better meet
customer needs for next-generation audit recovery services;       

- accelerate expansion into existing and new recovery audit markets;  

- be more competitive with other leading audit recovery companies,    
      including the current and former consulting arms of the Big 5 accounting
firms;                                                            

- add to their intellectual property portfolio in the field of audit  
recovery processes; and                                           

   - add qualified auditors and other employees from the HSA-Texas workforce
to PRG, enhancing its expertise in audit recovery technology.     

RECOMMENDATION OF THE BOARD OF DIRECTORS (SEE PAGE 31)                          

   The PRG board of directors has voted unanimously to nominate the proposed
directors, conditioned on the closing of the asset acquisition, and to approve  
the terms and provisions of the asset agreement and the stock agreement and the 
proposed issuance of shares and options, and believes that they are fair to     
PRG's shareholders and in their best interest. The PRG board of directors       
recommends that PRG's shareholders vote for the approval of the proposed share  
and option issuances and in favor of the nominated directors.                   

OPINION OF FINANCIAL ADVISOR TO PRG (SEE PAGES 34-39)                           

    In deciding to approve the proposed acquisitions, PRG's board of directors
considered the oral opinion of its financial advisor, Merrill Lynch, Pierce,    
Fenner & Smith Incorporated, which opinion was subsequently confirmed in a      
written opinion, to the effect that, as of the date of the opinion, and subject 
to and based on the considerations referred to in the opinion, the consideration
to be paid by PRG in connection with the proposed acquisitions was fair, from a 
financial point of view, to PRG. The opinion, dated as of August 3, 2001, is    
attached as Annex C to this proxy statement. PRG urges its shareholders to read 
the opinion of Merrill Lynch in its entirety.                                   

SHAREHOLDER APPROVAL (SEE PAGES 29-30)                                          

As of the record date, PRG directors and executive officers and their 
affiliates owned in the aggregate approximately 16.70% of its outstanding shares
of common stock, which shares PRG expects to be voted for approval of the       
proposed share and option issuances and in favor of the nominated directors. The
affirmative vote of a majority of the outstanding shares of PRG common stock    
entitled to vote and present at the special meeting is required to approve the  
proposed share and option issuances and to elect the nominated directors. As of 
the record date, PRG directors and executive officers and their affiliates did  
not own, beneficially or of record, any shares of HSA-Texas common stock.       
HSA-Texas has informed PRG that, as of the record date, directors and executive 
officers of HSA-Texas owned, beneficially or of record, 3,100 shares of PRG     
common stock.                                                                   

THE SPECIAL MEETING (SEE PAGE 29)                                               

    The special meeting of the shareholders of PRG will be held on January 24,
2002, at 9:00 a.m., local time, at PRG's offices, 2300 Windy Ridge Parkway,     
Atlanta, Georgia 30339-8426.                                                    

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ACCOUNTING TREATMENT (SEE PAGE 41)                                              

     PRG will account for the proposed acquisitions under the purchase method of
accounting.                                                                     

REGULATORY APPROVALS (SEE PAGE 40)                                              

The proposed acquisitions are subject to review by the Department of  
Justice and the Federal Trade Commission, or FTC, to determine whether they     
comply with applicable antitrust laws. Under the provisions of the HSR Act, the 
proposed acquisitions could not be completed until the waiting period           
requirement of the HSR Act had been satisfied. On August 3, 2001, PRG and       
HSA-Texas filed required documents with the FTC and requested early termination 
of the waiting period, which was granted effective as of August 10, 2001.       

DISSENTERS' RIGHTS (SEE PAGE 41)                                                

  PRG's shareholders are not required to approve the proposed acquisitions
under Georgia law, but rather are required by Nasdaq rules to approve the       
issuance of shares, including shares subject to options, that are proposed to be
issued in connection with the proposed acquisitions. Georgia corporate law,     
which governs PRG as a Georgia corporation, does not afford dissenters' or      
appraisal rights in connection with transactions such as the proposed           
acquisitions to holders of shares that are quoted on The Nasdaq National Market,
or Nasdaq, as are PRG's shares. Therefore, PRG shareholders have no dissenters' 
or appraisal rights with respect to the proposed acquisitions.                  

LIMITATION ON CONSIDERING OTHER ACQUISITION PROPOSALS (SEE PAGES 54-55)         

  PRG and HSA-Texas have agreed not to consider an alternative acquisition
proposal or other similar transaction with another party while the proposed     
acquisitions are pending; provided, however, that PRG may consider an           
alternative acquisition proposal if:                                            

- a third party has made an unsolicited, bona fide written proposal to
PRG's board of directors; and                                     

- the PRG board determines in good faith that consideration of the  
     alternative acquisition proposal is necessary for the board to comply
with its fiduciary duties to PRG's shareholders; and            

     - the board determines that the alternative acquisition proposal will, if
completed, be superior to the proposed acquisitions.            

    PRG may also consider an alternative acquisition proposal if a third party
agrees to acquire HSA-Texas, including the four affiliated foreign operating    
companies, concurrently as if they were a part of PRG.                          

LENDER APPROVALS (SEE PAGES 40-41)                                              

 PRG has held extensive discussions with the nine members of its banking
syndicate concerning the proposed acquisitions. The credit facility, as amended,
provides that a two-thirds majority of the banks in the syndicate must approve  
the proposed acquisitions. As a result of these discussions with the members of 
PRG's current banking syndicate, PRG believes that it will be unable to obtain  
the consent of at least two-thirds of the members of the syndicate required in  
order to complete the proposed acquisitions. PRG is therefore negotiating a new 
senior credit facility, the proceeds of which PRG will utilize to repay certain 
indebtedness of HSA-Texas and fund various merger and integration costs related 
to the proposed acquisitions. PRG expects to obtain a new senior credit facility
with a borrowing capacity of up to $75 million, with tiered interest based on   
either prime or LIBOR and a term of at least three years, secured by all of     
PRG's assets. Aggregate outstanding borrowing may be limited to a percentage of 
eligible receivables. PRG will not complete the proposed acquisitions unless a  
senior credit facility with terms substantially equivalent to those described   
above, with immediate borrowing availability of at least $30.0 million and with 
interest rates substantially equivalent to or more favorable to PRG than those  
of its current senior credit facility, is in place as of or prior to the closing
of the proposed acquisitions.                                                   

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CONDITIONS TO THE ASSET AGREEMENT (SEE PAGES 53-54)                             

    The obligations of PRG and HSA-Texas to complete the asset acquisition are
subject to the satisfaction of a number of conditions in addition to the        
approval by a majority of PRG's shareholders, including:                        

- the acquisition of substantially all of the outstanding stock of    
       HSA-Singapore and all of the outstanding stock of HSA-Asia, HSA-Australia
     and HSA-Canada pursuant to the stock agreement prior to or concurrently
with the closing of the asset agreement;                          

   - the approval for listing on The Nasdaq National Market of the shares of
PRG common stock to be issued in the proposed acquisitions; and   

- PRG's obtaining either the consent of its principal lenders to the  
   proposed acquisitions or a new or amended senior credit facility that
does not prohibit the proposed transactions.                      

TERMINATION OF THE ASSET AGREEMENT (SEE PAGES 55-56)                            

    Either PRG or HSA-Texas is entitled to terminate the asset agreement under
specified conditions, including:                                                

   - if the proposed acquisitions have not been completed by March 31, 2002;

- if PRG has not received lender consent or obtained a new or amended 
    credit facility on or before March 31, 2002 that does not prohibit the
proposed transactions;                                            

- if a court issues a final and nonappealable order that prohibits the
proposed acquisitions; or                                         

  - if PRG shareholders or the holders of HSA-Texas voting common stock do
not approve the proposed acquisitions.                            

    In addition, PRG and HSA-Texas can terminate the asset agreement by mutual
written consent, and HSA-Texas can terminate the asset agreement if a           
"triggering event" occurs, such as the approval by the board of directors of PRG
of an alternative acquisition proposal which does not include the concurrent    
acquisition of HSA-Texas and the four affiliated foreign operating companies.   

TERMINATION FEES (SEE PAGES 57-58)                                              

   If the asset agreement is terminated after PRG mails this proxy statement
to its shareholders because:                                                    

     - the PRG board of directors approves or recommends to its shareholders any
    alternative acquisition proposal which does not include the concurrent
acquisition of HSA-Texas and the four affiliated foreign operating
companies;                                                        

- the PRG board withdraws its recommendation or amends it in a manner 
adverse to HSA-Texas; or                                          

- a tender or exchange offer is commenced and PRG does not recommend  
rejection of the offer;                                           

PRG will be obligated to pay HSA-Texas a fee in the amount of $2.0 million, plus
HSA-Texas' expenses incurred in connection with the proposed acquisitions, by   
wire transfer of immediately available funds.                                   

In addition, if the asset agreement is terminated after PRG mails this
proxy statement to its shareholders because:                                    

 - the HSA-Texas special meeting to approve the asset acquisition is not
held prior to March 31, 2002;                                     

- HSA-Texas or any affiliated foreign operating company elects not to 
   participate in specified alternative acquisitions proposed by PRG; or

   - HSA-Texas or shareholders of the affiliated foreign operating companies
     have breached their representations and warranties or failed to perform
  their covenants under the asset agreement or the stock agreement, as
applicable,                                                       

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HSA-Texas will be required to promptly pay PRG an amount equal to all of PRG's  
expenses incurred in connection with the proposed acquisitions by wire transfer 
of immediately available funds. See "Material Terms of the Asset                
Agreement -- Termination Fees" for a detailed discussion of termination fees.   

EXPENSES (SEE PAGE 58)                                                          

   Except as described above, the asset agreement provides that all expenses
incurred by each respective party shall be borne by that party. However, if the 
proposed acquisitions are completed, PRG will pay any previously unpaid         
reasonable and necessary fees and expenses of attorneys and accountants of      
HSA-Texas.                                                                      

COMPARATIVE PER SHARE MARKET PRICE                                              

   PRG common stock is listed on The Nasdaq National Market under the symbol
"PRGX." On July 25, 2001, the last full trading day before the public           
announcement of the proposed acquisitions, the last sale price per PRG common   
share on Nasdaq was $10.51. On December 10, 2001, the most recent practicable   
date prior to the filing of this proxy statement, the last sale price per PRG   
common share on Nasdaq was $7.76. HSA-Texas' and its affiliates' common stock is
not publicly traded.                                                            

UNAUDITED COMPARATIVE PER SHARE DATA                                            

  The following summary presents per share information for PRG, HSA-Texas,
HSA-Singapore, HSA-Asia, HSA-Australia and HSA-Canada on an historical, pro     
forma combined and pro forma diluted equivalent basis for the periods and as of 
the dates indicated below. The pro forma information gives effect to the        
proposed acquisitions using the purchase method of accounting. This information 
should be read in conjunction with HSA-Texas' historical financial statements   
and related notes and the pro forma combined financial data included elsewhere  
or incorporated by reference in this proxy statement. The pro forma information 
should not be relied upon as being indicative of the historical results that the
companies would have had if the proposed acquisitions had occurred before such  
periods or the future results that the companies will experience after the      
proposed acquisitions.                                                          

The PRG pro forma combined income (loss) per diluted share has been   
computed based on the diluted number of outstanding shares of PRG, adjusted for 
the PRG common stock to be issued in the proposed acquisitions of HSA-Texas,    
HSA-Singapore, HSA-Asia, HSA-Australia, and HSA-Canada. The pro forma equivalent
income (loss) from continuing operations per share of the acquired companies is 
based on the pro forma income from continuing operations per fully diluted      
common share of PRG multiplied by the estimated number of shares of PRG common  
stock to which each holder of one share of each of the acquired companies'      
common stock will be entitled upon completion of the proposed acquisitions, as  
follows:                                                                        

                                                                [Download Table]
                                                                          
HSA-Texas(1)...............................................    1.71 shares
HSA-Singapore(2)...........................................   15.35 shares
HSA-Asia(2)................................................  752.34 shares
HSA-Australia(2)...........................................  245.66 shares
HSA-Canada(2)..............................................  307.08 shares

---------------                                                                 

(1) Assumes that at closing HSA-Texas will have 2,307,482 outstanding voting    
 shares of common stock, 6,435,383 outstanding shares of non-voting common
stock, 1,133,423 shares subject to outstanding options and 64,569       
outstanding SARs, and that the PRG "average price" is $7.764.           

(2) Assumes that the number of outstanding shares at closing will be 102 shares 
of HSA-Singapore common stock, 100 shares of HSA-Asia common stock,     
 consisting of 2 outstanding "A" shares of common stock and 98 outstanding
  "B" shares of common stock, 1,000 shares of HSA-Australia common stock and
1,000 shares of HSA-Canada common stock.                                

    PRG, HSA-Texas and the affiliated foreign operating companies historically
have not paid cash dividends on common shares. PRG intends to retain all of its 
earnings for the future operations and growth of its business and does not      
intend to pay cash dividends in the foreseeable future. PRG is prohibited from  
paying dividends by its credit facility.                                        

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     The PRG pro forma combined book value per share is based upon the pro forma
combined equity of PRG, divided by the pro forma number of outstanding shares of
PRG common stock as of September 30, 2001. The pro forma equivalent book value  
per share of the acquired companies is based on the pro forma book value per    
share of PRG multiplied by the estimated number of shares of PRG common stock to
which each holder of one share of each acquired company's common stock will be  
entitled upon completion of the proposed acquisitions, as listed above.         

  The pro forma combined and pro forma equivalent amounts may vary, based,
with respect to the HSA-Texas amounts, upon the closing price of PRG common     
stock on the effective date and the other assumptions set forth above in        
footnotes 1 and 2.                                                              

                                                        [Enlarge/Download Table]

                                                                YEAR ENDED      NINE MONTHS ENDED 
                                                             DECEMBER 31, 2000  SEPTEMBER 30, 2001
                                                             -----------------  ------------------
                                                                                                  
Statement of Operations Data:                                                                     
  Income (loss) from continuing operations per weighted                                           
     average diluted share:                                                                       
                         HISTORICAL                                                               
     PRG....................................................    $      0.11         $     0.09    
     HSA-Texas..............................................          (0.38)              0.19    
     HSA-Singapore..........................................     (18,008.40)           (753.36)   
     HSA-Asia...............................................          35.49            (685.26)   
     HSA-Australia..........................................        (320.96)           (242.62)   
     HSA-Canada.............................................        (170.13)            113.96    

                     PRO FORMA COMBINED                                                           
     PRG....................................................           0.02               0.07    

                    PRO FORMA EQUIVALENT                                                          
     HSA-Texas..............................................           0.03               0.12    
     HSA-Singapore..........................................           0.31               1.07    
     HSA-Asia...............................................          15.05              52.66    
     HSA-Australia..........................................           4.91              17.20    
     HSA-Canada.............................................           6.14              21.50    

                                                                [Download Table]

                                                             AS OF SEPTEMBER 30,
                                                                    2001        
                                                             -------------------
                                                                                
Balance Sheet Data:                                                             
  Net Book Value Per Share:                                                     
                         HISTORICAL                                             
     PRG....................................................     $      4.59    
     HSA-Texas..............................................            1.15    
     HSA-Singapore..........................................       (2,347.15)   
     HSA-Asia...............................................      (17,413.35)   
     HSA-Australia..........................................         (277.75)   
     HSA-Canada.............................................         (418.67)   

                     PRO FORMA COMBINED                                         
     PRG....................................................            5.23    

                    PRO FORMA EQUIVALENT                                        
     HSA-Texas..............................................            8.94    
     HSA-Singapore..........................................           80.28    
     HSA-Asia...............................................        3,934.74    
     HSA-Australia..........................................        1,284.80    
     HSA-Canada.............................................        1,606.03    

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The pro forma data above assume that the shares of PRG common stock   
received by HSA-Texas will be available for distribution to the HSA-Texas       
shareholders, and not subject to claims of creditors of HSA-Texas. See "Material
Terms of the Asset Agreement -- Retained Liabilities" for a description of      
liabilities to be retained by HSA-Texas after the proposed acquisitions.        

HISTORICAL MARKET PRICES OF PRG COMMON STOCK

     The table below sets forth for the periods presented the high and low sales
prices per share for PRG common stock, as reported on The Nasdaq National       
Market, adjusted for the 3-for-2 stock split effected by a stock dividend paid  
on August 17, 1999. PRG has not paid cash dividends on its common stock since   
its initial public offering on March 26, 1996 and does not intend to pay cash   
dividends in the foreseeable future. Moreover, restrictive covenants included in
PRG's bank credit facility prohibit payment of cash dividends.                  

                                                                [Download Table]

                                                               COMMON STOCK  
                                                                  PRICES     
                                                              ---------------
                                                               HIGH     LOW  
                                                              ------   ------
                                                                             
YEAR ENDED DECEMBER 31, 1999:                                                
  First Quarter.............................................  $26.67   $18.75
  Second Quarter............................................   32.25    22.42
  Third Quarter.............................................   45.50    24.83
  Fourth Quarter............................................   47.50    23.00
YEAR ENDED DECEMBER 31, 2000:                                                
  First Quarter.............................................  $34.38   $14.75
  Second Quarter............................................   20.56    13.00
  Third Quarter.............................................   18.81     7.88
  Fourth Quarter............................................    9.91     3.06
YEAR ENDED DECEMBER 31, 2001:                                                
  First Quarter.............................................  $ 7.67   $ 4.81
  Second Quarter............................................   14.00     4.88
  Third Quarter.............................................   16.10     9.18
  Fourth Quarter (through December 10, 2001)................    9.80     4.20

  As of December 3, 2001, there were 48,797,620 shares of PRG common stock
outstanding, which were owned by 338 holders of record.                         

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PRG SELECTED CONSOLIDATED FINANCIAL INFORMATION 

     The following table sets forth selected consolidated financial data for PRG
as of and for the five years ended December 31, 2000 and as of September 30,    
2001 and for the nine months ended September 30, 2001 and 2000. Such historical 
consolidated financial data as of and for the five years ended December 31, 2000
have been derived from PRG's Consolidated Financial Statements and Notes        
thereto. The Consolidated Balance Sheets as of December 31, 2000 and 1999, and  
the related Consolidated Statements of Operations, Shareholders' Equity and Cash
Flows for each of the years in the three-year period ended December 31, 2000 and
the independent auditors' report thereon, which in each such year is based      
partially upon the report of other auditors and refers to changes in accounting 
for revenue recognition in 2000 and 1999, are incorporated by reference in this 
proxy statement. Such historical consolidated financial data as of September 30,
2001 and for the nine months ended September 30, 2001 and 2000 are derived from 
PRG's unaudited Consolidated Financial Statements, and include, in the opinion  
of management, all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the data for the periods. In March 2001, PRG        
initiated a strategic realignment designed to enhance PRG's financial position  
and clarify its investment and operating strategy by focusing primarily on its  
core Accounts Payable business. Under this strategic realignment initiative, PRG
intends to divest the following non-core businesses: Meridian VAT Reclaim       
("Meridian") within the former Taxation Service segment, the Logistics          
Management Services segment, the Communications Services segment and the Ship   
and Debit ("Ship & Debit") division within the Accounts Payable Services        
segment. Selected Consolidated Financial Data for PRG has been restated to      
reflect Meridian, Logistics Management Services, Communications Services, and   
Ship & Debit as discontinued operations for all periods presented. In addition, 
in December 2001, the executive committee of PRG's board of directors authorized
the sale of PRG's French Taxation Services business. As a result of the         
foregoing, the French Taxation Services business has been classified as a       
discontinued operation and all historical and pro forma financial information   
contained herein has been restated to remove this business from continuing      
operations. Selected Consolidated Financial data for PRG was retroactively      
restated, as required under accounting principles generally accepted in the     
United States of America, to include the accounts of Meridian and PRS           
International, Ltd. which were acquired in August 1999 and accounted for under  
the pooling-of-interests method. Further, PRG made the decision in the second   
quarter of 1999 to change its method of revenue recognition retroactively       
effective to January 1, 1999 to recognize revenue on all of its then existing   
operations when it invoices clients for its fees. PRG had previously recognized 
revenue from services provided to its historical client base (consisting        
primarily of retailers, wholesale distributors and governmental entities) at the
time overpayment claims were presented to and approved by its clients. In       
accordance with the applicable requirements of accounting principles generally  
accepted in the United States of America, consolidated financial statements for 
periods prior to 1999 have not been restated. Due to accounting changes, certain
financial statement amounts related to continuing operations for 1999 will not  
be directly comparable to corresponding amounts for 1998 and prior years, and   
certain financial statement amounts related to discontinued operations for 2000 
will not be directly comparable to corresponding amounts for 1999 and prior     
years. The data presented below should be read in conjunction with the          
Consolidated Financial Statements and Notes thereto incorporated in this proxy  
statement by reference to PRG's Form 8-K filed on December   , 2001.            

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 

                                                        [Enlarge/Download Table]

                                             NINE MONTHS                                                                  
                                                ENDED                                                                     
                                            SEPTEMBER 30,                       YEARS ENDED DECEMBER 31,                  
                                         -------------------   ---------------------------------------------------------- 
                                           2001       2000     2000(13)   1999(2)(10)   1998(1)(3)   1997(1)(4)   1996(1) 
                                         --------   --------   --------   -----------   ----------   ----------   ------- 
                                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)                       
                                                                                                                          
STATEMENTS OF OPERATIONS DATA:                                                                                            
Revenues...............................  $186,299   $190,287   $255,110    $246,378      $180,903     $118,539    $85,439 
Cost of revenues.......................   100,041    101,736   139,430      132,115        97,268       62,572     45,227 
Selling, general and administrative                                                                                       
  expense(5)...........................    74,521     66,867   100,435       78,757        60,900       41,055     28,925 
                                         --------   --------   --------    --------      --------     --------    ------- 
  Operating income.....................    11,737     21,684    15,245       35,506        22,735       14,912     11,287 
Interest (expense), net................    (3,900)    (3,762)   (5,270)      (2,234)         (403)           3        (90)
                                         --------   --------   --------    --------      --------     --------    ------- 
  Earnings from continuing operations                                                                                     
    before income taxes, discontinued                                                                                     
    operations and cumulative effect of                                                                                   
    accounting change..................     7,837     17,922     9,975       33,272        22,332       14,915     11,197 
Income taxes(6)........................     3,448      7,886     4,389       13,642         8,263        5,519      7,799 
                                         --------   --------   --------    --------      --------     --------    ------- 
  Earnings from continuing operations                                                                                     
    before discontinued operations and                                                                                    
    cumulative effect of accounting                                                                                       
    change.............................     4,389     10,036     5,586       19,630        14,069        9,396      3,398 
Discontinued operations:                                                                                                  
  Earnings (loss) from discontinued                                                                                       
    operations, net of income taxes....    (1,303)   (22,755)  (44,714)       7,806           565          (32)       445 
  Loss on disposal from discontinued                                                                                      
    operations including operating                                                                                        
    results from phase out period, net                                                                                    
    of income taxes(11)................   (31,000)        --        --           --            --           --         -- 
                                         --------   --------   --------    --------      --------     --------    ------- 
  Earnings (loss) from discontinued                                                                                       
    operations.........................   (32,303)   (22,755)  (44,714)       7,806           565          (32)       445 
                                         --------   --------   --------    --------      --------     --------    ------- 
  Earnings (loss) before cumulative                                                                                       
    effect of accounting change........   (27,914)   (12,719)  (39,128)      27,436        14,634        9,364      3,843 
Cumulative effect of accounting                                                                                           
  change...............................        --         --        --      (29,195)           --           --         -- 
                                         --------   --------   --------    --------      --------     --------    ------- 
        Net earnings (loss)............  $(27,914)  $(12,719)  $(39,128)   $ (1,759)     $ 14,634     $  9,364    $ 3,843 
                                         ========   ========   ========    ========      ========     ========    ======= 
Cash dividends per share(12)...........  $     --   $     --   $    --     $   0.01      $   0.01     $   0.01    $  0.16 
                                         ========   ========   ========    ========      ========     ========    ======= 
Basic earnings (loss) per share:                                                                                          
  Earnings from continuing operations                                                                                     
    before discontinued operations and                                                                                    
    cumulative effect of accounting                                                                                       
    change.............................  $   0.09   $   0.20   $  0.11     $   0.41      $   0.36     $   0.28    $  0.11 
  Discontinued operations..............     (0.67)     (0.46)    (0.91)        0.16          0.01           --       0.02 
  Cumulative effect of accounting                                                                                         
    change.............................        --         --        --        (0.61)           --           --         -- 
                                         --------   --------   --------    --------      --------     --------    ------- 
        Net earnings (loss)............  $  (0.58)  $  (0.26)  $ (0.80)    $  (0.04)     $   0.37     $   0.28    $  0.13 
                                         ========   ========   ========    ========      ========     ========    ======= 
Diluted earnings (loss) per share:                                                                                        
  Earnings from continuing operations                                                                                     
    before discontinued operations and                                                                                    
    cumulative effect of accounting                                                                                       
    change.............................  $   0.09   $   0.20   $  0.11     $   0.40      $   0.35     $   0.27    $  0.11 
  Discontinued operations..............     (0.66)     (0.45)    (0.90)        0.15          0.01           --       0.01 
  Cumulative effect of accounting                                                                                         
    change.............................        --         --        --        (0.59)           --           --         -- 
                                         --------   --------   --------    --------      --------     --------    ------- 
        Net earnings (loss)............  $  (0.57)  $  (0.25)  $ (0.79)    $  (0.04)     $   0.36     $   0.27    $  0.12 
                                         ========   ========   ========    ========      ========     ========    ======= 

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 

                                                        [Enlarge/Download Table]

                                                                                DECEMBER 31,                          
                                        SEPTEMBER 30,  ---------------------------------------------------------------
                                            2001       2000(13)   1999(2)(7)   1998(1)(3)(8)   1997(1)(4)   1996(1)(9)
                                        -------------  --------   ----------   -------------   ----------   ----------
                                                                       (IN THOUSANDS)                                 
                                                                                                                      
BALANCE SHEET DATA:                                                                                                   
  Cash and cash equivalents............    $  6,700    $16,127     $ 14,150      $ 20,016       $ 13,664     $17,056  
  Working capital......................     137,059    208,308      177,072        85,592         55,172      36,388  
  Total assets.........................     408,704    453,232      460,757       349,430        102,074      51,936  
  Long-term debt, excluding current                                                                                   
    installments and loans from                                                                                       
    shareholders.......................     100,125    153,361       92,811       111,132         24,199         716  
  Total shareholders' equity...........     223,925    247,529      294,970       143,828         45,537      23,570  

---------------                                                                 

(1) Selected consolidated financial data for PRG as of and for the three years
   ending December 31, 1998, as previously reported, have been retroactively
     restated, as required under accounting principles generally accepted in the
United States of America, to include the accounts of Meridian VAT     
     Corporation Limited and PRS International, Ltd. which were each acquired in
  August 1999 and accounted for under the pooling-of-interests method. See
   Notes 2 and 10 of Notes to Consolidated Financial Statements incorporated
  in this proxy statement by reference to PRG's Form 8-K filed on December
, 2001.                                                           

(2) During 1999, PRG completed six acquisitions accounted for as purchases    
consisting of Payment Technologies, Inc. (April), Invoice and Tariff  
    Management Group, LLC (June), AP SA (October), Freight Rate Services, Inc.
  (December), Integrated Systems Consultants, Inc. (December) and minority
interests in three subsidiaries of Meridian VAT Corporation Limited   
(December). See Notes 2 and 10 of Notes to Consolidated Financial     
    Statements incorporated in this proxy statement by reference to PRG's Form
8-K filed on December   , 2001.                                       

(3) During 1998, PRG completed eight acquisitions accounted for as purchases  
consisting of Precision Data Link (March), The Medallion Group (June),
     Novexel S.A. (July), Loder, Drew & Associates, Inc. (August), Cost Recovery
Professionals Pty Ltd (September), Robert Beck & Associates, Inc. and 
  related businesses (October), IP Strategies SA (November) and Industrial
Traffic Consultants, Inc. (December). See Notes 2 and 10 of Notes to  
   Consolidated Financial Statements incorporated in this proxy statement by
reference to PRG's Form 8-K filed on December   , 2001.               

(4) During 1997, PRG completed four acquisitions accounted for as purchases   
     consisting of Accounts Payable Recovery Services, Inc. (February), The Hale
    Group (May), 98.4% of Financiere Alma, S.A. and its subsidiaries (October)
and TradeCheck, LLC (November), and one acquisition accounted for as a
  pooling of interests, Shaps Group, Inc. (January). See Notes 2 and 10 of
Notes to Consolidated Financial Statements incorporated in this proxy 
statement by reference to PRG's Form 8-K filed on December   , 2001.  

(5) Includes merger-related charges relating to a business acquired under the 
   pooling-of-interests accounting method and certain restructuring charges.
   See Note 16 of Notes to Consolidated Financial Statements incorporated in
   this proxy statement by reference to PRG's Form 8-K filed on December   ,
2001.                                                                 

(6) In connection with PRG's March 1996 initial public offering, all domestic 
entities became C corporations. As a result of these conversions to C 
   corporations, PRG incurred a charge to operations of $3.7 million in 1996
     for cumulative deferred income taxes. PRG's 1996 provision for income taxes
 of $7.8 million consists of the above-mentioned $3.7 million charge for
cumulative deferred income taxes combined with $4.1 million in tax    
    provisions for the three quarters subsequent to the March 26, 1996 initial
public offering.                                                      

(7) Balance Sheet Data as of December 31, 1999 reflect the receipt of $118.5  
    million in net proceeds from PRG's January 1999 follow-on public offering.
  See Note 8 of Notes to Consolidated Financial Statements incorporated in
   this proxy statement by reference to PRG's Form 8-K filed on December   ,
2001.                                                                 

(8) Balance Sheet Data as of December 31, 1998 reflect the receipt of $81.2   
  million in net proceeds from PRG's March 1998 follow-on public offering.
See Note 8 of Notes to Consolidated Financial                         

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    Statements incorporated in this proxy statement by reference to PRG's Form
8-K filed on December   , 2001.                                       

(9) Balance Sheet Data as of December 31, 1996 reflect the receipt of $34.8   
million in net proceeds from PRG's March 1996 initial public offering 
   together with the partial use of such proceeds to repay substantially all
debt obligations other than certain convertible debentures which were 
converted to equity immediately prior to the offering.                

(10) In 1999, PRG changed its method of accounting for revenue recognition. See 
Notes 2(b) and 1(d) of Notes to Consolidated Financial Statements     
   incorporated in this proxy statement by reference to PRG's Form 8-K filed
on December   , 2001.                                                 

(11) In December 2001, PRG authorized the sale of its French Taxation Services  
    business. As a result, PRG will recognize a loss on disposal of the French
 Taxation Services business of approximately $54.0 million in the fourth
quarter of 2001, based on December 3, 2001 exchange rates.            

(12) Cash dividends per share represent distributions to shareholders of PRG    
prior to PRG's initial public offering and distributions to the       
shareholders of PRS International, Ltd.                               

(13) During 2000, PRG completed two acquisitions accounted for as purchases     
     consisting of The Right Answer, Inc. (March) and TSL Services, Inc. (June).
  See Note 2 of Notes to Consolidated Financial Statements incorporated in
   this proxy statement by reference to PRG's Form 8-K filed on December   ,
2001.                                                                 

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HSA-TEXAS SELECTED COMBINED FINANCIAL INFORMATION 

     The following selected historical combined financial data should be read in
conjunction with HSA-Texas' combined financial statements contained in this     
proxy statement. The statement of operations data for fiscal years 1998 through 
2000 and the balance sheet data as of December 31, 2000 and 1999 have been      
derived from HSA-Texas' audited combined financial statements, and the selected 
combined financial data as of December 31, 1998 and September 30, 2001 and for  
the nine months ended September 30, 2001 and 2000 have been derived from        
HSA-Texas' unaudited combined financial statements and include, in the opinion  
of management of HSA-Texas, all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the data for these periods. Certain    
reclassifications have been made to the 2000, 1999 and 1998 amounts to conform  
to the presentation in 2001. The combined financial data included herein may not
necessarily be indicative of the financial position or results of operations of 
HSA-Texas in the future. Selected financial data as of, and for the years ended,
December 31, 1996 and 1997, have not been presented, due to HSA-Texas' inability
to obtain from its former licensees a significant portion of the necessary      
financial information required to prepare financial statements for those years  
in conformity with accounting principles generally accepted in the United States
of America. In addition, HSA-Texas does not believe that such selected financial
data would be material to evaluation of the information regarding HSA-Texas     
contained in this proxy statement because it relates to periods in which the    
majority of HSA-Texas' operations were conducted by independently owned         
licensees. See "Business of HSA-Texas."                                         

                                                        [Enlarge/Download Table]

                                               NINE MONTHS ENDED                                        
                                         -----------------------------      YEARS ENDED DECEMBER 31,    
                                         SEPTEMBER 30,   SEPTEMBER 30,   ------------------------------ 
                                             2001            2000          2000       1999       1998   
                                         -------------   -------------   --------   --------   -------- 
                                                                 (IN THOUSANDS)                         
                                                                                                        
STATEMENTS OF OPERATIONS DATA:                                                                          
Revenues................................   $100,761        $102,542      $138,708   $133,789   $117,599 
Cost of revenues........................     65,651          67,364        91,222     94,071     89,849 
Selling, general and administrative                                                                     
  expenses..............................     35,564          34,396        48,324     37,760     26,223 
                                           --------        --------      --------   --------   -------- 
  Operating income (loss)...............       (454)            782          (838)     1,958      1,527 
Interest income (expense), net..........     (2,277)         (2,240)       (2,938)    (2,243)    (1,770)
Settlement of litigation................      3,650              --            --         --         -- 
Other income (expense), net.............         10             (72)           47        (33)       264 
                                           --------        --------      --------   --------   -------- 
  Income (loss) before income taxes.....        929          (1,530)       (3,729)      (318)        21 
Foreign tax benefit(1)..................        512              --            --         --         -- 
                                           --------        --------      --------   --------   -------- 
  Net income (loss).....................   $  1,441        $ (1,530)     $ (3,729)  $   (318)  $     21 
                                           ========        ========      ========   ========   ======== 

                                                        [Enlarge/Download Table]

                                                                              DECEMBER 31,        
                                                       SEPTEMBER 30,   ---------------------------
                                                           2001         2000      1999      1998  
                                                       -------------   -------   -------   -------
                                                                     (IN THOUSANDS)               
                                                                                                  
BALANCE SHEET DATA:                                                                               
Cash and cash equivalents.............................    $ 6,071      $ 2,179   $ 3,910   $ 1,980
Working capital (deficit).............................         48       (3,669)      997     9,294
Total assets..........................................     69,893       60,668    48,956    45,330
Long-term debt, excluding current installments........     33,763       30,074    23,125    27,022
Total stockholders' equity............................      7,396          186     5,701     5,627

---------------                                                                 

(1) HSA-Texas has been a subchapter S corporation for all periods presented and 
    therefore has no income tax expense other than a foreign tax benefit item in
2001.                                                                   

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 

SUMMARY SELECTED UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION

The following summary selected unaudited pro forma combined financial 
information for PRG has been derived from the historical consolidated financial 
statements contained in this proxy statement which give effect to the           
acquisition of the HSA-Texas assets and substantially all of the outstanding    
stock of HSA-Singapore and all of the outstanding stock of HSA-Asia,            
HSA-Australia and HSA-Canada, under purchase accounting, and should be read in  
conjunction with the unaudited pro forma combined financial statements and the  
related notes contained herein. For pro forma purposes, PRG's unaudited pro     
forma combined statements of operations for the nine months ended September 30, 
2001 and the year ended December 31, 2000 are presented as if the purchase had  
occurred as of January 1, 2000, and PRG's unaudited pro forma combined balance  
sheet as of September 30, 2001 is presented as if the purchase had occurred as  
of that date.                                                                   

 The summary selected unaudited pro forma combined financial information
should be read in conjunction with PRG's unaudited consolidated financial       
statements and related notes included in PRG's Form 8-K filed on December   ,   
2001 and the audited consolidated financial statements and related notes in     
PRG's Form 8-K filed on December   , 2001, which are incorporated by reference  
herein. The pro forma information is based on estimates and assumptions and may 
not necessarily be indicative of what PRG's results of operations or financial  
position would have been had the proposed acquisitions been effected as of and  
for the periods presented, nor is such information necessarily indicative of    
PRG's results of operations or financial position for any future period or date.

                                                        [Enlarge/Download Table]

                                                                                     NINE MONTHS  
                                                               YEAR ENDED               ENDED     
                                                              DECEMBER 31,          SEPTEMBER 30, 
                                                                  2000                  2001      
                                                             --------------        ---------------
                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                                  
Revenues....................................................    $393,818               $287,060   
Cost of revenues............................................     230,652                165,692   
Selling, general and administrative expenses................     152,841                111,381   
                                                                --------               --------   
  Operating income..........................................      10,325                  9,987   
Interest (expense), net.....................................      (7,964)                (5,658)  
Settlement of litigation income.............................          --                  3,650   
                                                                --------               --------   
  Earnings from continuing operations before income taxes...       2,361                  7,979   
Income taxes................................................       1,039                  3,511   
                                                                --------               --------   
  Earnings from continuing operations.......................    $  1,322               $  4,468   
                                                                ========               ========   
Basic earnings per share -- earnings from continuing                                              
  operations................................................    $   0.02               $   0.07   
                                                                ========               ========   
Diluted earnings per share -- earnings from continuing                                            
  operations................................................    $   0.02               $   0.07   
                                                                ========               ========   
Shares used for basic per share calculation.................      63,824                 63,135   
Shares used for diluted per share calculation...............      65,900                 64,769   

                                                                [Download Table]

                                                              SEPTEMBER 30, 2001
                                                              ------------------
                                                                                
BALANCE SHEET DATA:                                                             
Cash and cash equivalents...................................       $  5,421     
Working capital.............................................         89,664     
Long-term debt, excluding current installments..............        160,644     
Total shareholders' equity..................................        333,658     

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SPECIAL CONSIDERATIONS

You should consider the following together with the other information 
included or incorporated by reference in this proxy statement.                  

SPECIAL CONSIDERATIONS RELATING TO THE PROPOSED ACQUISITIONS                    

     COMPLETION OF THE PROPOSED ACQUISITIONS WILL RESULT IN SUBSTANTIAL DILUTION
TO SHAREHOLDINGS OF CURRENT PRG SHAREHOLDERS.                                   

     As of December 3, 2001, PRG had outstanding 48,797,620 shares of its common
stock. If the proposed acquisitions are completed and PRG issues the maximum    
aggregate consideration of approximately 15,353,846 shares of PRG common stock  
in exchange for substantially all of the assets of HSA-Texas and substantially  
all of the outstanding stock of the four affiliated foreign operating companies,
immediately following the proposed acquisitions affiliates of HSA-Texas will own
approximately 23.5% of PRG's outstanding common stock, and the ownership of     
current PRG shareholders will be reduced to approximately 76.5%.                

   COMPLETION OF THE PROPOSED ACQUISITIONS COULD RESULT IN MATERIAL DILUTION
TO PRG'S EARNINGS PER SHARE.                                                    

   PRG's unaudited pro forma combined financial statements contained in this
proxy statement, which give effect to the proposed acquisitions as if they had  
closed on January 1, 2000, show a reduction of $.09 per share in PRG's pro forma
combined basic and diluted earnings per share from continuing operations for the
year ended December 31, 2000 as compared to its historical audited results for  
the same period, and a reduction of $.02 per share in PRG's unaudited pro forma 
combined basic and diluted earnings per share from continuing operations for the
nine months ended September 30, 2001 as compared to unaudited historical numbers
for the comparable period. PRG's earnings from continuing operations for the    
year ended December 31, 2000 were approximately $5.6 million as compared to pro 
forma combined earnings from continuing operations of approximately $1.3 million
for the same period, and earnings from continuing operations for the nine months
ended September 30, 2001 were approximately $4.4 million as compared to pro     
forma combined earnings from continuing operations of approximately $4.5 million
for the same period. It is possible that PRG's future earnings per share will be
materially diluted as a result of the completion of the proposed acquisitions.  
If the proposed acquisitions have a material negative impact on PRG's earnings  
per share, the trading price of PRG's common stock may be materially adversely  
affected.                                                                       

    IF THE ASSET AGREEMENT IS TERMINATED AFTER PRG MAILS THIS PROXY STATEMENT,
PRG WILL INCUR SIGNIFICANT COSTS.                                               

   If the asset agreement is terminated after PRG mails this proxy statement
to its shareholders because:                                                    

- PRG is unable to obtain the approval of its shareholders;           

  - PRG materially breaches its representations and warranties or fails to
    perform its covenants under the asset agreement and any such breach or
   failure is not cured by the earlier of 10 days from notice thereof or
March 31, 2002; or                                                

     - PRG has not held a special meeting of its shareholders by March 31, 2002;

then PRG will be obligated to reimburse HSA-Texas for all reasonable fees and   
expenses, including reasonable attorneys' fees, accountants' fees, financial    
advisory fees, broker fees and filing fees, that have been paid by or on behalf 
of HSA-Texas in connection with the preparation and negotiation of the proposed 
acquisitions and related transactions.                                          

   If the asset agreement is terminated after PRG mails this proxy statement
to its shareholders because:                                                    

- the PRG board of directors or any committee thereof approves or     
       recommends to its shareholders any alternative acquisition proposal which
   does not include the concurrent acquisition of HSA-Texas and the four
       affiliated foreign operating companies or their assets by the third party
as if HSA-Texas and                                               

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       the four affiliated foreign operating companies were a part of PRG at the
completion of such alternative acquisition proposal; or           

    - the PRG board of directors or any committee thereof shall for any reason
      have withdrawn, or shall have amended or modified in a manner adverse to
      HSA-Texas, the PRG board's recommendations of the proposed acquisitions;
or                                                                

- a tender or exchange offer to acquire 50% or more of the outstanding
    shares of PRG common stock shall have been commenced by a third party,
      and PRG shall not, within 10 business days after such tender or exchange
       offer is first published or given to its shareholders, issued a statement
recommending rejection of such tender or exchange offer,          

then PRG will be obligated to pay HSA-Texas $2.0 million plus all transaction   
expenses incurred by HSA-Texas and its shareholders, including all reasonable   
out of pocket legal and accounting fees, all broker and financial advisor fees, 
all HSR fees, and all SEC fees.                                                 

     In addition, if the proposed acquisitions are not completed for any reason,
PRG will incur a substantial and immediate charge to earnings, estimated to be  
within a range of $9.0 million to $11.0 million, for all cumulative out of      
pocket business combination costs related to the proposed acquisitions.         

THE PROPOSED ACQUISITIONS ARE ANTICIPATED TO RESULT IN LOWER COMBINED 
REVENUES FROM CLIENTS WITH RESPECT TO WHICH PRG AND HSA-TEXAS TOGETHER HAVE HAD 
THE FIRST AND SECOND AUDIT POSITIONS.                                           

    Some of PRG's clients require that two independent audit companies perform
recovery audits of their payment transactions in a first recovery audit followed
by a second recovery audit. In situations where both PRG and HSA-Texas now      
perform both the first and second recovery audit services, it is possible that  
the client will, upon PRG's acquisition of HSA-Texas, retain another company for
the first or second audit position in place of them. PRG estimates that there   
are 38 clients with respect to which PRG and HSA-Texas together have had the    
first and second recovery audit positions. These clients represented            
approximately 32% of PRG's total revenues for the year ended December 31, 2000  
and approximately 50% of the total revenues of HSA-Texas for that year. After   
the combination, a substantial number of these clients may request that the     
combined company perform the first or second audits at reduced rates, or they   
may award the first or second recovery audit position to another party, rather  
than allowing the combined company to keep both positions. In either case, the  
combined revenues from these clients may be materially lower.                   

THE VALUE OF SHARES OF PRG COMMON STOCK RECEIVABLE IN THE PROPOSED    
ACQUISITIONS IS UNCERTAIN.                                                      

    Other than adjustments in the asset agreement for the "in the money" value
of outstanding options and SARs, neither the asset agreement nor the stock      
agreement provides for any adjustments in the number of shares of PRG common    
stock deliverable to HSA-Texas or the shareholders of the affiliated foreign    
operating companies as a result of fluctuations in the price of PRG common      
stock.                                                                          

     Therefore, other than as discussed above, if the market value of PRG common
stock changes significantly, there will be no change, either upward or downward,
in the aggregate number of shares of PRG common stock to be issued to HSA-Texas 
or the shareholders of the foreign operating companies. Accordingly, the effect 
of any such significant upward change in the stock price of PRG common stock    
will result in PRG paying more for the assets of HSA-Texas and the stock of the 
affiliated foreign operating companies than is presently contemplated. You      
should obtain recent market quotations for PRG common stock in order to assess  
accurately the market value of the PRG shares that will be issued in exchange   
for the HSA-Texas assets and the stock of the affiliated foreign operating      
companies. PRG cannot predict or give any assurances as to the market price of  
PRG common stock before or after the closing of the proposed acquisitions.      
Recently, the stock market and PRG's stock price have experienced extreme price 
and volume fluctuations. These market fluctuations have materially affected the 
market price of PRG common stock and may materially affect the market price of  
PRG common stock in the future.                                                 

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    FAILURE TO HIRE AND RETAIN CRITICAL HSA-TEXAS PERSONNEL COULD DIMINISH THE
BENEFITS OF THE PROPOSED ACQUISITIONS TO PRG.                                   

 The successful integration of the HSA-Texas business into PRG's current
business operations will depend in large part on PRG's ability to hire and      
retain personnel critical to the business and operations of HSA-Texas. PRG may  
be unable to retain management personnel and auditors that are critical to the  
successful operation of the HSA-Texas business, resulting in loss of key        
information, expertise or know-how and unanticipated additional recruiting and  
training costs and otherwise diminishing anticipated benefits of the proposed   
acquisitions for PRG and its shareholders. In addition, if PRG cannot           
successfully implement a revised compensation plan that reduces the compensation
level of a large number of HSA-Texas' auditors, the anticipated benefits of the 
proposed acquisitions will be diminished. Even if PRG is successful in          
implementing the revised compensation plan, some HSA-Texas auditors may elect   
not to work for PRG if their compensation is reduced.                           

   IF PRG IS NOT SUCCESSFUL IN INTEGRATING THE BUSINESS OF HSA-TEXAS AND ITS
AFFILIATED FOREIGN OPERATING COMPANIES, PRG'S OPERATIONS MAY BE ADVERSELY       
AFFECTED.                                                                       

     It is not certain that PRG and the business of HSA-Texas and its affiliated
foreign operating companies can be successfully integrated in a timely manner or
at all or that any of the anticipated benefits will be realized. The challenges 
involved in this integration include the following:                             

- retaining and integrating management and other key personnel of each
company;                                                          

- combining the corporate cultures of PRG and HSA-Texas;              

- combining service offerings effectively and quickly;                

 - transitioning HSA-Texas' auditors to PRG's information management and
compensation systems;                                             

    - integrating sales and marketing efforts so that customers can understand
and do business easily with the combined company;                 

- transitioning all worldwide facilities to common accounting and     
information technology systems; and                               

   - coordinating a large number of employees in widely dispersed operations
in the United States and several foreign countries.               

Risks from unsuccessful integration of the companies include:         

  - the impairment of relationships with employees, clients and suppliers;

   - the potential disruption of the combined company's ongoing business and
distraction of its management;                                    

   - delay in introducing new service offerings by the combined company; and

- unanticipated expenses related to integration of the companies.     

  The combined company may not succeed in addressing these risks. Further,
PRG cannot assure you that the growth rate of the combined company will equal or
exceed the historical growth rates experienced by PRG, HSA-Texas or any of its  
affiliates individually. PRG's ability to realize the anticipated benefits of   
the proposed acquisitions will depend in part on PRG's ability to integrate     
HSA-Texas' operations into PRG's current operations in a timely and efficient   
manner.                                                                         

This integration may be difficult and unpredictable because PRG's     
compensation arrangements, service offerings and processes are highly complex   
and have been developed independently from those of HSA-Texas. Successful       
integration requires coordination of different management personnel and         
auditors, as well as sales and marketing efforts and personnel. If PRG cannot   
successfully integrate the HSA-Texas assets with its operations, PRG may not    
realize the expected benefits of the proposed acquisitions.                     

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IF PRG IS NOT SUCCESSFUL IN INTEGRATING THE BUSINESS OPERATIONS OF    
HSA-TEXAS IN THE UNITED KINGDOM, PRG'S FINANCIAL RESULTS MAY BE ADVERSELY       
AFFECTED.                                                                       

HSA-Texas' operations in the United Kingdom generated revenues of     
approximately $24.4 million and operating income of approximately $1.8 million  
for its fiscal year ended April 30, 2001. PRG's ability to realize the          
anticipated benefits of the proposed acquisitions will depend in part on PRG's  
ability to integrate HSA-Texas' United Kingdom operations into PRG's current    
United Kingdom operations in a timely and efficient manner. If PRG cannot       
successfully integrate such operations with its operations, PRG may not realize 
the expected benefits of the proposed acquisitions and PRG's financial results  
may be adversely affected.                                                      

THE ACQUISITIONS BY PRG OF BUSINESSES OUTSIDE OF ITS CORE BUSINESS OF 
ACCOUNTS PAYABLE AUDITING HAVE BEEN, IN GENERAL, FINANCIALLY AND OPERATIONALLY  
UNSUCCESSFUL.                                                                   

The acquisitions by PRG of businesses outside of its core business of 
accounts payable auditing have been, in general, financially and operationally  
unsuccessful. As a result, on January 31, 2001, PRG announced that its board of 
directors had approved the sale of its Meridian VAT Reclaim business, the       
Communications Services segment, the Logistics Management Services segment, and 
the Ship and Debit division within the Accounts Payable Service segment. The    
sale of the Logistics Management Services segment was completed on October 30,  
2001. In addition, on December 10, 2001, the executive committee of the PRG     
board approved the sale for approximately 352 million French francs ($47.8      
million at December 3, 2001 exchange rates) of PRG's French Taxation Services   
segment. PRG expects to record a loss on the sale of approximately $54.0 million
in the fourth quarter of 2001, based on December 3, 2001 exchange rates. While  
PRG believes that the acquisition of HSA-Texas and its affiliates is within its 
core business, there can be no assurance that PRG will be more successful in    
achieving financial and operational success with the proposed acquisitions than 
it was in previous non-core business acquisitions.                              

THE PROPOSED ACQUISITIONS MAY FAIL TO ACHIEVE BENEFICIAL SYNERGIES.   

 PRG and HSA-Texas believe that the proposed acquisitions will result in
beneficial synergies between the parties and their respective recovery audit    
businesses. Factors that could cause the combined company to fail to achieve    
these anticipated synergies and potential benefits include:                     

- failure to retain clients of either company;                        

  - PRG's ability to timely integrate the service and sales efforts of the
combined company;                                                 

    - the risk that the combined company may lose audit contracts from clients
     for whom PRG and HSA-Texas currently serve in both the first and second
audit positions;                                                  

- failure to achieve operating and cost efficiencies in the combined  
company;                                                          

  - the risk that it may be difficult to retain key management, marketing,
and technical personnel; and                                      

- competitive conditions and cyclicality in the audit recovery market.

   Regardless of the outcome of the factors discussed above, there can be no
assurance that the anticipated synergies will be achieved. The failure to       
achieve such synergies may affect the combined company's operating results and  
efficiencies and its ability to expand into existing and new recovery audit     
markets.                                                                        

TRANSACTION COSTS OF THE PROPOSED ACQUISITIONS COULD ADVERSELY AFFECT 
COMBINED FINANCIAL RESULTS.                                                     

   PRG and HSA-Texas are expected to incur direct transaction costs of up to
approximately $15.0 million in connection with the proposed acquisitions. If the
benefits of the proposed acquisitions do not exceed the costs associated with   
the proposed acquisitions, the combined company's financial results, including  
earnings per share, could be adversely affected.                                

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SPECIAL CONSIDERATIONS RELATING TO PRG'S BUSINESS FOLLOWING THE PROPOSED        
ACQUISITIONS                                                                    

PRG HAS VIOLATED ITS DEBT COVENANTS IN THE PAST AND MAY DO SO IN THE  
FUTURE.                                                                         

    As of September 30, 2001, PRG was not in compliance with certain financial
ratio covenants in its credit facility. The existing covenant violations were   
waived by PRG's lenders in an amendment to the credit facility dated November 9,
2001. This amendment also relaxed certain financial ratio covenants for the     
fourth quarter of 2001 and each of the quarters of 2002. No assurance can be    
provided that PRG will not violate these covenants or the covenants of any      
replacement financing in the future, or that, if such violations occur, PRG's   
lenders will not elect to pursue their contractual remedies under the credit    
facility, including requiring the immediate repayment in full of all amounts    
outstanding. There can be no assurance that PRG can secure adequate or timely   
replacement financing to repay its lenders in the event of such a repayment     
demand.                                                                         

 PRG DEPENDS ON ITS LARGEST CLIENTS FOR SIGNIFICANT REVENUES, AND IF PRG
LOSES A MAJOR CLIENT, PRG'S REVENUES COULD BE ADVERSELY AFFECTED.               

PRG generates a significant portion of its revenues from its largest  
clients. For the nine month period ended September 30, 2001, PRG's two largest  
clients accounted for approximately 17.9% of PRG's revenues from continuing     
operations. For the year ended December 31, 2000, PRG's two largest clients     
accounted for approximately 16.0% of PRG's revenues from continuing operations. 
If PRG loses any major clients, PRG's results of operations could be materially 
and adversely affected by the loss of revenue, and PRG would have to seek to    
replace the lost clients with new business.                                     

    PRG'S ANNOUNCED PLANNED DIVESTITURES MAY NOT ACHIEVE ANTICIPATED BENEFITS.

PRG has announced the planned divestiture of its Meridian VAT Reclaim 
business, its Communications Services segment, its Logistics Management Services
segment, its Ship & Debit division within the Accounts Payable Services segment 
and its French Taxation Services segment. Although PRG is currently proceeding  
to complete these divestitures, there is no guaranty that they can be completed 
on a timely basis, if at all, or that the businesses to be divested can be      
disposed of at the prices PRG anticipates. If PRG is unable to divest these     
businesses, if the timing of the divestitures exceeds that anticipated, or if   
the proceeds received in the divestitures are lower than expected, PRG may not  
achieve the anticipated benefits. For example, PRG may incur additional losses  
upon completion of the divestitures, PRG may not realize the cost savings       
anticipated as a result of the divestitures and management's time and attention 
may be diverted to a greater degree than expected. In addition, the announced   
intention to dispose of these businesses may result in a diminished value of the
assets to be divested through, for example, the loss of customers or key        
personnel employed by such businesses and therefore diminish expected operating 
results in these businesses. Any of these events or others could have a material
adverse impact on PRG's business, results of operations and liquidity.          

THE SALE OF PRG'S FRENCH TAXATION SERVICES OPERATIONS WILL RESULT IN A
SUBSTANTIAL AND MATERIAL NET LOSS.                                              

    On December 3, 2001, PRG entered into an agreement, subject to approval of
PRG's board of directors, to sell its French Taxation Services business for     
approximately 352 million French francs (approximately $47.8 million at December
3, 2001 exchange rates). On December 10, 2001, the executive committee of PRG's 
board of directors ratified this agreement and authorized the sale of PRG's     
French Taxation Services segment. The sale of the French Taxation Services      
business will result in a net loss on the transaction of approximately $54.0    
million in the fourth quarter of 2001, based on December 3, 2001 exchange rates.

  AN ADVERSE JUDGMENT IN THE SECURITIES ACTION LITIGATION IN WHICH PRG AND
JOHN M. COOK ARE DEFENDANTS COULD HAVE A MATERIAL ADVERSE EFFECT ON PRG'S       
RESULTS OF OPERATIONS AND LIQUIDITY.                                            

     PRG and John M. Cook are defendants in three putative class action lawsuits
filed on June 6, 2000 in the United States District Court for the Northern      
District of Georgia, Atlanta Division, which have since been consolidated into  
one proceeding. A judgment against PRG in this case could have a material       
adverse effect on PRG's results of operations, stock price and liquidity, while 
a judgment against Mr. Cook could adversely affect his financial condition and  
therefore have a negative impact upon his performance as PRG's chief executive  
officer. Plaintiffs in this litigation have alleged in general terms that the   
defendants violated                                                             
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Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5  
promulgated thereunder by allegedly disseminating materially false and          
misleading information about a change in PRG's method of recognizing revenue and
in connection with revenue reported for a division. The plaintiffs further      
allege that these misstatements and omissions led to an artificially inflated   
price for PRG's common stock during the putative class period, which runs from  
July 19, 1999 to July 26, 2000. This case seeks an unspecified amount of        
compensatory damages, payment of litigation fees and expenses, and equitable    
and/or injunctive relief. Although PRG believes the alleged claims in this      
lawsuit are without merit and intends to defend the lawsuit vigorously, due to  
the inherent uncertainties of the litigation process and the judicial system,   
PRG is unable to predict the outcome of this litigation.                        

ADDITIONAL ACQUISITIONS OR FINANCING MAY DECREASE PRG SHAREHOLDERS'   
PERCENTAGE OWNERSHIP IN PRG AND REQUIRE PRG TO INCUR ADDITIONAL DEBT.           

 PRG may issue equity securities in future acquisitions or in connection
with future financings, including any additional financings necessary to obtain 
lender consent to the proposed acquisitions. These issuances could be dilutive  
to PRG shareholders. PRG also may incur additional debt and amortization expense
related to goodwill and other intangible assets in future acquisitions or in    
connection with debt or equity financing or a combination thereof. This         
additional debt and amortization expense may reduce significantly PRG's         
profitability and materially and adversely affect PRG's business, financial     
condition and results of operations.                                            

   PRG MAY NOT BE ABLE TO CONTINUE TO IDENTIFY A LARGER VOLUME OF RECOVERIES
EACH YEAR FOR THE CLIENTS SERVED BY PRG'S RETAIL/WHOLESALE OPERATIONS.          

     For most clients served by PRG's retail/wholesale operations, PRG typically
identifies a larger volume of recoveries each year as compared to recoveries    
realized in the immediately preceding year. There is no guaranty, however, that 
these larger recoveries will continue. If such recovery increases do not        
continue, PRG's revenues and operating results would be materially adversely    
affected. Factors that could prevent recoveries from increasing include advances
in technology which significantly reduce the levels of client overpayments or an
unexpected reversal of current trends toward the outsourcing of non-core        
competencies such as recovery audit services.                                   

   STRIKES OR OTHER EMPLOYMENT DISRUPTIONS BY OR ON THE PART OF EMPLOYEES OF
FOREIGN GOVERNMENTS WITH WHOM PRG'S FRENCH TAXATION SERVICES OPERATIONS TRANSACT
BUSINESS COULD HAVE A MATERIAL ADVERSE EFFECT ON THE REVENUES GENERATED BY PRG'S
FRENCH TAXATION SERVICES OPERATIONS.                                            

    If PRG is unable to sell its French Taxation Services business, any strike
or other disruption of employment by or on the part of the employees of the     
French government with whom PRG's French Taxation Services operations transact  
business could significantly delay the recognition of revenue by the French     
Taxation Services operations and cause PRG to fail to achieve its revenue and   
earnings estimates for one or more quarters or perhaps for an entire fiscal     
year. See "-- The sale of PRG's French Taxation Services operations will result 
in a substantial and material net loss" above.                                  

  CLIENT AND VENDOR BANKRUPTCIES AND VENDOR CHARGEBACKS COULD REDUCE PRG'S
EARNINGS.                                                                       

    PRG's clients generally operate in intensely competitive environments, and
bankruptcy filings are not uncommon. Future bankruptcy filings by one or more of
PRG's larger clients or significant vendor chargebacks by one or more of PRG's  
larger clients could have a material adverse effect on PRG's business, financial
condition and results of operations.                                            

PRG RELIES ON INTERNATIONAL OPERATIONS FOR SIGNIFICANT REVENUES.      

   In 2000, approximately 23.9% of PRG's revenues from continuing operations
and 7.8% of the aggregate revenues of HSA-Texas and its affiliates to be        
acquired by PRG were generated from international operations. International     
operations are subject to risks, including:                                     

     - political and economic instability in the international markets served by
PRG;                                                              

- difficulties in staffing and managing foreign operations and in     
collecting accounts receivable;                                   

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   - fluctuations in currency exchange rates, particularly weaknesses in the
      Euro, the pound and other currencies of countries in which PRG transacts
business, which could result in currency translation losses that  
materially reduce PRG's earnings;                                 

   - costs associated with adapting PRG's services to PRG's foreign clients'
needs;                                                            

- unexpected changes in regulatory requirements and laws;             

  - difficulties in transferring earnings from PRG foreign subsidiaries to
PRG; and                                                          

- burdens of complying with a wide variety of foreign laws and labor  
     practices, including laws that could subject certain tax recovery audit
practices to regulation as the unauthorized practice of law.      

Because PRG expects a significant portion of its revenues to come from
international operations, the occurrence of any of the above events could       
materially and adversely affect PRG's business, financial condition and results 
of operations.                                                                  

RECOVERY AUDIT SERVICES ARE NOT WIDELY USED IN INTERNATIONAL MARKETS. 

   PRG's long-term growth objectives are based in material part on achieving
significant future growth in international markets. Although PRG's recovery     
audit services constitute a generally accepted business practice among retailers
in the U.S., Canada, and Mexico, such services have not yet become widely used  
in many international markets. Prospective clients, vendors or other involved   
parties in foreign markets may not accept PRG's services. The failure of these  
parties to accept and use PRG's services could have a material adverse effect on
PRG's business, financial condition and results of operations.                  

    PRG REQUIRES SIGNIFICANT MANAGEMENT AND FINANCIAL RESOURCES TO OPERATE AND
EXPAND PRG'S RECOVERY AUDIT SERVICES INTERNATIONALLY.                           

In PRG's experience, entry into new international markets requires    
considerable management time as well as start-up expenses for market            
development, hiring and establishing office facilities. In addition, PRG has    
encountered, and expects to continue to encounter, significant expense and      
delays in expanding PRG's international operations because of language and      
cultural differences, staffing, communications and related issues. PRG generally
incurs the costs associated with international expansion before any significant 
revenues are generated. As a result, initial operations in a new market         
typically operate at low margins or may be unprofitable. Because PRG's          
international expansion strategy will require substantial financial resources,  
PRG may incur additional indebtedness or issue additional equity securities     
which could be dilutive to PRG's shareholders. In addition, financing for       
international expansion may not be available to PRG on acceptable terms and     
conditions.                                                                     

  THE LEVEL OF PRG'S ANNUAL PROFITABILITY IS SIGNIFICANTLY AFFECTED BY ITS
THIRD AND FOURTH QUARTER OPERATING RESULTS.                                     

    The purchasing and operational cycles of PRG's clients typically cause PRG
to realize higher revenues and operating income in the last two quarters of its 
fiscal year. If PRG does not continue to realize increased revenues in future   
third and fourth quarter periods, PRG's profitability for any such quarter and  
the entire year could be materially and adversely affected because selling,     
general and administrative expenses are largely fixed over the short term.      

    PRG MAY BE UNABLE TO PROTECT AND MAINTAIN THE COMPETITIVE ADVANTAGE OF ITS
PROPRIETARY TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS.                        

   PRG's operations could be materially and adversely affected if PRG is not
adequately able to protect its proprietary software, audit techniques and       
methodologies, and other proprietary intellectual property rights. PRG relies on
a combination of trade secret laws, nondisclosure and other contractual         
arrangements and technical measures to protect its proprietary rights. Although 
PRG presently holds U.S. and foreign registered trademarks and U.S. registered  
copyrights on certain of its proprietary technology, PRG may be unable to obtain
similar protection on its other intellectual property. In addition, in the case 
of foreign registered trademarks, PRG may not receive the same enforcement      
protection on its intellectual property as in the U.S.                          

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PRG generally enters into confidentiality agreements with its employees,        
consultants, clients and potential clients and limits access to, and            
distribution of, its proprietary information. Nevertheless, PRG may be unable to
deter misappropriation of its proprietary information, detect unauthorized use  
and take appropriate steps to enforce its intellectual property rights. PRG's   
competitors also may independently develop technologies that are substantially  
equivalent or superior to PRG's technology. Although PRG believes that its      
services and products do not infringe on the intellectual property rights of    
others, PRG cannot prevent someone else from asserting a claim against PRG in   
the future for violating their technology rights.                               

     PRG'S FAILURE TO RETAIN THE SERVICES OF MR. COOK COULD ADVERSELY IMPACT ITS
CONTINUED SUCCESS.                                                              

  PRG's continued success depends largely on the efforts and skills of its
executive officers and key employees, particularly John M. Cook. PRG has entered
into employment agreements with Mr. Cook and other members of management. PRG   
also maintains key man life insurance policies in the aggregate amount of $13.3 
million on the life of Mr. Cook. The loss of the services of Mr. Cook could     
materially adversely affect the combined company's business, financial condition
and results of operations.                                                      

PRG MAY NOT BE ABLE TO CONTINUE TO COMPETE SUCCESSFULLY WITH OTHER    
BUSINESSES OFFERING RECOVERY AUDIT SERVICES.                                    

The recovery audit business is highly competitive. PRG's principal    
competitors for accounts payable recovery audit services include many local and 
regional firms. PRG's competitors for tax recovery audit services in France     
include major international accounting firms, tax attorneys and several smaller 
tax recovery audit firms. Also, PRG believes that the major international       
accounting firms or their former consulting units that have been spun-off or    
divested may become formidable competitors in the future. PRG is uncertain      
whether it can continue to compete successfully with its competitors. In        
addition, PRG's profit margins could decline because of competitive pricing     
pressures that may have a material adverse effect on the combined company's     
business, financial condition and results of operations.                        

    PRG'S ARTICLES OF INCORPORATION, BYLAWS, AND SHAREHOLDERS' RIGHTS PLAN AND
GEORGIA LAW MAY INHIBIT A TAKEOVER OF PRG.                                      

PRG's articles of incorporation and bylaws and Georgia law contain    
provisions that may delay, deter or inhibit a future acquisition of PRG not     
approved by PRG's board of directors. This could occur even if PRG shareholders 
are offered an attractive value for their shares or if a substantial number or  
even a majority of PRG shareholders believe the takeover is in their best       
interest. These provisions are intended to encourage any person interested in   
acquiring PRG to negotiate with and obtain the approval of PRG's board of       
directors in connection with the transaction. Provisions that could delay, deter
or inhibit a future acquisition include the following:                          

- a staggered board of directors;                                     

    - specified requirements for calling special meetings of shareholders; and

- the ability of the board of directors to consider the interests of  
      various constituencies, including PRG's employees, clients and creditors
and the local community.                                          

     PRG's articles of incorporation also permit the board of directors to issue
shares of preferred stock with such designations, powers, preferences and rights
as it determines, without any further vote or action by PRG's shareholders. In  
addition, PRG has in place a "poison pill" shareholders' rights plan that will  
trigger a dilutive issuance of common stock upon substantial purchases of PRG's 
common stock by a third party which are not approved by the board of directors. 
Also, the shareholders' rights plan requires approval by a majority of the      
continuing directors, as defined in the plan, to redeem the rights plan, amend  
the rights plan, or exclude a person or group who acquires beneficial ownership 
or more than 15 percent of the outstanding PRG common stock from being          
considered an acquiring person under the rights plan. These provisions also     
could discourage bids for shares of PRG's common stock at a premium and have a  
material adverse effect on the market price of PRG's shares.                    

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    THE PRICE OF PRG'S STOCK HAS BEEN VOLATILE AND COULD CONTINUE TO FLUCTUATE
SUBSTANTIALLY.                                                                  

PRG's common stock is traded on The Nasdaq National Market. The market
price of PRG's common stock has been volatile, has fluctuated substantially and 
could continue to do so, based on a variety of factors, including the following:

  - future announcements concerning PRG or its key clients or competitors;

- technological innovations;                                          

- government regulations;                                             

- litigation; or                                                      

    - changes in earnings estimates by analysts or the publication of negative
reports by analysts about PRG.                                    

   Furthermore, stock prices for many companies fluctuate widely for reasons
that may be unrelated to their operating results. These fluctuations and general
economic, political and market conditions, such as recessions or international  
currency fluctuations and demand for PRG's services, may adversely affect the   
market price of the combined company's common stock.                            

  PRG'S FURTHER EXPANSION INTO ELECTRONIC COMMERCE AUDITING STRATEGIES AND
PROCESSES MAY NOT BE PROFITABLE.                                                

     PRG anticipates a growing need for recovery auditing services among current
clients migrating to internet-based procurement, and among potential clients    
already engaged in electronic commerce transactions. In response to future      
demand for PRG's recovery auditing expertise, PRG intends to further expand into
internet technology areas in the near future and may make substantial financial 
investments to do so. The profitability of these investments can not be assured 
nor can the demand for these services be fully anticipated.                     

FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE 

PRG and HSA-Texas have made forward-looking statements in this proxy  
statement about PRG and HSA-Texas and the combined company that are subject to  
risks and uncertainties. Any statements contained in this proxy statement that  
are not statements of historical or current fact may be deemed forward-looking  
statements. Forward-looking statements may be identified by such words as       
"could," "may," "might," "will," "would," "shall," "should," "pro forma,"       
"potential," "pending," "plans," "anticipates," "believes," "estimates,"        
"expects," "intends" or similar expressions, including the negative of any of   
the foregoing. Some of the forward-looking statements contained in this proxy   
statement include:                                                              

   - statements regarding the expected completion date and purchase price of
       the acquisition of the business of Howard Schultz & Partner (Deutschland)
       GmbH, an independently owned licensee of HSA-Texas, and expected purchase
     price adjustment in the acquisition of Tamebond Ltd. and J&G Associates
Ltd.;                                                             

- statements regarding the expected assumption of debt and anticipated
transaction expenses in connection with the proposed acquisitions;

   - statements regarding expected payments at the closing to Howard Schultz
by PRG;                                                           

    - statements regarding the estimated reduction in the number of PRG shares
    to be received by HSA-Texas resulting from the "in the money" value of
all options and SARs outstanding at closing;                      

- statements regarding the potential dilutive effect of the proposed  
acquisitions on PRG's earnings per share;                         

- statements regarding the financial and operational success of the   
proposed acquisitions;                                            

- statements regarding the expected impact of the sale of PRG's French
Taxation Services operations;                                     

    - statements regarding the expected benefits and synergies of the proposed
acquisitions;                                                     

  - statements made by HSA-Texas with respect to its liquidity and capital
needs; and                                                        

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- the information concerning possible or assumed future results of    
operations of the combined company set forth under "Summary Term  
Sheet -- Questions and Answers About the Proposed Acquisitions,"  
"Additional Summary Term Sheet Information," "The Proposed        
       Acquisitions -- Background of the Proposed Acquisitions," "-- Reasons for
      the Proposed Acquisitions -- PRG's Reasons for the Proposed Acquisitions
  and Recommendations of PRG's Board of Directors," and "-- Opinion of
  PRG's Financial Advisor," "Summary Term Sheet -- The Profit Recovery
    Group International Inc. Summary Selected Unaudited Pro Forma Combined
   Financial Information," and "The Profit Recovery Group International,
Inc. and Subsidiaries Pro Forma Combined Financial Statements     
(Unaudited)."                                                     

In making these forward-looking statements, PRG believes that the     
expectations are based on reasonable assumptions. These statements are not meant
to predict future events or circumstances and might not be realized if actual   
results and events differ materially from PRG's and HSA-Texas' expectations.    
Several factors, some of which are beyond PRG's and HSA-Texas' control, which   
are discussed under the heading "Special Considerations" and elsewhere in this  
proxy statement and in the documents that PRG has incorporated by reference,    
could affect the outcome of the matters discussed in these forward-looking      
statements and the future results of PRG and the combined company after         
completion of the proposed acquisitions. These factors could cause the results  
or other outcomes to differ materially from those expressed in PRG's and        
HSA-Texas' forward-looking statements.                                          

     Given these uncertainties, you are cautioned not to place undue reliance on
forward-looking statements. PRG and HSA-Texas disclaim any obligation to        
announce publicly the results of any revisions to any of the forward-looking    
statements contained in this proxy statement to reflect future events or        
developments.                                                                   

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THE PRG SPECIAL MEETING 

PURPOSE, TIME AND PLACE                                                         

This proxy statement is being furnished to shareholders of PRG in     
connection with the solicitation of proxies by the PRG board of directors for   
use at the PRG special meeting.                                                 

The PRG special meeting will be held on January 24, 2002, at 9:00 a.m.
local time at PRG's offices, 2300 Windy Ridge Parkway, Atlanta, Georgia         
30339-8420. At the PRG special meeting, holders of PRG common stock will be     
asked to consider and vote upon a proposal to approve the proposed issuance of  
up to 15,353,846 shares of PRG common stock as consideration in connection with 
the proposed acquisitions, the issuance of options to purchase up to 1,678,826  
shares of PRG common stock in connection with the assumption of certain         
outstanding HSA-Texas options, and the election of Howard Schultz and Andrew    
Schultz as Class II directors, Nate Levine as a Class I director and Arthur     
Budge, Jr. as a Class III director, contingent upon the closing of the proposed 
acquisitions. Other than the proposal to approve the proposed share and option  
issuances and elect the nominated directors, PRG is not aware of any other      
matters that may come before the special meeting. However, PRG shareholders may 
be asked to consider and vote upon matters incidental to the business to be     
conducted at the special meeting.                                               

RECORD DATE; VOTING POWER                                                       

    The PRG board of directors has fixed the close of business on December 11,
2001 as the record date for determining the holders of PRG common stock entitled
to notice of, and to vote at, the PRG special meeting. Only holders of record of
PRG common stock at the close of business on the record date will be entitled to
notice of, and to vote at, the PRG special meeting.                             

At the close of business on the record date,      shares of PRG common
stock were issued and outstanding and entitled to vote at the PRG special       
meeting. Holders of record of PRG common stock are entitled to one vote for each
share of PRG common stock held of record on the record date on any matter which 
may properly come before the PRG special meeting. Votes may be cast at the PRG  
special meeting in person or by proxy.                                          

   The presence at the PRG special meeting, either in person or by proxy, of
the holders of a majority of the outstanding shares of the PRG common stock is  
necessary to constitute a quorum in order to transact business at the PRG       
special meeting. In the event that a quorum is not present at the PRG special   
meeting, it is expected that such meeting will be adjourned or postponed in     
order to solicit additional proxies.                                            

Assuming that a quorum is present, approval of the proposed share and 
option issuances and election of the nominated directors will require the       
affirmative vote of a majority of the shares of PRG common stock eligible to    
vote that are actually voted either in person or by proxy.                      

  Broker non-votes, i.e., proxies from brokers or nominees indicating that
such persons have not received instructions from the beneficial owners or other 
persons entitled to vote shares as to a matter with respect to which brokers or 
nominees do not have discretionary power to vote will not be considered as      
present for the purposes of establishing a quorum. Brokers who hold shares of   
PRG common stock as nominees, in the absence of instructions from the beneficial
owners, will not have discretionary authority to vote such shares for the       
approval of the proposed share and option issuances and election of the         
nominated directors. Abstentions will be counted as present for purposes of     
establishing a quorum. Any shares which are not voted due to abstentions or     
because a nominee-broker lacks discretionary authority will be disregarded and  
will have no effect on the outcome of the vote.                                 

SHARE OWNERSHIP OF MANAGEMENT                                                   

     As of the close of business on the record date, PRG directors and executive
officers and their affiliates had the right to vote approximately 8,362,531     
outstanding shares of PRG common stock, collectively representing approximately 
16.70% of PRG's outstanding shares of common stock. PRG's directors and         
executive officers are expected to vote for the approval of the proposed share  
and option issuances and the                                                    

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election of the nominated directors. As of the record date, directors and       
executive officers of PRG did not own any shares of HSA-Texas common stock.     
HSA-Texas has informed PRG that, as of the record date, directors and executive 
officers of HSA-Texas owned, beneficially or of record, 3,100 shares of PRG     
common stock.                                                                   

VOTING OF PROXIES                                                               

  Shares represented by properly executed proxies received in time for the
special meeting will be voted at the meeting in the manner specified by such    
proxies. PRG shareholders should be aware that, if their proxies are properly   
executed but do not contain voting instructions, such proxies will be voted for 
approval of the proposed share and option issuances and the election of the     
nominated directors. It is not expected that any matter other than as described 
in this proxy statement will be brought before the PRG special meeting. If      
incidental matters are properly presented before the meeting, the persons named 
in your PRG proxy will have authority to vote on such matters without consulting
you. These matters may include a proposal to adjourn or postpone the meeting in 
order to solicit additional votes in favor of the proposed acquisitions.        

    Votes cast by proxy or in person at the special meeting will be counted by
the person or persons appointed by PRG to act as election inspectors for the    
meeting. Prior to the meeting, the inspector(s) will sign an oath to perform    
their duties in an impartial manner and to the best of their abilities. The     
inspector(s) will ascertain the number of shares outstanding and the voting     
power of each of such shares, determine the shares represented at the meeting   
and the validity of proxies and ballots, count all votes and ballots and perform
certain other duties as required by law.                                        

REVOCABILITY OF PROXIES                                                         

 The grant of a proxy on the enclosed PRG proxy card does not preclude a
shareholder from voting in person. A shareholder of PRG may revoke a proxy at   
any time prior to its exercise by:                                              

  - delivering a written notice of revocation bearing a later date or time
      than the proxy, so that it is received prior to such shareholder's proxy
  being voted at the PRG special meeting, to The Profit Recovery Group
      International, Inc., 2300 Windy Ridge Parkway, Suite 100 North, Atlanta,
Georgia 30339-8426, Attention: Secretary;                         

  - delivering a duly executed proxy bearing a later date or time than the
    revoked proxy to the Secretary of PRG, so that it is received prior to
 such shareholder's proxy being voted at the PRG special meeting; or

- attending the PRG special meeting and voting in person.             

Attendance at the PRG special meeting will not by itself constitute   
revocation of a proxy, unless you cast your vote at the special meeting.        

 PRG does not expect to adjourn its special meeting for a period of time
long enough to require the setting of a new record date for the special meeting.
If an adjournment occurs, it will have no effect on the ability of PRG          
shareholders of record as of the record date to exercise their voting rights or 
to revoke any previously delivered proxies.                                     

SOLICITATION OF PROXIES                                                         

  The PRG board of directors is soliciting the accompanying proxy, and PRG
will bear the cost of the solicitation. Arrangements will be made with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of     
solicitation material to the beneficial owners of PRG common stock held of      
record by such persons, and PRG will reimburse such companies, custodians,      
nominees and fiduciaries for their reasonable out-of-pocket expenses. In        
addition to solicitation by mail, the directors, officers and employees of PRG  
may solicit proxies from shareholders by telephone, telegram or in person. Such 
persons will not receive any additional compensation for their solicitation     
activities.                                                                     

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RECOMMENDATION OF THE BOARD OF DIRECTORS                                        

     The PRG board of directors has unanimously determined that the terms of the
asset agreement and the stock agreement are fair to and in the best interests of
PRG and the PRG shareholders. Accordingly, the PRG board of directors           
unanimously recommends that PRG shareholders vote for the proposal to approve   
the proposed share and option issuances and to elect the nominated directors.   

 Your vote is very important, regardless of the number of PRG shares you
own. Please vote as soon as possible to make sure that your PRG shares are      
represented at the meeting. To vote your PRG shares, please complete, date, and 
sign the enclosed PRG proxy and mail it promptly in the postage-paid envelope   
provided, whether or not you plan to attend the meeting. You may revoke your PRG
proxy at any time before it is voted at the special meeting. If you are a holder
of record, you may also cast your vote in person at the special meeting. If your
shares are held in an account at a brokerage firm or bank, you must instruct it 
on how to vote your shares. If you do not vote, it may jeopardize PRG's ability 
to obtain a quorum, thereby resulting in a disapproval of the proposed share and
option issuances and the failure to elect the four director nominees.           

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THE PROPOSED ACQUISITIONS 

 The following discussion describes the material aspects of the proposed
acquisitions. While PRG believes that the description covers the material terms 
of the proposed acquisitions, this summary may not contain all of the           
information that is important to you. You should carefully read this entire     
proxy statement and the other documents referred to in this proxy statement for 
a more complete understanding of the proposed acquisitions.                     

BACKGROUND OF THE PROPOSED ACQUISITIONS                                         

   In November 1997, John Cook, the Chairman of PRG, and Howard Schultz, the
Chairman of HSA-Texas, met in Dallas, Texas to discuss the possibility of a     
combination of HSA-Texas and PRG. Following this meeting, neither party had any 
further contact or discussions relating to a possible business combination until
November 2000.                                                                  

    In early November 2000, Jonathan Golden, a director of and counsel to PRG,
received a call from a business associate of Howard Schultz inquiring as to     
whether PRG would be interested in reviving discussions relating to a possible  
combination. Mr. Golden advised Mr. Cook of the call and Mr. Cook called Mr.    
Schultz. Since both men intended to be in Bangkok, Thailand on November 11 and  
12, 2000, they met in Bangkok, signed a mutual confidentiality agreement and    
commenced a discussion of a possible business combination.                      

   On December 18, 2000, Howard and Andrew Schultz, Mac Martirossian, Senior
Vice President and Group Managing Director -- International of HSA-Texas, and   
Arthur Budge, Jr., a financial adviser to HSA-Texas, met with Mr. Cook, Jack    
Toma, vice chairman of PRG and Mr. Golden in Atlanta, Georgia, to continue      
discussions relating to a possible business combination. On January 9 and 10,   
2001, Mr. Golden, Gene Ellis, the chief financial officer of PRG, and Mr. Toma  
met with Arthur Budge, Jr., Mac Martirossian, and attorneys for HSA-Texas in    
Dallas, Texas to continue these discussions. At these meetings, based on PRG's  
preliminary analysis of the anticipated EBITDA of HSA-Texas, assuming the       
closing of the then-proposed Tamebond Ltd., J&G Associates Ltd., Howard Schultz 
& Partner (Deutschland) GmbH, Phoenix Audit Recoveries, Inc., JASAMA, Inc. and  
Lowery, Inc. acquisitions, PRG offered 21.0 million shares of its common stock  
for HSA-Texas, subject to completion of due diligence. PRG and HSA-Texas        
realized that since they are competitors, the exchange of information could     
create competition problems. In order to avoid the exchange of competitively    
sensitive information of the two companies, Bain & Co., an independent          
consulting firm, was hired to review and compile information furnished by both  
companies and to provide each company with summaries that did not disclose      
competitively advantageous information that could be used if the negotiations   
did not result in a transaction. These initial meetings were followed by a      
series of meetings on January 15-16, 2001 in Dallas; February 28, 2001 in       
Dallas; March 8-9, 2001 in Atlanta; March 22-23, 2001 in Atlanta; March 27, 2001
in Dallas; May 21-23, 2001 in Atlanta; June 20-21, 2001 in Dallas; July 1, 2001 
in Dallas; and July 25-26, 2001 in Atlanta. On May 22, 2001, following          
completion of its preliminary due diligence, PRG reduced its offer to 16.0      
million shares of common stock, less an adjustment for the amount of debt to be 
incurred by HSA-Texas in connection with the Phoenix Audit Recoveries, Inc.,    
JASAMA, Inc. and Lowery, Inc. acquisitions.                                     

    On July 25, 2001, PRG and HSA-Texas and the shareholders of the affiliated
foreign operating companies entered into a letter of intent to which were       
attached drafts of proposed definitive agreements outlining the details of the  
transaction. The letter of intent was announced by PRG in its earnings          
conference call on July 26, 2001, at which time a press release was also issued.
Based on the July 25, 2001 closing price of PRG common stock of $10.51, PRG     
placed a value on the transaction of approximately $160 million, exclusive of   
any debt to be assumed or incurred. See "Pro Forma Combined Financial           
Statements," Note 1(B) for a discussion of the total estimated purchase price of
the proposed acquisitions. The parties executed definitive agreements as of     
August 3, 2001. The parties executed amended and restated asset and stock       
agreements on December 11, 2001.                                                

REASONS FOR THE PROPOSED ACQUISITIONS                                           

The following discussion of the reasons for the proposed acquisitions 
contains a number of forward-looking statements that reflect the current views  
of PRG with respect to future events that could affect its                      
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financial performance. Forward-looking statements are subject to risks and      
uncertainties. Actual results and outcomes may differ materially from the       
results and outcomes discussed in the forward-looking statements. Cautionary    
statements that identify important factors that could cause or contribute to    
differences in results and outcomes include those discussed in "Special         
Considerations."                                                                

PRG's board of directors has determined that the terms of the proposed
acquisitions are fair to, and in the best interests of, PRG's shareholders.     
PRG's board of directors consulted with PRG's senior management, as well as     
PRG's financial advisors and legal counsel, in reaching its decision to approve 
the asset agreement and the stock agreement. PRG's primary reasons for entering 
into the asset agreement and the stock agreement are the beliefs of its board of
directors and the management of PRG that the proposed acquisitions may allow PRG
to enjoy a number of benefits, including:                                       

- accelerating innovation and audit effectiveness and thereby better  
meeting customer needs for recovery audit services;               

- accelerating expansion into existing and new recovery audit markets;

- gaining additional clients and revenues;                            

   - being more competitive with other providers of recovery audit services;

   - adding to its intellectual property assets in recovery audit processes;

- receiving significant operating synergies from alignment of cost    
     structures, consolidation of technology expenditures and elimination of
duplicate positions and facilities; and                           

- adding qualified auditors and other employees of HSA-Texas and its  
     affiliated foreign operating companies to PRG and thereby enhancing its
recovery audit expertise.                                         

  The conclusions reached by the board of directors of PRG with respect to
the above factors supported the determination that the purchase by PRG of       
substantially all of the assets of HSA-Texas, the acquisition of substantially  
all of the outstanding stock of the affiliated foreign operating companies and  
the issuance of shares of PRG common stock and the assumption of HSA-Texas      
options pursuant to the asset agreement and the stock agreement, are fair to,   
and in the best interests of, PRG. In reaching the determination that the asset 
agreement and stock agreement are in the best interests of PRG's shareholders,  
the board of directors of PRG considered a number of other factors, including   
the factors listed below:                                                       

     - the judgment, advice and analyses of PRG's management with respect to the
      potential strategic, financial and operational benefits of the purchase;

     - the terms of the asset agreement and the stock agreement, including price
     and structure, which were considered by PRG's board of directors and by
 the management of PRG to provide a fair and equitable basis for the
overall transaction; and                                          

- the oral opinion of Merrill Lynch, which opinion was subsequently   
       confirmed in a written opinion dated as of August 3, 2001, to PRG's board
 of directors, to the effect that, as of the date of the opinion and
    subject to and based on the considerations referred to in the opinion,
 the consideration to be paid by PRG in connection with the proposed
acquisitions was fair, from a financial point of view, to PRG.    

The board of directors of PRG also considered a number of potentially 
negative factors in its deliberations. The potentially negative factors         
considered by the board of directors of PRG included:                           

   - potential loss of revenue from clients where PRG and HSA-Texas together
have both the first and second audit positions;                   

   - the risk that the transaction might not be completed in a timely manner
or at all;                                                        

- the likelihood of reduced borrowing capacity following closing;     

 - the potential negative impact of any vendor or client confusion after
announcement of the proposed acquisitions;                        

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- the potential negative reaction of the financial community after    
announcement of the proposed acquisitions;                        

- the risk that the potential benefits of the transaction may not be  
     realized, including the inability of PRG to hire the former auditors of
HSA-Texas;                                                        

  - the analysis that the estimated theoretical maximum consideration that
could be paid in an acquisition of HSA-Texas by a financial buyer,  
  considering capital structures typically employed by financial buyers,
    ranged from approximately $60.0 million to approximately $100.0 million,
   which is less than the approximately $160.0 million value, based on the
    July 25, 2000 closing price of PRG common stock, of the PRG common stock
to be paid as consideration in the transaction;                     

- the costs associated with the transaction; and                      

- the other risks and uncertainties discussed above under "Special    
Considerations."                                                  

 The foregoing discussion of information and factors considered by PRG's
board of directors is not intended to be exhaustive, but is believed to include 
all material factors considered by the board of directors. In view of the wide  
variety of factors considered by PRG's board of directors, PRG's board of       
directors did not find it practicable to quantify or otherwise assign relative  
weights to the specific factors considered. In addition, the board of directors 
did not reach any specific conclusions on each factor considered, or any aspect 
of any particular factor, but conducted an overall analysis of these factors.   
Individual members of PRG's board of directors may have given different weights 
to different factors. After taking into account all of the factors set forth    
above, however, PRG's board of directors unanimously agreed that the asset      
agreement and the stock agreement are fair to, and in the best interests of, PRG
and its shareholders and that PRG should proceed with the proposed acquisitions 
and enter into the asset agreement and the stock agreement.                     

There can be no assurance that the benefits of the potential growth,  
synergies or opportunities considered by PRG's board will be achieved through   
completion of the proposed acquisitions. See "Special Considerations."          

OPINION OF PRG'S FINANCIAL ADVISOR                                              

   On July 24, 2001, Merrill Lynch delivered its oral opinion, which opinion
was subsequently confirmed in a written opinion dated as of August 3, 2001, to  
the PRG board of directors to the effect that, as of such dates and based upon  
the assumptions made, matters considered and limits of review set forth in such 
opinion, the proposed consideration to be paid by PRG pursuant to the proposed  
acquisitions was fair from a financial point of view to PRG. A copy of Merrill  
Lynch's opinion is attached to this document as Annex C.                        

     Merrill Lynch's opinion sets forth the assumptions made, matters considered
and certain limitations on the scope of review undertaken by Merrill Lynch. Each
holder of PRG common stock is urged to read Merrill Lynch's opinion, which is   
attached as Annex C, in its entirety. Merrill Lynch's opinion was intended for  
the use and benefit of the PRG board of directors, was directed only to the     
fairness of the consideration from a financial point of view to PRG, did not    
address the merits of the underlying decision by PRG to engage in the proposed  
acquisitions and does not constitute a recommendation to any shareholder of PRG 
as to how that shareholder should vote on the proposed share and option issuance
or any related matter. The consideration was determined on the basis of         
negotiations between PRG and HSA-Texas and was approved by the PRG board of     
directors. This summary of Merrill Lynch's opinion is qualified in its entirety 
by reference to the full text of the opinion attached as Annex C.               

In arriving at its opinion, Merrill Lynch, among other things:        

  - Reviewed certain publicly available business and financial information
     relating to PRG and HSA-Texas that Merrill Lynch deemed to be relevant;

    - Reviewed certain information, including financial forecasts, relating to
     the business, earnings, cash flow, assets, liabilities and prospects of
PRG and HSA-Texas, as well as the amount and timing of the        

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     cost savings and related expenses and synergies expected to result from
the proposed acquisitions furnished to Merrill Lynch by PRG;      

- Conducted discussions with members of senior management and         
     representatives of PRG concerning the matters described in the previous
      two bullets, as well as their respective businesses and prospects before
   and after giving effect to the proposed acquisitions and the expected
synergies;                                                        

   - Reviewed the market prices and valuation multiples for PRG common stock
    and compared them with those of certain publicly traded companies that
Merrill Lynch deemed to be relevant;                              

     - Reviewed the results of operations of PRG and HSA-Texas and compared them
       with those of certain publicly traded companies that Merrill Lynch deemed
to be relevant;                                                   

- Participated in certain discussions and negotiations among          
representatives of PRG and their legal advisor;                   

 - Reviewed the potential pro forma impact of the proposed acquisitions;

  - Reviewed each of the acquisition agreements, except for the disclosure
       schedules thereto, which disclosure schedules had not been completed; and

    - Reviewed such other financial studies and analyses and took into account
     such other matters as Merrill Lynch deemed necessary, including Merrill
     Lynch's assessment of general economic, market and monetary conditions.

Merrill Lynch's opinion stated that Merrill Lynch was not given the   
opportunity to conduct discussions with HSA-Texas concerning any of the matters 
described in the previous bullet points.                                        

    In preparing its opinion, Merrill Lynch assumed and relied on the accuracy
and completeness of all information supplied or otherwise made available to     
Merrill Lynch, discussed with or reviewed by or for Merrill Lynch, or publicly  
available, and Merrill Lynch did not assume any responsibility for independently
verifying such information or undertake an independent evaluation or appraisal  
of any of the assets or liabilities of PRG or HSA-Texas, and was not furnished  
with any such evaluation or appraisal. In addition, Merrill Lynch did not assume
any obligation to conduct any physical inspection of the properties or          
facilities of PRG or HSA-Texas. With respect to the financial forecast          
information and the expected synergies furnished to or discussed with Merrill   
Lynch by PRG, Merrill Lynch assumed that they were reasonably prepared and      
reflected the best currently available estimates and judgment of PRG's          
management as to the expected future financial performance of PRG and HSA-Texas 
and the expected synergies. Merrill Lynch also assumed that the final forms of  
the disclosure schedules to the acquisition agreements would not contain any    
information materially adverse to Merrill Lynch's analysis.                     

 Merrill Lynch's opinion was necessarily based upon market, economic and
other conditions as they existed and could be evaluated on, and on the          
information made available to Merrill Lynch as of, the date of its opinion.     
Merrill Lynch assumed that in the course of obtaining the necessary regulatory  
or other consents or approvals, contractual or otherwise, for the proposed      
acquisitions, no restrictions, including any divestiture requirements or        
amendments or modifications, would be imposed that would have a material adverse
effect on the contemplated benefits of the proposed acquisitions.               

    Merrill Lynch expressed no opinion as to the prices at which shares of PRG
common stock would trade following the announcement or completion of the        
proposed acquisitions.                                                          

  The following is a summary of certain financial and comparative analyses
performed by Merrill Lynch that were presented to PRG's board of directors in   
connection with the oral opinion delivered to PRG's board of directors on July  
24, 2001. The financial analyses summarized below include information presented 
in tabular format. In order to understand fully Merrill Lynch's financial       
analyses, the tables must be read together with the text of each summary. The   
tables alone do not constitute a complete description of the financial analyses.
Considering the data described below without considering the full narrative     
description of the financial analyses, including the methodologies and          
assumptions underlying the analyses, could create a misleading or incomplete    
view of Merrill Lynch's financial analyses.                                     
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HSA-Texas Analysis                                                              

   Comparable Public Company Analysis.  Using publicly available information
and estimates of future financial results published by First Call Corporation   
and other various research reports, Merrill Lynch compared certain financial and
operations data and ratios for HSA-Texas with the corresponding data and ratios 
of comparable companies.                                                        

 The companies selected for the comparable company analysis included the
following publicly traded companies:                                            

- Automatic Data Processing, Inc.;                                    

- Convergys Corporation;                                              

- CSG Systems International, Inc.;                                    

- The BISYS Group, Inc.;                                              

- Ceridian Corporation;                                               

- Factset Research Systems Inc.; and                                  

- NCO Group, Inc.                                                     

Merrill Lynch derived an estimated valuation range for HSA-Texas by   
comparing market value as a multiple of estimated 2002 earnings. The earnings   
estimates were obtained from First Call, a data service that monitors and       
publishes a compilation of earnings estimates produced by selected research     
analysts on companies of interest to investors, as of July 13, 2001, and        
adjusted by Merrill Lynch to exclude goodwill amortization. Merrill Lynch also  
compared firm value as a multiple of estimated 2001 earnings before interest,   
taxes, depreciation and amortization, which is referred to as "EBITDA."         

The results of this analysis were as follows:                         

                                                        [Enlarge/Download Table]

                                                       HIGH FOR    LOW FOR     MEAN FOR 
                                                      COMPARABLE  COMPARABLE  COMPARABLE
                                                      COMPANIES   COMPANIES   COMPANIES 
                                                      ----------  ----------  ----------
                                                                                        
Market value as a multiple of estimated 2002            27.6x        9.0x       20.9x   
  earnings...........................................                                   
Firm value as a multiple of estimated 2001 EBITDA....   17.8x        6.0x       13.3x   

     Comparing market value as a multiple of estimated 2002 earnings and using a
reference range from 12.0x to 16.0x, the estimated equity value of HSA-Texas    
ranged from approximately $155.0 million to approximately $205.0 million.       
Comparing firm value as a multiple of estimated 2001 EBITDA and reviewing       
selected research reports, Merrill Lynch extrapolated 2002 EBITDA multiples.    
Comparing firm value as a multiple of estimated 2002 EBITDA and using a         
reference range from 6.0x to 8.0x, the estimated equity value of HSA-Texas      
ranged from approximately $120.0 million to approximately $175.0 million.       

Leveraged Buyout Analysis.  Merrill Lynch performed an analysis of the
theoretical maximum consideration that could be paid in an acquisition of       
HSA-Texas by a financial buyer, based on HSA-Texas management projections, as   
adjusted by Bain & Co., and considering capital structures typically employed by
financial buyers. In its analysis, Merrill Lynch assumed that a financial buyer 
would be subject to the following constraints:                                  

   - a maximum ratio of total debt to 2001 EBITDA ranging from 4.0x to 4.5x;

    - a maximum ratio of senior debt to 2001 EBITDA ranging from 2.5x to 3.0x;

- a minimum 5-year return on equity of approximately 30%;             

 - a maximum equity investment ranging from 40% to 50% of consideration;

- a maximum senior debt repayment period of 7 years; and              

- a 2005 EBITDA exit multiple range of 6.0x to 8.0x.                  

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Assuming a financial buyer refinanced $50.0 million of HSA-Texas      
indebtedness and incurred transaction expenses of $4.0 million, the estimated   
theoretical maximum consideration that could be paid in an acquisition of       
HSA-Texas by a financial buyer ranged from approximately $60.0 million to       
approximately $100.0 million.                                                   

   Discounted Cash Flow Analysis.  Merrill Lynch performed a discounted cash
flow, or "DCF," analysis for HSA-Texas using projections provided by HSA-Texas' 
management and modified by Bain & Co.                                           

   The DCF for HSA-Texas was calculated assuming discount rates ranging from
11.5% to 12.5% and was comprised of the sum of the present values of:           

   - The projected cash flows for HSA-Texas for the years 2002 through 2006;
and                                                               

     - The 2006 terminal value based upon a range of multiples from 6.0x to 8.0x
estimated 2006 EBITDA.                                            

 Merrill Lynch then subtracted from this sum $50.0 million in respect of
HSA-Texas' net debt.                                                            

Performing a DCF analysis for HSA-Texas, the estimated equity value of
HSA-Texas ranged from approximately $150.0 million to approximately $210.0      
million.                                                                        

Merrill Lynch also performed the DCF analysis assuming PRG attains its
projected synergies for the proposed acquisitions, which resulted in estimated  
synergies on a present value basis of approximately $20.0 million. Including    
these estimated synergies, the estimated equity value of HSA-Texas ranged from  
approximately $170.0 million to approximately $230.0 million.                   

PRG Analysis                                                                    

    Historical Stock Performance.  Merrill Lynch reviewed the trading price of
the shares of PRG's common stock for the one-year period ended July 23, 2001.   
This stock performance review indicated that, for the 52-week period ended July 
23, 2001, the high and low closing prices per share of PRG common stock were    
$14.50 and $3.75, respectively.                                                 

   Comparable Public Company Analysis.  Using publicly available information
and estimates of future financial results published by First Call, Merrill Lynch
compared certain historical stock, financial and operations data and ratios for 
PRG with the corresponding data and ratios of the same group of companies listed
above for the HSA-Texas comparable public company analysis.                     

   Merrill Lynch derived estimated per-share valuation ranges for PRG common
stock by comparing market value as a multiple of 2001 earnings per share, market
value as a multiple of 2002 earnings per share, and firm value as a multiple of 
2001 EBITDA. The earnings estimates were obtained from First Call, as of July   
13, 2001, and adjusted by Merrill Lynch to exclude goodwill amortization.       

                                                        [Enlarge/Download Table]

                                                         HIGH FOR    LOW FOR     MEAN FOR        
                                                        COMPARABLE  COMPARABLE  COMPARABLE       
                                                        COMPANIES   COMPANIES   COMPANIES    PRG 
                                                        ----------  ----------  ----------  -----
                                                                                                 
Market value as a multiple of estimated 2001              33.7x       10.4x       25.0x     27.1x
  earnings.............................................                                          
Market value as a multiple of estimated 2002              27.6x        9.0x       20.9x     19.2x
  earnings.............................................                                          
Firm value as a multiple of estimated 2001 EBITDA......   17.8x        6.0x       13.3x     10.9x

 Based on these analyses, Merrill Lynch derived a value per share of PRG
common stock ranging from:                                                      

     - $10.80 to $12.70 by comparing market value as a multiple of 2001 earnings
per share and using a reference range from 23.0x to 27.0x;        

     - $10.55 to $13.20 by comparing market value as a multiple of 2002 earnings
per share and using a reference range from 16.0x to 20.0x; and    

     - $10.40 to $12.80 by comparing firm value as a multiple of 2001 EBITDA and
using a reference range from 9.0x to 11.0x.                       

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    Discounted Cash Flow Analysis.  Merrill Lynch performed a DCF analysis for
PRG using projections provided by PRG's management.                             

   The DCF for PRG was calculated assuming discount rates ranging from 11.5%
to 12.5% and was comprised of the sum of the present values of:                 

 - The projected cash flows for PRG for the years 2002 through 2006; and

     - The 2006 terminal value based upon a range of multiples from 7.0x to 9.0x
estimated 2006 EBITDA.                                            

 Merrill Lynch then subtracted from this sum $30.0 million in respect of
PRG's net debt.                                                                 

    Performing a DCF analysis for PRG, the estimated equity value per share of
PRG common stock ranged from $12.66 to $16.29, based on 48.7 million PRG common 
shares outstanding.                                                             

Pro Forma Combination Analysis                                                  

  Merrill Lynch also analyzed certain pro forma effects resulting from the
proposed acquisitions. Using the projected earnings of HSA-Texas for the years  
2002, 2003 and 2004 provided by the management of HSA-Texas (as adjusted by Bain
& Co.), and the projected earnings of PRG for the years 2002, 2003 and 2004     
provided by the management of PRG, Merrill Lynch compared the projected earnings
per share of PRG on a stand-alone basis, assuming the proposed acquisitions did 
not occur, to the per-share earnings of PRG, assuming the proposed acquisitions 
did occur.                                                                      

Using the assumptions detailed above, the analysis indicated that the 
proposed acquisitions would be accretive to projected earnings per share of PRG 
common stock in 2002, 2003 and 2004 if PRG realized pre-tax cost-savings        
synergies of $2.8 million, $3.4 million and $4.2 million, respectively,         
excluding amortization of goodwill and assuming amortization of approximately   
$20.0 million of intangible assets.                                             

     The summary of analyses performed by Merrill Lynch set forth above does not
purport to be a complete description of the analyses performed by Merrill Lynch 
in arriving at its opinion. The preparation of a fairness opinion is a complex  
process and is not necessarily susceptible to partial or summary description.   
Accordingly, Merrill Lynch believes that its analyses must be considered as a   
whole and that selecting portions of its analyses and the factors considered by 
Merrill Lynch, without considering all analyses and factors, could create an    
incomplete view of the processes underlying the Merrill Lynch opinions. Merrill 
Lynch did not assign relative weights to any of its analyses in preparing its   
opinion. The matters considered by Merrill Lynch in its analyses were based on  
numerous macroeconomic, operating and financial assumptions with respect to     
industry performance, general business and economic conditions and other        
matters, many of which are beyond PRG's and Merrill Lynch's control and involve 
the application of complex methodologies and educated judgment. Any estimates   
contained in the Merrill Lynch analyses are not necessarily indicative of actual
past or future results or values, which may be significantly more or less       
favorable than the estimates. Estimated values do not purport to be appraisals  
and do not necessarily reflect the prices at which businesses or companies may  
be sold in the future. The estimates are inherently subject to uncertainty.     

No company utilized as a comparison in the analyses described above is
identical to PRG or HSA-Texas. In addition, various analyses performed by       
Merrill Lynch incorporate projections prepared by research analysts using only  
publicly available information. These estimates may or may not prove to be      
accurate. An analysis of publicly traded comparable companies is not            
mathematical; rather it involves complex considerations and judgments concerning
differences in financial and operating characteristics of the comparable        
companies and other factors that could affect the public trading value of the   
comparable companies to which they are being compared.                          

The PRG board selected Merrill Lynch to act as its financial advisor  
because of Merrill Lynch's reputation as an internationally recognized          
investment banking firm with substantial experience in transactions similar to  
the proposed acquisitions and because Merrill Lynch is familiar with PRG and its
business. As part of Merrill Lynch's investment banking business, Merrill Lynch 
is continually engaged in the valuation of businesses and their securities in   
connection with mergers and acquisitions, leveraged buyouts, negotiated         
underwritings, secondary distributions of listed and unlisted securities and    
private placements.                                                             
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   Pursuant to the terms of a letter agreement between PRG and Merrill Lynch
dated January 4, 2001, PRG agreed to pay Merrill Lynch a fee in the amount of   
$2.5 million. This fee is payable in two installments as follows:               

    - $250,000 of such fee was paid upon Merrill Lynch's providing its opinion
to PRG's board of directors; and                                  

- $2.25 million is payable upon the completion of the proposed        
acquisitions.                                                     

    PRG has agreed to reimburse Merrill Lynch for its reasonable out-of-pocket
expenses incurred in connection with its engagement (including the reasonable   
fees and disbursements of legal counsel) and to indemnify Merrill Lynch and     
related parties from and against specified liabilities, including liabilities   
under the federal securities laws, arising out of its engagement.               

   Merrill Lynch has, in the past, provided financial advisory and financing
services to PRG and/or its affiliates and may continue to do so and has         
received, and may receive, additional fees for the rendering of those services. 
In connection with PRG's $125 million convertible notes offering that closed in 
November and December 2001, Merrill Lynch received fees of approximately $3.0   
million. Also, during the last two years, PRG has paid fees to Merrill Lynch and
its affiliates in the amount of approximately $11,400 for services provided. In 
addition, in the ordinary course of Merrill Lynch's business, Merrill Lynch and 
its affiliates may actively trade PRG common stock and other securities of PRG  
for their own account and for the accounts of customers. Accordingly, Merrill   
Lynch and its affiliates may at any time hold a long or short position in such  
securities.                                                                     

INTERESTS OF DIRECTORS AND OFFICERS OF HSA-TEXAS IN THE PROPOSED ACQUISITIONS   

   Members of HSA-Texas' management and board of directors have interests in
the proposed acquisitions that are different from, or in addition to, their     
rights as shareholders or optionholders of HSA-Texas, which may create conflicts
of interest. The HSA-Texas board of directors was aware of and considered these 
interests in reaching its conclusion that the asset agreement and the           
transactions contemplated thereby are fair to, and in the best interests of,    
HSA-Texas and its shareholders.                                                 

     Stockholdings.  As of the record date, the directors and executive officers
of HSA-Texas individually or beneficially owned 2,307,482 or 100% of the        
outstanding shares of voting common stock of HSA-Texas and 3,873,301 or 60.19%  
of the outstanding shares of non-voting common stock of HSA-Texas. Based on the 
assumptions set forth below, after completion of the proposed acquisitions,     
officers and directors of HSA-Texas will individually or beneficially own       
approximately 17.33% of PRG's outstanding common stock.                         

   In addition, based on the assumptions set forth below, Howard Schultz and
Andrew Schultz will collectively beneficially own approximately 4,770,811 shares
and 5,812,343 shares, respectively, of PRG's outstanding common stock           
immediately following the closing. Howard Schultz and Andrew Schultz will then  
beneficially own 7.48% and 9.12%, respectively, of the outstanding shares of PRG
common stock.                                                                   

  The beneficial ownership numbers shown above were calculated assuming an
average PRG common stock price of $7.764 per share, and are based upon the      
following assumptions:                                                          

     - HSA-Texas continues to have outstanding 2,307,482 shares of voting common
     stock, 6,435,383 shares of non-voting common stock, options to purchase
1,133,423 shares and 64,569 SARs, and Howard and Andrew Schultz's 
respective beneficial ownership thereof remains unchanged; and    

     - HSA-Texas' remaining liabilities, including the expenses of effecting the
liquidation and winding up of HSA-Texas, do not exceed the value  
HSA-Texas' assets not purchased by PRG.                           

  Stock Options.  On the closing date, PRG will assume options to purchase
167,631 shares of HSA-Texas common stock currently held by Arthur Budge, Jr.,   
with an exercise price of $9.06 per share that will convert into options to     
purchase 248,295 shares of PRG common stock with an exercise price of $6.12 per 
share, assuming an option conversion ratio of 1.4812. PRG will also grant       
options to purchase 250,000 shares of PRG                                       

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common stock to Howard Schultz at an exercise price equal to the closing sales  
price per share of PRG common stock on The Nasdaq National Market on the closing
date.                                                                           

     Assumption of a portion of the Howard Schultz loan.  On the closing date of
the asset acquisition, PRG will assume a portion of the amount of principal and 
interest payable to Howard Schultz for amounts loaned to HSA-Texas, including   
loans made subsequent to September 30, 2001. The amount to be assumed is        
currently estimated to be approximately $7.4 million. See "PRG Director and     
Executive Officer Information -- Certain Transactions."                         

Employment with PRG.  It is anticipated that certain of the current   
officers and directors of HSA-Texas will be employed by PRG after the proposed  
acquisitions. In addition, it is anticipated that Howard Schultz will serve as  
the initial chairman of the board of the combined company and Andrew Schultz    
will serve as a director and an executive officer of the combined company       
following the proposed acquisitions. Each of Howard Schultz and Andrew Schultz  
will have an employment agreement with PRG for a term of two years.             

EFFECTIVE DATE                                                                  

   The proposed acquisitions will become effective as of 12:01 a.m., Eastern
time, on the closing date.                                                      

REGULATORY APPROVALS                                                            

PRG and HSA-Texas have agreed in the asset agreement to use their best
efforts to take whatever actions are required to obtain necessary regulatory    
approvals and consents with respect to the proposed acquisitions. Other than    
clearance under the antitrust laws applicable to the proposed acquisitions, PRG 
and HSA-Texas do not believe that any additional material governmental filings  
or approvals are required with respect to the proposed acquisitions.            

  Under the HSR Act and the related rules, the proposed acquisitions could
not be completed until PRG and HSA-Texas notified and furnished information to  
the Federal Trade Commission, or FTC, and the Antitrust Division of the United  
States Department of Justice, and specified waiting period requirements had been
satisfied. In connection with the proposed acquisitions, on or before August 3, 
2001, PRG and HSA-Texas filed the required notification and report forms with   
the FTC and the Antitrust Division under the HSR Act. Effective as of August 10,
2001, the request for early termination of the applicable waiting period was    
granted.                                                                        

  At any time before or after the completion of the proposed acquisitions,
either the Antitrust Division or the FTC could take any action under U.S.       
antitrust laws as it deems necessary or desirable in the public interest,       
including seeking to enjoin the completion of the proposed acquisitions or      
seeking the divestiture of substantial assets owned by PRG or HSA-Texas. Private
parties and state attorneys general may also bring actions under U.S. antitrust 
laws depending on the circumstances. Although PRG and HSA-Texas believe that the
proposed acquisitions do not raise significant concerns under U.S. antitrust    
laws, PRG and HSA-Texas can give no assurance that a challenge to the proposed  
acquisitions on antitrust grounds will not be made or, if a challenge is made,  
that it would not be successful.                                                

LENDER APPROVALS                                                                

 PRG has held extensive discussions with the nine members of its banking
syndicate concerning the proposed acquisitions. The credit facility, as amended,
provides that a two-thirds majority of the banks in the syndicate must approve  
the proposed acquisitions. As a result of these discussions with the members of 
PRG's current banking syndicate, PRG believes that it will be unable to obtain  
the consent of at least two-thirds of the members of the syndicate required in  
order to complete the proposed acquisitions. PRG is therefore negotiating a new 
senior credit facility, the proceeds of which PRG will utilize to repay certain 
indebtedness of HSA-Texas and fund various merger and integration costs related 
to the proposed acquisitions. PRG expects to obtain a new senior credit facility
with a borrowing capacity of up to $75 million, with tiered interest based on   
either prime or LIBOR and a term of at least three years, secured by all of     
PRG's assets. Aggregate outstanding borrowings may be limited to a percentage of
eligible receivables. PRG will not complete the                                 

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proposed acquisitions unless a senior credit facility with terms substantially  
equivalent to those described above, with immediate borrowing availability of at
least $30.0 million and with interest rates substantially equivalent to or more 
favorable to PRG than those of its current senior credit facility, is in place  
as of or prior to the closing of the proposed acquisitions.                     

ASSUMPTION OF HSA-TEXAS INDEBTEDNESS                                            

   PRG expects to incur or assume between $59.7 million and $69.5 million of
HSA-Texas net debt in connection with the proposed acquisitions.                

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE PROPOSED          
ACQUISITIONS                                                                    

    The following discussion is not tax advice. This discussion summarizes the
material U.S. federal income tax consequences to PRG of the proposed            
acquisitions of substantially all of the assets of HSA-Texas and substantially  
all of the outstanding stock of the affiliated foreign operating companies under
the Internal Revenue Code, or the Code, existing regulations thereunder,        
including final, temporary or proposed regulations, and current administrative  
rulings and court decisions, all of which are subject to change, retroactively  
or prospectively, and possibly to differing interpretations.                    

  Neither PRG nor HSA-Texas has requested, or plans to request, any ruling
from the Internal Revenue Service with regard to any of the U.S. federal income 
tax consequences of the transactions described in this proxy statement, and the 
statements in this proxy statement are not binding on the IRS or any court.     
Thus, there can be no assurance that these statements will not be challenged by 
the IRS or sustained by a court if challenged by the IRS.                       

   The proposed acquisition of substantially all of the assets of HSA-Texas,
and subsequent liquidation of HSA-Texas, are intended to qualify as a           
reorganization under Section 368(a)(1)(C) of the Code. PRG should not recognize 
taxable gain or loss solely as a result of the acquisition of the acquired      
HSA-Texas assets in exchange for PRG common stock. PRG's tax basis in the       
acquired assets should generally be the same as HSA-Texas's tax basis in such   
assets.                                                                         

    The proposed acquisitions of the stock of the affiliated foreign operating
companies by PRG are intended to qualify as reorganizations under Section       
368(a)(1)(B) of the Code. PRG will not be required to recognize taxable gain or 
loss solely as a result of the acquisitions.                                    

The foregoing discussion is not intended to be a complete analysis or 
description of all potential U.S. federal income tax consequences or any other  
consequences of the acquisition of substantially all of the assets of HSA-Texas 
and substantially all of the stock of the affiliated foreign operating          
companies.                                                                      

ACCOUNTING TREATMENT                                                            

   The proposed acquisitions will be accounted for under the purchase method
of accounting in accordance with accounting principles generally accepted in the
United States of America.                                                       

PRG RIGHTS PLAN                                                                 

PRG's board of directors has taken sufficient action to exempt the    
transactions contemplated by the asset agreement and stock agreement from the   
provisions of the rights plan.                                                  

DISSENTERS' AND APPRAISAL RIGHTS RELATED TO THE PROPOSED ACQUISITIONS           

PRG shareholders will not have dissenters' or appraisal rights in     
connection with the proposed acquisitions.                                      

BOARD OF DIRECTORS AND MANAGEMENT FOLLOWING PROPOSED ACQUISITIONS               

If the proposed share and option issuances are approved, the nominated
directors are elected and the proposed acquisitions are closed, PRG will        
continue to be managed by the same board of directors and officers              

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of PRG as before the proposed acquisitions except that the size of the board of 
directors will be to expanded from 9 to 13 members and Howard Schultz will serve
as the initial chairman of the board of the combined company, and Andrew        
Schultz, Arthur Budge, Jr. and Nate Levine will serve as directors of the       
combined company.                                                               

    Information relating to the business experience of each of Howard Schultz,
Andrew Schultz, Arthur Budge, Jr. and Nate Levine is set forth under the heading
"PRG Director and Executive Officer Information." In addition, information      
relating to PRG's management, executive compensation, voting securities, certain
relationships and related transactions and other related matters pertaining to  
PRG is also set forth under the heading "PRG Director and Executive Officer     
Information."                                                                   

  Blum Capital Partners, L.P. and its affiliates, who, based on an amended
Schedule 13D filing dated December 5, 2001, currently beneficially own          
approximately 14.6% of PRG's outstanding common stock, including stock          
obtainable upon conversion of convertible notes, purchased $40.0 million of the 
$125.0 million of notes issued in PRG's recent convertible notes offering. Blum 
Capital Partners has expressed an interest in obtaining representation on PRG's 
board of directors, and PRG has had discussions with them regarding this matter.

NASDAQ LISTING                                                                  

    PRG will use its reasonable best efforts to cause the shares of PRG common
stock to be issued in the proposed acquisitions, and the shares reserved for    
issuance upon exercise of PRG stock options issued in connection with the       
assumption of certain outstanding HSA-Texas stock options, to be approved for   
listing on The Nasdaq National Market prior to the closing date. This listing is
a condition to closing the proposed acquisitions.                               

FEDERAL SECURITIES LAW CONSEQUENCES                                             

    The shares of PRG common stock to be received by HSA-Texas pursuant to the
asset agreement and by the affiliated foreign operating companies pursuant to   
the stock agreement will be restricted securities and may only be sold:         

- pursuant to an effective registration statement;                    

- in compliance with Rule 144 under the Securities Act; or            

   - in compliance with another exemption from the registration requirements
of the Securities Act.                                            

Rule 144 requires that sales be made in compliance with the rule's holding      
period requirements, volume limitations, manner of sale provisions, current     
information requirements and notice of sale requirements. The volume limitations
of Rule 144 require that the number of securities sold in any three month period
may not exceed the greater of one percent of the number of shares of outstanding
PRG common stock or the average weekly trading volume for PRG common stock      
during the preceding four week period.                                          

   Under the registration rights agreement, in addition to filing a Form S-3
registration statement for up to $10.0 million of PRG common stock concurrently 
with the closing of the proposed acquisitions, PRG will be required upon written
request from a holder of registrable securities to register the shares of PRG   
common stock issued in the proposed acquisitions for resale; provided however,  
that PRG will not be required to file more than one registration statement      
during any six month period or, other than the initial filing, file a           
registration statement regarding a request covering less than $5.0 million of   
such PRG common stock in a firm commitment underwritten offering. See "Other    
Related Agreements -- Registration Rights Agreement."                           

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MATERIAL TERMS OF THE ASSET AGREEMENT 

     The following is a discussion of the material terms of the proposed amended
and restated asset agreement. The full text of the asset agreement is attached  
as Annex A hereto and is included as part of this proxy statement. You are      
encouraged to read the entire asset agreement carefully.                        

ASSETS TO BE ACQUIRED                                                           

  The asset agreement provides that PRG will purchase substantially all of
the assets of HSA-Texas, including all right, title and interest in and to:     

- contracts with clients;                                             

- other contract rights, including the rights to acquire the direct to
    store delivery audit operations and the businesses of Howard Schultz &
Partner (Deutschland) GmbH and Howard Schultz & Associates        
(International) Ltd.;                                             

- accounts receivable;                                                

- work in progress;                                                   

- fixed assets;                                                       

- goodwill; and                                                       

  - other tangible and intangible assets of HSA-Texas used or held for the
conduct of its business as of the effective date.                 

EXCLUDED ASSETS                                                                 

     PRG will not acquire, and HSA-Texas will not transfer to PRG, the following
assets:                                                                         

- any assets held under any pension, profit sharing or other employee 
benefit plan;                                                     

- the amount of cash, up to a maximum of $7,000, required for funding 
       termination obligations, if any, of HSA-Texas in respect of the HSA-Texas
401(k) plan;                                                      

 - the two parcels of real property and the improvements thereon used on
       August 3, 2001 as the HSA-Texas headquarters in Dallas, Texas and related
mortgage debt;                                                    

- the amount of any cash received by HSA-Texas after August 3, 2001   
      attributable to the exercise by employees of HSA-Texas of any options to
purchase HSA-Texas common stock;                                  

- an amount of cash, and to the extent cash is insufficient, accounts 
  receivable of HSA-Texas having a face amount which in the reasonable
      estimation of Howard Schultz and Andrew Schultz, as agreed to by PRG, is
     sufficient to enable them to pay certain flow-through state and federal
       income taxes; provided, that in the event that the amount of flow-through
taxes paid is less than the face amount of the retained accounts  
      receivable, HSA-Texas shall pay PRG the amount of such excess in cash or
   by return to PRG of any such uncollected accounts receivable promptly
after payment of the flow-through taxes; and                      

- HSA-Texas' corporate minute and stock books.                        

ASSUMED LIABILITIES                                                             

PRG will assume on the closing date, as of the effective date, the    
following liabilities of HSA-Texas outstanding as of the effective date:        

   - all liabilities and obligations of HSA-Texas to the extent disclosed on
 the December 31, 2000 balance sheet contained in HSA-Texas' audited
  financial statements, or incurred in the ordinary course of business
after December 31, 2000 through the effective date to the extent  
disclosed on the estimated                                        

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 balance sheet delivered by HSA-Texas at closing, or incurred in the
      ordinary course of business after the effective date through the closing
of the asset acquisition consistent with past practices;          

  - the portion of the amount of principal and interest outstanding on the
      effective date payable to Howard Schultz for amounts loaned to HSA-Texas
       (less approximately $3.0 million paid by HSA-Texas in connection with the
acquisition of Lowery, Inc.) for:                                 

- working capital for normal operations,                    

        - HSA-Texas transaction expenses paid prior to the effective date in
connection with the proposed acquisitions,              

       - aggregate amounts paid to the respective sellers of Phoenix Audit
        Recoveries, Inc., JASAMA, Inc., Tamebond Ltd., J&G Associates Ltd.
  and Howard Schultz & Partner (Deutschland) GmbH prior to the
   effective date pursuant to certain acquisition agreements, as
approved by PRG;                                          

          - amounts required to cancel HSA-Texas options of persons not hired by
PRG,                                                    

- amounts required to cancel HSA-Texas SARs, and            

          - principal and interest payments paid by HSA-Texas since December 31,
       2000 and prior to the effective date on certain notes issued in
connection with certain prior acquisitions made by      
HSA-Texas;                                                    

     - all outstanding obligations and liabilities of HSA-Texas arising from and
after the effective date under the assigned contracts and assigned
leases;                                                           

 - the aggregate principal and accrued interest amount of the "change in
  status payments," amounts paid to compensate HSA-Texas auditors with
  respect to work in progress for the differential between the current
      HSA-Texas audit commission rates and the new commission rates to be made
     effective prior to the closing of the asset acquisition, if any, to the
  extent accrued on the estimated balance sheet and outstanding on the
effective date;                                                   

  - commissions payable to associates or commissioned employees whether or
    not they accept employment with PRG or its designee upon collection of
     accounts receivable with respect to work in progress outstanding on the
effective date which is converted to accounts receivable after the
    effective date, net of any deductions attributable to vendor paybacks,
  except to the extent any associate has agreed in writing to accept a
"change in status payment" in lieu of such commission amounts; and

     - amounts owed under HSA-Texas' severance policies in effect as of the date
     of the asset agreement to any employee of HSA-Texas or its subsidiaries
to whom PRG and HSA-Texas have mutually agreed PRG will not offer 
employment with PRG or any of its affiliates.                     

  Concurrently with the closing of the asset acquisition, PRG will make an
initial payment to Howard Schultz of $7.0 million for amounts loaned to         
HSA-Texas.                                                                      

RETAINED LIABILITIES                                                            

  The liabilities and obligations which will be retained by HSA-Texas will
consist of all liabilities of HSA-Texas that are not included on the estimated  
balance sheet and the following:                                                

   - all liabilities secured by or related to HSA-Texas' Dallas headquarters
property and all other liabilities of HSA-Texas or any subsidiary 
relating to indebtedness for borrowed money;                      

  - all liabilities of HSA-Texas and its subsidiaries and shareholders for
 federal, state, local or foreign taxes, including taxes incurred in
respect of or measured by:                                        

      - the income of HSA-Texas and its subsidiaries earned on or realized prior
      to the effective date to the extent such liabilities exceed the amount
       accrued for such liabilities on the December 31, 2000 audited financial
statements and/or the estimated balance sheet; and              

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   - any gain or income from the transfer of the acquired assets and other
transactions contemplated by the asset agreement;               

  - all claims and liabilities, regardless of when arising, resulting from
     HSA-Texas' or its shareholders' breach, on or before the closing of the
asset acquisition, of any covenant, condition or other obligation 
    required of HSA-Texas or its shareholders under any contract or lease;

  - all liabilities under HSA-Texas' or any of its subsidiaries' severance
     policies to any employee or associate of HSA-Texas and its subsidiaries
who is offered employment as of the closing date and who either:  

- rejects the offer of employment;                                  

     - did not satisfy on the closing date the employment conditions specified
in the asset agreement;                                         

- voluntarily resigns his or her employment within 30 days after the
   commencement of such person's employment with PRG or its designated
subsidiary; or                                                  

- does not accept the engagement as an independent contractor;      

   - any liabilities with respect to employee benefits or under any employee
benefit plan;                                                     

- all non-business payables of HSA-Texas and its subsidiaries;        

- all obligations and liabilities with respect to HSA-Texas options of
persons not hired by PRG and with respect to HSA-Texas SARs; and  

    - all obligations and liabilities to any holder of HSA-Texas voting common
stock who exercises dissenters' rights.                           

PURCHASE PRICE                                                                  

    Under the terms of the asset agreement, PRG will acquire substantially all
of the assets of HSA-Texas in exchange for the assumption of certain HSA-Texas  
liabilities and the issuance of an aggregate of 14,724,338 shares of PRG common 
stock, less a number of shares of PRG common stock having a value equal to the  
"in the money" value of the options to purchase shares of HSA-Texas common stock
and HSA-Texas SARs outstanding at the closing.                                  

PRG will also grant options to purchase up to 1,678,826 shares of PRG 
common stock in connection with the assumption of all outstanding HSA-Texas     
options held by persons who are offered and accept employment or an engagement  
as an independent contractor with PRG or a position on its board of directors.  

The "in the money" value of each outstanding option and SAR will be   
determined by subtracting the per share exercise price of the option or the per 
share grant price of the SAR from the "per share value." The formula for the    
"per share value" as follows:                                                   

- 14,724,338;                                                         

- times the PRG "average price;"                                      

- divided by the sum of:                                              

- the number of shares of HSA-Texas common stock outstanding on the 
closing date; plus                                              

 - the number of shares of HSA-Texas common stock subject to HSA-Texas
options outstanding on the closing date; plus                   

- the number of HSA-Texas SARs outstanding on the closing date.     

     Neither PRG nor HSA-Texas has the right to terminate the asset agreement or
renegotiate the number of shares to be received by HSA-Texas as a result of     
market price fluctuations; provided, however, that HSA-Texas may terminate the  
asset agreement if PRG's per share closing price on any day beginning on August 
3, 2001 and ending on a date five trading days prior to the closing date is less
than $4.00. You are encouraged to obtain current market quotations of PRG common
stock.                                                                          
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HSA-TEXAS STOCK OPTIONS AND SARS                                                

Options to be Assumed by PRG                                                

At the closing, PRG will assume all outstanding options held by each  
HSA-Texas option holder who:                                                    

- is offered and accepts employment with PRG and meets the employment 
conditions specified in the asset agreement;                      

- agrees to serve on PRG's board of directors; or                     

- becomes an independent contractor of PRG.                           

Each option that PRG assumes will thereafter constitute an option to  
purchase shares of PRG common stock, at terms equivalent to those of the        
HSA-Texas stock option, in accordance with the 1999 Howard Schultz & Associates 
Stock Option Plan. After the closing, PRG will adopt a stock option plan to     
provide for the administration by PRG of the assumed options. See "PRG/HSA-Texas
Stock Option Plan."                                                             

 Prior to the closing of the asset acquisition, HSA-Texas will amend and
restate its option plan and, if necessary, amend the option grant agreements in 
order to extend the expiration date of the HSA-Texas options upon a change of   
control to five years from one year and to modify or delete the provisions that 
relate to HSA-Texas' status as a private company.                               

Within thirty days after the closing date, PRG intends to file a      
registration statement on Form S-8 with the SEC to register the shares of PRG   
common stock subject to the assumed options. After the filing of the Form S-8,  
shares of PRG common stock received upon exercise of assumed options will be    
freely transferrable, unless held by "affiliates" of PRG. See "The Proposed     
Acquisitions -- Federal Securities Law Consequences."                           

  The number of shares of PRG common stock underlying assumed options will
equal the number of shares of HSA-Texas common stock subject to such options    
immediately prior to the closing multiplied by an option conversion ratio,      
rounded upward to the nearest whole share, and the per share exercise price will
equal the exercise price of the HSA-Texas stock option immediately prior to the 
closing divided by the option conversion ratio, rounded upward to the nearest   
whole cent. The option conversion ratio equals the "per share value" divided by 
the PRG "average price" over the five trading day period ending five trading    
days prior to the closing of the asset acquisition. The formula for the "per    
share value" is contained at "-- Purchase Price."                               

     Assuming that at closing there will be 2,307,482 shares of HSA-Texas voting
common stock outstanding, 6,435,383 shares of HSA-Texas nonvoting common stock  
outstanding, 1,133,423 shares of HSA-Texas common stock subject to outstanding  
options and 64,569 outstanding HSA-Texas SARs, the option conversion ratio will 
be 1.4812. HSA-Texas option holders currently own HSA-Texas options at one of   
two exercise prices per share, $8.16 or $9.06. As an example based on the       
assumptions above, an HSA-Texas option to purchase 1,000 shares of HSA-Texas    
common stock at an exercise price of $8.16 per share would be converted into an 
option to purchase 1,481 shares of PRG common stock at an exercise price of     
$5.51 per share. An HSA-Texas option to purchase 1,000 shares of HSA-Texas      
common stock at an exercise price of $9.06 per share would be converted into an 
option to purchase 1,481 shares of PRG common stock at an exercise price of     
$6.12 per share.                                                                

Options Not Assumed by PRG                                                  

If an HSA-Texas option holder:                                        

      - is not offered employment or an independent contractor relationship with
PRG;                                                            

  - does not accept employment or an independent contractor relationship
with PRG;                                                       

- does not meet PRG's employment conditions; or                     

    - does not serve on PRG's board of directors following the acquisitions;

HSA-Texas will, prior to or concurrently with the closing, cancel the           
outstanding option and pay the option holder an amount equal to the per share   
amount that each HSA-Texas shareholder would receive upon dissolution of        
HSA-Texas, less the exercise price of the option.                               
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Stock Appreciation Rights                                                   

HSA-Texas will, concurrently with the closing or as soon thereafter as
practicable, in exchange for the cancellation of each outstanding HSA-Texas SAR,
offer to pay each HSA-Texas SAR holder an amount in cash equal to the per share 
amount that an HSA-Texas shareholder would receive upon dissolution of HSA-     
Texas, less the grant price of the HSA-Texas SAR.                               

SHAREHOLDER REPRESENTATIVE                                                      

 Howard Schultz has been appointed as the shareholder representative for
each of the shareholders of HSA-Texas who are parties to the asset agreement. As
the shareholder representative, Mr. Schultz is authorized to take any and all   
actions and make any decisions required or permitted to be taken by him under   
the asset agreement. For example, under the asset agreement, the shareholder    
representative has the authority to:                                            

   - approve any action or perform any covenant or agreement under the asset
      agreement which requires the consent, approval, waiver or performance of
the HSA-Texas shareholders, including any action with regard to   
termination;                                                      

 - settle all claims, matters, disputes or disagreements under the asset
    agreement, the escrow agreement and the indemnification agreement; and

- extend the closing date or change the location of the closing.      

HSA-Texas shareholders will be bound by all actions taken by the      
shareholder representative in connection with the asset agreement, and PRG will 
be entitled to rely on any action or decision of the shareholder representative 
evidenced by a written document executed by the shareholder representative as   
the action or decision of each of HSA-Texas' shareholders. Except for willful   
misconduct or gross negligence, the shareholder representative shall not be     
liable for any action taken in the performance of his duties and shall be       
entitled to indemnification from all liabilities, losses, damages, costs and    
expenses of any kind which may be reasonably incurred or suffered by the        
shareholder representative as a result of the performance of the shareholders   
representative's duties under the asset agreement.                              

EXPECTED CLOSING OF THE PROPOSED ACQUISITION                                    

Under the asset agreement, the acquisition will close on a date to be 
designated by PRG and HSA-Texas, but no later than the tenth business day after 
the satisfaction or waiver of the conditions described below, unless another    
time or date is agreed to by the parties. The asset agreement further provides  
that if the closing has not occurred by March 31, 2002, then, subject to certain
conditions described more fully in this proxy statement, either party may       
terminate the agreement, provided such party is not then in breach.             

REPRESENTATIONS AND WARRANTIES                                                  

  The asset agreement contains customary representations and warranties by
HSA-Texas to PRG regarding aspects of HSA-Texas' and its subsidiaries' assets,  
business, financial condition and structure, including the following:           

    - HSA-Texas' and its subsidiaries' corporate organization, corporate power
and good standing;                                                

 - the absence of untrue statements of material facts or the omission of
material facts;                                                   

- ownership of HSA-Texas capital stock and options and SARs;          

- title to the assets being conveyed;                                 

- receivables, inventory, equipment and real property;                

- environmental and immigration matters;                              

- intellectual property matters;                                      

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 - compliance with all applicable laws, orders, rules and regulations of
governmental entities, and all licenses and permits;              

- tax matters and financial matters;                                  

- employment and labor matters, including benefits and ERISA;         

- trade payables, accrued expenses and other related matters;         

- insurance;                                                          

- material contracts, material leases and license agreements;         

- key clients, employees and associates;                              

- litigation and legal proceedings;                                   

     - the authorization, execution, delivery, performance and enforceability of
the asset agreement and related matters;                          

- internet matters and Year 2000 compliance;                          

- bank accounts;                                                      

- the absence of unlawful payments;                                   

- the absence of conflicts between the asset agreement and HSA-Texas' 
      articles of incorporation, and bylaws and agreements with third parties;

- required consents of third parties or governmental entities;        

- the absence of material changes or events since December 31, 2000;  

- broker's fees and expenses;                                         

- the absence of discussions between HSA-Texas and other potential    
acquirors;                                                        

     - the accuracy of information supplied by HSA-Texas in connection with this
proxy statement;                                                  

     - board approval of the proposed acquisitions and approval requirements for
shareholders;                                                     

   - to the effect that the assets constitute all of the material assets and
   rights with which HSA-Texas has conducted its business for the twelve
month period prior to the effective date;                         

   - the acquisition of Phoenix Audit Recoveries, Inc. and JASAMA, Inc., two
   independent contractors of HSA-Texas, and the acquisition of Tamebond
   Ltd., the parent of Howard Schultz & Associates (International) Ltd.,
which was the licensee of HSA-Texas in the United Kingdom, and J&G
    Associates Ltd., an independent contractor that provides services with
respect to the business of HSA-Texas in the United Kingdom;       

 - entering into a purchase agreement dated November 15, 2001 to acquire
     Howard Schultz & Partner (Deutschland) GmbH, a licensee of HSA-Texas that
provides recovery audit services in Germany and Austria;            

  - the investment intent of HSA-Texas and HSA-Texas shareholders party to
the asset agreement; and                                          

- disclosure of certain transactions between shareholders, directors, 
officers, employees, associates, and affiliates of HSA-Texas and  
HSA-Texas or its subsidiaries.                                    

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  The asset agreement also contains limited representations and warranties
made by PRG to HSA-Texas. See "Other Related Agreements -- Indemnification      
Agreement" for a discussion of the survival period of the representations and   
warranties set forth above.                                                     

COVENANTS AND AGREEMENTS                                                        

The asset agreement also contains covenants by the parties, including 
covenants relating to:                                                          

- conduct of the business by HSA-Texas pending the closing of the     
transaction;                                                      

- HSA-Texas' maintenance of good relations with all individuals and   
     entities that have business relationships with HSA-Texas that relate to
the assets being sold to PRG;                                     

- access to information by PRG and HSA-Texas;                         

     - cooperation in connection with governmental and regulatory filings and in
obtaining consents and approvals;                                 

   - PRG's presenting an offer letter for two years of employment to each of
 Howard Schultz and Andrew Schultz and other employment matters with
respect to HSA-Texas' employees and independent contractors;      

 - issuance by PRG of new nonqualified options to purchase shares of PRG
     common stock to certain key employees who were employees or independent
   contractors of HSA-Texas prior to the closing of the asset agreement;

- use of reasonable best efforts by the parties to cause the proposed 
    acquisition to be recognized as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code and other tax matters;

- liquidation of HSA-Texas following the closing;                     

- use of HSA-Texas' best efforts to obtain all consents and approvals 
       required to complete the proposed acquisitions, including approvals under
the HSR Act;                                                      

   - HSA-Texas, Howard Schultz, Andrew Schultz, the trusts which are parties
to the asset agreement and certain other shareholders of HSA-Texas
entering into noncompetition, non-solicitation and confidentiality
agreements with PRG;                                              

- press releases and confidential treatment of non-public information;

- both parties holding shareholders' meetings to approve the asset    
agreement and the proposed acquisitions;                          

- payment of acquisition expenses;                                    

    - use of HSA-Texas' best efforts to obtain releases of all recorded liens,
subject to certain exceptions;                                    

- arrangements for the transfer to PRG of cash in bank accounts of    
HSA-Texas after the closing of the asset acquisition;             

 - continuation of HSA-Texas' healthcare coverage and vesting of account
balances under HSA-Texas' 401(k) Plan;                            

     - lease of a portion of HSA-Texas' principal Dallas, Texas office to PRG at
market rental rates;                                              

- waiver of compliance with any applicable bulk sales law;            

- commission payments with respect to accounts receivable and work in 
     progress of HSA-Texas employees and associates for any HSA-Texas audits
which have not been finalized;                                    

     - the entering into by John Cook, John Toma, Howard Schultz, Andrew Schultz
     and certain other shareholders of HSA-Texas of a shareholders agreement
with PRG;                                                         

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- contribution, without consideration, of certain equity interests in 
subsidiaries of HSA-Texas;                                        

   - use of commercially reasonable efforts by PRG to cause the PRG board to
       be enlarged to 13 members and to nominate Howard Schultz, Andrew Schultz,
       Nate Levine and Arthur Budge, Jr. for election by the PRG shareholders to
     the PRG board of directors and Mr. Budge to be renominated for election
     by the PRG shareholders at the PRG annual meeting of shareholders to be
held in 2002;                                                     

  - transfer prior to the closing of any assets and rights relating to the
business owned by shareholders of HSA-Texas to HSA-Texas;         

     - HSA-Texas' delivering all required schedules to the asset agreement on or
before December 4, 2001;                                          

- changing PRG's corporate name to PRG-Schultz International, Inc.;   

     - PRG's agreeing after the closing date to assume HSA-Texas' obligations to
   advance expenses under certain advancement agreements, each dated as of
      August 23, 2001, between HSA-Texas and Michael Glazer, Stephanie Holloway,
A. Schultz, and H. Schultz;                                         

  - repayment prior to the closing of the asset acquisition of all amounts
owed by shareholders of HSA-Texas to HSA-Texas;                   

- public announcements and notification of material changes;          

   - HSA-Texas' working with the parties to the German acquisition agreement
   to complete the acquisition of the business of Howard Schultz & Partner
(Deutschland) GmbH pursuant to the German acquisition agreement;    

- use of HSA-Texas' best efforts to enter into a written cost-sharing 
     agreement between HSA-Texas, PRG and Extreme Recoveries, Inc. in form and
     substance satisfactory to PRG, which shall set forth the terms upon which
      HSA-Texas has agreed to subsidize a portion of Extreme Recoveries' cost of
the lawsuit styled Evert Software Inc v. Extreme Recoveries, Inc.;  

    - obtaining resignations of all persons from all offices and directorships
in each of HSA-Texas' subsidiaries and licensees; and             

- filing applicable tax returns of HSA-Texas and its subsidiaries.    

See "Other Related Agreements -- Indemnification Agreement" for a     
discussion of the survival period of the covenants set forth above.             

INDEMNIFICATION BY HSA-TEXAS AND PRG                                            

     The asset agreement provides that HSA-Texas, Howard Schultz, Andrew Schultz
and certain affiliated Schultz family trusts which are parties to the asset     
agreement, jointly and severally, will indemnify PRG and its subsidiaries,      
affiliates, officers, directors, employees and agents from any damages, claims, 
liabilities, lawsuits, losses, costs or expenses, including reasonable          
attorneys' fees and expenses incurred in litigation or otherwise, incurred in   
connection with the matters set forth below and others discussed in the asset   
agreement:                                                                      

 - any misrepresentation or breach of any representation or warranty, or
breach, nonfulfillment of, or failure to perform, any covenant,   
  obligation or agreement of HSA-Texas or any shareholder of HSA-Texas
     contained in or made pursuant to the asset agreement or in any schedule
      or with respect to each of the acquisitions of Phoenix Audit Recoveries,
       Inc., JASAMA, Inc., Howard Schultz & Partner (Deutschland) GmbH, Tamebond
Ltd. and J&G Associates Ltd.;                                     

- any liability or obligation suffered by PRG, other than HSA-Texas'  
   liabilities specifically assumed by PRG, relating to the operation of
       HSA-Texas' business or the ownership of its assets prior to the effective
date or with respect to each of the acquisitions of Phoenix Audit 
    Recoveries, Inc., JASAMA, Inc., Howard Schultz & Partner (Deutschland)
       GmbH, Tamebond Ltd. and J&G Associates Ltd., prior to the closing date of
     such acquisitions, which is not specifically disclosed in the schedules
to the asset agreement;                                           

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  - any failure of any of HSA-Texas or a subsidiary thereof to comply with
any specified legal compliance requirements;                      

- the treatment, by any governmental entity, of HSA-Texas independent 
       contractors or HSA-Texas affiliated foreign operating company independent
contractors as employees and not as independent contractors;      

   - any tax or other charge or expense for HSA-Texas' failure to qualify or
maintain its qualification as an S corporation;                   

     - any failure to obtain prior to closing the asset agreement any consent to
    the assignment to PRG of any agreements between HSA-Texas and Tamebond
      Ltd. and J & G Associates Ltd. or Howard Schultz & Partner (Deutschland)
GmbH;                                                             

- the failure to obtain concurrently with the closing of Phoenix Audit
    Recoveries, Inc., JASAMA, Inc., Howard Schultz & Partner (Deutschland)
GmbH, Tamebond Ltd. and J & G Associates Ltd. non-competition,    
  non-solicitation and confidentiality restrictive covenants from each
seller and each equity holder of such seller;                     

    - the failure, effective from and after the respective closings of Phoenix
  Audit Recoveries, Inc. and JASAMA, Inc., of HSA-Texas, or PRG as its
    assignee, to collect in full, net of any reserve established as of the
     respective closing date of such acquisitions, within 270 days after the
   day on which it first becomes due and payable, any account receivable
   outstanding on the books of Phoenix Audit Recoveries, Inc. or JASAMA,
Inc. on the respective closing date of each such acquisition;     

    - any claims asserted by shareholders of HSA-Texas, HSA-Texas optionees or
holders of HSA-Texas SARs in connection with or arising out of the
     determination of the number and exercise price of options to be assumed
 by PRG, and the allocation among the HSA-Texas shareholders and the
       optionees of the shares of PRG common stock under the asset agreement and
the consideration to be paid to the shareholders of the affiliated
foreign operating companies under the stock agreement;            

- the failure to close the acquisition of Howard Schultz & Partners   
       (Deutschland) GmbH or to close such acquisition on the terms agreed to by
PRG at any time within 365 days after the closing of the asset    
acquisition;                                                      

- all retained liabilities;                                           

- the failure to comply with any applicable bulk transfer laws;       

- the amount in excess of $100,000 of any vendor payback provided the 
      aggregate vendor paybacks to such client are in excess of $350,000, less
any payback reserve applicable in respect of any inactive audit;  

  - any claim, except claims raised by Evert Software, Inc., by any person
    that the manufacture, marketing, license, sale or use by HSA-Texas and
its subsidiaries, or by PRG after the closing, of any intellectual
  property assets used by any of HSA-Texas' independent contractors in
     connection with services rendered to HSA-Texas violates or will violate
any license or agreement with any third party or infringes or has 
infringed on the intellectual property rights of others;          

    - any breach occurring prior to the closing by HSA-Texas or any subsidiary
    of any representation, warranty, covenant or agreement in any assigned
contract or assigned lease; and                                   

- all severance liabilities or obligations of any subsidiary to any   
employees of or other service providers to the business.          

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     If, at any time within 365 days after the closing of the asset acquisition,
despite commercially reasonable efforts, PRG is unable to close the acquisition 
of Howard Schultz & Partner (Deutschland) GmbH because the seller has demanded a
purchase price in excess of or terms more favorable to the seller than those    
previously agreed to by PRG at the closing of the asset acquisition, PRG will   
notify the HSA-Texas shareholders representative in writing specifying the basis
for such inability to close and if applicable the amount of the consideration in
excess of the agreed upon purchase price required to close such acquisition. In 
such event PRG will have the option:                                            

   - to close such acquisition by paying the excess price or agreeing to the
more favorable terms, as applicable, in which event, the HSA-Texas
     shareholders party to the asset agreement and HSA-Texas, will indemnify
       PRG, and its subsidiaries, affiliates, directors, officers, employees and
     agents, and hold them harmless, from and against the full amount of the
     additional cost to PRG of the excess price or such terms less favorable
to PRG to close such acquisition; or                              

     - not to close such acquisition, in which event, the HSA-Texas shareholders
    party to the asset agreement and HSA-Texas will indemnify PRG, and its
      subsidiaries, affiliates, directors, officers, employees and agents, and
 hold them harmless, from the expected lost earnings to PRG from the
      failure to close such acquisition. In such case, the parties have agreed
       that if such acquisition is not closed, the indemnification to which PRG,
  and its subsidiaries, affiliates, directors, officers, employees and
      agents, will be entitled will equal $1.4 million, as liquidated damages,
  which amount the parties agree is reasonable and has been arrived at
    after a good faith effort to estimate the value of such lost earnings.

     In the event that such acquisition is not completed prior to 365 days after
the closing of the asset acquisition, despite PRG's commercially reasonable     
efforts, the HSA-Texas shareholders party to the asset agreement and HSA-Texas  
will indemnify PRG, and its subsidiaries, affiliates, directors, officers,      
employees and agents, and hold them harmless, from the expected lost earnings to
PRG from the failure to close such acquisition, and the parties have agreed such
amount equals $1.4 million, as liquidated damages.                              

    Neither HSA-Texas, Howard Schultz, Andrew Schultz nor the trusts which are
parties to the asset agreement shall have any liability to the PRG for any      
claims, liabilities, lawsuits, costs, damages or expenses, including reasonable 
attorneys' fees and expenses incurred in litigation or otherwise, arising out of
and sustained by PRG with respect to HSA-Texas' failure to obtain an executed   
non-competition agreement from any of Michael Lowery, Gertrude Lowery, Charles  
Schembri or Mac Martirossian.                                                   

     The asset agreement also provides that PRG will indemnify HSA-Texas and its
shareholders and HSA-Texas' affiliates, directors, officers, employees and      
agents harmless from and against all claims, liabilities, lawsuits, costs,      
damages or expenses, including reasonable attorneys fees and expenses incurred  
in litigation or otherwise, arising out of and sustained by any of them due to  
or relating to:                                                                 

     - any misrepresentation or breach of any representation, warranty, covenant
or agreement of PRG in the asset agreement; and                   

- any liability or obligation incurred by HSA-Texas or any shareholder
      relating to the operation or ownership of the HSA-Texas business by PRG,
       or the ownership or use of the acquired assets by PRG, from and after the
effective date.                                                   

Concurrently with the closing, PRG, HSA-Texas, Howard Schultz, Andrew 
Schultz, the Andrew H. Schultz Irrevocable Trust and certain other affiliated   
Schultz family trusts which are parties to the asset agreement will enter into  
an indemnification agreement which will set forth the procedures for            
indemnification, and the survival period and limitations on indemnification of  
the claims described above. For a discussion of the indemnification agreement,  
see "Other Related Agreements -- Indemnification Agreement" below.              

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CONDITIONS TO CLOSING                                                           

PRG's and HSA-Texas' respective obligations to close the proposed     
acquisitions are subject to the satisfaction or waiver, on or prior to the      
closing date, of the following conditions:                                      

     - approval by PRG's shareholders of the proposed share and option issuances
and the election of the nominated directors;                      

- HSA-Texas' providing to PRG on or before December 26, 2001, a fully 
    executed copy of an HSA-Texas unanimous consent or a certified copy of
      resolutions duly adopted by the holders of HSA-Texas voting common stock
approving the asset agreement;                                    

- no law, injunction or other order preventing the completion of the  
proposed acquisitions may be in effect or pending or threatened;  

   - no objection by the SEC to PRG's mailing of this proxy statement to PRG
   shareholders and no stop order or other order or suspension of use of
      this proxy statement shall have been issued by the SEC and no proceeding
  for that purpose shall have been initiated or threatened by the SEC;

- the approval for listing on The Nasdaq National Market, subject to  
  official notice of issuance, of the shares of PRG common stock to be
issued in the proposed acquisitions;                              

- the absence of certain conflicts;                                   

- all parties' having obtained all required consents;                 

    - prior to or concurrently with the closing, PRG must have consummated the
       stock agreement with regard to HSA-Singapore, HSA-Asia, HSA-Australia and
HSA-Canada; and                                                   

    - PRG must have obtained the required consents of its principal lenders, a
   syndicate led by Bank of America, N.A., or have entered into a new or
amended senior credit facility that does not prohibit the proposed
acquisitions.                                                     

     Also, HSA-Texas' obligations to close the proposed acquisitions are subject
to the satisfaction or waiver of each of the following additional conditions:   

     - PRG must perform in all material respects its obligations under the asset
agreement, including certain deliveries to be made at closing and 
delivery of certain executed documents; and                       

 - PRG's representations and warranties contained in the asset agreement
      must be accurate in all material respects as of the closing of the asset
      agreement and as of the date of the asset agreement, except for any such
 representations and warranties that are made as of a specific date,
       which, in such case, must be accurate in all material respects as of such
date; and                                                         

   - PRG's board must have nominated for election by the PRG shareholders at
       the PRG special meeting Howard Schultz, Andrew Schultz, Arthur Budge, Jr.
  and Nate Levine, and such nominees must have been elected at the PRG
special meeting.                                                  

   Also, PRG's obligations to close the proposed acquisitions are subject to
the satisfaction or waiver of each of the following additional conditions:      

     - HSA-Texas must perform in all material respects its obligations under the
     asset agreement, including certain deliveries to be made at closing and
delivery of certain executed documents;                           

     - each shareholder of HSA-Texas must have repaid in full at or prior to the
closing all amounts owed by such shareholder to HSA-Texas;        

- HSA-Texas' representations and warranties contained in the asset    
     agreement and in schedules must be accurate in all material respects as
   of the closing of the asset agreement and as of the date of the asset
    agreement, except for any such representations and warranties that are
      made as of a specific date, which, in such case, must be accurate in all
material respects as of such date;                                

     - HSA-Texas must have completed the acquisition of Howard Schultz & Partner
   (Deutschland) GmbH in accordance with the German acquisition agreement;
and                                                                 

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     - the opinion of Merrill Lynch shall not have been modified or withdrawn by
Merrill Lynch.                                                    

PRG and HSA-Texas currently believe that it is likely that all of the 
material conditions to the asset acquisition will be fulfilled. In the unlikely 
event that a condition is not fulfilled, PRG or HSA-Texas may, but will not be  
required to, waive the condition and complete the asset acquisition. If a waiver
by PRG results in a material change in the terms of the asset acquisition, PRG  
will resolicit the votes of its shareholders.                                   

LIMITATION ON HSA-TEXAS' AND PRG'S ABILITY TO CONSIDER OTHER ACQUISITION        
PROPOSALS                                                                       

  HSA-Texas and PRG have agreed that they will not directly or indirectly,
and will not authorize or permit any of their representatives to, directly or   
indirectly:                                                                     

- solicit, initiate or encourage the submission of any alternative    
    acquisition proposal with respect to HSA-Texas or take any action that
   may reasonably be expected to lead to such an alternative acquisition
proposal; or                                                      

     - participate in any discussions or negotiations or furnish any information
regarding HSA-Texas or PRG or its subsidiaries to any person in   
      connection with an inquiry or indication of interest that may lead to an
alternative acquisition proposal.                                 

     However, these restrictions shall not be deemed to prevent PRG or its board
of directors from complying with its legal rights to make a public statement    
about a tender offer under Rule 14e-2(a) promulgated under the Securities       
Exchange Act of 1934 with regard to an alternative acquisition proposal.        
Furthermore, these restrictions will not prohibit PRG from furnishing nonpublic 
information regarding PRG or its subsidiaries to, or entering into discussions  
or negotiations with, any person in response to an unsolicited bona fide        
proposal that is submitted by that person, if:                                  

   - the board of directors of PRG determines in good faith that this action
       is required in order for the board of directors of PRG to comply with its
fiduciary obligations to PRG's shareholders under applicable law; 

- the board of directors of PRG determines in good faith that the     
  unsolicited alternative acquisition proposal would, if completed, be
    reasonably likely to constitute a superior proposal, as defined below;
and                                                               

  - prior to taking such action, PRG receives from that person an executed
confidentiality agreement containing customary limitations.       

However, PRG may also take any action which may lead to an alternative
acquisition proposal from a person if the person agrees to include in the       
alternative acquisition proposal the concurrent acquisition of all of the stock 
or substantially all of the assets of HSA-Texas and the four affiliated foreign 
operating companies as if HSA-Texas and the four affiliated foreign operating   
companies were a part of PRG at the completion of the alternative acquisition   
proposal.                                                                       

For these purposes, a superior proposal means an unsolicited bona fide
written offer by a third party which:                                           

- the board of directors of PRG determines in its good faith business 
     judgment to be superior to PRG's shareholders from a financial point of
       view as compared to the transactions contemplated by the asset agreement;
and                                                               

 - is reasonably capable of being completed in accordance with its terms
     taking into account all factors the board considers relevant, including
all legal, financial, regulatory and other aspects of the offer.  

   If HSA-Texas receives an alternative acquisition proposal, any inquiry or
indication of interest that may reasonably be expected to lead to an alternative
acquisition proposal or any request for nonpublic information, HSA-Texas has    
agreed to notify PRG promptly upon becoming aware of it.                        

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In addition, the PRG board of directors has agreed not to:            

    - withdraw or modify, or propose to withdraw or modify, its recommendation
    for the approval of the proposed acquisitions in an adverse manner; or

- approve or recommend to its shareholders an alternative acquisition 
proposal, unless:                                                 

      - the PRG board of directors determines in good faith that it is necessary
        to terminate the asset agreement in order for the PRG board of directors
to comply with its fiduciary duties to PRG's shareholders under 
        applicable law, in which case PRG will terminate the asset agreement and
pay to HSA-Texas a termination fee of $2.0 million; or          

      - the alternative acquisition proposal includes the concurrent acquisition
   of HSA-Texas and the four affiliated foreign operating companies or
    substantially all of the assets of HSA-Texas and the four affiliated
   foreign operating companies as if HSA-Texas and the four affiliated
       foreign operating companies were a part of PRG at the completion of the
     PRG alternative acquisition proposal, in which case PRG may terminate
    the asset agreement without any obligation to pay HSA-Texas the $2.0
million termination fee.                                        

   The PRG board of directors may not approve or recommend a PRG alternative
acquisition proposal on the basis that it is necessary to comply with its       
fiduciary duties to PRG's shareholders, and in connection therewith withdraw or 
modify its recommendation, unless:                                              

- the PRG alternative acquisition proposal is a superior proposal, as 
defined above; and                                                

   - the PRG board of directors shall have specifically determined that such
   action is necessary for the PRG board of directors to comply with its
fiduciary duties to PRG's shareholders.                           

TERMINATION OF THE ASSET AGREEMENT                                              

 The asset agreement may be terminated at any time prior to the closing,
whether before or after approval of the proposed acquisitions by the            
shareholders of HSA-Texas or PRG:                                               

- by mutual written consent of HSA-Texas and PRG;                     

- by either PRG or HSA-Texas, if:                                     

      - the proposed acquisitions have not been completed on or before March 31,
      2002; provided the party exercising the right to terminate is not then
in breach in any material respect of any of its representations,
       warranties, covenants or other agreements under the asset agreement; or

  - PRG has not received lender consent or entered into a new or amended
senior credit facility on or before March 31, 2002 that does not
prohibit the proposed transactions; or                          

    - any court or other governmental entity has taken or failed to take any
      action that has become final and non-appealable enjoining, restraining
or otherwise prohibiting the proposed acquisitions; or          

- by HSA-Texas, if:                                                   

   - PRG materially breaches its representations or warranties or fails to
     perform its covenants or agreements under the asset agreement and any
     such breach or failure has not been cured by the earlier of March 31,
2002 or 10 days after receipt of written notice thereof has been
received by PRG, provided that neither HSA-Texas nor any of its 
shareholders is then in breach in any material respect of its   
    representations, warranties, covenants or agreements under the asset
agreement; or                                                   

   - approval of PRG's shareholders has not been obtained by reason of the
failure to obtain the required PRG vote;                        

   - upon the occurrence of an event that has a material adverse effect on
       PRG, taken as a whole with its consolidated subsidiaries, provided that
neither HSA-Texas nor any of its shareholders is then in        

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  breach in any material respect of its representations, warranties,
covenants or agreements under the asset agreement;              

  - the per share closing price of PRG's common stock on any trading day
       during the period beginning on August 3, 2001 and ending on a date five
       trading days prior to the closing of the asset acquisition is less than
$4.00;                                                          

- the PRG board of directors or any committee thereof approves or   
        recommends to its shareholders an alternative acquisition proposal which
        includes the concurrent acquisition of HSA-Texas and the four affiliated
     foreign operating companies by a third party, but HSA-Texas or any of
       the affiliated foreign operating companies, in its discretion, does not
elect to participate in such alternative acquisition proposal;  

- the PRG board of directors or any committee thereof approves or   
   recommends to its shareholders any alternative acquisition proposal
      which does not include the concurrent acquisition of HSA-Texas and the
  four affiliated foreign operating companies by a third party as if
    HSA-Texas and the four affiliated foreign operating companies were a
       part of PRG at the completion of such alternative acquisition proposal;

      - the PRG board of directors or any committee thereof shall for any reason
        have withdrawn, or shall have amended or modified in a manner adverse to
     HSA-Texas, the PRG board's recommendation to the PRG shareholders; or

  - a tender or exchange offer to acquire 50% or more of the outstanding
      shares of PRG common stock shall have been commenced by a third party,
       and PRG shall not within 10 business days after such tender or exchange
  offer is first published, have sent or given to its shareholders a
    statement disclosing that PRG recommends rejection of such tender or
exchange offer.                                                 

- by PRG, if:                                                         

  - its board makes the determination to enter into a definitive written
agreement with respect to an alternative acquisition proposal;  

      - HSA-Texas or its shareholders materially breach their representations or
     warranties or fail to perform their covenants or agreements under the
    asset agreement and such breach or failure has not been cured by the
    earlier of March 31, 2002 or 10 days after receipt of written notice
     thereof has been received by HSA-Texas and its shareholders, provided
that PRG is not then in breach in any material respect of its   
    representations, warranties, covenants or agreements under the asset
agreement;                                                      

- approval of the HSA-Texas shareholders has not been obtained;     

   - approval of the HSA-Texas recommendations are rescinded by any of the
holders of HSA-Texas voting common stock;                       

   - upon the occurrence of an event that has a material adverse effect on
  HSA-Texas, provided that PRG is not then in breach in any material
   respect of its representations, warranties, covenants or agreements
under the asset agreement; or                                   

     - within 30 days after receipt of all schedules that were not attached to
the asset agreement on the date it was signed.                  

Upon termination in accordance with the above provisions, the asset   
agreement will become void and have no effect, without any liability or         
obligation on the part of PRG, HSA-Texas or their respective shareholders,      
officers or directors, other than the payment of termination fees as described  
below, and provisions relating to broker's fees and expenses, confidentiality   
and other provisions that survive generally; provided, however, that termination
will not relieve any party from liability or damages arising out of its breach  
of the representations, warranties, covenants or agreements set forth in the    
asset agreement.                                                                

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TERMINATION FEES                                                                

   If the asset agreement is terminated after PRG mails this proxy statement
to its shareholders:                                                            

  - by either party, because the HSA-Texas special meeting was not held by
March 31, 2002; or                                                

- by PRG, because approval of the HSA-Texas shareholders has not been 
obtained;                                                         

     - by PRG, because approval of the asset agreement has been rescinded by any
of the holders of HSA-Texas voting common stock;                  

- by HSA-Texas, because it elects not to participate in an alternative
acquisition proposal; or                                          

   - by PRG, because HSA-Texas or its shareholders materially breached their
representations or warranties or failed to perform covenants or   
     agreements under the asset agreement and such breach or failure was not
cured by the earlier of March 31, 2002 or 10 days after receipt of
written notice thereof has been received by HSA-Texas and its     
   shareholders, provided that PRG is not then in breach in any material
       respect of its representations, warranties, covenants or agreements under
the asset agreement;                                              

then HSA-Texas will be required to promptly pay PRG an amount equal to all of   
PRG's expenses incurred in connection with the proposed acquisitions, by wire   
transfer of immediately available funds.                                        

     The asset agreement also provides that if the asset agreement is terminated
after PRG mails this proxy statement to its shareholders:                       

  - by either party, because PRG shareholders fail to approve the proposed
     share and option issuances and the election of the nominated directors;

- by HSA-Texas, because PRG materially breaches its representations or
  warranties or fails to perform its covenants or agreements under the
      asset agreement and any such breach or failure has not been cured by the
  earlier of March 31, 2002 or 10 days after receipt of written notice
       thereof has been received by PRG, provided that neither HSA-Texas nor any
   of its shareholders who are parties to the asset agreement is then in
breach in any material respect of its representations, warranties,
covenants or agreements under the asset agreement; or             

  - by either party, because the PRG special meeting was not held by March
31, 2002;                                                         

then PRG will be required to promptly pay HSA-Texas an amount equal to all of   
HSA-Texas' expenses incurred in connection with the proposed acquisitions by    
wire transfer of immediately available funds.                                   

If the asset agreement is terminated by HSA-Texas after PRG mails this
proxy statement to its shareholders because:                                    

- the PRG board of directors or any committee thereof approves or     
       recommends to its shareholders any alternative acquisition proposal which
   does not include the concurrent acquisition of HSA-Texas and the four
     affiliated foreign operating companies by a third party as if HSA-Texas
       and the four affiliated foreign operating companies were a part of PRG at
the completion of such alternative acquisition proposal;          

    - the PRG board of directors or any committee thereof shall for any reason
      have withdrawn, or shall have amended or modified in a manner adverse to
 HSA-Texas, the PRG board's recommendation to PRG's shareholders; or

- a tender or exchange offer to acquire 50% or more of the outstanding
    shares of PRG common stock shall have been commenced by a third party,
  and PRG shall not have, within 10 business days after such tender or
       exchange offer is first published, have sent or given to its shareholders
    a statement disclosing that PRG recommends rejection of such tender or
exchange offer;                                                   

then PRG will be required to pay HSA-Texas a fee of $2.0 million and all of     
HSA-Texas' expenses incurred by HSA-Texas and its shareholders in connection    
with the asset agreement. The termination fee will be                           

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payable within 10 days after HSA-Texas exercises its right to terminate the     
asset agreement as described above.                                             

EXPENSES                                                                        

The asset agreement provides that, subject to the provisions regarding
termination fees as described above, PRG and HSA-Texas will pay their own       
respective fees and expenses incurred in connection with the asset agreement and
the transactions contemplated by the asset agreement. The PRG transaction       
expenses include all fees and expenses of agents, representatives, brokers,     
counsel and accountants for PRG, financial advisory expenses of Bain & Co., all 
filing fees and expenses in respect of filings by PRG under the HSR Act, and all
fees and expenses for the preparation, printing, filing, and mailing of this    
proxy statement and drafts of the joint proxy statement/prospectus registration 
statement on Form S-4 previously prepared in connection with the asset          
acquisition and the solicitation of shareholder approvals in connection         
herewith.                                                                       

   In addition, if the proposed acquisitions are completed, PRG will pay any
previously unpaid reasonable and necessary fees and expenses of attorneys and   
accountants of HSA-Texas incurred in connection with the proposed acquisitions, 
including all fees and expenses of KPMG LLP in connection with the audit of HSA-
Texas, its majority-owned subsidiaries and those companies under common control 
and ownership by its controlling stockholders financial statements.             

  If either party shall terminate the asset agreement prior to the date on
which PRG mails this proxy statement to its shareholders or if either party     
shall terminate the asset acquisition after PRG mails this proxy statement      
because a court or governmental entity prohibits the transactions contemplated  
by the asset agreement or PRG fails to obtain lender consent, and such party    
seeking termination is not then in breach in any material respect of any of its 
representations, warranties, covenants and other agreements under the asset     
agreement, neither party shall have any liability or obligation to the other to 
pay either its expenses or the termination fee described above.                 

If PRG terminates the asset agreement:                                

    - because of an event which has a material adverse effect on HSA-Texas; or

- in order to enter into a superior acquisition; or                   

- within 30 days of receipt of the required schedules;                

and PRG is not then in breach in any material respect of any of its             
representations, warranties, covenants and other agreements under the asset     
agreement, neither party shall have any liability or obligation to the other to 
pay either its expenses or the termination fee described above.                 

If HSA-Texas terminates the asset agreement because:                  

- an event has a material adverse effect on PRG; or                   

 - PRG's closing price is less than $4.00 during the period beginning on
August 3, 2001 and ending on a date five trading days prior to the
closing of the asset acquisition; or                              

- PRG's board or any committee recommends an alternative transaction; 

and HSA-Texas is not then in breach in any material respect of any of its       
representations, warranties, covenants and other agreements under the asset     
agreement, neither party shall have any liability or obligation to the other to 
pay either its expenses or the termination fee described above.                 

     Any and all expenses incurred by any shareholder of HSA-Texas in connection
with the authorization, negotiation, preparation, execution and performance of  
the asset agreement and the contemplated transactions will be paid by such      
shareholder of HSA-Texas.                                                       

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AMENDMENT; WAIVER                                                               

The asset agreement may be amended by the parties, by action taken or 
authorized by their respective boards of directors, at any time before or after 
approval of the proposed acquisitions by the shareholders of PRG and HSA-Texas; 
except that after approval has been obtained, no amendment which by law or The  
Nasdaq National Market rules would require further approval by PRG's            
shareholders will be made without such further approval. In addition, prior to  
the closing, the parties may:                                                   

     - extend the time for the performance of any obligation or other act of any
other party to the asset agreement;                               

     - waive any inaccuracies in the representations and warranties contained in
    the asset agreement or in any document delivered pursuant to the asset
agreement; and                                                    

  - waive compliance with any of the agreements or conditions contained in
    the asset agreement, provided that no amendment which by law or Nasdaq
      National Market rules requires further approval by PRG shareholders will
be made without such further approval.                            

  All amendments and waivers must be in writing and signed by the parties.

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MATERIAL TERMS OF THE STOCK AGREEMENT 

     The following is a discussion of the material terms of the proposed amended
and restated stock agreement. The full text of the stock agreement is attached  
as Annex B hereto, and is included as part of, this proxy statement. You are    
encouraged to read the entire stock agreement carefully.                        

PURCHASE PRICE; CLOSING                                                         

    Under the terms of the stock agreement, PRG will acquire substantially all
of the outstanding stock of HSA-Singapore and all of the outstanding stock of   
HSA-Asia, HSA-Australia and HSA-Canada, each an affiliated foreign operating    
company of HSA-Texas, in exchange for a total aggregate consideration of 629,508
shares of PRG common stock, of which an aggregate of:                           

- 1,535 shares will be issued to acquire HSA-Singapore;               

- 75,234 shares will be issued to acquire HSA-Asia;                   

- 245,662 shares will be issued to acquire HSA-Australia; and         

- 307,077 shares will be issued to acquire HSA-Canada.                

The closing of the transactions contemplated by the stock agreement is
contingent upon the closing of the transactions contemplated by the asset       
agreement. In the event the transactions contemplated by the asset agreement are
not completed, the parties to the stock agreement will not have any obligation  
to complete the transactions described in the stock agreement.                  

SHAREHOLDER REPRESENTATIVE                                                      

   Pursuant to the stock agreement, Howard Schultz has been appointed as the
shareholder representative for each of the shareholders of the affiliated       
foreign operating companies. The terms and provisions relating to the           
shareholder representative under the stock agreement are substantially the same 
as those under the asset agreement. See "Material Terms of the Asset            
Agreement -- Shareholder Representative" above.                                 

REPRESENTATIONS AND WARRANTIES                                                  

  The stock agreement contains customary representations and warranties by
the shareholders of the affiliated foreign operating companies to PRG regarding 
aspects of each of the affiliated foreign operating companies' assets, business,
financial condition, and structure and other facts pertinent to the proposed    
acquisitions, including such shareholders' ownership of the stock of the        
affiliated foreign operating companies and their authority to enter into the    
stock agreement. Matters covered by the representations and warranties made by  
the shareholders of each affiliated foreign operating company include the       
following:                                                                      

- corporate organization, corporate power and good standing;          

 - the absence of untrue statements of material facts or the omission of
material facts;                                                   

 - that each affiliated foreign operating company has, and will have, at
  closing, marketable title to all of its assets free and clear of any
    mortgages, liens, pledges and security interests, except for any liens
for taxes not yet due and payable;                                

- information regarding audits and accounts receivable;               

- environmental and immigration matters;                              

- intellectual property matters;                                      

    - compliance with all applicable laws and all licenses and permits held by
each affiliated foreign operating company;                        

- tax returns and liabilities;                                        

- financial statements;                                               
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- employment matters, including benefits and ERISA;                   

- trade payables, accrued expenses and outstanding debt;              

- insurance;                                                          

 - material contracts, leases and license agreements, the enforceability
thereof and the lack of any defaults thereunder;                  

- key clients, employees and associates;                              

- compliance with employment laws;                                    

- litigation and legal proceedings;                                   

- internet matters and Year 2000 compliance;                          

- bank accounts;                                                      

- the absence of unlawful payments;                                   

- that the consummation of the purchase of the stock of the affiliated
    foreign operating companies does not require the consent of any person
  and will not violate any material contracts of the foreign operating
companies, or laws or organizational documents applicable to the  
shareholders of the affiliated foreign operating companies;       

- the absence of material changes or events;                          

   - investment intent of each of the shareholders of the affiliated foreign
operating companies;                                              

- the absence of any broker's fees or expenses; and                   

- disclosure of certain arrangements with any shareholder, director,  
       officer, employee, associate or other affiliate of the affiliated foreign
operating company.                                                

  The stock agreement also contains limited representations and warranties
made by PRG to the shareholders of each of the affiliated foreign operating     
companies.                                                                      

See "Other Related Agreements -- Indemnification Agreement" for a     
discussion of the survival period of the representations and warranties set     
forth above.                                                                    

COVENANTS AND AGREEMENTS                                                        

The stock agreement also contains covenants by the parties, including 
covenants relating to:                                                          

 - conduct of the business of the affiliated foreign operating companies
pending the closing of the transaction;                           

     - each affiliated foreign operating company maintaining good relations with
    all individuals and entities that have business relationships with it;

- access to information by PRG and the affiliated foreign operating   
companies;                                                        

- use of best efforts to obtain all consents and approvals required to
complete the proposed acquisitions;                               

- press releases and confidential treatment of non-public information;

- acquisition expenses and tax matters;                               

- waivers of claims and covenants not to sue;                         

- resignations of each of the shareholders of the affiliated foreign  
 operating companies from all offices and directorships held by such
shareholders;                                                     

- repayment by shareholders of shareholder loans from each affiliated 
foreign operating company;                                        

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  - delivery of all required schedules to the stock agreement on or before
November 19, 2001;                                                  

 - transfer of equity interests by Acceptor Professional Directors (Pte)
    Ltd. to reduce its equity interest in HSA-Singapore to equal the minimum
  amount required to satisfy Singapore law regarding resident ownership;

- commission payments with respect to accounts receivable and work in 
   progress of certain independent contractors of the affiliated foreign
operating companies to employees; and                             

- public announcements and notification of material changes.          

See "Other Related Agreements -- Indemnification Agreement" for a     
discussion of the survival period of the covenants set forth above.             

INDEMNIFICATION                                                                 

     The stock agreement provides that Howard Schultz, Andrew H. Schultz and the
Andrew H. Schultz Irrevocable Trust, jointly and severally, will indemnify PRG, 
and its subsidiaries, affiliates, officers, directors, employees and agents from
any damages, claims, liabilities, lawsuits, costs, losses or expenses, including
reasonable attorney's fees and expenses incurred in litigation or otherwise,    
incurred in connection with:                                                    

 - any misrepresentation or breach of any representation or warranty, or
breach, nonfulfillment of, or failure to perform, any covenant,   
  obligation or agreement of any shareholder of the affiliated foreign
operating companies contained in the stock agreement;             

    - any liability or obligation suffered by PRG as a result of the operation
  of the business of the affiliated foreign operating companies or the
ownership or use of the assets of the affiliated foreign operating
     companies prior to the closing date of the stock agreement which is not
specifically disclosed in the schedules to the stock agreement;   

     - any failure of any of the affiliated foreign operating companies prior to
  the closing of the stock acquisition to obtain any required consent;

    - the treatment, by any governmental entity, of independent contractors of
the affiliated foreign operating companies as employees and not as
independent contractors;                                          

    - the amount in excess of $100,000 of any vendor payback of any affiliated
    foreign operating company in respect of any inactive audit which is in
excess of $350,000;                                               

  - all severance liabilities or obligations, if any, to all employees and
all associates of any affiliated foreign operating company who    
  voluntarily resign employment within 30 days after the closing date;

 - any litigation, arbitrations and mediations of the affiliated foreign
       operating companies that existed on or at any time prior to the effective
date of the acquisitions; and                                     

 - any surplus distributed to the Andrew H. Schultz Irrevocable Trust by
HSA-Canada to pay federal income taxes.                           

    The stock agreement also provides that PRG will indemnify each shareholder
of an affiliated foreign operating company and hold it harmless from and against
all losses arising out of and sustained by any of them due to or relating to:   

     - any misrepresentation or breach of any representation, warranty, covenant
or agreement of PRG in the stock agreement; and                   

     - any liability or obligation incurred by any shareholder of the affiliated
       foreign operating companies relating to the operation or ownership of any
     affiliated foreign operating company by PRG, or the ownership or use of
     the assets of any affiliated foreign operating company by PRG, from and
after the effective date.                                         

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Concurrently with the closing, PRG, HSA-Texas, Howard Schultz, Andrew 
Schultz, the Andrew H. Schultz Irrevocable Trust and certain other affiliated   
Schultz family trusts will enter into an indemnification agreement which will   
set forth the procedures for indemnification, and the survival period and       
limitations on indemnification of the claims described above. For a discussion  
of the indemnification agreement, see "Other Related                            
Agreements -- Indemnification Agreement" below.                                 

CONDITIONS TO CLOSING                                                           

PRG's and the affiliated foreign operating companies' shareholders'   
respective obligations to close the proposed acquisitions are subject to the    
satisfaction or waiver, on or prior to the closing date, of the following       
conditions:                                                                     

- no law, injunction or other order preventing the completion of the  
proposed acquisitions may be in effect or pending or threatened;  

 - the asset agreement must be consummated prior to or concurrently with
  closing of the transactions contemplated in the stock agreement; and

- all required consents and approvals must be obtained.               

     The shareholders of the affiliated foreign operating companies' obligations
to close the proposed acquisitions are subject to the satisfaction, or waiver by
the shareholder representative, on or prior to the closing date, of each of the 
following additional conditions:                                                

 - PRG must perform its obligations under the stock agreement, including
certain deliveries to be made at closing; and                     

 - PRG's representations and warranties contained in the stock agreement
must be accurate in all material respects as of the closing of the
  proposed acquisitions and as of the date of the stock agreement, and
      except for any such representations and warranties that are made as of a
  specific date, which, in such case, must be accurate in all material
respects as of such date.                                         

 PRG's obligations to close the proposed acquisitions are subject to the
satisfaction, or waiver by PRG, on or prior to the closing date, of the         
following additional conditions:                                                

  - the shareholders of the affiliated foreign operating companies and the
     Andrew H. Schultz Irrevocable Trust must have performed in all material
     respects their obligations under the stock agreement, including certain
deliveries to be made at closing;                                 

  - absence of any pending or threatened investigation by any governmental
     entity with regard to any affiliated foreign operating company which in
    the reasonable judgment of PRG would have a material adverse effect on
such affiliated foreign operating company;                        

  - since December 31, 2000, no affiliated foreign operating company shall
have been subject to a material adverse effect;                   

- the shareholders of the affiliated foreign operating companies must 
provide PRG with revised schedules dated as of the closing date;  

   - the shareholders of the affiliated foreign operating companies' and the
  Andrew H. Schultz Irrevocable Trust's representations and warranties
contained in the stock agreement must be accurate in all material 
   respects as of the closing of the proposed acquisitions and as of the
  date of the stock agreement, except for any such representations and
       warranties that are made as of a specific date, which, in such case, must
be accurate in all material respects as of such date;             

- the repayment of all amounts owed by any shareholder to any of the  
companies.                                                        

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PRG and the shareholders of the affiliated foreign operating companies
currently believe that it is likely that all of the material conditions to the  
stock acquisition will be fulfilled. In the unlikely event that a condition is  
not fulfilled, the parties may, but will not be required to, waive the condition
and complete the stock acquisition. If a waiver by PRG results in a material    
change in the terms of the stock acquisition, PRG will resolicit the votes of   
its shareholders.                                                               

TERMINATION OF THE STOCK AGREEMENT                                              

    The stock agreement will automatically terminate on the termination of the
asset agreement. The stock agreement may be terminated at any time prior to the 
closing as follows:                                                             

- by mutual written consent of the shareholder representative and PRG;

- by either PRG or the shareholder representative if:                 

      - the proposed acquisitions have not been completed on or before March 31,
   2002, provided that the party exercising the right to terminate the
       stock agreement is not then in breach in any material respect of any of
        its representations, warranties, covenants or other agreements under the
stock agreement;                                                

     - PRG has not received lender consent or obtained a new or amended senior
      credit facility on or before March 31, 2002 that does not prohibit the
proposed transactions;                                          

    - any court or other governmental entity has taken any action enjoining,
restraining or otherwise prohibiting the proposed acquisitions; 

- by the shareholder representative, if:                              

   - PRG materially breaches its representations or warranties or fails to
     perform its covenants or agreements under the stock agreement and any
     such breach or failure has not been cured by the earlier of March 31,
2002 or 10 days after receipt of written notice thereof has been
received by PRG; provided that none of the shareholders of the  
        affiliated foreign operating companies is then in breach in any material
   respect of its representations, warranties, covenants or agreements
under the stock agreement; or                                   

- by PRG, if:                                                         

   - any of the shareholders of the affiliated foreign operating companies
        materially breach their representations or warranties or fail to perform
       their covenants or agreements under the stock agreement and such breach
    or failure has not been cured by the earlier of March 31, 2002 or 10
     days after receipt of written notice thereof has been received by the
      shareholder representative, provided that PRG is not then in breach in
     any material respect of its representations, warranties, covenants or
agreements under the stock agreement; or                        

- upon the occurrence of an event or development that has a material
    adverse effect on any of the affiliated foreign operating companies,
      provided that PRG is not then in breach in any material respect of its
    representations, warranties, covenants or agreements under the stock
agreement; or                                                   

 - within 30 days after receipt of all of the schedules required to be
delivered pursuant to the stock agreement.                      

Upon termination in accordance with the above provisions, the stock   
agreement will become void and have no effect, without any liability or         
obligation on the part of PRG or the respective shareholders of the affiliated  
foreign operating companies, other than the provisions relating to transaction  
expenses and fees, including expenses and fees of agents, representatives,      
brokers, counsel and accountants, and other provisions that survive generally;  
provided, however, that termination will not relieve any party from liability or
damages arising out of its breach of the representations, warranties, covenants 
or agreements set forth in the asset agreement or the stock agreement. See      
"Material Terms of the Asset Agreement -- Termination of the Asset Agreement."  

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AMENDMENT; WAIVER                                                               

Prior to the closing, the parties may amend the stock agreement to:   

     - extend the time for the performance of any obligation or other act of any
other party to the stock agreement;                               

     - waive any inaccuracies in the representations and warranties contained in
      the stock agreement or in any document required to be delivered pursuant
to the stock agreement; and                                       

  - waive compliance with any of the agreements or conditions contained in
the stock agreement.                                              

    All amendments and waivers must be in writing and signed on behalf of each
of the parties.                                                                 

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OTHER RELATED AGREEMENTS

The following are descriptions of the material provisions of other    
agreements entered into or to be entered into in connection with the proposed   
acquisitions.                                                                   

SHAREHOLDER AGREEMENT                                                           

In connection with the proposed acquisitions, PRG, HSA-Texas, Howard  
Schultz, Andrew Schultz, the Andrew H. Schultz Irrevocable Trust, of which      
Andrew Schultz is the trustee and the beneficiary, certain other affiliated     
Schultz family trusts, John M. Cook, the current chairman of the board and chief
executive officer of PRG, and John M. Toma, the current vice chairman of PRG,   
will enter into a shareholder agreement.                                        

     Pursuant to the shareholder agreement, the parties will agree not to effect
any transfer of PRG common stock that such party now owns of record or acquires 
and to take such actions as are necessary to prevent any transfers of PRG common
stock beneficially owned by such party, other than a transfer:                  

- by HSA-Texas to its shareholders in a pro rata distribution;        

   - to a party's spouse, lineal or adopted descendants, siblings and lineal
   or adopted descendants of siblings, trusts for the benefit of parties
       referred to above, charitable trusts and charitable foundations; provided
   that the transferee becomes a party to the shareholder agreement, and
agrees to be bound by its terms;                                  

    - pursuant to a tender offer or exchange offer approved and recommended by
a simple majority of PRG's board of directors;                    

     - by means of a public sale in a "brokers' transaction," as defined in Rule
 144 under the Securities Act of 1933, in the market on a nationally
recognized U.S. exchange or The Nasdaq National Market;           

- pursuant to a private block sale not to exceed $20.0 million in the 
aggregate in any given six month period;                          

    - pursuant to a firm commitment, underwritten registration statement filed
  and declared effective pursuant to the registration rights agreement
   entered into by Howard Schultz, Andrew Schultz, the Andrew H. Schultz
Irrevocable Trust, certain other parties and PRG;                 

- for charitable purposes or pursuant to a gratuitous transfer for the
       benefit of such transferor or the transferor's spouse, siblings or lineal
    descendents, all in an aggregate amount not to exceed $10.0 million in
any given 12 month period;                                        

- pursuant to the written consent of all parties to the shareholders  
agreement.                                                        

 In addition, the parties to the shareholder agreement will agree, as to
matters submitted to a vote of PRG's shareholders, to vote and take such actions
as necessary to cause any shares of PRG common stock beneficially owned by such 
party to be voted consistent with the recommendation of a specified majority of 
PRG's board of directors; provided that:                                        

    - the specified majority must consist of at least nine members of PRG's 13
member board of directors;                                        

- if the number of members of PRG's board of directors is increased or
     decreased from 13, then the number of directors required to recommend a
     matter will be accordingly increased or decreased to that percentage of
 the total board, rounded up to the nearest whole number, equal to 9
divided by 13; and                                                

 - PRG's board of directors shall not have withdrawn such recommendation
prior to the vote.                                                

Further, the parties will agree not to:                               

     - initiate, propose, cause or vote in favor of or consent to a sale of PRG,
  unless the sale of PRG has been approved and recommended by a simple
majority of PRG's board of directors;                             

     - participate in or encourage the solicitation of PRG proxies in opposition
 to a recommendation of PRG's board of directors with respect to any
matter;                                                           
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- form, join or in any way participate in a group for the purpose of  
    acquiring, holding, voting or effecting the transfer of any PRG common
stock; or                                                         

- take any action that might require PRG to make a public announcement
regarding a sale of PRG, unless such sale has been approved and   
recommended by a majority of PRG's board of directors.            

The shareholder agreement will terminate upon the earlier to occur of:

    - the second anniversary of the closing date of the proposed acquisitions;

  - a material default by PRG with respect to any material loan agreement,
      provided that the lender under such loan agreement has given PRG written
       notice of such material default and has exercised its right to notice the
  default in accordance with the terms of such loan agreement and such
default remains uncured or unwaived for not less than thirty days 
following PRG's receipt of such notice;                           

    - completion by PRG, without the consent of Howard Schultz or his personal
     representative or estate, of a merger, consolidation, exchange, sale of
  substantially all of the assets of PRG or other business combination
having an aggregate transaction value in excess of $50.0 million; 

- completion of a fully underwritten, firm commitment public offering 
      pursuant to an effective registration statement under the Securities Act
     of 1933 covering the offer and sale by PRG of PRG common stock with net
proceeds to PRG in excess of $50.0 million;                       

     - amendment of PRG's articles of incorporation as they exist on the closing
     date other than any amendment contemplated in the asset agreement or an
amendment approved by Howard Schultz; or                          

 - any change in the number of members of PRG's board of directors other
  than as contemplated in the asset agreement or as approved by Howard
Schultz;                                                          

provided, however, that a vote in favor of the following by Howard Schultz in   
his capacity as a director of PRG will be deemed to be a consent and approval of
such action:                                                                    

- completion by PRG of a merger, consolidation, exchange, sale of     
  substantially all of the assets of PRG or other business combination
having an aggregate transaction value in excess of $50.0 million; 

- an amendment to PRG's articles of incorporation; or                 

- any change in the number of members of PRG's board of directors.    

REGISTRATION RIGHTS AGREEMENT                                                   

   In connection with the proposed acquisitions, PRG and each of the parties
to the asset and stock agreements and each additional holder of HSA-Texas voting
or nonvoting common stock will enter into a registration rights agreement. Under
the registration rights agreement, PRG will file a registration statement on    
Form S-3 on or before the closing of the proposed acquisitions to register up to
$10.0 million of PRG common stock as directed by Howard and Andrew Schultz. PRG 
will also be required upon written request from a holder of registrable         
securities to register the shares of PRG common stock issued in the proposed    
acquisitions for resale pursuant to a firm commitment underwritten public       
offering, subject to certain exceptions; provided, however, that PRG will not be
required to file more than one registration statement during any six month      
period or file a registration statement, other than the initial filing,         
regarding a request covering less than $5.0 million of such PRG common stock in 
a firm commitment underwritten offering. The registration rights agreement also 
provides that all registration expenses will be paid by PRG except under certain
circumstances, including when the registration request is subsequently withdrawn
by a majority of such shareholders, unless the shareholders agree that the      
request will count as one demand registration under the registration rights     
agreement.                                                                      

   Pursuant to the registration rights agreement, PRG will have the right to
defer the filing of any registration statement, other than the initial filing,  
or supplement or amendment thereto for a period of not more that 135 days from  
the date of the request if PRG provides notice to such requesting shareholder   
stating that compliance with the request would require the disclosure of        
material nonpublic information and it would                                     
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be seriously detrimental to PRG and its shareholders for the registration       
statement to be filed or for it to be supplemented or amended at that time. In  
addition, the registration rights agreement will also provide for               
indemnification by PRG of each holder of registrable securities, indemnification
of PRG by each holder of registrable securities participating in any            
registration and indemnification of any underwriters by each of PRG and all     
sellers of registrable securities with respect to claims arising from such      
registration. The registration rights agreement will not be applicable to any   
shares which are eligible for immediate resale under Rule 144 or Rule 145 under 
the Securities Act.                                                             

INDEMNIFICATION AGREEMENT                                                       

In connection with the proposed acquisitions, PRG, HSA-Texas, Howard  
Schultz, Andrew Schultz, the Andrew H. Schultz Irrevocable Trust and certain    
other affiliated Schultz family trusts will enter into an indemnification       
agreement. The indemnification agreement will set forth the procedures for      
indemnification of claims, the survival period of claims and the limitations on 
indemnification of claims under each of the asset agreement and stock agreement,
which are discussed above under the headings "Material Terms of the Asset       
Agreement -- Indemnification by HSA-Texas and PRG" and "Material Terms of the   
Stock Agreement -- Indemnification."                                            

 Under the indemnification agreement, all representations and warranties
contained in the asset agreement, the stock agreement and the agreements to be  
executed and delivered in connection therewith to complete the contemplated     
transactions shall survive the execution and delivery of such agreements for a  
period ending on the date, referred to herein as the general expiration date, 60
days after the date of issuance of PRG's independent auditors' report in respect
of the second annual audited financial statements issued after the closing date 
which include the acquired assets of HSA-Texas and the business of the          
affiliated foreign operating companies in the financial statements and results  
of operations of PRG. The representations and warranties shall thereafter cease 
to be of any force and effect, except for:                                      

    - claims as to which notice has been given prior to the general expiration
date and which are pending on such date;                          

- claims based on the breach or nonfulfillment of representations,    
      warranties, covenants and agreements relating to taxes, employee benefit
      plans, or any litigation, arbitrations and mediations that existed on or
      at any time prior to the closing date, each of which shall survive until
      the end of the statute of limitations applicable to the underlying claim
for which indemnification is sought;                              

- claims based on the breach or nonfulfillment of representations,    
      warranties, covenants and agreements relating to compliance by HSA-Texas
     or its subsidiaries with applicable laws, orders, rules and regulations
       of all governmental entities, each of which shall survive until the third
anniversary of the closing date; and                              

   - representations and warranties with respect to ownership of the capital
stock of HSA-Texas, any of its subsidiaries, and of HSA-Asia,     
      HSA-Singapore, HSA-Australia and HSA-Canada, each of which shall survive
without expiration.                                               

     In addition, all covenants and agreements contained in the asset agreement,
stock agreement and the agreements to be executed and delivered in connection   
therewith to complete the contemplated transactions shall survive the execution 
and delivery of such agreements for a period ending on the general expiration   
date, provided that any covenant which expressly specifies a period for         
performance shall survive until the end of such specified period. In the event  
of a breach of a representation or warranty or failure to perform a covenant or 
agreement by a party which constitutes civil fraud, the representation,         
warranty, covenant or agreement shall survive the completion of the transactions
contemplated in the asset agreement and stock agreement and continue in full    
force and effect thereafter with respect to such fraud until the expiration of  
the applicable statute of limitations for civil fraud.                          

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 Also, if the acquisition of Howard Schultz & Partner (Deutschland) GmbH
closes after the closing of the asset acquisition, the period during which PRG, 
and its subsidiaries, affiliates, directors, officers, employees and agents, may
bring claims against HSA-Texas and/or the shareholders party to the asset       
agreement for:                                                                  

 - any misrepresentation or breach of any representation or warranty, or
breach, nonfulfillment of, or failure to perform, any covenant,   
   obligation or agreement in any acquisition agreement approved by PRG;

- any liability or obligation suffered by PRG, other than HSA-Texas'  
       liabilities specifically assumed by PRG, relating to the operation of the
       business of such seller and use of the assets by the seller, which is not
specifically disclosed in the schedules to the asset agreement;   

- the treatment, by any governmental entity, of HSA-Texas affiliated  
      foreign operating companies independent contractors as employees and not
as independent contractors;                                       

     - any failure to obtain prior to closing the asset agreement any consent to
  the assignment to PRG of any agreements between HSA-Texas and Howard
Schultz & Partner (Deutschland) GmbH;                             

   - the failure to obtain concurrently with the closing of Howard Schultz &
Partner (Deutschland) GmbH, non-competition, non-solicitation and 
    confidentiality restrictive covenants from each seller and each equity
holder of such seller;                                            

- the failure to close the acquisition of Howard Schultz & Partners   
       (Deutschland) GmbH or to close such acquisition on the terms agreed to by
       PRG at any time within 365 days after the closing of the asset agreement;

shall survive until the third anniversary of the respective closing date of such
acquisition.                                                                    

 The indemnification agreement will also provide that neither HSA-Texas,
Howard Schultz, Andrew Schultz nor the affiliated Schultz family trusts which   
are parties to the indemnification agreement will be obligated to indemnify PRG 
for an indemnified claim until the total amount of all such claims equals or    
exceeds $3.0 million in the aggregate, at which time, all such claims, including
those up to $3.0 million, may be claimed in full by PRG; provided, however, PRG 
shall have the right to be indemnified without regard to such base amount for   
claims relating to or arising from certain specified events, including:         

- the treatment, by any governmental entity, of HSA-Texas independent 
contractors as employees and not as independent contractors;      

 - certain severance liabilities or obligations to employees of or other
service providers to the HSA-Texas business;                      

    - the amount in excess of $100,000 of any vendor payback, less any payback
reserve applicable in respect of any inactive audit, provided the 
aggregate vendor payback to such client is in excess of $350,000; 

     - any litigation, arbitrations, or mediations that existed on or before the
closing;                                                          

- claims in respect of payroll and other tax liabilities; and         

 - any surplus distributed to the Andrew H. Schultz Irrevocable Trust by
HSA-Australia and/or HSA-Canada to pay federal income taxes.      

   Notwithstanding the foregoing, in no event will PRG, on the one hand, and
HSA-Texas, Howard Schultz and Andrew Schultz, on the other, be liable for       
indemnified claims exceeding 35% of the aggregate amount of the consideration to
be paid by PRG pursuant to the asset agreement, the stock agreement and the     
consideration paid or to be paid for the acquisitions of Tamebond Ltd., J & G   
Associates Ltd., Howard Schultz & Partner (Deutschland) GmbH, Phoenix Audit     
Recoveries, Inc. and JASAMA, Inc.                                               

EMPLOYMENT AGREEMENTS                                                           

    Effective at the closing, PRG will enter into an employment agreement with
Howard Schultz that expires on the second anniversary of the closing date.      
Pursuant to Howard Schultz' employment agreement, Howard                        
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Schultz will receive an annual base salary of $400,000, and will not be eligible
for a bonus during the term of the employment agreement. In addition, Howard    
Schultz will receive options to purchase 250,000 shares of PRG common stock at  
an exercise price per share equal to the closing price of PRG common stock on   
the closing date, as published in The Wall Street Journal on the business day   
immediately following the closing date, which options will vest over a five-year
period at 20% per year. Howard Schultz also is eligible to participate in PRG's 
employee benefit plans and other benefits pursuant to his employment agreement. 

  In addition, effective at the closing, PRG will enter into an employment
agreement with Andrew Schultz that currently expires on the second anniversary  
of the closing date. Pursuant to Andrew Schultz' employment agreement, Andrew   
Schultz will receive an annual base salary of $240,000, and will be eligible to 
receive an incentive bonus, which will include payout potentials of up to 35% of
annual salary for achievement of annual target performance goals and 70% of base
pay for achievement of annual maximum performance goals, during the term of the 
employment agreement. Andrew Schultz also is eligible to participate in PRG's   
employee benefit plans and other benefits pursuant to his employment agreement. 

NONCOMPETITION AGREEMENT                                                        

In connection with the proposed acquisitions, PRG, HSA-Texas, Howard  
Schultz, Andrew Schultz, certain affiliated Schultz family trusts and four other
shareholders of HSA-Texas will enter into a noncompetition, nonsolicitation and 
confidentiality agreement. Under the agreement, HSA-Texas, Howard Schultz,      
Andrew Schultz, certain other affiliated Schultz family trusts and four other   
shareholders of HSA-Texas will agree not to, for a period of five (5) years from
and after the effective date, except on behalf of PRG:                          

  - within the geographic area in which HSA-Texas conducts its business on
    the closing date, provide or perform services which are in competition
       with the HSA-Texas business, either on the shareholder's own behalf or on
   behalf of any other person, whether as a shareholder, owner, partner,
  proprietor, agent, consultant, independent contractor or lender of a
competing business or otherwise;                                  

  - within the geographic area in which HSA-Texas conducts its business on
       the closing date, have a financial interest in or be in any way connected
with or affiliated with any competing business;                   

   - use, reproduce, distribute, disclose or otherwise disseminate to anyone
    any proprietary information utilized by HSA-Texas or its affiliates in
the HSA-Texas business at any time prior to the closing; provided,
       proprietary information utilized by HSA-Texas or any such affiliate prior
       to the closing that constitutes a trade secret under applicable law shall
       not be used, reproduced, distributed, disclosed or otherwise disseminated
as long as such information retains its status as a trade secret; 

- solicit or call upon any of HSA-Texas's accounts, former clients of 
    HSA-Texas to which services have been provided by HSA-Texas within the
last two years prior to the closing or any prospective client of  
     HSA-Texas, or any employee or independent contractor of any such client
      or prospective client, for purposes of selling or providing any product,
      equipment or service which is competitive with any product, equipment or
     service sold, leased, offered for sale or lease or under development by
     HSA-Texas during the 24-month period immediately preceding the closing;

   - hire, solicit, entice, persuade or induce, or attempt to hire, solicit,
      entice, persuade or induce any person who was employed by, or performing
       services as an independent contractor or as an employee of an independent
    contractor for, HSA-Texas or an affiliate and is subsequently hired or
  engaged by PRG in connection with PRG's acquisition of the HSA-Texas
business pursuant to the asset agreement, either to terminate such
   person's employment with PRG or to cease performing such services for
PRG; or                                                           

- authorize any person to engage in or assist any person in any of the
activities described in the preceding paragraph.                  

   Notwithstanding the foregoing, HSA-Texas, Howard Schultz, Andrew Schultz,
certain affiliated Schultz family trusts and the four other shareholders may own
any number of shares of PRG common stock or have a passive investment in less   
than one percent (1%) of the outstanding capital stock of any other publicly    
traded company that is, or is connected with or affiliated with, a competing    
business.                                                                       
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS OF HSA-TEXAS

   This discussion should be read in conjunction with the combined financial
statements of HSA-Texas, its majority-owned subsidiaries and those companies    
under common control and ownership by its controlling stockholders and their    
family members and notes thereto included elsewhere in this proxy statement.    
References to HSA-Texas in this "Management's Discussion and Analysis of the    
Financial Condition and Results of Operations of HSA-Texas" are to those        
entities in the aggregate, except where the context otherwise requires.         

OVERVIEW                                                                        

     In 1970, HSA-Texas began to offer accounts payable and other recovery audit
services. HSA-Texas is a leading provider of such services to large and mid-size
businesses having numerous payment transactions with many vendors.              

  In businesses with large volumes of vendor transactions with fluctuating
prices, some small percentage of erroneous overpayments to vendors is           
inevitable. In the aggregate, these transaction errors can represent meaningful 
"lost profits" that can be particularly significant for businesses with         
relatively low profit margins. HSA-Texas' trained, experienced auditors use     
sophisticated proprietary technology and advanced recovery techniques and       
methodologies to identify overpayments to vendors and other payees. These       
auditors also review clients' current practices and processes related to        
procurement and other expenses in order to identify solutions to manage and     
reduce expense levels, as well as apply knowledge and expertise of              
industry-specific "best practices" to assist clients in improving their business
efficiencies.                                                                   

RESULTS OF OPERATIONS                                                           

  The following table sets forth the percentage of revenues represented by
certain items in HSA-Texas' condensed combined statements of operations for the 
periods indicated:                                                              

                                                        [Enlarge/Download Table]

                                                  NINE MONTHS                                
                                                     ENDED                                   
                                                 SEPTEMBER 30,     YEARS ENDED DECEMBER 31,  
                                                ---------------    ------------------------- 
                                                2001      2000     2000      1999      1998  
                                                -----     -----    -----     -----     ----- 
                                                                                             
Revenues....................................... 100.0%    100.0%   100.0%    100.0%    100.0%
                                                -----     -----    -----     -----     ----- 
Cost of revenues...............................  65.2      65.7     65.8      70.3      76.4 
Selling, general and administrative expense....  35.3      33.5     34.8      28.2      22.3 
                                                -----     -----    -----     -----     ----- 
          Operating income (loss)..............  (0.5)      0.8     (0.6)      1.5       1.3 
                                                -----     -----    -----     -----     ----- 
Other income (expense)                                                                       
  Interest income..............................   0.2       0.3      0.3       0.3       0.2 
  Interest expense.............................  (2.4)     (2.5)    (2.4)     (2.0)     (1.7)
  Settlement of litigation.....................   3.6        --       --        --        -- 
  Other income (expense), net..................    --      (0.1)      --        --       0.2 
                                                -----     -----    -----     -----     ----- 
     Interest and other income (expense),                                                    
       net.....................................   1.4      (2.3)    (2.1)     (1.7)     (1.3)
                                                -----     -----    -----     -----     ----- 
          Income (loss) before income taxes....   0.9      (1.5)    (2.7)     (0.2)       -- 
Foreign tax benefit............................   0.5        --       --        --        -- 
                                                -----     -----    -----     -----     ----- 
          Net income (loss)....................   1.4%     (1.5)%   (2.7)%    (0.2)%      --%
                                                =====     =====    =====     =====     ===== 

Nine Months Ended September 30, 2001 Compared to Nine Months Ended September
30, 2000                                                                        

     Revenues.  HSA-Texas' revenues are generated primarily from a contractually
specified percentage of the amount of the net overpayments actually recovered by
HSA-Texas for its clients, either in the form of credits taken by such clients  
against invoices submitted by its recurring transaction vendors or cash re-     

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payment of those amounts. HSA-Texas has one reportable operating segment,       
consisting of accounts payable auditing services.                               

   Revenues decreased by $1.7 million from $102.5 million in the nine months
ended September 30, 2000 to $100.8 million in the nine months ended September   
30, 2001.                                                                       

  Domestic revenues decreased by approximately $4.3 million in 2001, while
international revenues increased by $2.5 million, compared to the nine months   
ended September 30, 2000. The decrease in domestic revenues was partially a     
result of lost accounts and lower production on certain clients. The increase in
international revenues was partially a result of obtaining new accounts in late 
2000 and higher production on existing accounts.                                

 Cost of Revenues.  Cost of revenues consists principally of commissions
paid or payable to HSA-Texas' auditors based primarily upon the amount of       
overpayment recoveries. Also included in cost of revenues are partial           
reimbursement of direct costs incurred by the auditors, including rental of     
non-headquarters offices, travel, telephone, utilities, maintenance, supplies   
and clerical assistance.                                                        

     Cost of revenues as a percentage of revenues decreased slightly to 65.2% in
the nine months ended September 30, 2001, down from 65.7% for the same period in
2000, due to the change in the mix of domestic and international revenues, as   
well as actions taken to reduce domestic cost of revenues.                      

Selling, General and Administrative Expenses.  Selling, general and   
administrative expenses include the expenses of sales and marketing activities, 
information technology services and HSA-Texas' corporate data centers, human    
resources, legal, accounting, administration, depreciation of property and      
equipment and amortization of intangibles.                                      

  Selling, general and administrative expenses as a percentage of revenues
increased to 35.3% of revenues in the nine months ended September 30, 2001, up  
from 33.5% of revenues for the same period in 2000. A substantial portion of    
this increase was due to higher payroll costs associated with building          
HSA-Texas' management infrastructure, higher legal and accounting fees and      
higher bad debt expenses in the nine months ended September 30, 2001, compared  
to the same period in 2000.                                                     

     Settlement of Litigation.  In May 2001, HSA-Texas entered into a settlement
agreement with respect to litigation pending at December 31, 2000, involving a  
group of independent contractors formerly associated with HSA-Texas. Pursuant to
the settlement agreement, HSA-Texas was relieved of certain obligations to pay  
accrued commissions to those independent contractors, which amounted to $3.2    
million at December 31, 2000. The total May 2001 settlement was $3.7 million.   

     Foreign Tax Benefit.  During the third quarter of 2001, HSA-Texas collected
$512,000 in taxes paid on its behalf to the Inland Revenue taxing authority by  
its former licensee in the United Kingdom. The refund was a result of inquiries 
made by HSA-Texas which caused Inland Revenue to reverse its position on the    
taxability of royalties remitted by the licensee. HSA-Texas had not recorded a  
receivable in prior periods, due to the uncertainty of collection.              

 Net Income (Loss).  HSA-Texas had net income of $1.4 million or 1.4% of
revenues in the nine months ended September 30, 2001, compared to a net loss of 
$(1.5) million or (1.5)% of revenues for the same period in 2000, due primarily 
to the factors discussed above.                                                 

Year Ended December 31, 2000 Compared To Year Ended December 31, 1999 

   Revenues increased 3.7% to $138.7 million in 2000, up from $133.8 million
in 1999. The increase was primarily attributable to increased revenue from      
existing clients as a result of HSA-Texas achieving additional recoveries for   
those clients.                                                                  

  Cost of revenues as a percentage of revenues decreased to 65.8% in 2000,
down from 70.3% in 1999. This decrease resulted primarily from the acquisition  
of its affiliates, Howard Schultz & Associates of the Northeast, Inc. and Howard
Schultz & Associates of the Mid-Atlantic, Inc. on January 1, 2000. These        
acquisitions had a favorable impact on cost of revenues, since they enabled     
HSA-Texas to compensate the                                                     

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independent contractor audit associates directly, at a rate which was lower than
that previously paid to the acquired affiliates.                                

  Selling, general and administrative expenses as a percentage of revenues
increased to 34.8% of revenues in 2000, up from 28.2% of revenues in 1999. A    
substantial portion of this increase was due to higher payroll costs associated 
with building HSA-Texas' management infrastructure, higher costs associated with
information technology expenditures and generally higher travel, meeting and    
other general and administrative expenses. Additionally, in 2000, HSA-Texas'    
depreciation of property and equipment and amortization of goodwill were higher 
than in 1999, due to the acquisition of the affiliated companies discussed above
and the expansion of HSA-Texas' business.                                       

     Interest Expense.  Interest expense for 2000 was $3.4 million, up from $2.7
million in 1999. The increase was due to an increased level of borrowings       
primarily related to promissory notes issued in 2000 for the acquisitions       
discussed above, as well as an increase in other notes payable used to finance  
the increase in infrastructure during 2000.                                     

Net Income (Loss).  HSA-Texas incurred a net loss of $(3.7) million or
(2.7)% of revenues in 2000, compared to a net loss of $(0.3) million or (0.2)%  
of revenues in 1999, due primarily to the reasons outlined above.               

Year Ended December 31, 1999 Compared To December 31, 1998            

Revenues.  Revenues increased 13.8% to $133.8 million in 1999, up from
$117.6 million in 1998. This year-over-year increase of $16.2 million was       
primarily due to the acquisition of the European operations, the addition of new
clients in all other international markets generating incremental revenue, and  
increased revenues from selected domestic clients, resulting from higher audit  
recoveries.                                                                     

   Cost of Revenues.  Cost of revenues as a percentage of revenues decreased
to 70.3% in 1999, down from 76.4% in 1998, due to the acquisition of three      
affiliated companies on January 1, 1999. The acquisition of the affiliated      
companies had a favorable impact on cost of revenues, since it enabled HSA-Texas
to compensate the independent contractor audit associates directly, at a rate   
which was lower than that paid to the affiliated associates.                    

Selling, General and Administrative Expenses.  Selling, general and   
administrative expenses as a percentage of revenues increased to 28.2% in 1999, 
up from 22.3% in 1998. HSA-Texas increased its management infrastructure        
substantially in 1999 to accommodate the acquisitions discussed above and       
incurred $1.2 million in compensation expense in 1999 (none in 1998) resulting  
from stock options issued to non-employees. Additionally, HSA-Texas incurred    
additional depreciation and amortization expenses in 1999 associated with these 
acquisitions.                                                                   

     Interest Expense.  Interest expense for 1999 was $2.7 million, up from $2.0
million in 1998, due primarily to acquisition-related indebtedness.             

Net Income (Loss).  HSA-Texas incurred a net loss of $(0.3) million in
1999, compared to net income of $21,000 in 1998 due primarily to the reasons    
outlined above.                                                                 

LIQUIDITY AND CAPITAL RESOURCES                                                 

From time to time, HSA-Texas has borrowed money from a bank and a     
stockholder to meet on-going operating cash flow needs. HSA-Texas believes that 
the combination of cash available from these lenders and cash flow generated    
from future operations will be sufficient to meet HSA-Texas' working capital    
expenditure requirements through December 31, 2002, including the transaction   
costs associated with the proposed acquisitions.                                

Net cash provided by operating activities was $7.0 million in the nine
months ended September 30, 2001, and $6.7 million in the nine months ended      
September 30, 2000.                                                             

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    Net cash used in investing activities was $2.1 million and $4.5 million in
the nine months ended September 30, 2001 and 2000, respectively. During the nine
months ended September 30, 2001, HSA-Texas borrowed approximately $5.5 million  
from a principal stockholder and made payments of approximately $5.4 million    
against debt incurred in various acquisitions. During the nine months ended     
September 30, 2000, HSA-Texas issued approximately $2.3 million in notes payable
in connection with the acquisition of a building in 2000, and made payments of  
approximately $3.7 million against debt incurred in acquisitions of principal   
associates in prior years. HSA-Texas also distributed approximately $1.5 million
in cash to its principal stockholders during the nine months ended September 30,
2000. Additionally, HSA-Texas provided loans to stockholders of $0.8 million and
$0.3 million, and made payments on lease obligations of $0.4 million and $0.3   
million, in the nine months ended September 30, 2001 and 2000, respectively.    

    Net cash provided by operating activities was $11.1 million in 2000, $10.3
million in 1999 and $6.2 million in 1998. The increase each year was due        
primarily to the acquisitions discussed above.                                  

Net cash used in investing activities was $7.0 million in 2000, $3.7  
million in 1999 and $2.7 million in 1998. The expenditures each year primarily  
related to the purchase of property and equipment, to support the increased     
management infrastructure and the acquisitions discussed above.                 

Net cash used in financing activities was $5.9 million in 2000, $4.7  
million in 1999 and $3.0 million in 1998. These uses of cash resulted from the  
following: principal payments on notes payable, net of proceeds from the        
issuance of notes payable, were $3.8 million in 2000, $4.7 million in 1999 and  
$1.1 million in 1998, and distributions to stockholders were $1.5 million in    
2000 and $2.4 million in 1998 (none in 1999). Additionally, 1998 cash used in   
financing activities included proceeds from issuance of common stock net of     
loans of stockholders of $0.5 million and 2000 cash used in financing activities
included principal payments on capital lease obligations of $0.4 million and a  
loan provided to a stockholder of $0.2 million.                                 

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BUSINESS OF HSA-TEXAS 

THE BUSINESS                                                                    

Howard Schultz & Associates International, Inc., its subsidiaries and 
licensees are industry pioneers in providing recovery audit services. HSA-Texas 
audits accounts payable records, occupancy costs, vendor statements and direct  
to store delivery audit records to recover overpayments that are a result of    
missed credits, duplicated payments, overlooked allowances, incorrect invoices  
and other discrepancies. References herein to HSA-Texas are to HSA-Texas, its   
majority-owned subsidiaries and those companies under common control and        
ownership by its controlling stockholders and their family members in the       
aggregate, except where the context otherwise requires.                         

     HSA-Texas provides recovery audit services to large and mid-size businesses
having numerous payment transactions with many vendors. These businesses        
include, but are not limited to, retailers, manufacturers, wholesale            
distributors, technology companies and healthcare providers. During 2000, two   
clients, The Kroger Company and JC Penney accounted for 13% and 10%,            
respectively, of HSA-Texas' combined revenues. During 1999 the same two clients 
accounted for 12% and 10%, respectively, of HSA-Texas' combined revenues. During
1998, one client, American Stores, accounted for 11% of HSA-Texas' combined     
revenues.                                                                       

HSA-Texas receives a contractual percentage of overpayments and other 
savings it identifies and its clients recover or realize.                       

   HSA-Texas has more than 1,000 audit associates working in most major U.S.
cities and several international markets. HSA-Texas operates 25 regional offices
in the United States, Australia, Belgium, Canada, France, Germany, Hong Kong,   
Italy, Mexico, the Philippines, Portugal, Singapore, Thailand, Taiwan, the      
Netherlands, Spain and the United Kingdom.                                      

    HSA-Texas has affiliate companies that conduct operations for HSA-Texas in
Asia, Australia and Canada. These affiliate companies are Howard Schultz &      
Associates (Asia) Ltd., a Hong Kong corporation; HS&A International Pte, Ltd., a
Singapore corporation; Howard Schultz & Associates (Australia), a Texas         
corporation; and Howard Schultz & Associates (Canada), a Texas corporation.     
These entities primarily provide recovery audit services in Singapore, Hong     
Kong, Australia and Canada. In addition to these companies which operate as     
affiliates of HSA-Texas, HSA-Texas has a licensee operating in Germany.         

HISTORY                                                                         

    HSA-Texas commenced business in 1970. Prior to 1996, HSA-Texas' operations
were conducted substantially through its independent contractors. HSA-Texas     
secured client contracts, but all services were rendered by the independent     
contractors. These independent contractors received approximately 80%-85% of the
revenues generated from clients and incurred all of the direct expenses of      
performing the recovery audit services while HSA-Texas was paid a contract fee  
equal to approximately 15%-20% of the revenues generated. During this time      
period, HSA-Texas was essentially a holding company collecting contract and     
license fees.                                                                   

Beginning in January 1995 and continuing through July 2001, HSA-Texas 
entered into a series of transactions to acquire the operations of its          
"principal associates." These principal associates were HSA-Texas' licensees and
provided the independent contract auditors that performed audit recovery        
services for HSA-Texas in various regions in the United States. Following these 
acquisitions, HSA-Texas assigned existing management personnel to run the       
acquired operations, utilizing independent contractors, who previously had      
provided audit services to the principal associates, to perform the necessary   
audit functions. Additionally, HSA-Texas invested heavily in building a         
corporate infrastructure and information systems to effectively manage and      
support field operations. HSA-Texas also established a centralized training and 
development group, regional business development professionals, and centralized 
marketing, client relations, corporate-based human resource and finance         
functions. In 1998, HSA-Texas began acquiring its foreign licensees. In         
addition, in 2001 HSA-Texas entered into a definitive agreement to acquire its  
German licensee.                                                                

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     Set forth below is a summary of the acquisitions related to HSA-Texas' U.S.
and foreign operations:                                                         

                                                        [Enlarge/Download Table]

      DATE OF ACQUISITION       PRINCIPAL ASSOCIATE OR LICENSEE WHOSE STOCK OR ASSETS WERE ACQUIRED
      -------------------       -------------------------------------------------------------------
                                                                                                   
March 4, 1996.................. Howard Schultz & Associates of the Pacific Southwest               
April 1, 1996.................. Howard Schultz & Associates of the Southeast, Inc.                 
June 16, 1997.................. Howard Schultz & Associates of the Central States, Inc.            
June 30, 1997.................. Howard Schultz & Associates of the Mountain States, Inc.           
June 30, 1997.................. Howard Schultz & Associates of the North Central States, Inc.      
January 5, 1998................ Howard Schultz & Associates, Mid Pacific, Inc.                     
July 1, 1998................... Howard Schultz & Associates of Mid-Southwest, Inc.                 
January 1, 1999................ HS&A Florida, Inc.                                                 
January 1, 1999................ Howard Schultz & Associates of the Mid-West, Inc.                  
January 1, 1999................ Howard Schultz & Associates of the Pacific Northwest, Inc.         
January 1, 2000................ Howard Schultz & Associates of the Northeast, Inc.                 
January 1, 2000................ Howard Schultz & Associates of the Mid-Atlantic, Inc.              
January 23, 1998............... Howard Schultz & Associates (1989) Corporation                     
January 30, 1998............... Howard Schultz & Associates (Australia) PTY Limited                
November 1998.................. Various European licensees                                         
November 1, 2000............... Infinite Imaging Systems, Inc.                                     
July 3, 2001................... Lowery, Inc.                                                       
September 1, 2001.............. Phoenix Audit Recoveries, Inc.                                     
September 17, 2001............. JASAMA, Inc.                                                       
November 21, 2001.............. Tamebond Ltd. and J&G Associates Ltd.                              

     On November 21, 2001, HSA-Texas acquired all of the stock of Tamebond Ltd.,
the parent of Howard Schultz & Associates (International) Ltd., which is the    
licensee of HSA-Texas in the United Kingdom, and all of the stock of J&G        
Associates Ltd., an independent contractor that provides services with respect  
to the business of HSA-Texas in the United Kingdom, for an aggregate purchase   
price of approximately $11.5 million plus a closing net worth adjustment        
estimated to be approximately $1.0 million at December 10, 2001 exchange rates. 

HSA-Texas entered into a purchase agreement dated November 15, 2001 to
acquire 98% of the outstanding stock of Howard Schultz & Partner (Deutschland)  
GmbH, or Deutschland, a licensee of                                             
HSA-Texas that provides recovery audit services in Germany and Austria, for a   
purchase price equal to the sum of 98% of Deutschland's shareholders' equity at 
December 31, 2001 and an amount equal to 23% of Deutschland's receipts during   
the period from July 1, 1999 through June 30, 2001, currently estimated in the  
aggregate to be approximately $2.2 million at December 10, 2001 exchange rates. 
The transaction is expected to close in January 2002. The remaining 2% of       
Deutschland is owned by Howard Schultz and will be contributed to HSA-Texas     
prior to the closing of the proposed acquisitions.                              

   On September 17, 2001, HSA-Texas acquired substantially all of the assets
and certain specified, related liabilities of JASAMA, Inc., an independent      
contractor that performed direct to store delivery audit operations for         
HSA-Texas, in exchange for a $1.2 million note payable in six equal quarterly   
installments beginning January 1, 2002, bearing interest at the rate of 7.0% per
annum.                                                                          

  On September 1, 2001, HSA-Texas acquired substantially all of the assets
and certain specified, related liabilities of Phoenix Audit Recoveries, Inc., an
independent contractor that performed direct to store delivery audit operations 
for HSA-Texas, in exchange for a $3.0 million note payable in six equal         
quarterly installments beginning January 1, 2002, bearing interest at the rate  
of 7.0% per annum.                                                              

 On July 3, 2001, HSA-Texas acquired substantially all of the assets and
certain specified related liabilities of Lowery, Inc., an independent contractor
that performed recovery audit and information technology services for HSA-Texas,
in exchange for 307,482 shares of HSA-Texas voting common stock, the assumption 
of $1 million in debt, which was repaid upon assumption, and the forgiveness of 
$2.048 million of outstanding advances to Lowery, Inc. The shares of HSA-Texas  
voting common stock are subject to the terms                                    

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of a stock ownership and restriction agreement which gives HSA-Texas limited    
"call" options on the stock upon termination of the recipient's employment.     

    HSA-Texas also completed acquisitions of licensees in Australia and Canada
in 1998 and in Europe in 1999, as discussed below.                              

   On January 23, 1998, HSA-Canada, an affiliated foreign operating company,
acquired all of the net assets of a former licensee in Canada.                  

On January 30, 1998, HSA-Australia, an affiliated foreign operating   
company, acquired all of the net assets of a former licensee in Australia.      

In November 1998, HSA-Texas formed its wholly-owned subsidiary, Howard
Schultz & Associates Europe, N.V., a Belgian corporation ("HS&A Europe"), for   
the purpose of acquiring the equity interests of entities that performed        
recovery audit services in various European countries, including Belgium,       
France, Italy and Spain. HS&A Europe acquired 100% of such interests in January 
1999 (except for a 10% interest in Howard Schultz Italia S.r.l., which was      
acquired by HS&A Europe in March 2000).                                         

On November 1, 2000, HSA-Texas acquired the stock of Infinite Imaging 
Systems, Inc. for a total purchase price of approximately $1.5 million. The     
acquired company provides document imaging utilizing high speed scanning        
technology to convert paper records into a digital format. The digitized        
documents are then indexed and archived. HSA-Texas is currently evaluating its  
options with respect to continuing or disposing of this business.               

AUDIT SERVICES                                                                  

Accounts Payable Services                                                   

Through the use of proprietary technology, audit techniques and       
methodologies, HSA-Texas' trained and experienced auditors examine merchandise  
procurement records on a post-payment basis to identify overpayments resulting  
from duplicate payments, missed discounts, allowances, rebates and other forms  
of pricing concessions offered by vendors.                                      

    HSA-Texas' accounts payable services are offered to two main client types,
with each type currently having different service delivery characteristics.     

     Retail and Wholesale Industries.  Services provided to retail and wholesale
clients are currently HSA-Texas' largest worldwide source of revenues. These    
services typically recur annually and are largely predictable in terms of       
estimating the dollar volume of client overpayments which will be ultimately    
recovered. For most retail/wholesale clients, HSA-Texas typically identifies a  
larger volume of recoveries each year when compared to recoveries realized in   
the immediate preceding year. This growth generally results from factors such as
increasing sophistication of HSA-Texas' auditors and software, and continuing   
client migration toward electronic merchandise procurements which HSA-Texas can 
more thoroughly audit. HSA-Texas currently serves retail/wholesale clients on   
four continents.                                                                

 Other Industries.  HSA-Texas also examines merchandise procurements and
other payments made by business entities such as manufacturers, distributors and
healthcare providers which are collectively termed as "commercial clients."     
Services to these types of clients tend to be more rotational in nature with    
different divisions of a given client often audited in pre-arranged annual      
sequences. Accordingly, revenues derived from a given client may change markedly
from year-to-year depending on factors such as the size and nature of the client
division under audit. Currently, the majority of HSA-Texas' commercial clients  
are located in the U.S.                                                         

Occupancy Cost Audit Services                                               

  The occupancy cost audit services division primarily examines the common
area maintenance cost, improper property tax allocations and incorrect          
percentage rent charges and other real estate fees that many real estate tenants
experience. HSA-Texas provides auditors who will identify overpayments by       
reviewing common area maintenance charges and related costs, office building    
operating cost, property tax allocation                                         

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cost, rent charges, including percentage rent and CPI adjustments, insurance and
overhead expenses. In their audit, the auditors examine leases and other types  
of cost statements provided to lessees.                                         

Statement Audit Services                                                    

The statement audit services division has its auditors review vendors'
records for the client. The auditors review statements from suppliers for       
credits that are not itemized on invoices as well as other items not taken from 
vendor statements. The process begins with requesting copies of vendor          
statements to be sent to HSA-Texas' statement audit center. Follow-up telephone 
calls are made by a bank of callers specially trained by HSA-Texas to obtain    
statements not sent by the vendors or to clarify questions relating to          
statements received. Once the audit associates have analyzed the statements,    
vendors are contacted to validate the potential claim. This service differs from
the standard accounts payable audit, since its success is dependent on the      
effectiveness of the telephone solicitations.                                   

Direct to Store Delivery Audit Services                                     

     The direct store delivery audit services division specializes in recovering
overpayments generated through the processing of transactions which bypass the  
warehouse system, primarily for grocery retailers. Certain products, such as    
soft drinks, potato chips and snacks, are delivered directly to the grocery     
store shelves by vendor route salesmen. The paperwork for these deliveries is   
processed through a separate system, independent of the client's warehouse      
receiving system, where all other products are received and processed. The      
invoices in direct store delivery audits usually are of relatively low dollar   
amounts. These invoices are audited to recover discounts and credits that were  
not taken in the ordering process generating the invoices.                      

Client Contracts                                                            

     HSA-Texas' typical client contract provides that HSA-Texas is entitled to a
contractual percentage of overpayments or other savings recovered for or        
realized by clients. Clients generally recover claims by either (a) taking      
credits against outstanding payables or future purchases from the involved      
vendors, or (b) receiving refund checks directly from those vendors. The method 
of effecting a recovery is often dictated by industry practice. The client      
contract provides that HSA-Texas is entitled to a fee for the rendering of that 
service.                                                                        

     In addition to client contracts, many clients establish specific procedural
guidelines that HSA-Texas must satisfy prior to submitting claims for client    
approval. These guidelines are unique to each client.                           

  HSA-Texas recognizes revenue when it invoices clients for its fee, which
occurs after the client has processed approved claims.                          

TECHNOLOGY                                                                      

    HSA-Texas has data technology centers in Salt Lake City, Utah and Chicago,
Illinois in the U.S., as well as in Mexico City, Mexico; Sydney, Australia;     
Brussels, Belgium; and Hong Kong. HSA-Texas employs applications of computer    
technology to meet clients' needs in an increasingly paperless environment. The 
primary software tool of HSA-Texas is SUREF!ND(R) which is HSA-Texas'           
proprietary suite of software tools for analysis of HSA-Texas' clients'         
electronic records.                                                             

   At the beginning of a typical accounts payable recovery audit engagement,
HSA-Texas obtains transaction data from its client for the time period under    
audit. HSA-Texas receives this data typically by magnetic media, which is then  
reformatted into standardized and proprietary layouts at one of HSA-Texas'      
technology centers.                                                             

HSA-Texas' experienced programmers then prepare statistical reports to
verify the completeness and accuracy of the data. HSA-Texas delivers this       
reformatted data to its auditors who, using SUREF!ND(R), sort, filter and search
the data for overpayments. HSA-Texas also produces client-specific standard     
reports and statistical data for its auditors. These reports and data often     
reveal patterns of activity or unusual relationships suggestive of potential    
overpayment situations.                                                         

HSA-Texas has developed and continuously updates and refines its      
proprietary accounts payable databases to assist it in providing recovery audit 
services to its domestic retail/wholesale clients. These                        

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databases serve as a central repository reflecting its auditors' experiences,   
vendor practices and knowledge of regional and national pricing information,    
including seasonal allowances, discounts and rebates. These proprietary         
databases, however, do not include confidential client information. Auditors use
these databases to identify discounts, allowances and other pricing information 
not previously detected.                                                        

SEASONALITY                                                                     

     HSA-Texas has experienced and expects to continue to experience seasonality
in its business. HSA-Texas typically realizes higher revenues and operating     
income in the last two quarters of its fiscal year.                             

SALES AND MARKETING                                                             

   HSA-Texas maintains its sales and marketing function at its Dallas, Texas
headquarters as well as at regional offices throughout the U.S. Due to the      
highly confidential and proprietary nature of a business' purchasing patterns   
and procurement prices combined with the typical desire to maximize the amount  
of funds recovered, most prospective clients conduct an extensive investigation 
which may include an on-site inspection of HSA-Texas' service facilities.       
HSA-Texas has typically found that its service offerings require long sales     
cycles and the highest level of direct person-to-person contact.                

PROPRIETARY RIGHTS                                                              

   HSA-Texas continuously evaluates new recovery audit software and enhances
existing proprietary software. HSA-Texas regards its proprietary software as    
protected by trade secret and copyright laws of general applicability. In       
addition, HSA-Texas attempts to safeguard its software through employee and     
third-party nondisclosure agreements and other methods of protection. While     
HSA-Texas' competitive position may be affected by its ability to protect its   
software and other proprietary information, HSA-Texas believes that the         
protection afforded by trade secret and copyright laws is less significant to   
HSA-Texas' success than the continued pursuit and implementation of its         
operating strategies and other factors such as the knowledge, ability and       
experience of its personnel.                                                    

  HSA-Texas owns or has rights to various copyrights, trademarks and trade
names used in HSA-Texas' business, including but not limited to SUREF!ND(R).    

COMPETITION                                                                     

     The recovery audit business is highly competitive and barriers to entry are
relatively low. The competitive factors affecting the market for HSA-Texas'     
recovery audit services include:                                                

- establishing and maintaining client relationships;                  

- quality and quantity of claims identified;                          

- experience and professionalism of audit staff;                      

- rates for services;                                                 

- technology; and                                                     

- geographic scope of operations.                                     

   In addition to PRG, HSA-Texas' principal competitors for accounts payable
recovery audit services include many local and regional firms.                  

In recent years, HSA-Texas has seen increasing competition from the   
consulting arms of the five largest international accounting firms.             
Historically, the accounting firms have been precluded from providing           
significant levels of recovery audit services due to the potential for conflicts
of interest with audit clients. Additionally, the accounting firms have relied  
primarily on fee-based arrangements versus the predominant contingency model    
associated with recovery audit services. Since January 2000, three of the       
accounting firms have spun off, sold or otherwise granted separate independence 
to their management consulting units and one other has announced its intention  
to eventually effect a similar separation. With the potential for conflicts of  

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interest substantially reduced, HSA-Texas believes that these independent       
consulting units may become formidable competitors in the future.               

EMPLOYEES AND CONTRACTORS                                                       

   As of November 30, 2001, HSA-Texas and its subsidiaries had approximately
560 employees dedicated to its business operations, and approximately 500       
independent contractors providing audit services for HSA-Texas located in the   
U.S., Australia, France, Spain, Italy, Belgium, the Netherlands and Canada.     
HSA-Texas is currently reviewing plans and options to convert independent       
contractor auditors to employees of HSA-Texas who will perform the same type of 
services. HSA-Texas believes that its relationships with its employees and      
independent contractors are good.                                               

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) 

On August 3, 2001, PRG signed a definitive agreement with HSA-Texas to
acquire for up to 16 million shares of its common stock substantially all of the
assets of HSA-Texas and substantially all of the outstanding stock of           
HSA-Singapore, and all of the outstanding stock of HSA-Asia, HSA-Australia and  
HSA-Canada, each an affiliated foreign operating company of HSA-Texas, pursuant 
to an agreement and plan of reorganization in connection with the asset         
acquisition and an agreement and plan of reorganization in connection with the  
stock acquisition. Unless the text otherwise requires, references to HSA-Texas  
in this pro forma section also include the affiliated entities of HSA-Texas that
are included in the audited financial statements of HSA-Texas.                  

 The following unaudited pro forma combined financial statements present
financial information giving effect to the proposed acquisitions under purchase 
accounting and to the proposed disposal of PRG's French Taxation Services       
business as discussed below. The unaudited pro forma combined balance sheet as  
of September 30, 2001 is presented as if the proposed acquisitions and the      
proposed disposal of PRG's French Taxation Services business, as discussed      
below, had been completed as of that date. The unaudited pro forma combined     
statements of operations for the nine month period ended September 30, 2001 and 
the year ended December 31, 2000 are presented as if the proposed acquisitions  
and the proposed disposal of PRG's French Taxation Services business, as        
discussed below, had been completed as of January 1, 2000.                      

The unaudited pro forma combined financial statements reflect certain 
assumptions deemed probable by PRG management regarding the purchase. The total 
estimated purchase cost of the proposed acquisitions was allocated on a         
preliminary basis to assets based upon management's best estimates of their fair
value with the excess cost over the net assets acquired allocated to goodwill.  
The adjustments to the unaudited pro forma combined financial information are   
subject to change pending a final analysis of the total purchase cost and the   
fair value of the assets assumed. The impact of these changes could be material.

 The unaudited pro forma combined financial statements should be read in
conjunction with PRG's unaudited consolidated financial statements and notes    
thereto included in PRG's Quarterly Report on Form 10-Q for the period ended    
September 30, 2001 and the audited consolidated financial statements and notes  
thereto incorporated by reference herein from PRG's Annual Report on Form 10-K  
for the fiscal year ended December 31, 2000 as amended by PRG's Form 8-K filed  
on December   , 2001. The pro forma adjustments are based upon preliminary      
estimates, available information and certain assumptions that management deems  
appropriate and are not necessarily indicative of what PRG's results of         
operations or financial position would have been had the transaction been in    
effect as of and for the periods presented, nor is such information necessarily 
indicative of PRG's results of operations or financial position for any future  
period or date.                                                                 

    On December 3, 2001, PRG entered into an agreement, subject to approval of
PRG's board of directors, to sell its French Taxation Services business for     
approximately 352 million French francs (approximately $47.8 million at December
3, 2001 exchange rates). On December 10, 2001, the executive committee of PRG's 
board of directors ratified the agreement and authorized the sale of PRG's      
French Taxation Services business. The sale of the French Taxation Services     
business will result in a net loss on the transaction of approximately $54.0    
million in the fourth quarter of 2001, based on December 3, 2001 exchange rates.
As a result of the foregoing, the French Taxation Services business has been    
classified as a discontinued operation for accounting purposes, and all         
historical and pro forma financial information contained herein has been        
restated to remove this business from continuing operations. See "Special       
Considerations -- Special Considerations Relating to PRG's Business Following   
the Proposed Acquisitions -- The sale of PRG's French Taxation Services         
operations will result in a substantial and material net loss."                 

    On November 26, 2001, PRG closed on a $95.0 million offering of its 4 3/4%
convertible subordinated notes due 2006. PRG issued an additional $15.0 million 
of the notes on December 3, 2001, and on December 4, 2001, the initial          
purchasers of the notes issued on November 26, 2001 purchased an additional     
$15.0 million of the notes to cover over allotments, bringing to $125.0 million 
the aggregate amount issued.                                                    

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PRG received net proceeds from the offering of approximately $121.4 million. The
proceeds of the notes were used to pay down PRG's outstanding balance under its 
senior credit facility. The coupon on the convertible notes of 4 3/4% is        
slightly favorable to the weighted average interest rate incurred on PRG's      
senior credit facility. The effect of these notes upon the EPS calculations for 
the periods presented are antidilutive and as such have not been included in the
proforma adjustments.                                                           

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 

PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

                                                        [Enlarge/Download Table]

                                                                               PRO FORMA          
                                                                      --------------------------- 
                                                 PRG      HSA-TEXAS   ADJUSTMENTS        COMBINED 
                                               --------   ---------   -----------        -------- 
                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)        
                                                                                                  
Revenues...................................... $186,299   $100,761     $      --         $287,060 
Cost of revenues..............................  100,041     65,651            --          165,692 
Selling, general and administrative                                                               
  expenses....................................   74,521     35,564         1,296(D)(E)    111,381 
                                               --------   --------     ---------         -------- 
          Operating income (loss).............   11,737       (454)       (1,296)           9,987 
Interest (expense), net.......................   (3,900)    (2,277)          519(F)        (5,658)
Settlement of litigation......................       --      3,650            --            3,650 
Other income (expense), net...................       --         10           (10)(H)           -- 
                                               --------   --------     ---------         -------- 
          Earnings from continuing operations                                                     
            before income taxes...............    7,837        929          (787)           7,979 
Income tax expense (benefit)..................    3,448       (512)          575(G)         3,511 
                                               --------   --------     ---------         -------- 
          Earnings from continuing                                                                
            operations........................ $  4,389   $  1,441     $  (1,362)        $  4,468 
                                               ========   ========     =========         ======== 
Basic earnings per share -- earnings from                                                         
  continuing operations....................... $   0.09                                  $   0.07 
                                               ========                                  ======== 
Diluted earnings per share -- earnings from                                                       
  continuing operations....................... $   0.09                                  $   0.07 
                                               ========                                  ======== 
Denominator:                                                                                      
  Denominator for basic earnings per share --                                                     
     weighted-average shares outstanding......   48,182                   14,953           63,135 
  Effect of dilutive securities:                                                                  
     Employee stock options...................      496                    1,138            1,634 
                                               --------                ---------         -------- 
          Denominator for diluted earnings....   48,678                   16,091           64,769 
                                               ========                =========         ======== 

See Accompanying Notes to Unaudited Pro Forma Combined Financial Statements.

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 

PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)

FOR THE YEAR ENDED DECEMBER 31, 2000

                                                        [Enlarge/Download Table]

                                                                               PRO FORMA           
                                                                      ---------------------------- 
                                                 PRG      HSA-TEXAS   ADJUSTMENT          COMBINED 
                                               --------   ---------   -----------         -------- 
                                                      (IN THOUSANDS, EXCEPT PER SHARE DATA)        
                                                                                                   
Revenues.....................................  $255,110   $138,708      $    --           $393,818 
Cost of revenues.............................   139,430     91,222           --            230,652 
Selling, general and administrative                                                                
  expenses...................................   100,435     48,324        4,082(D)(E)      152,841 
                                               --------   --------      -------           -------- 
  Operating income (loss)....................    15,245       (838)      (4,082)            10,325 
Interest (expense), net......................    (5,270)    (2,938)         244(F)          (7,964)
Other income (expense), net..................        --         47          (47)(H)             -- 
                                               --------   --------      -------           -------- 
  Earnings (loss) from continuing operations                                                       
     before income taxes.....................     9,975     (3,729)      (3,885)             2,361 
Income tax expense (benefit).................     4,389         --       (3,350)(G)          1,039 
                                               --------   --------      -------           -------- 
  Earnings (loss) from continuing                                                                  
     operations..............................  $  5,586   $ (3,729)     $  (535)          $  1,322 
                                               ========   ========      =======           ======== 
Basic earnings per share -- earnings from                                                          
  continuing operations......................  $   0.11                                   $   0.02 
                                               ========                                   ======== 
Diluted earnings per share -- earnings from                                                        
  continuing operations......................  $   0.11                                   $   0.02 
                                               ========                                   ======== 
Denominator:                                                                                       
  Denominator for basic earnings per share --                                                      
     weighted-average shares outstanding.....    48,871                  14,953             63,824 
  Effect of dilutive securities:                                                                   
     Shares issuable for Groupe AP earnout...       201                      --                201 
     Employee stock options..................       737                   1,138              1,875 
                                               --------                 -------           -------- 
          Denominator for diluted earnings...    49,809                  16,091             65,900 
                                               ========                 =======           ======== 

See Accompanying Notes to Unaudited Pro Forma Combined Financial Statements.

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. 

PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)

AS OF SEPTEMBER 30, 2001

                                                        [Enlarge/Download Table]

                                                                                              PRO FORMA           
                                                                                     ---------------------------- 
                                                                PRG      HSA-TEXAS   ADJUSTMENTS        COMBINED  
                                                              --------   ---------   -----------        --------- 
                                                                                (IN THOUSANDS)                    
                                                                                                                  
                                                     ASSETS                                                       
Current assets:                                                                                                   
  Cash and cash equivalents.................................  $  6,700    $ 6,071     $ (7,350)(A)      $   5,421 
  Receivables:                                                                                                    
    Contract receivables....................................    43,913     15,233           --             59,146 
    Employee advances and miscellaneous receivables.........     4,388      1,491           --              5,879 
                                                              --------    -------     --------          --------- 
        Total receivables...................................    48,301     16,724           --             65,025 
                                                              --------    -------     --------          --------- 
  Prepaid expenses and other current assets.................     2,852      1,930           --              4,782 
  Deferred income taxes.....................................    10,099         --           --             10,099 
  Net assets of discontinued operations.....................   149,465         --      (51,307)(C)         98,158 
                                                              --------    -------     --------          --------- 
        Total current assets................................   217,417     24,725      (58,657)           183,485 
                                                              --------    -------     --------          --------- 
Property and equipment:                                                                                           
  Computer and other equipment..............................    43,037     14,067       (4,525)(B)         52,579 
  Furniture and fixtures....................................     3,286      1,546         (455)(B)          4,377 
  Land and buildings........................................        --      4,716       (4,716)(A)             -- 
  Leasehold improvements....................................     4,513      1,648       (1,454)(A)(B)       4,707 
                                                              --------    -------     --------          --------- 
                                                                50,836     21,977      (11,150)            61,663 
  Less accumulated depreciation and amortization............    29,801      9,334       (7,234)(B)         31,901 
                                                              --------    -------     --------          --------- 
    Property and equipment, net.............................    21,035     12,643       (3,916)            29,762 
                                                              --------    -------     --------          --------- 
Noncompete agreements.......................................       315         --           --                315 
Deferred loan costs.........................................     2,139         --           --              2,139 
Goodwill....................................................   162,077     31,511      149,507(B)         343,095 
Intangible assets...........................................        --         --       32,400(B)          32,400 
Deferred income taxes.......................................       582         --           --                582 
Other assets................................................     5,139      1,014       (4,541)(B)          1,612 
                                                              --------    -------     --------          --------- 
        Total assets........................................  $408,704    $69,893     $114,793          $ 593,390 
                                                              ========    =======     ========          ========= 
                                      LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities:                                                                                              
  Current installments of long-term debt....................  $ 52,045    $ 8,461     $(40,463)(A)(C)   $  20,043 
  Capital lease obligations -- current......................        --        682           --                682 
  Accounts payable and accrued expenses.....................     7,444      7,478       12,249(B)          27,171 
  Accrued payroll and related expenses......................    20,869      7,993       17,000(B)          45,862 
  Deferred tax recovery audit revenue.......................        --         --           --                 -- 
  Other current liabilities.................................        --         63           --                 63 
                                                              --------    -------     --------          --------- 
        Total current liabilities...........................    80,358     24,677      (11,214)            93,821 
Long-term debt, excluding current installments..............   100,125     33,763       26,756(A)(C)      160,644 
Capital lease obligations, excluding current installments...        --        971           --                971 
Deferred compensation.......................................     4,296         --           --              4,296 
                                                              --------    -------     --------          --------- 
        Total liabilities...................................   184,779     59,411       15,542            259,732 
                                                              --------    -------     --------          --------- 
Common stock put options....................................        --      3,086       (3,086)(B)             -- 
Shareholders' equity:                                                                                             
  Preferred stock...........................................        --         --           --                 -- 
  Common stock..............................................        51        701         (686)(B)             66 
  Additional paid-in capital................................   320,238      6,773      154,151(B)         481,162 
  Accumulated deficit.......................................   (67,949)      (688)     (53,312)(B)(C)    (121,949)
  Accumulated other comprehensive loss......................    (6,139)       610        2,184(B)(C)       (3,345)
  Less treasury stock at cost...............................   (21,024)        --           --            (21,024)
  Unearned portion of restricted stock......................    (1,252)        --           --             (1,252)
                                                              --------    -------     --------          --------- 
        Total shareholders' equity..........................   223,925      7,396      102,337            333,658 
                                                              --------    -------     --------          --------- 
        Total liabilities and shareholders' equity..........  $408,704    $69,893     $114,793          $ 593,390 
                                                              ========    =======     ========          ========= 

See Accompanying Notes to Unaudited Pro Forma Combined Financial Statements.

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

NOTE 1.  UNAUDITED PRO FORMA COMBINED BALANCE SHEET                             

     The unaudited pro forma combined balance sheet gives effect to the purchase
and the proposed disposal of PRG's French Taxation Services business as if they 
had occurred on September 30, 2001 with respect to the balance sheets of PRG and
HSA-Texas.                                                                      

On August 3, 2001, PRG signed a definitive agreement with HSA-Texas to
acquire for up to 16.0 million shares of its common stock substantially all of  
the assets of HSA-Texas and substantially all of the outstanding stock of       
HSA-Singapore and all of the outstanding stock of HSA-Asia, HSA-Australia, and  
HSA-Canada, each an affiliated foreign operating company, pursuant to an        
agreement and plan of reorganization in connection with the asset acquisition   
and an agreement and plan of reorganization in connection with the stock        
acquisition. This business combination will be accounted for under the purchase 
method of accounting.                                                           

The following adjustments were reflected in the unaudited pro forma   
combined balance sheet:                                                         

(A) To eliminate HSA-Texas assets not acquired and HSA-Texas
liabilities not assumed and cash to be paid at closing.               

      (B) To record common stock and options issued to HSA-Texas and the
  application of purchase accounting. The total purchase price consists of
 approximately 14.9 million shares of PRG common stock with an estimated
fair value of approximately $156.7 million, 1.7 million fully vested  
options to purchase PRG's common stock with an estimated fair value of
approximately $4.2 million, and estimated direct transaction costs of 
approximately $15.0 million. The fair value of PRG's common stock was 
 determined as the average closing price per share from July 24, 2001 to
     July 28, 2001, which was $10.482. PRG announced the proposed transaction on
  July 26, 2001. The fair value of fully vested PRG options was determined
using the Black Scholes pricing model.                                

  The amounts and components of the estimated purchase price are presented
below:                                                                          

                                                                [Download Table]

                                                              (IN THOUSANDS)
                                                                            
Common stock................................................     $     15   
Additional paid-in capital..................................      160,924   
Transaction costs...........................................       15,000   
                                                                 --------   
          Total estimated purchase price....................     $175,939   
                                                                 ========   

The allocation of the estimated purchase price is as follows:         

                                                                [Download Table]

                                                              (IN THOUSANDS)
                                                                            
Assets acquired.............................................     $ 28,396   
Liabilities assumed.........................................      (65,875)  
                                                                 --------   
  Net liabilities assumed...................................      (37,479)  
Allocation of purchase price to:                                            
  Intangible assets.........................................       32,400   
  Goodwill..................................................      181,018   
                                                                 --------   
          Total estimated purchase price....................     $175,939   
                                                                 ========   

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THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

   The identified tangible and intangible assets likely to be recognized are
as follows:                                                                     

                                                                [Download Table]

                                                              (IN THOUSANDS)
                                                                            
Tangible assets:                                                            
  Total receivables.........................................     $ 15,233   
  Property and equipment....................................        8,727   
  Other.....................................................        4,436   
                                                                 --------   
          Total tangible assets.............................     $ 28,396   
                                                                 ========   

                                                                [Download Table]

                                                                      ESTIMATED 
                                                        VALUE        USEFUL LIFE
                                                    --------------   -----------
                                                    (IN THOUSANDS)              
                                                                                
Intangible assets:                                                              
  Customer relationships..........................     $21,000         20 years 
  Trade name......................................       9,000       Indefinite 
  Unrecognized customer revenue...................       2,000         2 months 
  Employee agreements.............................         400          2 years 
                                                       -------                  
          Total intangible assets.................     $32,400                  
                                                       =======                  

    Customer Relationships: The value of the customer relationships represents
the present value of the future cash flows attributable to HSA's existing       
customers based on historical margins.                                          

   The average remaining life was derived from the historical attrition rate
of HSA's customers, where a customer is considered lost in the first year where 
there is no revenue attributable to them. The average life of customer          
relationships was estimated at 20 years.                                        

 Trade names: In the valuation of trade names, the supposition is that a
company would be willing to pay for the right to use an established and         
registered trademark or trade name in the sale of similar products that would   
not otherwise enjoy the required customer acceptance.                           

The trade names under consideration, "Howard Schultz & Associates     
International" and "Howard Schultz & Associates" are associated with the name of
the company rather than relating to a specific product or service. The          
expectation is that the combined business leveraging these trade names will     
continue indefinitely as a going concern. There are no current plans to change  
or modify the names; therefore, the trade names have an indefinite life.        

Unrecognized customer revenue (order or production backlog): Order or 
production backlog is a marketing-related asset primarily used in the marketing 
or promotion of products and services. It meets the contractual-legal criterion 
for recognition apart from goodwill, because it arises from a customer contract.
In this case, production backlog is viewed as unrecognized revenue where claims 
by HSA-Texas have been submitted to their client's suppliers but have not       
achieved the point of revenue recognition.                                      

 Unrecognized customer revenue has an estimated life of two months' time
until revenue is realized.                                                      

   Employee Agreements: HSA-Texas has employment agreements with four of its
executive officers. If any one of these employees were to leave, HSA-Texas would
incur the expense of recruiting and training a replacement. Therefore, the value
of the current employee agreements is the sum of the costs of the lost          
productivity due to training, the overhead for taxes and benefits, and the      
recruiting cost associated with each employee.                                  

    The average life was estimated at two years based on the employee contract
terms.                                                                          

   PRG expects to amortize intangible assets with definite useful lives over
their respective estimated useful lives to their estimated residual values, and 
review them for impairment in accordance with SFAS No. 121,                     

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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." PRG expects to amortize tangible assets over their estimated   
useful lives as estimated above.                                                

     The adjustments to computer and other equipment, leasehold improvements and
accumulated depreciation noted in adjustment B to the unaudited pro forma       
combined balance sheet are to record the fixed assets purchased at their        
estimated fair value (determined as the net book value at the date of the       
purchase).                                                                      

     The adjustments to liabilities include an estimate of severance costs to be
incurred for employees of HSA-Texas or of the affiliated foreign operating      
companies who are not retained by the combined organization and a provision for 
lease payments for duplicate HSA-Texas facilities that will be closed.          
Additionally, adjustments to liabilities include an estimate of costs to be     
incurred to complete the acquisition.                                           

In addition, PRG will assume certain other obligations of HSA-Texas   
including obligations owed to HSA-Texas independent contractors to be incurred  
prior to closing. Presently, PRG has estimated this liability at $12.0 million. 
As a result, this adjustment has been reflected in the pro forma combined       
balance sheet adjustments.                                                      

    The number of shares to be issued was calculated assuming an average price
per share of PRG common stock of $7.764. The number of shares to be issued in   
the proposed acquisitions will vary according to the average price per share of 
our common stock, which in turn will affect the stated purchase price as        
follows:                                                                        

                                                                [Download Table]

                                                         STATED PURCHASE PRICE
                                                            (IN THOUSANDS)    
                                                         ---------------------
                                                                              
$ 4.00..................................................       $181,739       
$ 5.00..................................................       $181,739       
$ 6.00..................................................       $181,477       
$ 7.00..................................................       $179,113       
$ 8.00..................................................       $177,117       
$ 9.00..................................................       $175,564       
$10.00..................................................       $174,321       
$11.00..................................................       $173,305       
$12.00..................................................       $172,458       
$13.00..................................................       $171,741       
$14.00..................................................       $171,126       
$15.00..................................................       $170,594       
$16.00..................................................       $170,128       

The stated purchase price will increase as the average market price   
decreases because the number of shares to be issued increases. This results from
a smaller "in the money" value for the HSA-Texas options at lower average       
prices, which in turn results in a smaller reduction in the number of shares    
issued. Pursuant to EITF No. 99-12, the transaction will be valued at a per     
share amount of $10.482, the average closing price per share of PRG common stock
from July 24, 2001 to July 28, 2001. This purchase price for accounting purposes
may not reflect the actual market value to the HSA-Texas shareholders.          

  Under purchase accounting, the total purchase price will be allocated to
the acquired assets based upon their fair values. Allocations are subject to    
valuations as of the date of the completion of the purchase. PRG expects to     
allocate the total purchase price to goodwill and other identifiable intangible 
and tangible assets. In accordance with SFAS No. 142, "Goodwill and Other       
Intangible Assets," goodwill as well as intangible assets with indefinite useful
lives will no longer be amortized but instead these assets must be tested for   
impairment at least annually. PRG expects to amortize intangible assets with    
definite useful lives over their respective estimated useful lives to their     
estimated residual values, and review them for impairment in accordance with    
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for       
Long-Lived Assets to Be Disposed Of." PRG expects to amortize tangible assets   
over their estimated useful lives.                                              

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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

  (C) PRG entered into an agreement effective December 3, 2001, subject to
approval of PRG's board of directors, to sell its French Taxation Services      
business. PRG anticipates recording a loss on the sale of approximately $54.0   
million in the fourth quarter of 2001, based on December 3, 2001 exchange rates.
See "Special Considerations -- Special Considerations Relating to PRG's Business
Following the Proposed Acquisitions -- The sale of PRG's French Taxation        
Services operations will result in a substantial and material net loss." These  
pro forma adjustments reflect an estimated loss of $54.0 million as a reduction 
to shareholders' equity in the pro forma combined balance sheet.                

NOTE 2.  UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS                  

  The unaudited pro forma combined statements of operations give effect to
the purchase as if it had occurred at January 1, 2000. The following adjustments
have been reflected in the unaudited pro forma combined statements of           
operations:                                                                     

     (D) Adjustment to remove depreciation and amortization expense in
order to reflect only the ongoing impact of assets acquired.          

          (E) To record the application of purchase accounting, the amortization
   of identifiable intangible and tangible assets. The pro forma adjustments
assume that the estimated purchase price of $175.9 million will be    
allocated to goodwill and other identifiable intangible and tangible  
assets. Goodwill, as well as intangible assets, with indefinite useful
 lives will not be amortized but instead these assets must be tested for
    impairment at least annually. Intangible assets with definite useful lives
 will be amortized over their respective estimated useful lives to their
   estimated residual values, and reviewed for impairment in accordance with
     SFAS No. 121. Tangible assets will be amortized over their estimated useful
lives. The ultimate lives assigned will be determined at the date of  
closing based on the facts and circumstances existing at that date.   

Pro forma adjustments D and E are as follows (in thousands):                    

                                                        [Enlarge/Download Table]

                                                        YEAR ENDED      NINE MONTHS ENDED 
                                                     DECEMBER 31, 2000  SEPTEMBER 30, 2001
                                                     -----------------  ------------------
                                                                                          
Adjustment D:                                                                             
  Depreciation on building and leasehold                                                  
     improvements not acquired......................      $ (376)             $ (275)     
Adjustment E:                                                                             
  Amortization of intangible assets with estimated                                        
     useful lives...................................       3,250                 625      
  Other:                                                                                  
     Howard Schultz's payroll expense...............         400                 300      
     Net adjustment to rental income for building                                         
       not acquired and leased back.................         855                 656      
     Reclassification for HSA financials to conform                                       
       with PRG presentation format.................         (47)                (10)     
                                                          ------              ------      
       Total pro forma adjustments..................      $4,082              $1,296      
                                                          ======              ======      

        (F) To eliminate interest expense related to the loans that will not
be assumed by us as a result of the transaction.                      

    (G) To adjust income tax expense to the statutory rate in effect
     during the periods for which the pro forma income statements are presented.

        (H) To reflect reclassification of HSA-Texas' other income (expense)
to selling, general and administrative expenses to conform with PRG's 
financial presentation.                                               

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PRG/HSA-TEXAS STOCK OPTION PLAN 

In order to administer the HSA-Texas options assumed by PRG which will
convert into options to purchase shares of PRG common stock, on October 24,     
2001, PRG's board of directors adopted the PRG/HSA-Texas Stock Option Plan. The 
material provisions of the PRG/HSA-Texas Stock Option Plan, or the plan, are    
summarized below.                                                               

ELIGIBILITY FOR PARTICIPATION UNDER THE PLAN                                    

  Participation in this plan is limited to participants in the 1999 Howard
Schultz & Associates Stock Option Plan whose HSA-Texas options are assumed by   
PRG. PRG estimates that, as of the date of this proxy statement, up to 450      
employees (including officers), up to 500 independent contractors and one       
non-employee director of PRG will be eligible to participate in the plan.       
Nothing contained in the plan or in any agreement entered into pursuant thereto 
may confer upon any person any right to continue as a director, officer or      
employee of PRG or its subsidiaries or as a consultant or advisor, or limit in  
any way any right of shareholders or of the board, as applicable, to remove such
person.                                                                         

SHARES RESERVED UNDER THE PLAN                                                  

    The plan provides for the issuance of a maximum of 1,678,826 shares of PRG
common stock, subject to adjustment in the event of stock dividends, stock      
splits, combination of shares, recapitalizations, or other changes in the       
outstanding common stock of PRG. Shares issued under the plan may consist, in   
whole or in part, of authorized and unissued shares, treasury shares or shares  
purchased on the open market.                                                   

PURPOSE OF THE PLAN                                                             

     The purpose of the plan is to allow PRG to attract and retain key employees
and independent contractors and advisors of HSA-Texas who become employees,     
independent contractors or directors of PRG following the acquisitions and to   
provide these individuals with a proprietary interest in PRG through the        
granting of nonqualified stock options. The plan is not qualified under Section 
401(a) of the Code and is not subject to the provisions of the Employee         
Retirement Income Security Act of 1974.                                         

DURATION OF THE PLAN                                                            

   The plan will expire when the last option outstanding under it has either
been exercised or has expired. All options outstanding under the plan will      
expire five years from the closing of the proposed acquisitions.                

ADMINISTRATION OF THE PLAN                                                      

The plan will be administered by PRG's compensation committee. In     
administering the plan, the compensation committee, shall have the authority to 
interpret the plan and prescribe, amend, and rescind any rules and regulations  
necessary or appropriate for the administration of the plan, and make such other
determinations and take such other actions as it deems necessary or advisable in
connection with the foregoing.                                                  

   The current compensation committee members are Jonathan Golden, Chairman,
Thomas S. Robertson and Jackie M. Ward. Under the plan, acts by a majority of   
the compensation committee, or acts reduced to or approved in writing by a      
majority of the members of the compensation committee, shall be the valid acts  
of the compensation committee.                                                  

     No members of the board of directors or the compensation committee shall be
liable for any action or determination made in good faith with respect to the   
plan or any stock options granted under it. No member of the board or the       
compensation committee, shall be liable for any act or omission of any other    
member of the board or the compensation committee, or for any act or omission on
his or her own part, except those resulting from such member's own gross        
negligence or willful misconduct. In addition to such other rights of           
indemnification as such member may have as a member of the board or compensation
committee, each                                                                 

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member of the board and the compensation committee shall be entitled to         
indemnification by PRG with respect to administration of the plan and the       
granting of rights and benefits under it.                                       

AMENDMENT OF THE PLAN                                                           

     The board may at any time and from time to time, without the consent of the
participants, alter, amend, revise, suspend, or discontinue the plan in whole or
in part. In the event of any amendment to the plan, the holder of any stock     
option outstanding under the plan shall, upon request of the compensation       
committee and as a condition to the exercisability thereof, execute a conforming
amendment in the form prescribed by the compensation committee to the stock     
option agreement. No amendments shall adversely affect any rights of            
participants or obligations of PRG to participants with respect to any          
outstanding stock options without the consent of the affected participant.      

PLAN BENEFITS                                                                   

The only options outstanding under the plan will be options that are  
assumed in the asset acquisition. After the completion of the asset acquisition,
there will be no additional grants under the plan. Based on the assumptions     
described in "Summary Term Sheet -- Questions and Answers About the Proposed    
Acquisitions -- What will happen to the HSA-Texas stock options and SARs        
outstanding at closing?," the number and exercise price of options that will be 
outstanding to executive officers as a group, non-executive directors and       
non-executive employees pursuant to the plan are set forth below.               

                                                        [Enlarge/Download Table]

                                                                        EXERCISE PRICE 
                                                             NUMBER OF    OR RANGE OF  
INDIVIDUAL/GROUP                                              OPTIONS   EXERCISE PRICES
----------------                                             ---------  ---------------
                                                                                       
Executive Officer Group.....................................        --    $       --   
Non-Executive Director Group................................   248,295          6.12   
All Employees excluding Executive Officer Group............. 1,430,531     5.51-6.12   

VESTING OF OPTIONS                                                              

All options under the plan are currently vested.                      

ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SHARES                              

     If the shares of common stock of PRG shall increase through the declaration
of a stock dividend or through any recapitalization resulting in a stock        
split-up, combination or exchange of shares of common stock, then appropriate   
adjustments shall be made to the number of shares of common stock and the       
exercise price per share under each stock option previously granted and         
unexercised.                                                                    

 In the event of any reorganization, merger or consolidation pursuant to
which PRG is not the surviving or resulting corporation, or of any proposed sale
of substantially all of the assets of PRG, there may be substituted for each    
share of common stock subject to the unexercised portions of the outstanding    
stock option that number of shares of each class of stock or other securities or
that amount of cash, property or assets of the surviving or consolidated company
which were distributed or distributable to the stockholders of PRG in respect of
each share of common stock held by them. The outstanding stock options will then
be exercisable for the substituted stock, securities, cash or property in       
accordance with their terms. However, the board, in its sole discretion, may    
cancel any portion or all of the stock options as of the effective date of any  
reorganization,                                                                 

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merger or consolidation, or of any proposed sale of substantially all of the    
assets of PRG, or of any dissolution or liquidation of PRG, and, with respect to
any stock options that are cancelled, either:                                   

  - give notice to each holder or such holder's personal representative of
      its intention to cancel the stock options and permit the purchase during
       the 30 day period next preceding such effective date of any or all of the
     shares subject to the outstanding stock options, including shares as to
which the stock options would not otherwise be exercisable; or    

 - pay the holder thereof an amount equal to a reasonable estimate of an
     amount equal to the difference between the net amount per share payable
     in the transaction or as a result of the transaction, less the exercise
price of the stock options.                                       

    The board may make an adjustment if PRG shall, at any time while any stock
option under the plan is in force and remains unexpired:                        

- sell all or substantially all of its property, or                   

- dissolve, liquidate, or wind up its affairs.                        

In this case, if the board so determines in its sole discretion, each 
participant may thereafter receive upon exercise of an option under the plan in 
lieu of each share of common stock of PRG which the participant would have been 
entitled to receive, the same kind and amount of any securities or assets as may
be issuable, distributable or payable upon any such sale, dissolution,          
liquidation, or winding up with respect to each share of common stock of PRG.   

 In the event that PRG shall, at any time prior to the expiration of any
stock option, make any partial distribution of its assets in the nature of a    
partial liquidation, whether payable in cash or in kind, but excluding the      
distribution of a cash dividend payable out of retained earnings or earned      
surplus and designated as such, then in such event the exercise prices then in  
effect with respect to each option shall be reduced, as of the payment date of  
such distribution, in proportion to the percentage reduction in the tangible    
book value of the shares of PRG's common stock, determined in accordance with   
accounting principles generally accepted in the United States of America,       
resulting by reason of such distribution. However, in no event shall any        
adjustment of exercise prices in accordance with the terms of the plan result in
any exercise prices being reduced below the par value per share of the common   
stock.                                                                          

DURATION AND TERMINATION OF OPTIONS                                             

The option period will begin on the date of the closing of the asset  
acquisition and terminate on the date that is five years from the date of the   
closing of the asset acquisition. Each option is exercisable during such        
five-year period unless it terminates earlier in accordance with its terms. No  
option may be exercised subsequent to its termination.                          

Upon the termination of service of a participant for any reason, the  
specific stock option agreement shall govern the treatment of any unexercised   
stock options. In the event of a termination, the compensation committee may, in
its discretion:                                                                 

     - provide for the extension of the exercisability of a stock option for any
period that is not beyond the applicable expiration date thereof; 

- accelerate the vesting or exercisability of a stock option;         

    - eliminate or make less restrictive any restrictions contained in a stock
option;                                                           

   - waive any restriction or other provision of the plan or a stock option;
or                                                                

   - otherwise amend or modify the stock option in any manner that is either
     not adverse to such participant or is consented to by such participant.

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   In the event of termination of service of a participant by PRG for cause,
all of the participant's outstanding stock options, whether or not vested, shall
be forfeited and immediately terminate. In the event of a termination of service
of a participant for any reason other than for cause, then the stock option will
terminate and be forfeited at the first of the following to occur:              

 - 5 p.m. on the date which is twelve months following the participant's
termination of service due to death or disability;                

- 5 p.m. on the date which is ninety days following the participant's 
  retirement or following the participant's involuntary termination of
service without cause;                                            

- 5 p.m. on the day prior to the date of the participant's voluntary  
      termination, other than termination of service for death, disability, or
retirement; or                                                    

- 5 p.m. on the date prior to the date the participant violates any   
   covenant not to compete or confidentiality agreement set forth in the
participant's stock option agreement.                             

    The plan specifies the definitions of "cause," "disability," "retirement,"
and "termination" for purposes of determining these provisions.                 

MEANS OF EXERCISE OF OPTIONS                                                    

   Options may be exercised by giving written notice to PRG at its principal
office address, accompanied by full payment of the purchase price therefor and  
the applicable withholding tax, either:                                         

- in United States dollars in cash or by check; or                    

 - if permitted by the compensation committee, the delivery of shares of
  common stock having a fair market value equal, as of the date of the
    exercise, to the cash exercise price of the option, provided, that the
shares must have been held for at least six months.               

NON-TRANSFERABILITY OF OPTIONS                                                  

No option is transferable except by will or by the laws of descent and
distribution, and all options are exercisable, during the lifetime of the       
grantee, only by the grantee or the grantee's guardian or legal representative. 

TAX TREATMENT                                                                   

   The following discussion addresses certain anticipated federal income tax
consequences to PRG and to recipients of awards made under the plan. It is based
on the Code and interpretations thereof in effect on the date of this proxy     
statement. This summary is not intended to be exhaustive and, among other       
things, does not describe state, local or foreign tax consequences.             

     A company, such as PRG, for which an individual is performing services will
generally be allowed to deduct amounts that are includable in the taxable income
of such individual as compensation income in PRG's taxable year in which the    
employee's taxable year of inclusion ends, provided that such amounts qualify as
reasonable compensation for the services rendered. This general rule will apply 
to the deductibility of a participant's compensation income resulting from      
participation in the plan. The timing and amount of deductions available to PRG 
as a result of the plan will, therefore, depend upon the timing and amount of   
compensation income recognized by a participant as a result of participation in 
the plan. The following discusses the timing and amount of compensation income  
which will be recognized by participants and the accompanying deduction which   
will be available to PRG.                                                       

All of the options under the plan are classified as nonqualified stock
options, or NSOs. A participant to whom a NSO is granted will not normally      
recognize income at the time of grant of the option. When a participant         
exercises a NSO, the participant will generally recognize compensation income,  
and PRG will be entitled to a deduction, in an amount equal to the excess, if   
any, of the fair market value of the shares of common stock when acquired over  
the option exercise price. The amount of gain or loss recognized by a           
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participant from a subsequent sale of shares of common stock acquired from the  
exercise of a NSO will be equal to the difference between the sales price for   
the shares of common stock and the sum of the exercise price of the option plus 
the amount of compensation income recognized by the participant upon exercise of
the option.                                                                     

 Different tax rules will apply to a participant who would be subject to
suit under Section 16(b) of the Securities Exchange Act of 1934, or the Exchange
Act, from the sale of the shares of PRG common stock received upon the exercise 
of an NSO. For such a participant, unless the participant makes an election     
pursuant to Section 83(b) of the Code, the amount of compensation income        
recognized with respect to the shares of PRG common stock received upon the     
exercise of an NSO will be determined at the earlier of the following           
determination dates:                                                            

     - the first day on which the participant would not be subject to suit
        under Section 16(b) of the Exchange Act with respect to such shares,
or                                                          

      - the expiration of the six-month period following the exercise of the
NSO.                                                        

A Section 83(b) election represents an election by a participant to   
recognize the compensation consequences of receipt of the shares of PRG common  
stock at the time the shares are acquired notwithstanding that at such time sale
of the shares would subject the participant to potential liability under Section
16(b) of the Exchange Act. A Section 83(b) election must be made within 30 days 
of receipt of the shares by filing a written statement with the IRS, PRG and, if
applicable, the affiliate of PRG that is the participant's employer. If a       
Section 83(b) election is made, the amount of compensation income recognized    
with respect to the shares, the tax basis for the shares and their capital gain 
holding period is determined by reference to the fair market value of the shares
when they are received.                                                         

   If a Section 83(b) election is not timely made with respect to the shares
subject to Section 16(b) of the Exchange Act, the amount of ordinary            
compensation income recognized with respect to the shares will be determined at 
the earlier of the two determination dates described above. The amount of       
compensation income recognized by the participant will be measured by the excess
of the value of the shares at such time over the option exercise price, and the 
participant's tax basis in the shares will be determined by reference to the    
fair market value of the shares at that time. The participant's capital gain    
holding period for the shares will also begin at that time, rather than when the
shares were acquired. Furthermore, if a Section 83(b) election is not made with 
respect to the shares subject to Section 16(b) of the Exchange Act, any         
dividends paid with respect to the shares will be treated as compensation income
subject to withholding and employment taxes until the earlier of the two        
determination dates described above. After such time, the dividends paid will be
treated as any other dividends paid with respect to PRG common stock and thus   
taxed as ordinary income which is not compensation.                             

TAX WITHHOLDING                                                                 

     Whenever PRG proposes, or is required, to distribute shares of common stock
under the plan, PRG may require the recipient to satisfy any Federal, state and 
local tax withholding requirements prior to the delivery of any certificate for 
such shares or, in the discretion of the committee, PRG may withhold from the   
shares to be delivered shares sufficient to satisfy all or a portion of the tax 
withholding requirements.                                                       

UNFUNDED STATUS OF THE PLAN                                                     

The plan is intended to constitute an "unfunded" plan for incentive   
compensation. With respect to any payments not yet made to a participant by PRG,
nothing contained in the plan shall give any participant or optionee any rights 
that are greater than those of a general creditor of PRG.                       

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PRG DIRECTOR AND EXECUTIVE OFFICER INFORMATION

ELECTION OF DIRECTORS                                                           

PRG currently has nine directors. On October 24, 2001, the PRG board  
increased the size of the board to 13, effective upon the closing of the asset  
acquisition. The board is divided into three classes of directors, designated as
Class I, Class II and Class III. The three classes serve staggered three-year   
terms. Shareholders annually elect directors to serve for the three-year term   
applicable to the class for which such directors are nominated or until their   
successors are elected and qualified. At the special meeting, shareholders will 
be voting to elect four directors: Howard Schultz and Andrew Schultz to serve as
Class II directors, Nate Levine to serve as a Class I director and Arthur Budge,
Jr. to serve as a Class III director.                                           

    The director elected to serve as a Class I director at the special meeting
to be held on January 24, 2002 will serve for a term that expires on the earlier
of the 2003 annual meeting of shareholders of PRG or when his successor is      
elected and qualified. Each director elected to serve as a Class II director    
will serve for a term that expires on the earlier of the 2004 annual meeting of 
shareholders or when his successor is elected and qualified. The director       
elected to serve as a Class III director will serve for a term that expires on  
the earlier of the 2002 annual meeting of shareholders or when his successor is 
elected and qualified.                                                          

The name, age and term of each director nominee are set forth below:            

Director Nominees                                                           

                                                        [Enlarge/Download Table]

                      NAME OF NOMINEE                        AGE   CLASS OF DIRECTOR  TERM EXPIRES
                      ---------------                        ----  -----------------  ------------
                                                                                                  
Howard Schultz..............................................   73  Class II               2004    
Andrew H. Schultz...........................................   35  Class II               2004    
Nate Levine.................................................   64  Class I                2003    
Arthur N. Budge, Jr.........................................   46  Class III              2002    

     HOWARD SCHULTZ is the founder of Howard Schultz & Associates International,
Inc. and has served as its chairman since 1970. Mr. Schultz received a B.A. in  
Mathematics and Economics from Cornell University in 1950. Mr. Schultz is a PRG 
Class II director nominee at PRG's special meeting. The terms of PRG Class II   
directors expire in 2004.                                                       

  ANDREW H. SCHULTZ has served as executive vice president and a member of
the board of directors of HSA-Texas since January, 2000. Mr. Schultz has held   
several positions at HSA-Texas during the period from 1990 to 1999, including   
the position of senior vice president and chief financial officer since March,  
1999 and the position of vice president - special projects from 1996 to 1999.   
Mr. Schultz is a PRG Class II director nominee at PRG's special meeting. The    
terms of PRG Class II directors expire in 2004.                                 

    NATE LEVINE serves as chief executive officer of ETAN Industries, which he
founded in 1977. ETAN owns Cable Management Associates, a multiple cable system 
operator serving over 55,000 subscribers, and Credit Protection Association, a  
company specializing in bad debt recovery for the cable TV and video industry.  
Mr. Levine is also an active private investor, personally managing his portfolio
of stocks, real estate and private investments. Mr. Levine is a graduate of RCA 
Institute of Technology. Mr. Levine is a Class I director nominee at PRG's      
special meeting. The terms of PRG Class I directors expire in 2003.             

     ARTHUR N. BUDGE, JR. has served as president and chief executive officer of
Five States Energy Company, an owner of a portfolio of oil and gas investments, 
since 1998. Since 1985, Mr. Budge has also served as president of Budge         
Financial, Inc., a company that provides clients with planning, forecasting and 
investment analysis services and asset management. In addition, Mr. Budge serves
as a principal in several Blockbuster Video franchise limited partnerships and  
serves as a director of several non-public companies in which Mr. Budge and his 
clients have investments. Mr. Budge received a B.B.A. in Finance from Texas Tech
University in 1977 and an M.S. in Business Administration from Texas Tech       
University in 1979. Mr. Budge is a PRG Class III director nominee at PRG's      
special meeting. The terms of PRG Class III directors expire in 2002.           

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Howard Schultz is the father of Andrew Schultz.                       

Directors Continuing in Office                                              

                                                        [Enlarge/Download Table]

            NAME OF NOMINEE             AGE  CLASS OF DIRECTOR    TERM EXPIRES     SERVICE AS DIRECTOR
            ---------------             ---  -----------------  -----------------  -------------------
                                                                                                      
Stanley B. Cohen(1)(2)................. 58     Class II              2004          Since November 1990
Garth H. Greimann(2)................... 46     Class II              2004          Since April 1995   
E. James Lowrey(2)..................... 73     Class II              2004          Since December 1995
Fred W.I. Lachotzki(4)................. 54     Class III             2002          Since January 1996 
Thomas S. Robertson(3)(4).............. 59     Class III             2002          Since May 1999     
Jackie M. Ward(3)...................... 62     Class III             2002          Since May 1999     
John M. Cook(1)........................ 59      Class I              2003          Since November 1990
John M. Toma(1)........................ 56      Class I              2003          Since November 1990
Jonathan Golden(1)(3)(4)............... 64      Class I              2003          Since November 1990

---------------                                                                 

(1) Member of the Executive Committee.                                          
(2) Member of the Audit Committee.                                              
(3) Member of the Compensation Committee.                                       
(4) Member of the Nominating Committee                                          

STANLEY B. COHEN is the president and sole director/shareholder of SBC
Financial Corporation ("SBC") and until March 31, 1999, was the President and   
sole director/shareholder of Advisory Services, Ltd. ("ASL"). These companies   
provided certain financial consulting and investment services to PRG and certain
of its executive officers until December 31, 1999. In addition, until December  
31, 1998, Mr. Cohen was President of Capital Advisory Corporation, a financial  
advisory company. Mr. Cohen served or has served, as applicable, in each of     
these positions in excess of five years. Mr. Cohen has served as a director of  
PRG since its founding in 1990.                                                 

JOHN M. COOK is chairman of the board, chief executive officer and    
president of PRG, having served as chairman and CEO and since founding PRG in   
November 1990. Mr. Cook served as president of PRG from November 1990 through   
January 1998 and resumed this role in October 2000. Mr. Cook also serves as a   
director of CryoLife, Inc., a company engaged in cryopreservation of            
transplantable human tissue and development of complementary implantable        
products and technologies.                                                      

    JONATHAN GOLDEN has served as a director of PRG since its founding in 1990
and provides consulting services to PRG through Jonathan Golden, P.C., a wholly 
owned professional corporation ("JGPC"). Mr. Golden also serves through his     
professional corporation as a partner in the Atlanta, Georgia law firm of Arnall
Golden Gregory LLP, which provides legal services to PRG. Mr. Golden has served 
in this capacity for in excess of five years. Mr. Golden also serves as a       
director of SYSCO Corporation, a distributor of food and related products.      

   GARTH H. GREIMANN has served since 1989 in two management positions, most
recently as Managing Director, of Berkshire Partners LLC, a private equity      
investment firm that manages five investment funds. Mr. Greimann also has served
as a Managing Director of Third Berkshire Associates, a Limited Partnership,    
which is the general partner of Berkshire Fund III, a Limited Partnership.      
Berkshire Fund III makes private equity and equity-related investments in       
established middle market companies. Prior to 1996, Mr. Greimann was an         
individual general partner of Berkshire Fund III, a Limited Partnership.        

FRED W.I. LACHOTZKI has served since 1989 as a professor at Nyenrode  
University in The Netherlands, most recently as a Philip Morris Professor of    
Strategic Entrepreneurship. Mr. Lachotzki is Co-Chairman of Meyer Monitor, a    
research consulting company in the area of corporate architecture and also      
serves as a director of DKV-Nederland, an insurance company specializing in     
healthcare, Frg Navigation Systems, which makes controls for automatic guided   
vehicles, Merison Holding NV, the owner of a franchised chain of                

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electronics retail stores and a supplier of non-food products to supermarket    
chains, and Unisono, a marketing and distribution company in the People's       
Republic of China.                                                              

E. JAMES LOWREY served as Executive Vice President -- Finance and     
Administration of SYSCO Corporation from 1978 until his retirement in 1993 and  
was a director of SYSCO Corporation from 1981 to 1993. He currently serves as a 
director of Riviana Foods, Inc., a processor and distributor of rice and other  
food products.                                                                  

  THOMAS S. ROBERTSON is the Dean of the Goizueta Business School at Emory
University, a position he assumed in July 1998. Prior to taking this position at
Emory University, he was a member of the faculty of the London Business School  
since 1994, with his most recent position being Deputy Dean.                    

 JOHN M. TOMA was elected Vice Chairman of PRG in January 1997. Prior to
that he was Executive Vice President -- Administration of PRG and had served in 
such capacity since 1992. Mr. Toma has served as a Director of PRG since its    
founding in November 1990 and as Senior Vice President -- Administration of PRG 
from 1990 to 1992.                                                              

     JACKIE M. WARD is the Managing Director for Intec USA, a telecommunications
systems company, and has held this position since January 2001. Prior to        
assuming her current position, Ms. Ward was the President and Chief Executive   
Officer of Computer Generation Incorporated, a provider of turn-key             
telecommunications systems products and data processing services that she       
co-founded in 1968. She serves as a director of BankAmerica Corporation, a      
banking and financial services company, Equifax, Inc., a provider of credit and 
payment information services, Flowers Foods, Inc., a producer of baked foods,   
Matria Healthcare, Inc., a provider of specialized home healthcare services,    
PTEK Holdings, Inc., a provider of enhanced communications and data services,   
SCI Systems, Inc., a diversified electronics manufacturer, and Trigon           
Healthcare, Inc., a managed healthcare company.                                 

No family relationship exists among any of the current directors and  
executive officers of PRG.                                                      

 Blum Capital Partners, L.P. and its affiliates, who based on an amended
Schedule 13D filing made on December 5, 2001, currently beneficially own        
approximately 14.6% of PRG's outstanding common stock, including stock          
obtainable upon conversion of convertible notes, purchased $40 million of the   
$125 million of notes issued in PRG's recent convertible notes offering. Blum   
Capital Partners has expressed an interest in obtaining representation on PRG's 
board of directors, and PRG has had discussions with them regarding this matter.

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INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD            

Meetings of the Board of Directors                                          

Through December 7, 2001, there were eight meetings of the board of   
directors in 2001. Each director who was a director through December 7, 2001    
attended more than 75 percent of all meetings of the board of directors and any 
committees on which that director served.                                       

Director Compensation                                                       

PRG compensates its non-employee directors $20,000 per year for their 
service on the board and any committee thereof. Non-employee directors are      
reimbursed for all out-of-pocket expenses, if any, incurred in attending board  
and committee meetings. The board of directors has approved an automatic annual 
grant of options under PRG's Stock Incentive Plan to directors not employed by  
PRG to purchase from 2,500 to 7,500 shares of common stock; provided, however,  
that no grants will be made in any year unless PRG's fully diluted earnings per 
share, before business acquisitions and restructuring expenses, for such year   
shall have increased by at least 25 percent over the previous year. A 25 percent
increase in the adjusted earnings per share will result in a grant of options to
purchase 2,500 shares of common stock while each additional one percent increase
in adjusted earnings per share will result in a grant of options to purchase an 
additional 200 shares of common stock, up to a maximum annual grant of options  
to purchase 7,500 shares of common stock. The per share option exercise price   
will be the closing price of PRG's common stock on The Nasdaq National Market on
December 31 of the year of grant, or if no sale of the common stock was made on 
that date, on the next preceding date on which there was such a sale. Options   
will vest in 20 percent increments over a period of five years. Since PRG did   
not attain the minimum 25 percent increase in adjusted earnings per share in    
2000 over 1999, no automatic grant of stock options was made to the non-employee
directors for 2000.                                                             

 To offer additional compensation that is tied to future appreciation in
PRG's common stock to five outside directors, on August 14, 2000, PRG granted   
10,000 options that were immediately vested to each of Ms. Ward and Messrs.     
Greimann, Lachotzki, Lowrey and Robertson. The per share exercise price was the 
closing price as of the date of grant of $9.265. In addition, on March 26, 2001,
Ms. Ward and Messrs. Cohen, Golden, Greimann, Lachotzki, Lowrey and Robertson   
each were granted additional vested options to acquire 10,000 shares of PRG     
common stock with a per share exercise price of $6.56, the closing price of     
PRG's common stock on the date of such grant.                                   

 Jonathan Golden, a director of PRG, provides consulting services to PRG
through JGPC. Mr. Golden is the sole shareholder of JGPC. During 2000, PRG paid 
JGPC aggregate consulting fees of approximately $36,000. PRG currently pays JGPC
a consulting fee of $6,000 per month. The consulting agreement may be terminated
by either party for any reason upon not less than 30 days prior notice.         

Audit Committee                                                             

   PRG's audit committee consists of three outside directors: Messrs. Cohen,
Greimann and Lowrey. Through December 7, 2001, the audit committee met four     
times in 2001. The audit committee reviews the general scope of PRG's annual    
audit and the nature of services to be performed for PRG in connection          
therewith, acting as liaison between the board of directors and PRG's           
independent auditors. The audit committee also formulates and reviews various   
PRG policies, including those relating to accounting practices and the internal 
control structure of PRG. In addition, the audit committee is responsible for   
recommending, reviewing and monitoring the performance of PRG's independent     
auditors.                                                                       

Compensation Committee                                                      

 PRG has a compensation committee consisting of three directors: Messrs.
Golden and Robertson and Ms. Ward. Through December 7, 2001, the compensation   
committee met five times in 2001. The compensation committee is responsible for 
reviewing and establishing the annual compensation for all executive officers,  
including the salary and the compensation package of each such officer. A       
portion of the compensation package may include an incentive award. The         
compensation committee also administers PRG's                                   

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benefit plans, including the Stock Incentive Plan, the Executive Incentive Plan,
the Management and Professional Incentive Plan and PRG's Employee Stock Purchase
Plan and will administer the PRG/HSA-Texas Stock Option Plan; provided, however,
that the board of directors has delegated all rights to determine awards of     
stock-based compensation to individuals who file reports pursuant to Section 16 
of the Securities Exchange Act of 1934, or the Exchange Act, to a subcommittee  
of the compensation committee consisting of Mr. Robertson and Ms. Ward, each of 
whom is a "non-employee" director, as such term is defined in Rule 16b-3        
promulgated pursuant to the Exchange Act and is an "outside" director, as such  
term is defined in the regulations promulgated pursuant to Section 162(m) of the
Internal Revenue Code.                                                          

Nominating Committee                                                        

PRG has a standing nominating committee of the board of directors     
consisting of three directors: Messrs. Golden, Lachotzki and Robertson. As of   
December 7, 2001, the nominating committee had not met in 2001. The nominating  
committee has the responsibility to consider and recommend nominees for the     
board of directors and assess the performance of the board. The nominating      
committee will consider nominees recommended by security holders to the extent  
that such security holders comply with PRG's advance notice Bylaw provisions.   

  Notwithstanding anything to the contrary which is or may be set forth in
any of PRG's filings under the Securities Act of 1933 or the Securities Exchange
Act of 1934 that might incorporate PRG filings, including this proxy statement, 
in whole or in part, the following Report and the Performance Graph shall not be
incorporated by reference into any such filings.                                

MARCH 2001 REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION       

  The compensation committee is composed entirely of directors who are not
employed by PRG. The committee considers and establishes compensation policies  
and approves benefit plans as well as specifically setting salary, annual       
incentive levels, and long-term incentive levels for the chief executive officer
and other members of executive management.                                      

Compensation Philosophy                                                     

The compensation committee reviewed and further refined the executive 
compensation program in 2000. A high emphasis was placed on performance-based   
incentives.                                                                     

 In 2000, the committee established targets for PRG revenue and earnings
before interest, taxes, depreciation and amortization ("EBITDA") as a minimum   
for the performance-based incentives and has slightly increased the potential   
maximum bonus for the highest category of performance. The compensation         
committee believes that having greater levels of each executive's compensation  
determined by performance-based incentives, and enhancing the incentives for    
exceptional performance, serves to greater align the executive's interests with 
those of PRG's shareholders.                                                    

The following objectives were used by the compensation committee in   
designing PRG's 2000 executive compensation program. The compensation program   
must:                                                                           

- Attract, motivate and retain key executives;                        

- Align key management and shareholder interests; and                 

   - Provide incentives that reward executive management performance only if
     PRG's performance meets or exceeds planned results as part of PRG's pay
for performance philosophy.                                       

Executive Compensation Program                                              

  The 2000 executive compensation program consisted of base salary, annual
incentives and long-term remuneration in the form of deferred compensation      
arrangements and non-qualified stock options. In addition, two executive        
officers received signing bonus payments for commencing employment with PRG in  
2000.                                                                           

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   Base Salary.  In determining the appropriate base salary levels for 2000,
the compensation committee considered several factors, including current        
industry practices, external market surveys of similarly sized companies and    
review of peer group compensation. For 2000, base salaries were set by the      
compensation committee for members of executive management with the following   
factors in mind:                                                                

- the fact that rapidly growing responsibilities and complexities are 
inherent in key positions;                                        

     - the need to retain key executives with industry knowledge within PRG; and

- the need to attract new talent.                                     

All of these factors were considered subjectively with no particular  
emphasis or weight given to any one factor.                                     

  Annual Incentive Compensation.  The 2000 annual incentives for executive
management pursuant to PRG's Management and Professional Incentive Plan included
several performance criteria: PRG pro forma earnings per share, PRG revenues,   
PRG operating income, functional expense control, cash collections and specific 
business or personal performance objectives. The Management and Professional    
Incentive Plan was designed to align pay more directly to financial results,    
with increases and decreases in incentive pay from year to year tied to         
financial targets achieved and missed, respectively. Components of the executive
officers' annual incentive compensation were established by the compensation    
committee. The 2000 annual incentive compensation for Messrs. Cook and Toma was 
based solely on PRG pro forma earnings per share attainment. Annual incentive   
compensation in 2000 for the other executive officers was based on factors such 
as PRG pro forma earnings per share, PRG operating income, functional expense   
control and specific business and personal performance objectives. The 2000     
annual incentives for each executive officer contained targets for each         
incentive component to ensure that no annual incentive compensation would be    
earned for substandard performance. Additionally, maximum limits were in effect 
for each incentive component pertaining to each executive officer. No incentive 
bonuses were awarded to any of the named executive officers for 2000, as defined
under the heading "-- Executive Compensation" below, except for a prorated      
minimum bonus payment of $8,333 to Mr. Ellis, which was negotiated as a part of 
his current employment agreement.                                               

 Deferred Compensation.  PRG historically has provided, and continues to
provide, non-qualified deferred compensation arrangements for certain executive 
officers. The purpose of these arrangements is to assist in the retention of    
these executives by allowing a portion of their total compensation to be        
deferred along with a full or partial matching obligation by PRG. In most       
instances, the matching obligation vests over a series of years of continuing   
employment with PRG. Each executive officer negotiated the deferred compensation
component of his compensation package when he entered into his employment       
agreement with PRG. Mr. Cook does not have a deferred compensation element in   
his employment agreement. Since deferred compensation is accrued and paid in    
accordance with provisions of the related employment agreements, no additional  
determinations with respect to this compensation component are made by the      
compensation committee.                                                         

 Other Long-Term Incentive Compensation.  PRG's shareholders approved an
additional long-term incentive program through the adoption of PRG's Stock      
Incentive Plan. All executive officers have received option grants under the    
Stock Incentive Plan. The use of stock options is meant to align the interests  
of key executives and shareholders. All options granted to executive officers   
under the Stock Incentive Plan through the date of this proxy statement have    
been at fair market value on the date of the grant. Generally, option grants    
made before 2001 vest ratably over five years of continuous employment with PRG.
Option grants made beginning in 2001 generally will vest ratably over four years
of continuous employment with PRG. In 2001, the compensation committee elected  
to vest all options in the event of a change in control. The compensation       
committee grants options to key employees of PRG, including the executive       
officers, based upon the following subjective factors: current position, level  
of performance, potential for future responsibilities and the number of vested  
and unvested options already held. The size of the grant is intended to create  
meaningful opportunities for stock ownership for the executive officers.        

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On August 14, 2000, the compensation committee awarded shares of restricted     
stock to certain named executive officers, such shares to vest over a five-year 
period of continuous employment with PRG.                                       

    Compliance with Code Section 162(m).  The maximum amount which an employer
may claim as a compensation deduction with respect to certain employees in a    
given fiscal year, pursuant to Section 162(m) of the Code is $1.0 million,      
unless an exemption for performance-based compensation is met. The compensation 
committee believes it is unlikely that any executive officers of PRG will, in   
the near future, receive in excess of $1.0 million in aggregate compensation,   
other than those individuals with respect to whom the performance-based         
compensation exemption has been satisfied or severance payments are made.       

Compensation of Chief Executive Officer.  On March 20, 1996, Mr. Cook 
signed a revised employment agreement with PRG. This agreement currently expires
in the year 2005, but provides for automatic one-year renewals upon expiration  
of each year of employment, such that it always has a five-year term, subject to
prior notice of non-renewal by the board of directors. Under Mr. Cook's         
employment agreement, the compensation committee fixed the 2000 salary of Mr.   
Cook at $500,000.                                                               

     An annual incentive compensation arrangement pursuant to the Management and
Professional Incentive Plan was established for Mr. Cook pursuant to which he   
was eligible to earn an annual cash incentive of up to 200 percent of his annual
salary if PRG achieved certain pro forma earnings per share goals for 2000. The 
target goal for 2000 was established at $1.12 per share, which represented a    
41.7 percent increase over PRG's 1999 pro forma earnings per share of $0.79 per 
share. PRG reported a loss of $(0.80) per share for 2000. Mr. Cook did not earn 
a bonus for 2000.                                                               

     Mr. Cook's incentive option program under the Stock Incentive Plan provided
that option grants would be made if 2000 adjusted earnings per share exceeded   
the level achieved in 1999 by 30 percent or more. Since PRG's adjusted earnings 
per share did not exceed the level achieved in 1999, no stock options were      
granted to Mr. Cook for 2000 under the incentive option program.                

                          Compensation Committee

                             Jonathan Golden, Chairman
                       Thomas S. Robertson
                  Jackie M. Ward

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EXECUTIVE COMPENSATION                                                          

   The following table sets forth the compensation paid or accrued by PRG to
the chief executive officer and the other four most highly paid executive       
officers of PRG in 2000 who were executive officers at December 31, 2000 and two
others who would have been among the four most highly paid executive officers   
had they continued as executive officers through the end of 2000, the "named    
executive officers". The information presented is for the years ended December  
31, 2000, 1999 and 1998.                                                        

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                                       LONG-TERM                             
                                                                                     COMPENSATION                            
                                            ANNUAL COMPENSATION(1)            ---------------------------                    
                                  ------------------------------------------  RESTRICTED     SECURITIES                      
                                   SALARY       BONUS        OTHER ANNUAL        STOCK       UNDERLYING        ALL OTHER     
NAME AND POSITION           YEAR  ($)(2)(3)   ($)(3)(4)   COMPENSATION($)(5)  AWARD($)(6)   OPTIONS(#)(7)  COMPENSATION($)(8)
-----------------           ----  ---------   ---------   ------------------  -----------   -------------  ------------------
                                                                                                                             
John M. Cook............... 2000  $484,617    $     --         $    --         $     --             --         $    9,724    
  Chairman of the Board     1999   405,782     452,300              --               --        300,000                900    
  and Chief Executive       1998   350,012     359,800              --               --        180,000                900    
  Officer                                                                                                                    
John M. Toma............... 2000   388,461          --              --               --             --             66,500    
  Vice Chairman             1999   333,840     147,672              --               --        150,000             55,900    
                            1998   305,994     125,827              --               --        120,000             58,952    
Donald E. Ellis, Jr.(9).... 2000   158,077     213,166              --               --        250,000            105,634    
  Executive Vice            1999   216,058     129,250              --               --         30,000             26,446    
  President --              1998   175,000      71,393              --               --             --             26,446    
  Finance, Chief Financial                                                                                                   
  Officer and Treasurer                                                                                                      
Robert G. Kramer........... 2000   247,692          --              --           48,125         15,000             25,000    
  Executive Vice President  1999   216,154      90,179              --               --         30,000             25,000    
  and Chief Information     1998   225,000      52,043          65,528               --             --             25,000    
  Officer                                                                                                                    
Mark C. Perlberg........... 2000   293,846          --              --          336,875        100,000             25,000    
  President, Accounts                                                                                                        
  Payable Group                                                                                                              
Michael A. Lustig(10)...... 2000   343,801          --              --          481,250             --          1,597,500    
  Former President and      1999   291,154     224,356              --               --        225,000             40,900    
  Chief Operating Officer   1998   299,538     154,200              --          981,750        510,000             42,230    
Scott L. Colabuono(11)..... 2000   271,766      50,000              --          336,875         10,000            981,666    
  Former Executive Vice     1999   138,462     101,155              --               --        112,500                 --    
  President -- Finance,     1998        --          --              --               --             --                 --    
  Chief Financial Officer                                                                                                    
  and Treasurer                                                                                                              

---------------                                                                 

(1) The compensation described in this table does not include medical, group  
   life insurance or other benefits received by the named executive officers
    which are available generally to all salaried employees of PRG and certain
     perquisites and other personal benefits, securities or property received by
   the named executive officers which do not exceed the lesser of $50,000 or
    10 percent of any such officer's salary and bonus disclosed in this table.
 (2) Includes contributions made by the named executive officers to PRG's 401(k)
Plan during the years presented.                                      
(3) Includes amounts that the named executive officers have elected to defer  
under their respective deferred compensation programs.                
(4) Includes $59,000 retention bonus, $145,833 sign-on bonus and $8,333       
prorated minimum bonus for Mr. Ellis for 2000 and for Mr. Colabuono, a
final $50,000 installment of his 1999 sign-on bonus.                  
(5) Includes $50,328 for relocation and $14,600 for car allowance for Mr.     
Kramer.                                                               
(6) Messrs. Kramer, Perlberg, Lustig and Colabuono received awards of 5,000   
  shares, 35,000 shares, 50,000 shares and 35,000 shares, respectively, of
    restricted stock on August 14, 2000. The shares awarded to Mr. Kramer vest
     100 percent August 14, 2005. The shares awarded to Messrs. Perlberg, Lustig
 and Colabuono vest ratably over five years of continued employment with
PRG. On August 21, 1998, 63,000 restricted shares were awarded to Mr. 
Lustig, such shares to vest ratably over seven years of continued     

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    employment, with vesting to accelerate in certain circumstances. Following
 Mr. Lustig's resignation from PRG effective as of October 25, 2000, all
     restricted shares awarded in 1998 were forfeited. Restricted shares awarded
  to Messrs. Lustig and Colabuono in 2000 were forfeited as of October 25,
  2000, the dates of their respective resignations, in accordance with the
  terms of the respective awards. The restricted shares awarded to Messrs.
     Kramer and Perlberg were the only shares of restricted stock held by any of
  the named executive officers on December 31, 2000. At December 31, 2000,
these shares were valued at, $31,875 and $223,125, respectively.      
(7) Does not include non-qualified stock options granted under the Stock      
  Incentive Plan on March 26, 2001 to Messrs. Cook (200,000 options), Toma
   (150,000 options) and Perlberg (135,000 options). Each option grant has a
    five-year term and vested 50 percent on the date of grant and will vest 25
percent on each of the first two anniversaries of such grant.         
(8) Consists of:                                                              

  - Premiums for supplemental term life insurance paid by PRG on behalf of
   Mr. Cook -- $8,224 in 2000; Mr. Ellis -- $1,468 in 2000 and $1,446 in
each of 1999 and 1998; and Mr. Lustig -- $1,330 in 1998.          

     - Annual contributions by PRG to the deferred compensation programs for the
named executive officers:                                         

DEFERRED COMPENSATION 

                                                                [Download Table]

                                                 2000      1999      1998  
                                                -------   -------   -------
                                                                           
Mr. Cook.....................................   $    --   $    --   $    --
Mr. Toma.....................................    65,000    55,000    55,000
Mr. Ellis....................................        --    25,000    25,000
Mr. Kramer...................................    25,000    25,000    25,000
Mr. Perlberg.................................    25,000        --        --
Mr. Lustig...................................        --    40,000    40,000
Mr. Colabuono................................        --        --        --

    - Annual matching contributions to PRG's 401(k) Plan made by PRG on behalf
   of Messrs. Cook and Toma in 2000 -- $1,500 each; and to Messrs. Cook,
Toma and Lustig in 1999 and 1998 -- $900 each.                    

     - Severance payments to Messrs. Lustig and Colabuono for 2000 of $1,597,500
      and $981,666, respectively, and severance payments to Mr. Ellis for 2000
of $104,166. See "-- Employment Agreements" below.                
(9) Mr. Ellis was formerly Senior Vice President, Chief Financial Officer and 
  Treasurer of PRG and relinquished those positions when Mr. Colabuono was
  elected Executive Vice President -- Finance, Chief Financial Officer and
Treasurer on July 19, 1999. Mr. Ellis subsequently rejoined PRG as its
Executive Vice President, Chief Financial Officer and Treasurer as of 
October 26, 2000.                                                     
(10) Mr. Lustig resigned his position as President and Chief Operating Officer  
of PRG effective as of October 25, 2000.                              
(11) Amounts shown for 1999 reflect compensation for Mr. Colabuono from July 19,
     1999 when he began employment with PRG. Mr. Colabuono resigned his position
as Executive Vice President -- Finance, Chief Financial Officer and   
Treasurer of PRG effective as of October 25, 2000.                    

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Option Grants Table                                                         

The following table sets forth certain information regarding options  
granted to the named executive officers during the year ended December 31, 2000.
No separate SARs were granted during 2000.                                      

STOCK OPTION GRANTS IN LAST FISCAL YEAR 

                                                        [Enlarge/Download Table]

                                                                                     POTENTIAL REALIZABLE 
                                 NUMBER OF    PERCENT OF                               VALUE AT ASSUMED   
                                SECURITIES      TOTAL                               ANNUAL RATES OF STOCK 
                                UNDERLYING     OPTIONS                              PRICE APPRECIATION FOR
                                  OPTIONS     GRANTED TO   EXERCISE OR                   OPTION TERM      
                                  GRANTED    EMPLOYEES IN  BASE PRICE   EXPIRATION  ----------------------
NAME                              (#)(1)         2000        ($/SH)        DATE       5%($)       10%($)  
----                            -----------  ------------  -----------  ----------  ---------    ---------
                                                                                                          
John M. Cook...................        --          --        $   --           --    $     --     $     -- 
John M. Toma...................        --          --            --           --          --           -- 
Donald E. Ellis, Jr.(2)........   250,000        8.60%         4.31      4/25/06     332,500      742,500 
Robert G. Kramer...............    10,000         .34%        25.75       1/4/10     162,000      410,500 
Robert G. Kramer...............     5,000         .17%         9.63      2/10/06      14,800       33,200 
Mark C. Perlberg(3)............   100,000        3.44%        28.77      2/15/10          --           -- 
Michael A. Lustig..............        --          --            --           --          --           -- 
Scott L. Colabuono(4)..........    10,000         .34%        25.75       1/4/10          --           -- 

---------------                                                                 

(1) Unless otherwise footnoted, options are non-qualified options granted under 
the Stock Incentive Plan. All options have either five-and-one-half or  
ten-year terms with 20 percent of the options vesting and becoming      
 exercisable on each of the first five anniversaries of the date of grant;
  provided, however, that all options granted under the Stock Incentive Plan
will vest automatically upon the occurrence of certain events.          
(2) These options vest as follows: 100,000 shares became exercisable on the     
   grant date; the remaining 150,000 shares are exercisable at a rate of 4,167
   per month beginning November 26, 2000 and continuing thereafter on the 26th
day of each of the next 34 months, and on October 26, 2003 the remaining
4,155 shares shall become exercisable.                                  
(3) These options vest as follows: 20,000 shares became exercisable on the grant
date; the remaining 80,000 shares vest 20 percent on each grant date    
  anniversary thereafter. These options were subsequently surrendered to PRG
on August 14, 2000. See "-- Certain Transactions" below.                
(4) These options were subsequently surrendered to PRG on August 14, 2000. See  
"-- Certain Transactions" below.                                        

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Option Exercises and Year-End Value Table                                   

  None of the named executive officers held or exercised SARs during 2000.
The following table sets forth certain information regarding options exercised  
during the year ended December 31, 2000, and unexercised options held at        
year-end, by each of the named executive officers.                              

AGGREGATED OPTION EXERCISES IN 2000 AND OPTION VALUES AT DECEMBER 31, 2000

                                                        [Enlarge/Download Table]

                                                        NUMBER OF SECURITIES         VALUE OF UNEXERCISED    
                                                       UNDERLYING UNEXERCISED       IN-THE-MONEY OPTIONS AT  
                                SHARES               OPTIONS AT FISCAL YEAR-END         FISCAL YEAR-END      
                               ACQUIRED     VALUE                (#)                        ($)(1)           
                              ON EXERCISE  REALIZED  ---------------------------  ---------------------------
NAME                              (#)        ($)     EXERCISABLE   UNEXERCISABLE  EXERCISABLE   UNEXERCISABLE
----                          -----------  --------  -----------   -------------  -----------   -------------
                                                                                                             
John M. Cook.................       --     $     --    346,233        119,057      $     --       $     --   
John M. Toma.................       --           --    135,000         52,500            --             --   
Donald E. Ellis, Jr. ........   39,000      565,250    108,333        141,667       223,437        292,188   
Robert G. Kramer.............       --           --     37,500         60,000            --             --   
Mark C. Perlberg.............       --           --         --             --            --             --   
Michael A. Lustig............       --           --    306,150             --        15,000             --   
Scott L. Colabuono...........       --           --         --             --            --             --   

---------------                                                                 

(1) Calculated based on a fair market value of $6.375 per share of common stock 
at December 31, 2000, less the applicable exercise prices.              

Employment Agreements                                                       

     PRG has entered into an employment agreement, as amended, with John M. Cook
that currently expires December 31, 2005. The employment agreement provides for 
automatic one-year renewals upon the expiration of each year of employment, such
that it always has a five-year term, subject to prior notice of non-renewal by  
the board of directors. Pursuant to Mr. Cook's employment agreement, for 2000   
through 2005, Mr. Cook receives an annual base salary of $500,000, effective    
March 1, 2000, and an annual target bonus of up to 200 percent of his base      
salary based upon PRG's performance for the respective year. For the year 2001, 
the compensation committee determined that Mr. Cook is eligible to receive up to
a maximum of 150,000 options if earnings per share for 2001 are greater than 150
percent of 2000 adjusted earnings per share. Mr. Cook will be entitled to       
receive a pro-rata share of options if 2001 earnings per share are between 130  
percent and 149 percent of 2000 earnings per share. Any options granted to Mr.  
Cook would be granted at fair market value as of the end of 2001 and would vest 
over a four-year period at 25 percent per year. If Mr. Cook is terminated other 
than for cause or if Mr. Cook resigns for "Good Reason," he is eligible to      
receive a severance payment for the remainder of the five-year term, comprised  
of base salary and bonus, up to a maximum amount not to be deemed an "excess    
parachute payment" under the Code, and all outstanding options immediately      
become vested. "Good Reason" means any of the following occurring without Mr.   
Cook's consent:                                                                 

- the assignment of duties or a position or title inconsistent with or
lower than the duties, position or title provided in Mr. Cook's   
employment agreement;                                             

   - a requirement that Mr. Cook perform a substantial portion of his duties
outside Atlanta, Georgia;                                         

     - a reduction of Mr. Cook's compensation unless the board or an appropriate
       committee of the Board has authorized a general compensation decrease for
all executive officers of PRG;                                    

   - the acquisition by any person, entity or group of 50 percent or more of
  the combined voting power of the then outstanding securities of PRG;

  - certain events of merger, consolidation, or transfer of assets of PRG,
"change in control," resulting in a minority ownership by PRG     
    stockholders in the successor company following the change in control;

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   - the existing directors of PRG prior to a change in control constituting
      less than a majority of the directors of the successor company following
the change in control; or                                         

    - any other transaction or event that the board of directors of PRG in its
discretion identifies as a change in control for this purpose.    

Mr. Cook also is entitled to receive certain supplemental insurance   
coverage and other personal benefits under his employment agreement. Mr. Cook   
has agreed not to compete with PRG or to solicit any of PRG's clients or        
employees for a period of 18 months following termination of employment.        

   PRG also has entered into employment agreements with John M. Toma, Donald
E. Ellis, Jr., Robert G. Kramer, and Mark C. Perlberg. The agreements with      
Messrs. Toma and Kramer automatically renewed on December 31, 2000 and provide  
for automatic one-year renewals upon the expiration of each year of employment, 
subject to prior notice of non-renewal by the board of directors. Mr. Ellis'    
agreement terminates in October 2003. Prior to their resignations, PRG was also 
a party to employment agreements with each of Michael A. Lustig and Scott L.    
Colabuono. Messrs. Toma, Ellis, Kramer Perlberg, Lustig and Colabuono have      
agreed not to compete with PRG nor to solicit any clients or employees of PRG   
for a period of 18 months following termination of their respective employment. 

    Effective March 1, 2000 Mr. Toma receives a base salary of $400,000 with a
target bonus potential of 50 percent of his base salary, with a maximum         
potential bonus of 100 percent of his base salary based upon PRG's annual       
performance. In addition, Mr. Toma is eligible to receive, for 2001, up to a    
maximum of 100,000 options if earnings per share for 2001 are greater than 150  
percent of 2000 adjusted earnings per share. Mr. Toma will also be entitled to  
receive a pro-rata share of options if earnings per share for 2001 are between  
130 percent and 149 percent of 2000 adjusted earnings per share. Any options    
granted to Mr. Toma would be granted at fair market value as of the end of 2001 
and would vest over a four-year period at 25 percent per year. In addition, PRG 
has agreed to make annual contributions in the amount of $65,000 per year to a  
deferred compensation program for Mr. Toma, which amounts will vest 50 percent  
immediately and the remainder over a ten-year period. If Mr. Toma is terminated 
other than for cause or if Mr. Toma resigns for "Good Reason," as defined in Mr.
Cook's employment arrangement, with the additional qualifying event of Mr.      
Cook's removal without cause as chief executive officer of PRG, he is eligible  
to receive a severance benefit consisting of (1) two years of base salary,      
target bonus and auto allowance, (2) a contribution of two years of the annual  
deferred compensation credit to a rabbi trust established for deferred          
compensation, and (3) payment of employee COBRA premiums, plus a full state and 
federal tax gross-up sufficient to pay any applicable excise taxes on items (1) 
through (3). PRG also has agreed to provide Mr. Toma with certain other personal
benefits. Mr. Toma's employment agreement will automatically renew on December  
31, 2001 and provides for automatic one-year renewals at the expiration of each 
year of employment, subject to prior notice of non-renewal by the board of      
directors.                                                                      

Prior to leaving PRG in June 1999, Mr. Ellis received a base salary of
$250,000 per year plus a retention bonus of $59,000 for remaining with PRG      
through May 31, 2000. On May 31, 2000, Mr. Ellis resigned from PRG and received 
a severance benefit of $104,166. On October 26, 2000, Mr. Ellis rejoined PRG as 
its Executive Vice President -- Finance, Chief Financial Officer and Treasurer, 
with a base salary of $300,000 per annum and bonus potential of up to 70 percent
of his base salary, with a minimum bonus of $50,000 per annum. Mr. Ellis        
received a sign-on bonus in the amount of $145,833. The compensation committee  
also granted Mr. Ellis options to purchase 250,000 shares of common stock of    
PRG, with 100,000 shares vesting immediately and the remaining 150,000 shares   
vesting ratably over 36 months. Upon termination without cause or a resignation 
for Good Reason, as defined in Mr. Cook's employment agreement, with the        
additional qualifying events of Mr. Cook no longer serving as chief executive   
officer, or the liquidation or dissolution of PRG, any then unvested portion of 
the aforementioned 250,000 share option grant will immediately vest and Mr.     
Ellis will receive a severance payment equal to 24 months of base salary and car
allowance, plus a bonus of $100,000, and a full state and federal tax gross-up  
sufficient to pay any applicable excise taxes on such amounts.                  

    For the year 2001, Mr. Kramer's base salary was increased to $265,000 with
a target bonus set at 35 percent of base salary. Mr. Kramer elected to defer    
payment of $25,000 of his base salary pursuant to a                             
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deferred compensation plan. Pursuant to Mr. Kramer's employment agreement, he is
eligible to receive a target-level bonus based in part upon PRG's performance   
for the year. In addition, PRG agreed to make annual matching contributions in  
the aggregate amount of $25,000 per year to Mr. Kramer's deferred compensation  
program, which amounts vest over a ten-year period. Upon termination, other than
for cause or by voluntary resignation, Mr. Kramer will receive severance        
payments equal to six months of base salary.                                    

Effective February 9, 2000, Mr. Perlberg entered into an employment   
agreement with PRG. For the year 2000, Mr. Perlberg was paid a base salary of   
$325,000, with a target bonus of 35 percent of base salary. Mr. Perlberg elected
to defer $25,000 of his base salary pursuant to a deferred compensation plan. In
addition, PRG agreed to make annual matching contributions in the aggregate     
amount of $25,000 per year to Mr. Perlberg's deferred compensation program,     
which amounts vest over a ten-year period. Effective October 1, 2001, Mr.       
Perlberg's base salary was increased to $375,000. Also, in February 2001,       
pursuant to his employment agreement, Mr. Perlberg received a sign-on bonus     
equal to 33 percent of his base salary paid in 2000. Upon termination, other    
than for cause or by voluntary resignation, Mr. Perlberg will receive severance 
payments equal to 24 months of base salary, bonus at target level, and car      
allowance, paid monthly.                                                        

    Upon Mr. Lustig's resignation effective as of October 25, 2000, Mr. Lustig
received a lump sum payment of $937,500 plus the right to receive 18 additional 
monthly payments, each such payment equal to the sum of his monthly salary and  
the monthly proration of his annual car allowance. Upon certain events of change
in control of PRG, payment of such monthly payments may be accelerated.         

Upon Mr. Colabuono's resignation effective as of October 25, 2000, Mr.
Colabuono received a lump sum payment of $301,041 plus the right to receive 18  
additional monthly payments, each such payment equal to the sum of his monthly  
salary and the monthly proration of each of his annual target bonus and his     
annual car allowance. Upon certain events of change in control of PRG, payment  
of such monthly payments may be accelerated.                                    

Stock Incentive Plan                                                        

   On June 15, 1998, PRG, with the approval of its shareholders, amended its
Stock Incentive Plan, which initially provided for the grant of options to      
acquire a maximum of 9,375,000 shares of common stock, subject to certain       
adjustments. On June 8, 2000, PRG's shareholders approved an amendment to the   
Stock Incentive Plan such that the Stock Incentive Plan currently provides for  
the grant of options and other awards to acquire a maximum, aggregate of        
10,875,000 shares of common stock, subject to certain adjustments. As of August 
31, 2001, options for 7,167,637 shares were outstanding, after adjustment for   
forfeitures, and options for 1,430,873 shares had been exercised. Options may be
granted under this plan to employees, officers or directors of and consultants  
and advisors to, PRG and its subsidiaries. PRG estimates that, as of March 30,  
2001, approximately 2,000 employees, including officers, and seven non-employee 
directors of PRG were eligible to participate in the Stock Incentive Plan.      
Unless sooner terminated by the board, this plan terminates in June 2008.       

Employee Stock Purchase Plan                                                

In May 1997, PRG's shareholders approved the adoption of The Profit   
Recovery Group International, Inc. Employee Stock Purchase Plan. This plan is   
intended to be an "employee stock purchase plan" as defined in Code Section 423.
Under this plan, eligible employees may authorize payroll deductions at the end 
of a semi-annual purchase period of from 1 percent to 10 percent of their       
compensation, as defined in the stock purchase plan, with a minimum deduction of
$10 per pay period and a maximum aggregate deduction of $10,625 during each     
semi-annual purchase period, to purchase common stock at a price of 85% of the  
fair market value thereof as of the first trading day, as defined in the stock  
purchase plan, of the offering period. The aggregate number of shares of common 
stock which may be purchased by all participants under this plan may not exceed 
1,125,000, subject to certain adjustments. PRG estimates that, as of December   
31, 2000, approximately 1,800 employees of PRG and its subsidiaries are eligible
to participate in this plan. This plan will terminate at the option of PRG's    
compensation committee or, if earlier, at the time purchase rights have been    
exercised for all shares of common stock reserved for purchase under this plan. 

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PRG's 401(k) Plan                                                           

PRG assumed, effective immediately prior to completion of its initial 
public offering, the 401(k) plan sponsored by a predecessor of PRG. This plan is
a tax-qualified retirement plan designed to meet the requirements of Sections   
401(a) and 401(k) of the Code. Under this plan, participants may elect to make  
pre-tax savings deferrals of from 1 percent to 15 percent of their compensation 
each year, subject to annual limits on such deferrals (e.g., $10,500 in 2000)   
imposed by the Code. PRG may also in its discretion, on an annual basis, make a 
matching contribution with respect to a participant's elective deferrals and/or 
may make additional PRG contributions. The only form of benefit payment under   
this 401(k) plan is a single lump-sum payment equal to the balance in the       
participant's account. Under this 401(k) plan, the vested portion of a          
participant's accrued benefit is payable upon such employee's termination of    
employment, attainment of age 59 1/2, with respect to 100 percent vested        
accounts only, retirement, total and permanent disability or death.             

CERTAIN TRANSACTIONS                                                            

     The following members of Mr. Cook's immediate family are employed by PRG as
field auditors or audit managers and received compensation in 2000 in the       
approximate amounts set forth beside their names: David H. Cook,                
brother -- $201,250 consisting of $175,000 salary and $26,250 bonus; Harriette  
L. Cook, sister-in-law -- $97,000 consisting of $44,000 salary, $3,000 bonus and
$50,000 commissions; Pamela M. Cook, sister -- $115,000 salary; and Allen R.    
Sluiter, brother-in-law -- $135,000 commissions.                                

 Mr. Toma's sister-in-law, Maria A. Neff, is employed with PRG as Senior
Vice President of Human Resources. For 2000, PRG paid Ms. Neff compensation of  
approximately $138,000 salary.                                                  

  On August 14, 2000, five named executive officers surrendered a total of
1,295,000 nonqualified stock options to allow for broad-based grants of stock   
options and awards of restricted stock to employees throughout PRG. The table   
below identifies the executive officers who surrendered nonqualified stock      
options and the amount of nonqualified stock options surrendered. No            
consideration was paid for the surrender and cancellation.                      

                                                        [Enlarge/Download Table]

                                      VESTED OPTIONS  UNVESTED OPTIONS  TOTAL OPTIONS    WEIGHTED AVERAGE  
                                       SURRENDERED      SURRENDERED      SURRENDERED   EXERCISE PRICE/SHARE
                                      --------------  ----------------  -------------  --------------------
                                                                                                           
Mr. Cook.............................     72,000          408,000          480,000            $25.96       
Mr. Toma.............................     33,000          199,500          232,500             25.99       
Mr. Ellis............................         --               --               --                --       
Mr. Kramer...........................         --               --               --                --       
Mr. Perlberg.........................     20,000           80,000          100,000             28.77       
Mr. Lustig...........................     33,750          326,250          360,000             25.96       
Mr. Colabuono........................     22,500          100,000          122,500             28.93       

   See "-- Summary Compensation Table, Footnote (6)" above for a description
of restricted stock awarded to such named executive officers. Messrs. Lustig and
Colabuono subsequently forfeited their shares of restricted stock in exchange   
for an unspecified portion of the lump sum payments they received following     
their resignations.                                                             

HSA-Texas owns the building in which HSA-Texas' Dallas headquarters is
located. Following the closing, PRG will lease a portion of HSA-Texas' current  
office space from HSA-Texas for a period of approximately three years at market 
rental rates.                                                                   

     On the closing date of the asset acquisition, PRG will assume approximately
$7.4 million of the amount of principal and interest outstanding on the         
effective date payable to Howard Schultz for amounts loaned to HSA-Texas,       
including amounts loaned subsequent to September 30, 2001, for:                 

- working capital for normal operations;                              

- HSA-Texas transaction expenses incurred in connection with the asset
acquisition;                                                      

     - amounts required to cancel HSA-Texas options of persons not hired by PRG;

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- amounts required to cancel HSA-Texas SARs; and                      

    - principal and interest payments since December 31, 2000 on certain notes
     issued in connection with certain prior acquisitions made by HSA-Texas.

  Currently the amount to be assumed is estimated to be approximately $7.4
million. Concurrently with the closing of the asset acquisition, PRG will make  
an initial payment of $7.0 million to Howard Schultz for amounts loaned to      
HSA-Texas.                                                                      

    On the closing date, PRG will assume options to purchase 167,631 shares of
HSA-Texas common stock currently held by Arthur Budge, Jr., with an exercise    
price of $9.06 per share that will convert into options to purchase 248,295     
shares of PRG common stock with an exercise price of $6.12 per share, assuming  
an option conversion ratio of 1.4812.                                           

  PRG will grant options to purchase 250,000 shares of PRG common stock to
Howard Schultz at an exercise price equal to the closing sales price per share  
of PRG common stock on The Nasdaq National Market on the closing date.          

    Alma Intervention, S.A. ("Alma"), a wholly-owned subsidiary of PRG, leases
certain vehicles and business equipment and other property used in the business 
from Collek S.N.C., a French company owned by Marc Eisenberg. Mr. Eisenberg     
served as a Class II director during 2000, but did not stand for election as a  
director at the 2001 Annual Meeting of Shareholders. Alma also leases office    
space from a relative of Mr. Eisenberg. Aggregate rent paid by Alma in 2000 for 
these vehicles, property and office space was $228,000.                         

    PRG has also entered into a consulting agreement with Lieb Finance S.A., a
Luxembourg company of which Mr. Eisenberg is the sole owner and employee, to    
assist on strategic and long-term planning matters for PRG and its affiliates in
certain portions of Europe. The term of the consulting agreement will end       
October 7, 2002. Under the consulting agreement, Lieb Finance S.A. receives an  
annual consulting fee of approximately 325,000 French francs, the approximate   
equivalent of $44,016 as of December 10, 2001.                                  

 Blum Capital Partners, L.P. and its affiliates, who based on an amended
Schedule 13D filing made on December 5, 2001, currently beneficially own        
approximately 14.6% of PRG's outstanding common stock, including stock          
obtainable upon conversion of convertible notes, purchased $40 million of the   
$125 million of PRG's convertible notes due 2006. Blum Capital Partners has     
expressed an interest in obtaining representation on PRG's board of directors,  
and PRG has had discussions with them regarding this matter.                    

See "-- Information About the Board of Directors and Committees of the
Board -- Director Compensation" above for a discussion of certain additional    
transactions.                                                                   

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE                         

 Section 16(a) of the Exchange Act requires PRG's executive officers and
directors and persons who beneficially own more than 10 percent of PRG's stock  
to file initial reports of ownership and reports of changes in ownership with   
the SEC. Executive officers, directors and greater than 10 percent beneficial   
owners are required by SEC regulations to furnish PRG with copies of all Section
16(a) forms they file.                                                          

  Based solely on its review of copies of forms received by it pursuant to
Section 16(a) of the Exchange Act, or written representations from certain      
reporting persons, PRG believes that with respect to the fiscal year ended      
December 31, 2000, all Section 16(a) filing requirements applicable to its      
executive officers, directors and greater than 10 percent beneficial owners were
complied with, except that Mr. Kramer filed one late Form 5 reporting one late  
transaction, Mr. Lowrey filed one late Form 4 and one late Form 5, reporting one
late transaction each, and Mr. Lachotzki filed one late Form 5 reporting one    
late transaction.                                                               

Compensation Committee Interlocks and Insider Participation                 

   PRG's compensation committee consists of Messrs. Golden and Robertson and
Ms. Ward. PRG has paid the law firm of Arnall Golden Gregory LLP, of which Mr.  
Golden's personal corporation, JGPC, serves as a                                

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partner, compensation for legal services rendered since 1991 and expects to     
continue utilizing this firm's services in the future.                          

OWNERSHIP OF DIRECTORS, DIRECTOR NOMINEES, PRINCIPAL SHAREHOLDERS AND CERTAIN   
EXECUTIVE OFFICERS OF PRG                                                       

The following table sets forth information regarding the beneficial   
ownership of PRG's common stock as of October 31, 2001, and as adjusted to give 
effect to the proposed acquisitions, by:                                        

- each person, or group of affiliated persons, known by PRG to be the 
      beneficial owner of more than 5 percent of the outstanding common stock;

- the named executive officers;                                       

- each director and director nominee of PRG; and                      

- all of PRG's executive officers and directors, including director   
nominees, as a group.                                             

    Except as otherwise indicated in the footnotes to this table, PRG believes
that the persons named in this table have sole investment and voting power with 
respect to all the shares of common stock indicated.                            

                                                        [Enlarge/Download Table]

                                                    BENEFICIAL OWNERSHIP                             
                                                 AS OF OCTOBER 31, 2001(1)         PRO FORMA(1)      
                                                 --------------------------  ------------------------
BENEFICIAL OWNER                                   SHARES       PERCENTAGE     SHARES      PERCENTAGE
----------------                                 -----------   ------------  -----------   ----------
                                                                                                     
John M. Cook(2)(3).............................   4,719,481         9.58%      4,719,481      7.35%  
Mellon Financial Corporation(4)................   2,984,087         6.12       2,984,087      4.68   
Blum Capital Partners, L.P.(5).................   7,850,160        14.55       7,850,160     11.39   
Farallon Capital Management LLC(6).............   3,627,987         7.19       3,627,987      5.55   
Stanley B. Cohen(7)............................     803,000         1.65         803,000      1.26   
Jonathan Golden(8).............................   1,206,205         2.47       1,206,205      1.89   
Garth H. Greimann(8)...........................      37,491            *          37,491         *   
Fred W. I. Lachotzki(9)........................      64,000            *          64,000         *   
E. James Lowrey(10)............................      54,000            *          54,000         *   
Thomas S. Robertson(11)........................      24,700            *          24,700         *   
John M. Toma(12)...............................   1,008,355         2.06       1,008,355      1.58   
Jackie M. Ward(11).............................      31,535            *          31,535         *   
Donald E. Ellis, Jr.(13).......................     183,333            *         183,333         *   
Robert G. Kramer(14)...........................      89,983            *          84,983         *   
Mark C. Perlberg(15)...........................     140,448            *         140,448         *   
Scott L. Colabuono(16).........................       6,200            *           6,200         *   
Michael A. Lustig(17)..........................      17,445            *          17,445         *   
Arthur Budge, Jr.(18)..........................          --           --         248,295         *   
Nate Levine(18)................................          --           --              --        --   
Andrew Schultz(18).............................          --           --       5,812,343      9.18   
Howard Schultz(18).............................          --           --       5,020,811      7.85   
All executive officers and directors as a group                                                      
  (16 persons)(19).............................   8,362,531        16.70%     19,443,980     29.67%  

---------------                                                                 

*  Represents holdings of less than one percent.                            

(1) Applicable percentage of ownership at December 3, 2001 is based upon      
48,797,620 shares of common stock outstanding. Beneficial ownership is
    determined in accordance with the rules of the SEC and includes investment
  and voting power with respect to the shares shown as beneficially owned.
  Shares of common stock subject to options currently exercisable or which
  will become exercisable within sixty (60) days of the date of this proxy
    statement are deemed outstanding for computing the percentage ownership of
the person holding such options, but are not deemed outstanding for   
computing the percentage ownership of any other persons. The pro forma
shares and percentage reflect the percentage                          

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     of ownership as of December 7, 2001 after the issuance of 14,953,403 shares
  of PRG common stock in the proposed acquisitions, and are based upon the
following assumptions:                                                

- an average PRG common stock price of $7.764 per share;              

     - HSA-Texas continues to have outstanding 2,307,482 shares of voting common
     stock, 6,435,383 shares of non-voting common stock, options to purchase
1,133,423 shares and 64,569 SAR's, and Howard and Andrew Schultz's
respective beneficial ownership thereof remains unchanged; and    

 - HSA-Texas' remaining liabilities, including the expenses of effecting
liquidation and winding up of HSA-Texas, do not exceed the value  
HSA-Texas' assets not purchased by PRG.                           

(2) The business address for Mr. Cook is 2300 Windy Ridge Parkway, Suite 100  
North, Atlanta, Georgia 30339-8426.                                   
(3) Includes 897,618 shares held by the Cook Family Limited Partnership, for  
which Mr. Cook serves as the general partner, 86,159 shares and 60,000
  shares held by the Cook Family Grantor Retained Annuity Trust and the M.
 Lucy Cook Family 2001 Grantor Retained Annuity Trust, respectively, for
 which Mr. Cook is trustee and has sole investment and voting power with
    respect to such shares, 90,000 shares held by the John M. Cook Family 2001
   Grantor Retained Annuity Trust for which M. Lucy Cook, Mr. Cook's spouse,
  is trustee and has sole investment and voting power with respect to such
shares, and 695,139 shares held by M. Lucy Cook. Also includes 491,233
     shares subject to options which are currently exercisable. Does not include
     1,191,809 shares held for the benefit of John M. Cook pursuant to a Grantor
Retained Annuity Trust for which James R. Cook is trustee and has sole
 investment and voting power with respect to such shares, 294,013 shares
held by the John M. Cook Charitable Remainder UniTrust for which M.   
 Christine Cook is trustee and has sole investment and voting power with
 respect to such shares, and 1,191,809 shares held for the benefit of M.
Lucy Cook pursuant to a Grantor Retained Annuity Trust for which M.   
    Christine Cook and M. Thomas Cook are co-trustees and have sole investment
and voting power with respect to such shares.                         
(4) Information provided is based on a Schedule 13-G dated January 22, 2001   
     filed by Mellon Financial Corporation ("Mellon"). Mellon's business address
is One Mellon Center, Pittsburgh, Pennsylvania 15258. Shares are      
   beneficially owned by direct or indirect subsidiaries of Mellon, a parent
     holding company of certain banks and registered investment advisers. Mellon
   has shared voting and dispositive power with respect to 297,800 and 6,400
   shares, respectively. No single investment advisory client of Mellon owns
 more than 5 percent of the common stock reported as beneficially owned.

 (5)Includes 3,229,975 shares the Blum Reporting Persons, as defined below, have
the right to acquire upon conversion of convertible notes acquired on   
November 26, 2001. Includes an additional 1,937,985 shares the Blum     
  Reporting Persons have the right to acquire upon conversion of convertible
notes acquired on December 3, 2001. Information provided is based on a  
    Schedule 13D filed on November 13, 2001, as amended on November 26, 2001 and
December 5, 2001 by BLUM Capital Partners, L.P., a California limited   
    partnership, ("BLUM L.P."); Richard C. Blum & Associates, Inc., a California
corporation ("RCBA Inc."); RCBA GP, L.L.C., a Delaware limited liability
company ("RCBA GP"); Blum Strategic GP II, L.L.C., a Delaware limited   
   liability company ("Blum GP"); Blum Strategic Partners II, L.P., a Delaware
limited partnership; and Richard C. Blum, the Chairman and a substantial
shareholder of RCBA Inc. and a managing member of RCBA GP and Blum GP   
(collectively, the "Blum Reporting Persons"). BLUM L.P. is a California 
 limited partnership whose principal business is acting as general partner
    for investment partnerships and providing investment advisory services. BLUM
 L.P. is an investment advisor registered with the Securities and Exchange
  Commission. The sole general partner of BLUM L.P. is RCBA Inc. Each of the
Blum Reporting Persons reports that it has shared voting and dispositive
  power over the shares reported above. The principal office for each of the
  Blum Reporting Persons is 909 Montgomery Street, Suite 400, San Francisco,
California 94133.                                                       

(6)Includes 1,679,587 shares the Farallon Reporting Persons, as defined below,
  have the right to acquire upon conversion of convertible notes acquired on
   November 26, 2001. Information provided is based on a Schedule 13D filed on
 November 29, 2001, by Farallon Capital Management LLC, a Delaware limited
liability company; Farallon Capital Partners, L.P., a California limited
partnership; Farallon Capital Institutional Partners, L.P., a California
limited partnership; Farallon Capital Institutional Partners II, L.P., a
    California limited partnership; Farallon Capital Institutional Partners III,
L.P., a                                                                 

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Delaware limited partnership; Tinicum Partners, L.P., a New York limited
    partnership; Farallon Partners, L.L.C., a Delaware limited liability company
  which is the general partner of each of the above partnerships; Enrique H.
Boilini; David I. Cohen; Joseph F. Downes; William F. Duhamel; Andrew B.
  Fremder; Richard B. Fried; Monica R. Landry; William F. Mellin; Stephen L.
Millham; Meridee A. Moore; Thomas F. Steyer and Mark C. Wehrly          
(collectively, the "Farallon Reporting Persons"). Each of the Farallon  
 Reporting Persons reports that it has shared voting and dispositive power
over the shares reported above. The principal office for each of the    
Farallon Reporting Persons other than Enrique Boilini is c/o Farallon   
  Capital Management, L.L.C., One Maritime Plaza, Suite 1325, San Francisco,
California 94111. The address of Enrique Boilini is c/o Farallon Capital
Management, L.L.C., 75 Holly Hill Lane, Greenwich, Connecticut 06830.   

(7) Includes 231,677 shares held by the Stanley B. Cohen Grantor Retained     
     Annuity Trust for the benefit of Mr. Cohen, for which Shirley L. Cohen, Mr.
  Cohen's spouse, is the trustee and has sole investment and voting power,
22,000 shares held by the SBC Family Limited Partnership for which Mr.
   Cohen is a general partner and 16,000 shares subject to options which are
currently exercisable.                                                

(8) Includes 26,000 shares subject to options which are currently exercisable.

(9) Includes 41,000 shares subject to options which are currently exercisable.

(10) Includes 29,000 shares subject to options which are currently exercisable. 

(11) Includes 21,500 shares subject to options which are currently exercisable. 

(12) Includes 48,034 shares held for the benefit of Mr. Toma for which Maria A. 
     Neff and Dorothy M. Toma, Mr. Toma's spouse, serve as co-trustees and share
   investment and voting power with respect to such shares. Includes 275,886
shares held by the Toma Family Limited Partnership, for which Mr. Toma
serves as the general partner and 5,556 shares held by Toma Family    
Foundation, Inc. of which Mr. Toma is President. Also, includes 73,190
shares held by Mrs. Toma, 12,021 shares held by the Mary Caitlin Cook 
 Trust, of which Mr. Toma is the trustee, 10,298 shares held by the Adam
     Cook Trust, of which Mr. Toma is the trustee, and 247,500 shares subject to
options which are currently exercisable.                              

(13) Represents 150,000 shares subject to options which are currently           
exercisable and 8,333 shares subject to options which will become     
 exercisable within sixty (60) days of the date of this proxy statement.

(14) Includes 5,000 shares of stock currently subject to certain restrictions   
     and risk of forfeiture. Includes 75,000 shares subject to options which are
currently exercisable.                                                

(15) Includes 35,000 shares of stock currently subject to certain restrictions  
and risk of forfeiture and 67,500 shares subject to options which are 
currently exercisable.                                                

(16) Mr. Colabuono resigned his position as Executive Vice President Finance,   
  Chief Financial Officer and Treasurer of PRG effective as of October 25,
2000 and is no longer an executive officer of PRG.                    

(17) Mr. Lustig resigned his position as President and Chief Operating Officer  
of PRG effective as of October 25, 2000 and is no longer an executive 
officer of PRG.                                                       

(18) Messrs. Budge, Levine, Andrew Schultz and Howard Schultz will become       
     directors upon the completion of the HSA acquisitions. Based on assumptions
set forth above at note (1), each will become beneficial owners of the
    following shares of PRG common stock following the closing of the proposed
 acquisitions: Mr. Budge 248,295 shares; Mr. Levine 0 shares; Mr. Andrew
Schultz 5,812,343 shares; and Mr. Howard Schultz 5,020,811 shares. The
   numbers shown for Howard Schultz and Mr. Budge include 250,000 shares and
    248,295 shares, respectively, subject to options which will be immediately
   exercisable. The business address for these reporting persons is 9241 LBJ
Freeway, Suite 100, Dallas, Texas 75243.                              

(19) Includes 40,000 shares of stock currently subject to certain restrictions  
    and risk of forfeiture. Also includes options to purchase 1,200,567 shares
  which are either currently exercisable or will become exercisable within
    sixty (60) days of the date of this proxy statement. The pro forma numbers
include an additional 498,295 shares subject to options which will be 
 exercisable immediately following the closing of the asset acquisition.

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EXECUTIVE OFFICERS                                                              

     Each of the executive officers of PRG was elected by the board of directors
to serve until the board of directors' meeting immediately following the next   
annual meeting of the shareholders or until his earlier removal by the board or 
his resignation. The following table lists the executive officers of PRG and    
their ages and offices with PRG.                                                

                                                        [Enlarge/Download Table]

NAME                                        AGE            OFFICE WITH REGISTRANT          
----                                        ---            ----------------------          
                                                                                           
John M. Cook............................... 59   Chairman of the Board, Chief Executive    
                                                 Officer and Director                      
John M. Toma............................... 56   Vice Chairman and Director                
Donald E. Ellis, Jr........................ 50   Executive Vice President -- Finance, Chief
                                                 Financial Officer and Treasurer           
Robert G. Kramer........................... 58   Executive Vice President and Chief        
                                                 Information Officer                       
Mark C. Perlberg........................... 45   President -- Accounts Payable Group       

The employment histories of those executive officers who are not also 
directors are set forth below:                                                  

DONALD E. ELLIS, JR. rejoined PRG in October 2000 as Executive Vice   
President -- Finance, Chief Financial Officer and Treasurer. Mr. Ellis had      
previously served PRG as Special Assistant to the Chairman from July 19, 1999 to
May 31, 2000 and as its Senior Vice President, Chief Financial Officer and      
Treasurer from March 1995 to July 1999. Prior to first joining PRG, Mr. Ellis   
served as Vice President -- Finance, Treasurer and Chief Financial Officer of   
Information America, Inc., a provider of on-line computer information services. 
Mr. Ellis is a certified public accountant.                                     

     ROBERT G. KRAMER joined PRG in October 1997 as Executive Vice President and
Chief Information Officer. Prior to joining PRG, Mr. Kramer had worked for Home 
Shopping Network, Inc. since 1996 as Executive Vice President and Chief         
Information Officer. From 1994 to 1996, Mr. Kramer served as Executive Vice     
President and Chief Information Officer with Hanover Direct, Inc., a direct     
specialty retailer.                                                             

   MARK C. PERLBERG joined PRG in February 2000 as President of the Accounts
Payable Group. Prior to joining PRG, Mr. Perlberg had worked for John H. Harland
Company, a check printing company, since February 1996, most recently serving as
Vice President and General Manager of the North Region.                         

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PERFORMANCE GRAPH                                                               

Set forth below is a line graph presentation comparing the cumulative 
shareholder return on PRG's common stock (Nasdaq: PRGX), on an indexed basis,   
against cumulative total returns of the Nasdaq Stock Market (U.S. Companies)    
Index and the Hambrecht & Quist Technology Index. The graph assumes that the    
value of the investment in the common stock in each index was $100 on March 26, 
1996. The Performance Graph shows total return on investment for the period     
beginning March 26, 1996 (the date of PRG's initial public offering) through    
December 31, 2000.                                                              

                                                                [Download Table]

                THE PROFIT                                       
              RECOVERY GROUP     NASDAQ STOCK   HAMBRECHT & QUIST
            INTERNATIONAL, INC.  MARKET (U.S.)     TECHNOLOGY    
            -------------------  -------------  -----------------
                                                                 
3/26/1996         $100.00           $100.00          $100.00     
12/31/1996        $145.45           $118.44          $123.07     
12/31/1997        $161.36           $145.06          $144.29     
12/31/1998        $340.34           $204.57          $224.43     
12/31/1999        $362.22           $380.17          $501.24     
12/31/2000        $ 86.93           $228.74          $324.03     

Total return assumes reinvestment of any dividends. 

SHAREHOLDER PROPOSALS 

 Appropriate proposals of shareholders intended to be presented at PRG's
2002 Annual Meeting of Shareholders pursuant to Rule 14a-8 promulgated under the
Securities Exchange Act, must be received by PRG by December 21, 2001 for       
inclusion in its proxy statement and form of proxy relating to that meeting. In 
addition, all shareholder proposals submitted outside of the shareholder        
proposal rules promulgated pursuant to Rule 14a-8 under the Exchange Act must be
received by PRG by January 20, 2002 in order to be considered timely. If such   
shareholder proposals are not timely received, proxy holders will have          
discretionary voting authority with regard to any such shareholder proposals    
which may come before the 2002 annual meeting. With regard to such shareholder  
proposals, if the date of the 2002 annual meeting is subsequently advanced or   
delayed by more than 30 days from the date of the 2001 annual meeting, PRG      
shall, in a timely manner, inform shareholders of the change and the date by    
which proposals must be received.                                               

INDEPENDENT AUDITORS

The accounting firm of KPMG LLP are the independent auditors of PRG.  
Approval or selection of the independent auditors of PRG is not submitted for a 
vote of PRG's shareholders. The board of directors of PRG has historically      
selected the independent auditors of PRG, with the advice of the audit          
committee, and                                                                  

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the board believes that it would be to the detriment of PRG and its shareholders
for there to be any impediment to the board's exercising its judgment to remove 
PRG's independent auditors if, in its opinion, such removal is in the best      
interest of PRG and its shareholders.                                           

  It is anticipated that a representative from the accounting firm of KPMG
LLP will be present at the PRG special meeting to answer appropriate questions  
and make a statement if the representative desires to do so.                    

WHERE YOU CAN FIND MORE INFORMATION 

     PRG files annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy this information at the SEC's   
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please 
call the SEC at 1-800-SEC-0330 for further information regarding the public     
reference room. In addition, the SEC also maintains an internet worldwide web   
site that contains reports, proxy statements and other information about issuers
like PRG who file electronically with the SEC. The address of that site is      
http://www.sec.gov.                                                             

   HSA-Texas and its affiliates are not reporting companies and therefore no
reports or financial information about them is publicly available.              

The SEC allows PRG to "incorporate by reference" information into this
proxy statement, which means that PRG can disclose important information to you 
by referring you to another document filed separately with the SEC. The         
information incorporated by reference is deemed to be part of this proxy        
statement, except for any information superseded by information contained       
directly in this proxy statement. This proxy statement incorporates by reference
the documents set forth below that PRG has previously filed with the SEC. These 
documents contain important information about PRG and its financial condition.  

The following documents that PRG previously filed with the SEC are    
incorporated by reference in this document:                                     

  - PRG's Annual Report on Form 10-K for the year ended December 31, 2000;

 - PRG's Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001, June 30, 2001 and September 30, 2001;                       

- PRG's Current Report on Form 8-K filed on October 9, 2001;          

- PRG's Current Report on Form 8-K filed on November 1, 2001;         

- PRG's Current Report on Form 8-K filed on November 15, 2001;        

- PRG's Current Report on Form 8-K filed on November 16, 2001; and    

 - The description of PRG's common stock contained in PRG's registration
       statement on Form 8-A (Registration No. 0-28000) as declared effective by
    the SEC on March 26, 1996, as amended by the registration statement on
Form 8-A/A on August 9, 2000.                                     

    All documents that PRG files pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 from the date of this proxy statement to 
the date of the special meeting shall also be deemed to be incorporated in this 
proxy statement by reference and to be a part of it from the date they are filed
with the SEC.                                                                   

    PRG has supplied all information contained or incorporated by reference in
this proxy statement relating to PRG, and HSA-Texas has supplied all such       
information contained in this proxy statement relating to                       
HSA-Texas and its affiliates.                                                   

     Documents incorporated by reference are available from PRG, without charge,
excluding all exhibits unless PRG has specifically incorporated by reference an 
exhibit in this proxy statement or in a document                                

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incorporated by reference herein. Shareholders may obtain documents incorporated
by reference in this proxy statement by requesting them in writing or by        
telephone from:                                                                 

The Profit Recovery Group International, Inc.                 
Leslie H. Kratcoski                                           
Director, Investor Relations                                  
2300 Windy Ridge Parkway                                      
Suite 100 North                                               
Atlanta, Georgia 30339-8426                                   
Telephone: (770) 779-3900                                     

  If you would like to request documents from PRG, you must do so no later
than five business days prior to the special meeting, or January 16, 2002, in   
order to receive them prior to the special meeting.                             

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY  
REFERENCE IN THIS PROXY STATEMENT. NONE OF PRG, HSA-TEXAS OR ANY OF THEIR       
AFFILIATES HAVE AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS       
DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT  
IS DATED DECEMBER   , 2001.                                                     

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

INDEX TO COMBINED FINANCIAL STATEMENTS

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
AUDITED FINANCIAL STATEMENTS:                                     
Independent Auditors' Report................................   F-2
Combined Balance Sheets as of December 31, 2000 and 1999....   F-3
Combined Statements of Operations for the years ended             
  December 31, 2000, 1999 and 1998..........................   F-4
Combined Statements of Stockholders' Equity for the years         
  ended December 31, 2000, 1999 and 1998....................   F-5
Combined Statements of Cash Flows for the years ended             
  December 31, 2000, 1999 and 1998..........................   F-6
Notes to Combined Financial Statements......................   F-7

UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS:                 
Combined Balance Sheets as of September 30, 2001 and              
  December 31, 2000.........................................  F-21
Combined Statements of Operations for the nine-month periods      
  ended September 30, 2001 and 2000.........................  F-22
Combined Statements of Cash Flows for the nine-month periods      
  ended September 30, 2001 and 2000.........................  F-23
Notes to Combined Financial Statements......................  F-24

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INDEPENDENT AUDITORS' REPORT

The Board of Directors of                                                       
Howard Schultz & Associates International, Inc.                                 

    We have audited the accompanying combined balance sheets of Howard Schultz
& Associates International, Inc. (see note 1) as of December 31, 2000 and 1999, 
and the related combined statements of operations, stockholders' equity, and    
cash flows for each of the years in the three-year period ended December 31,    
2000. These combined financial statements are the responsibility of the         
Company's management. Our responsibility is to express an opinion on these      
combined financial statements based on our audits.                              

 We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan  
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a 
test basis, evidence supporting the amounts and disclosures in the financial    
statements. An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

     In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Howard Schultz &    
Associates International, Inc. as of December 31, 2000 and 1999, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 2000, in conformity with accounting principles        
generally accepted in the United States of America.                             

                /s/ KPMG LLP

Dallas, Texas                                                                   
July 26, 2001                                                                   
except as to note 16,                                                       
which is as of September 5, 2001                                            

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

COMBINED BALANCE SHEETS 

                                                                [Download Table]

                                                                DECEMBER 31,   
                                                              -----------------
                                                               2000      1999  
                                                              -------   -------
                                                               (IN THOUSANDS)  
                                                                               
                                    ASSETS                                     
Current assets:                                                                
  Cash and cash equivalents.................................  $ 2,179   $ 3,910
  Accounts receivable, net..................................   15,644    12,904
  Commission advances, net..................................    2,058     1,471
  Principal associate advance...............................      550        --
  Prepaid expenses and other current assets.................    1,512     1,138
                                                              -------   -------
          Total current assets..............................   21,943    19,423
Property and equipment, net (notes 4 and 7).................   11,781     6,273
Other assets:                                                                  
  Goodwill, net (notes 3 and 5).............................   25,226    21,149
  Other assets..............................................      768     1,911
                                                              -------   -------
          Total assets......................................  $59,718   $48,756
                                                              =======   =======

                     LIABILITIES AND STOCKHOLDERS' EQUITY                      
Current liabilities:                                                           
  Accounts payable..........................................  $ 3,529   $   820
  Accrued compensation......................................    1,868     1,012
  Accrued commissions and royalties.........................    9,543     7,394
  Other accrued expenses....................................    3,506     1,508
  Notes payable, current portion (note 6)...................    6,422     7,286
  Capital lease obligations, current portion (note 7).......      620       144
  Other current liabilities.................................      124       262
                                                              -------   -------
          Total current liabilities.........................   25,612    18,426
Notes payable, net of current portion (note 6)..............   30,074    23,125
Capital lease obligations, net of current portion (note                        
  7)........................................................    1,388       293
                                                              -------   -------
          Total liabilities.................................   57,074    41,844
                                                              -------   -------
Common stock put options (note 10)..........................    2,458     1,211
Stockholders' equity: (note 10)                                                
  Common stock..............................................    2,102     2,102
  Retained earnings (accumulated deficit)...................   (2,129)    3,070
  Accumulated other comprehensive income....................      213       529
                                                              -------   -------
          Total stockholders' equity........................      186     5,701
                                                              -------   -------
Commitments and contingencies (notes 7 and 15)                                 
          Total liabilities and stockholders' equity........  $59,718   $48,756
                                                              =======   =======

See accompanying notes to combined financial statements.

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

COMBINED STATEMENTS OF OPERATIONS 

                                                        [Enlarge/Download Table]

                                                                YEARS ENDED DECEMBER 31,    
                                                             ------------------------------ 
                                                               2000       1999       1998   
                                                             --------   --------   -------- 
                                                                     (IN THOUSANDS)         
                                                                                            
Revenues, net............................................... $138,708   $133,789   $117,599 
Cost of revenues............................................   91,222     94,071     89,849 
Selling, general and administrative expenses................   48,324     37,760     26,223 
                                                             --------   --------   -------- 
          Operating income (loss)...........................     (838)     1,958      1,527 
                                                             --------   --------   -------- 
Interest income.............................................      425        462        198 
Interest expense............................................   (3,363)    (2,705)    (1,968)
Other income (expense), net.................................       47        (33)       264 
                                                             --------   --------   -------- 
          Interest and other income (expense), net..........   (2,891)    (2,276)    (1,506)
                                                             --------   --------   -------- 
          Net income (loss)................................. $ (3,729)  $   (318)  $     21 
                                                             ========   ========   ======== 

See accompanying notes to combined financial statements.

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY 

                                                        [Enlarge/Download Table]

                                                           RETAINED      ACCUMULATED                
                                                           EARNINGS         OTHER          TOTAL    
                                                COMMON   (ACCUMULATED   COMPREHENSIVE  STOCKHOLDERS'
                                                STOCK      DEFICIT)        INCOME         EQUITY    
                                               --------  ------------   -------------  -------------
                                                                  (IN THOUSANDS)                    
                                                                                                    
Balance at December 31, 1997.................. $ 1,421     $  5,733         $    1       $  7,155   
  Comprehensive income:                                                                             
     Net income...............................      --           21             --             21   
     Foreign currency translation                                                                   
       adjustment.............................      --           --            142            142   
                                                                                         --------   
          Total comprehensive income..........                                                163   
  Distributions to stockholders...............      --       (2,366)            --         (2,366)  
  Issuance of common stock....................     681           --             --            681   
                                               --------    --------         ------       --------   
Balance at December 31, 1998.................. $ 2,102     $  3,388         $  143       $  5,633   
  Comprehensive income (loss):                                                                      
     Net loss.................................      --         (318)            --           (318)  
     Foreign currency translation                                                                   
       adjustment.............................      --           --            386            386   
                                                                                         --------   
          Total comprehensive income..........                                                 68   
                                               --------    --------         ------       --------   
Balance at December 31, 1999.................. $ 2,102     $  3,070         $  529       $  5,701   
  Comprehensive income (loss):                                                                      
     Net loss.................................      --       (3,729)            --         (3,729)  
     Foreign currency translation                                                                   
       adjustment.............................      --           --           (316)          (316)  
                                                                                         --------   
          Total comprehensive loss............                                             (4,045)  
  Distributions to stockholders...............      --       (1,470)            --         (1,470)  
                                               --------    --------         ------       --------   
Balance at December 31, 2000.................. $ 2,102     $ (2,129)        $  213       $    186   
                                               ========    ========         ======       ========   

See accompanying notes to combined financial statements.

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

COMBINED STATEMENTS OF CASH FLOWS 

                                                        [Enlarge/Download Table]

                                                               YEARS ENDED DECEMBER 31,   
                                                              --------------------------- 
                                                               2000      1999      1998   
                                                              -------   -------   ------- 
                                                                    (IN THOUSANDS)        
                                                                                          
Cash flows from operating activities:                                                     
  Net income (loss).........................................  $(3,729)  $  (318)  $    21 
  Adjustments to reconcile net income (loss) to net cash                                  
     provided by operating activities:                                                    
     Depreciation and amortization..........................    8,074     5,494     3,987 
     Non-cash interest expense..............................      637       570       265 
     Non-cash stock compensation expense....................    1,247     1,211        -- 
  Changes in assets and liabilities, net of working capital                               
     from acquisitions:                                                                   
     Accounts receivable, net...............................   (2,601)    7,550    (3,848)
     Associate advances.....................................     (550)       --        -- 
     Commission advances, net...............................     (587)     (789)    2,278 
     Prepaid expenses and other current assets..............      (38)      318      (687)
     Other assets...........................................    1,143    (2,133)       38 
     Accounts payable and other accrued expenses............    4,646      (127)    1,212 
     Accrued commissions and royalties......................    2,149    (2,779)    2,892 
     Accrued compensation...................................      856     1,012        -- 
     Other accrued liabilities..............................     (138)      262        -- 
                                                              -------   -------   ------- 
          Net cash provided by operating activities.........   11,109    10,271     6,158 
                                                              -------   -------   ------- 
Cash flows from investing activities:                                                     
  Purchases of property and equipment.......................   (5,858)   (2,181)   (1,387)
  Acquisitions of businesses................................     (617)   (1,123)   (1,275)
  Other.....................................................     (476)     (376)       -- 
                                                              -------   -------   ------- 
          Net cash used in investing activities.............   (6,951)   (3,680)   (2,662)
                                                              -------   -------   ------- 
Cash flows from financing activities:                                                     
  Proceeds from issuance of common stock....................       --        --       681 
  Proceeds from issuance of notes payable, net..............    3,272     2,336     2,443 
  Principal payments on notes payable.......................   (7,027)   (7,065)   (3,608)
  Principal payments on capital lease obligations...........     (404)       --        -- 
  Distributions to stockholders.............................   (1,470)       --    (2,366)
  Net loans (provided to) repaid by stockholders............     (260)       68      (148)
                                                              -------   -------   ------- 
          Net cash used in financing activities.............   (5,889)   (4,661)   (2,998)
                                                              -------   -------   ------- 
Net increase (decrease) in cash and cash equivalents........   (1,731)    1,930       498 
Cash and cash equivalents at beginning of year..............    3,910     1,980     1,482 
                                                              -------   -------   ------- 
Cash and cash equivalents at end of year....................  $ 2,179   $ 3,910   $ 1,980 
                                                              =======   =======   ======= 
Supplemental disclosures of non-cash investing and financing                              
  activities:                                                                             
  In conjunction with the acquisition of businesses:                                      
     Fair value of assets acquired..........................  $10,220   $ 8,612   $ 9,289 
     Cash paid..............................................      617     1,123     1,275 
     Notes payable to seller................................    9,203     7,489     7,639 
     Release of funds escrowed in 1999......................      400        --        -- 
     Other notes payable to third party.....................       --       981       458 
  Issuance of capital lease obligation for the purchase of                                
     equipment..............................................  $ 1,975   $   437   $    -- 
                                                              =======   =======   ======= 
  Cash paid for:                                                                          
     Interest...............................................  $ 2,553   $ 2,208   $ 1,465 
                                                              =======   =======   ======= 

See accompanying notes to combined financial statements.

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 2000, 1999 AND 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

(a) Description of Business and Basis of Presentation                       

The accompanying combined financial statements of Howard Schultz &    
Associates International, Inc. include the accounts of Howard Schultz &         
Associates International, Inc. ("HSA-Texas"), its majority-owned subsidiaries,  
Howard Schultz & Associates Europe N.V., Howard Schultz & Associates de Mexico, 
S.A. de C.V., Howard Schultz & Associates International (Thailand) Limited, HS&A
Imaging, Inc. ("HS&A Imaging") and companies which were under majority common   
control and ownership by the controlling stockholders/family members of         
HSA-Texas, which are Howard Schultz, Andrew H. Schultz and the Andrew H. Schultz
Irrevocable Trust (the "Schultz Trust"). These entities include Howard Schultz &
Associates (Canada) Inc. ("HSA-Canada"), Howard Schultz & Associates (Australia)
Inc. ("HSA-Australia"), HS&A International Pte Ltd. ("HSA-Singapore"), and      
Howard Schultz & Associates (Asia) Limited ("HSA-Asia"). All entities included  
in the combined financial statements are collectively referred to herein as the 
"Company". All significant intercompany balances and transactions have been     
eliminated in combination.                                                      

 The principal business of the Company is providing accounts payable and
other recovery audit services to large and mid-size businesses having numerous  
payment transactions with many vendors. These businesses include, but are not   
limited to, retailers, manufacturers, wholesale distributors, technology        
companies, and healthcare providers. The Company provides its services          
throughout the United States and in 16 other countries.                         

(b) Use of Estimates                                                        

  Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of       
contingent assets and liabilities to prepare these financial statements in      
conformity with accounting principles generally accepted in the United States of
America. Actual results could differ from those estimates.                      

(c) Revenue Recognition                                                     

  The Company's revenues are based on specific contracts with its clients.
Such contracts generally specify the: (a) time periods covered by the audit, (b)
nature and extent of audit services to be provided by the Company, (c) client's 
duties in assisting and cooperating with the Company, and (d) fees payable to   
the Company generally expressed as a specified percentage of the amounts        
recovered by the client resulting from overpayment claims identified.           

     In addition to contractual provisions, most clients also establish specific
procedural guidelines which the Company must satisfy prior to submitting claims 
for client approval. These guidelines are unique to each client and impose      
specific requirements on the Company such as adherence to vendor interaction    
protocols, provision of advance written notification to vendors of forthcoming  
claims, securing written claim validity concurrence from designated client      
personnel and, in limited cases, securing written claim validity concurrence    
from the involved vendors. Approved claims are processed by clients and         
generally taken as credits against outstanding payables or future purchases from
the vendors involved. It is only after completing these steps that the Company  
invoices its clients for its fees.                                              

   For all recovery audit operations, the Company recognizes revenue when it
invoices clients for its fee.                                                   

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

(d) Cash and Cash Equivalents                                               

     The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. Cash and cash        
equivalents consist of money market funds, certificates of deposit, overnight   
repurchase agreements and other investment securities. The Company had cash     
equivalents of $86,000 and $1,956,000 at December 31, 2000 and 1999,            
respectively.                                                                   

(e) Commission Advances                                                     

From time to time, the Company makes advances of commissions to its   
independent contractor auditors. Such advances are recorded as current assets   
and recovered from commissions payable to the contractors as such commissions   
are earned in connection with providing audit recovery services.                

(f) Property and Equipment                                                  

   Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets which    
range from three to 30 years. Leasehold improvements are amortized using the    
straight-line method over the shorter of the lease term or estimated life of the
asset.                                                                          

(g) Direct Expenses                                                         

   Direct expenses incurred during the course of accounts payable audits and
other recovery audit services are expensed as incurred and are included in cost 
of revenues. Cost of revenues consists principally of commissions paid or       
payable to the Company's auditors, who are independent contractors, based       
primarily upon the level of overpayment recoveries, and compensation paid to    
various types of hourly workers and salaried operational managers. Also included
in cost of revenues are other direct costs incurred by these personnel,         
including rental of non-headquarters offices, travel and entertainment,         
telephone, utilities, maintenance and supplies and clerical assistance.         

(h) Goodwill                                                                

 Goodwill represents the excess of the purchase price over the estimated
fair value of net assets of acquired businesses. The Company evaluates the      
unique relevant aspects of each individual acquisition when establishing an     
appropriate goodwill amortization period. Goodwill is being amortized on a      
straight-line basis over estimated useful lives ranging from 5 to 7 years. The  
Company assesses the recoverability of this intangible asset by determining     
whether the amortization of goodwill over its remaining life can be recovered   
through undiscounted future operating cash flows of the acquired operation. The 
amount of goodwill impairment, if any, is measured based on projected discounted
future operating cash flows using a discount rate reflecting the Company's      
average cost of funds. The assessment of the recoverability of goodwill will be 
impacted if estimated future operating cash flows are not achieved.             

(i) Impairment of Long-Lived Assets                                         

 Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the        
carrying amount of an asset may not be recoverable. Recoverability of assets to 
be held and used is measured by a comparison of the carrying amount of an asset 
to future net cash flows expected to be generated by the asset. If such assets  
are considered to be impaired, the impairment is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets. Assets  
to be disposed of are reported at the lower of the carrying amount or fair value
less cost to sell.                                                              

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

(j) Income Taxes                                                            

   HSA-Texas, HSA-Canada and HS&A Imaging have each elected to be treated as
an S Corporation for tax purposes. Accordingly, the tax consequences of all     
profits and losses are the responsibility of the stockholders of each of those  
corporations. Income taxes for the remaining companies included in the Company, 
all of which are foreign-based corporations, are accounted for under the asset  
and liability method for financial reporting purposes. Deferred tax assets and  
liabilities are recognized for the future tax consequences attributable to      
differences between the financial statement carrying amounts of existing assets 
and liabilities and their respective tax bases and operating losses and tax     
credit carryforwards. (See Note 8)                                              

(k) Foreign Currency Translation                                            

     The local currency is the functional currency in the countries in which the
Company conducts business outside of the United States. The assets and          
liabilities denominated in foreign currency are translated into U.S. dollars at 
the current rate of exchange at the balance sheet date and revenues and expenses
are translated at the average monthly exchange rates. The resulting translation 
gains and losses are recorded as accumulated other comprehensive income in      
stockholders' equity. Transaction gains and losses included in results of       
operations are not material.                                                    

(l) Employee Stock Options                                                  

The Company accounts for its stock option plan in accordance with the 
provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting   
for Stock Issued to Employees," and related interpretations. Accordingly,       
compensation expense would be recorded on the date of grant only if the fair    
value of the underlying stock exceeded the exercise price.                      

2. MERGERS                                                                      

 On January 1, 1999, the Company acquired 100% of the outstanding common
stock of three companies owned (directly or beneficially) by the controlling    
stockholders of HSA-Texas through the issuance of 3,716 shares of HSA-Texas     
common stock: HS&A Acquisition, Inc., which was owned 100% by Howard Schultz;   
HS&A Acquisition No. 2, Inc., which was owned 100% by Andrew H. Schultz; and    
HS&A Acquisition No. 3, Inc., which was owned 100% by the Schultz Trust.        

   The combination of the Company and these three entities was accounted for
as a common control merger on an "as if" pooling-of-interests at historical     
cost.                                                                           

3. ACQUISITIONS                                                                 

   From January 1998 through January 2000, the Company entered into a series
of transactions to acquire operations known as "principal associates." The      
principal associates provided the independent contract auditors that performed  
audit recovery services for the Company in various regions in the United States.
The Company also completed acquisitions of licensees in Australia and Canada in 
1998 and in Europe in 1999.                                                     

A summary of the acquisitions of principal associates follows:        

                                                        [Enlarge/Download Table]

      DATE OF ACQUISITION        PRINCIPAL ASSOCIATE ACQUIRED          PURCHASE PRICE       
      -------------------        ----------------------------          --------------       
                                                                                            
January 5, 1998................ Howard Schultz & Associates,    $3.4 million note payable,  
                                  Mid Pacific, Inc.               discounted to $3.1 million
July 1, 1998................... Howard Schultz & Associates of  $4.8 million note payable,  
                                  Mid-Southwest, Inc.             discounted to $4.4 million
January 1, 1999................ HS&A Florida, Inc.              $3.0 million note payable,  
                                                                  discounted to $2.7 million

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

                                                        [Enlarge/Download Table]

      DATE OF ACQUISITION        PRINCIPAL ASSOCIATE ACQUIRED          PURCHASE PRICE       
      -------------------        ----------------------------          --------------       
                                                                                            
January 1, 1999................ Howard Schultz & Associates of  $2.1 million note payable,  
                                  the Mid-West, Inc.              discounted to $1.9 million
January 1, 1999................ Howard Schultz & Associates of  $3.2 million note payable,  
                                  the Pacific Northwest, Inc.     discounted to $2.9 million
January 1, 2000................ Howard Schultz & Associates of  $3.6 million note payable,  
                                  the Northeast, Inc.             discounted to $3.4 million
                                                                  and $0.4 million of cash  
January 1, 2000................ Howard Schultz & Associates of  $5.1 million note payable,  
                                  the Mid-Atlantic, Inc.          discounted to $4.8 million

     On January 23, 1998, HSA-Canada, an affiliate of HSA-Texas, acquired all of
the net assets of a former licensee in Canada for a total purchase price of     
$600,000, which was funded by HSA-Texas.                                        

   On January 30, 1998, HSA-Australia, an affiliate of HS&A, acquired all of
the net assets of a former licensee in Australia for a total purchase price of  
$1.1 million, which was funded through a $458,000 note payable to the Schultz   
Trust and cash of $675,000.                                                     

  In November 1998, the Company formed its wholly-owned subsidiary, Howard
Schultz & Associates Europe, N.V., a Belgian corporation ("HS&A Europe"), for   
the purpose of acquiring the equity interests of entities that performed        
recovery audit services in various European countries, including Belgium,       
France, Italy and Spain. HS&A Europe acquired 100% of such interests in January 
1999 (except for a 10% interest in Howard Schultz Italia S.r.l., which was      
acquired by HS&A Europe in 2000 for approximately $0.12 million) for a total    
purchase price of $1.1 million. The Company funded this acquisition through cash
of approximately $0.14 million and a bank loan of approximately $0.98 million.  

 On November 1, 2000, the Company acquired the stock of Infinite Imaging
Systems, Inc. for a total purchase price of approximately $1.5 million, payable 
in the form of $500,000 in cash and a promissory note in the amount of $1.0     
million.                                                                        

The above acquisitions were accounted for using the purchase method of
accounting and, accordingly, results of operations of the acquired entities have
been included in the accompanying combined financial statements from the dates  
of acquisition. The purchase prices were allocated to tangible assets acquired  
and intangible assets based on the estimated fair values at the respective dates
of acquisition. Additionally, as the promissory notes for the principal         
associate acquisitions were entered into at below-market rates of interest, in  
order to record the promissory notes at fair value, the Company recorded a      
discount for each promissory note. The discount effectively decreased the total 
purchase price of each acquisition. The Company incurred no significant direct  
costs of acquisition. A summary of the total purchase price and purchase price  
allocation for acquisitions made during 2000, 1999 and 1998 is as follows (in   
thousands):                                                                     

                                                        [Enlarge/Download Table]

                                                     ACQUISITIONS  ACQUISITIONS  ACQUISITIONS
                                                       IN 2000       IN 1999       IN 1998   
                                                     ------------  ------------  ------------
                                                                                             
Net tangible assets.................................   $   477        $1,964        $1,427   
Goodwill............................................     9,743         6,648         7,862   
                                                       -------        ------        ------   
          Total purchase price......................   $10,220        $8,612        $9,289   
                                                       =======        ======        ======   

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

    Unaudited pro forma operating results as though the acquisitions discussed
above had occurred on January 1, 1999, with adjustments primarily to give effect
to amortization of goodwill and interest expense related to the promissory      
notes, are as follows (in thousands):                                           

                                                        [Enlarge/Download Table]

                                                             YEARS ENDED DECEMBER 31,
                                                             ------------------------
                                                                2000          1999   
                                                             ----------    ----------
                                                                                     
Revenues....................................................  $140,141      $134,976 
Operating income............................................       800         2,124 
Net loss....................................................  $ (2,012)     $   (859)

4. PROPERTY AND EQUIPMENT                                                       

Property and equipment, which includes assets under capital leases, at
December 31, 2000 and 1999 consists of the following (in thousands):            

                                                                [Download Table]

                                                               2000      1999  
                                                              -------   -------
                                                                               
Land........................................................  $ 1,045   $   265
Buildings...................................................    3,670     1,743
Leasehold Improvements......................................    1,336     1,230
Equipment...................................................   11,087     6,575
Furniture and Fixtures......................................      618       642
Software....................................................      938       175
                                                              -------   -------
                                                               18,694    10,630
Less accumulated depreciation and amortization..............    6,913     4,357
                                                              -------   -------
          Net property and equipment........................  $11,781   $ 6,273
                                                              =======   =======

    Depreciation expense for the years ended December 31, 2000, 1999, and 1998
was approximately $2,556,000, $1,176,000, and $927,000, respectively.           

5. GOODWILL                                                                     

 Goodwill represents the excess of the purchase price over the estimated
fair value of the net assets of acquired businesses.                            

     Goodwill and accumulated amortization consists of the following at December
31, 2000 and 1999 (in thousands):                                               

                                                                [Download Table]

                                                               2000      1999  
                                                              -------   -------
                                                                               
Goodwill....................................................  $39,907   $30,312
Less accumulated amortization...............................   14,681     9,163
                                                              -------   -------
                                                              $25,226   $21,149
                                                              =======   =======

   Amortization expense for the years ended December 31, 2000, 1999 and 1998
was approximately $5,518,000, $4,318,000, and $3,060,000, respectively.         

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

6. NOTES PAYABLE                                                                

  Notes payable at December 31, 2000 and 1999 is summarized as follows (in
thousands):                                                                     

                                                                [Download Table]

                                                               2000      1999  
                                                              -------   -------
                                                                               
Notes payable -- acquisition related:                                          
  $1.4 million promissory note, payable in twenty four (24)                    
     equal installments, commencing on July 1, 1996, bearing                   
     interest at a rate of 6.05% per annum..................  $   265   $   546
  $6.5 million promissory note, payable in fifteen (15)                        
     equal semi-annual installments, commencing on December                    
     1, 1997, bearing interest at a rate of 6.39% per                          
     annum..................................................    3,507     4,251
  $6.8 million promissory note, payable in sixteen (16)                        
     equal semi-annual installments, commencing on December                    
     31, 1997, bearing interest at a rate of 6.77% per                         
     annum..................................................    4,749     5,578
  $3.4 million promissory note, payable in twelve (12) equal                   
     semi-annual installments, commencing on June 30, 1998,                    
     bearing interest at a rate of 5.93% per annum..........    1,615     2,384
  $4.8 million promissory note, payable in twelve (12) equal                   
     semi-annual installments, commencing on January 1,                        
     1999, bearing interest at a rate of 5.60% per annum....    2,656     3,375
  $3.0 million promissory note, payable in twelve (12) equal                   
     semi-annual installments, commencing on July 1, 1999,                     
     bearing interest at a rate of 4.46% per annum..........    1,869     2,247
  $3.6 million promissory note, payable in twelve (12)                         
     semi-annual installments, commencing on July 1, 2000,                     
     bearing interest at a rate of 5.99% per annum..........    2,855        --
Notes payable -- acquisition related, due to current                           
  employees:                                                                   
  $2.0 million promissory note, payable in twelve (12)                         
     semi-annual installments each commencing on December                      
     31, 1997, bearing interest at a rate of 6.39% per                         
     annum..................................................      799     1,108
  $2.1 million promissory note, payable in twelve (12)                         
     semi-annual installments, commencing on July 1, 1999,                     
     bearing interest at a rate of 4.46% per annum..........    1,312     1,618
  $3.2 million promissory note, payable in twelve (12) equal                   
     semi-annual installments, commencing on July 1, 1999,                     
     bearing interest at a rate of 4.46% per annum..........    1,947     2,402
  $5.1 million promissory note, payable in twelve (12) equal                   
     semi-annual installments, commencing on July 1, 2000                      
     bearing interest at a rate of 6.12% per annum..........    4,044        --
  $1.0 million promissory note, payable in twenty-four (24)                    
     equal installments commencing on December 1, 2000,                        
     bearing interest at a rate of 10% per annum............      924        --

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

                                                                [Download Table]

                                                               2000      1999  
                                                              -------   -------
                                                                               
Note payable -- Bank, with monthly installments of $12,030                     
  including interest at 8.25% per annum, beginning October                     
  1999 and maturing October 2014. The note is collateralized                   
  by land, building and personal guarantee of stockholder...    1,187     1,230
Note payable -- Bank, with monthly installments of $19,359                     
  including interest at 8.25% per annum, beginning May 2000                    
  and maturing April 2020. The note is collateralized by                       
  land, building and personal guarantee of stockholder......    2,240        --
Note payable -- stockholder, interest at 5.59% per annum,                      
  with monthly interest only payments maturing March 2003.                     
  This note is unsecured....................................    5,050     4,050
Notes payable -- other, primarily international.............    1,477     1,622
                                                              -------   -------
                                                               36,496    30,411
Less: current portion.......................................    6,422     7,286
                                                              -------   -------
                                                              $30,074   $23,125
                                                              =======   =======

In connection with the acquisition-related notes payable, the Company 
recorded a discount from the face of the notes payable to reflect an effective  
market interest rate. At December 31, 2000 and 1999, the unamortized discount   
was $1,402,000 and $1,492,000, respectively, on face amounts of $27,020,000 and 
$25,027,000, respectively. The effective interest rates range from 7.75% and    
8.5%, with a weighted average effective interest rate of 8.3% at December 31,   
2000 and 1999. The acquisition-related notes are secured generally by the assets
acquired in the relevant transaction.                                           

Maturities of notes payable at December 31, 2000, are as follows (in  
thousands):                                                                     

                                                                [Download Table]

YEAR ENDING DECEMBER 31,                                      AMOUNT 
------------------------                                      -------
                                                                     
  2001......................................................  $ 6,422
  2002......................................................    7,150
  2003......................................................   12,105
  2004......................................................    5,761
  2005......................................................    3,161
  Thereafter................................................    3,299
                                                              -------
          Total future maturities...........................   37,898
          Less unamortized discount.........................    1,402
                                                              -------
          Total notes payable...............................  $36,496
                                                              =======

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

7. LEASE OBLIGATIONS                                                            

(a) Capital Leases                                                          

    The Company has entered into several capital leases primarily for computer
and office equipment, expiring on various dates through December 2004. The      
leases generally have terms of 36 months to 60 months. Future minimum lease     
payments under non-cancelable capital leases having terms in excess of one year 
are as follows (in thousands):                                                  

                                                                [Download Table]

YEAR ENDING DECEMBER 31,                                     (SEE NOTE 7(B))
------------------------                                     ---------------
                                                                            
  2001.....................................................      $  834     
  2002.....................................................         754     
  2003.....................................................         643     
  2004.....................................................         232     
                                                                 ------     
          Total future minimum lease payments..............       2,463     
Less amount representing interest..........................         455     
                                                                 ------     
Present value of minimum lease payments....................       2,008     
Less current portion.......................................         620     
                                                                 ------     
Capital lease obligations -- long-term.....................      $1,388     
                                                                 ======     

  Included in property and equipment at December 31, 2000 and 1999 are the
following assets under capital leases:                                          

                                                                [Download Table]

                                                               2000    1999
                                                              ------   ----
                                                                           
Equipment...................................................  $2,412   $437
Less: accumulated depreciation..............................     466     --
                                                              ------   ----
                                                              $1,946   $437
                                                              ======   ====

(b) Operating Leases                                                        

The Company is committed under various noncancelable operating lease  
arrangements for facilities and equipment. Rent expense for 2000, 1999, and 1998
was $938,000, $722,000, and $150,000, respectively. The future minimum annual   
lease payments under these leases for the next five years are summarized as     
follows:                                                                        

                                                                [Download Table]

YEAR ENDING DECEMBER 31,                                    (AMOUNT IN 000'S)
------------------------                                    -----------------
                                                                             
  2001....................................................       $1,035      
  2002....................................................          964      
  2003....................................................          638      
  2004....................................................          365      
  2005....................................................          323      
                                                                 ------      
                                                                 $3,325      
                                                                 ======      

8. INCOME TAXES                                                                 

    At December 31, 2000, the Company had foreign operating loss carryforwards
available to offset future foreign taxable income of approximately $4,120,000.  
The Company's remaining deferred tax assets and liabilities are not significant.
In assessing the realizability of deferred tax assets, the Company considers    
whether it is more likely than not that some portion or all of the deferred tax 
assets will not be realized. The ultimate realization of deferred tax assets    
depends on the generation of future taxable income during the periods in which  
those temporary differences become deductible. Based upon these considerations, 
the                                                                             

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

Company's deferred tax assets relating to the operating losses have been fully  
offset by a valuation allowance of $1,004,000. Accordingly, no income tax       
benefit has been recorded. These operating loss carryforwards begin to expire in
2004 based on local tax laws and regulations.                                   

9. EMPLOYEE BENEFIT PLANS                                                       

 The Company maintains a 401(k) Plan which allows eligible participating
employees to defer receipt of a portion of their compensation up to 15% and     
contribute such amount to one or more investment funds. Employee contributions  
are matched by the Company, dollar for dollar, up to 5% per participant. The    
Company may also make discretionary contributions to the Plan as determined by  
the Company each plan year. Company matching funds and discretionary            
contributions vest at the rate of 20% each year beginning after the             
participants' second year of service. Company contributions were approximately  
$475,000, $291,000 and $73,000 for the years ended December 31, 2000, 1999 and  
1998, respectively.                                                             

10. STOCKHOLDERS' EQUITY                                                        

(a) Common Stock                                                            

The authorized, issued and outstanding common stock of the Company at 
December 31, 2000 and 1999 is summarized as follows:                            

                                                        [Enlarge/Download Table]

                                                           NUMBER OF SHARES            
                                                       ------------------------        
                                                                    ISSUED AND   COMMON
                                                       AUTHORIZED   OUTSTANDING  STOCK 
                                                       ----------   -----------  ------
                                                                                       
HSA-Texas voting......................................  2,000,000    2,000,000   $  341
HSA-Texas non voting.................................. 10,000,000    6,381,566    1,080
HSA-Canada............................................ 10,000,000        1,000        1
HSA-Australia......................................... 10,000,000        1,000      674
HSA-Singapore.........................................    100,000            5       --
HSA-Asia..............................................      1,000          100        6
                                                       ----------    ---------   ------
                                                       32,101,000    8,383,671   $2,102
                                                       ==========    =========   ======

    Effective March 24, 1999, HSA-Texas restated its Articles of Incorporation
to increase the number of authorized shares of its common stock to 12,000,000,  
of which 2,000,000 are voting and 10,000,000 are non-voting, and to change the  
par value of such stock to no par value. Also, effective as of March 24, 1999,  
the HSA-Texas declared a stock dividend to its stockholders of record as of     
March 23, 1999, of 922.9615 shares per outstanding share of common stock and    
issued the appropriate number of shares of its common stock to such stockholders
in respect of such stock dividend. The stock dividend has been accounted for as 
a stock split and, accordingly, all share amounts have been retroactively       
adjusted to give effect to the stock split. At December 31, 2000, outstanding   
shares included 2,000,000 shares of voting common stock and 6,381,566 shares of 
non-voting common stock.                                                        

   Effective January 1, 2001, the Company issued approximately 30,638 shares
of its non-voting common stock to Charles Schembri. In connection with such     
issuance, the parties entered into a Stock Transfer Restriction Agreement. The  
Agreement provides, among other things, limited "put" and "call" options as to  
such shares upon the termination of Mr. Schembri's employment, each at a        
purchase price equal to the fair market value of the shares, subject to certain 
conditions. Also effective January 1, 2001, the Company issued an immaterial    
number of fractional shares of its non-voting common stock to each of Howard    
Schultz, Andrew Schultz, the Schultz Trust and Charles Schembri in order to     
"round up" previous issuances of fractional shares that had been made to such   
shareholders. Accordingly, as of the close of business on January 1, 2001, the  
shareholders of the Company's no par value common stock were as follows: Voting 
shares: Howard Schultz -- 1,257,200; Andrew Schultz -- 274,400; and, the Schultz
Trust -- 468,400; Non-                                                          

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

Voting shares: Howard Schultz -- 4,011,452; Andrew Schultz -- 875,551; the      
Schultz Trust -- 1,494,563; and, Charles Schembri -- 30,638.                    

(b) Stock Option Plan                                                       

   On March 22, 1999, the board of directors of the Company adopted the 1999
Howard Schultz & Associates Stock Option Plan (the "Plan"), under which         
2,500,000 shares of HS&A non-voting common stock are available for issuance with
respect to awards granted to officers, directors, key employees and independent 
contractors.                                                                    

   The board of directors has designated a committee to administer the Plan.
From time to time, the Committee will designate key employees and independent   
contractors to whom the options will be granted. According to the terms of the  
Plan, the options typically vest in annual increments of one-third of the number
of options granted, beginning on the third year after the date of grant and the 
options generally expire ten years from the date of grant. Upon a change in     
control, all outstanding options fully vest. The Plan also includes a provision 
whereby the grantee of an option can cause the Company to purchase any or all of
his/her shares of common stock acquired through the exercise of option(s) at a  
price per share equal to the fair market value of the common shares.            
Accordingly, under APB Opinion 25, a measurement date does not occur until the  
options are exercised and the Company will continue to estimate fair value      
periodically as such options vest.                                              

During the years ended December 31, 2000 and 1999, the Company granted
options to employees to purchase 358,099 and 251,530 shares of the common stock 
of HS&A, respectively. The options granted during the years ended December 31,  
2000 and 1999 were granted at exercise prices of $9.06 and $8.16, respectively. 
The estimated fair value of the options granted was $5,470,000 and $2,752,000 at
December 31, 2000 and 1999, respectively.                                       

    During the years ended December 31, 2000 and 1999, the Company also issued
options to non-employees to acquire 210,125 and 32,170 shares, respectively of  
HSA-Texas common stock at exercise prices of $9.06 and $8.16, respectively. The 
estimated fair value of the options granted was $3,454,000 and $369,000 at      
December 31, 2000 and 1999, respectively. In connection with the issuance of    
these options, the Company recorded the estimated fair value of the options     
granted of $298,000 and $94,000 as an operating expense and as common stock put 
options in the accompanying combined financial statements during the years ended
December 31, 2000 and 1999, respectively, based on the options vested. The fair 
value of each option was estimated using the Black-Scholes option pricing model 
with the following assumptions: risk free interest rate ranging from 4.7% to    
5.8%, expected option life of 10 years; expected volatility ranging from 53% to 
72% and no dividend yield. The vesting period is the same as options issued to  
employees as discussed below. Under EITF 96-18 "Accounting for Equity           
Instruments That Are Issued to Other Than Employees for Acquiring, or in        
Conjunction with Selling, Goods or Services," for those options that vest over a
period of time, a measurement date has not occurred. The Company will continue  
to estimate fair value periodically as such options vest.                       

   The fair value of total employee and non-employee vested option issuances
outstanding at December 31, 2000 and 1999 of $2,458,000 and $1,211,000,         
respectively, has been classified in the mezzanine between liabilities and      
stockholders' equity due to the fact that option holders can put the options    
back to the Company subsequent to exercising the options.                       

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

A summary of the Company's stock option activity for the years ended  
December 31, 2000 and 1999 follows:                                             

                                                        [Enlarge/Download Table]

                                                            $9.06     $8.16            
                                                           OPTIONS   OPTIONS    TOTAL  
                                                           -------   -------   ------- 
                                                                                       
Outstanding at December 31, 1998..........................      --        --        -- 
  Granted.................................................      --   283,700   283,700 
  Exercised...............................................      --        --        -- 
  Forfeited...............................................      --        --        -- 
                                                           -------   -------   ------- 
Outstanding, December 31, 1999............................      --   283,700   283,700 
  Granted................................................. 568,224        --   568,224 
  Exercised...............................................      --        --        -- 
  Forfeited............................................... (40,609)  (29,718)  (70,327)
                                                           -------   -------   ------- 
Outstanding, December 31, 2000............................ 527,615   253,982   781,597 
                                                           =======   =======   ======= 

 Options granted in 1999 begin to vest at the rate of one-third per year
beginning January 1, 2002 and expire on December 31, 2009. Of the 2000 grants,  
options to acquire 400,593 shares of HSA-Texas common stock begin to vest at the
rate of one-third per year beginning January 1, 2003 and expire on December 31, 
2010, and options to acquire 167,631 shares of HS&A common stock begin to vest  
at the rate of one-third per year beginning October 1, 2003 and expire on       
September 29, 2010. Accordingly, no options are vested at December 31, 2000 or  
1999.                                                                           

The Company applies APB Opinion 25 and related interpretations in     
accounting for stock options issued to employees and non-employee directors. The
Company has recognized compensation expense of $949,000 and $1,117,000 during   
the year ended December 31, 2000 and 1999, respectively, based on the intrinsic 
value of the options at the date of grant and the estimated fair value of the   
underlying common stock at those dates.                                         

     Had the Company determined compensation cost based on the fair value at the
grant date for its stock options granted to employees and non-employee directors
under Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting 
for Stock-Based Compensation", the Company's net income (loss) would have been  
the pro forma amounts below for the years ended December 31, 2000 and 1999 (in  
thousands):                                                                     

                                                                [Download Table]

                                                               2000      1999   
                                                              -------   ------- 
                                                                                
Net income (loss):                                                              
  As reported...............................................  $(3,729)  $  (318)
  Pro forma.................................................  $(4,422)  $  (580)

   The fair value of stock options granted in 2000 and 1999 was estimated on
the date of grant using the Black-Scholes option pricing model. The weighted    
average fair values and related assumptions were:                               

                                                                [Download Table]

                                                               2000       1999  
                                                             ---------   ------ 
                                                                                
Weighted average fair value................................. $   17.42   $17.42 
Risk free interest rates....................................  5.8%-6.3%     4.7%
Weighted-average expected life of option years..............        10       10 
Volatility factor of expected market price..................      0.72     0.53 

11. RELATED PARTY TRANSACTIONS                                                  

As of December 31, 2000 and 1999, the Company owed $5,050,000 and     
$4,050,000, respectively to Howard Schultz (Note 6). The Company paid Mr.       
Schultz interest in the amounts of $168,000, $168,000 and $126,000, during the  
years ended December 31, 2000, 1999 and 1998, respectively.                     

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

    HSA-Australia borrowed funds from the Schultz Trust in connection with the
acquisition (Note 3). The outstanding borrowings, including cumulative unpaid   
interest, at December 31, 2000 and 1999 were $584,000 and $532,000,             
respectively.                                                                   

    The Company has access to a condominium owned by the Schultz family, which
is used by the Company's clients, employees and independent contractors from    
time to time. The Company paid the Schultz family rental fees of $35,000 during 
each of the years ended December 31, 2000, 1999 and 1998, respectively.         

As of December 31, 2000 and 1999, stockholders of HSA-Texas owed the  
Company $390,000 and $130,000, respectively. Amounts are non-interest bearing   
and due on demand and are included in other current assets.                     

 The Company leases software from Howard Schultz under a lease agreement
dated December 1999. The Company made total payments of approximately $115,000  
in 2000, including approximately $37,000 in interest and $78,000 in principal.  
Monthly installments of approximately $8,900 are payable through December 31,   
2004. The Company had recorded a related capital lease obligation of $352,000 at
December 31, 2000.                                                              

12. MAJOR CLIENTS                                                               

  During 2000, two clients accounted for 13% and 10%, respectively, of the
Company's combined revenues. During 1999, the same two clients accounted for 12%
and 10%, respectively, of the Company's combined revenues. During 1998, one     
client accounted for 11% of the Company's combined revenues.                    

13. SEGMENT AND RELATED INFORMATION                                             

 The Company has one reportable operating segment consisting of accounts
payable services. Accounts payable services consist of the review of client     
accounts payable disbursements to identify and recover overpayments. This       
operating segment includes accounts payable services provided to retailers,     
wholesale distributors and various other types of business entities. The Company
performs these accounts payable services in the United States, Canada, Mexico,  
Australia, and throughout Europe and Asia, including France, Spain and Hong     
Kong.                                                                           

  Geographical information for the years ended December 31, 2000, 1999 and
1998 is as follows:                                                             

                                                                [Download Table]

                                                          2000      1999      1998  
                                                        --------  --------  --------
                                                                  ($000'S)          
                                                                                    
United States.......................................... $127,836  $122,560  $112,530
Europe.................................................    4,359     4,150        --
Mexico.................................................      756       207       125
Australia..............................................    1,936     2,987     2,345
Canada.................................................    2,464     3,533     2,568
Asia...................................................    1,357       352        31
                                                        --------  --------  --------
          Revenues, net................................ $138,708  $133,789  $117,599
                                                        ========  ========  ========

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

Geographical information at December 31, 2000 and 1999 is as follows: 

                                                                [Download Table]

                                                               2000      1999 
                                                              -------   ------
                                                                  ($000'S)    
                                                                              
United States...............................................  $11,855   $7,442
Europe......................................................      146      383
Mexico......................................................       91       81
Australia...................................................      140      136
Canada......................................................      118      120
Asia........................................................      199       22
                                                              -------   ------
          Total long-lived assets...........................  $12,549   $8,184
                                                              =======   ======

For purposes of the geographical information above, revenues are      
attributable to the individual countries based on the location of the customer. 
Long-lived assets are attributed to the individual countries based on the       
physical location of the assets. Long-lived assets are primarily property and   
equipment.                                                                      

14. FAIR VALUE OF FINANCIAL INSTRUMENTS                                         

   The carrying amount for cash and cash equivalents, receivables, advances,
accounts payable and accrued expenses and current portion of long-term          
obligations approximate fair value because of the short maturity of these       
instruments.                                                                    

 The fair values of each of the Company's long-term debt instruments are
based on the amount of future cash flows associated with each instrument        
discounted using the Company's current borrowing rate for similar debt          
instruments of comparable maturity. The estimated fair value approximates the   
carrying value of the Company's notes payable as the notes have either been     
entered into at rates of interest that reflect market rates at December 31, 2000
and 1999 or have been recorded with a discount to reflect an effective market   
rate of interest.                                                               

Fair value estimates are made at a specific point in time, based on   
relevant market information about the financial instrument. These estimates are 
subjective in nature and involve uncertainties and matters of significant       
judgment and therefore cannot be determined with precision. Changes in          
assumptions could significantly affect these estimates.                         

15. COMMITMENTS AND CONTINGENCIES                                               

  The Company has contingent liabilities resulting from litigation, claims
and commitments incidental to the ordinary course of business. Management       
believes, based on the advice of counsel, that the ultimate resolution of such  
contingencies will not have a materially adverse effect on the financial        
position, results of operations or liquidity of the Company.                    

    The Company also has contingent liabilities in connection with two Letters
of Credit relating to a loan agreement and a leasing agreement for Howard       
Schultz & Associates Europe, N.V. These letters of credit are partially         
collateralized by a certificate of deposit of the Company and personal funds of 
a shareholder. The unsecured amounts of these contingent liabilities were       
$1,279,000 and $1,070,000 at December 31, 2000, and December 31, 1999,          
respectively.                                                                   

16. SUBSEQUENT EVENTS                                                           

   In May 2001, the Company entered into a settlement agreement with respect
to litigation pending at December 31, 2000, involving a group of independent    
contractors formerly associated with the Company. Pursuant to the agreement, the
Company was relieved of certain obligations to pay accrued commissions to       

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

those contractors, which amounted to $3.2 million at December 31, 2000. The     
total settlement was $3.7 million.                                              

In July 2001, the Company acquired substantially all of the assets and
certain, specified related liabilities, of an independent contractor of the     
Company that performed recovery audit and information technology services for   
the Company, in a tax-free reorganization in exchange for 307,482 newly-issued  
shares of the Company's no par value, voting common stock, assumption of        
$1,000,000 in debt (repaid upon assumption), and forgiveness of $2,048,000 of   
advances to the independent contractor outstanding as of the acquisition date.  
In connection with such issuance, the parties entered into a Stock Ownership and
Restriction Agreement. The Agreement provides, among other things, limited      
"call" options as to such shares upon the termination of the recipient's        
employment, each at a purchase price equal to the fair market value of the      
shares, subject to certain conditions.                                          

 On July 26, 2001, the Company announced that the board of directors had
approved a letter of intent to be acquired by The Profit Recovery Group         
International, Inc. ("PRG") in an all-stock transaction, which is expected to   
close in the fourth quarter of 2001. The combination is subject to finalization 
of a definitive agreement, approval of both companies' shareholders, approval   
from PRG's bank syndicate, and customary regulatory approvals.                  

    On September 1, 2001, the Company acquired substantially all of the assets
and certain specified, related liabilities of an independent contractor that    
performed recovery audit services for the Company in exchange for a $3.0 million
note payable in six equal quarterly installments beginning January 1, 2002      
bearing interest at the rate of 7.0% per annum.                                 

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

COMBINED BALANCE SHEETS 

                                                        [Enlarge/Download Table]

                                                             SEPTEMBER 30,   DECEMBER 31,
                                                                 2001            2000    
                                                             -------------   ------------
                                                              (UNAUDITED)                
                                                                    (IN THOUSANDS)       
                                                                                         
Current assets:                                                                          
  Cash and cash equivalents.................................    $ 6,071        $ 2,179   
  Accounts receivable, net..................................     15,233         15,644   
  Commission advances, net..................................      1,491          2,058   
  Principal associate advance...............................         --            550   
  Prepaids and other current assets.........................      1,930          1,512   
                                                                -------        -------   
          Total current assets..............................     24,725         21,943   
Property and equipment, net.................................     12,643         11,781   
Other assets:                                                                            
  Goodwill, net.............................................     31,511         25,226   
  Other assets..............................................      1,014            768   
                                                                -------        -------   
          Total assets......................................    $69,893        $59,718   
                                                                =======        =======   
Current liabilities:                                                                     
  Accounts payable..........................................    $   922        $ 3,529   
  Accrued compensation......................................        879          1,868   
  Accrued commissions and royalties.........................      7,114          9,543   
  Other accrued expenses....................................      6,556          3,506   
  Notes payable, current portion............................      8,461          6,422   
  Capital lease obligations, current portion................        682            620   
  Other current liabilities.................................         63            124   
                                                                -------        -------   
          Total current liabilities.........................     24,677         25,612   
Notes payable, net of current portion.......................     33,763         30,074   
Capital lease obligations, net of current portion...........        971          1,388   
                                                                -------        -------   
          Total liabilities.................................     59,411         57,074   
                                                                -------        -------   
Common stock put options....................................      3,086          2,458   
Stockholders' equity: (Notes 3 and 5)                                                    
  Common stock..............................................      7,474          2,102   
  Accumulated deficit.......................................       (688)        (2,129)  
  Accumulated other comprehensive income....................        610            213   
                                                                -------        -------   
          Total stockholders' equity........................      7,396            186   
                                                                -------        -------   
Commitments and contingencies (Note 7)                                                   
          Total liabilities and stockholders' equity........    $69,893        $59,718   
                                                                =======        =======   

See accompanying notes to unaudited combined financial statements.

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

UNAUDITED COMBINED STATEMENTS OF OPERATIONS 

                                                                [Download Table]

                                                              NINE MONTHS ENDED  
                                                                SEPTEMBER 30,    
                                                             ------------------- 
                                                               2001       2000   
                                                             --------   -------- 
                                                               (IN THOUSANDS)    
                                                                                 
Revenues, net............................................... $100,761   $102,542 
Cost of revenues............................................   65,651     67,364 
Selling, general and administrative expenses................   35,564     34,396 
                                                             --------   -------- 
          Operating income (loss)...........................     (454)       782 
                                                             --------   -------- 
Interest income.............................................      185        295 
Interest expense............................................   (2,462)    (2,535)
Settlement of litigation (Note 7)...........................    3,650         -- 
Other income (expense), net.................................       10        (72)
                                                             --------   -------- 
     Interest and other income (expense), net...............    1,383     (2,312)
                                                             --------   -------- 
          Income (loss) before income taxes.................      929     (1,530)
                                                             --------   -------- 
Foreign tax benefit (Note 6)................................      512         -- 
                                                             --------   -------- 
          Net income (loss)................................. $  1,441   $ (1,530)
                                                             ========   ======== 

See accompanying notes to unaudited combined financial statements.

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

UNAUDITED COMBINED STATEMENTS OF CASH FLOWS 

                                                                [Download Table]

                                                              NINE MONTHS ENDED 
                                                                SEPTEMBER 30,   
                                                              ----------------- 
                                                               2001      2000   
                                                              -------   ------- 
                                                               (IN THOUSANDS)   
                                                                                
Cash flows from operating activities:                                           
  Net income (loss).........................................  $ 1,441   $(1,530)
  Adjustments to reconcile net income (loss) to net cash                        
     provided by operating activities:                                          
     Depreciation and amortization..........................    6,700     5,605 
     Non-cash interest expense..............................      394       478 
     Non-cash stock compensation expense....................      628       837 
  Changes in assets and liabilities, net of working capital                     
     from acquisitions:                                                         
     Accounts receivable, net...............................     (589)   (2,610)
     Prepaid expenses and other current assets..............      423    (1,857)
     Principal associate advances...........................   (1,498)       -- 
     Commission advances, net...............................    1,044       256 
     Other assets...........................................      235       965 
     Accounts payable and other accrued expenses............    1,713     3,315 
     Accrued commissions and royalties......................   (2,429)      999 
     Accrued compensation...................................   (1,049)      389 
     Other current liabilities..............................      (61)     (155)
                                                              -------   ------- 
          Net cash provided by operating activities.........    6,952     6,692 
                                                              -------   ------- 
Cash flows used in investing activities --                                      
  purchase of property and equipment........................   (2,097)   (4,474)
                                                              -------   ------- 
Cash flows from financing activities:                                           
  Proceeds from issuance of common stock....................       16        -- 
  Proceeds from issuance of notes payable, net..............    5,548     2,268 
  Principal payments on notes payable.......................   (5,414)   (3,741)
  Principal payments on capital lease obligations...........     (355)     (280)
  Distributions to stockholders.............................       --    (1,470)
  Net loans provided to stockholders........................     (758)     (263)
                                                              -------   ------- 
          Net cash used in financing activities.............     (963)   (3,486)
                                                              -------   ------- 
  Net increase (decrease) in cash and cash equivalents......    3,892    (1,268)
  Cash and cash equivalents at beginning of the period......    2,179     3,910 
                                                              -------   ------- 
  Cash and cash equivalents at the end of the period........  $ 6,071   $ 2,642 
                                                              =======   ======= 
Supplemental disclosures of non-cash investing and financing                    
  activities:                                                                   
  In conjunction with the acquisition of businesses:                            
     Fair value of assets acquired..........................  $12,604   $ 8,203 
     Forgiveness of advances................................  $ 2,048        -- 
     Notes payable to seller................................  $ 5,200   $ 8,203 
     Common stock issued to seller..........................  $ 5,356        -- 
Cash paid for:                                                                  
  Interest..................................................  $ 1,851   $ 1,277 
                                                              =======   ======= 

See accompanying notes to unaudited combined financial statements.

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001 AND 2000 

(UNAUDITED) 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

Description of Business and Basis of Presentation                           

    The accompanying unaudited combined financial statements of Howard Schultz
& Associates International, Inc. include the accounts of Howard Schultz &       
Associates International, Inc. ("HSA-Texas"), its majority-owned subsidiaries,  
Howard Schultz & Associates Europe N.V., Howard Schultz & Associates de Mexico, 
S.A. de C.V., Howard Schultz & Associates International (Thailand) Limited, HS&A
Imaging, Inc. ("HS&A Imaging") and companies which were under majority common   
control and ownership by the controlling stockholders/family members of         
HSA-Texas, which are Howard Schultz, Andrew H. Schultz and the Andrew H. Schultz
Irrevocable Trust (the "Schultz Trust"). These entities include Howard Schultz &
Associates (Canada) Inc. ("HSA-Canada"), Howard Schultz & Associates (Australia)
Inc. ("HSA-Australia"), Howard Schultz & Associates (Asia) Limited ("HSA-Asia"),
and HS&A International Pte Ltd ("HSA-Singapore"). All entities included in the  
combined financial statements are collectively referred to herein as the        
"Company". All significant intercompany balances and transactions have been     
eliminated in combination.                                                      

     The accompanying unaudited combined financial statements of the Company for
the nine months ended September 30, 2001 and 2000 have been prepared in         
accordance with accounting principles generally accepted in the United States of
America. Significant accounting policies followed by the Company were disclosed 
in the notes to the combined financial statements for the year ended December   
31, 2000. Operating results for interim periods are not necessarily indicative  
of the results that may be expected for the full year. The accompanying         
financial statements are for interim periods and should be read in conjunction  
with the 2000 audited combined financial statements of the Company.             

    Certain reclassifications have been made to the 2000 amounts to conform to
the presentation in 2001.                                                       

2. RELATED PARTY TRANSACTION                                                    

As of September 30, 2001 and December 31, 2000, the Company owed      
$10,350,000 and $5,050,000, respectively, to Howard Schultz. The Company paid   
Mr. Schultz interest in the amount of $306,000 during the nine-month period     
ended September 30, 2001.                                                       

3. STOCKHOLDERS' EQUITY                                                         

    During the nine-month period ended September 30, 2001, the Company granted
options to employees and non-employees to purchase 331,754 shares and 37,638    
shares, net of cancellations, of the common stock of HSA-Texas, respectively, at
an exercise price of $9.06. Additionally, the Company awarded stock grants      
totaling 23,179 shares to certain employees, and granted 64,569 stock           
appreciation rights, at a grant price of $9.06 per stock appreciation right, to 
certain employees in international markets.                                     

4. SEGMENT AND RELATED INFORMATION                                              

 The Company has one reportable operating segment consisting of accounts
payable services. Accounts payable services consist of the review of client     
accounts payable disbursements to identify and recover overpayments. This       
operating segment includes accounts payable services provided to retailers,     
wholesale distributors and various other types of business entities. The Company
performs these accounts payable services in the United States, Canada, Mexico,  
Australia, and throughout Europe and Asia, including France, Spain and Hong     
Kong.                                                                           

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

   Geographical information for the nine months ended September 30, 2001 and
2000 is as follows:                                                             

                                                        [Enlarge/Download Table]

                                                             SEPTEMBER 30,   SEPTEMBER 30,
                                                                 2001            2000     
                                                             -------------   -------------
                                                                    (IN THOUSANDS)        
                                                                                          
                                         REVENUES                                         
United States...............................................   $ 91,762        $ 96,055   
Europe......................................................      4,102           3,065   
Mexico......................................................        662             299   
Australia...................................................      1,317           1,054   
Canada......................................................      2,161           1,595   
Asia........................................................        757             474   
                                                               --------        --------   
          Revenues, net.....................................   $100,761        $102,542   
                                                               ========        ========   

   Geographical information as of September 30, 2001 and 2000 is as follows:

                                                        [Enlarge/Download Table]

                                                             SEPTEMBER 30,   SEPTEMBER 30,
                                                                 2001            2000     
                                                             -------------   -------------
                                                                    (IN THOUSANDS)        
                                                                                          
                                     LONG-LIVED ASSETS                                    
United States...............................................    $13,000         $11,154   
Europe......................................................        219             114   
Mexico......................................................        105              90   
Australia...................................................         42              76   
Canada......................................................        101             119   
Asia........................................................        190             236   
                                                                -------         -------   

Total long-lived assets.....................................    $13,657         $11,789   
                                                                =======         =======   

For purposes of the geographical information above, revenues are      
attributable to the individual countries based on the location of the customer. 
Long-lived assets are attributed to the individual countries based on the       
physical location of the assets. Long-lived assets are primarily property and   
equipment.                                                                      

5. MERGERS AND ACQUISITIONS                                                     

  On August 3, 2001, the Company entered into a definitive agreement to be
acquired by The Profit Recovery Group International, Inc. ("PRG") in an         
all-stock transaction, which is expected to close in the fourth quarter of 2001.
The combination is subject to approval of both companies' shareholders, approval
from PRG's bank syndicate, and customary regulatory approvals.                  

     In connection with the announced acquisition by PRG, the board of directors
of the Company terminated the Company's Management Incentive Plan. On August 22,
2001, the board of directors approved the issuance of options to purchase 79,000
shares of the common stock of HSA-Texas, at an exercise price of $9.06, to the  
participants in the Management Incentive Plan.                                  

  Also, in July 2001, the Company acquired substantially all of the assets
and certain, specified related liabilities, of an independent contractor of the 
Company that performed recovery audit and information technology services for   
the Company, in a tax-free reorganization in exchange for 307,482 newly-issued  
shares of the Company's no par value, voting common stock, assumption and       
payment of $1,000,000 in debt (repaid upon assumption) and forgiveness of       
$2,048,000 of advances to the independent contractor outstanding as of the      
acquisition date.                                                               

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

    On September 1, 2001, the Company acquired substantially all of the assets
and certain specified, related liabilities of an independent contractor that    
performed recovery and audit services for the Company in exchange for a $3.0    
million note payable in six equal quarterly installments beginning January 1,   
2002 with simple interest at the rate of 7.0% per annum.                        

     On September 17, 2001, the Company acquired substantially all of the assets
and certain specified liabilities of an independent contractor that performed   
recovery audit services for the Company in exchange for a $1.2 million note     
payable in six equal quarterly installments beginning January 1, 2002 with      
simple interest at a rate of 7.0% per annum.                                    

The above acquisitions were accounted for using the purchase method of
accounting and, accordingly, results of operations of the acquired entities have
been included in the accompanying combined financial statements from the dates  
of acquisition. The purchase prices were allocated to tangible assets acquired  
and intangible assets based on the estimated fair values at the respective dates
of acquisition. The Company incurred no significant direct costs of acquisition.
A summary of the total purchase price and purchase price allocation for         
acquisitions made in July and September 2001 is as follows (in thousands):      

                                                                [Download Table]
                                                                     
Net tangible assets.........................................  $ 2,168
Goodwill....................................................   10,436
                                                              -------
          Total purchase price..............................  $12,604
                                                              =======

  Unaudited pro forma operating results as though the acquisitions made in
July and September, 2001 had occurred on January 1, 2000, with adjustments      
primarily to give effect to interest expense related to the promissory notes,   
are as follows (in thousands):                                                  

                                                                [Download Table]

                                                              NINE MONTHS ENDED  
                                                                SEPTEMBER 30,    
                                                             ------------------- 
                                                               2001       2000   
                                                             --------   -------- 
                                                                                 
Revenues.................................................... $100,761   $102,542 
Operating income (loss).....................................     (890)       640 
Net income (loss)........................................... $    808   $ (1,946)

6. FOREIGN TAX BENEFIT                                                          

   During the third quarter of 2001, the Company collected $512,000 in taxes
paid on its behalf to the Inland Revenue taxing authority by its licensee in the
United Kingdom. The refund was a result of inquiries made by the Company, which 
caused Inland Revenue to reverse its position on the taxability of royalties    
remitted by the licensee. The Company had not recorded a receivable in prior    
periods, due to the uncertainty of collection.                                  

7. COMMITMENTS AND CONTINGENCIES                                                

   In May 2001, the Company entered into a settlement agreement with respect
to litigation pending at December 31, 2000, involving a group of independent    
contractors formerly associated with the Company. Pursuant to the agreement, the
Company was relieved of certain obligations to pay accrued commissions to those 
contractors, which amounted to $3.7 million at the date of settlement. The      
Company has no further obligations with respect to those contractors at         
September 30, 2001.                                                             

  The Company has contingent liabilities resulting from litigation, claims
and commitments incidental to the ordinary course of business. Management       
believes, based on the advice of counsel, that the ultimate resolution of such  
contingencies will not have a materially adverse effect on the financial        
position, results of operations or liquidity of the Company.                    

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HOWARD SCHULTZ & ASSOCIATES INTERNATIONAL, INC. 

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) 

    The Company also has contingent liabilities in connection with two Letters
of Credit relating to a loan agreement and a leasing agreement for Howard       
Schultz & Associates Europe, N.V. These letters of credit are partially         
collateralized by a certificate of deposit of the Company and personal funds of 
a shareholder. The unsecured amounts of these contingent liabilities of the     
Company were $686,000 and $1,279,000 at September 30, 2001, and December 31,    
2000, respectively.                                                             

8. SUBSEQUENT EVENTS                                                            

On November 15, 2001, HS&A Europe N.V., a subsidiary of the Company,  
entered into a purchase agreement to acquire 98% of the stock of Howard Schultz 
& Partner (Deutschland) GmbH, the licensee of HSA-Texas in Germany and Austria, 
for a purchase price equal to the sum of 98% of Deutschland's shareholders'     
equity at December 31, 2001 and an amount equal to 23% of Deutschland's receipts
during the period from July 1, 1999 through June 30, 2001. The remaining 2% of  
Howard Schultz & Partner (Deutschland) GmbH is owned by Howard Schultz.         

On November 21, 2001, HS&A Acquisition - UK, Inc., a subsidiary of the
Company, acquired all of the stock of Tamebond Ltd., the parent of Howard       
Schultz & Associates (International) Ltd., which was the licensee of HSA-Texas  
in the United Kingdom, and all of the stock of J&G Associates Ltd., an          
independent contractor that provides services with respect to the business of   
HSA-Texas in the United Kingdom, in exchange for a $7.9 million note payable and
a $3.6 million note payable, each bearing interest at the rate of 5.5% per annum
with accrued interest payable in three semi-annual installments beginning May   
21, 2002 plus consideration for each company's net assets, which has not yet    
been determined.                                                                

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                                                                         ANNEX A

AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION

        THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of the 11th day of December, 2001, by and among THE PROFIT RECOVERY GROUP       
INTERNATIONAL, INC., a Georgia corporation ("PRGX"), HOWARD SCHULTZ & ASSOCIATES
INTERNATIONAL, INC., a Texas corporation ("HSA-Texas"), HOWARD SCHULTZ, a Texas 
resident ("H. Schultz"), ANDREW H. SCHULTZ, a Texas resident ("A. Schultz"),    
each of the trusts identified on the signature pages hereto (collectively, the  
"Trusts" and individually a "Trust") (each of H. Schultz, A. Schultz and the    
Trusts being collectively, the "Shareholders" and individually a "Shareholder"),
and H. SCHULTZ, as representative of the Shareholders ("Shareholders'           
Representative").                                                               

 WITNESSETH:

  WHEREAS, PRGX, HSA-Texas, the Shareholders and the Shareholders'
Representative are parties to that certain Agreement and Plan of Reorganization 
dated as of August 3, 2001 (the "Original Agreement"); and                      

  WHEREAS, the parties to the Original Agreement wish to amend and
restate the Original Agreement in its entirety, as provided herein;             

NOW, THEREFORE, in consideration of the premises, the mutual  
representations, warranties and covenants herein contained and other good and   
valuable consideration, the receipt and sufficiency of which are hereby         
acknowledged, the parties hereby amend and restate the Original Agreement, as   
follows:                                                                        

        WHEREAS, HSA-Texas is in the business of (a) auditing accounts payable
records, occupancy costs, vendor statements and direct to store delivery records
to recover overpayments that are a result of missed credits, duplicated         
payments, overlooked allowances, incorrect invoices and other discrepancies,    
through its Global Data Services (GDS) Center, Associate Support Center,        
Occupancy Cost Audit Group, Statement Audit Group, Direct to Store Delivery     
Group and Commercial Audit Group and (b) operating a document imaging service   
bureau and selling and dealing in electronic document imaging and microfilming  
services (collectively, the "Business");                                        

      WHEREAS, HSA-Texas conducts the Business in the United States and in
non-U.S. countries (a) through those first-tier and second-tier majority owned  
subsidiaries of HSA-Texas listed on Schedule 1(a) attached hereto (collectively,
the "Subsidiaries" and individually a "Subsidiary"; and the Subsidiaries,       
collectively with HSA-Texas, being the "Companies" and individually, a          
"Company") and (b) through licenses granted to those entities listed on Schedule
1(b) attached hereto (collectively, the "Licensees" and individually, a         
"Licensee");                                                                    

WHEREAS, the parties hereto desire to enter into a plan of    
reorganization qualifying under Section 368(a)(1)(C) of the Internal Revenue    
Code of 1986, as amended (the "Code"), whereby HSA-Texas shall transfer to PRGX,
and PRGX shall acquire, substantially all of the assets of HSA-Texas used or    
held for use in the Business in exchange for shares of common stock of PRGX, no 
par value per share ("PRGX Common Stock"), pursuant to the terms of this        
Agreement (the "Acquisition");                                                  

      WHEREAS, PRGX intends to acquire solely in exchange for unregistered
shares of PRGX Common Stock, concurrently with the consummation of the          
Acquisition, (a) substantially all of the outstanding equity of HS&A            
International Pte Ltd., a Singapore corporation and a Licensee ("HSA            
Singapore"), from H. Schultz and (b) all of the outstanding equity of (i) Howard
Schultz & Associates (Asia) Limited, a Hong Kong corporation and a Licensee     
("HSA Asia"), from H. Schultz, (ii) Howard Schultz & Associates (Australia),    
Inc., a Texas corporation and a Licensee ("HSA Australia"), from the            

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Andrew H. Schultz Irrevocable Trust (the "AHS Irrevocable Trust") and (iii)     
Howard Schultz & Associates (Canada), Inc., a Texas corporation and a Licensee  
("HSA Canada"), from the AHS Irrevocable Trust, pursuant to an Agreement and    
Plan of Reorganization Pursuant to Section 368(a)(1)(B) of the Internal Revenue 
Code, as Amended, dated August 3, 2001, as amended and restated by agreement    
dated as of December 11, 2001 (collectively, HSA Singapore, HSA Asia, HSA       
Australia and HSA Canada being the "Affiliated Foreign Operating Companies,"    
such agreement, as amended and restated, being the "Stock Agreement," and such  
acquisitions collectively being the "Concurrent Acquisitions");                 

     WHEREAS, prior to or at the Closing, each of the Shareholders shall
contribute all of the shares of common stock of each Subsidiary owned by him or 
it to the direct parent corporation of such Subsidiary holding a majority of the
capital stock of such Subsidiary or such parent corporation's designee without  
consideration as provided in Section 4.20 hereof;                               

     WHEREAS, as of the date hereof, HSA-Texas' authorized capital stock
consists of 12,000,000 shares of common stock, no par value per share, 2,000,000
of which having voting rights ("HSA-Texas Voting Common Stock") and 10,000,000  
of which have no voting rights except where Texas law requires ("HSA-Texas      
Non-Voting Common Stock" and collectively with the HSA-Texas Voting Common      
Stock, the "HSA-Texas Common Stock") and the Shareholders own a majority of the 
outstanding shares of HSA-Texas Common Stock;                                   

WHEREAS, the parties hereto desire to set forth certain       
representations, warranties and covenants made by each to the other as an       
inducement to the consummation of the transactions contemplated herein and      
certain additional agreements related thereto;                                  

NOW, THEREFORE, in consideration of the premises, the mutual  
representations, warranties and covenants herein contained and other good and   
valuable consideration, the receipt and sufficiency of which are hereby         
acknowledged, the parties hereby agree as follows:                              

        Appendix A attached hereto contains a list of the location, by Section
reference, of the definition of each capitalized term used herein.              

 ARTICLE 1
REORGANIZATION

   1.1      ASSETS TO BE ACQUIRED. Subject to and upon the terms and
conditions set forth herein, PRGX agrees to acquire from HSA-Texas, and         
HSA-Texas agrees to transfer to PRGX, as of the Closing Date, except as provided
in Section 1.2 hereof, all right, title and interest in and to the tangible and 
intangible assets of HSA-Texas used or held for use in the conduct of the       
Business as of the Closing Date, including assets which have been fully         
depreciated, amortized and/or expensed, whether or not reflected on the         
Estimated Balance Sheet, free and clear of all claims, liens, encumbrances,     
security interests and similar interests of any kind or nature whatsoever except
for the Permitted Encumbrances (collectively, the "Acquired Assets") including  
the following:                                                                  

            (a)      all machinery, appliances, equipment, including
computer hardware (and as to each computer, the software licensed for use       
thereon), tools, supplies, leasehold improvements, furniture and fixtures, used 
or held for use by HSA-Texas in connection with the Business as of the Closing  
Date, including those items listed on Schedule 1.1(a) attached hereto           
(collectively, the "Fixed Assets");                                             

                  (b)      all written and oral "Contracts" (which, for purposes
hereof, shall include all written or oral contracts with Clients (collectively, 
the "Client Contracts"), employment agreements, agreements with Associates,     
agreements with independent contractors, agreements with Licensees, the DSD     

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Acquisition Agreements, the U.K. Acquisition Agreements and the German          
Acquisition Agreement (as defined herein and collectively, the "Other           
Acquisition Agreements") and all other agreements and instruments relating to   
the Acquired Assets and the operation of the Business to which HSA-Texas is a   
party or to which the Acquired Assets are subject or bound, except for any      
Lease) which PRGX specifically agrees to assume, which assumption shall be      
evidenced by inclusion of such Contract by PRGX on a schedule to the Assignment 
and Assumption Agreement (collectively, "Assigned Contracts");                  

                 (c)      all accounts receivable, notes receivable, employee,
independent contractor and associate advances made by HSA-Texas (collectively,  
"Accounts Receivable") and all work in progress including all unbilled claims of
HSA-Texas (collectively, the "Work in Progress");                               

            (d)      all benefits accruing to HSA-Texas as lessee or
sublessee under, those "Leases" (which, for purposes hereof, means all written  
and oral leases or subleases in respect of the Business and to which HSA-Texas  
is a party, including all real property and equipment leases), which PRGX       
specifically agrees to assume, which assumption shall be evidenced by inclusion 
of such Lease by PRGX on a schedule to the Assignment and Assumption Agreement  
(collectively, the "Assigned Leases");                                          

                 (e)      all intellectual property used or owned by HSA-Texas
or the Business, including:                                                     

                     (i)      the trade names and trademarks "Howard
Schultz & Associates(R)," "Howard Schultz & Associates International(R),"       
"HS&A", "SUREF!ND(R)" "DIRECTF!ND(R)", "NETF!ND", and any other trade names,    
trademarks, service marks, brand names, certification marks, trade dress and    
other indications of origin, whether registered or unregistered, the goodwill   
associated with the foregoing and registrations in any jurisdiction, and        
applications to register in any jurisdiction, including any extension,          
modification or renewal of any such registration or application;                

                         (ii)     inventions, discoveries and ideas, whether
patentable or not, in any local, state, U.S. or non-U.S. jurisdiction;          

                (iii)    patents, applications for patents
(including, without limitation, divisions, continuations, continuations in part 
and renewal applications), and any renewals, extensions or reissues thereof, in 
any local, state, U.S. or non-U.S. jurisdiction;                                

                       (iv)     nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit the use or     
disclosure thereof by any person;                                               

                (v)      writings and other works, whether
copyrightable or not, in any local, state, U.S. or non-U.S. jurisdiction;       

                (vi)     registrations or applications for
registration of copyrights in any local, state, U.S. or non-U.S. jurisdiction,  
and any renewals or extensions thereof, and all unregistered copyrighted works; 

                          (vii)    all computer and electronic data processing
programs and software programs and systems and related documentation, research  
projects, computer software under development, software concepts owned and      
proprietary intellectual property, processes, formulae and algorithms, including
all intellectual property used in the ownership, marketing, development,        
maintenance, support and delivery of the software and presently owned or        
licensed by HSA-Texas which are used or proposed to be used or reserved for use 
by HSA-Texas in the Business (including SUREF!ND(R) software, DIRECTF!ND(R)     
software, NETF!ND(TM) software, and any other computer software programs and    
databases developed by or for HSA-Texas and the Business or licensed to them)   
(the "Software");                                                               

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                    (viii)   all intellectual property inventions,
improvements, developments, modifications and derivative works, whether or not  
reduced to practice, which HSA-Texas, Shareholders, or any employee of HSA-Texas
or Associate, together or individually, alone or in combination with each other 
or any other person, has made which relates to the Business (collectively,      
"Developments");                                                                

                     (ix)     all know-how, trade secrets, formulas,
confidential information, customer lists, technical information, data, reports, 
deliverables, source code, object code, process technology, plans, drawings and 
blueprints;                                                                     

                       (x)      and any similar intellectual property or
proprietary rights, including those set forth on Schedule 5.19(a) attached      
hereto (collectively, the "Intellectual Property Assets");                      

           (f)      all of HSA-Texas' licenses, consents, permits,
variances, certifications and approvals of all Governmental Entities, to the    
extent assignable, including those listed on Schedule 1.1(f) attached hereto    
(collectively, the "Licenses and Permits");                                     

              (g)      all claims, security and other deposits, refunds,
prepaid expenses, causes of action, lawsuits, choses in action, rights of       
recovery and rights to indemnification, warranty rights, rights under           
non-disclosure, non-competition, non-solicitation, and similar agreements, and  
rights of set off in respect of the Business and Acquired Assets, including     
those items listed on Schedule 1.1(g) attached hereto (collectively, the        
"Deposits and Other Rights");                                                   

             (h)      all of HSA-Texas' client and supplier lists, all
client files, all files related to employees, consultants or independent        
contractors, all computer data bases and other business records relating to the 
Acquired Assets other than HSA-Texas' corporate minute books and stock records; 

                  (i)      all of HSA-Texas' telephone numbers and the directory
advertising for such telephone numbers;                                         

        (j)      all of HSA-Texas' bank accounts, lock boxes
(including the contents thereof), safety deposit boxes (including the contents  
thereof), including those listed on Schedule 1.1(j) attached hereto;            

                  (k)      all of HSA-Texas' cash on hand, cash in bank or other
financial institution accounts and cash equivalents;                            

          (l)      all of HSA-Texas' equity ownership interests,
including shares of voting and non-voting common and preferred stock, in all of 
the Subsidiaries, and interests in any joint ventures; and                      

               (m)      all of HSA-Texas' other tangible personal property
and intangible property used or held for use in connection with the Business,   
including any and all goodwill and going concern value of the Business and the  
Companies.                                                                      

    1.2      EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in Section 1.1 hereof, PRGX shall not acquire, and HSA-Texas shall not
transfer to PRGX, the following assets (collectively, the "Excluded Assets"):   

         (a)      HSA-Texas' corporate minute and stock books;

                 (b)      any assets held under any pension, profit sharing or
other Employee Benefit Plan;                                                    

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           (c)      the amount of cash, up to a maximum of $7,000,
required for funding termination obligations, if any, of HSA-Texas in respect of
the HSA-Texas 401k Plan;                                                        

                  (d)      the two parcels of real property and the improvements
thereon used on the date hereof as the HSA-Texas headquarters in Dallas, Texas, 
located at the addresses and with the legal descriptions, as set forth on       
Schedule 1.2 attached hereto (such real property and improvements collectively  
being the "Dallas Headquarters");                                               

               (e)      the amount of any cash received by HSA-Texas after
the date hereof attributable to the exercise by employees of HSA-Texas of any   
options to purchase HSA-Texas Common Stock; and                                 

         (f)      an amount of cash, and to the extent cash is
insufficient, accounts receivable of HSA-Texas (the "Retained Accounts") having 
a face amount, which in the reasonable estimation of the Shareholders, as agreed
to by PRGX, is in an amount sufficient to enable the Shareholders to pay        
Flow-Through Taxes (but not to pay taxes on any gains or income on the          
transactions contemplated herein) resulting from normal operations in the       
ordinary course of business for the period beginning on January 1, 2001 through 
the Closing Date and any Flow-Through Taxes attributable to the collection of   
the Retained Accounts; provided in the event that the amount of Flow-Through    
Taxes paid is less than the face amount of the retained accounts receivable,    
HSA-Texas shall pay PRGX the amount of such excess in cash or by return to PRGX 
of any such uncollected accounts receivable promptly after payment of the       
Flow-Through Taxes.                                                             

         1.3      CONVEYANCE OF ASSETS. The conveyance, transfer and delivery of
the Acquired Assets shall be made by HSA-Texas and accepted by PRGX as of the   
Closing Date, as follows:                                                       

                  (a)      HSA-Texas shall execute and deliver to PRGX a bill of
sale in the form of Exhibit 1.3(a) attached hereto and made a part hereof (the  
"Bill of Sale");                                                                

                 (b)      HSA-Texas and PRGX shall execute and deliver to PRGX
an Assignment and Assumption Agreement in the form of Exhibit 1.3(b) attached   
hereto and made a part hereof (the "Assignment and Assumption Agreement") with  
respect to the Assumed Liabilities;                                             

          (c)      HSA-Texas shall execute and deliver to PRGX a
trademark assignment in the form of Exhibit 1.3(c)-1 attached hereto and made a 
part hereof and a copyright assignment in the form of Exhibit 1.3(c)-2 attached 
hereto and made a part hereof; and                                              

                (d)      HSA-Texas shall execute and deliver such additional
instruments of transfer, conveyance and assignment on the Closing Date, as      
counsel to HSA-Texas and counsel to PRGX shall mutually deem necessary or       
appropriate.                                                                    

       1.4      CLOSING. The closing of the transactions contemplated herein
(the "Closing") shall take place at 10:00 a.m. Eastern time on a date to be     
specified by the parties, which shall be no later than the tenth business day   
after the satisfaction or waiver (subject to applicable law) of the conditions  
set forth in Article 8 hereof, unless another time or date is agreed to by the  
parties hereto (the "Closing Date"). The Closing will be held at the offices of 
Arnall Golden Gregory LLP, Atlanta, Georgia. The Closing shall be effective as  
of 12:01 a.m., Eastern time, on the Closing Date.                               

 ARTICLE 2
CONSIDERATION; ASSUMPTION OF LIABILITIES

2.1      CONSIDERATION.                                       

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                 (a)      Determination of Consideration. Subject to the terms
and conditions of this Agreement and subject to the possible forfeiture of      
certain shares of PRGX Common Stock as provided in Section 2.5 hereof, the      
aggregate consideration (the "Consideration") payable to HSA-Texas for the      
Acquired Assets shall be determined as follows:                                 

    (i)      14,724,338 shares of PRGX Common Stock;

            (ii)     less that number of shares of PRGX Common Stock
determined, as follows:                                                         

                     (A)      first, calculate the aggregate "in the
money" value of HSA-Texas Options outstanding on the Closing Date (including    
both the HSA-Texas Options of Persons Not Hired and HSA-Texas Options which are 
Options to be Assumed) in accordance with Section 2.1(b) below;                 

                      (B)      second, calculate the aggregate "in the
money" value of the HSA-Texas SARs outstanding on the Closing Date in accordance
with Section 2.1(b) below;                                                      

                          (C)      third, provided that such sum is a positive
number, add the result of the calculations in Section 2.1(a)(ii)(A) and Section 
2.1(a)(ii)(B) above, and divide the sum by the average closing price per share  
of PRGX Common Stock (as reported in The Wall Street Journal) for the 5         
consecutive trading days ending on the fifth trading day immediately preceding  
the Closing Date (the "PRGX Average Price").                                    

  (b)      "In the Money" Calculation. The "in the money" value of
HSA-Texas Options and HSA-Texas SARs is determined, as follows:                 

           (i)      multiply 14,724,338 by the PRGX Average Price;

                  (ii)     divide the product in (i) above by the sum of (A) the
number of shares of HSA-Texas Common Stock outstanding on the Closing Date, (B) 
the number of shares of HSA-Texas Common Stock subject to HSA-Texas Options     
(both HSA-Texas Options of Persons Not Hired and Options to be Assumed)         
outstanding on the Closing Date, and (C) and the number of HSA-Texas SARs       
outstanding on the Closing Date;                                                

                (iii)    the quotient in (ii) above is the "Per Share Value"
of the gross consideration paid by PRGX for HSA-Texas' Acquired Assets (before  
reducing such gross consideration by the "in the money" value of the HSA-Texas  
Options and HSA-Texas SARs outstanding on the Closing Date);                    

                 (iv)     the per share "in the money" value of each HSA-Texas
Option and each HSA-Texas SAR equals the Per Share Value less the respective    
exercise price of such HSA-Texas Option and the grant price of such HSA-Texas   
SARs;                                                                           

                (v)      the aggregate "in the money value" of the HSA-Texas
Options or HSA-Texas SARs, as the case may be, equals the product of the per    
share "in the money value" of each HSA-Texas Option or each HSA-Texas SAR       
granted at a particular exercise or grant price, times the total number of      
HSA-Texas Options or HSA-Texas SARs outstanding at Closing granted at such      
exercise or grant price; and                                                    

                 (vi)     the sum of the aggregate "in the money value" of the
HSA-Texas Options                                                               

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and the HSA-Texas SARs divided by the PRGX Average Price determines the number  
of shares of PRGX Common Stock to be deducted in Section 2.1(a)(ii) above.      

                  (c)      Payment to HSA-Texas at Closing. On the Closing Date,
HSA-Texas shall be entitled to receive a stock certificate or certificates for  
that number of shares of PRGX Common Stock equal to the Consideration; provided 
that in lieu of delivering fractional shares, PRGX shall deliver to HSA-Texas an
amount in cash based on the PRGX Average Price.                                 

2.2      ASSUMPTION OF LIABILITIES.                           

              (a)      Assumed Liabilities. PRGX agrees to assume on the
Closing Date, only the following liabilities outstanding as of the Closing Date,
to the extent not included in Retained Liabilities (collectively, the           
liabilities described in Sections 2.2(a) and 2.2(b) hereof being the "Assumed   
Liabilities"): all liabilities and obligations of HSA-Texas to the extent       
disclosed either on the December 31, 2000 balance sheet contained in the Audited
Statements (reduced by the amount such liabilities have been paid prior to the  
Closing Date) or on the Estimated Balance Sheet, prepared as provided herein and
all liabilities and obligations of HSA-Texas incurred by HSA-Texas in the       
ordinary course of Business after the Closing Date consistent with past         
practices, and the amount of principal and interest outstanding on the Closing  
Date in respect of the Assumed Schultz Loan (without duplication of any other   
Assumed Liability). For purposes hereof, "Assumed Schultz Loan" means that      
portion of HSA-Texas' obligations to H. Schultz as of the Closing Date solely   
for amounts loaned to HSA-Texas for the following, less $3,048,000 (paid by     
HSA-Texas in connection with the asset acquisition of Lowrey, Inc.):            

                          (i)      normal operations in the ordinary course of
the Business to be acquired pursuant hereto, including amounts expended by the  
Business in acquisitions of assets utilized by the Business (but will not       
include amounts paid or to be paid (A) equal to cash distributions to           
Shareholders after December 31, 2000, other than normal compensation and expense
reimbursement, (B) after December 31, 2000 in respect of any asset or liability 
designated an Excluded Asset or a Retained Liability and (C) that are not       
directly related to the Business to be acquired by PRGX pursuant hereto, all of 
which such amounts will not be deemed part of the Assumed Schultz Loan, but will
include amortization of HSA-Texas' mortgages in respect of the Dallas           
Headquarters from December 31, 2000 through the Closing Date);                  

                        (ii)     the aggregate amount, if any, paid to the
respective sellers thereof prior to the Closing Date pursuant to the DSD        
Acquisition Agreements and the U.K. Acquisition Agreements, as approved by PRGX;
and if the German Acquisition has closed prior to the Closing, the aggregate    
amount paid to the sellers thereof prior to the Closing Date pursuant to the    
German Acquisition Agreement, as approved by PRGX;                              

                           (iii)    that portion of the aggregate amount paid by
HSA-Texas to the holders of HSA-Texas SARs to extinguish their rights thereunder
prior to or concurrently with the Closing which represents the "in the money"   
value of the HSA-Texas SARs, together with applicable withholding amounts,      

                           (iv)     that portion of the aggregate amount paid by
HSA-Texas to the Optionees who are Persons Not Hired to cancel their HSA-Texas  
Options prior to or concurrently with the Closing which represents the "in the  
money value" of all such HSA-Texas Options of Persons Not Hired, together with  
applicable withholding amounts,                                                 

                      (v)      all HSA-Texas Transaction Expenses paid
prior to the Closing Date, and                                                  

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                      (vi)     principal and interest payments paid by
HSA-Texas since December 31, 2000 and prior to the Closing Date on the          
acquisition-related notes payable described in Note 3 of the Audited Statements 
(the "Acquisition-Related Notes").                                              

              (b)      Certain Assumed Liabilities. Without limiting the
generality of the foregoing, PRGX shall assume on the Closing Date the following
liabilities of HSA-Texas:                                                       

                          (i)      all outstanding obligations and liabilities
of HSA-Texas arising from and after the Closing Date under the Assigned Leases  
and the Assigned Contracts (which shall include the Other Acquisition Agreements
and other documents executed in connection therewith as approved by PRGX, but   
shall not include, except as provided in Section 4.27 hereof, any agreements or 
understandings providing for expense advancement in connection with             
indemnification, or other indemnification, of officers and/or directors of any  
Company, including the Advancement Agreements between HSA-Texas and Michael     
Glazer, Stephanie Holloway, Andrew Schultz and Howard Schultz previously        
delivered to PRGX);                                                             

                           (ii)     the aggregate principal and accrued interest
amount of the Commission Buy-Down Payments, as agreed to by PRGX, to the extent 
accrued on the Estimated Balance Sheet and outstanding on the Closing Date;     

                          (iii)    commission amounts payable to Associates or
commissioned employees whether or not they accept employment with PRGX or its   
designee upon collection of Work in Progress outstanding on the Closing Date    
which is converted to accounts receivable after the Closing Date, net of any    
deductions attributable to Vendor Paybacks (except to the extent any Associate  
has agreed in writing to accept a Commission Buy-Down Payment in lieu of such   
commission amounts); and                                                        

                     (iv)     amounts owed under HSA-Texas severance
policies (including policies with respect to accrued, but unused, vacation      
and/or sick pay) in effect as of the date hereof to any employee of the         
Companies to whom PRGX and HSA-Texas have mutually agreed not to offer          
employment by PRGX or any of its affiliates to the extent such amounts are      
specified on Schedule 2.2(b)(iv) (the "Assumed Severance Amount").              

                 (c)      Schultz Loan Worksheet. At least 3 days prior to the
Closing, HSA-Texas shall prepare and deliver to PRGX a detailed estimated       
worksheet, certified by the chief financial or other executive officer of       
HSA-Texas as true, correct and complete, establishing the amount of the Assumed 
Schultz Loan, showing (i) the balance of the amount owed by HSA-Texas to H.     
Schultz as of December 31, 2000, (ii) the total cash received by HSA-Texas from 
H. Schultz from December 31, 2000 through the Closing Date, (iii) the amount    
repaid by HSA-Texas to H. Schultz during the period from December 31, 2000      
through the Closing Date, (iv) any payments by HSA-Texas after December 31, 2000
through the Closing Date that would not qualify, under the provisions of        
Sections 2.2(a)(i)-(iv) hereof, as funds that are included within the definition
of the Assumed Schultz Loan (the "Schultz Loan Worksheet"). Concurrently with   
the Closing, PRGX shall assume the Assumed Schultz Loan and make an initial     
payment to H. Schultz of $7,000,000 of the Assumed Schultz Loan. PRGX will have 
5 business days after the Closing to review and consult with HSA-Texas and H.   
Schultz about the Schultz Loan Worksheet. Promptly after the end of such 5      
business day period, either (A) PRGX shall pay H. Schultz the amount, if any, in
excess of $7,000,000 of the Assumed Schultz Loan as set forth in the Schultz    
Loan Worksheet or as otherwise agreed to by PRGX and H. Schultz within such 5   
business day period, or (B) H. Schultz shall repay to PRGX the amount, if any,  
that he was paid at Closing in excess of the amount agreed to by PRGX and H.    
Schultz as representing the Assumed Schultz Loan within such 5 business day     
period. All amounts paid by PRGX to H. Schultz, or repaid by H. Schultz to PRGX,
under this Section 2.2 shall be paid by wire transfer in immediately available  
funds to an account designated by H. Schultz to PRGX, or by PRGX to H. Schultz, 
as the case may be, in writing prior to the Closing; provided that such         

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payments will be made without prejudice to each parties' rights under Section   
2.2(d) below.                                                                   

                (d)      Post-Closing Review. During the 18 months following
the Closing Date, PRGX and H. Schultz shall each have the right to request that 
the Accountants, as defined in Section 4.17(d) hereof, review the Schultz Loan  
Worksheet and the amount of the Assumed Schultz Loan. In the event that such    
determination shows that theamount PRGX paid under Section 2.2(c) above was     
incorrect and that payments are required by PRGX or by H. Schultz, any such     
payment shall be made by H. Schultz or PRGX to the other, as the case may be,   
within 15 days after completion of the review by the Accountants, and PRGX's    
payment, after satisfying any such post-Closing review rights and payment       
adjustments, shall be in full and final settlement of all amounts of principal  
and accrued interest owed by PRGX to H. Schultz in respect of the Assumed       
Schultz Loan. The fees and expenses charged by the Accountants in respect of    
such review shall be borne equally by PRGX and H. Schultz.                      

      2.3      RETAINED LIABILITIES. The liabilities and obligations which
shall be retained by HSA-Texas shall consist of all liabilities of HSA-Texas    
that are not set forth on the Estimated Balance Sheet (other than the           
liabilities comprising the Assumed Schultz Loan and other than the liabilities  
described in Section 2.2(b) hereof, all of which are Assumed Liabilities), and  
the following liabilities, whether or not included on the Estimated Balance     
Sheet (the "Retained Liabilities"):                                             

                (a)      all liabilities secured by or related to the Dallas
Headquarters property described on Schedule 1.2 attached hereto and all other   
liabilities of any Company relating to indebtedness for borrowed money, except  
as specifically provided otherwise herein;                                      

                  (b)      all liabilities of the Companies and Shareholders for
federal, state, local or foreign Taxes, including Taxes incurred in respect of  
or measured by (i) the income of the Companies earned on or realized prior to   
the Closing Date to the extent such liabilities exceed the amount accrued for   
such liabilities on the December 31, 2000 Audited Statements and/or the         
Estimated Balance Sheet and (ii) any gain or income from the transfer of the    
Acquired Assets and other transactions contemplated herein;                     

              (c)      all claims and liabilities, whether arising on or
before, or subsequent to Closing, resulting from HSA-Texas' or Shareholders'    
breach, on or before Closing, of any covenant, condition or other obligation    
required of HSA-Texas or Shareholders under any Contract or Lease;              

           (d)      all liabilities under any Companies' severance
policies to any employee or Associate of the Companies (i) to whom PRGUSA       
offered employment as of the Closing Date and who either (a) rejected PRGUSA's  
offer of employment, (b) did not satisfy on the Closing Date the Employment     
Conditions specified herein or (c) voluntarily resigned his employment with     
PRGUSA within 30 days after the commencement of such person's employment with   
PRGUSA or (ii) to whom PRGUSA offered engagement as an independent contractor   
and such person did not accept such engagement (collectively "Persons Not       
Hired");                                                                        

                  (e)      except as specifically provided in Section 2.2(b)(iv)
with respect to certain severance obligations, any liabilities with respect to  
employee benefits (including any liability for unused vacation or sick pay) or  
under any Employee Benefit Plan;                                                

               (f)      all non-Business payables of any of the Companies,
meaning those not directly related to the Business to be acquired by PRGX       
pursuant hereto;                                                                

                  (g)      all obligations and liabilities in excess of or other
than the "in the money value" as of the Closing Date as accrued on the Estimated
Balance Sheet with respect to HSA-Texas Options of Persons Not Hired and        
HSA-Texas SARs; and                                                             

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                  (h)      all obligations and liabilities to any shareholder of
HSA Texas who exercises dissenters' rights.                                     

2.4      HSA-TEXAS OPTIONS AND HSA-TEXAS SARS.                

                 (a)      Assumed Options. Concurrently with the Closing, PRGX
will assume all of the HSA-Texas Options set forth on Schedule 5.5(b) held by   
each of those Optionees identified on Schedule 5.5(b) hereof, who either is     
offered and accepts employment with PRGX and meets the Employment Conditions, is
offered and accepts engagement by PRGX as an independent contractor, or has     
agreed to serve on the Board of Directors of PRGX (with all of the HSA-Texas    
Options of such Optionees being the "Options to be Assumed"). With respect to   
each of the Options to be Assumed, PRGX shall substitute PRGX Common Stock for  
HSA-Texas Common Stock in respect of the unexercised portion of such HSA-Texas  
Option in accordance with the 1999 Howard Schultz & Associates Stock Option     
Plan, as amended prior to the Closing Date in accordance herewith (the          
"HSA-Texas Option Plan") and based on the Option Conversion Ratio described     
herein (after such assumption and conversion, the "Assumed Options"). Effective 
upon the Closing, PRGX shall adopt a stock option plan providing substantially  
the same terms and conditions as the HSA-Texas Option Plan, as amended as       
described herein for the administration by PRGX of the Assumed Options. The     
number of shares of PRGX Common Stock subject to each Assumed Option shall equal
the number of shares of HSA-Texas Common Stock to which the corresponding       
HSA-Texas Option was subject immediately prior to the Closing, multiplied by the
Option Conversion Ratio (rounded to the nearest whole share), and the per share 
exercise price of such Assumed Option shall equal the exercise price of the     
corresponding HSA-Texas Option immediately prior to the Closing, divided by the 
Option Conversion Ratio, rounded upward to the nearest whole cent. The Assumed  
Options shall be fully vested and immediately exercisable upon the Closing,     
subject to compliance with applicable federal and state securities laws, and    
shall expire on the fifth anniversary of the Closing Date.                      

              (b)      Amendment to HSA-Texas Option Plan; Mechanics for
Receiving Assumed Option. Prior to Closing, HSA-Texas shall adopt an amended and
restated HSA-Texas Option Plan in substantially the same form attached hereto as
Exhibit 2.4(b), and, if necessary, amend the HSA-Texas option grant agreements, 
in order to extend the expiration date of the HSA-Texas Options upon a "change  
of control" as defined therein to five years, modify or delete those provisions 
that relate to HSA-Texas' status as a private company whose shares of capital   
stock are not publicly traded and such other amendments as mutually agreed by   
PRGX and HSA-Texas. Promptly after the Closing, HSA-Texas and PRGX shall jointly
notify all Optionees whose HSA-Texas Options have become Assumed Options of the 
number of shares of PRGX Common Stock subject thereto and the exercise price    
thereof. HSA-Texas shall cooperate with PRGX in connection with PRGX's          
distribution of this information to the Optionees as described herein.          

              (c)      Option Conversion Ratio. For purposes hereof, the
"Option Conversion Ratio" means the Per Share Value, as determined pursuant to  
Section 2.1(b) hereof, divided by the PRGX Average Price.                       

                (d)      Adjustments. If, between the date of this Agreement
and the Closing Date, the outstanding PRGX Common Stock or HSA-Texas Common     
Stock shall have been changed into a different number of shares or different    
class by reason of any reclassification, recapitalization, stock split,         
split-up, combination or exchange of shares, or a stock dividend or dividend    
payable in any other securities shall be declared with a record date within such
period, or any similar event shall have occurred, the Option Conversion Ratio,  
to the extent not adjusted as a result of the adjustment to the PRGX Average    
Price, shall be appropriately adjusted to provide to the Optionees the same     
economic effect as contemplated by this Agreement prior to such event.          

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           (e)      Form S-8. PRGX shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of PRGX Common  
Stock for delivery upon exercise of the Assumed Options. As soon as practicable,
but in no event more than 30 days, after the Closing Date, PRGX shall file a    
registration statement on Form S-8 (or any successor or other appropriate form) 
with respect to the shares of PRGX Common Stock subject to such Assumed Options,
and shall use its commercially reasonable efforts to maintain the effectiveness 
of such registration statement or registration statements (and maintain the     
current status of the prospectus or prospectuses referred to therein) for so    
long as such Assumed Options remain outstanding.                                

      (f)      HSA-Texas SARs. With respect to all stock
appreciation rights granted by HSA-Texas (collectively, the "HSA-Texas SARs"),  
HSA-Texas shall, prior to or concurrently with the Closing, acquire for cash in 
an amount equal to the aggregate difference between the Per Share Value and the 
grant price of such HSA-Texas SARs, provided such difference is a positive      
number, plus any other amount required to extinguish such HSA-Texas SARs.       
HSA-Texas will be responsible for deducting or withholding from such payment and
remitting to the appropriate Tax Authority(ies) such amount or amounts as may be
required to be so deducted or withheld pursuant to applicable federal, state or 
local laws.                                                                     

           (g)      Persons Not Hired. In respect of the HSA-Texas
Options held by any Person Not Hired, HSA-Texas shall, prior to or concurrently 
with the Closing, cancel all such HSA-Texas Options and pay such Optionees an   
amount in cash equal to the "spread" in respect of such HSA-Texas Option, as    
defined in and in accordance with Article XI of the HSA-Texas Option Plan.      
HSA-Texas will be responsible for deducting or withholding from such payment and
remitting to the appropriate Tax Authority(ies) such amount or amounts as may be
required to be so deducted or withheld pursuant to applicable federal, state or 
local laws.                                                                     

 ARTICLE 3
 APPROVALS

3.1      APPROVALS; PROXY STATEMENT; SHAREHOLDER MEETINGS.    

(a)      PRGX Approvals.                    

                           (i)      PRGX Recommendations. PRGX hereby represents
that the PRGX Board of Directors (the "PRGX Board"), at a meeting duly called   
and held, has (A) approved this Agreement and the transactions contemplated     
hereby, including the Acquisition and the Concurrent Acquisitions, the issuance 
of shares of PRGX Common Stock as Consideration in connection with the          
Acquisition and as consideration in connection with the Concurrent Acquisitions 
and the issuance of options to acquire PRGX Common Stock in connection with the 
assumption of the Assumed Options (the "PRGX Share Issuance and Option          
Issuance"), and (B) resolved to recommend approval of the PRGX Share Issuance   
and Option Issuance by the PRGX shareholders and the election of the directors  
to be nominated in accordance with Section 4.18 hereof at the PRGX Special      
Meeting (the recommendations referred to in clause (B) above are collectively   
referred to in this Agreement as the "PRGX Recommendations").                   

                          (ii)     Opinion of PRGX Financial Advisor. PRGX has
received the opinion of Merrill Lynch (the "Fairness Opinion"), dated on or     
about the date of the Letter of Intent by and among PRGX, HSA-Texas, the        
Shareholders and certain other shareholders of HSA-Texas dated July 24, 2001    
(the "Letter of Intent"), and updated as of August 3, 2001, to the effect that, 
as of such date, the aggregate consideration to be paid by PRGX pursuant to this
Agreement and the Stock Agreement is fair to PRGX from a financial point of     
view, a copy of which opinion has been made available to HSA-Texas.             

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                   (iii)    PRGX Special Meeting. PRGX shall, in
accordance with all applicable laws, duly call, give notice of, convene and hold
a special meeting of its shareholders (the "PRGX Special Meeting") as soon as   
practicable for the purpose of considering and taking action on the PRGX        
Recommendations. In order to comply with certain requirements of The Nasdaq     
National Market, on which shares of PRGX Common Stock are listed, PRGX shall, as
promptly as practicable after the date of this Agreement prepare and file with  
the Securities and Exchange Commission (the "SEC") in accordance with applicable
regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") a proxy statement to be mailed by PRGX to its shareholders soliciting     
votes in favor of the PRGX Recommendations at the PRGX Special Meeting (the     
"Proxy Statement").                                                             

(b)      HSA-Texas Approvals.               

                           (i)      HSA-Texas Recommendations. HSA-Texas and the
Shareholders hereby represent and warrant that the HSA-Texas Board of Directors 
(the "HSA-Texas Board"), at a meeting duly called and held, has unanimously (A) 
approved this Agreement and the transactions contemplated hereby, including the 
Acquisition and the Concurrent Acquisitions, and (B) resolved to recommend      
approval and adoption of this Agreement, the Acquisition and the Concurrent     
Acquisitions by the HSA-Texas shareholders (the recommendations referred to in  
clause (B) above are collectively referred to in this Agreement as the          
"HSA-Texas Recommendations").                                                   

                         (ii)     HSA-Texas Shareholder Approval. As soon as
practicable after delivery by HSA-Texas to each of the holders of HSA-Texas     
Voting Common Stock of (A) a draft of this Agreement, (B) a copy of any other   
documents or information which the holders of HSA-Texas Voting Common Stock     
request PRGX to deliver to them, and (C) any other documents and information    
required by Texas corporate law to be delivered by HSA-Texas to the holders of  
HSA-Texas Voting Common Stock, HSA-Texas shall within 5 days after the date of  
this Agreement, in accordance with all applicable laws, HSA-Texas' articles of  
incorporation and bylaws, either (1) duly call, give notice of (or obtain       
appropriate waivers of notice of), convene and hold a special meeting of the    
holders of HSA-Texas Voting Common Stock to consider and take action on the     
HSA-Texas Recommendations or (2) obtain the unanimous written consent of the    
holders of HSA-Texas Voting Common Stock containing resolutions approving the   
HSA-Texas Recommendations. The Shareholders covenant and agree that they shall  
vote in favor of the HSA-Texas Recommendations at any such special meeting or   
shall execute the HSA-Texas unanimous consent within 15 days after the date of  
this Agreement.                                                                 

               (c)      PRGX Shares. The shares of PRGX Common Stock to be
issued as Consideration hereunder (the "PRGX Shares") will be unregistered,     
restricted securities, issued pursuant to customary investment representations  
by HSA-Texas and the Shareholders, as set forth in Section 5.38 hereof.         

           (d)      Cooperation. PRGX shall obtain and furnish the
information required by the SEC to be included in the Proxy Statement. HSA-Texas
and Shareholders agree that they will promptly provide PRGX with information    
concerning HSA-Texas and its shareholders required to be included in the Proxy  
Statement. PRGX shall use its reasonable best efforts to respond to any comments
of the SEC with respect to the Proxy Statement as promptly as practicable. If at
any time prior to the Closing Date there shall occur any event with respect to  
PRGX or HSA-Texas or any of their respective subsidiaries, as the case may be,  
or with respect to other information supplied by PRGX or HSA-Texas, as the case 
may be, for inclusion in the Proxy Statement, in either case which event is     
required to be described in an amendment of, or a supplement to, the Proxy      
Statement, PRGX or HSA-Texas shall notify the other party, and such event shall 
be so described, and such amendment or supplement shall be promptly filed with  
the SEC and, as required by applicable law, disseminated to the PRGX            
shareholders. PRGX shall notify HSA-Texas promptly upon (i) the issuance or     
threatened issuance of any stop order or other order preventing or              

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suspending the use of the Proxy Statement, (ii) any proceedings commenced or    
threatened to be commenced by the SEC or any state securities commission that   
might result in the issuance of a stop order or other order or suspension of    
use of the Proxy Statement or (iii) any request by the SEC to supplement or     
amend the Proxy Statement after the mailing thereof. PRGX and, to the extent    
applicable, HSA-Texas, shall use their reasonable best efforts to prevent or    
promptly remove any stop order or other order preventing or suspending the use  
of the Proxy Statement and to comply with any such request by the SEC or any    
state securities commission to amend or supplement the Proxy Statement.         

              (e)      Solicitation of Proxies. PRGX Board shall use its
commercially reasonable efforts to solicit from the PRGX shareholders proxies in
favor of the PRGX Recommendations and shall take all other action necessary or  
in the opinion of PRGX advisable to secure the vote of the PRGX shareholders    
required for the approval of the PRGX Recommendations.                          

              (f)      SEC Comments. PRGX and HSA-Texas will notify each
other promptly of the receipt by such party or its representatives of any       
comments from the SEC or its staff or any other appropriate government official 
and of any requests by the SEC or its staff or any other appropriate government 
official for amendments or supplements to the Proxy Statement or for additional 
information and will supply the other party with copies of all correspondence   
between PRGX, HSA-Texas or any of their respective representatives, on the one  
hand, and the SEC or its staff or any other appropriate government official, on 
the other hand, with respect thereto.                                           

               (g)      HSA-Texas Comfort Letters. HSA-Texas shall use its
commercially reasonable efforts to cause to be delivered to PRGX a letter from  
KPMG LLP (Dallas), dated as of the date on which the Proxy Statement is mailed  
to the PRGX shareholders, which letter will be updated as of the Closing Date,  
addressed to PRGX, with respect to data contained in the Proxy Statement, in    
form and substance reasonably satisfactory to PRGX and customary in scope and   
substance for comfort letters delivered by independent public accountants in    
connection with proxy statements similar to the Proxy Statement.                

                  (h)      PRGX Comfort Letters. PRGX shall use its commercially
reasonable efforts to cause to be delivered to HSA-Texas a letter from KPMG LLP 
(Atlanta), dated as of the date on which the Proxy Statement is mailed to the   
PRGX shareholders, which letter will be updated as of the Closing Date,         
addressed to HSA-Texas, with respect to data contained in the Proxy Statement,  
in form and substance reasonably satisfactory to HSA-Texas and customary in     
scope and substance for comfort letters delivered by independent public         
accountants in connection with proxy statements similar to the Proxy Statement. 

         3.2               LISTING OF SHARES. PRGX shall use its reasonable best
efforts to cause the shares of PRGX Common Stock to be issued in the            
Acquisition, and the shares of PRGX Common Stock to be reserved for issuance    
upon exercise of the Assumed Options, to be approved for listing on The Nasdaq  
National Market, subject to official notice of issuance, concurrently with the  
Closing Date.                                                                   

3.3               INTENTIONALLY OMITTED.                      

3.4               NO NEGOTIATIONS.                            

                (a)      HSA-Texas. From and after the date hereof until the
earlier of the termination of this Agreement pursuant to Article 9 hereof or the
Closing, neither HSA-Texas nor any of the Shareholders will take any of the     
following actions, nor will HSA-Texas or any of the Shareholders permit any of  
HSA-Texas or the Subsidiaries to take any of the following actions, nor will    
HSA-Texas or any of the Shareholders authorize any officer, director or employee
of or any investment banker, attorney, accountant or other advisor or           
representative of, HSA-Texas or any of its Subsidiaries to take any of the      
following actions (and will instruct such persons not to take any of the        
following actions), directly or indirectly: (i)                                 

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solicit, initiate or encourage the submission of a proposal for any HSA-Texas   
Alternative Transaction or (ii) participate in any discussions or negotiations  
regarding, or furnish to any "Third Party" (which, for all purposes of this     
Agreement includes any "person" as such term is defined in Section 13(d)(3) of  
the Exchange Act other than PRGX, HSA-Texas or any affiliate thereof) any       
information with respect to, or take any other action knowingly to facilitate,  
any HSA-Texas Alternative Transaction or any inquiries or the making of any     
proposal that constitutes, or may reasonably be expected to lead to, any        
HSA-Texas Alternative Transaction. For all purposes of this Agreement,          
"HSA-Texas Alternative Transaction" means: (i) a merger, reorganization, share  
exchange, consolidation, business combination, recapitalization, liquidation,   
dissolution or similar transaction involving HSA-Texas or any of those of the   
Subsidiaries whose assets, individually or in the aggregate, constitute 20% or  
more of the consolidated assets of HSA-Texas and its Subsidiaries, (ii) any     
purchase or sale of 20% or more of the consolidated assets (including stock of  
Subsidiaries) of HSA-Texas and its Subsidiaries outside the ordinary course of  
business (iii) the purchase or sale of, or tender or exchange offer for, capital
stock of HSA-Texas or any of the Subsidiaries, (iv) the issuance by HSA-Texas of
capital stock containing terms which are inconsistent with the consummation of  
the transactions contemplated by this Agreement, or (v) the declaration or      
payment of any dividend or distribution other than those permitted by Section   
4.5(a)(iii) hereof. HSA-Texas and the Shareholders agree to notify PRGX in      
writing promptly upon becoming aware that it or they have received any          
indications in writing or otherwise of interest, requests for information or    
offers in respect of an HSA-Texas Alternative Transaction relating to any of the
assets or operations of HSA-Texas or its Subsidiaries, and will communicate to  
PRGX the identity of the potential buyer and, if indicated, whether or not the  
consideration in respect of the HSA-Texas Alternative Transaction is in an      
amount greater than the Consideration provided for herein or in the Stock       
Agreement. HSA-Texas and Shareholders represent that neither it nor they are    
party to or bound by any agreement with respect to an HSA-Texas Alternative     
Transaction.                                                                    

           (b)      PRGX. From and after the date hereof until the
earlier of the termination of this Agreement pursuant to Article 9 hereof or the
Closing, PRGX will not, and will not permit any of its subsidiaries to, and will
not authorize any officer, director or employee of or any investment banker,    
attorney, accountant or other advisor or representative of, PRGX or any of its  
subsidiaries to (and will instruct such persons not to), directly or indirectly,
(i) solicit, initiate or encourage the submission of a proposal for any PRGX    
Alternative Transaction or (ii) participate in any discussions or negotiations  
regarding, or furnish to any Third Party any information with respect to, or    
take any other action knowingly to facilitate, any PRGX Alternative Transaction 
or any inquiries or the making of any proposal that constitutes, or may         
reasonably be expected to lead to, any PRGX Alternative Transaction; provided,  
however, that nothing contained in this Section 3.4(b) shall prohibit the PRGX  
Board from furnishing information to, or entering into discussions or           
negotiations with, any Third Party that (A) makes an unsolicited bona fide      
proposal of a PRGX Alternative Transaction if (1) the PRGX Board determines in  
good faith that such action is necessary for the PRGX Board to comply with its  
fiduciary duties to PRGX's shareholders under applicable law, (2) the PRGX Board
determines in good faith that such PRGX Alternative Transaction would, if       
consummated, constitute or be reasonably likely to constitute a Superior        
Proposal and (3) prior to taking such action, receives from such Third Party an 
executed confidentiality agreement in reasonably customary form or (B) agrees to
include in the PRGX Alternative Transaction the concurrent acquisition of       
HSA-Texas and the Affiliated Foreign Operating Companies or substantially all of
HSA-Texas' and the Affiliated Foreign Operating Companies' assets as if         
HSA-Texas and the Affiliated Foreign Operating Companies were a part of PRGX at 
the consummation of the PRGX Alternative Transaction. PRGX will promptly notify 
HSA-Texas of its receipt of any written indications of interest or written      
offers in respect of a PRGX Alternative Transaction.                            

              (c)      PRGX Recommendations. The PRGX Board will not (i)
withdraw or modify, or propose to withdraw or to modify, in any case in a manner
adverse to HSA-Texas, the PRGX Recommendations or (ii) approve or recommend to  
its shareholders a PRGX Alternative Transaction,                                

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unless (A) the PRGX Board determines in good faith that it is necessary to      
terminate this Agreement in order for the PRGX Board to comply with its         
fiduciary duties to PRGX's shareholders under applicable law, in which case,    
PRGX will terminate this Agreement and pay HSA-Texas the Termination Fee as     
provided in Section 9.2(e) hereof or (B) such PRGX Alternative Transaction      
includes the concurrent acquisition of HSA-Texas and the Affiliated Foreign     
Operating Companies or substantially all of HSA-Texas' and the Affiliated       
Foreign Operating Companies' assets as if HSA-Texas and the Affiliated Foreign  
Operating Companies were a part of PRGX at the consummation of the PRGX         
Alternative Transaction, in which case PRGX may terminate this Agreement without
any obligation to pay HSA-Texas any Termination Fee. The PRGX Board may not     
approve or recommend a PRGX Alternative Transaction on the basis that it is     
necessary to comply with its fiduciary duties to PRGX's shareholders (and in    
connection therewith, withdraw or modify the PRGX Recommendations) unless (1)   
such PRGX Alternative Transaction is a Superior Proposal and (2) the PRGX Board 
shall have specifically determined that such action is necessary for the PRGX   
Board to comply with its fiduciary duties to PRGX's shareholders. Nothing       
contained in this Section 3.4(c) shall prohibit PRGX from taking and disclosing 
to its shareholders a position contemplated by Rule 14e-2(a) promulgated under  
the Exchange Act or from making any disclosure to PRGX's shareholders which, in 
the good faith reasonable judgment of the PRGX Board, is required under         
applicable law; provided, that except as otherwise permitted in this Section    
3.4(c), PRGX shall not withdraw or modify, or propose to withdraw or modify, the
PRGX Recommendations or approve or recommend, or propose to approve or          
recommend, a PRGX Alternative Transaction. Notwithstanding anything contained in
this Agreement to the contrary, (x) any action by the PRGX Board permitted by,  
and taken in accordance with, this Section 3.4(c) shall not constitute a breach 
of this Agreement by PRGX and (y) nothing in this Agreement shall (aa) limit the
PRGX's Board's ability to make any disclosure to PRGX's shareholders that the   
PRGX Board determines in good faith is required to be made to satisfy its       
fiduciary duties under applicable law or (bb) limit PRGX's ability to make any  
disclosure required by applicable law, and such actions shall not be considered 
a breach of this Agreement.                                                     

(d)      Definitions.                       

                        (i)      For all purposes of this Agreement, "PRGX
Alternative Transaction" specifically excludes each of the proposed divestitures
described on Schedule 3.4(d) hereof and means: (A) a merger, reorganization,    
share exchange, consolidation, business combination, recapitalization,          
liquidation, dissolution or similar transaction involving PRGX or any of those  
of its subsidiaries whose assets, individually or in the aggregate, constitute  
20% or more of the consolidated assets of PRGX and its subsidiaries; (B) any    
purchase or sale of 20% or more of the consolidated assets (including stock of  
subsidiaries) of PRGX and its subsidiaries, taken as a whole; (C) the purchase  
or sale of, or tender or exchange offer for, 20% or more of the shares of       
capital stock of PRGX; (D) the issuance by PRGX of capital stock containing     
terms which are inconsistent with the consummation of the transactions          
contemplated by this Agreement; (E) the declaration or payment of a dividend    
representing 20% or more of the value of PRGX and its subsidiaries, taken as a  
whole; or (F) the repurchase by PRGX or any of its subsidiaries of an aggregate 
of more than 20% of the outstanding shares of capital stock of PRGX, except for 
repurchases pursuant to PRGX's previously announced stock buy back plan.        

                    (ii)     For all purposes of this Agreement, a
"Superior Proposal" means any bona fide written unsolicited proposal of a PRGX  
Alternative Transaction that the PRGX Board determines in its good faith        
business judgment (A) would result in a transaction, if consummated, that would 
be superior to PRGX's shareholders from a financial point of view as compared to
the transactions contemplated hereby and (B) is reasonably capable of being     
consummated in accordance with its terms (including that any financing required 
to consummate the transaction contemplated by such proposal is reasonably likely
to be obtained), in each case taking into account all factors the PRGX Board    
considers relevant, including all legal, financial, regulatory and other aspects
of the proposal and the Third Party.                                            

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        3.5      REGISTRATION RIGHTS AGREEMENT. Concurrently with the Closing,
PRGX, each of the Shareholders and each holder of shares of the Foreign         
Affiliated Operating Companies (other than Acceptor Professional Directors Pte  
Ltd) will enter into a registration rights agreement in respect of the shares of
PRGX Common Stock issued in connection with this Acquisition and the Concurrent 
Acquisitions in substantially the same form attached hereto as Exhibit 3.5A (the
"Registration Rights Agreement"). In addition, at the Closing, each person, in  
addition to the Shareholders, who is a holder of HSA-Texas Voting Common Stock  
or of HSA-Texas Non-Voting Common Stock and who has executed and delivered to   
PRGX at or prior to the Closing an investment representation letter in          
substantially the same form as Exhibit 3.5B attached hereto (the "Investment    
Representation Letter"), may execute at the Closing and become a party to the   
Registration Rights Agreement.                                                  

 ARTICLE 4
 ADDITIONAL COVENANTS AND AGREEMENTS

4.1      DUE DILIGENCE REVIEW.                                

               (a)      Due Diligence. HSA-Texas shall deliver to PRGX all
Schedules required to be attached hereto in accordance with Section 4.21 and    
shall promptly deliver to PRGX true, correct and complete copies of all         
documents, together with all amendments thereto through the date of execution   
hereof, contemplated by this Agreement and required by the terms hereof to be   
listed on the Exhibits or Schedules attached hereto not previously delivered to 
PRGX, including any Material Leases, Material Contracts, insurance policies, the
Historical Statements and Companies' Tax Returns for 1997, 1998 and 1999. Prior 
to the Closing Date, PRGX, its counsel and representatives, including KPMG LLP  
(collectively, the "PRGX Representatives") shall have conducted such due        
diligence investigation of the Business of HSA-Texas as PRGX shall determine.   
HSA-Texas shall provide such persons full access during normal business hours to
the offices, properties, books, records, files and other documents and          
information regarding HSA-Texas' assets and Business, to HSA-Texas' employees,  
independent contractors, Associates, officers, sales agents, project managers,  
contract service providers, strategic partners, other representatives and       
customers and to all materials, programs, data, reports, systems, practices,    
deliverables, and other properties and assets and shall fully cooperate with    
PRGX and such persons and provide full opportunity to said parties to make such 
investigation and copy such documents as PRGX shall desire; provided, however,  
that (i) no information with respect to any specific Clients will be required to
be disclosed pursuant to this Section prior to or in any manner other than as   
set forth in the Schedules attached hereto (or to be attached hereto) in        
accordance with Section 5.14, Section 5.15 (with respect to information about   
Clients) or Section 5.17 hereof, (ii) no information with respect to trade      
secrets relating to technology and/or auditing methodology of the Business will 
be provided prior to obtaining HSA-Texas' consent, which consent will not be    
unreasonably withheld, (iii) with respect to employees of the Business, PRGX    
will not communicate with such persons without prior notice to HSA-Texas and    
providing HSA-Texas an opportunity to be present at any meeting with such       
employees, and (iv) with respect to Associates, PRGX will not communicate with  
the Associates prior to obtaining HSA-Texas' consent, which consent will not be 
unreasonably withheld. Such persons shall not contact independent contractors or
customers of HSA-Texas without HSA-Texas' prior consent. No investigation of the
Business of HSA-Texas by PRGX, its counsel and representatives, including the   
PRGX Representatives, either prior to, on, or after the date hereof shall affect
PRGX's right to rely upon, or HSA-Texas' and Shareholders' responsibility for   
the accuracy of the representations and warranties of HSA-Texas and Shareholders
made herein.                                                                    

           (b)      Historical Statements. As soon as practicable,
HSA-Texas and Shareholders, at their sole cost and expense, shall prepare and   
provide to PRGX an audited combined balance sheet (including the notes thereto) 
of HSA-Texas, its consolidated Subsidiaries, and the Affiliated Foreign         
Operating Companies prepared as of December 31, 2000 and December 31, 1999, and 
the related audited                                                             

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combined statements of operations, changes in Shareholders' equity and cash     
flows for each of the years in the three year period ending December 30, 2000,  
including in each case, the notes thereto, together with an unqualified audit   
report thereon (the "Report") of KPMG LLP, HSA-Texas' independent auditor       
(collectively, the "Audited Statements") and separate internal unaudited        
combined quarterly balance sheets and combined income statements as of and for  
the calendar quarters ended June 30, 2001 and September 30, 2001 (collectively, 
such quarterly statements with the Audited Statements, the "Historical          
Statements"). In addition, HSA-Texas and Shareholders shall provide PRGX with   
such other financial information, including copies of books and records and     
other materials (i) required in connection with filing the Proxy Statement, (ii)
sufficient to enable PRGX to prepare such pro forma financial statements as     
shall comply with the provisions of Article 11 of Regulation S-X to be presented
in the Proxy Statement and any filing required pursuant to the Exchange Act, and
(iii) in form and substance satisfying the requirements for filing the          
Historical Statements and Report with the Securities and Exchange Commission.   
HSA-Texas and Shareholders will, and will cause each of its Subsidiaries' and   
the Affiliated Foreign Operating Companies' officers, directors and employees   
to, cooperate fully with PRGX and the PRGX Representatives to provide all such  
information and documents as PRGX or the PRGX Representatives may periodically  
request.                                                                        

              (c)      Estimated Financials. On or before seven business
days prior to the Closing Date, HSA-Texas shall prepare in accordance with      
Section 4.1(d) hereof, and PRGX and HSA-Texas shall agree upon, a combined      
estimated balance sheet of HSA-Texas, its majority-owned Subsidiaries, and the  
Affiliated Foreign Operating Companies, including a detailed listing of the     
assets and liabilities of the Business as of the Closing Date and such separate 
estimated balance sheets, on a stand-alone basis as of the Closing Date, of     
those operating units of the Business as agreed to by PRGX and HSA-Texas        
(collectively the "Estimated Balance Sheet"), and a combined written estimated  
income statement of HSA-Texas, its majority-owned Subsidiaries, and the         
Affiliated Foreign Operating Companies, including a detailed listing of         
revenues, expenses and income of the Business for the period from January 1,    
2001 through the Closing Date and such separate estimated income statements, on 
a stand-alone basis for such period, of those operating units of the Business as
agreed to by PRGX and HSA-Texas (collectively the "Estimated Income Statement"),
and a combined written estimated statement of cash flows of HSA-Texas, its      
consolidated Subsidiaries, and the Affiliated Foreign Operating Companies for   
the period from January 1, 2001 through the Closing Date and such separate      
estimated statements of cash flows, on a stand-alone basis for such period, of  
those operating units of the Business as agreed to by PRGX and HSA-Texas (the   
"Estimated Statement of Cash Flows") (collectively, the Estimated Balance Sheet,
the Estimated Income Statement, the Estimated Statement of Cash Flows, being the
"Estimated Financials"), each of which statements will contain with respect to  
any item which is not capable of determination at Closing, a good faith estimate
of such item as of the Closing Date, and which shall, when delivered, be        
attached hereto as Schedule 4.1(c).                                             

               (d)      Preparation of Estimated Financials. The Estimated
Financials shall be prepared in accordance with generally accepted accounting   
principles for financial reporting in the United States ("GAAP") applied on a   
basis consistent with the Historical Statements including the notes thereto,    
shall include the same categories of assets and liabilities of the Companies as 
of the Closing Date as were included on the December 31, 2000 balance sheet     
included in the Audited Statements and the same items of revenues, expenses and 
income of the Companies as of the Closing Date as were included on the income   
statement for the year ended December 31, 2000 included in the Audited          
Statements, and shall be consistent with HSA-Texas' past accounting practices   
and procedures.                                                                 

                (e)      Confidentiality. Between the date of this Agreement
and the Closing Date, PRGX and HSA-Texas will maintain in confidence, and will  
cause their respective directors, officers, employees, agents, representatives  
and advisors, to maintain in confidence any written, oral or other information  
obtained in confidence from any other party hereto in connection with this      
Agreement or the transactions contemplated herein, unless (a) such information  
is already known to such party or to others not bound by a                      

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duty of confidentiality or such information becomes publicly available through  
no fault of such party, (b) or use of such information is necessary or          
appropriate in making any filing or obtaining any consent or approval required  
for the consummation of the transactions contemplated herein, or (c) the        
furnishing of such information is required by, or is necessary or appropriate in
connection with, legal proceedings or any statute, regulation or rule of any    
Governmental Entity. The parties hereto will hold any information obtained      
pursuant to this Agreement in confidence in accordance with, and shall otherwise
be subject to the Nondisclosure Agreement dated November 2000 between HSA-Texas 
and PRGX (the "Nondisclosure Agreement"), which Nondisclosure Agreement shall   
continue in full force and effect.                                              

4.2      EMPLOYMENT MATTERS.                                  

                  (a)      H. Schultz and A. Schultz Offer Letters. Concurrently
with the Closing, PRGX and H. Schultz shall enter into an offer letter for      
two-year employment (the "H. Schultz Offer Letter") in substantially the form of
Exhibit 4.2A attached hereto and PRGX and A. Schultz shall enter into an offer  
letter for two-year employment (the "A. Schultz Offer Letter") in substantially 
the form of Exhibit 4.2B attached hereto.                                       

(b)      Other PRGX Employment.             

                          (i)      The Business is conducted through employees
of the Companies and through independent contractors directly or indirectly     
engaged by the Companies (including those persons designated as Regional        
Associates, Resident Associates, Senior Associates, Junior Associates, Principal
Associates or otherwise who are engaged directly or indirectly by the Companies 
or any other Associate or affiliate thereof) to perform accounts payable        
auditing and related consulting services, which independent contractors         
(collectively such independent contractors being, "Associates"). PRGX shall     
cause its wholly owned subsidiary, The Profit Recovery Group USA, Inc.          
("PRGUSA") to offer employment to such employees and Associates as indicated on 
Schedule 4.2 attached hereto, each of whom are persons whose continued          
employment is important to the success of the Business (such persons, as        
designated or modified from time to time by PRGX prior to the Closing, together 
with H. Schultz and A. Schultz, being the "Key Employees"). PRGX may, but shall 
have no obligation to offer employment to any other employees of the Companies  
or any other Associates.                                                        

                     (ii)     With respect to any individual offered
employment by PRGUSA, such employment shall be subject to the following         
conditions: such person shall (A) report to work for PRGUSA, (B) shall sign     
customary documents and forms including a Form I-9 and PRGUSA's Employee        
Agreement (providing for non-competition, non-solicitation and confidentiality  
covenants during the term of such person's employment and for 24 months         
thereafter), in substantially the form attached hereto as Exhibit 4.2C (the     
"Employee Agreement"), if a Key Employee, prior to the Closing Date, if not a   
Key Employee, within 60 days after the Closing Date, and (C) meet PRGUSA's then 
current employment standards (collectively, the "Employment Conditions");       
provided that nothing contained herein shall preclude PRGX or PRGUSA from       
revising the Employment Conditions after the Closing or effecting the           
termination of any such persons after the Closing. HSA-Texas and Shareholders   
shall cooperate with and assist PRGX in obtaining executed Employee Agreements  
from Key Employees and such other employees, consultants and independent        
contractors as PRGX designates as needed or requested by PRGX. Notwithstanding  
the foregoing, in no event shall PRGX be required to provide employee benefits  
the same as or similar to those provided by HSA-Texas or otherwise.             

             (c)      Payroll. The parties acknowledge that, after the
Closing, PRGUSA shall move those employees and Associates of the Business who   
are offered and accept employment by PRGUSA and who meet the Employment         
Conditions (the "Hired Employees") to PRGUSA's payroll system as soon as        
practicable, but no later than a date 90 days after the Closing Date. Until such
time as such Hired                                                              

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Employees are included on PRGUSA's payroll system, HSA-Texas shall, when and as 
funded by PRGUSA, make disbursements on behalf of PRGUSA and as PRGUSA's agent  
to the Hired Employees for payroll and employee compensation earned after the   
Closing Date in respect of their employment by PRGUSA in accordance with        
HSA-Texas past practices pursuant to instructions from PRGUSA. PRGX will cause  
PRGUSA to fund HSA-Texas with all amounts necessary to make such payments prior 
to the time such payments are due to the Hired Employees, including payroll     
taxes, and PRGX shall indemnify and hold HSA-Texas harmless in respect of any   
and all liabilities arising from such arrangement, other than HSA-Texas' failure
to properly apply the funds advanced by PRGUSA.                                 

                 (d)      Continuation of Healthcare Coverage. HSA-Texas shall
use its best efforts to obtain and deliver to PRGX prior to the Closing an      
undertaking from its current group health and dental insurance providers that   
such providers will continue coverage of (a) the Hired Employees, (b) their     
covered dependents as of the Closing Date and (c) all other "M & A qualified    
beneficiaries" as of the Closing Date, as that term is defined in U.S. Treas.   
Reg. ss.54.4980B8, Q & A -4(a), with respect to the transactions contemplated   
hereby, within the meaning of such Treas. Reg., at PRGX's sole expense, subject 
to participants' contributions, deductibles and copayments, as applicable, until
such time as the Hired Employees are enrolled into such PRGUSA health and       
welfare benefit plans as such persons may be eligible to participate in.        
HSA-Texas shall notify PRGUSA of the termination of any group health or dental  
insurance plans sponsored by HSA-Texas which occurs after the Closing Date.     

                  (e)      HSA-Texas' 401(k) Plan. HSA-Texas agrees that it will
cause the account balance, if any, of each Business Employee under the HSA-Texas
401(k) Plan (the "401(k) Plan") to be fully vested as of the Closing Date. Such 
vested account balances shall include (i) the employer matching contribution on 
behalf of Business Employees for the 401(k) Plan's 2000 plan year (the "2000    
Employer Match"), and (ii) the employer matching contribution on behalf of      
Business Employees for the 401(k) Plan's 2001 plan year (the "2001 Employer     
Match") and (iii) if applicable, the accrued, prorated portion prior to the     
Closing Date, of the employer matching contribution on behalf of Business       
Employees for the 401(k) Plan's 2002 plan year (the "2002 Employer Match"). The 
2000 Employer Match, the 2001 Employer Match and, if applicable, the 2002 Match 
will be contributed by HSA-Texas to the 401(k) Plan on or prior to the Closing  
Date. At Closing, HSA-Texas shall deliver to PRGX an amendment to the 401(k)    
Plan, properly authorized by the Board of Directors of HSA-Texas, that ceases   
contributions to the 401(k) Plan effective from and after the Closing Date. As  
soon as reasonably practicable following the Closing, HSA-Texas shall (i) amend 
the 401(k) Plan to bring the 401(k) Plan into compliance with current laws,     
including, without limitation, changes in law described in Rev. Proc. 2000-27,  
2000-26 I.R.B. 1272, (ii) file the 401(k) Plan with the IRS pursuant to Form    
5310 to obtain a determination upon plan termination, and (iii) take all actions
subsequent to such filing as are necessary to obtain a favorable determination  
upon plan termination from the IRS, including, without limitation, making any   
amendments to the 401(k) Plan requested by the IRS. HSA-Texas shall bear all    
costs and expenses associated with the foregoing. Upon receipt of a favorable   
determination letter from the IRS with respect to the 401(k) Plan, HSA-Texas    
shall cause the 401(k) Plan to distribute the Participant's vested account      
balances in the 401(k) Plan in accordance with applicable law, and PRGUSA shall 
have no obligation to accept qualified direct transfer distributions from the   
401(k) Plan. Until such distributions are made, HSA-Texas, PRGX and PRGUSA shall
take such actions as are necessary to maintain any plan loan that any Business  
Employee may have outstanding from the 401(k) Plan ("HSA-Texas Plan Loan") in   
good standing and with repayment terms comparable to the repayment terms of such
HSA-Texas Plan Loan in effect prior to the Closing Date, including, without     
limitation, facilitating repayment of such HSA-Texas Plan Loans by means of     
payroll deduction from salary paid by PRGUSA. Once all distributions have been  
made from the 401(k) Plan, HSA-Texas shall take appropriate steps to terminate  
the 401(k) Plan. The obligations of HSA-Texas under this Section 4.2(e) shall be
assumed by the Shareholders following the liquidation of HSA-Texas.             

                 (f)      New PRGX Stock Options. Effective as of the Closing,
in consideration of their                                                       

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employment with PRGX, PRGX shall, pursuant to PRGX's standard stock option      
agreement (the "PRGX Stock Option Agreement"), grant to certain Key Employees   
(as mutually agreed to by PRGX and HSA-Texas), new non-qualified options to     
purchase that number of shares of PRGX Common Stock set forth in their          
respective PRGX Stock Option Agreements, at an exercise price equal to the      
closing sale price per share of PRGX Common Stock on the Closing Date (as       
reported in The Wall Street Journal published on the first business day         
immediately following the Closing Date) in amounts commensurate with those      
non-qualified options to purchase shares of PRGX Common Stock that PRGX has     
recently granted prior to the date hereof to PRGX personnel in similar jobs. In 
order to receive options to purchase PRGX Common Stock, such Person must be a   
Hired Employee.                                                                 

                  (g)      Notices to Employees. HSA-Texas shall, for itself and
on behalf of PRGX, acting as PRGX's agent, be solely responsible for providing  
any notices and other communications to employees, except for employees who     
receive offers of employment from by PRGX or PRGUSA, and to any state dislocated
worker unit and to other appropriate Governmental Entities, as required under   
the Workers Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101  
et. Seq., or any similar provision of any federal, state, regional, foreign or  
local law rule or regulation (collectively, the "WARN Act and Similar Laws").   
HSA-Texas shall use its best efforts to send all such required notices within 5 
days after the date on which PRGX first mails the Proxy Statement for the PRGX  
Special Meeting to PRGX shareholders. HSA-Texas agrees to indemnify the PRGX    
Indemnified Parties and hold them harmless in accordance with Article 7 hereof  
from and against any back pay, benefits, penalties, fines or any other claims,  
liabilities, lawsuits, losses, costs, damages or expenses (including reasonable 
attorneys' fees and expenses awarded to other parties as relief by any court of 
competent jurisdiction or incurred by the PRGX Indemnified Parties in litigation
or otherwise) arising out of and sustained by any of the PRGX Indemnified       
Parties due to or relating to any deficiency contained in such notices or       
communications, any failure to provide notices or communications required by the
WARN Act and Similar Laws in a timely manner within the prescribed time period  
prior to the Closing Date or any other failure to comply with the provisions of 
the WARN Act and Similar Laws.                                                  

                  4.3      CONSENTS. Promptly after execution of this Agreement,
HSA-Texas and Shareholders will apply for or otherwise seek, and use their best 
efforts to obtain, all consents, releases and approvals required with respect to
HSA-Texas and/or Shareholders for consummation of the transactions contemplated 
hereby, including without limitation, those consents listed in Schedule 5.4     
hereof (collectively, "Consents"). Any charges imposed by the lessors or other  
parties to the Assigned Contracts and Assigned Leases for such estoppels and    
consents shall be borne solely by HSA-Texas.                                    

             4.4      NON-COMPETITION AGREEMENT. Concurrently with the
Closing, in consideration of the acquisition of Acquired Assets as contemplated 
herein, HSA-Texas, the Shareholders, Michael Lowery, Gertrude Lowery, Charles   
Schembri and Mac Martirossian shall enter into a non-competition,               
non-solicitation, and confidentiality agreement with PRGX in substantially the  
form attached hereto as Exhibit 4.4 (the "Non-competition Agreement").          

     4.5      CONDUCT OF BUSINESS BY HSA-TEXAS PENDING
REORGANIZATION. HSA-Texas and Shareholders covenant and agree that, unless PRGX 
shall otherwise consent in writing or as otherwise specifically contemplated    
herein, between the date hereof and the Closing, the Business shall be conducted
only in, and HSA-Texas shall not take any action except in, the ordinary course 
of business and in a manner consistent with HSA-Texas' past practices; and      
HSA-Texas will use its best efforts to preserve substantially intact the        
Business of HSA-Texas, to keep available the services of the present officers,  
employees, and consultants of the Companies, and to preserve the present        
relationships of the Companies with customers, clients and other persons having 
business relationships with the Companies. HSA-Texas and Shareholders covenant  
and agree that between the date hereof and Closing, there shall be no material  
diminution of the Acquired Assets, nor any material increase in the Assumed     
Liabilities except for amounts                                                  

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owed by HSA-Texas to H. Schultz for advances of amounts that would be included  
in the definition of the Assumed Schultz Loan. By way of amplification and not  
limitation, except as expressly provided for in this Agreement, HSA-Texas and   
Shareholders covenant that, between the date hereof and the Closing, the        
Companies and Shareholders shall not, directly or indirectly, do any of the     
following without the prior written consent of PRGX, which consent will not be  
unreasonably withheld or delayed:                                               

                 (a)      (i) issue, sell, gift, pledge, transfer, dispose of,
encumber, authorize any shares of capital stock, or any options, warrants,      
convertible securities or other rights of any kind to acquire any shares of     
capital stock of, or any other ownership interest in, any Company; (ii) amend   
the Articles of Incorporation or By-Laws or other organizational documents of   
any Company; (iii) split, combine or reclassify any outstanding share of any    
Company's capital stock or other ownership interest, or declare, set aside or   
pay any dividend or distribution payable in cash, stock, property or otherwise  
with respect to any Company's capital stock or other ownership interest (except 
for (A) normal salary and bonuses earned in the ordinary course of business that
have been disclosed to PRGX in writing in advance of payment, and (B)           
distributions from HSA-Texas (not in excess of the amount set forth in Section  
1.2(f)) to enable its Shareholders to pay federal and state taxes on the taxable
income (for U.S. federal and state and foreign income tax purposes) from the    
Business' operations in the ordinary course of the business for the period from 
and after January 1, 2001 up to the Closing Date, in each case consistent with  
HSA-Texas' past practices and as disclosed to PRGX in writing in advance of     
payment, and (C) the aggregate amount of cash received by HSA-Texas from and    
after the date hereof and prior to the Closing Date attributable to the exercise
by its employees of any HSA-Texas Options) (iv) redeem, purchase or otherwise   
acquire any shares of any Company's capital stock or other ownership interest;  
or (v) enter into any contract, agreement, commitment or arrangement with       
respect to any of the matters set forth in this Section 4.5(a);                 

               (b)      except with respect to the Other Acquisitions, (i)
acquire (by merger, consolidation, or acquisition of stock or assets) any       
interest in any corporation, partnership or other business organization or      
division thereof; (ii) except in the ordinary course of business and in a manner
consistent with past practices, sell, pledge, dispose of, or encumber any assets
of any Company; (iii) enter into any material Contract or agreement, except for 
Client Contracts entered into in the ordinary course of business; (iv) authorize
or consummate any single capital expenditure in excess of $50,000 or capital    
expenditures in the aggregate in excess of $100,000; or (v) enter into or amend 
any contract, agreement, commitment or arrangement with respect to any of the   
matters set forth in this Section 4.5(b);                                       

                 (c)      take any action other than in the ordinary course of
business and in a manner consistent with past practice (none of which actions   
shall be unreasonable or unusual) with respect to materially increasing the     
compensation or other remuneration of any officer, director, Shareholder or     
employee of any Company, pay any bonuses to any of its employees (except for    
bonuses earned in the ordinary course of business and disclosed to PRGX in      
writing in advance of payment), or with respect to the grant of any severance or
termination pay (otherwise than pursuant to policies of HSA-Texas in effect on  
the date hereof and fully disclosed to PRGX in writing prior to the date hereof)
or with respect to any increase of benefits payable under its severance or      
termination pay policies in effect on the date hereof;                          

               (d)      make any payments except in the ordinary course of
business and in amounts and in a manner consistent with past practice (none of  
which payments shall be unreasonable or unusual), under any Employee Benefit    
Plan or otherwise to any employee of, or independent contractor or consultant   
to, any Company, enter into any Employee Benefit Plan, any employment or        
consulting agreement, grant or establish any new awards under any such existing 
Employee Benefit Plan or agreement, or adopt or otherwise amend any of the      
foregoing;                                                                      

             (e)      take any action except in the ordinary course of
business and in a manner consistent with past practice with respect to, or make 
any change in, its methods of management, distribution,                         

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marketing, accounting or operating (including practices relating to payment of  
trade accounts or to other payments) or relating to establishing or adjusting   
reserves, writing down or failing to write down (in accordance with its past    
practices consistently applied) or writing up the value of any assets of any    
Company;                                                                        

                (f)      take any action or enter into any agreement or make
any change in the billing or collection of its accounts receivable and unbilled 
claims (other than in the ordinary course of business and consistent with past  
practices), including without limitation, discounting or writing off any of     
HSA-Texas' accounts receivable or work in progress for early payment, or        
granting any other deduction or discount thereon or accelerating the collection 
thereof;                                                                        

          (g)      take any action to incur, assume, increase or
guarantee prior to Closing any indebtedness for borrowed money from banks or    
other financial institutions or cancel, without payment in full, any notes,     
loans or other receivables;                                                     

           (h)      loan or advance monies to any Person under any
circumstance whatsoever except travel advances or other reasonable expense      
advances to employees or audit associates of any Company made in the ordinary   
course of business and consistent with past practice;                           

          (i)      change any existing bank accounts or lock box
arrangements of any Company, except for deposits, withdrawals, or changes of    
signatories in the ordinary course of business;                                 

               (j)      waive any material rights of any Company or settle
any material claim involving any Company;                                       

              (k)      sell, license, or otherwise dispose of any of its
Intellectual Property Assets other than in the ordinary course of business      
consistent with past practice;                                                  

                (l)      fail to make any Tax filing or Tax payment required
to be made prior to the Closing Date; or                                        

                 (m)      do any act or omit to do any act which would cause a
breach of, or inability to perform, any contract, commitment or obligation of   
any Company or any Shareholder, which breach has a Material Adverse Effect on   
HSA-Texas or the ability of HSA-Texas or Shareholders to perform its, his or her
obligations under this Agreement or any HSA-Texas Transaction Document.         

4.6      NOTIFICATION.                                        

                (a)      HSA-Texas and Shareholders shall give prompt notice
to PRGX of the following:                                                       

                           (i)      The occurrence or nonoccurrence of any event
of which any Shareholder or HSA-Texas obtains knowledge the occurrence or       
nonoccurrence of which would be reasonably likely to cause either (A) a material
breach of any representation or warranty of HSA-Texas or any Shareholder        
contained in this Agreement at any time from the date hereof to the Closing     
Date, or (B) directly or indirectly, any Material Adverse Effect. PRGX's        
knowledge of any facts obtained by PRGX prior to the date hereof or disclosed   
herein that may give rise after the date hereof to a Material Adverse Effect on 
HSA-Texas shall not affect whether or not a Material Adverse Effect on HSA-Texas
shall have occurred.                                                            

                          (ii)     Any material failure by HSA-Texas to comply
with or satisfy any covenant, condition or agreement to be complied with or     
satisfied by it hereunder.                                                      

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           (b)      PRGX shall give prompt notice to HSA-Texas and
Shareholders of the following:                                                  

                           (i)      The occurrence or nonoccurrence of any event
of which PRGX obtains knowledge the occurrence or nonoccurrence of which would  
be reasonably likely to cause either (A) a material breach of any representation
or warranty of PRGX contained in this Agreement at any time from the date hereof
to the Closing Date, or (B) directly or indirectly, any Material Adverse Effect.
Neither HSA-Texas' nor any Shareholder's knowledge of any facts obtained by     
HSA-Texas or such Shareholder prior to the date hereof or disclosed herein that 
may give rise after the date hereof to a Material Adverse Effect on PRGX shall  
affect whether or not a Material Adverse Effect on PRGX shall have occurred.    

                          (ii)     Any material failure by HSA-Texas to comply
with or satisfy any covenant, condition or agreement to be complied with or     
satisfied by it hereunder.                                                      

              (c)      For purposes of this Agreement, "Material Adverse
Effect" means with respect to any Person, any change or effect that is          
materially adverse to the financial condition, business, results of operations, 
assets, or prospects of such Person and its subsidiaries, taken as a whole. For 
purposes of this Agreement, "Person" means an individual, partnership, a        
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a Governmental Entity. Notwithstanding the      
foregoing, the delivery of any notice pursuant to this Section 4.6. shall not   
limit or otherwise affect the remedies available hereunder to the Person        
receiving such notice.                                                          

4.7      PUBLIC ANNOUNCEMENTS.                                

               (a)      PRGX and HSA-Texas will issue a mutually agreeable
joint press release at such time as PRGX and HSA-Texas shall agree. HSA-Texas   
and Shareholders shall obtain the prior written consent of PRGX before issuing  
any press release or otherwise making any public statements with respect to the 
transactions contemplated herein and shall not issue any such press release or  
make any such public statement prior to receiving such consent. After the       
execution of this Agreement, PRGX shall use commercially reasonable efforts to  
provide HSA-Texas and the Shareholders with a copy of any press release relating
to the transaction prior to its release, provided that nothing contained herein 
shall limit PRGX from making any public disclosure relating to the transactions 
without such prior delivery to HSA-Texas and Shareholders if, in PRGX's good    
faith belief, such public disclosure is necessary to comply with applicable law,
regulations or stock exchange rules.                                            

               (b)      Except for any public announcement relating to the
transactions contemplated herein as may be required by law or stock exchange    
rules or as provided in this Section or in Section 4.1 hereof, each Company,    
each Shareholder, and PRGX agrees that until the press release contemplated in  
Section 4.7(a) hereof is issued, each of such parties have not, and have        
directed its directors, officers, employees, representatives and agents who have
knowledge of the transactions not to, disclose to any Person who is not a       
participant in discussions concerning the transactions (other than persons whose
consent is required to be obtained hereunder), any of the terms, conditions or  
other facts with respect to the transactions contemplated herein, or any portion
of the PRGX Disclosure which has not been made publicly available by PRGX,      
including the fact that negotiations are taking place. In addition, each Company
and Shareholder shall obtain the prior written consent of PRGX (and shall       
require their respective directors, officers, members, employees,               
representatives and agents who have knowledge of the transactions contemplated  
hereby or of any portion of the PRGX Disclosure which has not been made publicly
available by PRGX to obtain the prior written consent of PRGX) before buying,   
selling, assigning, exchanging (by merger or otherwise) or otherwise trading in 
or engaging in any transactions with respect to PRGX securities, including any  
grant of a lien or other security interest with respect to PRGX securities, any 
short sale, the sale of any option or contract to purchase, the purchase of any 
option or contract to sell, the grant of any option, right or warrant to        
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any hedge, swap, straddle, collar, prepaid forward contract, single pay contract
or other agreement that transfers, in whole or in part, any of the economic     
consequences of ownership of any such securities, whether such transaction is to
be settled by delivery of securities, in cash or otherwise, until such time as  
PRGX shall have notified HSA-Texas in writing that such permission is no longer 
required due to the public availability of all material information with respect
to the contemplated transactions and the PRGX Disclosure.                       

     4.8      REGULATORY AUTHORIZATION. As soon as practicable after the
date hereof, PRGX, HSA-Texas and Shareholders shall each file with the United   
States Federal Trade Commission ("FTC") and the United States Department of     
Justice ("DOJ") the notification and report form required for the transactions  
contemplated hereby in connection therewith pursuant to the Hart-Scott-Rodino   
Antitrust Improvements Act of 1976, as amended ("HSR Act") and each agrees to   
file as promptly as practicable any supplemental information requested by the   
DOJ or FTC. Any such notification and report form and supplemental information  
will be in substantial compliance with the requirements of the HSR Act. All fees
in respect of any filings under the HSR Act made by PRGX and HSA-Texas in       
connection with the transactions contemplated herein shall paid by PRGX. All    
fees in respect of any filings made by any Shareholder under the HSR Act in     
connection with the transactions contemplated herein shall be paid by such      
Shareholder. Each of the parties shall assist the other in making all filings   
under the HSR Act and shall provide all information and documentation requested 
by the DOJ or the FTC.                                                          

4.9      TAX MATTERS.                                         

                  (a)      Definitions. As used in this Agreement, the following
terms have the specified meanings:                                              

                           (i)      "Flow-Through Taxes" shall mean U.S. federal
income Taxes attributable to income and gains of HSA-Texas until the Closing    
date which are payable by Shareholders pursuant to Section 1366 of the Code for 
Tax years, or partial Tax years, for which HSA-Texas is an S corporation. The   
term "Flow-Through Taxes" shall also include any state or local income Taxes    
attributable to income and gains of HSA-Texas which are payable by the          
Shareholders under principles comparable to Section 1366 of the Code.           

                      (ii)     "Tax Authority" shall mean any federal,
foreign, national, state, county or municipal or other local government, any    
subdivision, agency, commission or authority thereof, or any quasi-governmental 
body exercising any taxing authority or any other authority exercising tax      
regulatory authority.                                                           

                          (iii)    "Tax Return" shall mean any return, amended
return, estimated return, information return, declaration, deposit, claim for   
refund or statement (including any related or supporting information) filed or  
to be filed with any Tax Authority in connection with the determination,        
assessment, collection or administration of any Tax or filed by or including    
HSA-Texas or any of the Subsidiaries.                                           

                     (iv)     "Tax" or "Taxes" shall mean all taxes,
charges, fees, interest, fines, penalties, additions to tax or other            
assessments, whether disputed or not, including without limitation, income,     
excise, environmental, property, sales, gross receipts, gains, transfer,        
occupation, privilege, employment (including social security and unemployment), 
use, value added, capital stock or surplus, franchise taxes, advance corporate  
tax and customs duties imposed by any Tax Authority, payable by HSA-Texas, the  
Shareholders, or any of the Subsidiaries, or relating to or chargeable against  
HSA-Texas' or any of the Subsidiaries' assets, revenues or income and payable by
HSA-Texas, the Shareholders or such Subsidiary.                                 

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(b)      Tax Returns.                       

                         (i)      Preparation and Filing of Tax Returns. The
Shareholders shall prepare or cause to be prepared, and file or cause to be     
filed, at the Shareholders' expense, all Tax Returns required to be filed by    
HSA-Texas and the Shareholders. Such Tax Returns for HSA-Texas shall be prepared
based on and consistent with tax accounting methods and principles used by      
HSA-Texas and Shareholders, as the case may be, in preparing Tax Returns for    
prior Tax periods.                                                              

                         (ii)     Methods of Allocating Tax Liabilities. For
purposes of preparing the Estimated Financials, any Tax for any Tax period which
begins before the Closing Date and ends after the Closing Date (an "Overlap Tax 
Period") shall be allocated as follows: The portion of such Tax which relates to
the portion of such Taxable period ending on the Closing Date shall (A) in the  
case of any Taxes other than Taxes based upon or related to income or receipts, 
be deemed to be an amount of such Tax for the total number of days in the       
Overlap Tax Period multiplied by a fraction the numerator of which is the number
of days in the Taxable period ending on the Closing Date and the denominator is 
the total number of days in the entire Overlap Tax Period, and (B) in the case  
of any Tax based upon or related to income or receipts, be deemed to be equal to
the amount which would be payable if the relevant Taxable period ended on the   
Closing Date. Any credits relating to a Taxable period that begins before and   
ends after the Closing Date shall be taken into account as though the relevant  
Taxable period ended on the Closing Date. All determinations necessary to give  
effect to the foregoing allocations shall be made in a manner consistent with   
the prior practice of the Companies.                                            

                          (c)      Cooperation of Parties. Except as otherwise
provided in this Agreement, the parties hereby agree that each of them shall    
cooperate with the other in executing or causing to be executed any required    
document and by making available to the other all work papers, records and notes
of any kind at all reasonable times for the purpose of allowing the appropriate 
party to complete Tax Returns, participate in a proceeding, obtain refunds, make
any determination required under this Agreement or defend or prosecute Tax      
claims.                                                                         

                          (d)      Reorganization. HSA-Texas, Shareholders and
PRGX hereby acknowledge and agree that the transactions contemplated hereby with
respect to the acquisition of the Acquired Assets of HSA-Texas shall be treated 
by the parties for all tax purposes as (i) the acquisition by PRGX of the       
Acquired Assets solely in consideration of the issuance to HSA-Texas of the     
shares of PRGX Common Stock, constituting the Consideration and the assumption  
by PRGX of the Assumed Liabilities, and (ii) as a tax-free reorganization under 
Section 368(a)(1)(C) of the Code and any other applicable laws. It is the intent
of the parties that this Agreement shall constitute a "plan of reorganization"  
for purposes of Section 368(a) of the Code. The parties hereto shall use their  
best efforts to cause the transaction contemplated hereby to be recognized as a 
tax-free reorganization under Section 368(a)(1)(C) of the Code and any other    
applicable state or federal law.                                                

   4.10     LIQUIDATION OF HSA-TEXAS. HSA-Texas hereby covenants and
agrees that, following the Closing, it will promptly effect its complete        
liquidation and distribute all of its remaining assets (including the shares of 
PRGX Common Stock) to its stockholders in accordance with applicable law and its
operative agreements.                                                           

 4.11     TRANSACTION EXPENSES. Except as otherwise specifically
provided in Section 9.2 hereof, all of the expenses incurred by PRGX in         
connection with the authorization, negotiation, preparation, execution and      
performance of this Agreement and other agreements referred to herein and the   
consummation of the transactions contemplated hereby, including, without        
limitation, all fees and expenses of agents, representatives, brokers, counsel  
and accountants for PRGX, Bain & Co., all filing fees and expenses in respect of
filings by PRGX under the HSR Act, and all fees and expenses for the            
preparation,                                                                    

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printing, filing, and mailing of the Proxy Statement, and the drafts of the     
Joint Proxy Statement/Prospectus and Registration Statement on Form S-4         
previously prepared in connection with the Acquisition, and the solicitation of 
shareholder approvals ("PRGX Transaction Expenses") shall be paid by PRGX.      
Except as otherwise specifically provided in Section 9.2 hereof, all expenses   
incurred by HSA-Texas in connection with the authorization, negotiation,        
preparation, execution and performance of this Agreement and the other          
agreements referred to herein and the consummation of the transactions          
contemplated hereby, including without limitation, all fees and expenses of     
agents, representatives, brokers, counsel, accountants, and all HSR filing fees 
of HSA-Texas ("HSA-Texas Transaction Expenses") shall be paid by HSA-Texas or   
Shareholders. If the Acquisition is consummated, PRGX shall pay any previously  
unpaid reasonable and necessary fees and expenses of attorneys and accountants  
of HSA-Texas (including all fees and expenses of KPMG LLP in connection with the
preparation of the Audited Statements) in connection with or related to the     
authorization, preparation, negotiation, execution, and performance of this     
Agreement and the transactions contemplated herein. Any and all expenses        
incurred by any stockholder of HSA-Texas, including the Shareholders, in        
connection with the authorization, negotiation, preparation, execution and      
performance of this Agreement and the other agreements referred to herein and   
the consummation of the transactions contemplated hereby shall be paid solely by
such stockholder of HSA-Texas.                                                  

        4.12     REMOVAL OF LIENS AND ENCUMBRANCES. HSA-Texas and Shareholders
hereby agree to use their best efforts to obtain and file releases and          
termination statements for all recorded liens, encumbrances, judgments and      
similar filings which in any way relate to or affect the Acquired Assets as such
liens, encumbrances, judgments and similar filings are described on Schedule 5.3
hereto, other than the Permitted Encumbrances (the "Recorded Liens") as and when
provided herein. In respect of any such Recorded Liens that reflect underlying  
obligations of a Company that have previously been satisfied, HSA-Texas shall,  
or shall cause such Company to, obtain and file releases and termination        
statements in respect thereof prior to the Closing Date. In respect of any      
Recorded Liens and any liens relating to the Permitted Encumbrances that reflect
underlying obligations that will be paid by PRGX, HSA-Texas or such Company at  
Closing, HSA-Texas shall, or shall cause such Company to, prior to the Closing  
Date, prepare termination statements and releases in respect of such Recorded   
Liens and cause them to be executed by the secured party in respect thereof and 
delivered to PRGX at Closing for filing upon confirmation by such secured party 
of receipt of funds satisfying such underlying obligation. HSA-Texas and        
Shareholders hereby covenant and agree to indemnify and hold PRGX harmless from 
and against any and all losses or liabilities incurred by PRGX resulting from or
arising out of HSA-Texas' failure to remove any Recorded Liens or liens relating
to Permitted Encumbrances which are paid off concurrently with the Closing, in  
accordance with Article 7 hereof.                                               

     4.13     BULK SALES LAW. PRGX hereby waives compliance by HSA-Texas
with any applicable U.C.C. or tax bulk sales law, and HSA-Texas and Shareholders
agree, jointly and severally, to indemnify and hold harmless PRGX (and          
affiliates thereof) from and against any claims or liabilities not assumed by   
PRGX pursuant to this Agreement asserted against PRGX (or any affiliate thereof)
by any creditor of HSA-Texas by reason of such noncompliance or for any other   
claims or liabilities against PRGX for failure to comply with any such bulk     
transfer law.                                                                   

       4.14     BANK ACCOUNTS. Prior to the Closing Date and effective as of
the Closing Date, HSA-Texas and Shareholders shall have caused the following to 
occur in respect of each of the Bank Accounts: All payments to HSA-Texas or     
Shareholders in connection with the Business received on or after the Closing   
Date will be for the sole benefit of PRGX and, provided the Closing occurs,     
shall be remitted to PRGX as part of the Acquired Assets. Signature cards       
required by the Bank to change or add to persons authorized to access the       
Accounts shall have been provided to PRGX with sufficient time for PRGX to      
complete and transmit to the Bank prior to the Closing Date.                    

         4.15     DALLAS LEASE. Prior to the Closing, HSA-Texas and Shareholders
shall negotiate a                                                               

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lease between PRGX and the HSA-Texas for that square footage of the premises    
required by the Business after the Closing, at fair market rental rates and     
other terms and conditions acceptable to PRGX. All expenses of HSA-Texas in     
connection with the negotiation, execution and delivery of such lease, and all  
brokers fees of HSA-Texas and PRGX, shall be borne by the Shareholders.         

4.16     INTENTIONALLY OMITTED.                               

4.17     COMMISSION BUY-DOWN PAYMENTS.                        

                (a)      For purposes hereof, the following terms shall have
the following meanings:                                                         

                       (i)      "Post-Change Date Collections" means all
collections received after the Change Date from accounts receivable and work in 
process of all audits of HSA-Texas outstanding as of the Change Date.           

                      (ii)     "Change Date" means a date prior to the
Closing agreed to by PRGX and HSA-Texas as of which the commission rates of     
Associates and, if applicable, employees of HSA-Texas will be changed from the  
Old Rate to the New Rates.                                                      

                          (iii)    "Old Rate" means the commission rate for an
Associate and, if applicable, employee of HSA-Texas payable by HSA-Texas        
pursuant to a written or oral compensation agreement in effect immediately prior
to the Change Date, which rates for all written and oral agreements are set     
forth by auditor and by audit on Schedule 5.18(b) and Schedule 5.15 attached    
hereto.                                                                         

                    (iv)     "New Rate" means with respect to each
Associate and, if applicable, employee of HSA-Texas, the new commission rate for
such Associate or employee, as set forth in the Addendum to such person's       
compensation agreement with HSA-Texas, as agreed to by HSA-Texas and such       
Associate or employee, and as approved by PRGX.                                 

                           (v)      "Addendum" means a written agreement between
HSA-Texas and an Associate or, if applicable, employee of HSA-Texas, in form and
substance approved by PRGX, which, among other things, changes the Old Rate to  
the New Rate effective on the Change Date with respect to the Associate's or    
employee's commissions on Post-Change Date Collections and sets forth the       
agreement between the parties thereto regarding the amount and terms of the     
Commission Buy-Down Payment.                                                    

                       (vi)     "Hypothetical Net Future Cash" means the
good faith estimate as agreed to by each Associate or, as applicable, employee  
and HSA-Texas, and as approved by PRGX, of the amount of Post-Change Date       
Collections in respect of each audit to which such Associate or employee is, as 
of the Change Date, entitled to a commission at the Old Rate pursuant to a      
written or oral compensation agreement compensation agreement with HSA-Texas,   
less an agreed upon amount of all related reductions for Vendor Paybacks, voids,
cancels, client bankruptcies or insolvencies and other adjustments.             

                          (vii)    "Commission Buy-Down Payment" means a fixed
amount, as agreed to by such Associate or, as applicable, employee and          
HSA-Texas, and as approved by PRGX, payable on terms as set forth in the        
Addendum, which represents the aggregate dollar amount as of the Change Date of 
the difference between the Old Rate and the New Rate with respect to            
Hypothetical Net Future Cash of each audit in respect of which such Associate or
employee is entitled to a commission under their respective compensation        
agreements with HSA-Texas.                                                      

                        (viii)   "Actual Net Receipts" means PRGX's actual
cash collections received on billings through March 31, 2004 of Post-Change Date
Collections of HSA-Texas in respect of which an                                 

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Associate or, as applicable, employee of HSA-Texas has entered into an Addendum.

                 (b)      HSA-Texas will use its best efforts to obtain, prior
to Closing, a signed Addendum from all Associates and, if applicable, employees 
who are entitled to commissions pursuant to written compensation agreements with
HSA-Texas. In consideration of the New Rate as set forth in the Addendum, the   
Addendum will provide that HSA-Texas will pay such Associate or employee the    
Commission Buy-Down Payment in the amount and on the terms set forth in the     
Addendum, as agreed to by such Associate or employee and HSA-Texas, and as      
approved by PRGX, all subject to appropriate withholding and deductions. PRGX   
shall assume pursuant to the terms hereof the aggregate amount of all such      
Commission Buy-Down Payments payable to Associates and employees of HSA-Texas   
that are accrued as a liability on the Estimated Balance Sheet.                 

               (c)      Notwithstanding anything to the contrary contained
herein or in the Indemnification Agreement, on or before June 30, 2004, PRGX    
will submit to the Shareholders' Representative a written statement setting     
forth, and calculating the difference between, (i) the sum of the aggregate     
amount of all commissions at the New Rate on Actual Net Receipts plus the       
aggregate Commission Buy-Down Payments made pursuant to Addenda specifically    
agreed to by PRGX ("Actual Payments") and (ii) the aggregate amount of all      
commissions that would have been payable to the Associates and employees who    
signed an Addendum at the Old Rates on Actual Net Receipts ("Hypothetical       
Commissions").                                                                  

         (d)      Within 90 days after PRGX's delivery of such
statement to the Shareholders' Representative, the Shareholders' Representative 
shall complete its review of the statement. If PRGX and the Shareholders'       
Representative reach agreement on such statement within such 90 day period, such
statement shall be the "Final Commissions Statement." If PRGX and the           
Shareholders' Representative are unable to reach agreement on the statement     
within 20 days after the Shareholders' Representative's 90-day review period of 
the statement, the parties shall submit the matter to Grant Thornton LLP (or its
successor-in-interest) in Atlanta, Georgia (the "Accountants") for resolution.  
Such resolution by the Accountants shall be set forth in a written report       
delivered by the Accountants to PRGX and the Shareholders' Representative within
15 days after submission of the dispute to the accountants, and the statement as
modified by the Accountants report, being the "Accountants' Final Commissions   
Statement" and shall be final and binding on the parties hereto. All expenses of
the Accountants incurred in such resolution shall be shared equally between PRGX
and the Shareholders' Representative.                                           

                (e)      If the amount of Actual Payments exceeds the amount
of Hypothetical Commissions, each amount as set forth on the Final Commissions  
Statement or, if applicable, the Accountants' Final Commissions Statement (the  
"Excess") by at least 2.5% of the Hypothetical Commissions, HSA-Texas and each  
of the Shareholders, jointly and severally, agree to pay PRGX 50% of the full   
amount of such Excess within 10 days after the date on which the Final          
Commissions Statement is agreed to or, if applicable, on which the Accountants' 
Final Commissions Statement is delivered to PRGX and the Shareholders'          
Representative (the "Statement Date"). This obligation is without regard to the 
requirement in Section 4(a) of the Indemnification Agreement that the amount of 
Section 7.1 Indemnified Claims and Section 6.1 Indemnified Claims, as defined   
therein, must exceed the Base Amount, defined therein, before PRGX will assert a
claim against HSA-Texas and the Shareholders for indemnification. In no event   
will the Shareholders be subject to any additional indemnification obligation   
for the payment of the Excess pursuant to Section 7.1 of this Agreement or      
Section 6.1 of the Stock Agreement if the Shareholders fulfill their obligations
to pay the Excess in accordance with this Section 4.17.                         

              (f)      If the amount of Actual Payments is less than the
amount of Hypothetical Commissions, each amount as set forth on the Final       
Commission Buy-Down Payments Statement (the "Shortfall") by at least 2.5% of the
Hypothetical Commissions, the parties hereto agree that 50% of the full amount  
of such Shortfall shall increase the Base Amount under the Indemnification      
Agreement; provided                                                             

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that if on the Statement Date, the aggregate amount of Section 7.1 Indemnified  
Claims and Section 6.1 Indemnified Claims have exceeded the Base Amount, then a 
new Base Amount equal to the original Base Amount plus 50% of the full amount of
such Shortfall shall immediately be instituted, upon the same terms and         
conditions as provided in the Indemnification Agreement, in respect of all      
Section 7.1 Indemnified Claims and Section 6.1 Indemnified Claims that arise    
after the Statement Date.                                                       

     4.18     DIRECTORS. Subject to compliance with the Georgia Business
Corporation Code (the "GBCC"), PRGX's Certificate of Incorporation, the         
fiduciary duties of the PRGX Board of Directors and applicable law, as soon as  
practicable after the Closing, PRGX shall promptly use its commercially         
reasonable efforts to take all actions necessary (a) to cause the PRGX Board to 
be enlarged to thirteen (13) members, and either (b) to cause the following four
persons: H. Schultz, A. Schultz, Arthur N. Budge, Jr. and Nate Levine to be     
nominated by the PRGX Board for election as directors of PRGX by the PRGX       
shareholders at the Special Meeting or, if PRGX's audited financial statements  
for the year ended December 31, 2001 are required to be delivered to PRGX's     
shareholders either with or prior to delivery of the Proxy Statement, (c) to    
appoint the following persons to fill the four new vacancies on the Board: H.   
Schultz, A. Schultz, Arthur N. Budge, Jr. and Nate Levine; provided that the    
term of each director appointed in accordance with (c) above to such newly      
created directorship shall expire at the next election of directors by the PRGX 
shareholders in accordance with the GBCC. H. Schultz and A. Schultz will be     
nominated (or appointed, as the case may be) as Class II Directors, Nate Levine 
will be nominated (or appointed, as the case may be) as a Class I Director, and 
Mr. Budge will be nominated (or appointed, as the case may be) as a Class III   
Director. In connection with the PRGX annual meeting of shareholders to be held 
in 2002, PRGX will use its commercially reasonable efforts to take all actions  
necessary to cause Mr. Budge (or, if the Directors named above have been        
appointed, all such Directors) to be renominated for election by the PRGX       
shareholders at such meeting.                                                   

         4.19     SHAREHOLDER AGREEMENT. Effective upon the Closing, each of the
Shareholders shall enter into a shareholders agreement with John M. Cook and    
Jack M. Toma in substantially the form attached hereto as Exhibit 4.19 (the     
"Shareholder Agreement").                                                       

      4.20     CONTRIBUTION OF SHARES. Effective upon the Closing, each of
the Shareholders shall, and shall use its best efforts to cause all other equity
owners of each of the Subsidiaries to contribute without consideration therefor 
all of the equity interests owned by such Shareholder or other equity owner in  
such Subsidiary to the direct parent corporation holding a majority of the      
outstanding equity interest in such Subsidiary or to the designee of such       
corporation, unless such ownership is required by the jurisdiction of           
organization of such Subsidiary, in which case, each of the Shareholders shall, 
and shall use its best efforts to cause all other equity owners of such         
Subsidiaries, to enter into a written agreement, in substantially the form      
attached hereto as Exhibit 4.20, confirming that such Person is holding such    
equity interests solely to satisfy a requirement of local law and that such     
Person agrees to transfer such equity interest to any designee of PRGX, without 
consideration, upon written request by PRGX, after the Closing.                 

       4.21     SCHEDULES. As soon as practicable but in no event later than
December 4, 2001, HSA-Texas shall deliver final forms of all those Schedules    
required by the terms hereof that are not attached hereto, which Schedules shall
speak as of August 3, 2001, unless otherwise indicated on such Schedule.        

     4.22     TRANSFER OF PERSONAL PROPERTY. Effective upon the Closing,
each of the Shareholders shall transfer to HSA-Texas by appropriate documents of
transfer, any and all right, title and interest such Shareholder has in and to  
any assets (including Intellectual Property Assets) and rights relating to the  
Business which any of the Companies use to conduct the Business, so that at the 
Closing all such assets shall be part of the Acquired Assets, but not including 
the condominium owned by the Schultz family that is used from time to time by   
the Companies.                                                                  

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   4.23     REPAYMENT OF OTHER SHAREHOLDER LOANS. Effective upon the
Closing, HSA-Texas and the Shareholders shall cause all of the stockholders of  
HSA-Texas (including those other than the Shareholders) to repay in full all    
amounts owed by such stockholders to HSA-Texas.                                 

4.24     RESIGNATIONS. Effective upon the Closing, each of the
Shareholders shall resign and shall cause all other persons to resign, in       
writing from all offices and directorships held by such Shareholder or other    
person in each of the Subsidiaries and Licensees.                               

4.25     GERMAN ACQUISITION.                                  

            (a)      From and after the date hereof, HSA-Texas shall
diligently work with the parties to the German Acquisition to consummate such   
acquisition pursuant to the German Acquisition Agreement. HSA-Texas agrees to   
keep PRGX fully and promptly apprised of the status of such acquisition.        
HSA-Texas will not enter into any agreement with respect to the German          
Acquisition without the prior review by and consent of PRGX, which consent will 
not be unreasonably withheld.                                                   

               (b)      If, at any time within 365 days after the Closing,
despite commercially reasonable efforts, PRGX is unable to close the acquisition
of the businesses of the German Licensee because the German Licensee has        
demanded a purchase price in excess of or terms more favorable than those       
previously agreed to by PRGX at the Closing, PRGX will notify the Shareholders' 
Representative in writing specifying the basis for such inability to close and  
if applicable the amount of the consideration in excess of the agreed upon      
purchase price required to close such acquisition. In such event PRGX will have 
the option:                                                                     

                       (i)      to close such acquisition by paying such
excess price or agreeing to the more favorable terms, as applicable, in which   
event, the Shareholders and HSA-Texas, hereby indemnify the PRGX Indemnified    
Parties (as defined herein) and hold them harmless, in accordance with the      
provisions of Article 7 hereof, from and against the full amount of the         
additional cost to PRGX of such excess price or such terms less favorable to    
PRGX to close the German Acquisition; or                                        

                      (ii)     not to close such acquisition, in which
event, the Shareholders and HSA-Texas hereby indemnify the PRGX Indemnified     
Parties and hold them harmless, in accordance with the provisions of Article 7  
hereof, from the expected lost earnings to PRGX from the failure to close the   
German Acquisition, which lost earnings will cause immediate and irreparable    
economic harm to PRGX which actual loss to be suffered by PRGX will be          
difficult, if not impossible to ascertain. Therefore, the parties have agreed   
that if the German Acquisition is not closed pursuant hereto, the               
indemnification to which the PRGX Indemnified Parties will be entitled will     
equal $1,400,000, as liquidated damages, which amount the parties hereto agree  
is reasonable and has been arrived at after a good faith effort to estimate the 
value of such lost earnings.                                                    

                 (c)      In the event that the acquisition of the business of
the German Licensee is not completed prior to 365 days after the Closing,       
despite PRGX's commercially reasonable efforts, the Shareholders and HSA-Texas  
hereby indemnify the PRGX Indemnified Parties and hold them harmless from the   
expected lost earnings to PRGX from the failure to close the German Acquisition,
which, for the reasons stated in Section 4.25(b)(ii) above, the parties have    
agreed equals $1,400,000, as liquidated damages.                                

                  (d)      The indemnification obligations contained in Sections
4.25(b)(ii) and 4.25(c) are without regard to, and not subject to, the          
requirement in Section 4(a) of the Indemnification Agreement that the amount of 
Section 7.1 Indemnified Claims and Section 6.1 Indemnified Claims, as defined   
therein, must                                                                   

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exceed the Base Amount, defined therein, before PRGX will assert a claim against
HSA-Texas and the Shareholders for indemnification pursuant hereto.             

    4.26     CORPORATE NAME. As soon as practicable following Closing,
HSA-Texas shall change its corporate name to a name which does not contain the  
words "Howard Schultz", "Schultz" or the letters "HS&A", and HSA-Texas and      
Shareholders shall cooperate with PRGX in any efforts undertaken by PRGX to     
secure or protect its rights in any name used by the Companies in the conduct of
the Business prior to Closing. As soon as practicable following Closing, PRGX   
will change its corporate name to "PRG-Schultz International, Inc."             

      4.27     CERTAIN ADVANCEMENT OF EXPENSES. From and after the Closing
Date, PRGX agrees to assume HSA-Texas' obligations to advance expenses under    
those certain Advancement Agreements, each dated as of August 23, 2001, between 
HSA-Texas and Michael Glazer, Stephanie Holloway, A. Schultz, and H. Schultz    
(the "Managers"), copies of which Advancement Agreements were previously        
provided to PRGX, only if the Manager incurs expenses in a claim, action, suit, 
proceeding or investigation which is brought, whether before or after the       
Closing Date, by a shareholder of PRGX, in such person's capacity as a          
shareholder of PRGX, by reason of the fact that such person served as a Manager 
of HSA-Texas; provided that PRGX shall have no obligation under the foregoing   
provisions of this Section 4.27 to any Manager when and if (i) a court of       
competent jurisdiction shall ultimately determine, and such determination shall 
have become final and non-appealable, that indemnification of such Manager in   
the manner contemplated hereby is prohibited by applicable law or (ii) the loss,
claim, damage, liability, cost, expense, judgment or fine is based on or arises 
from a final non-appealable order of a court of competent jurisdiction or in    
connection with a settlement, consent, decree, order or injunction with any     
governmental agency or authority finding that the Manager violated Section 16(b)
of the Exchange Act, Section 10(b) of the Exchange Act or Rule 10b-5 promulgated
thereunder or any federal or state securities law relating to or governing      
"insider" trading of securities. At the Closing Date, each Manager shall confirm
in writing that upon the finality of any such determination that PRGX is not    
liable for any such claims for expenses, the Manager will immediately reimburse 
PRGX in full for any fees, expenses and costs incurred by PRGX advanced in      
connection with the defense of such claims. Any Manager wishing to claim expense
reimbursement under this Section 4.27, upon learning of any such claim, action, 
suit, proceeding or investigation, shall immediately notify PRGX, thereof       
(provided that the failure to give such notice shall not affect any obligations 
hereunder, except to the extent that the indemnifying party is actually and     
materially prejudiced thereby).                                                 

 ARTICLE 5
 REPRESENTATIONS AND WARRANTIES OF
HSA-TEXAS AND SHAREHOLDERS

         In order to induce PRGX to enter into this Agreement and consummate the
transactions contemplated hereby, HSA-Texas and each Shareholder jointly and    
severally represent and warrant to PRGX as follows, each of which warranties and
representations is material to and relied upon by PRGX.                         

     5.1      ORGANIZATION AND AUTHORITY OF COMPANIES. Each Company is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction designated on Schedule 5.1(a) attached hereto. Each Company 
is duly qualified as a foreign corporation in all jurisdictions inside and      
outside of the United States in which the conduct of its business or the        
ownership of its properties requires such qualification (except where the       
failure to do so would not have a Material Adverse Effect on such Company) and  
Schedule 5.1(b) lists all the jurisdictions inside and outside the United States
where each Company is so qualified. Each Company has all necessary corporate    
power and authority to own, lease and operate its properties and conduct its    
business as it is currently being conducted. Except as                          

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described on Schedule 1(a), no Company owns, directly or indirectly, any equity 
interest in any corporation, partnership, joint venture, or other entity.       

      5.2      CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. HSA-Texas
has full corporate power and authority, and each Shareholder has full power and 
authority, to execute and deliver this Agreement and each of the HSA-Texas      
Transaction Documents to which HSA-Texas or such Shareholder is or will be a    
party and to consummate the transactions contemplated hereby. "HSA-Texas        
Transaction Documents" means each of the agreements, documents and instruments  
referenced in this Agreement to be executed and delivered by HSA-Texas and/or   
any Shareholder. Prior to the Closing Date, the directors and the Shareholders  
of HSA-Texas shall have duly approved and authorized the execution and delivery 
of this Agreement and each of the HSA-Texas Transaction Documents to which      
HSA-Texas is or will be a party and the consummation of the transactions        
contemplated hereby and thereby, and no other corporate proceedings shall then  
be necessary. In respect of each of the Trusts, the execution, delivery and     
performance of this Agreement by such Trust has been duly authorized by all     
governing agreements of such Trust. In respect of each trust, the trustee       
identified on Schedule 5.2(a) hereof is the sole Trustee of such Trust and has  
sole full right, power and authority to enter into this Agreement on behalf of  
the Trust and to perform Trust's obligations hereunder. Assuming that this      
Agreement and each of the HSA-Texas Transaction Documents which are also PRGX   
Transaction Documents constitutes a valid and binding agreement of PRGX, this   
Agreement and each of the HSA-Texas Transaction Documents constitutes, or will  
constitute when executed and delivered, a valid and binding agreement of        
HSA-Texas and/or such Shareholder, as the case may be, in each case enforceable 
in accordance with its terms. The duly elected directors and officers of each   
Company are set forth on Schedule 5.2(b) attached hereto.                       

        5.3      TITLE TO ASSETS. Except as set forth on Schedule 5.3 attached
hereto, each Company has good, valid and marketable title to all of its assets  
free and clear of any mortgages, liens, pledges, security interests,            
encumbrances, or similar rights of every kind and nature, except for any liens  
for taxes not yet due and payable and those encumbrances in respect of the      
Acquisition-Related Notes specifically set forth on Schedule 5.11B attached     
hereto which will be removed concurrently with the Closing (collectively, the   
"Permitted Encumbrances") and except for liens and encumbrances on the Dallas   
Headquarters property, which is an Excluded Asset. Except for the Dallas        
Headquarters property, which is an Excluded Asset, no Company owns any real     
property.                                                                       

        5.4      NO CONFLICT; REQUIRED CONSENTS. Schedule 5.4 contains a true,
correct and complete list of (a) all Material Contracts and Material Leases that
require consent or approval to the assignment of such Material Contract or      
Material Lease in order to operate the Business on a daily basis as presently   
conducted and (b) all contracts (other than Material Contracts) and all Leases  
(other than Material Leases) that require consent or approval to the assignment 
of a Contract or Lease where the absence of such consent is likely to result in 
a Material Adverse Effect (collectively, the "Company Consents" and individually
a "Company Consent"). Assuming compliance with the applicable requirements of   
the HSR Act and assuming all Company Consents have been obtained or taken prior 
to Closing, the execution and delivery by HSA-Texas and Shareholders of this    
Agreement and the HSA-Texas Transaction Documents, and the consummation by      
HSA-Texas and Shareholders of the transactions contemplated hereby and thereby  
do not and will not (i) require the consent, approval or action of, or any      
filing with or notice to, any corporation, firm, Person or other entity or any  
Governmental Entity (except for the Acquisition-Related Notes and related       
security agreements, and except for consents and approvals under Contracts and  
Leases not required to be listed on Schedule 5.4); (ii) violate the terms of    
any instrument, document or agreement to which any Company is a party, or by    
which any Company or any Shareholder or the property of any Company is bound,   
or be in conflict with, result in a breach of or constitute (upon the giving of 
notice or lapse of time or both) a default under any such instrument, document  
or agreement, or result in the creation of any lien upon any of the property or 
assets of any Company (except for the Acquisition-Related Notes and related     
security agreements, and except for                                             

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consents and approvals under Contracts and Leases not required to be listed on  
Schedule 5.4), in each case except where such violation, conflict, breach,      
default or lien will not have a Material Adverse Effect; (iii) violate          
HSA-Texas' Articles of Incorporation or Bylaws or other organizational or       
governing agreements; or (iv) violate any order, writ, injunction, decree,      
judgment, ruling, law, rule or regulation of any Governmental Entity applicable 
to any Company, the Business or the Acquired Assets. No Company nor any         
Shareholder is subject to, or is a party to, any mortgage, lien, lease,         
agreement, contract, instrument, order, judgment or decree or any other         
restriction of any kind or character which would prevent or hinder the continued
operation of the Business after the Closing Date on substantially the same basis
as theretofore operated.                                                        

5.5      OWNERSHIP OF CAPITAL STOCK AND OPTIONS.              

             (a)      All outstanding shares of each Company's capital
stock are validly issued, fully paid and non-assessable and are owned of record 
and beneficially solely by those persons and entities listed on Schedule 5.5(a) 
attached hereto in respect of each Company. Except as set forth on Schedule     
5.5(a), no one other than the Shareholders has any beneficial or record interest
in the capital stock of HSA-Texas and no one other than the shareholders        
identified on Schedule 5.5(a) in respect of each Subsidiary owns any beneficial 
or record interest in the capital stock of such Subsidiary. Each Shareholder    
warrants and represents that it is the lawful owner of, and has good and        
marketable title to, all of HSA-Texas' outstanding capital stock identified as  
owned by it on Schedule 5.5(a), free and clear of any mortgage, pledge, claim,  
lien, charge, encumbrance or other right in any third party (including any right
to purchase, vote or direct the voting of, any shares thereof). HSA-Texas       
represents and warrants that the lawful owner(s) of each Subsidiary are         
identified on Schedule 5.5.(a) and that each such owner(s) so identified have   
good and marketable title to, all of such Subsidiary's outstanding capital stock
identified as owned by it on Schedule 5.5(a), free and clear of any mortgage,   
pledge, claim, lien, charge, encumbrance or other right in any third party      
(including any right to purchase, vote or direct the voting of, any shares      
thereof). Schedule 5.5(a) includes a true, correct and complete list of those   
Subsidiaries organized in jurisdictions which require individual or resident    
shareholders.                                                                   

               (b)      Schedule 5.5(b) attached hereto is a true, correct
and complete list of the only options outstanding as of the date hereof, issued 
by HSA-Texas prior to the date hereof, to purchase shares of HSA-Texas Common   
Stock, showing the name and address of the holder (each an "Optionee"), the     
number of shares of HSA-Texas Common Stock subject to such option, the exercise 
price of such option, the expiration date of such option and any other relevant 
information with respect to such option, which list will be updated (only so as 
to delete options from such list that may have been cancelled or surrendered,   
but not so as to add any options or other rights to such list) so as to be true,
correct and complete as of the Closing Date (collectively, the "HSA-Texas       
Options"). Prior to the date hereof, HSA-Texas has provided PRGX with a true,   
correct and complete copy of the 1999 Howard Schultz & Associates Stock Option  
Plan, which is the only stock option plan pursuant to which any options to      
acquire shares of any of the Companies' common stock have been granted. Also set
forth on Schedule 5.5(b) is a true, correct and complete list of the only       
holders of HSA-Texas SARs, showing the name and address of each holder, the     
number of SARs granted to such holder, the grant price of such SAR, and all     
other relevant information with respect to such HSA-Texas SAR, which list will  
be updated so as to be true, correct and complete as of the Closing Date. As    
soon as practicable after the date hereof, HSA-Texas will provide true correct  
and complete copies of all option grant agreements entered into by HSA-Texas,   
which reflect options outstanding as of the date hereof to acquire shares of    
common stock of any of the Companies and true correct and complete copies of all
documents memorializing the HSA-Texas SARs and any other contract rights        
obligating any of the Companies to issue shares of its capital stock or         
otherwise relating to its capital stock, in each case as amended and in effect  
on the date hereof (collectively, the "Grant Agreements"). All such HSA-Texas   
Options are fully vested and are nonqualified stock options, and are not        
"incentive stock options", under Section 422 of the Code. The HSA-Texas Common  
Stock subject to all HSA-Texas                                                  

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Options is solely HSA-Texas Non-Voting Common Stock. Except as set forth on     
Schedule 5.5(b), no Company has issued any convertible securities, options,     
warrants, or entered into any contracts, commitments, agreements,               
understandings, arrangements or restrictions by which it is bound to issue any  
additional shares of its capital stock or other securities or which otherwise   
relate to its capital stock or other securities. Any and all convertible        
securities, options, warrants or contracts, commitments, agreements,            
understandings, arrangements or restrictions by which any Company other than    
HSA-Texas is bound to issue additional shares of its capital stock or other     
securities or which otherwise relate to its capital stock or other securities,  
including those options granted by Howard Schultz & Associates Europe, SA, to   
Pascal Bordet, Viller Galafassi and Tomas Herreros (but not the SARs that were  
granted to terminate such options as set forth on Schedule 5.5(b) hereof), have 
been, or prior to Closing will be, fully and finally terminated without any     
liability to PRGX. All HSA-Texas Options have been granted under a stock option 
grant agreement in the form attached hereto in Schedule 5.5(b)(i) and there are 
no other written or oral agreements relating to such HSA-Texas Options. All     
HSA-Texas SARs have been granted pursuant to a document(s) in the form attached 
hereto as Schedule 5.5(b)(ii) and there are no other written or oral agreements 
relating to such HSA-Texas SARs.                                                

                  5.6      COMPLIANCE WITH LAWS. Except as set forth on Schedule
5.6, each Company is in compliance with all applicable laws, orders, rules and  
regulations of all Governmental Entities, except where such noncompliance has   
and will have, individually or in the aggregate, no Material Adverse Effect on  
the Business or Acquired Assets. No Company nor any Shareholder has received    
written notice of any noncompliance with the foregoing, nor are they aware of   
any basis therefor.                                                             

                  5.7      LICENSES AND PERMITS. Except as set forth on Schedule
5.7, each Company holds and is in compliance with all Licenses and Permits      
listed on Schedule 1.1(f) attached hereto, and such list constitutes all of the 
city, county, state, federal and foreign licenses, permits, approvals and       
authorizations necessary or required for the use or ownership of the Acquired   
Assets and the operation of the Business, except where such failure to hold or  
noncompliance has or will have, individually or in the aggregate, no Material   
Adverse Effect on the Business or Acquired Assets. No Company nor any           
Shareholder has received written notice of any violations in respect of any such
Licenses and Permits. No proceeding is pending or, to the Knowledge of HSA-Texas
or any Shareholder, threatened, which seeks revocation or limitation of any such
Licenses and Permits.                                                           

             5.8      FINANCIAL INFORMATION. Prior to the date hereof,
HSA-Texas has delivered to PRGX true, correct and complete copies of the        
Historical Statements for periods through June 30, 2001, except that Historical 
Statements (other than the Audited Statements) do not contain customary         
footnotes. The Historical Statements have been prepared in accordance with GAAP,
fairly present the combined financial position of the Companies and the         
Affiliated Foreign Operating Companies at the respective dates thereof and the  
combined results of operations of the Companies and the Affiliated Foreign      
Operating Companies for the periods then ended, in each case in accordance with 
past practice and GAAP consistently applied during the periods presented (except
as otherwise disclosed in the notes thereto). The Estimated Financials will be  
prepared in accordance with GAAP, will fairly present the combined financial    
conditions of the Companies and the Affiliated Foreign Operating Companies for  
the period ended as of the Closing Date, in accordance with past practice and   
GAAP consistently applied during the periods presented. The Historical          
Statements are, and the Estimated Financials will be, consistent with the books 
and records of the Business. All work papers related to the Historical          
Statements and the Estimated Financials and other financial information provided
by the Companies and the Affiliated Foreign Operating Companies to PRGX or KPMG 
LLP in connection with their due diligence are true, correct and consistent with
the books and records of the Companies and the Affiliated Foreign Operating     
Companies. On the date hereof there were, and as of the Closing Date there will 
be, no liabilities or obligations of the Companies or the Affiliated Foreign    
Operating Companies of any nature, whether liquidated, unliquidated, accrued,   
absolute, contingent or otherwise except for those (i) that are specifically    
reflected or reserved against as to amount                                      

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in the balance sheets contained in the Audited Statements, or (ii) that are     
Assumed Liabilities or are specifically set forth on Schedule 5.8 attached      
hereto, none of which, individually or in the aggregate, constitutes a Material 
Adverse Effect. Except as disclosed on Schedule 5.8 attached hereto, no Company 
is, nor has any Company been during the 12 months immediately preceding the     
execution of this Agreement, insolvent within the meaning of 11 U.S.C. ss.      
101(31). Each Company has paid and is paying its debts as they become due.      

        5.9      SUFFICIENCY OF ASSETS. The Acquired Assets, together with the
Excluded Assets, constitute all of the material assets and rights of any nature 
with which HSA-Texas has conducted the Business for the twelve month period     
prior to the Closing Date, subject only to additions and deletions in the       
ordinary course of business. The Acquired Assets are owned and held solely by   
the Companies, and all agreements, obligations, expenses and transactions       
related to the Business have been entered into, incurred and conducted solely by
the Companies.                                                                  

      5.10     DEPOSITS AND OTHER RIGHTS. Attached as Schedule 1.1(g) is a
true, correct and complete list of all Deposits and Other Rights of each of the 
Companies, listing, where appropriate, the location thereof. Schedule 1.1(g)    
shall be updated, as of the Closing Date, to list the amount of all monetary    
Deposits and Other Rights.                                                      

5.11     TRADE PAYABLES; ACCRUED EXPENSES; OTHER DEBT.        

           (a)      Trade Payables. All trade payables and accrued
expenses of the Companies assumed by PRGX at Closing shall have been incurred in
the ordinary course of business, shall be directly related to the Business to be
acquired by PRGX pursuant hereto, and shall not, as of the Closing Date, be     
overdue other than those, if any, not yet paid due to a bona fide dispute (as   
detailed on Schedule 5.11A).                                                    

               (b)      Debt for Borrowed Money. Schedule 5.11B is a true,
correct and complete list as of the date hereof, which list will be updated at  
Closing so as to be true, correct and complete as of the Closing Date, of all   
debts, obligations, guaranties, seller financing and other indebtedness for     
borrowed money of each of the Companies outstanding as of the date hereof       
(including the Acquisition-Related Notes), stating the origin of the obligation,
the obligee of such obligation, the security therefor (including a specific     
description of collateral), the terms of payment and the amount owed as of the  
date hereof                                                                     

5.12     TAX RETURNS AND PAYMENTS.                            

          (a)      Payment of Taxes and Other Matters. Except as
otherwise disclosed in Schedule 5.12 attached hereto: (i) all material Tax      
Returns, including estimated Tax returns and reports of every kind with respect 
to Taxes which are due to have been filed by HSA-Texas and the Subsidiaries on  
or before the Closing Date in accordance with any applicable law in all         
jurisdictions where HSA-Texas or any Subsidiary is subject to Taxes, have been  
or will be duly filed on or before the Closing Date and are, or on or before the
Closing Date will be, true, correct and complete in all material respects; (ii) 
all Taxes, deposits or other payments which relate to Taxes required to be paid 
(whether or not shown on a Tax Return) by HSA-Texas and any Subsidiary on or    
prior to the Closing Date have been, or will be, paid in full or will be accrued
or reserved as a Tax liability on the December 31, 2000 Audited Financials      
and/or on the Estimated Financials; (iii) there are not now any extensions of   
time in effect with respect to the dates on which any Tax Returns or reports of 
Taxes were or are due to be filed; (iv) all deficiencies asserted as a result of
any examination of any Tax Return or report of Taxes of HSA-Texas or any        
Subsidiary have been, or on or before the Closing Date, will be, paid in full or
finally settled with no outstanding liability to HSA-Texas or any Subsidiary or 
will be included in the amount of the reserve for Tax liability shown on the    
December 31, 2000 Audited Financials and/or on the Estimated Financials, and no 
issue has been raised in any such examination which, by application of the same 
or similar principles, reasonably could be                                      

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expected to result in a proposed deficiency for any other period not so         
examined; (v) to HSA-Texas' knowledge, no claims have been asserted against and 
no proposals or deficiencies for any Taxes are being asserted against HSA-Texas 
or any Subsidiary, or proposed or threatened, and no audit or investigation of  
any Tax Return or report of Taxes is currently underway, pending or threatened; 
(vi) there are no outstanding waivers or agreements by HSA-Texas or any         
Subsidiary for the extension of time for the assessment of any Taxes or         
deficiency thereof, nor are there any requests for rulings, outstanding         
subpoenas or requests for information, notices of proposed reassessment of any  
property owned or leased by HSA-Texas or any Subsidiary or any other matter     
pending between HSA-Texas or any Subsidiary and any taxing authority; (vii)     
there are no liens for Taxes upon any property or assets of HSA-Texas or any    
Subsidiary except statutory liens for current Taxes not yet delinquent; (viii)  
to HSA-Texas' knowledge, no claim has ever been made by a Tax Authority in a    
jurisdiction where any Subsidiary does not file Tax Returns that such Subsidiary
is or may be subject to Tax by that jurisdiction; (ix) no Subsidiary is a party 
to or bound by any tax allocation or tax sharing agreement and has no current or
potential contractual obligation to indemnify any other Person with respect to  
Taxes; (x) no Subsidiary and, with respect to Flow-Through Taxes attributable to
the operations of HSA-Texas, no Shareholder, is required to include in income   
any adjustment pursuant to Section 481(a) of the Code by reason of a voluntary  
change in accounting method initiated by such Subsidiary or HSA-Texas, nor to   
HSA-Texas' knowledge, has the Internal Revenue Service proposed any adjustment  
or change in accounting methods for HSA-Texas or any Subsidiary.                

                 (b)      Subchapter S Status. HSA-Texas made a valid election
to be treated as an S Corporation for U.S. federal income tax purposes effective
as of January 1, 1983 (the "S Effective Date"), and such election has remained  
valid and effective at all times since such date, and HSA-Texas will be an S    
corporation up to and including the day before the Closing Date. HSA-Texas has  
made available to PRGX a true, correct and complete copy of its S election, and 
acknowledgement of receipt thereof by the Internal Revenue Service.             

        5.13     FIXED ASSETS. The Fixed Assets and the fixed assets leased by
each of the Companies include all of the furniture, fixtures, and equipment     
owned and used by each of the Companies in the operation of the Business. Except
as specifically set forth on Schedule 1.1(a) attached hereto, each of the Fixed 
Assets is in the possession of the Companies and is in good operating condition 
and repair, normal wear and tear excepted. Prior to the Closing, HSA-Texas will 
deliver to PRGX a true, correct and complete list of the Fixed Assets of the    
Companies that is reconciled with the Fixed Assets line item of the Estimated   
Balance Sheet.                                                                  

5.14     INFORMATION ON AUDITS; ACCOUNTS RECEIVABLE.          

       (a)      Information on Audits. Schedule 5.14(a) will be delivered by
HSA-Texas to PRGX on or before 3 days after the mailing by PRGX of the Proxy    
Statement to its shareholders. Schedule 5.14(a), when so delivered, will be a   
true, correct and complete list, as of the last day of the calendar quarter     
immediately preceding delivery of such Schedule, of the following information   
with respect to each Active Audit of Key Clients; provided that with respect to 
such Schedule, Key Clients shall not be identified by name, but shall be        
represented by a letter of the alphabet, and at least 3 business days prior to  
the Closing, HSA-Texas will update the information contained on Schedule 5.14(a)
so as to be true, correct and complete as of the Closing Date, and deliver to   
PRGX a key which identifies the name and address of the Key Client represented  
by each letter on such list:                                                    

(i)      name of Client;  

          (ii)     primary or secondary audit;

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                   (iii)    scope of audit (e.g., all divisions,
Southeast region only-merchandise, expenses, advertising, real estate);         

                         (iv)     audit year(s) or other covered time period
of audit;                                                                       

                          (v)      the contract rate for the Company's service
fee;                                                                            

                     (vi)     Client reserve or holdback percentage;

                    (vii)    audit commencement date and projected
completion date;                                                                

                   (viii)   aggregate claims approved by Client;

                     (ix)     aggregate gross service fees billed to
Client by the Company for such audit;                                           

                          (x)      aggregate amount of cash receipts from such
audit;                                                                          

                 (xi)     reserve amount held by Client; and

                          (xii)    the aggregate amount of Vendor Paybacks per
audit that have been paid as of June 30, 2001 (and as of the last day of the    
calendar quarter immediately preceding the Closing Date).                       

For purposes hereof, "Active Audits" means, collectively, all those audits of   
Clients of the Business in respect of which claims remain to be written,        
including those listed on Schedule 5.14(a) attached hereto. "Inactive Audits"   
means, collectively, all those audits for Clients of the Business in respect of 
which no claims remain to be written, including those in respect of which Client
continues, as of the date hereof, to hold a reserve for credits, chargebacks or 
other Vendor Paybacks. A "Vendor Payback" means the credits, chargebacks or     
payments made by a Company to a Client as a result of the Client's refund of    
payments made to such Client's vendor refunding commissions received by said    
Company from such Client.                                                       

                 (b)      Accounts Receivable. Prior to the Closing, HSA-Texas
shall provide PRGX with a true, correct and complete list of the Accounts       
Receivables of the Companies and the Affiliated Foreign Operating Companies     
reconciled with the Accounts Receivable line item on the Estimated Balance      
Sheet, showing by Client and by each Active Audit for such Client, the terms and
time period for collection thereof. Each of the Accounts Receivable is bona fide
and represents a valid obligation arising from sales actually made or services  
actually performed by the Companies or the Affiliated Foreign Operating         
Companies in the ordinary course of Business. Each of the Accounts Receivable   
shall be as of the Closing Date current and collectible in full within ninety   
(90) days after the day on which it first becomes due and payable net of the    
reserve shown on the Estimated Balance Sheet (which reserve will be adequate and
calculated consistent with past practice and will not represent a greater       
percentage of the Accounts Receivable reflected on the Estimated Balance Sheet  
than the reserve to the accounts receivable on the December 31, 2000 balance    
sheet contained in the Audited Statements) and will not represent a material    
adverse change in the composition of such Accounts Receivable in terms of aging.
There is no contest, claim, dispute, defense or right of setoff relating to the 
amount or validity of such Account Receivable, except for possible vendor       
payback claims of the Client. As to each such Account Receivable, to the        
Knowledge of HSA-Texas and, if such Account Receivable is on the books of a     
Subsidiary, to the knowledge of such Subsidiary, neither the vendor nor the     
respective Client has objected to the claim for reimbursement upon which such   
Account Receivable is based. The Work in Progress included in the Acquired      
Assets is bona fide and will, if and when converted to Accounts Receivable,     
represent valid obligations arising from sales actually made or services        
actually performed by the Companies in the                                      

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ordinary course of business, subject only to possible vendor pay-back claims of 
the Client.                                                                     

5.15     MATERIAL CONTRACTS; LICENSE AGREEMENTS.              

           (a)      Definition of Material Contract. Schedule 5.15
attached hereto is a true, correct and complete list of all "Material Contracts"
which, for purposes hereof, means, collectively, all Contracts which:           

                           (i)      are with those entities which constitute Key
Clients for 2000 or 2001;                                                       

                         (ii)     evidence the obligation of any Company for
debt to any Person for borrowed money or evidence the obligation of any Person, 
including any franchisee or licensee, to any of the Companies for borrowed money
(including seller/licensee financing arrangements, but not Leases);             

                      (iii)    are license agreements (including those
related to Software), either as licensor or licensee, including all agreements  
with all Licensees and which involve an aggregate annual expenditure or receipt 
by any Company of $25,000 or more;                                              

                         (iv)     are with strategic or business partners of
any Company, including all agreements relating to the Salt Lake City Data       
Processing Center and the direct to store delivery audit operations of the      
Business;                                                                       

                       (v)      involve the provision of data processing
services or telecommunications services to any Company and which involve an     
aggregate annual expenditure by any Company of $100,000 or more;                

                        (vi)     are contracts with vendors of products or
services to any Company (including supply or requirements contracts), indicating
any which are not cancelable by such Company without cost on 60 days or less    
notice and which involve an aggregate annual expenditure by any Company of      
$100,000 or more;                                                               

                (vii)    are with employees or independent
contractors or sales agents of any Company;                                     

                          (viii)   relate to any merger, asset purchase, stock
purchase or similar purchase and sale agreement to which any of the Company is  
or was a party within the last three years, or has continuing obligations in    
respect of, including all agreements relating to the prior acquisition of the   
imaging business, the Salt Lake City Data Processing Center and the DSD         
Acquisitions;                                                                   

                      (ix)     are with any current Client and have an
unexpired term of 2 or more years;                                              

                 (x)      have or may have the effect of (1)
prohibiting or impairing any business practice of the Companies, any acquisition
of property (tangible or intangible) by Companies or the conduct of business by 
the Companies, (2) requiring the referral of any business by the Companies, or  
(3) requiring or purporting to require the payment of money or the acceleration 
of performance of any obligations of any Company by virtue of the Closing; or   

                         (xi)     are Client Contracts which contain any (1)
obligations to provide equipment or services beyond the scope of the Business or
(2) any guaranty, rebate or refund that will or is reasonably likely to exceed  
$25,000 in any 12 month period.                                                 

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Schedule 5.15 indicates thereon the category, by section reference, of Material 
Contract described in this Section 5.15(a) to which such Material Contract      
belongs. Notwithstanding anything to the contrary herein, with respect to the   
information about Clients and Key Clients on the Schedules or deliveries        
required to be delivered as of the date hereof by this Section 5.15, Client and 
Key Clients shall not be identified by name, but shall be represented by a      
letter of the alphabet, and immediately prior to the Closing, HSA-Texas will    
deliver to PRGX a key which identifies the name and address of the Client or Key
Client represented by each letter on such list.                                 

                  (b)      Certain Representations regarding Material Contracts.
Except as specifically set forth in Schedule 5.15(b)-1, no Company has entered  
into any agreement under which it is restricted from providing services to      
Clients or potential Clients or any class of Clients, in any geographic area    
during any period of time or in any segment of the market. HSA-Texas and        
Shareholders have provided or made available to PRGX true, correct and complete 
copies of all written Material Contracts, including any and all amendments and  
waivers thereto, and have provided descriptions of the material terms of any    
oral Material Contracts on Schedule 5.15(b)-2 hereof. Assuming the Material     
Contracts constitute the valid and binding agreements of the Company party      
thereto, such Material Contracts are valid, legally binding and enforceable     
against the other parties thereto subject to laws of general application in     
effect affecting creditors' rights and subject to the exercise of judicial      
discretion in accordance with general equitable principles. Except as           
specifically set forth on Schedule 5.15(b)-3, no Company nor, to the Knowledge  
of HSA-Texas or any Shareholder, any other party to any of the Material         
Contracts, is in breach of, or in default under, any of the Material Contracts, 
and no event has occurred which, with the giving of notice or lapse of time, or 
both, would constitute a default by any Company or, to the Knowledge of         
HSA-Texas or any Shareholder, any other party to any of the Material Contracts. 
Except as specifically set forth on Schedule 5.15(b)-4, the assignment of any of
the Material Contracts to PRGX in accordance with this Agreement will not       
constitute a breach or violation of such Material Contract.                     

             (c)      Contracts regarding Licensees. Prior to the date
hereof, HSA-Texas has provided to PRGX true, correct and complete copies of all 
agreements, together with all amendments, supplements and addenda thereto,      
between PRGX and each Licensee. In addition to the representations set forth in 
subsection (b) above, HSA-Texas and Shareholders make the following additional  
representations in respect of Material Contracts involving a Licensee. With     
respect to the German Licensee, HSA-Texas has the absolute and unqualified right
to purchase the license granted to such Licensee pursuant to the terms of a     
written agreement, true, correct and complete copies of which have been         
previously delivered to PRGX.                                                   

    5.16     MATERIAL LEASES. Schedule 5.16 attached hereto is a true,
correct and complete list of all "Material Leases," which means, for purposes   
hereof, all Leases which (a) involve an aggregate annual expenditure by any     
Company of $25,000 or more, (b) are not cancelable by such Company without cost 
on sixty (60) days' or less notice, or (c) have a term which extends for more   
than one (1) year from the Closing Date. HSA-Texas has delivered to PRGX true,  
correct and complete copies of all of the Material Leases, together with all    
amendments, addenda and supplements thereto. Except as specifically set forth on
Schedule 5.16, with respect to each Material Lease:                             

         (a)      the Company party thereto holds the leasehold interest created
under each Material Lease;                                                      

        (b)      assuming the Material Lease constitutes the valid and binding
agreement of such Company, the Material Lease is legal, valid, binding and      
enforceable against the other party thereto and in full force and effect,       
subject to laws of general application in effect affecting creditors' rights and
subject to the exercise of judicial discretion in accordance with general       
equitable principles;                                                           

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                  (c)      subject to obtaining any necessary consent in respect
of the transactions contemplated hereunder and assuming the Material Lease      
constitutes the valid and binding agreement of the party thereto other than such
Company, the Material Lease will continue to be legal, valid, binding and       
enforceable against PRGX and in full force and effect on identical terms        
following the Closing Date;                                                     

                (d)      no Company, nor, to HSA-Texas' or any Shareholder's
Knowledge, any other party to the Material Lease is in breach or default, and no
event has occurred which, with the giving of notice or lapse of time, would     
constitute a breach or default by such Company or permit termination,           
modification or acceleration thereunder by any other party thereto;             

               (e)      no Company nor, to HSA-Texas' or any Shareholder's
Knowledge, any other party to the Material Lease has repudiated in writing any  
provision thereof;                                                              

            (f)      there have been and there are no disputes, oral
agreements or forbearances in effect as to the Material Lease;                  

            (g)      no Company has assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in the leasehold of the   
Material Lease and HSA-Texas and Shareholders are not aware of any such         
assignment, transfer, conveyance, mortgage, deed in trust or encumbrance of any 
interest in the leasehold of the Material Lease;                                

              (h)      in respect of each such Material Lease which is a
real property lease, (i) such lease is the only instrument which gives rise to a
right of occupancy by the Company at such location, (ii) Company is the original
lessee (or has validly succeeded to the rights of the original lessee) under    
such lease, (iii) Company actively occupies such location, (iv) Company has paid
the rent under the lease on a current basis and there are no past due amounts;  
and                                                                             

               (i)      in respect of each such Material Lease which is an
equipment lease, (i) such Company is in actual possession of the equipment      
leased under each equipment lease, (ii) Company has paid the rent set forth in  
each of the equipment leases on a current basis and there are no past due       
amounts. Attached as Schedule 5.16 is a true, correct and complete list of the  
equipment subject to each equipment lease and the location of such equipment.   

        5.17     CLIENTS AND KEY CLIENTS. For purposes hereof, "Clients" means
those clients to whom any Company provides or has provided the services of the  
Business and "Key Clients" means those 27 Clients of the Companies and the      
Affiliated Foreign Operating Companies, which as of December 31, 2000 (or in    
respect of 2001, as of the period from January 1, 2001 to June 30, 2001)        
accounted for the highest percentages of the revenue of the Clients generating  
at least 80% of the revenues of the Companies and the Affiliated Foreign        
Operating Companies on a combined basis during such period.                     

            (a)      Schedule 5.17(a-1) attached hereto contains the
number of Key Clients for each of 2000 and 2001, and the aggregate revenues of  
such Clients for each of such periods. Schedule 5.17(a-2) separately states the 
number of Key Client Contracts (and the aggregate revenues of such number of Key
Clients for each of such periods) which contain any of the following provisions:
(i) performance guaranties, refunds or rebates that could reasonably be expected
to exceed $25,000, with respect to any annual audit period, (ii) have or may    
have the effect of limiting or impairing any material business practice or      
activity of any Company, (iii) have a net commission rate below 20% of recovered
funds, (iv) require any referral of business by any Company, (v) allow for      
cancellation by the Client on less than 90 days notice or (vi) require consent  
to assignment, the payment of money or the acceleration of performance of any   
obligation by a Company because of the proposed transaction with PRGX. Except   
for the number of Key Clients (with the aggregate revenues for such number for  
each period) listed on Schedule 5.17(a-3), to the                               

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Knowledge of HSA-Texas, there are no Key Clients who have, within the 12 months 
immediately preceding the date hereof, expressed to any Company material        
dissatisfaction with the Companies' services. Schedule 5.17(a-4) contains the   
revenues generated by all Key Clients during each of 2000 and 2001, the         
percentage of the total revenues of the Companies and the Affiliated Foreign    
Operating Companies on a combined basis for each such period that the revenues  
of the Key Clients for such period constitutes, and the average remaining term  
of the Contracts for all Key Clients. Schedule 5.17(a-5) contains the number of 
Key Clients gained from or lost to any Person other than PRGX in the last 24    
months and the number of primary audits for Key Clients converted to secondary  
audits in the last 24 months, other than audits in which PRGX performs the      
primary audit. All written contracts with Key Clients reflect all material terms
of the contractual relationship of the Key Client with the Company.             

                  (b)      Schedule 5.17(b-1) when delivered, as provided below,
will be a true, correct and complete list of all Key Clients, which will be     
separately identified for each of 2000 and 2001. Schedule 5.17(b-2) will        
specifically identify each Key Client Contract which contains any of the        
following provisions: (i) performance guaranties, refunds or rebates that could 
reasonably be expected to exceed $25,000, with respect to any annual audit      
period, (ii) have or may have the effect of limiting or impairing any material  
business practice or activity of any Company, (iii) have a net commission rate  
below 20% of recovered funds, (iv) require any referral of business by any      
Company, (v) allow for cancellation by the Client on less than 90 days notice or
(vi) require consent to assignment, the payment of money or the acceleration of 
performance of any obligation by a Company because of the proposed transaction  
with PRGX. Except as will be specifically described on Schedule 5.17(b-3), to   
the Knowledge of HSA-Texas, there are no Key Clients who have, within the 12    
months immediately preceding the date hereof, expressed to any Company material 
dissatisfaction with the Companies' services. Schedule 5.17(b-4) will contain a 
true, correct and complete list for calendar year 2000 and 2001 of each Key     
Client for each such period, the revenues generated by each such Key Client     
during the respective period, the percentage of the total revenues of the       
Companies and the Affiliated Foreign Operating Companies on a combined basis for
each such period that the revenues of each Key Client for such period           
constitutes, and the term of the Contract for such Key Client, including the    
expiration date thereof. In addition, Schedule 5.17(b-5) will include a list of 
Key Clients gained from or lost to any Person other than PRGX in the last 24    
months a list of primary audits for Key Clients converted to secondary audits in
the last 24 months, other than audits in which PRGX performs the primary audit, 
and the details of any rebate, recovery advance, or recovery guarantee          
provisions with Key Clients for 2000 and 2001, and the assumption or            
reimbursement of Key Client expenses associated with data acquisition or other  
audit related activities ("Key Client Programs"). Schedule 5.17(b-1) through    
Schedule 5.17(b-5) will be delivered to PRGX at least five business days prior  
to the Closing. In addition, upon delivery of such Schedules, HSA-Texas will    
update the information contained on Schedule 5.17(b), so as to be true, correct 
and complete as of the Closing Date. At least five days prior to the Closing,   
HSA-Texas will provide PRGX true, correct and complete copies of all contracts  
with all Key Clients, together with all amendments thereto. All contracts with  
Key Clients reflect all material terms of the contractual relationship of the   
Key Client with the Company as of the Closing Date.                             

5.18     EMPLOYEES; ASSOCIATES.                               

(a)      Employees.                         

                           (i)      Schedule 5.18(a) includes in respect to each
current employee of each of the Companies, a true, correct and complete list of 
the name, location address, function and title of such person, base salary or   
hourly rate, any bonus, commission formulae or profit sharing agreements        
applicable thereto, all other benefits and all accrued commissions, the amount  
of any advances on commissions (describing the repayment terms thereof) and     
expenses such Person has received which are outstanding as of the Closing Date  
and the name of the entity which pays the compensation or commission to such    
employee. Schedule 5.18(a) includes a true, correct and complete list of all    
agreements and understandings                                                   

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between each Company and its employees (including a description on such Schedule
of all oral agreements) concerning their employment relationship with such      
Company (including all restrictive covenant agreements and severance benefits), 
true, correct and complete copies of which have been provided to PRGX (or       
descriptions contained on Schedule 5.18(a) in respect of any oral agreements).  

                        (ii)     Except as otherwise set forth in Schedule
5.18(a), the employment of each employee is terminable within 30 days' written  
notice by such Company or such employee, subject to any rights to salaries and  
commissions earned prior to such termination and no such Person has been granted
the right to continued employment or engagement by any Company or to any        
material compensation or payment following termination of employment with such  
Company.                                                                        

                        (iii)    Schedule 5.18(a) contains a true, correct
and complete copy of HSA-Texas' standard form employment agreement and          
non-competition and restrictive covenant agreement with its employees. Except to
the extent specified on Schedule 5.18(a), there are no deviations from such     
standard contract in the agreements with the employees, except for immaterial   
modifications which do not confer additional benefits on such employee or impose
additional liability on any Company.                                            

                         (iv)     To HSA-Texas' and Shareholders' Knowledge,
no officer or Key Employee, or any group of employees, intends to terminate     
their employment with any Company, nor does any Company have a present intention
to terminate the employment of any officer, Key Employee or group of employees. 

(b)      Associates.                        

                           (i)      Schedule 5.18(b) includes in respect to each
Associate who, as of the date of this Agreement, is engaged by any of the       
Companies to perform auditing services a true, correct and complete list of the 
name, location address, function and title of such person, the Associate's      
commission percentage, any bonus arrangements, all accrued commissions, the     
amount of any advances on commissions or other amount owed to any Company       
(describing the repayment terms thereof) which are outstanding as of the Closing
Date, any rights to payments upon or after termination of the independent       
contractor relationship with any of the Companies, any other benefits, and the  
name of the entity which pays the commission to such Associate. Prior to the    
Closing, HSA-Texas shall have delivered to PRGX, true, correct and complete     
copies of all agreements and understandings between each Company and its        
Associates (including a written description on such Schedule of all oral        
agreements) together with all amendments, addenda and supplements thereto       
concerning their relationship with such Company (including any restrictive      
covenant agreements and any severance agreements).                              

                        (ii)     Except as otherwise set forth in Schedule
5.18(b), the engagement of each Associate is terminable within 30 days' written 
notice by such Company or such Associate, subject to any rights to commissions  
earned prior to such termination and no such Person has been granted the right  
to continued engagement by any Company or to any material compensation or       
payment following termination of engagement with such Company.                  

                          (iii)    Schedule 5.18(b) attached hereto contains a
true, correct and complete description of the Companies' policy for             
post-termination trailing commissions payable to Associates and its policy for  
the deduction of commissions associated with Client paybacks and lists any      
material deviations from such policy in respect of any Associate, except for    
immaterial modifications which do not confer additional benefits on such        
Associate or impose additional liability on any Company. Each Associate and any 
other Person who is designated by any Company as an independent contractor has  
met, and until the Closing Date will continue to meet, the requirements under   
the Code, and the regulations promulgated thereunder to be an independent       
contractor.                                                                     

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                         (iv)     To HSA-Texas' and Shareholders' Knowledge,
no Associates, or any group of Associates, intends to terminate their engagement
with any Company, nor does any Company have a present intention to terminate the
engagement of any Associate or group of Associates.                             

               (v)      None of Companies' agreements or
arrangements with any sales agents or Associates will obligate PRGX to pay      
commissions, fees or other compensation to such sales agents or Associates for  
revenues earned by PRGX for services performed for Clients after the Closing    
Date other than services of the type the Companies provided to such Clients     
prior to the Closing Date.                                                      

               (c)      Employment Laws. Each Company (i) is in compliance
with all applicable laws, rules and regulations respecting employment,          
employment practices, terms and conditions of employment and wages and hours in 
respect of its employees and, to the extent applicable, its Associates of all   
Governmental Entities which have jurisdiction over such Company's employment    
practices; (ii) has withheld all amounts required by law or by agreement to be  
withheld from the wages, salaries and other payments to its employees; (iii) is 
not liable for any arrears of wages or any taxes or any penalty for failure to  
comply with any of the foregoing in respect of any employees or Associates; and 
(iv) is not liable for any payment to any trust or other fund or to any         
governmental or administrative authority with respect to unemployment           
compensation benefits, social security or other benefits for employees (other   
than routine payments to be made in the normal course of business and consistent
with past practice). In respect of each Company's current and former employees  
and Associates, except as set forth on Schedule 5.18(b), (i) there are no       
charges, investigations, administrative proceedings or formal complaints of     
discrimination pending or, to HSA-Texas' and the Shareholders' Knowledge,       
threatened before any Governmental Entity against any Company; (ii) there have  
been no audits by any Governmental Entity of any of the Companies' equal        
employment opportunity practices; (iii) no current or former employee or        
Associate of any Company has notified any Company of any fact or circumstance   
which, if true, might constitute a violation of any Employment Law; and (iv) to 
HSA-Texas' and the Shareholders' Knowledge, no Company nor any employee of any  
Company has engaged in any activity which constitutes a violation of any        
Employment Law. For purposes hereof, "Employment Laws" means any constitutional,
statutory, regulatory or common law of any Governmental Entity relating to      
employment discrimination or harassment, including, but not limited to, the Age 
Discrimination in Employment Act, the Older Workers' Benefit Protection Act,    
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991 and the 
Americans with Disabilities Act.                                                

            (d)      Breaches. To the Knowledge of HSA-Texas and the
Shareholders, and, except as set forth in Schedule 5.18(d), (i) no Person       
employed or engaged as an employee, sales agent, business or strategic partner, 
Associate, independent contractor or consultant by any Company has, in respect  
of his or her activities to date on behalf of such Company, violated any of the 
terms or conditions of his or her employment agreement, independent contractor, 
proprietary inventions or similar agreement or other engagement with the Company
or any other contract to which Company is a party with any third party, or      
disclosed or used any trade secrets or proprietary or confidential information  
or documentation of any third party without the authorization of such third     
party, or interfered in the employment relationship between any third party and 
any of its employees and (ii) no Person employed or engaged as an employee,     
sales agent, business or strategic partner, independent contractor or consultant
by any Company has disclosed or used any trade secrets or any other proprietary 
or confidential information or documentation of any former employer or other    
third party, or has violated any non-compete obligation or confidential         
relationship that such Person has or may have had with any third party, in      
connection with such person's activities on behalf of the Companies. To         
HSA-Texas' and the Shareholders' Knowledge, except as set forth on Schedule     
5.18(d) and excluding any former employees or Associates who are performing     
services for PRGX or its affiliates, no former employees whose employment with  
any Company was terminated by such Company or by such employee or otherwise     
expired within the last 2 years and no Associate whose engagement with          

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any Company was terminated by such Company or by such Associate or otherwise    
expired within the last 2 years is currently or has within the last 2 years     
competed with the Business.                                                     

5.19     INTELLECTUAL PROPERTY.                               

             (a)      Schedule 5.19(a) is a true, correct and complete
list of all Intellectual Property Assets that are material to the conduct of    
the Business and/or are used by any of the Companies in the operation of the    
Business. Schedule 5.19(a) indicates with respect to the Intellectual Property  
Assets whether such Intellectual Property Asset is (i) owned by the Company,    
(ii) licensed to or from, the Company, and/or (iii) registered with any         
Governmental Entity (or whether an application for registration is pending).    
Except as would not, individually or in the aggregate, reasonably be expected   
to have a Material Adverse Effect on HSA-Texas: (A) each of the Companies owns, 
or is validly licensed to use (in each case, free and clear of all liens,       
security interests, charges, encumbrances and other adverse claims), all        
Intellectual Property Assets used in or necessary for the conduct of its        
business as currently conducted; (B) to the Knowledge of HSA-Texas and          
Shareholders, the use of any Intellectual Property Assets by any Company does   
not infringe on or otherwise violate the rights of any Person; (C) except as of 
the date hereof as disclosed in Schedule 5.19(a) with respect to certain        
software owned by H. Schultz which will be contributed by him to HSA-Texas      
prior to Closing in accordance with Section 4.21 hereof and with respect to     
which this representation will apply at Closing, the use of any licensed        
Intellectual Property Assets is in accordance with applicable licenses pursuant 
to which the Company acquired the right to use such Intellectual Property       
Asset; and (D) except as of the date hereof as disclosed in Schedule 5.19(a)    
with respect to certain software owned by H. Schultz which will be contributed  
by him to HSA-Texas prior to Closing in accordance with Section 4.21 hereof and 
with respect to which this representation will apply at Closing, to the         
Knowledge of HSA-Texas and Shareholders, no Person is challenging, infringing   
on, or otherwise violating any right of any of the Companies with respect to    
any Intellectual Property Asset owned by and/or licensed to any of the          
Companies. Except as would not reasonably be expected, individually or in the   
aggregate, to have a Material Adverse Effect on HSA-Texas, neither HSA-Texas    
nor any of the Shareholders has Knowledge of any pending claim, order or        
proceeding with respect to any Intellectual Property Asset used by any Company  
and to its Knowledge no Intellectual Property Asset owned and/or licensed by    
any Company is being used or enforced in a manner that would reasonably be      
expected to result in the abandonment, cancellation or unenforceability of such 
Intellectual Property Asset.                                                    

              (b)      Schedule 5.19(b) contains a complete and accurate
list and summary description of all of the Software and Developments. Schedule  
5.19(b) identifies any third-party software which has been incorporated into    
the Software (the "Incorporated Software"), and identifies any other standard   
third party software required to utilize the Software. Except as specified on   
Schedule 5.19(b), no Company has taken any measures to register, patent,        
copyright or otherwise protect the Software other than reasonable efforts to    
protect the confidentiality of the source code for the Software. Except as set  
forth on Schedule 5.19(b), the Company identified on Schedule 5.19(b) owns      
outright the Software and Developments, and no Company has sold, licensed,      
leased or otherwise transferred or granted any interest or rights to any of     
such Software and Developments, and:                                            

                          (i)      Such Company possesses or has access to the
original and all copies of all documentation, including all source code for all 
Software and Developments owned by it;                                          

                           (ii)     any Intellectual Property Assets (other than
those intellectual property assets claimed by Evert Software in the litigation  
described on Schedule 5.24 attached hereto) that were created by employees of   
any Company or by Associates were made in the regular course of such employees' 
employment relationship with such Company or such Associates' engagement        
directly or indirectly by the Company using such Company's facilities and/or    
resources and, as such, constitute "works made for hire" within the meaning of  
the United States Copyright Act of 1976, as amended (the "Copyright Act"). Each 
Company acquired its rights to the Incorporated Software pursuant to the license
agreements listed on Schedule 5.19(b), complete copies of which have been       
delivered to PRGX (the "Intellectual Property Rights Agreements"). As to        
Incorporated Software, each Company has the rights granted to it in the related 
Intellectual Property Rights Agreements;                                        

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               (iii)    with respect to all Software and
Developments and except as disclosed in the Intellectual Property Rights        
Agreements or the Client Contracts: (A) neither the manufacture, marketing,     
license, sale or use of any Software or Development violates or will violate any
license or agreement with any third party or infringes or has infringed on the  
intellectual property rights of others, (B) Company identified on Schedule      
5.19(b) has the exclusive right to use the Software and Developments, (C) such  
Company has retained the exclusive right to reproduce, copy, sell, license      
and/or distribute the Software and Developments.                                

                           (iv)     All of the Software which is licensed by any
Company under Client Contracts complies in all material respects with the       
performance representations with respect thereto contained in such Company's    
user and technical manuals in effect at the time of the Client Contracts, and,  
when used in accordance with such user and technical manuals, performs in       
accordance with the Client Contracts in all material respects. Except as set    
forth on Schedule 5.19(b), any such Software as is currently made available for 
licensing to or access by customers is ready for installation and/or use in     
substantial conformance with the capability and performance standards set forth 
in the user or instruction manual associated with such Software. Any such       
marketed Software system is documented and the documentation supplied to each   
licensee or user of each such system is sufficient in all material respects to  
enable a user reasonably competent in such matters to operate, access and/or use
such system as intended. Nothing has come to the attention of any Company or any
Shareholder to indicate that the license agreements entered into by any Company 
for use of Software by customers do not contain provisions for protection of    
such Company's confidential information, trade secrets and proprietary rights   
which such Company reasonably believes have been and will be sufficient to      
preserve such Company's proprietary rights therein.                             

                          (v)      Except as set forth on Schedule 5.19(b), no
Company has any royalty, commission or similar obligation relating to the       
Software.                                                                       

                    (vi)     To the Knowledge of HSA-Texas and the
Shareholders, none of the past or present employees or independent contractors  
of any Company is in possession of Software, nor has made unauthorized use of   
Software or the Intellectual Property Assets, except such as have had and will  
have no Material Adverse Effect. To the Knowledge of HSA-Texas and the          
Shareholders, no party other than the Companies has access to or possession of  
source code, except as disclosed in the Client Contracts. Except as set forth on
Schedule 5.19(b), none of the elements of the Software and the Intellectual     
Property Assets is in the public domain.                                        

               (c)      Subject to receipt of any consents required by the
terms thereof, the consummation of the transactions contemplated hereby will not
cause the termination, or cancellation, or otherwise affect in any manner any   
licenses or other rights held by any Company in the Intellectual Property Assets
(including rights to Incorporated Software) and will not alter or in any way    
impair any of the Intellectual Property                                         

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Assets (including rights to Incorporated Software).                             

           (d)      Each of the Companies has taken all reasonable
precautions to protect the secrecy, confidentiality, and value of its Trade     
Secrets. Companies have good title and an absolute (but not necessarily         
exclusive) right to use the Trade Secrets. The Trade Secrets are not part of the
public knowledge or literature, and, to HSA-Texas' and the Shareholders'        
Knowledge, have not been used, divulged, or appropriated either for the benefit 
of any Person or to the detriment of any Company. Except as set forth on        
Schedule 5.19(d), no Trade Secret is subject to any adverse claim or, to the    
Knowledge of HSA-Texas and the Shareholders, has been challenged or threatened  
in any way.                                                                     

                (e)      All third party software utilized by any Company is
identified in either Schedule 1.1(a) or Schedule 5.19(e). No Company uses any   
third party software which is not properly licensed to it, nor has it violated  
any such license. All software on each personal computer owned or leased by any 
Company is properly licensed to such Company, and such Company has in its       
possession written evidence of each such license. Upon the Closing, each such   
license will permit PRGX's continued use of such third party software after the 
Closing Date, with no additional cost to PRGX.                                  

          (f)      All obligations of H. Schultz under the Lease
Agreement dated December 1, 1999 between H. Schultz and HSA-Texas relating to   
computer software purchased from Oracle Corporation and all obligations of      
HSA-Texas under the Software License and Services Agreement between HSA-Texas   
and Oracle dated August 31, 1999 have been fully satisfied by HSA-Texas and all 
rights to the software that is the subject matter thereof have vested in        
HSA-Texas.                                                                      

  5.20     INTERNET PRESENCE. Except as set forth on Schedule 5.20
attached hereto, no Company has any public, private or reserved presence on the 
world wide web, multi-party extranet, virtual private network, or similar       
internet based, linked system ("Internet Presence"). Each Company's domain      
name(s), if any, are currently registered with the currently authorized Internet
Domain Name Registrar, are transferable to PRGX, and are in good standing.      
Except as set forth on Schedule 5.20 attached hereto, Companies warrant that    
their Internet Presence, is wholly passive and informational in nature and      
involves no interactivity between third parties and any Company including       
purchases, sales, leases or other commercial transactions conducted in any      
degree by or through the Internet Presence.                                     

     5.21     YEAR 2000 COMPLIANCE. Except as set forth on Schedule 5.21
attached hereto, each Company has previously performed unit, integration and    
acceptance testing of all software, hardware, and all other devices containing  
or utilizing electronic components reasonably necessary to the performance of   
the Business' obligations and operations and the Software (all of the foregoing,
collectively, "Computer Systems"), including all Computer Systems owned, leased,
sold, developed, assembled, distributed, supported, maintained, used, or        
operated by, to, for, or from any Company, and the results of such testing, as  
well as the Companies' experience to date, establish that all Computer Systems, 
have functioned normally before, during, and after the change from the year 1999
to each successive year through the year 2010, and Companies have no basis to   
believe there will be any interruption in service in the future attributable to 
such change.                                                                    

5.22     BENEFIT PLANS AND ERISA.                             

                  (a)      Employee Benefit Plans. Schedule 5.22(a) sets forth a
true and complete list of each "employee benefit plan" (as defined by Section   
3(3) of the Employee Retirement Income Security Act of 1974, as amended         
("ERISA")), and any other bonus, profit sharing, pension, compensation, deferred
compensation, stock option, stock purchase, fringe benefit, severance,          
post-retirement, scholarship, disability, sick leave, vacation, individual      
employment, commission, bonus, payroll practice, retention, or other plan,      
agreement, policy, trust fund or                                                

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arrangement (each such plan, agreement, policy, trust fund or arrangement is    
referred to herein as an "Employee Benefit Plan", and collectively, the         
"Employee Benefit Plans") that is currently in effect, was maintained since     
December 31, 1994 or which has been approved before the date hereof but is not  
yet effective, for the benefit of (i) directors or employees of any Company     
working in the Business or any other persons performing services for any Company
in the Business, including without limitation, the Associates (ii) former       
directors or employees of any Company working in the Business or any other      
persons formerly performing services for any Company in the Business, including,
without limitation, any Person formerly performing services for any Company as  
an independent contractor, and/or (iii) beneficiaries of anyone described in (i)
or (ii) (collectively, "Business Employees") or with respect to which any       
Company or any "ERISA Affiliate" (hereby defined to include any trade or        
business, whether or not incorporated, other than HSA-Texas, which has employees
who are or have been at any date of determination occurring within the preceding
six (6) years, treated pursuant to Section 4001(a)(14) of ERISA and/or Section  
414 of the Code as employees of a single employer which includes any Company)   
has or has had any obligation on behalf of any Business Employee. Except as     
disclosed on Schedule 5.22(a) attached hereto, there are no other benefits to   
which any Business Employee is entitled.                                        

                  (b)      Documents Delivered. HSA-Texas has delivered to PRGX,
with respect to each Employee Benefit Plan, true and complete copies of (i) the 
documents embodying and relating to each Employee Benefit Plan, including,      
without limitation, the current plan documents and documents creating any trust 
maintained pursuant thereto, all amendments, investment management agreements,  
group annuity contracts, administrative service contracts, insurance contracts, 
collective bargaining agreements, the most recent summary plan description with 
each summary of material modification, if any, and employee handbooks, (ii)     
annual reports including but not limited to Forms 5500, 990 and 1041 for the    
last three (3) years for the plan or any related trust, (iii) actuarial         
valuation reports and financial statements for the last three (3) years, (iv)   
each communication involving the plan or any related trust to or from the       
Internal Revenue Service ("IRS"), Department of Labor ("DOL"), Pension Benefit  
Guaranty Corporation ("PBGC") or any other governmental authority including,    
without limitation, the most recent determination letter received from the IRS  
pertaining to any Employee Benefit Plan intended to qualify under Sections      
401(a) or 501(c)(9) of the Code.                                                

               (c)      Compliance with ERISA and the Code; Pension Plans.
Except as set forth in Schedule 5.22(c), each Employee Benefit Plan is in       
compliance with the provisions of ERISA and the provisions of the Code          
applicable to it. Except as set forth in Schedule 5.22(c), no Company has       
maintained or contributed to any plan subject to the minimum funding standards  
of Section 302 of ERISA or Section 412 of the Code during its last six (6)      
fiscal years, and each plan maintained by an ERISA Affiliate which is subject to
Title IV of ERISA or Section 412 of the Code is fully accrued and funded in     
compliance with ERISA and the Code as of the Closing Date, and if any such plan 
or plans were terminated as of the Closing Date, the termination would satisfy  
the minimum funding requirements of ERISA and the Code. All Employee Benefit    
Plans which are "pension plans" as defined in Section 3(2) of ERISA have        
received favorable determination letters from the Internal Revenue Service as to
their tax-qualified status and the tax-exempt status of any related trust under 
Sections 401(a) and 501 of the Code, respectively, which determinations are     
currently in effect, and no event has occurred and no circumstances exists that 
will or could give rise to disqualification or loss of tax-exempt status of any 
such plan or trust. All amendments required to bring any such pension plans and 
related trusts into conformity with applicable law have been timely adopted or  
the applicable deadlines for making such amendments have not expired.           

                (d)      Multiple Employer Arrangements. Except as set forth
in Schedule 5.22(d), no Company nor any ERISA Affiliate maintains or contributes
to, is required to maintain or contribute to, or, since December 31, 1975, has  
maintained or contributed to, (i) a "multiemployer plan" (as defined by Section 
4001(a)(3) of ERISA), (ii) a "multiple employer welfare arrangement" (within the
meaning of Section 3(40) of ERISA), (iii) a "plan maintained by more than one   
employer" (within the meaning of Section 413(c) of the Code), or (iv) a         
voluntary employee beneficiary association within the meaning of                

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Section 501(c)(9) of the Code.                                                  

             (e)      No Employee Benefit Plan Claims. PRGX and PRGUSA
shall not, as a result of the transactions contemplated by this Agreement (or   
any employment by PRGX or PRGUSA of Business Employees): (i) become liable for  
any contribution, tax, lien, penalty, cost, interest, claim, loss, action, suit,
damage, cost assessment or other similar type of liability or expense of any    
Company or any ERISA Affiliate (including predecessors thereof) with regard to  
any Employee Benefit Plan or any Employee Benefit Plan sponsored, maintained or 
contributed to by an ERISA Affiliate (including predecessors thereof) (assuming 
a like definition of "Employee Benefit Plan" were applicable to ERISA Affiliates
as to those same types of agreements, policies, trusts, funds and arrangements  
sponsored, maintained or contributed to by them) (each such plan for an ERISA   
Affiliate, an "ERISA Affiliate Employee Benefit Plan"), including, without      
limitation, withdrawal liability arising under Title IV, Subtitle E, Part 1 of  
ERISA, liabilities to the PBGC, liabilities under Section 412 of the Code or    
Section 302(a)(2) of ERISA and liabilities arising from the failure to treat any
Person performing services for any Company or ERISA Affiliate as an employee (or
improper treatment of a Person as an employee), or (ii) be or become a party to 
any Employee Benefit Plan or any ERISA Affiliate Employee Benefit Plan.         

               (f)      No Liens. No Company, ERISA Affiliate, and none of
the Acquired Assets is subject to any lien arising under ERISA or the Code,     
including, but not limited to, a lien arising pursuant to Title IV of ERISA or  
Section 412 of the Code or a lien arising as a result of any tax imposed by     
Chapter 43 of Subtitle D of the Code. Neither HSA-Texas nor any ERISA Affiliate 
has ceased operations at a facility so as to become subject to the provisions of
Section 4062(e) of ERISA.                                                       

               (g)      COBRA Matters. Each Company, each ERISA Affiliate,
each Employee Benefit Plan and each Employee Benefit Plan "sponsor" or          
"administrator" (within the meaning of Section 3(16) of ERISA) has complied in  
all respects with the applicable requirements of Part 6 of Subtitle B of Title I
of ERISA and Section 4980B of the Code (such statutory provisions and           
predecessors thereof are referred to herein collectively as "COBRA"). Schedule  
5.22(g) attached hereto lists the name of each Business Employee who has        
experienced a "Qualifying Event" (as defined in COBRA) with respect to an       
Employee Benefit Plan who is eligible for "Continuation Coverage" (as defined in
COBRA) and whose maximum period for Continuation Coverage has not expired.      
Included in such list are the current address for each such individual, the date
and type of each Qualifying Event, whether the individual has already elected   
Continuation Coverage and, for any individual who has not yet elected           
Continuation Coverage, the date on which such individual was notified of his or 
her rights to elect Continuation Coverage. Schedule 5.22(g) attached hereto also
lists the name of each Business Employee who is on a leave of absence (whether  
or not pursuant to the Family and Medical Leave Act of 1993, as amended         
("FMLA")) and is receiving or is entitled to receive health coverage under an   
Employee Benefit Plan, whether pursuant to FMLA, COBRA or otherwise.            

                (h)      Accrued Vacation and Sick Pay. Attached hereto as a
part of Schedule 5.22(h) is a true, correct and complete list by employee of the
number of days and amount of accrued unpaid vacation and sick pay for each      
employee of each Company. No Company has any liability to Business Employees    
upon termination of employment for unused and/or accrued sick pay.              

        5.23     ENVIRONMENTAL COMPLIANCE. For purposes of this Agreement: (a)
"Environmental Laws" means the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., and all other applicable foreign,
federal, state, county, municipal, administrative or other laws, ordinances,    
rules, regulations and requirements or common law doctrines pertaining to       
environmental, health, safety or ecological conditions, along with any          
regulations promulgated thereunder; and (b) "Hazardous Material" means (i) any  
"hazardous substance", "hazardous waste" or "hazardous material" defined as such
in (or for                                                                      

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purposes of) any Environmental Law; (ii) any petroleum product; and (iii) any   
other substance, regardless of physical form, that is subject to any law        
regulating, or imposing obligations, liability, or standards of conduct         
concerning the protection of human health, plant life, animal life, natural     
resources, or property.                                                         

                  (a)      No Company, nor to the Knowledge of HSA-Texas and the
Shareholders, any prior owner, user or occupant of any property currently or    
formerly owned (collectively, the "Properties"), has conducted or authorized the
use, generation, transportation, storage, handling, treatment, or disposal of   
any Hazardous Material on the Properties, except as is necessary in the ordinary
course of business and in all cases in material compliance with the             
Environmental Laws and in each instance in a manner that has not and will not   
result in any liability to any Company, PRGX or the Properties;                 

               (b)      There has been by any Company no spill, discharge,
release, emission, or contamination of the Properties by any Hazardous Material;

            (c)      No Company nor any Shareholder has received any
written notice of, and to the Knowledge of HSA-Texas and the Shareholders, no   
Governmental Entity or any employee or agent thereof has determined, or         
threatens to determine, that there exists a violation of any Environmental Law  
at the Properties or that any Company has incurred any liability with respect to
the Properties or any wastes or material generated at the Properties under any  
Environmental Law;                                                              

               (d)      There is no pending litigation or proceeding by or
before any Governmental Entity in which it is alleged that there has been a     
discharge, spill, disposal or release of any Hazardous Material on or from the  
Properties, nor is any Company or any Shareholder aware of any facts or         
circumstances that would reasonably lead it to believe that any Person or       
Governmental Entity may allege any of the foregoing;                            

                (e)      There are no agreements between any Company and any
Governmental Entity relating in any way to the presence, spill, discharge,      
release, threat of release, storage, treatment or disposal of any Hazardous     
Material on or from the Properties;                                             

              (f)      There are no Environmental Laws applicable to the
Properties that would require any Company to obtain the approval of or provide  
notice to any Governmental Entity as a condition to the consummation of the     
transactions contemplated by this Agreement;                                    

               (g)      Each Company is, and at all times has been in full
compliance with, and has not been and is not in violation of or liable under any
Environmental Laws;                                                             

                  (h)      No Company is required to obtain any permits required
by any Environmental Laws to conduct the Business as it is presently being      
conducted;                                                                      

            (i)      No Company nor the Properties have incurred any
liability or obligation under the Environmental Laws or otherwise pertaining to 
Hazardous Materials that remains unresolved;                                    

               (j)      During each Company's leasing and occupancy of the
Properties, (A) none of the Properties has been excavated; and (B) to the       
Knowledge of HSA-Texas and the Shareholders no construction debris or other     
debris was buried on the Properties; and                                        

              (k)      HSA-Texas and Shareholders have delivered to PRGX
true and complete copies of all reports or tests with respect to the compliance 
of the Properties with the Environmental Laws and/or the presence of any        
Hazardous Material on the Properties, if any, that were (A) prepared for any    
Company or (B) prepared for other parties and are in the possession of any      
Company or any Shareholder.                                                     

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5.24     LITIGATION; JUDGMENTS.                               

                  (a)      Except as set forth on Schedule 5.24 attached hereto,
there is no action, proceeding or, to HSA-Texas' or Shareholders' Knowledge,    
investigation before any court, tribunal or governmental body pending or, to    
HSA-Texas' or Shareholders' Knowledge, threatened: (i) that has been commenced  
by or against or involving the Acquired Assets, any of the Companies or the     
Business, or (ii) that challenges, or may have the effect of preventing,        
delaying, making illegal, or otherwise interfering with any of the transactions 
contemplated herein or the Companies' or Shareholders' ability to consummate the
transactions contemplated by this Agreement and the HSA-Texas Transaction       
Documents or which might adversely affect the Business or the Acquired Assets.  

                  (b)      No event has occurred and no circumstance exists that
may give rise to or serve as a basis for the commencement of any such any       
action, proceeding or investigation described in subsection (a) above.          

                 (c)      None of the Companies or Shareholders are subject to
any judgment, order or decree entered in any lawsuit or proceeding relating to  
the Acquired Assets, the Companies or the operation of the Business, nor has any
such action been settled or resulted in a final judgment since January 1, 1999. 

    5.25     INSURANCE. Schedule 5.25 attached hereto contains a true,
correct and complete list of all of the insurance policies maintained by each   
Company, which schedule includes the name of the insurance company, the policy  
number, a description of the type of insurance covered by such policy, the      
dollar limit of the policy, and the annual premiums for such policy, and the    
name and phone number of the insurance agent in respect thereto. Companies shall
maintain such insurance policies in full force and effect through the Closing   
Date. Except as set forth on Schedule 5.25, (i) no claims are pending under the 
listed policies, nor do HSA-Texas or Shareholders know of any basis therefor and
(ii) there have been no settlement of insurance claims since January 1, 1999.   

5.26     IMMIGRATION MATTERS.                                 

                 (a)      Companies Employing Persons in the U.S. With respect
to each of the Companies which employees persons in the U.S.:                   

                     (i)      Current Employees. With respect to all
current employees (as defined in Section 274a.1(g) of Title 8, Code of Federal  
Regulations) of the Companies, true and complete copies of all Forms I-9        
(Employment Eligibility Verification Forms) completed pursuant to the           
Immigration Reform and Control Act of 1986, as amended, and all regulations     
promulgated thereunder ("IRCA") and any and all copies of documentation, records
or other papers retained with Forms I-9 (Employment Eligibility Verification    
Forms), will be delivered to PRGX prior to the Closing. Each of the Companies   
has complied with IRCA with respect to the completion of Forms I-9 for all      
employees and the re-verification of the employment status of any and all       
employees whose employment authorization documents indicated a limited period of
employment authorization.                                                       

                           (ii)     Former Employees. With respect to all former
employees of the Companies who left the employment within three (3) years prior 
to Closing, such Company has complied with IRCA with respect to the maintenance 
of Forms I-9 for at least three (3) years or for one (1) year beyond the date of
termination, whichever is later. True and complete copies all Forms I-9         
maintained for former employees pursuant to IRCA, and any and all copies of     
documentation, records or other papers retained with Forms I-9, will be         
delivered to PRGX prior to the Closing.                                         

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                         (iii)    Visa Status. Schedule 5.26 attached hereto
contains a true and complete list of all employees of each of the Companies     
working under INS authorization in E, F, H, J, L, M, O, P or TN Visa Status     
together with a listing of each such employee's visa status and visa expiration 
date. Each of the Companies maintains current files containing all Labor        
Condition Applications (LCA) and related public and non-public access           
documentation which it must present upon request by the U. S. Department of     
Labor or the general public, including but not limited to all documentation     
noted in 20 CFR ss. 655.760.                                                    

                          (iv)     Authorization to Work in U.S. The Companies
have only employed in respect of the Business individuals authorized to work in 
the United States. Within the twenty-four (24) months preceding the execution of
this Agreement, none of the Companies have received any written notice of any   
inspection or investigation relating to its alleged noncompliance with or       
violation of IRCA, nor has it been warned, fined or otherwise penalized by      
reason of any failure to comply with IRCA.                                      

                         (v)      Effect of Reorganization. The consummation
of the transactions contemplated by this Agreement will not, (i) give rise to   
any liability for the failure to properly complete and update Forms I-9, (ii)   
give rise to any liability for the employment of individuals not authorized to  
work in the United States or (iii) cause any current employee to become         
unauthorized to work in the United States.                                      

                     (vi)     Delivery of Forms I-9. HSA-Texas shall
obtain and provide to PRGX at least thirty (30) days before the Closing Date    
Forms I-9 from all of its Business Employees. HSA-Texas shall prepare all Forms 
W-2 for filing with the United States Internal Revenue Service for its current  
employees as of the Closing Date.                                               

              (b)      Companies Employing Persons Outside the U.S. With
respect to each of the Companies which employees persons outside the U.S., such 
Company is in compliance with all laws, orders, rules and regulations of all    
Governmental Entities relating to the employment of persons who are not citizens
of such jurisdiction.                                                           

   5.27     BROKER'S FEES. No Company or Shareholder has retained or
utilized the services of any broker, finder or intermediary or paid or agreed to
pay any fee or commission to any other Person for or on account of the          
transactions contemplated hereby, or had any communications with any Person with
respect thereto, which would obligate PRGX to pay any such fees or commissions. 

       5.28     ABSENCE OF MATERIAL CHANGES. Except as set forth in Schedule
5.28 attached hereto, from December 31, 2000 to the date of this Agreement:     

            (a)      there has not been any Material Adverse Effect;

                 (b)      no Company has lost (or received written notice that
it is about to lose) any Key Clients or Key Clients with which any Company has  
significant business relations;                                                 

            (c)      to the Knowledge of HSA-Texas, no former senior
manager (i.e., audit manager or higher) of any Company is currently competing   
with any Company or planning to so compete;                                     

            (d)      the Companies have operated the Business in the
ordinary course and have not sold, assigned, or transferred any assets except in
the ordinary course of business consistent with past practice;                  

                (e)      no Company or Shareholder has mortgaged, pledged or
subjected to any lien, pledge, mortgage, security interest, conditional sales   
contract, or other encumbrance of any nature whatsoever, any                    

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of the Acquired Assets;                                                         

                (f)      there has been no amendment, termination, or waiver
of any right of any Company under any contract, governmental license or permit  
that may materially adversely affect the Acquired Assets or the Business;       

(g)      No Company has:                    

                         (i)      paid any judgment resulting from any suit,
proceeding, arbitration, claim or counterclaim in respect of its assets or      
Business in excess of $1,000 (provided that all such excluded payments do not   
aggregate to more than $5,000);                                                 

                    (ii)     made any such payment to any party in
settlement of any such suit, proceeding, arbitration, claim or counterclaim in  
excess of $1,000 (provided that all such excluded payments do not aggregate to  
more than $5,000);                                                              

                        (iii)    written down, or failed to write down (in
accordance with its past practices consistently applied) or written up the value
of any inventory or assets of Companies;                                        

                         (iv)     made any material changes in the customary
methods of operation of the Business, including practices and policies relating 
to purchasing, marketing, selling, accounting, payment of trade creditors or in 
the billing or collection of accounts receivable or work in progress, including 
without limitation, discounting or writing off any of Companies' accounts       
receivable or work in progress for early payment, or granting any other         
deduction or discount thereon or accelerating the collection thereof except in  
accordance with past practices consistently applied;                            

                   (v)      (except in respect of ordinary trade
payables) incurred any indebtedness or guaranteed any indebtedness, except for  
borrowings under existing loans or lines of credit in the ordinary course of    
business consistent with past practice;                                         

                          (vi)     taken any action other than in the ordinary
course of business and in a manner consistent with past practices (none of which
actions has been unreasonable or unusual) with respect to increasing the        
compensation of any officer, director, consultant or employee of any Company,   
paid bonuses to any consultant or employees (except for bonuses earned in the   
ordinary course of business), or with respect to the grant of any severance or  
termination pay (otherwise than pursuant to policies of Companies in effect on  
the date hereof fully disclosed to PRGX in writing prior to the date hereof) or 
with respect to any increase of benefits payable under its severance or         
termination pay policies in effect on the date hereof;                          

                          (vii)    declared, set aside or paid any dividend or
distribution payable in cash, stock, property or otherwise with respect to any  
Company's capital stock (except for distributions to Shareholders consistent    
with past practices); or                                                        

                        (viii) agreed, whether in writing or otherwise, to
take any of the actions specified in this Section 5.28.                         

5.29     CERTAIN ARRANGEMENTS.                                

                  (a)      Schedule 5.29 is a true, correct and complete list as
of the date hereof and since December 31, 2000 of, any direct or indirect       
transaction or series of transactions involving more than $60,000 per year,     
individually or in the aggregate (other than in respect of compensation or      
travel or                                                                       

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expense account reimbursement in the ordinary course of business consistent with
past practice) that any Shareholder, director, officer, employee, Associate or  
other affiliate (for purposes of this Agreement, "affiliate" means any          
individual, partnership, corporation, trust, joint venture or other entity      
controlled by, controlling or under common control with any Company or any      
Shareholder) or any relative of any Shareholder, director, officer, employee,   
Associate, or other affiliate (collectively, a "Related Party") has or had with 
any Company and contains a brief description of each transaction, including     
without limitation:                                                             

                       (i)      any oral or written contract, agreement,
understanding, commitment or other arrangement providing for the furnishing of  
services, or the sale or rental of real or personal property from or otherwise  
requiring payments to any such Related Party or to any affiliate or relative of 
such Related Party;                                                             

                           (ii)     any loans or advances to or from any Company
(exclusive of travel advances, expense advances, and normal salary advances in  
connection with vacation periods, or compensation, or travel or expense account 
reimbursement all in the ordinary course of business) to any such Related Party 
or to any affiliate or relative of such Related Party, giving for each the      
principal amount outstanding, interest rate, maturity date and security         
therefor;                                                                       

                     (iii)    any direct or indirect interest in any
property, real or personal, tangible or intangible by any such Related Party or 
to any affiliate or relative of such Related Party, including inventions,       
patents, copyrights, trademarks, or trade names, used in or pertaining to the   
Business, except for the normal rights of a shareholder; and                    

                         (iv)     all services and overhead support provided
by such Related Party to any Company, describing the nature and value of such   
services and support, the amount of all compensation, fees, commissions or other
amounts owed by or to the Related Party and a description of the relationship   
of, and oral or written agreements or understandings between, any Company and   
such Related Party in respect of such Related Party as a supplier or customer to
any Company.                                                                    

                (b)      Except as set forth on Schedule 5.29, all services,
overhead support and other interests provided by Shareholder or any affiliate   
thereof to any Company have been provided on a basis no more favorable to such  
Company than could be obtained in an arms' length transaction.                  

              (c)      No Shareholder is engaged in competition with any
Company with respect to any line of the products or services of such Company in 
any market presently served by such Company. No Shareholder uses the services of
any employee of the Business in any other enterprise controlled by such         
Shareholder.                                                                    

      5.30     BANK ACCOUNTS. Schedule 1.1(j) contains a true, correct and
complete list showing the name and location of each bank or other institution in
which each Company has any deposit account, lock box or safe deposit box        
(collectively, the "Bank Accounts"), together with a listing of all account     
numbers and names of all persons authorized to draw thereon or have access      
thereto.                                                                        

       5.31     INFORMATION SUPPLIED. None of the information supplied or to
be supplied by HSA-Texas for inclusion or incorporation by reference in the     
Proxy Statement will, on the date it is first mailed to PRGX shareholders or at 
the time of the PRGX Special Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or        
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.                                     

  5.32     BOARD APPROVAL. The Board of Directors of HSA-Texas, by
resolutions duly adopted by vote of those voting at a meeting duly called and   
held and not subsequently rescinded or                                          

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modified in any way, has duly (a) approved this Agreement and the Acquisition   
and (b) recommended that the shareholders of HSA-Texas adopt this Agreement and 
directed that such adoption be submitted for consideration by the HSA-Texas     
shareholders. To the Knowledge of HSA-Texas and Shareholders, no state takeover 
statute is applicable to this Agreement or the Acquisition or the other         
transactions contemplated hereby.                                               

5.33     VOTE REQUIRED. If action to approve the HSA-Texas    
Recommendations is taken (a) at a meeting of the holders of HSA-Texas Voting    
Common Stock, approval of this Agreement and the other HSA-Texas Recommendations
will require the affirmative vote of two-thirds of the outstanding shares of    
HSA-Texas Voting Common Stock entitled to vote or (b) without a meeting, without
prior notice, and without a vote, by written consent, approval of this Agreement
and the other HSA-Texas Recommendations will require the consent or consents in 
writing, setting forth the action so taken, signed by the holders of all of the 
shares of HSA-Texas Voting Common Stock entitled to vote with respect to such   
action, and such vote or consent is the only vote of the holders of any class or
series of HSA-Texas capital stock necessary to approve or adopt the HSA-Texas   
Recommendations, including approval of this Agreement, the Acquisition and the  
consummation of the Acquisition and the other transactions contemplated herein  
(the "Required HSA-Texas Vote"). The holders of HSA-Texas Non-Voting Common     
Stock are not entitled to vote to approve or adopt this Agreement, the          
Acquisition and the consummation of the Acquisition and the other transactions  
contemplated herein.                                                            

 5.34     TERMINATION OF ALTERNATIVE NEGOTIATIONS. HSA-Texas and
Shareholders have and have caused the Subsidiaries to, and have instructed their
respective officers, directors, employees, investment bankers, attorneys,       
accountants and other agents to have, ceased and terminated any activities,     
discussions or negotiations with any parties conducted heretofore with respect  
to any possible HSA-Texas Alternative Transaction and have notified in writing  
each party with whom HSA-Texas, or any Shareholders, officer, director,         
investment advisor, financial advisor, attorney or other representative retained
by any of them, has had discussions with during the 60 days prior to the date of
this Agreement that the HSA-Texas Board no longer seeks the making of any       
HSA-Texas Alternative Transaction.                                              

5.35     NO UNLAWFUL PAYMENTS                                 

                  (a)      Neither HSA-Texas nor, to the Knowledge of HSA-Texas,
any director, officer, agent, employee, or other person associated with or      
acting on behalf of HSA-Texas has, directly or indirectly:                      

                    (i)      used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to     
political activity;                                                             

                       (ii)     made any unlawful payment to domestic or
foreign government officials or employees, or to domestic or foreign political  
parties or campaigns, from corporate funds;                                     

                    (iii)    violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended;                                      

                        (iv)     established or maintained any unlawful or
unrecorded fund of corporate monies or other assets;                            

                        (v)      made any false or fictitious entry on the
books or records of HSA-Texas;                                                  

                        (vi)     made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment;                                   

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                   (vii)    given any favor or gift which is not
deductible for federal income tax purposes; or                                  

                           (viii)   made any bribe, kickback or other payment of
a similar or comparable nature, whether lawful or not, to any person or entity, 
private or public, regardless of form, whether in money, property, or services, 
to obtain favorable treatment in securing business or to obtain special         
concessions, or to pay for favorable treatment for business secured or for      
special concessions already obtained.                                           

     5.36     DISCLOSURE. The statements, representations and warranties
made by HSA-Texas and any Shareholder in this Agreement and in the Schedules    
attached hereto do not contain any untrue statement of a material fact or omit  
to state a material fact necessary to make the statements contained herein or   
therein, in light of the circumstances under which they were made, not          
misleading. No notice given pursuant to Section 4.6 will contain any untrue     
statement or omit to state a material fact necessary to make the statements     
therein or in this Agreement in light of the circumstances in which they were   
made, not misleading. There is no fact Known to HSA-Texas or any Shareholder    
that has specific application to any Company (other than general economic or    
industry conditions) and that has a Material Adverse Effect or, as far as       
HSA-Texas or any Shareholder can reasonably foresee, materially threatens to    
have a Material Adverse Effect that has not been set forth in this Agreement or 
the Schedules hereto.                                                           

5.37     OTHER ACQUISITIONS.                                  

          (a)      DSD Acquisitions. Historically, HSA Texas has
conducted its direct to store delivery audit operations through two independent 
contractors, Phoenix Audit Recoveries, Inc. ("PAR") and JASAMA, Inc. ("JASAMA").
Effective as of September 1, 2001, HSA-Texas consummated the acquisition of     
substantially all of the assets of PAR solely in exchange for an unsecured      
promissory note in the original principal amount of $3,000,000 in accordance    
with that certain Asset Purchase Agreement dated as of September 1, 2001        
executed by PAR and HSA-Texas, a copy of which has been previously delivered to 
PRGX. Effective as of September 17, 2001, HSA-Texas consummated the acquisition 
of substantially all of the assets of JASAMA solely in exchange for an unsecured
promissory note in the original principal amount of $1,200,000 in accordance    
with that certain Asset Purchase Agreement dated as of September 17, 2001       
executed by JASAMA and HSA-Texas, a copy of which has been previously delivered 
to PRGX (collectively, such acquisitions being the "DSD Acquisitions" and       
collectively, such asset purchase agreements and promissory notes being the "DSD
Acquisition Agreements"). The DSD Acquisition Agreements are assignable to PRGX 
without the consent of PAR or JASAMA.                                           

                  (b)      U.K. Acquisitions. Effective as of November 21, 2001,
HSA-Texas and H S & A Acquisition - UK, Inc., a Texas corporation and a         
Subsidiary ("U.K. Acquisition Sub"), consummated the acquisition of all of the  
outstanding equity of Tamebond Limited ("Tamebond") and of J & G Associates     
Limited ("J & G") in exchange for two unsecured promissory notes in the         
aggregate principal amount of $11,501,450 (collectively, the "U.K.              
Acquisitions") in accordance with the following agreements and instruments: (i) 
Agreement for the Sale and Purchase of the entire Issued Share Capital of       
Tamebond among HSA-Texas, U.K. Acquisition Sub, Peter George Bennett and Eileen 
Margaret Bennett dated November 21, 2001, (ii) Instrument, issued by U.K.       
Acquisition Sub and guaranteed by HSA-Texas, Constituting US $7,945,000 and such
further loan notes to be issued pursuant to clause 3.2(b) and 4.2 of the        
Agreement                                                                       

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described in (i) above, 5 1/2 per cent Guaranteed, Unsecured Loan Notes dated   
November 21, 2001, (iii) Agreement for the Sale and Purchase of the entire      
Issued Share Capital of J & G among HSA-Texas, U.K. Acquisition Sub, John David 
Holdstock and Gillian Patricia Holdstock dated November 21, 2001, (ii)          
Instrument, issued by U.K. Acquisition Sub and guaranteed by HSA-Texas,         
Constituting US $3,556,450 and such further loan notes to be issued pursuant to 
clause 3.2(b) and 4.2 of the Agreement described in (i) above, 5 1/2 per cent   
Guaranteed, Unsecured Loan Notes dated November 21, 2001 (collectively, the     
agreements and instruments described in Section 5.37(b)(i)-(iv), being the "U.K.
Acquisition Agreements"),, copies of which U.K. Acquisition Agreements have been
previously delivered to PRGX. The U.K. Acquisition Agreements are assignable to 
PRGX without the consent of the Bennetts or the Holdstocks.                     

             (c)      German Acquisition. Effective as of November 15,
2001, Howard Schultz & Associates Europe S.A. ("HSA Europe") entered into an    
agreement with Daniel Van der Spiegal GmbH and Mrs. Leslie Van der Spiegal for  
the acquisition of all shares of Howard Schultz & Partner (Deutschland) GmbH    
(such entity being the "German Licensee" and such acquisition being the "German 
Acquisition"), other than those owned by H. Schultz or by HSA Europe (the       
"German Acquisition Agreement"), a copy of which has been previously delivered  
to PRGX. The German Acquisition Agreement is assignable to PRGX without the     
consent of the Van der Spiegals.                                                

   5.38     INVESTMENT INTENT. HSA-Texas and each of the undersigned
Shareholders hereby covenant, represent and warrant to PRGX as follows, and     
acknowledge that each such covenant, representation and warranty is material to 
and intended to be relied upon by PRGX:                                         

                (a)      The undersigned (which for purposes of this Section
5.38 includes HSA-Texas and each of the Shareholders) is acquiring the PRGX     
Shares for the undersigned's own account for investment purposes and not with a 
view to resale or distribution within the meaning of the Securities Act of 1933,
as amended (the "Securities Act") and the rules and regulations thereunder; and 
the undersigned will not distribute the PRGX Shares in violation or             
contravention of the Securities Act.                                            

             (b)      HSA-Texas is a Texas corporation and each of the
undersigned Shareholders, if an individual, is a resident of the state of Texas,
and, if a trust, is a trust organized under the laws of the state of Texas.     

              (c)      The undersigned acknowledges that all of the PRGX
Shares acquired by the undersigned will be issued to it without registration and
in reliance upon certain exemptions under the Securities Act and in reliance    
upon certain exemptions from registration requirements under applicable state   
securities laws.                                                                

                (d)      The undersigned will make no distribution, transfer
or assignment of any of the PRGX Shares except in compliance with the Securities
Act and any other applicable securities laws.                                   

              (e)      The undersigned consents, agrees and acknowledges
that the certificate or certificates representing the PRGX Shares may bear the  
following legend, or another legend to the same effect and agrees to the        
restrictions set forth therein:                                                 

The shares represented by this certificate have not been      
registered under the Securities Act of 1933, as amended or    
under the securities laws of any other jurisdiction, in       
reliance upon exemptions from the registration requirements   
of such laws. The shares represented by this certificate may  
not be sold or otherwise transferred, nor will an assignee or 
endorsee hereof be recognized as an owner of these shares by  
the issuer unless: (i) a registration statement under the     
Securities Act of 1933 as amended and other applicable        
securities laws with respect to the shares and the transfer   
shall then be in effect; or (ii) in the opinion of counsel    
satisfactory to the issuer, the shares are transferred in a   
transaction which is exempt from the registration             
requirements of such laws.                                    

              (f)      The undersigned is aware that no federal or state
agency has made any recommendation or endorsement of the PRGX Shares or any     
finding or determination as to the fairness of the investment in such           

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PRGX Shares.                                                                    

             (g)      Neither PRGX nor any person acting on its behalf
offered the PRGX Shares to the undersigned by means of general or public        
solicitation or general or public advertising, such as by newspaper or magazine 
advertisements, by broadcast media, or at any seminar or meeting whose attendees
were solicited by such means.                                                   

              (h)      The undersigned hereby acknowledges that the PRGX
Shares are a speculative investment. The undersigned represents that it can bear
the economic risks of such an investment for an indefinite period of time.      

                  (i)      The undersigned acknowledges, represents and warrants
that the undersigned has received and reviewed the following:                   

        (i)      A copy of this Agreement;

                        (ii)     A copy of all filings relating to PRGX on
the web site of the Securities and Exchange Commission (www.sec.gov), other than
PRGX's registration statement on form S-4 filed with the Commission on September
7, 2001, which has not been used by PRGX to offer the PRGX Shares to the        
undersigned; and                                                                

                           (iii)    Disclosure Document dated as of November 15,
2001; and                                                                       

                     (iv)     PRGX Private Offering Memorandum dated
November 30, 2001 relating to the Offering by PRGX of Convertible Subordinated  
Promissory Notes due 2006.                                                      

                  (j)      The undersigned acknowledges, represents and warrants
that the undersigned has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment  
in the PRGX Shares; that the undersigned has had reasonable opportunity to ask  
questions of and receive answers from PRGX's officers and directors and to      
obtain any additional information, documents or instruments available from PRGX 
that the undersigned has reasonably requested; and that the undersigned has     
consulted with its own legal, tax and financial advisors with respect to the tax
consequences of acquiring the PRGX Shares and has not relied upon PRGX or its   
representatives as to such matters.                                             

 ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PRGX

  In order to induce HSA-Texas and Shareholders to enter into this
Agreement and consummate the transactions contemplated hereby, PRGX represents  
and warrants to HSA-Texas and Shareholders as follows, each of which            
representations and warranties is material to and relied upon by HSA-Texas and  
Shareholders:                                                                   

      6.1      ORGANIZATION OF PRGX. PRGX is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia and
has the corporate power and authority to own its property and to carry on its   
business as now being conducted by it.                                          

     6.2      CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. PRGX has
full corporate power and authority to execute and deliver this Agreement and    
each of the other agreements, documents and instruments referenced in this      
Agreement to which PRGX is or will be a party (the "PRGX Transaction Documents")
and to consummate the transactions contemplated hereby and thereby. Prior to the
Closing Date, the Board of Directors of PRGX shall have duly approved and       
authorized the execution and delivery                                           

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of this Agreement and each of the PRGX Transaction Documents and the            
consummation of the transactions contemplated hereby and thereby, and no other  
corporate proceedings on the part of PRGX are necessary to approve and authorize
the execution and delivery of this Agreement and such PRGX Transaction Documents
and the consummation of the transactions contemplated hereby and thereby.       
Assuming that this Agreement and each of the PRGX Transaction Documents         
constitutes a valid and binding agreement of Companies and/or Shareholders, as  
the case may be, this Agreement and each of the PRGX Transaction Documents      
constitutes, or will constitute when executed and delivered, a valid and binding
agreement of PRGX, enforceable against PRGX in accordance with its terms.       

       6.3      NO CONFLICT; CONSENTS. The execution and delivery by PRGX of
this Agreement, the PRGX Transaction Documents and the consummation by PRGX of  
the transactions contemplated hereby and thereby do not and will not (a)        
require, other than compliance with applicable requirements of the HSR Act and  
the Lenders' Consent, the consent, approval or action of, or any filing or      
notice to, any corporation, firm, Person or other entity or any Governmental    
Entity; (b) violate the terms of any instrument, document or agreement to which 
PRGX is a party, or by which PRGX or the property of PRGX is bound, or be in    
conflict with, result in a breach of or constitute (upon the giving of notice or
lapse of time, or both) a default under any such instrument, document or        
agreement; (c) violate PRGX's Articles of Incorporation or Bylaws; or (d)       
violate any order, writ, injunction, decree, judgment, ruling, law or regulation
of any Governmental Entity applicable to PRGX, or the business or assets of     
PRGX.                                                                           

    6.4      BROKER'S FEES AND EXPENSES. Except for any broker used in
connection with the negotiation of the leased space at the Dallas Headquarters, 
PRGX has not retained or utilized the services of any broker, finder, or        
intermediary, or paid or agreed to pay any fee or commission to any other Person
for or on account of the transactions contemplated hereby, or had any           
communications with any Person which would obligate HSA-Texas or Shareholders to
pay any such fees or commissions.                                               

6.5      INFORMATION SUPPLIED.                                

                  (a)      None of the information supplied or to be supplied by
PRGX for inclusion or incorporation by reference in the Proxy Statement will, on
the date it is first mailed to PRGX shareholders or at the time of the PRGX     
Special Meeting, contain any untrue statement of a material fact or omit to     
state any material fact required to be stated therein or necessary in order to  
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the Securities Act of    
1933, as amended, and the rules and regulations of the SEC promulgated pursuant 
to such acts.                                                                   

             (b)      Notwithstanding the foregoing provisions of this
Section 6.5, no representation or warranty is made by PRGX with respect to      
statements made or incorporated by reference in the Proxy Statement based on    
information supplied by HSA-Texas for inclusion or incorporation by reference   
therein.                                                                        

         6.6      BOARD APPROVAL. The Board of Directors of PRGX, by resolutions
duly adopted by the affirmative vote of a majority of those voting at a meeting 
duly called and held, at which a quorum was present, and not subsequently       
rescinded or modified in any way, has duly (a) approved this Agreement, the     
Stock Agreement, the Acquisition, the Concurrent Acquisitions, and the PRGX     
Share Issuance and Option Issuance and (b) recommended that the shareholders of 
PRGX vote for the proposal to approve the proposed PRGX Share Issuance and      
Option Issuance and the election of the directors to be nominated in accordance 
with Section 4.18 at the PRGX Special Meeting. To the knowledge of PRGX, no     
state takeover statute is applicable to this Agreement or the Acquisition or the
other transactions contemplated hereby.                                         

       6.7      VOTE REQUIRED. Assuming that a quorum is present at the PRGX
Special Meeting,                                                                

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approval of the proposed PRGX Share Issuance and Option Issuance and the        
election of the nominated directors will require the affirmative vote of a      
majority of the shares of PRGX Common Stock eligible to vote that are actually  
voted either in person or by proxy at the PRGX Special Meeting (the "Required   
PRGX Vote"). Such vote is the only vote of the holders of any class or series of
PRGX capital stock necessary to approve the proposed PRGX Share Issuance and    
Option Issuance and the election of the nominated directors.                    

 ARTICLE 7
 INDEMNIFICATION

        7.1      INDEMNIFICATION BY HSA-TEXAS AND SHAREHOLDERS. In addition to
any other indemnification obligation of HSA-Texas or Shareholders under any     
other provision hereof, HSA-Texas and each of the Shareholders, jointly and     
severally, indemnify and hold PRGX, and its subsidiaries, affiliates, directors,
officers, employees and agents (collectively, the "PRGX Indemnified Parties"),  
harmless from and against all claims, liabilities, lawsuits, losses, costs,     
damages or expenses (including reasonable attorneys' fees and expenses awarded  
to the other parties as relief by any court of competent jurisdiction or        
incurred by the PRGX Indemnified Parties in litigation or otherwise) arising out
of and sustained by any of the PRGX Indemnified Parties due to or relating to,  
the following (collectively, "Section 7.1 Indemnified Claims"):                 

(a)      Misrepresentations or Breaches.    

                 (i)      With respect to the Companies, any
misrepresentation or breach of any representation or warranty, or breach,       
nonfulfillment of, or failure to perform, any covenant, obligation or agreement 
of HSA-Texas or any Shareholder contained in this Agreement or in any Schedule  
or Revised Schedule hereto or any HSA-Texas Transaction Document; and           

                (ii)     With respect to each of the Other
Acquisitions, any misrepresentation or breach of any representation or warranty 
or breach, nonfulfillment of, or failure to perform any covenant, obligation or 
agreement in any Other Acquisition Agreement by those persons or entities who   
are the sellers in such Other Acquisition Agreements and/or by HSA-Texas or any 
affiliate thereof or the purchaser thereunder in any such Other Acquisition     
Agreement in any schedule thereto, other agreement or instrument contemplated   
therein;                                                                        

                (b)      Operations and Ownership Prior to the Closing Date.

                           (i)      With respect to the Companies, any liability
incurred or obligation suffered by the PRGX Indemnified Parties, other than     
Assumed Liabilities, whether or not the existence or assertion of such liability
or obligation would constitute a breach of any representation, warranty,        
covenant, obligation or agreement contained herein or in any HSA-Texas          
Transaction Document relating to the operation of the Business, or the ownership
or use of the Acquired Assets prior to the Closing Date, which is not           
specifically disclosed in the Schedules or Revised Schedule delivered in        
accordance with Sections 4.1, 4.21, 8.3(f) and any other applicable provision   
hereof; and                                                                     

                (ii)     With respect to each of the Other
Acquisitions, any liability incurred or obligation suffered by the PRGX         
Indemnified Parties, other than liabilities specifically assumed pursuant to the
respective Other Acquisition Agreement, as approved by PRGX, whether or not the 
existence or assertion of such liability would constitute a breach of any       
representation, warranty, covenant, obligation or agreement contained in the    
Other Acquisition Agreement, relating to the operation of the business of such  
Seller and use of the assets by the Seller prior to the closing date of such    
Other Acquisition which is not specifically disclosed in the schedules delivered
in accordance with the Other Acquisition Agreement;                             

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                           (c)      Specific Legal Documents. Any failure of any
Company to comply with any specified legal compliance requirements, including   
Executive Order 11246, contained in any contracts of any Company with any       
Governmental Entity;                                                            

(d)      Tax Matters.                       

                          (i)      The treatment, as employees, for any period
prior to the Closing Date, by any Governmental Entity, including any Tax        
Authority, of any Associates, auditors, consultants or other service providers  
of the Business whom any Company treated for such period as independent         
contractors, and not as employees, for any foreign, national federal, state or  
local purposes, including any withholding for any state, federal or foreign     
income tax, FICA or FUTA amounts, state, federal or foreign unemployment        
insurance contributions, payments in respect of workers' compensation insurance,
the provision of benefits under the Employee Benefit Plans, or payments under   
The Fair Labor Standards Act or regulations promulgated thereunder, and         

                          (ii)     The treatment, as employees, for any period
prior to the respective closing date of any of the Other Acquisitions by any    
Governmental Entity, including any Tax Authority, of any service providers of   
the business of the Sellers or the U.K. Licensee or the German Licensee, as     
appropriate, in such Other Acquisition whom the respective Sellers or its       
business or the U.K. Licensee or the German Licensee, as appropriate, treated   
for such period as independent contractors, and not as employees, for any       
foreign, national federal, state or local purposes, as described above, but also
including, with respect to the U.K. Acquisition, any National Insurance         
Contributions, whether due of the employer or the employee in the United        
Kingdom; and;                                                                   

                     (iii)    Any Tax or other charge or expense for
HSA-Texas' failure to qualify or maintain its qualification as an S corporation 
(or the state equivalent thereof) in any jurisdiction.                          

(e)      Failures to Obtain.                

                         (i)      Any failure to obtain prior to Closing any
required consent to the assignment to PRGX of:                                  

                                 (A)      any agreements between HSA-Texas
and the U.K. Licensee or the German Licensee; or                                

                                 (B)      any other Acquired Asset (unless
PRGX has waived in writing prior to or at the Closing the requirement that such 
consent be obtained or unless such unobtained consent is listed on Schedule 5.4 
attached hereto, other than consents to the assignment of agreements with the   
U.K. Licensee even if listed on Schedule 5.4); and                              

                           (ii)     the failure to obtain, concurrently with the
closing of each of the Other Acquisitions, restrictive covenants from each      
Seller and each equity holder of such Seller as to non-competition,             
non-solicitation of customers and employees and confidentiality in form and     
substance acceptable to PRGX;                                                   

                 (f)      Accounts Receivable of the DSD Operations. Effective
from and after the respective closings of the DSD Acquisitions, the failure of  
HSA-Texas, or PRG as its assignee hereunder, to collect in full, net of any     
reserve established as of the respective closing date of the DSD Acquisitions,  
within 270 days after the day on which it first becomes due and payable any     
account receivable outstanding on the books of Phoenix Audit Recoveries, Inc. or
JASAMA, Inc. on the respective closing date of each such DSD Acquisition;       

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             (g)      Certain Vendor Paybacks. The amount in excess of
$100,000 of any Vendor Paybacks provided the aggregate Vendor Paybacks to such  
Client is in excess of $350,000; "Vendor Paybacks" means, for this purpose, all 
Vendor Paybacks in respect of the Inactive Audits of a Client (reduced by any   
Vendor Paybacks charged after the Closing against the aggregate reserves        
established by HSA-Texas prior to the Closing for all of such Client's Inactive 
Audits and without regard to potential claims that could be asserted against any
Associates for commissions or compensation paid with respect to such Client's   
Vendor Paybacks);                                                               

           (h)      Certain Other Liabilities. With respect to the
following:                                                                      

                          (i)      all severance liabilities or obligations of
any Company to any employees of, Associates of, or other service providers to   
the Business other than the Assumed Severance Amount; and                       

                     (ii)     any claims asserted by shareholders of
HSA-Texas, Optionees or holders of HSA-Texas SARs in connection with or arising 
out of (a) the determination of the number and exercise price of Options to be  
Assumed by PRGX, and the allocation among the HSA-Texas shareholders and the    
Optionees of the shares of PRGX Common Stock to be issued in the Share Issuance 
and the Options to be Assumed in the Option Issuance pursuant to this Agreement 
and the (b) the allocation of the Consideration hereunder and the consideration 
to be paid to the shareholders of the Affiliated Foreign Operating Companies    
under the Stock Agreement;                                                      

                           (iii)    the failure to close the German Acquisition,
in accordance with the terms of the German Acquisition Agreement and Section    
4.25 hereof; and                                                                

                        (iv)     except in respect of the claims raised by
Evert Software, Inc. in the litigation described on Schedule 5.24 attached      
hereto, any claim by any Associate, former Associate or other Person that the   
manufacture, marketing, license, sale or use by the Companies, or by PRGX after 
the Closing, of any intellectual property assets, including software and        
developments, used by the Companies, and/or used by any Associates in connection
with services rendered to or on behalf of the Business (including the           
Intellectual Property Assets transferred pursuant hereto), (A) violates or will 
violate any license or agreement with any third party or infringes or has       
infringed on the intellectual property rights of others, (B) that such Company  
or, after the Closing, PRGX, does not have the right to use such intellectual   
property assets and/or (C) that such Company or, after the Closing, PRGX, does  
not have the right to reproduce, copy, sell, license and/or distribute such     
intellectual property assets                                                    

                (i)      Certain Breaches. Any breach occurring prior to the
Closing by any Company in respect of any representation, warranty, covenant or  
agreement in any Assigned Contract or Assigned Lease;                           

                (j)      Retained Liabilities. All Retained Liabilities; and

                 (k)      Bulk Transfer. Failure to comply with any applicable
bulk transfer laws.                                                             

Notwithstanding the foregoing, neither HSA-Texas, H. Schultz, A. Schultz nor the
Trusts shall have any liability to the PRGX Indemnified Parties for any claims, 
liabilities, lawsuits, costs, damages or expenses (including reasonable         
attorneys' fees and expenses incurred in litigation or otherwise) arising out of
and sustained by any of the PRGX Indemnified Parties due to or relating to      
HSA-Texas' failure to obtain executed Non-competition Agreement from any of     
Michael Lowery, Gertrude Lowery, Charles Schembri or Mac Martirossian.          

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7.2      INDEMNIFICATION BY PRGX. In addition to any other    
indemnification obligation of PRGX hereunder, PRGX hereby indemnifies and holds 
HSA-Texas and Shareholders and Shareholders' and HSA-Texas' affiliates,         
directors, officers, employees and agents (collectively, the "HSA-Texas         
Indemnified Parties") harmless from and against all claims, liabilities,        
lawsuits, costs, damages or expenses (including reasonable attorneys fees and   
expenses incurred in litigation or otherwise) arising out of and sustained by   
any of them due to or relating to (a) any misrepresentation or breach of any    
representation, warranty, covenant or agreement of PRGX in this Agreement or any
of the PRGX Transaction Documents; and (b) any liability or obligation incurred 
by HSA-Texas or any Shareholder relating to the operation or ownership of the   
Business by PRGX, or the ownership or use of the Acquired Assets by PRGX, from  
and after the Closing Date, other than Section 7.1 Indemnified Claims and other 
than Retained Liabilities (collectively, "Section 7.2 Indemnified Claims").     

         7.3      PROCEDURES FOR INDEMNIFICATION. Concurrently with the Closing,
the parties hereto shall enter into an Indemnification Agreement in             
substantially the same form as attached hereto as Exhibit 7.3 (the              
"Indemnification Agreement"), providing the procedures for indemnification, the 
survival period and certain limitations on indemnification described herein and 
in the Stock Agreement.                                                         

 ARTICLE 8
CONDITIONS PRECEDENT

 8.1      CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of PRGX and HSA-Texas to consummate the Acquisition are subject to  
the satisfaction or waiver, by both PRGX and HSA-Texas, on or prior to the      
Closing Date of the following conditions:                                       

(a)      Shareholder Approval.              

                         (i)      PRGX shall have obtained the Required PRGX
Vote by the shareholders of PRGX in connection with the approval of the proposed
PRGX Share Issuance and Option Issuance and the election of the nominated       
directors, and                                                                  

                     (ii)     HSA-Texas shall have provided to PRGX,
within 15 days after the date of this Agreement, a fully executed copy of a     
unanimous written consent of the holders of HSA-Texas Voting Common Stock or a  
certified copy of resolutions duly adopted by the holders of HSA-Texas Voting   
Common Stock authorizing and approving the Agreement and the other HSA-Texas    
Recommendations.                                                                

              (b)      No Injunctions or Restraints, Illegality. No laws
shall have been adopted or promulgated, and no temporary restraining order,     
preliminary or permanent injunction or other order issued by a court or other   
Governmental Entity of competent jurisdiction shall be in effect, having the    
effect of making the Acquisition illegal or otherwise prohibiting consummation  
of the Acquisition. No action seeking such an order or injunction shall be      
pending or threatened. A "Governmental Entity" means any supranational,         
national, state, municipal, local or foreign government, any instrumentality,   
subdivision, court, administrative agency or commission or other authority      
thereof, or any quasi-governmental or private body exercising any regulatory,   
taxing, importing or other governmental or quasi-governmental authority (or any 
department, agency or political subdivision thereof).                           

           (c)      HSR Act. The waiting period (and any extension
thereof) applicable to the Acquisition under the HSR Act shall have been        
terminated or shall have expired.                                               

                  (d)      Listing. The shares of PRGX Common Stock to be issued
as Consideration or to be reserved for issuance in connection with the          
Acquisition shall have been approved for listing on The Nasdaq National Market, 
subject to official notice of issuance.                                         

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                (e)      Proxy Statement. The SEC shall not have objected to
PRGX's mailing the Proxy Statement to the PRGX shareholders and no stop order or
other order or suspension of use of the Proxy Statement shall have been issued  
by the SEC and no proceedings for that purpose shall have been initiated or     
threatened by the SEC.                                                          

                  (f)      Consents. Each of the consents and approvals that are
described in Section 6.3 shall have been duly obtained and shall be in full     
force and effect.                                                               

(g)      Intentionally omitted.             

(h)      Intentionally omitted.             

              (i)      Concurrent Acquisitions. Prior to or concurrently
with the Closing, PRGX shall have consummated the Stock Agreement in respect of 
the Concurrent Acquisitions.                                                    

(j)      Intentionally omitted.             

                  (k)      Lenders' Consent. PRGX shall have obtained either (i)
the consent of its principal lenders, a syndicate led by Bank of America, N.A., 
to the Acquisition, the Other Acquisitions, and the Concurrent Acquisitions,    
including an agreement by such lenders to loan to PRGX any and all amounts      
required to satisfy any of the Acquisition-Related Notes, to repay the Assumed  
Schultz Loan, to consummate the Concurrent Acquisitions, to pay any obligations 
assumed or to be paid by PRGX relating to the Other Acquisitions and any other  
transactions contemplated hereby (collectively, the "Contemplated Transactions" 
or (ii) if such consent is not obtained, PRGX shall have entered into a new or  
amended credit facility which makes the consent of its lenders unnecessary and  
which does not prohibit the Contemplated Transactions (in either event, the     
"Lenders' Consent").                                                            

 8.2      ADDITIONAL CONDITIONS TO OBLIGATIONS OF HSA-TEXAS. The
obligations of HSA-Texas to effect the Acquisition are subject to the           
satisfaction, or waiver by HSA-Texas, on or prior to the Closing Date of the    
following additional conditions:                                                

        (a)      Representations and Warranties. Each of the
representations and warranties of PRGX set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as of 
the Closing Date as though made on and as of the Closing Date (except to the    
extent that such representations and warranties speak as of another date, in    
which case such representations and warranties shall be true and correct as of  
such other date); and HSA-Texas shall have received a certificate of a senior   
executive officer and a senior financial officer of PRGX to such effect.        

                (b)      Performance of Obligations of PRGX. PRGX shall have
performed or complied with all agreements and covenants required to be performed
by it under this Agreement at or prior to the Closing Date that are qualified as
to materiality or Material Adverse Effect and shall have performed or complied  
in all material respects with all other material agreements and covenants       
required to be performed by it under this Agreement at or prior to the Closing  
Date that are not so qualified, and HSA-Texas shall have received a certificate 
of a senior executive officer and a senior financial officer of PRGX to such    
effect.                                                                         

             (c)      Closing Deliveries. PRGX shall have delivered to
HSA-Texas each of the following, together with any additional items which       
HSA-Texas may reasonably request to effect the transactions contemplated herein:

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 (i)      the Consideration;

     (ii)     intentionally omitted;

                         (iii)    the documents and instruments described in
Section 1.3 hereof duly executed by PRGX;                                       

                      (iv)     H. Schultz Offer Letter, the A. Schultz
Offer Letter, the offer letters for employment between PRGX and each of the     
other Key Employees, duly executed by PRGX or PRGUSA;                           

                           (v)      the Non-competition Agreement referred to in
Section 3.4 hereof duly executed by PRGX;                                       

                      (vi)     the Lenders' Consent, if applicable, as
described in Section 8.1(k) hereof;                                             

                    (vii)    the Closing Statement, reflecting the
payment and receipt of the Consideration, duly executed by PRGX;                

                          (viii)   the Shareholders Agreement duly executed by
John Cook and Jack Toma;                                                        

                (ix)     certified copies of the corporate
resolutions of the Board of Directors of PRGX authorizing and approving the     
Acquisition and the transactions contemplated herein, together with an          
incumbency certificate with respect to the officers of PRGX executing documents 
or instruments on behalf of PRGX;                                               

                          (x)      the Report of the Inspector of Elections of
the PRGX Special Meeting certifying that the Required PRGX Vote was obtained;   

                          (xi)     the Indemnification Agreement duly executed
by PRGX;                                                                        

                      (xii)    the Registration Rights Agreement, duly
executed by PRGX;                                                               

                           (xiii)   the payment to H. Schultz of all outstanding
principal and accrued interest on the Assumed Schultz Loan; and                 

                    (xiv)    any other documents or agreements, as
reasonably requested by HSA-Texas or Shareholders, contemplated hereby and/or   
necessary to consummate the transactions contemplated hereby.                   

                (d)      Election of Certain Nominees as Directors. The PRGX
Board shall have nominated for election by the PRGX shareholders at the PRGX    
Special Meeting those persons recommended by H. Schultz in accordance with      
Section 4.18 hereof and such nominees shall have been elected at the PRGX       
Special Meeting.                                                                

        8.3      ADDITIONAL CONDITIONS TO OBLIGATIONS OF PRGX. The obligations
of PRGX to effect the Acquisition are subject to the satisfaction, or waiver by 
PRGX, on or prior to the Closing Date of the following additional conditions:   

        (a)      Representations and Warranties. Each of the
representations and warranties of HSA-Texas and Shareholders set forth in this  
Agreement and in the Schedules and Revised Schedules delivered in accordance    
with this Agreement shall be true and correct in all material respects as of the
date                                                                            

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of this Agreement and as of the Closing Date as though made on and as of the    
Closing Date (except to the extent that such representations and warranties     
speak as of another date, in which case such representations and warranties     
shall be true and correct as of such other date); and PRGX shall have received a
certificate of a senior executive officer and a senior financial officer of     
HSA-Texas and of the Shareholders to such effect, together with a complete set  
of Schedules and Revised Schedules as of the Closing Date.                      

               (b)      Performance of Obligations of HSA-Texas. HSA-Texas
and Shareholders shall have performed or complied with all agreements and       
covenants required to be performed by it under this Agreement, including those  
set forth in Articles 3 and 4 hereof, at or prior to the Closing Date that are  
qualified as to materiality or Material Adverse Effect and shall have performed 
or complied in all material respects with all other material agreements and     
covenants required to be performed by it under this Agreement at or prior to the
Closing Date that are not so qualified, and PRGX shall have received a          
certificate of a senior executive officer and a senior financial officer of     
HSA-Texas and of the Shareholders to such effect.                               

                  (c)      Closing Deliveries. As of the Closing Date, HSA-Texas
and Shareholders shall have delivered possession of the Acquired Assets to PRGX.
At the Closing, HSA-Texas and Shareholders shall have delivered to PRGX each of 
the following, together with any additional items which PRGX may reasonably     
request to effect the transactions contemplated herein:                         

                (i)      a certified copy of the corporate
resolutions of the directors of HSA-Texas and Shareholders authorizing the      
transactions contemplated herein and the execution, delivery and performance of 
this Agreement and the HSA-Texas Transaction Documents by HSA-Texas and any     
other actions or authorizations required under Article 3 hereof, together with  
an incumbency certificate with respect to officers of HSA-Texas executing       
documents or instruments on behalf of HSA-Texas;                                

                   (ii)     the Bill of Sale, the Assignment and
Assumption Agreement and the other documents described in Section 1.3 hereof;   

     (iii)    intentionally omitted;

                           (iv)     the Non-competition Agreements duly executed
by HSA-Texas, Shareholders, Michael Lowery, Gertrude Lowery, Charles Schembri   
and Mac Martirossian;                                                           

                      (v)      written consents from all parties whose
consent to the transactions contemplated herein is required;                    

                     (vi)     an opinion of counsel to HSA-Texas and
Shareholder substantially in the form of Exhibit 8.3(c)(vi) attached hereto;    

                          (vii)    the H. Schultz Offer Letter, the A. Schultz
Offer Letter, the offer letters for employment between PRGX and each of the     
other Key Employees and the Employee Agreements, duly executed by each of the   
Key Employees;                                                                  

                 (viii)   a Certificate of Good Standing, or
equivalent certificate, in respect of each Company issued within 5 days prior to
the Closing, by the Secretary of State, or equivalent authority, of its         
jurisdiction of organization and by the Secretary of State, or equivalent       
authority, of any other jurisdiction in which such Company is qualified to do   
business;                                                                       

                     (ix)     if applicable, termination statements,
releasing all liens on the Acquired Assets;                                     

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                    (x)      a Closing Statement, duly executed by
HSA-Texas and Shareholders;                                                     

                        (xi)     the Historical Statements provided for in
Section 4.1 hereof and the Estimated Financials;                                

                       (xii)    the General Release substantially in the
form attached hereto as Exhibit 8.3(xii), duly executed by each Shareholder and 
by Michael Lowery, Gertrude Lowery, Charles Schembri and Mac Martirossian;      

                          (xiii)   the Shareholders Agreement duly executed by
the Shareholders;                                                               

                 (xiv)    the Dallas Lease, duly executed by
HSA-Texas;                                                                      

                           (xv)     the Indemnification Agreement, duly executed
by the Shareholders; and                                                        

                    (xvi)    any other documents or agreements, as
reasonably requested by HSA-Texas or Shareholders, contemplated hereby and/or   
necessary to consummate the transactions contemplated hereby.                   

                  (d)      Fairness Opinion. The Fairness Opinion shall not have
been modified or withdrawn by Merrill Lynch.                                    

                (e)      Repayment of Shareholder Loans. Each shareholder of
HSA-Texas, including the Shareholders, shall have repaid in full at or prior to 
the Closing all amounts owed by such shareholder to HSA-Texas.                  

                  (f)      Revised Schedules. The Companies and the Shareholders
shall have provided PRGX with revised Schedules dated as of the Closing Date    
(collectively, the "Revised Schedules"), with all changes duly noted thereon,   
accompanied by a certificate of a duly authorized officer of HSA-Texas and a    
certificate of the Shareholders certifying that such Revised Schedules are      
delivered pursuant to the applicable Sections of this Agreement; provided       
however, that in the event the Revised Schedules contain any disclosure or      
change which (i) should have been but was not shown on the Schedules attached   
hereto at the date hereof, or (ii) individually or in the aggregate is material 
to any warranty or representation contained herein, or (iii) arose outside the  
ordinary course of business, the condition contained in this Section shall be   
deemed unsatisfied unless PRGX has agreed in writing to such disclosures or     
changes.                                                                        

                 (g)      German Acquisition. HSA-Texas shall have consummated
the German Acquisition in accordance with the German Acquisition Agreement.     

 ARTICLE 9
 TERMINATION AND AMENDMENT

    9.1      TERMINATION. This Agreement may be terminated at any time
before the Closing Date (notwithstanding any approval of the Acquisition and    
adoption of this Agreement by the Shareholders or the PRGX shareholders):       

             (a)      by mutual written consent of HSA-Texas and PRGX;

                (b)      by either PRGX or HSA-Texas, if the Acquisition has
not been consummated on or                                                      

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before March 31, 2002 (the "Termination Date"), provided that the party seeking 
to exercise the right to terminate this Agreement under Section 9.1(b) is not   
then in breach in any material respect of any of its representations,           
warranties, covenants or other agreements under this Agreement;                 

                 (c)      by HSA-Texas, if the approval of the shareholders of
PRGX contemplated by this Agreement shall not have been obtained by reason of   
the failure to obtain the Required PRGX Vote, as contemplated herein; and by    
PRGX, if the approval of the shareholders of HSA-Texas shall not have been      
obtained by reason of failure to obtain the Required HSA-Texas Vote pursuant to 
Section 3.1(b)(ii) and Section 5.33 hereof, or by reason of the rescission by   
any of the holders of HSA-Texas Voting Common Stock of their approval of any of 
the HSA-Texas Recommendations;                                                  

             (d)      by either PRGX or HSA-Texas, if any Governmental
Entity of competent jurisdiction (i) shall have issued an order, decree or      
ruling or taken any other action (which the parties shall have used their       
reasonable best efforts to resist, resolve or lift, as applicable) permanently  
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and non-appealable, or (ii) shall have failed to issue an order, decree or
ruling or to take any other action, and such denial of a request to issue such  
order, decree or ruling or to take such other action shall have become final and
non-appealable (which order, decree, ruling or other action the parties shall   
have used their reasonable best efforts to obtain); or                          

            (e)      by HSA-Texas, (i) if PRGX shall have materially
breached its representations or warranties contained in this Agreement or failed
to perform in any material respect any of its covenants or other agreements     
contained in this Agreement, which breach would result in the failure to satisfy
the conditions set forth in Section 8.2(a) and (b) and in any such case such    
breach is incapable of being cured, or, if capable of being cured, shall not    
have been cured on or before the Termination Date within 10 days after written  
notice thereof shall have been received by PRGX; or (ii) upon the occurrence of 
an event that has a Material Adverse Effect on PRGX, taken as a whole with its  
consolidated subsidiaries, regardless of whether the conditions set forth in    
8.2(a) and (b) are capable of being satisfied on or before the Termination Date,
in either case provided that neither HSA-Texas nor any of the Shareholders is   
then in breach in any material respect of any of its representations,           
warranties, covenants or other agreements under this Agreement; or              

                (f)      by PRGX, (i) if HSA-Texas or the Shareholders shall
have materially breached any of their representations or warranties contained in
this Agreement or failed to perform in any material respect their covenants or  
other agreements contained in this Agreement, which breach would result in the  
failure to satisfy the conditions set forth in Section 8.3(a) and (b) and in any
such case such breach is incapable of being cured, or if capable of being cured,
shall not have been cured on or before the Termination Date and within 10 days  
after written notice thereof shall have been received by HSA-Texas and the      
Shareholders; or (ii) upon the occurrence of an event or development that has a 
Material Adverse Effect on HSA-Texas, regardless of whether the conditions set  
forth in Section 8.3(a) and (b) are capable of being satisfied on or before the 
Termination Date, in either case, provided PRGX is not then in breach in any    
material respect of any of its representations, warranties, covenants or other  
agreements under this Agreement; or                                             

             (g)      by HSA-Texas, if the per share closing price (as
reported in The Wall Street Journal) of PRGX Common Stock on any trading day    
during the period beginning on the date hereof and ending on a date 5 trading   
days prior to the Closing Date is less than $4.00, by written notice by         
HSA-Texas to PRGX within 3 days after the trading day on which the per share    
closing price of PRGX Common Stock was less than $4.00; or                      

                 (h)      by PRGX, in order to enter into a definitive written
agreement with respect to a PRGX Alternative Transaction; or                    

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           (i)      by HSA-Texas, if a Triggering Event shall have
occurred. For purposes of this Agreement, a "Triggering Event" shall be deemed  
to have occurred if, (A) the PRGX Board or any committee thereof shall have     
approved or recommended to its shareholders any PRGX Alternative Transaction    
which does not include the concurrent acquisition of HSA-Texas and the          
Affiliated Foreign Operating Companies or HSA-Texas' and the Affiliated Foreign 
Operating Companies assets by the Third Party which is party to such PRGX       
Alternative Transaction as if HSA-Texas and the Affiliated Foreign Operating    
Companies were a part of PRGX at the consummation of such PRGX Alternative      
Transaction, (B) the PRGX Board or any committee thereof shall for any reason   
have withdrawn or shall have amended or modified in a manner adverse to         
HSA-Texas the PRGX Recommendations; or (C) a tender or exchange offer to acquire
50% or more of the outstanding shares of PRGX Common Stock shall have been      
commenced by a Third Party, and PRGX shall not have sent to its shareholders    
pursuant to Rule 14e-2 promulgated under the Exchange Act, within 10 business   
days after such tender or exchange offer is first published sent or given, a    
statement disclosing that PRGX recommends rejection of such tender or exchange  
offer; or                                                                       

             (j)      by HSA-Texas, if the PRGX Board or any committee
thereof shall have approved or recommended to its shareholders a PRGX           
Alternative Transaction which includes the concurrent acquisition of HSA-Texas  
and the Affiliated Foreign Operating Companies or HSA-Texas' and the Affiliated 
Foreign Operating Companies' assets by a third party, but HSA-Texas or any of   
the Affiliated Foreign Operating Companies in its discretion, or                

                (k)      by PRGX, within 30 days after receipt of all of the
Schedules as provided in Section 4.21; or                                       

           (l)      notwithstanding anything in Section 9.1 to the
contrary, by PRGX or HSA-Texas, if PRGX has not received the Lenders' Consent   
described in Section 8.1(k) hereof on or before March 31, 2002.                 

9.2      EFFECT OF TERMINATION.                               

             (a)      Termination Prior to Mailing Proxy Statement. If
either party shall terminate this Agreement pursuant to any Section of Section  
9.1 prior to the date on which PRGX mails the Proxy Statement to its            
shareholders, and the party exercising such right is not then in breach in any  
material respect of any of its representations, warranties, covenants and other 
agreements under this Agreement, neither party shall have any liability or      
obligation to the other (including any obligation to pay the PRGX Transaction   
Expenses or the HSA-Texas Transaction Expenses, as the case may be, or the      
Termination Fee described below) except for those obligations as provided in    
Section 9.2(g) hereof.                                                          

               (b)      HSA-Texas Pays PRGX Transaction Expenses. If after
PRGX mails the Proxy Statement to its shareholders, (i) either party shall      
terminate this Agreement pursuant to Section 9.1(b) prior to obtaining the      
Required HSA-Texas Vote pursuant to Section 3.1(b)(ii) and Section 5.33 hereof, 
or PRGX shall terminate this Agreement pursuant to Section 9.1(c) (provided that
the basis for such termination is the failure of HSA-Texas' shareholders to     
obtain the Required HSA-Texas Vote pursuant to Section 3.1(b)(ii) and Section   
5.33 hereof, or the basis for such termination is the rescission by the holders 
of the HSA-Texas Voting Common Stock of the approval of any of the HSA-Texas    
Recommendations or the failure of any of the shareholders of the Affiliated     
Foreign Operating Companies (other than Acceptor Professional Directors Pte Ltd)
to execute the Stock Agreement concurrently herewith, (ii) HSA-Texas shall have 
terminated this Agreement pursuant to Section 9.1(j) or (iii) PRGX shall        
terminate this Agreement pursuant to Section 9.1(f)(i), then in any such event  
HSA-Texas shall promptly, but not later                                         

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than ten days after the date of such termination, pay PRGX an amount equal to   
all of the PRGX Transaction Expenses, by wire transfer of immediately available 
funds and, notwithstanding anything to the contrary contained herein, PRGX shall
not be required to pay any HSA-Texas Transaction Expenses hereunder.            

               (c)      PRGX Pays HSA-Texas Transaction Expenses. If after
PRGX mails the Proxy Statement to its shareholders, (i) either party shall      
terminate this Agreement pursuant to Section 9.1(b) prior to the PRGX Special   
Meeting having occurred or pursuant to Section 9.1(c) (provided that the basis  
for such termination is the failure of PRGX's shareholders to approve the       
proposed PRGX Share Issuance and Option Issuance and the election of the        
proposed directors) or (ii) HSA-Texas shall terminate this Agreement pursuant to
Section 9.1(e)(i), then in any such event PRGX shall promptly, but in no event  
later than ten days after the date of such termination, pay HSA-Texas an amount 
equal to all of the HSA-Texas Transaction Expenses, including all reasonable    
out-of-pocket legal and accounting fees, all broker and financial advisor fees, 
all HSR fees, and all SEC fees, payable by wire transfer of immediately         
available funds.                                                                

                (d)      Certain Terminations. If after PRGX mails the Proxy
Statement to its shareholders, either party shall terminate this Agreement      
pursuant to Section 9.1(d) or 9.1(l), or if PRGX shall terminate this Agreement 
pursuant to Sections 9.1(f)(ii), 9.1(h), or 9.1(k), or if HSA-Texas shall       
terminate this Agreement pursuant to Sections 9.1(e)(ii), 9.1(g) or 9.11(j), and
the party exercising such right is not then in breach in any material respect of
any of its representations, warranties, covenants and other agreements under    
this Agreement, neither party shall have any liability or obligation to the     
other (including any obligation to pay the PRGX Transaction Expenses or the     
HSA-Texas Transaction Expenses, as the case may be, or the Termination Fee      
described below) except for those obligations as provided in Section 9.2(g)     
hereof.                                                                         

           (e)      Termination Fee. If after PRGX mails the Proxy
Statement to its shareholders, HSA-Texas terminates this Agreement pursuant to  
Section 9.1(i), PRGX shall pay to HSA-Texas in cash the sum of $2,000,000       
("Termination Fee") plus all HSA-Texas Transaction Expenses incurred by         
HSA-Texas and the Shareholders in connection with this Agreement, including,    
without limitation, all reasonable out-of-pocket legal and accounting fees, all 
broker and financial advisor fees, all HSR fees, and all SEC fees.              

                  (f)      Timing of Payment of Termination Fee. The Termination
Fee shall be due and payable to HSA-Texas within ten (10) days after HSA-Texas' 
termination of this Agreement in accordance with Section 9.1(i) hereof.         

        (g)      Effect of Termination. If this Agreement is
terminated by either PRGX or HSA-Texas as provided in Section 9.1, this         
Agreement shall forthwith become void and have no further effect, without any   
liability or obligation on the part of PRGX, HSA-Texas, or their respective     
shareholders, officers or directors, other than with respect to the provisions  
of Section 4.1(e), Section 4.7(b), Section 4.11, Section 5.27, Section 6.4, this
Section 9.2, Section 10.6, Sections 10.8 and Section 10.10, which provisions    
shall survive such termination, and except that, notwithstanding anything to the
contrary contained in this Agreement, neither PRGX, HSA-Texas nor the           
Shareholders shall be relieved or released from any liabilities or damages      
arising out of its breach of this Agreement, including any representations,     
warranties, covenants or other agreements contained herein, and none of the     
limitations contained in Indemnification Agreement shall be applicable.         

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ARTICLE 10
MISCELLANEOUS PROVISIONS

         10.1     SEVERABILITY. If any provision of this Agreement is prohibited
by the laws of any jurisdiction as those laws apply to this Agreement, that     
provision shall be ineffective to the extent of such prohibition and/or shall be
modified to conform with such laws, without invalidating the remaining          
provisions hereto.                                                              

10.2     AMENDMENT; MODIFICATION; EXTENSION; WAIVER.          

                 (a)      This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any   
time before or after approval of the matters presented in connection with the   
Acquisition by the shareholders of PRGX and HSA-Texas, but, after any such      
approval, no amendment shall be made which by law or in accordance with the     
rules of the NASDAQ Stock Market requires further approval by the PRGX          
shareholders without such further approval; provided, however, this Agreement   
may not be amended except by an instrument in writing signed on behalf of each  
of the parties hereto.                                                          

                  (b)      At any time prior to the Closing, the parties may (a)
extend the time for the performance of any of the obligations or other acts of  
the other parties, (b) waive (by the party entitled to waive) any inaccuracies  
in the representations and warranties contained in this Agreement or in any     
document delivered pursuant to this Agreement or (c) subject to the proviso of  
Section 10.2(a) that no amendment shall be made which by law or in accordance   
with the rules of the NASDAQ Stock Market requires further approval by the PRGX 
shareholders without such further approval, waive compliance with any of the    
agreements or conditions contained in this Agreement. Any such extension or     
waiver shall be valid only if set forth in an instrument in writing signed by   
each of the parties hereto. No failure or delay by any party in exercising any  
right, power or privilege hereunder shall operate as a waiver thereof nor shall 
any single or partial exercise thereof preclude any other or further exercise   
thereof or the exercise of any other right, power or privilege. The rights and  
remedies herein provided shall be cumulative and not exclusive of any rights or 
remedies provided by law.                                                       

      10.3     ASSIGNMENT, SURVIVAL AND BINDING AGREEMENT. This Agreement,
the other HSA-Texas Transaction Documents and the other PRGX Transaction        
Documents (a) may not be assigned by PRGX on or prior to the Closing without the
prior written consent of HSA-Texas and Shareholders (except for an assignment to
a wholly owned subsidiary of PRGX, which may be made without the prior consent  
of, but with notice to, HSA-Texas provided that, in such event, the assignor    
shall remain obligated hereunder in the same manner as if such assignment had   
not been effected); (b) may not be assigned by PRGX after the Closing without   
the prior written consent of HSA-Texas and Shareholders' Representative, except 
for (i) an assignment to an affiliate of PRGX, which may be made without the    
prior consent of, but with notice to, HSA-Texas and Shareholders'               
Representative; provided that, in such event, the assignor shall remain         
obligated hereunder in the same manner as if such assignment had not been       
effected and (ii) in the event of a merger, consolidation, reorganization or    
similar transaction of PRGX with a Person where such other Person is the        
surviving entity of such transaction, this Agreement may be assigned by PRGX    
without the prior consent of, but with notice to, the Shareholders'             
Representative; and (c) may not be assigned by HSA-Texas or Shareholders at any 
time, without the prior written consent of PRGX. The terms and conditions of    
this Agreement shall inure to the benefit of and be binding upon the parties    
hereto and their respective heirs, personal representatives, successors and     
assigns. The parties hereto acknowledge that PRGX intends to transfer and assign
the Acquired Assets and the Assumed Liabilities to PRGUSA, its wholly-owned     
subsidiary, as soon as practicable after the Closing, whereupon all obligations 
of PRGX referred to herein with respect to such Acquired Assets and Assumed     
Liabilities shall thereafter be deemed to be primary obligations of PRGUSA, for 
which PRGX shall be secondarily liable.                                         

      10.4     COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which       
together shall constitute one and the same instrument.                          

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   10.5     NOTICES. All notices, requests, demands, claims or other
communications hereunder will be in writing and shall be deemed duly given if   
personally delivered, sent by telefax, sent by a recognized overnight delivery  
service which guarantees next-day delivery ("Overnight Delivery") or mailed by  
certified mail, return receipt requested, postage prepaid and addressed to the  
intended recipient, as set forth below:                                         

                                                                [Download Table]
                                                                                 
If to HSA-Texas or Shareholders:  Howard Schultz & Associates International, Inc.
                                  9924 LBJ Freeway                               
                                  Dallas, TX  75243                              
                                  Attention: Howard Schultz                      
                                  Telefax: (972) 690-7584                        

with a copy to:                   Malouf Lynch Jackson & Swinson                 
                                  600 Preston Commons East, 8115 Preston Road    
                                  Dallas, TX  75225                              
                                  Attention:  Curtis Swinson, Esq.               
                                  Telefax: (214) 273-0567                        

with a copy to:                   Michael Glazer, Esq.                           
                                  Howard Schultz & Associates International, Inc.
                                  9924 LBJ Freeway                               
                                  Dallas, TX  75243                              

If to PRGX:                       The Profit Recovery Group International, Inc.  
                                  2300 Windy Ridge Parkway                       
                                  Suite 100 North                                
                                  Atlanta, GA  30339-8426                        
                                  Attention:  Clinton McKellar, Jr.              
                                  Senior Vice President & General Counsel        
                                  Telefax: (770) 779-3034                        

with a copy to:                   Arnall Golden Gregory LLP                      
                                  1201 West Peachtree Street, Suite 2800         
                                  Atlanta, Georgia 30309-3400                    
                                  Attention:  Jonathan Golden, Esq.              
                                  Telefax: (404) 873-8701                        

or at such other address as any party hereto notifies the other parties hereof  
in writing. The parties hereto agree that notices or other communications that  
are sent in accordance herewith (i) by personal delivery or telefax, will be    
deemed received on the day sent or on the first business day thereafter if not  
sent on a business day (with written confirmation of receipt), (ii) by Overnight
Delivery, will be deemed received on the first business day immediately         
following the date sent, and (iii) by certified U.S. Mail, return receipt       
requested, will be deemed received three (3) business days immediately following
the date sent. For purposes of this Agreement, a "business day" is a day on     
which U.S. national banks are open for business and shall not include a Saturday
or Sunday or legal holiday. Notwithstanding anything to the contrary in this    
Agreement, no action shall be required of the parties hereto except on a        
business day and in the event an action is required on a day which is not a     
business day, such action shall be required to be performed on the next         
succeeding day which is a business day.                                         

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         10.6     ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. Except for the
Nondisclosure Agreement, which remains in full force and effect in accordance   
with the terms thereof, this Agreement, together with the Exhibits and Schedules
attached hereto, constitutes the entire agreement and supersedes any and all    
other prior agreements and undertakings, both written and oral, among the       
parties, or any of them, with respect to the subject matter hereof, including   
the Letter of Intent, and, except as otherwise expressly provided herein, is not
intended to confer upon any Person other than PRGX, HSA-Texas and the           
Shareholders, any rights or remedies hereunder.                                 

     10.7     FURTHER ASSURANCES. The parties to this Agreement agree to
execute and deliver, both before and after the Closing, any additional          
information or documents or agreements contemplated hereby and/or necessary or  
appropriate to effect and consummate the transactions contemplated hereby.      
Shareholders and Companies agree to provide to PRGX, both before and after the  
Closing, such information as PRGX may reasonably request in order to consummate 
the transactions contemplated hereby and to effect an orderly transition of the 
Business following the Closing Date.                                            

      10.8     CHOICE OF LAW. This Agreement and all documents executed in
connection therewith shall be governed by, and construed in accordance with, the
laws of the State of Georgia, regardless of the laws that might otherwise govern
under applicable principles of conflict of laws thereof.                        

  10.9     CONSENT TO JURISDICTION. Each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any federal court     
located in the Northern District of Georgia or, if there is not a basis for     
federal court jurisdiction, a Superior Court of Cobb County, Georgia in the     
event any dispute arises out of this Agreement or any of the transactions       
contemplated by this Agreement, (b) agrees that it will not attempt to deny or  
defeat such personal jurisdiction by motion or other request for leave from any 
such court, and (c) agrees that it will not bring any action relating to this   
Agreement or any of the transactions contemplated by this Agreement in any court
other than a federal court sitting in the Northern District of Georgia or a Cobb
County Superior Court.                                                          

10.10    DISPUTE RESOLUTION.                                  

                (a)      Financial Matters. Notwithstanding any provision of
this Agreement to the contrary, all disputes, controversies or claims arising   
out of or relating to this Agreement or the transactions contemplated hereby    
relating to financial matters shall be resolved by agreement among the parties, 
or, if not so resolved within forty-five (45) days following written notice of  
dispute given by either party hereto to the other, by arbitration in accordance 
with Title 9 of the United States Code (the United States Arbitration Act), the 
Commercial Arbitration Rules of the American Arbitration Association, and its   
Optional Rules for Emergency Measures of Protection (the "Optional Rules"), all 
as amended from time to time (collectively, the "Rules") and the provisions of  
this Section; provided, however, that the provisions of this Section shall      
prevail in the event of any conflict with such Rules. The parties agree that    
they shall use their best efforts to cause the matter to be presented to the    
arbitral tribunal as soon as possible in light of the complexity of the dispute.
The arbitral tribunal, except as provided under the Optional Rules, shall       
consist of three neutral arbitrators experienced in the industry related to the 
dispute, one of whom shall be chosen by the claimant and one chosen by          
respondent, and the two so chosen shall choose the third arbitrator who shall   
act as chairperson. The parties shall be entitled to engage in discovery in     
connection with arbitration, which discovery shall be conducted in accordance   
with Georgia rules of Civil Procedure and Evidence. Additionally, there shall be
no evidence by affidavit allowed, and each party shall disclose a list of all   
documentary evidence to be used, a list of all witnesses and experts to be      
called by the party at least twenty (20) days prior to the arbitration hearing. 
The decision of a majority of the arbitration panel with respect to the matters 
referred to them pursuant hereto shall be final and binding upon the parties to 
the dispute, and confirmation and enforcement thereof may be rendered thereon by
any court having jurisdiction upon application of any Person who is a party to  
the arbitration proceeding. The arbitral tribunal shall assess fees, expenses,  
compensation, and attorney's fees in the award as provided in the               

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Rules. The arbitral tribunal shall have no power or authority under this        
Agreement or otherwise to award or provide for the award of punitive or         
consequential damages against any party. Any arbitration shall be conducted in  
Atlanta, Georgia.                                                               

                 (b)      Other Matters. Notwithstanding any provision of this
Agreement to the contrary, in respect of all disputes, controversies or claims  
arising out of or relating to this Agreement or the transactions contemplated   
relating to any matters other than financial matters the parties may exercise   
any and all rights and remedies available at law or in equity. Without limiting 
the generality of the foregoing, in the event of a breach or threatened breach  
by any party hereto of any of its covenants or other obligations hereunder,     
including, without limitation, the parties' respective obligations to close the 
transactions contemplated hereby, each of the parties hereby consents and agrees
that the non-breaching party shall be entitled to an injunction or similar      
equitable relief restraining the breaching party(s) from committing or          
continuing any such breach or threatened breach or granting specific performance
of any act required to be performed by the breaching party(s) under any such    
provision, without the necessity of showing any actual damage or that money     
damages would not afford an adequate remedy and without the necessity of posting
any bond or other security. The right of the non-breaching party to injunctive  
relief shall be in addition to any and all other remedies available to it and   
shall not be construed to prevent it from pursuing, either consecutively or     
concurrently, any and all other legal or equitable remedies available to them   
including the recovery of monetary damages.                                     

    10.11    SCHEDULES, REVISED SCHEDULES AND EXHIBITS. All Schedules,
Revised Schedules and Exhibits referenced in this Agreement shall be deemed to  
be a part of this Agreement. The lists and deliveries referenced in Sections    
3.3, 5.8, 5.15 through 5.23 inclusive, and 5.26 or elsewhere herein, which have 
been delivered to PRGX prior to the execution of this Agreement, shall be       
updated prior to the Closing so as to be true, correct and complete and be      
"brought-down" as of the Closing Date, shall, when delivered, be accompanied by 
a certificate of the Shareholders and a duly authorized officer of HSA-Texas    
certifying that they are delivered pursuant to the applicable Section of this   
Agreement, as referenced in such certificate, and shall, when delivered, be     
attached to this Agreement and for all intents and purposes, be deemed Schedules
hereto. All Schedules and Revised Schedules shall be arranged in paragraphs     
corresponding to the lettered and numbered paragraphs contained in applicable   
Article hereof and shall provide information thereon separately in respect of   
each Company, as applicable.                                                    

        10.12    DEFINITION OF HSA-TEXAS' KNOWLEDGE. As used herein, the terms
"Known by HSA-Texas," "to HSA-Texas' Knowledge," "to the Knowledge of           
HSA-Texas," "to the best Knowledge of HSA-Texas" and words of similar import    
shall mean the actual knowledge after reasonable investigation of the following 
individuals on the date hereof and on the Closing Date: H. Schultz, A. Schultz, 
Charles Schembri and Mac Martirossian.                                          

      10.13    RELIANCE. Each party hereto acknowledges and represents (i)
that this Agreement is executed without reliance on any agreement, promise,     
statement, or representation by or on behalf of any person, except as set forth 
specifically herein or in the HSA-Texas Transaction Documents and/or the PRGX   
Transaction Documents or referred to herein or therein, (ii) that no person, and
no agent or attorney of any person, has made any promises, representations, or  
warranties whatsoever, whether expressed or implied, which are not expressly    
contained herein, and (iii) that he or its authorized officer has read this     
Agreement and is fully aware of its contents and legal effect.                  

10.14    MARITAL PROPERTY RIGHTS. The Persons signing in their
individual capacities below, whether as a party or as a "spouse" of a party,    
acknowledge and agree that: (i) each is individually joining in and assenting to
this Agreement, (ii) each consents to and approves of the transactions          
contemplated by this Agreement, and (iii) each intends individually to be       
legally bound by this Agreement and each of the HSA-Texas Transaction Documents 
to which such individual or his or her spouse is a party (the                   

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"Transaction Agreements"). Each such individual Person also acknowledges that he
or she will directly and personally benefit from the transactions contemplated  
by the Transaction Agreements to which such individual or his or her spouse is a
party, that he or she has had an opportunity to review all such agreements and  
consult with independent legal counsel, and that PRGX is entering into this     
Agreement and the PRGX Transaction Documents in reliance upon the agreements set
forth in this paragraph.                                                        

      10.15    SECTION HEADINGS; CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its        
construction or interpretation. All references to "Section" or "Sections" refer 
to the corresponding Section or Sections of this Agreement. All words used in   
this Agreement will be construed to be of such gender or number, as the         
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.                                    

ARTICLE 11
SHAREHOLDERS' REPRESENTATIVE

      11.1     IRREVOCABLE APPOINTMENT OF SHAREHOLDERS' REPRESENTATIVE. By
the execution and delivery of this Agreement, including counterparts hereof,    
effective upon the approval by the holders of HSA-Texas Voting Common Stock of  
the HSA-Texas Recommendations in accordance with Section 3.1(b)(ii) and Section 
5.33 hereof, the execution of the HSA-Texas Unanimous Consent, each Shareholder 
hereby irrevocably constitutes and appoints H. Schultz, and any successor to the
foregoing person appointed pursuant to Section 11.3 hereof, as the true and     
lawful agent and attorney-in-fact (referred to in this Agreement as the         
"Shareholders' Representative") of such Shareholder with full power of          
substitution and with full power and authority to act in the name, place and    
stead of such Shareholder with respect to the terms and provisions of this      
Section 11.1, as the same may be from time to time amended, and to do or refrain
from doing all such further acts and things, and to execute all such documents, 
as the Shareholders' Representative shall deem necessary or appropriate in      
connection with the following powers granted under this Section 11.1:           

             (a)      to approve any action or perform any covenant or
agreement hereunder or under any and all HSA-Texas Transaction Documents which  
requires the consent, approval, waiver or performance of the Shareholders,      
including, without limitation, any action under Article 9 hereof;               

       (b)      to settle all claims, matters, disputes or
disagreements under this Agreement and the Indemnification Agreement; and       

                 (c)      to extend the Closing Date or change the location of
the Closing.                                                                    

11.2     ACTS OF SHAREHOLDERS' REPRESENTATIVE.                

                (a)      The appointment of the Shareholders' Representative
in Section 11.1 hereof shall be deemed coupled with an interest and shall be    
irrevocable, and PRGX and any other Person may conclusively and absolutely rely,
without inquiry, upon any action of the Shareholders' Representative as the act 
of each of the Shareholders in all matters referred to in Section 11.1 hereof.  
Each Shareholder hereby ratifies and confirms all that the Shareholders'        
Representative shall do or cause to be done by virtue of Shareholders'          
Representative's appointment as Shareholders' Representative of such            
Shareholder. The Shareholders' Representative shall act for the Shareholders on 
all of the matters set forth in Section 11.1 hereof in the manner the           
Shareholders' Representative believes to be in the best interest of the         
Shareholders and consistent with Shareholders' Representative's obligations     
under this Agreement, but the Shareholders' Representative shall not be         
responsible to any Shareholder for any loss or damage any Shareholder may suffer
by reason of the performance by the Shareholders' Representative of             
Shareholders' Representative's duties under this Agreement, including any loss  
or damage resulting from any error of judgment, mistake of fact or law, or any  
act done or omitted to be done in                                               

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good faith, other than loss or damage arising from willful violation of law or  
gross negligence in the performance of Shareholders' Representative's duties    
under this Agreement.                                                           

               (b)      Each Shareholder hereby expressly acknowledges and
agrees that the Shareholders' Representative is authorized to act on behalf of  
such Shareholder notwithstanding any dispute or disagreement among the          
Shareholders, and that the PRGX shall be entitled to rely on any and all action 
taken by the Shareholders' Representative under this Agreement without liability
to, or obligation to inquire of, any of the Shareholders. PRGX is hereby        
expressly authorized to rely on the authority and genuineness of the signature  
of the Shareholders' Representative on any instrument, certificate or document. 
Upon receipt of any writing which reasonably appears to have been signed by the 
Shareholders' Representative, PRGX may act upon the same without any further    
duty of inquiry as to the genuineness of the writing.                           

11.3     REPLACEMENT OF SHAREHOLDERS' REPRESENTATIVE. If the  
Shareholders' Representative resigns or ceases to function in Shareholders'     
Representative's capacity for any reason whatsoever, then A. Schultz shall      
become the Shareholders' Representative and if A. Schultz shall cease to act as 
the Shareholders' Representative, then a majority-in-interest of the            
Shareholders shall appoint a successor; provided, however, that, if for any     
reason no successor has been appointed within thirty (30) days, then any        
Shareholder or PRGX shall have the right to petition a court of competent       
jurisdiction for appointment of a successor. A "majority-in-interest" means     
those Shareholders entitled to receive a majority of the Consideration under    
this Agreement.                                                                 

        11.4     INDEMNIFICATION OF SHAREHOLDERS' REPRESENTATIVE. Shareholders
do hereby jointly and severally agree to indemnify and hold the Shareholders'   
Representative harmless from and against any and all liability, loss, cost,     
damage or expense (including without limitation fees and expenses of legal      
counsel) reasonably incurred or suffered as a result of the performance of      
Shareholders' Representative's duties under this Agreement except for actions   
constituting gross negligence or willful misconduct.                            

         11.5     PROOF OF AUTHORITY. Each Shareholder shall execute and deliver
to the Shareholders' Representative such further documents requested by the     
Shareholders' Representative, if any, as may be necessary to the efficient proof
of his authority to act and to exercise the powers granted the Shareholders'    
Representative under this Article 11.                                           

   11.6     SURVIVABILITY OF POWER. EACH SHAREHOLDER INTENDS FOR THE
AUTHORIZATIONS AND AGREEMENTS IN THIS ARTICLE XI TO REMAIN IN FORCE AND NOT BE  
AFFECTED IF SUCH SHAREHOLDER SUBSEQUENTLY BECOMES MENTALLY OR PHYSICALLY        
DISABLED OR INCOMPETENT.                                                        

 [SIGNATURES BEGIN ON THE NEXT PAGE]

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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.                                               

PRGX:   
                 THE PROFIT RECOVERY GROUP
           INTERNATIONAL, INC.

By:     
                                     ---------------------------------------
           Name:  John M. Cook
                           Its:  Chairman of the Board and CEO

  HSA-TEXAS:
                   HOWARD SCHULTZ & ASSOCIATES
           INTERNATIONAL, INC.

By:     
                                     ---------------------------------------
             Name:  Howard Schultz
                           Its:  Chairman of the Board and CEO

     SHAREHOLDERS:

                                  ------------------------------------------
                                  Howard Schultz

                              Leslie Schultz, signing solely for the
                                 purpose of acknowledging the provisions
                 of Section 10.14 hereof

                                  ------------------------------------------
                                 Andrew H. Schultz

                              Nicole Malkoff Schultz, signing solely
                              for the purpose of acknowledging the
                            provisions of Section 10.14 hereof

                           Andrew H. Schultz Irrevocable Trust
               u/a dated May 1, 1997

By:     
                                     ---------------------------------------
                                       Andrew H. Schultz, Sole Trustee

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                        The Zachary Herman Schultz Trust
              u/a dated June 3, 1997

By:     
                                     ---------------------------------------
                                    Howard Schultz, Sole Trustee

                   The Gabriella Schultz Trust
                u/a dated March 31, 1998

By:     
                                     ---------------------------------------
                                    Howard Schultz, Sole Trustee

                     The Samuel Joel Schultz Trust
              u/a dated July 3, 2001

By:     
                                     ---------------------------------------
                                    Howard Schultz, Sole Trustee

                             The HHS Charitable Lead Annuity Trust
               u/a dated April 5, 2001

By:     
                                     ---------------------------------------
                                   Harold Berman, Sole Trustee

                             The LVS Charitable Lead Annuity Trust
               u/a dated April 5, 2001

By:     
                                     ---------------------------------------
                                   Harold Berman, Sole Trustee

                                    The Daniel Alan Schultz HHS (2001) GST Trust
               u/a dated April 5, 2001

By:     
                                     ---------------------------------------
                                   Harold Berman, Sole Trustee

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                                 The Jaynie Schultz Romaner HHS (2001) GST Trust
         u/a dated April 5, 2001

By:           
                                    --------------------------------------------
                             Harold Berman, Sole Trustee

                                The Andrew Harold Schultz HHS (2001) GST Trust
         u/a dated April 5, 2001

By:           
                                    --------------------------------------------
                             Harold Berman, Sole Trustee

                              The Daniel Alan Schultz LVS (2001) GST Trust
         u/a dated April 5, 2001

By:           
                                    --------------------------------------------
                             Harold Berman, Sole Trustee

                                 The Jaynie Schultz Romaner LVS (2001) GST Trust
         u/a dated April 5, 2001

By:           
                                    --------------------------------------------
                             Harold Berman, Sole Trustee

                                The Andrew Harold Schultz LVS (2001) GST Trust
         u/a dated April 5, 2001

By:           
                                    --------------------------------------------
                             Harold Berman, Sole Trustee

               SHAREHOLDERS' REPRESENTATIVE:

                                 -----------------------------------------------
                          Howard Schultz

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LIST OF APPENDICES, SCHEDULES AND EXHIBITS

                                                        [Enlarge/Download Table]
                                                                                                        
Appendix A            Location of Defined Terms                                                         

Schedule 1(a)         First and Second-Tier Subsidiaries of HSA-Texas                                   
Schedule 1(b)         Licensees                                                                         
Schedule 1.1(a)       Fixed Assets                                                                      
Schedule 1.1(f)       Licenses and Permits                                                              
Schedule 1.1(g)       Deposits and Other Rights                                                         
Schedule 1.1(j)       Bank Accounts and Lock Boxes                                                      
Schedule 1.2          Legal Descriptions of Parcels Constituting of Dallas, Headquarters                
Schedule 2.2(b)(iv)   Assumed Severance Amount                                                          
Schedule 3.4(d)       PRGX Proposed Divestitures (Prepared by PRGX)                                     
Schedule 4.1(c)       Estimated Financials                                                              
Schedule 4.2          Key Employees                                                                     
Schedule 5.1(a)       Jurisdictions in which HSA-Texas is Qualified to do Business                      
Schedule 5.1(b)       Jurisdictions in which other Companies are Qualified to do Business               
Schedule 5.2(a)       Trusts and Trustees                                                               
Schedule 5.2(b)       Each Company's Directors and Officers                                             
Schedule 5.3          List of Recorded Liens (other than Permitted Encumbrances)                        
Schedule 5.4          Consents                                                                          
Schedule 5.5(a)       Capitalization of Each Company                                                    
Schedule 5.5(b)       HSA-Texas Options and Optionees                                                   
Schedule 5.5(b)(i)    Form of HSA-Texas Stock Option Grant Agreement                                    
Schedule 5.5(b)(ii)   Form of Documents Relating to HSA-Texas SARs                                      
Schedule 5.6          Exceptions to Compliance with Laws                                                
Schedule 5.7          Exceptions to Licenses and Permits                                                
Schedule 5.8          Financial Information                                                             
Schedule 5.11A        Disputes Relating to Trade Payables and Accrued Expenses                          
Schedule 5.11B        Acquisition-Related Notes and Other Debts, Obligations, Guaranties and Liabilities
Schedule 5.12         Tax Matters                                                                       
Schedule 5.14(a)      Information on Audits                                                             
Schedule 5.15         Material Contracts                                                                
Schedule 5.15(b)-1    Certain Representations regarding Material Contracts                              
Schedule 5.15(b)-2    Descriptions of oral Material Contracts                                           
Schedule 5.15(b)-3    Breaches or Defaults of Material Contracts                                        
Schedule 5.15(b)-4    Assignability of Material Contracts                                               
Schedule 5.16         Material Leases                                                                   
Schedule 5.17(a-1)    Clients and Key Clients                                                           
           5.17(a-2)                                                                                    
           5.17(a-3)                                                                                    
           5.17(a-4)                                                                                    
           5.17(a-5)                                                                                    
Schedule 5.17(b-1)    Clients and Key Clients (delivered supplementally per the Agreement)              
           5.17(b-2)                                                                                    
           5.17(b-3)                                                                                    
           5.17(b-4)                                                                                    
           5.17(b-5)                                                                                    
Schedule 5.18(a)      Employees, Associates                                                             
           5.18(b)                                                                                      

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                                                                [Download Table]
                                                                               
           5.18(d)                                                             
Schedule 5.19  (a)   Intellectual Property Assets                              
           5.19(b)                                                             
           5.19(d)                                                             
           5.19(e)                                                             
Schedule 5.20        Internet Presence                                         
Schedule 5.21        Year 2000 Compliance                                      
Schedule 5.22  (a)   Benefit Plans and List of Accrued Vacation Obligations    
           5.22(c)                                                             
           5.22(d)                                                             
           5.22(g)                                                             
           5.22(h)                                                             
Schedule 5.24        Litigation                                                
Schedule 5.25        Insurance                                                 
Schedule 5.26        Immigration Matters                                       
Schedule 5.28        Material Changes                                          
Schedule 5.29        Certain Arrangements                                      

Exhibit 1.3(a)       Bill of Sale                                              
Exhibit 1.3(b)       Assignment and Assumption Agreement                       
Exhibit 1.3(c)-1     Trademark Assignment                                      
Exhibit 1.3(c)-2     Copyright Assignment                                      
Exhibit 2.4(b)       Amended and Restated HSA-Texas Option Plan                
Exhibit 3.5A         Registration Rights Agreement                             
Exhibit 3.5B         Investment Representation Letter                          
Exhibit 4.2A         H. Schultz Offer Letter                                   
Exhibit 4.2B         A. Schultz Offer Letter                                   
Exhibit 4.2C         Employee Agreement                                        
Exhibits 4.4         Non-competition Agreement                                 
Exhibit 4.19         Shareholder Agreement                                     
Exhibit 4.20         Agreement regarding Nominee Stockholder                   
Exhibit 7.3          Indemnification Agreement                                 
Exhibit 8.3(c)(vi)   Content of Opinion of HSA-Texas' and Shareholders' Counsel
Exhibit 8.3(c)(xii)  General Release                                           

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                                                                         ANNEX B

AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION PURSUANT TO
SECTION 368(A)(1)(B) OF THE INTERNAL REVENUE CODE, AS AMENDED 

     THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement" or this
"Stock Purchase Agreement") is made and entered into as of the 11th day of      
December, 2001, by and among THE PROFIT RECOVERY GROUP INTERNATIONAL, INC., a   
Georgia corporation ("PRGX"), HOWARD SCHULTZ, a Texas resident ("H. Schultz"),  
ANDREW H. SCHULTZ, a Texas resident ("A. Schultz"), ANDREW H. SCHULTZ           
IRREVOCABLE TRUST under agreement dated May 1, 1997 (the "Trust"), LESLIE       
SCHULTZ, a Texas resident ("L. Schultz") (each of H. Schultz, A. Schultz, the   
Trust, and L. Schultz being hereinafter collectively referred to as the         
"Shareholders" and individually as a "Shareholder"), and H. SCHULTZ, as         
representative of the Shareholders ("Shareholders' Representative").            

WITNESSETH: 

      WHEREAS, PRGX, the Shareholders and the Shareholders' Representative
are parties to that certain Agreement and Plan of Reorganization Pursuant to    
Section 368(A)(1)(B) of the Internal Revenue Code, As Amended dated as of       
August 3, 2001 (the "Original Agreement"); and                                  

  WHEREAS, the parties to the Original Agreement wish to amend and
restate the Original Agreement in its entirety, as provided herein;             

NOW, THEREFORE, in consideration of the premises, the mutual  
representations, warranties and covenants herein contained and other good and   
valuable consideration, the receipt and sufficiency of which are hereby         
acknowledged, the parties hereby amend and restate the Original Agreement, as   
follows:                                                                        

WHEREAS, PRGX, Shareholders, and Howard Schultz & Associates  
International, Inc., a Texas corporation ("HSA-Texas") have executed and        
delivered that certain Agreement and Plan of Reorganization, dated as of August 
3, 2001, as amended and restated by agreement dated December 11, 2001 (as       
amended and restated, the "Asset Purchase Agreement"), pursuant to which        
HSA-Texas shall sell to PRGX, and PRGX shall purchase from Schultz,             
substantially all of the assets of HSA-Texas; and                               

      WHEREAS, the portion of HSA-Texas' Business (as defined in the Asset
Purchase Agreement) not operated through HSA-Texas is conducted through Howard  
Schultz & Associates (Asia) Limited, a Hong Kong corporation ("Asia"); HS&A     
International Pte Ltd., a Singapore corporation ("Singapore"), Howard Schultz & 
Associates (Australia), Inc., a Texas corporation ("Australia"), and Howard     
Schultz & Associates (Canada), Inc., a Texas corporation ("Canada") (Asia,      
Singapore, Canada and Australia are hereinafter collectively referred to as the 
"Companies" and individually as the "Company") pursuant to written licenses;    
and                                                                             

      WHEREAS, PRGX, H. Schultz and A. Schultz have executed and delivered
that certain Indemnification Agreement, dated of even date herewith             
("Indemnification Agreement"), pursuant to which the parties thereto have       
agreed, among other things, on the terms and                                    

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conditions pursuant to which H. Schultz, A. Schultz and PRGX and others named   
therein will indemnify each other for breaches of representations, warranties   
and covenants set forth in this Stock Purchase Agreement and in the Asset       
Purchase Agreement; and                                                         

 WHEREAS, subject to the terms and conditions of this Agreement,
Shareholders and PRGX desire to exchange the Shares (defined in Section 1.1)    
for an agreed-upon number of shares of PRGX's common stock, no par value per    
share ("PRGX Common Stock") (the "Transaction"); and                            

       WHEREAS, the parties hereto desire to consummate the exchange for the
Shares (defined in Section 1.1 below) pursuant to a plan of reorganization      
intended to qualify under Section 368(a)(1)(B) of the Internal Revenue Code of  
1986, as amended, whereby PRGX shall acquire the Shares solely in exchange for  
PRGX's Common Stock;                                                            

   WHEREAS, the closing of the Transaction is contingent among other
things upon the closing of the asset acquisition described in the Asset         
Purchase Agreement ("Asset Acquisition").                                       

 NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the      
receipt and sufficiency of which are hereby acknowledged, the parties hereto    
agree as follows:                                                               

ARTICLE I 
PURCHASE AND SALE OF SHARES; CLOSING

 1.1      AGREEMENT TO EXCHANGE SHARES. Subject to the terms and
conditions of this Agreement, the Shareholders shall sell, transfer and assign  
to PRGX, and PRGX shall acquire from the Shareholders, on the Closing Date      
(defined in Section 1.3), all of shares of capital stock issued by the          
Companies and owned by the Shareholders (collectively, the "Shares") free and   
clear of all security interests, pledges, liens, encumbrances, charges, adverse 
claims of ownership or use, restrictions on the Shares' ownership, use, voting, 
transfer, receipt of dividends or any other encumbrances of any nature          
whatsoever ("Share Encumbrances").                                              

1.2      CONSIDERATION; ALLOCATION. Subject to the terms and  
conditions of this Agreement, the aggregate consideration ("Consideration")     
deliverable to the Shareholders in exchange for the Shares is Six Hundred       
Twenty-Nine Thousand Five Hundred And Eight (629,508) shares of PRGX Common     
Stock. The shares of PRGX Common Stock delivered as Consideration hereunder     
shall be unregistered, restricted securities issued subject to the investment   
representation made pursuant hereto and may not be resold except in compliance  
with applicable federal and state securities laws. Schedule 1.2 sets forth the  
number of shares of PRGX Common Stock each Shareholder is to receive and        
allocates the PRGX Common Stock among each of the Companies in which each       
Shareholder owns Shares; provided that in lieu of delivering fractional shares, 
PRGX shall deliver to any Shareholder otherwise entitled to a fractional share, 
an amount in cash based on the PRGX Average Price. For purposes hereof, "PRGX   
Average Price" means the average closing price per share of PRGX Common Stock   
(as reported in The Wall Street Journal) for the 5 consecutive trading days     
ending on the fifth trading day immediately preceding the Closing Date.         

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        1.3      CLOSING. The closing of the Transaction (the "Closing") shall
be consummated concurrently with the closing of the Asset Acquisition (the date 
on which the Closing occurs being hereinafter referred to as the "Closing       
Date.") The Transaction shall be effective on and as of 12:01 am Eastern time   
on the Closing Date. If the Asset Acquisition is not consummated for any reason 
whatsoever, then none of the parties hereto shall have any right or obligation  
to consummate the Transaction described in this Stock Purchase Agreement. The   
Closing shall be effective as of the same time and date as the closing of the   
Asset Acquisition.                                                              

ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDERS 

     In order to induce PRGX to enter into this Agreement and consummate
the transactions contemplated in this Agreement, H. Schultz and A. Schultz      
hereby, jointly and severally, represent and warrant to PRGX, and the Trust     
hereby severally represents and warrants to PRGX, as follows, each of which is  
material to and relied upon by PRGX.                                            

      2.1      ORGANIZATION AND AUTHORITY OF COMPANIES; SUBSIDIARIES. Each
Company is a corporation duly organized, validly existing and in good standing  
under the laws of the jurisdiction of its organization, all of which are        
designated on Schedule 2.1(a). Each Company is duly qualified as a foreign      
corporation in all jurisdictions inside and outside of the United States in     
which the conduct of its business or the ownership of its properties requires   
such qualification, and Schedule 2.1(b) lists all the jurisdictions inside and  
outside the United States where each Company is so qualified. Each Company has  
all necessary corporate power and authority to own, lease and operate its       
properties and conduct its business as it is currently being conducted. No      
Company owns, directly or indirectly, any equity interest in any corporation,   
partnership, joint venture, or other Person.                                    

For purposes of this Agreement, "Person" means an individual, 
partnership, a corporation, an association, a joint stock company, a trust, a   
joint venture, an unincorporated organization, or a Governmental Entity. For    
purposes of this Agreement, "Governmental Entity" means any supranational,      
national, state, municipal, local or foreign government, any instrumentality,   
subdivision, court, administrative agency or commission or other authority      
thereof, or any quasi-governmental or private body exercising any regulatory,   
taxing, importing or other governmental or quasi-governmental authority (or any 
department, agency or political subdivision thereof).                           

2.2      POWER AND AUTHORITY; DUE AUTHORIZATION; DIRECTORS AND
OFFICERS.                                                                       

             (a)      Each Shareholder has full power and authority to
execute and deliver this Agreement and each of the Shareholders' Transaction    
Documents to which each Shareholder is or will be a party and to consummate the 
transactions contemplated hereby and thereby. "Shareholders' Transaction        
Documents" means each of the agreements, documents and instruments referenced   
in this Agreement to be executed and delivered by any Shareholder.              

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Each Shareholder has duly executed and delivered this Agreement on the Closing  
Date subject to the terms and conditions of this Agreement, each Shareholder    
shall duly execute and deliver each of the Shareholders' Transaction Documents, 
and no other proceedings shall then be necessary for the execution, delivery or 
effectiveness of this Agreement and Shareholder's Transaction Documents.        

              (b)      Shareholders have delivered to PRGX true, correct
and complete copies of all documents, agreements and instruments which govern   
the Trust. In respect of the Trust, the execution, delivery and performance of  
this Agreement and the Shareholders' Transaction Documents by the Trust has     
been duly authorized and approved in accordance with all agreements governing   
the Trust. A. Schultz is the sole Trustee of the Trust and has sole full right, 
power and authority to enter into this Agreement on behalf of the Trust and to  
cause the Trust to perform its obligations hereunder and under the              
Shareholders' Transaction Documents.                                            

         (c)      Assuming that this Agreement and each of the
Shareholders' Transaction Documents which are also PRGX Transaction Documents   
constitute a valid and binding agreement of PRGX, this Agreement and each of    
the Shareholders' Transaction Documents constitute, or will constitute when     
executed and delivered, a valid and binding agreement of each Shareholder, in   
each case enforceable in accordance with its terms. A true, correct and         
complete list of the incumbent duly elected directors and officers of each      
Company are set forth on Schedule 2.2. Schedule 2.2 shall be updated on the     
Closing Date to be true, correct and complete as of the Closing Date.           

2.3      ASSETS.                                              

                (a)      Title. Except as set forth on Schedule 2.3(a), each
Company has a good, valid and marketable title to all of its assets free and    
clear of any mortgages, liens, pledges, security interests, encumbrances,       
claims or similar rights of every kind and nature, except for any liens for     
Taxes not yet due and payable. At Closing, each Company will have good, valid   
and marketable title to all of its assets free and clear of any mortgages,      
liens, pledges, security interests, encumbrances, claims or similar rights of   
every kind and nature, except for any liens for Taxes not yet due and payable   
and liens for liabilities reflected on the Estimated Balance Sheet (defined in  
Section 4.1(d)). No Company currently has title to, or a fee simple ownership   
interest in, any real property.                                                 

           (b)      Condition of the Assets. Prior to the Closing,
Shareholders shall cause each Company to deliver to PRGX a true, correct and    
complete list of the fixed assets of such Company reconciled with the fixed     
assets line item of the Estimated Balance Sheet.                                

  2.4      NO CONFLICT; REQUIRED CONSENTS. The consummation of the
Transaction does not and will not (i) require the consent, approval or action   
of, or any filing with or notice to, any corporation, firm, Person or other     
entity or any Governmental Entity; (ii) violate the terms of any Contract       
(defined in Section 2.12) to which any Company or Shareholder is a party, or by 
which any Company or any Shareholder or the property of any Company or          
Shareholder is bound, or be in conflict with, result in a breach of or          
constitute (upon the giving of notice or lapse of time or both) a default under 
any such Contract, or result in the creation of any lien upon any of the        

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property or assets of any Company; (iii) violate the organizational documents   
of any Company or the Trust; or (iv) violate any order, writ, injunction,       
decree, judgment, ruling, law, rule or regulation of any Governmental Entity    
(individually, a "Law" collectively, "Laws") applicable to any Company or any   
Shareholder. No Company nor any Shareholder is subject to, or is a party to,    
any Contract or Law of any kind or character which would prevent or hinder the  
continued operation of the Companies after the Closing Date on substantially    
the same basis as theretofore operated.                                         

2.5      OWNERSHIP OF CAPITAL STOCK AND OPTIONS.              

             (a)      All outstanding shares of each Company's capital
stock (including, without limitation, the Shares) are duly authorized, validly  
issued, fully paid and nonassessable. Schedule 2.5(a) is a true, correct and    
complete list of each Person who is a beneficial or record owner of any of the  
outstanding shares of capital stock of any of the Companies together with the   
number of shares owned by each such Person. As of the date of this Agreement,   
all outstanding shares of capital stock of each Company (including, without     
limitation, the Shares) are free and clear of all Share Encumbrances.           

              (b)      Except as set forth on Schedule 2.5(a), as of the
date hereof, there are outstanding (i) no shares of capital stock or other      
voting or non-voting securities of any Company, (ii) no securities of any       
Company convertible into or exchangeable for shares of capital stock or voting  
or non-voting securities of any Company, (iii) no options (including employee   
stock options), warrants or rights of conversion or other rights, agreements,   
arrangements or commitments obligating, or which may obligate, any Company to   
sell or issue any additional securities, (iv) no obligation of any Company to   
issue any voting or non-voting securities or securities convertible into or     
exchangeable for voting or non-voting securities of any Company, and (v) no     
equity equivalents, interests in the ownership or earnings, or other similar    
rights of or with respect to any Company (the items in clauses (i), (ii),       
(iii), (iv) and (v) being referred to collectively as the "Company              
Securities"). There are no outstanding obligations of any Company to            
repurchase, redeem or otherwise acquire any outstanding shares of Capital Stock 
of any Company or Company Securities.                                           

                 (c)      Acceptor Professional Directors (Pte) Ltd. ("Nominee
Shareholder") holds two shares of common stock of Singapore solely for the      
purpose of keeping Singapore in compliance with the applicable laws of the      
nation of Singapore.                                                            

      2.6      COMPLIANCE WITH LAWS. Each Company currently is, and always
has been, in compliance with all applicable Laws. No Company nor any            
Shareholder has received written notice of any noncompliance by any Company of  
any applicable Laws, nor to the Shareholders' knowledge, is there any basis     
therefor.                                                                       

    2.7      LICENSES AND PERMITS. Schedule 2.7 is a true, correct and
complete list of all licenses, permits, approvals and authorizations which have 
been issued or delivered to each Company. Each Company holds, and is in         
compliance with, all Licenses and Permits. No Company nor any Shareholder has   
received written notice of any violations in respect of any                     

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such Licenses and Permits. No proceeding is pending or, to the Shareholders'    
knowledge, threatened, which seeks revocation or limitation of any such         
Licenses and Permits.                                                           

2.8      FINANCIAL INFORMATION.                               

                 (a)      Schedule 2.8 is a true, correct and complete copy of
the Historical Statements (defined in Section 4.1). The Historical Statements   
have been prepared in accordance with generally accepted accounting principles  
(except that they may not contain customary footnotes) ("GAAP"), consistently   
applied for the periods presented, and fairly present the financial condition   
of each Company, at the respective dates thereof and the separate results of    
operations of each Company for the periods then ended, except as otherwise      
disclosed in the notes thereto, if any. The Interim Financials (defined in      
Section 4.1) and the Estimated Financials (defined in Section 4.1) will be      
prepared in accordance with GAAP (except that they may not contain customary    
footnotes), consistently applied for the periods presented, and will fairly     
present the financial condition of each Company, at the respective dates        
thereof and the separate results of operations of each Company for the periods  
then ended, except as otherwise disclosed in the notes thereto, if any          

           (b)      The Historical Statements are, and the Interim
Financials and the Estimated Financials will be, consistent with the books and  
records of each Company. All work papers related to the Historical Statements,  
the Interim Financials and the Estimated Financials and other financial         
information provided by the Companies to PRGX in connection with their due      
diligence are, and will be, true, correct and consistent with the books and     
records of each Company.                                                        

            (c)      On the date hereof, there are no liabilities or
obligations of any Company of any nature, whether liquidated, unliquidated,     
accrued, absolute, contingent or otherwise except for those that are            
specifically reflected or reserved against as to amount in the December 31,     
2000 balance sheets which are part of the Historical Financials and those       
arising thereafter in the ordinary course of each Company's business. On the    
Closing Date, there will be no liabilities or obligations of any Company of any 
nature, whether liquidated, unliquidated, accrued, absolute, contingent or      
otherwise, except for those that are specifically reflected or reserved against 
as to amount in the Estimated Financials.                                       

                (d)      No Company is, nor has any Company been, during the
12 months immediately preceding the execution of this Agreement, insolvent      
within the meaning of 11 U.S.C. ss. 101(31). Each Company has paid, and is      
paying, its debts as they become due.                                           

2.9      TRADE PAYABLES; ACCRUED EXPENSES; OTHER DEBT.        

              (a)      Trade Payables. As of the Closing Date, all trade
payables and accrued expenses of the Companies shall have been incurred in the  
ordinary course of business, shall be directly related to each Company's        
business, and shall not, as of the Closing Date, be overdue other than those,   
if any, not yet paid due to a bona fide dispute (as detailed on Schedule 2.9A). 

              (b)      Debt for Borrowed Money. Schedule 2.9B is a true,
correct and complete list as of the date hereof, which list will be updated     
prior to Closing so as to be true, correct and                                  

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complete as of the Closing Date, of all debts, obligations, guaranties,         
financings and other indebtedness for borrowed money of each of the Companies   
outstanding as of the date hereof (and as of the Closing Date), stating the     
origin of the obligation, the obligee of such obligation, the security therefor 
(including a specific description of collateral), the terms of payment and the  
amount owed as of the date hereof.                                              

2.10     TAX RETURNS AND PAYMENTS.                            

                (a)      Payment of Taxes and Other Matters. All Tax Returns
(defined in Section 4.7), including estimated Tax Returns (defined in Section   
4.7) and reports of every kind with respect to Taxes which are due to have been 
filed by the Companies on or before the Closing Date in accordance with any     
applicable law in all jurisdictions where any Company is subject to Taxes, have 
been or will be duly filed on or before the Closing Date and are, or on or      
before the Closing Date will be, true, correct and complete. All Taxes (defined 
in Section 4.7), deposits or other payments which relate to Taxes required to   
be paid (whether or not shown on a Tax Return) by any Company on or prior to    
the Closing Date have been, or will be, paid in full or will be accrued or      
reserved as a Tax liability on the December 31, 2000 Historical Financials      
and/or on the Estimated Financials. There are not now any extensions of time in 
effect with respect to the dates on which any Tax Returns or reports of Taxes   
for any Company were or are due to be filed. All deficiencies asserted as a     
result of any examination of any Tax Return or report of Taxes of any Company   
have been, or on or before the Closing Date, will be, paid in full or finally   
settled with no outstanding liability to the Company or the Shares or were, or  
will be, included in the amount of the reserve for Tax liability shown on the   
December 31, 2000 Historical Financials and/or on the Estimated Financials, and 
no issue has been raised in any such examination which, by application of the   
same or similar principles, reasonably could be expected to result in a         
proposed deficiency for any other period not so examined. No claims have been   
asserted against and no proposals or deficiencies for any Taxes are being       
asserted against any Company, or proposed or threatened, and no audit or        
investigation of any Tax Return or report of Taxes is currently underway,       
pending or threatened; there are no outstanding waivers or agreements by any    
Shareholder or any Company for the extension of time for the assessment of any  
Taxes or deficiency thereof, nor are there any requests for rulings,            
outstanding subpoenas or requests for information, notices of proposed          
reassessment of any property owned or leased by any Company or any other matter 
pending between any Company and any taxing authority; there are no liens for    
Taxes upon any property or assets of any Company except statutory liens for     
current Taxes not yet delinquent; to Shareholders' knowledge, no claim has ever 
been made by a Tax Authority (defined in Section 4.7) in a jurisdiction where   
any Company does not file Tax Returns that such Company is or may be subject to 
Tax by that jurisdiction; no Company is a party to or bound by any tax          
allocation or tax sharing agreement and has no current or potential contractual 
obligation to indemnify any other Person with respect to Taxes; no Company and, 
with respect to Flow-Through Taxes (defined in Section 4.7) attributable to the 
operations of Canada, no Shareholder, is required to include in income any      
adjustment pursuant to Section 481(a) of the Code by reason of a voluntary      
change in accounting method initiated by such Company, nor Shareholders'        
knowledge, has the Internal Revenue Service proposed any adjustment or change   
in accounting methods for any Company.                                          

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         (b)      Subchapter S Status. Canada has made a valid
election to be treated as an S Corporation for U.S. federal income tax purposes 
effective as of the date set forth on Schedule 2.10 attached hereto (the "S     
Effective Date"), and such election has remained valid and effective at all     
times since such date, and Canada will be an S corporation up to and including  
the day before the Closing Date. Canada has made available to PRGX true,        
correct and complete copies of such S election, and acknowledgement of receipt  
thereof by the Internal Revenue Service.                                        

2.11     INFORMATION ON AUDITS; ACCOUNTS RECEIVABLE.          

            (a)      Information on Audits. Schedule 2.11(a) will be
delivered by the Shareholder to PRGX within 3 days after the mailing by PRGX of 
the Proxy Statement to PRGX's Shareholders (as defined in Section 3.1 of the    
Asset Purchase Agreement.) Schedule 2.11(a), when so delivered, will be a true, 
correct and complete list as of the last day of the calendar quarter            
immediately preceding the delivery of such Schedule of the following            
information with respect to each Active Audit of Key Clients; provided that     
with respect to such Schedule, Key Clients shall not be identified by name, but 
shall be represented by a letter of the alphabet, and at least 3 business days  
prior to the Closing, Shareholders will update the information contained on     
Schedule 2.11(a) so as to be true, correct and complete as of the Closing Date, 
and deliver to PRGX a key which identifies the name and address of the Key      
Client represented by each letter on such list:                                 

(1)      name of Client;  

          (2)      primary or secondary audit;

                   (3)      scope of audit (e.g., all divisions,
     regional limitations, only-merchandise, expenses,
advertising, real estate);                  

                         (4)      audit year(s) or other covered time period
of audit;                                   

                          (5)      the contract rate for the Company's service
fee;                                        

                     (6)      Client reserve or holdback percentage;

                    (7)      audit commencement date and projected
completion date;                            

                   (8)      aggregate claims approved by Client;

                     (9)      aggregate gross service fees billed to
Client by the Company for such audit;       

                          (10)     aggregate amount of cash receipts from such
audit;                                      

                 (11)     reserve amount held by Client; and

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                          (12)     the aggregate amount of Vendor Paybacks per
                audit that have been paid as of June 30, 2001 (and as of the
              last day of the calendar quarter immediately preceding the
Closing Date).                              

For purposes hereof, "Active Audits" means, collectively, all those audits of   
Clients of the Companies in respect of which claims remain to be written,       
including those listed on Schedule 2.11(a) attached hereto. "Inactive Audits"   
means, collectively, all those audits for Clients of the Companies in respect   
of which no claims remain to be written, including those in respect of which    
Client continues, as of the date hereof, to hold a reserve for credits,         
chargebacks or other Vendor Paybacks. A "Vendor Payback" means the credits,     
chargebacks or payments made by a Company to a Client as a result of the        
Client's refund of payments made to such Client's vendor refunding commissions  
received by said Company from such Client.                                      

       (b)      Accounts Receivable. Prior to the Closing,
Shareholders shall provide PRGX with a true, correct and complete list of the   
accounts receivable ("Accounts Receivable") of the Companies reconciled with    
the accounts receivable line item on the Estimated Balance Sheet, showing by    
Client and by each Active Audit for such Client, the terms and time period for  
collection thereof. Each of the Accounts Receivable is bona fide and represents 
a valid obligation arising from sales actually made or services actually        
performed by each Company in the ordinary course of its business. Each of the   
Accounts Receivable shall be as of the Closing Date current and collectible in  
full within ninety (90) days after the day on which it first becomes due and    
payable net of the reserve shown on the Estimated Balance Sheet (which reserve  
will be adequate and calculated consistent with past practice and will not      
represent a greater percentage of the Accounts Receivable reflected on the      
Estimated Balance Sheet than the reserve to the accounts receivable on the      
December 31, 2000 balance sheet contained in the Historical Statements) and     
will not represent a material adverse change in the composition of such         
Accounts Receivable in terms of aging. There is no contest, claim, dispute,     
defense or right of setoff relating to the amount or validity of such Account   
Receivable, except for possible vendor payback claims of the Client. As to each 
such Account Receivable, to the Shareholders' knowledge, neither the vendor nor 
the respective Client has objected to the claim for reimbursement upon which    
such Account Receivable is based. The work in progress outstanding on the       
Closing Date will be bona fide and will, if and when converted to accounts      
receivable, represent valid obligations arising from sales actually made or     
services actually performed by the Companies in the ordinary course of          
business, subject only to possible vendor pay-back claims of the Client.        

2.12     MATERIAL CONTRACTS; LICENSE AGREEMENTS.              

                 (a)      Definition of Material Contract. Schedule 2.12(a) is
a true, correct and complete list of all "Material Contracts" which, for        
purposes hereof, means all written or oral contracts (collectively,             
"Contracts") which:                                                             

                          (i)      is with any Person which constitutes a "Key
Client" (defined in Section 2.14) for 2000 or 2001; or                          

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                          (ii)     evidences the obligation of any Company for
debt to any Person for borrowed money or evidences the obligation of any Person 
to any Company for borrowed money; or                                           

                      (iii)    is a license agreement (including those
related to software) in which a Company is either as licensor or licensee which 
involves an aggregate expenditure or receipt by any Company of $50,000 or more; 
or                                                                              

                         (iv)     is with a strategic or business partner of
any Company; or                                                                 

                        (v)      involves the provision of data processing
services or telecommunications services to any Company of $100,000 or more; or  

                        (vi)     is a contract with any vendor of products
or services to any Company (including supply or requirements contracts),        
indicating any which are not cancelable by such Company without cost on 60 days 
or less notice and which involve an aggregate annual expenditure by any Company 
of $100,000 or more; or.                                                        

                  (vii)    is with any employee or independent
contractor of any Company; or                                                   

                     (viii)   related to any merger, asset purchase,
stock purchase or similar purchase and sale agreement to which any of the       
Company is or was a party within the last three years; or                       

                     (ix)     is with any Client (defined in Section
2.14) and (1) has an unexpired term of two (2) or more years, or (2) requires   
any Company to provide equipment or services beyond the scope of such Company's 
business or (3) requires any Company to provide such Client with a guaranty,    
rebate or refund other than possible vendor payback claims of the Client that   
will or is reasonably likely to exceed $25,000 in any 12 month period; or       

                (x)      has or may have the effect of (1)
prohibiting or impairing (i) any business practice of any Company, (ii) any     
acquisition of property (tangible or intangible) by any Company or (iii) the    
conduct of business by any Company, including, without limitation, any          
restrictive covenant or noncompete agreement (2) requiring the referral of any  
business by any Company, or (3) requiring or purporting to require the payment  
of money or the acceleration of performance of any obligation of any Company by 
virtue of the Closing.                                                          

Schedule 2.12(a) indicates thereon the category, by section reference, of       
Material Contract described in this Section 2.12(a) to which such Material      
Contract belongs. Notwithstanding anything to the contrary herein, with respect 
to the information about Clients and Key Clients on the Schedules or deliveries 
required to be delivered as of the date hereof by this Section 2.12, Client and 
Key Clients shall not be identified by name, but shall be represented by a      
letter of the alphabet, and immediately prior to the Closing, Shareholders      
shall cause each Company to deliver to PRGX a key which identifies the name and 
address of the Client or Key Client represented by each letter on such list.    

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   (b)      Certain Representations re: Contracts.

                      (i)      Each Company has provided to PRGX true,
correct and complete copies of all written Material Contracts, including any    
and all amendments and waivers thereto and has provided true, correct and       
complete descriptions of the material terms of any oral Material Contracts on   
Schedule 2.12(b)(1).                                                            

                          (ii)     Assuming the Contracts constitute the valid
and binding agreements of the Company party thereto, such Contracts are valid,  
legally binding and enforceable against the other parties thereto subject to    
laws of general application in effect affecting creditors' rights and subject   
to the exercise of judicial discretion in accordance with general equitable     
principles. No Company nor, to Shareholders' knowledge, any other party to any  
of the Contracts, is in breach of, or in default under, any of the Contracts,   
and no event has occurred which, with the giving of notice or lapse of time, or 
both, would constitute a default by any Company or, to Shareholders' knowledge, 
any other party to any of the Contracts.                                        

2.13     MATERIAL LEASES. Schedule 2.13 is a true, correct and
complete list of all "Material Leases," which means, for purposes hereof, all   
leases of each Company which (a) involve an aggregate annual expenditure by     
such Company of $50,000 or more, (b) are not cancelable by such Company without 
cost on sixty (60) days' or less notice, (c) have a term which extends for more 
than one (1) year from the Closing Date, or (d) are for an interest in real     
estate. Each Company has provided to PRGX true, correct and complete copies of  
all of the Material Leases, together with all amendments, addenda and           
supplements thereto. With respect to each Material Lease:                       

          (a)      the Company party thereto holds the leasehold
interest created under each Material Lease;                                     

              (b)      assuming the Material Lease constitutes the valid
and binding agreement of such Company, the Material Lease is legal, valid,      
binding and enforceable against the other party thereto and in full force and   
effect, subject to laws of general application in effect affecting creditors'   
rights and subject to the exercise of judicial discretion in accordance with    
general equitable principles;                                                   

          (c)      subject to obtaining any necessary consent in
respect of the transactions contemplated hereunder and assuming the Material    
Lease constitutes the valid and binding agreement of the party thereto other    
than such Company, the Material Lease will continue to be legal, valid, binding 
and enforceable by and against such Company and in full force and effect on     
identical terms following the Closing Date;                                     

             (d)      no Company, nor, to Shareholders' knowledge, any
other party to the Material Lease is in breach or default, and no event has     
occurred which, with the giving of notice or lapse of time, would constitute a  
breach or default by such Company or permit termination, modification or        
acceleration thereunder by any other party thereto;                             

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            (e)      no Company nor, to Shareholders' knowledge, any
other party to the Material Lease has repudiated in writing any provision       
thereof;                                                                        

            (f)      there have been and there are no disputes, oral
agreements or forbearances in effect as to the Material Lease;                  

            (g)      no Company has assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in the leasehold of the   
Material Lease and Shareholders are not aware of any such assignment, transfer, 
conveyance, mortgage, deed in trust or encumbrance of any interest in the       
leasehold of the Material Lease;                                                

              (h)      in respect of each such Material Lease which is a
real property lease, (i) such lease is the only instrument which gives rise to  
a right of occupancy by the Company at such location, (ii) Company is the       
original lessee (or has validly succeeded to the rights of the original lessee) 
under such lease, (iii) Company actively occupies such location, (iv) Company   
has paid the rent under the lease on a current basis and there are no past due  
amounts; and                                                                    

               (i)      in respect of each such Material Lease which is an
equipment lease, (i) such Company is in actual possession of the equipment      
leased under each equipment lease, (ii) Company has paid the rent set forth in  
each of the equipment leases on a current basis and there are no past due       
amounts. Schedule 2.13(i) is a true, correct and complete list of the equipment 
subject to each equipment lease and the location of such equipment.             

        2.14     CLIENTS AND KEY CLIENTS. For purposes hereof, "Clients" means
those clients to whom any Company provides or has provided the services of its  
business and "Key Clients" means those Clients of the Companies which as of     
December 31, 2000 (or in respect of 2001, as of the period from January 1, 2001 
to June 30, 2001) accounted for the highest percentages of the revenue of the   
Clients generating at least 80% of the revenues of the Companies on a combined  
basis during such period.                                                       

            (a)      Schedule 2.14(a-1) attached hereto contains the
number of Key Clients for each of 2000 and 2001, and the aggregate revenues of  
such Clients for each of such periods. Schedule 2.14(a-2) separately states the 
number of Key Client Contracts (and the aggregate revenues of such number of    
Key Clients for each of such periods) which contain any of the following        
provisions: (i) performance guaranties, refunds or rebates that could           
reasonably be expected to exceed $25,000, with respect to any annual audit      
period, (ii) have or may have the effect of limiting or impairing any material  
business practice or activity of any Company, (iii) have a net commission rate  
below 20% of recovered funds, (iv) require any referral of business by any      
Company, (v) allow for cancellation by the Client on less than 90 days notice   
or (vi) require consent to assignment, the payment of money or the acceleration 
of performance of any obligation by a Company because of the proposed           
transaction with PRGX. Except for the number of Key Clients (with the aggregate 
revenues for such number for each period) listed on Schedule 2.14(a-3), to the  
Shareholders' knowledge, there are no Key Clients who have, within the 12       
months immediately preceding the date hereof, expressed to any Company material 
dissatisfaction with any Company's services. Schedule 2.14(a-4) contains the    
revenues generated by all Key Clients during each of 2000 and 2001, the         
percentage of the total revenues                                                

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of the Companies on a combined basis for each such period that the revenues of  
the Key Clients for such period constitutes, and the average remaining term of  
the Contracts for all Key Clients. Schedule 2.14(a-5) contains the number of    
Key Clients gained from or lost to any Person other than PRGX in the last 24    
months and the number of primary audits for Key Clients converted to secondary  
audits in the last 24 months, other than audits in which PRGX performs the      
primary audit. All written contracts with Key Clients reflect all material      
terms of the contractual relationship of the Key Client with such Company.      

           (b)      Schedule 2.14(b-1) when delivered, as provided
below, will be a true, correct and complete list of all Key Clients, which will 
be separately identified for each of 2000 and 2001. Schedule 2.14(b-2) will     
specifically identify each Key Client Contract which contains any of the        
following provisions: (i) performance guaranties, refunds or rebates that could 
reasonably be expected to exceed $25,000, with respect to any annual audit      
period, (ii) have or may have the effect of limiting or impairing any material  
business practice or activity of any Company, (iii) have a net commission rate  
below 20% of recovered funds, (iv) require any referral of business by any      
Company, (v) allow for cancellation by a Client on less than 90 days notice or  
(vi) require consent to assignment, the payment of money or the acceleration of 
performance of any obligation by any Company because of the proposed            
transaction with PRGX. Except as will be specifically described on Schedule     
2.14(b-3), to the Shareholders' knowledge, there are no Key Clients who have,   
within the 12 months immediately preceding the date hereof, expressed to any    
Company material dissatisfaction with any Company's services. Schedule          
2.14(b-4) will contain a true, correct and complete list for calendar year 2000 
and 2001 of each Key Client for each such period, the revenues generated by     
each such Key Client during the respective period, the percentage of the total  
revenues of the Companies on a combined basis for each such period that the     
revenues of each Key Client for such period constitutes, and the term of the    
Contract for such Key Client, including the expiration date thereof. In         
addition, Schedule 2.14(b-5) will include a list of Key Clients gained from or  
lost to any Person other than PRGX in the last 24 months a list of primary      
audits for Key Clients converted to secondary audits in the last 24 months,     
other than audits in which PRGX performs the primary audit, and the details of  
any rebate, recovery advance, or recovery guarantee provisions with Key Clients 
for 2000 and 2001, and the assumption or reimbursement of Key Client expenses   
associated with data acquisition or other audit related activities ("Key Client 
Programs"). Schedule 2.14(b-1) through Schedule 2.14(b-5) will be delivered to  
PRGX at least five business days prior to the Closing. In addition, upon        
delivery of such Schedules, the Shareholders shall cause each Company to update 
the information contained on Schedules 2.14(b-1) through (b-5), so as to be     
true, correct and complete as of the Closing Date. At least five days prior to  
the Closing, the Shareholders will cause each Company to provide PRGX true,     
correct and complete copies of all contracts with all Key Clients, together     
with all amendments thereto. All contracts with Key Clients reflect all         
material terms of the contractual relationship of the Key Client with each      
Company as of the Closing Date.                                                 

2.15     EMPLOYEES.                                           

               (a)      Employees. Schedule 2.15(a) is a true, correct and
complete list as of the date of this Agreement of the name, location address,   
function and title of each Company's employees, together with each employee's   
base salary or hourly rate, any bonus or commission formulae applicable         
thereto, vacation and sick leave, the amount of any advances on                 

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commissions (describing the repayment terms thereof) and expenses each employee 
has received which are outstanding and the name of the entity which pays the    
compensation or commission to such employee. Schedule 2.15(a) includes a true,  
correct and complete list of all agreements and understandings between each     
Company and its employees (including a description on such Schedule of all oral 
agreements) concerning their employment relationship with such Company          
(including all restrictive covenant agreements and severance benefits), true,   
correct and complete copies of which agreements have been provided to PRGX (or  
descriptions contained on Schedule 2.15(a) in respect of any oral agreements).  

                        (i)      Except as otherwise set forth in Schedule
2.15(a)(i), the employment of each employee is terminable without cause within  
30 days' written notice by such Company or such employee, subject to any rights 
to salaries and commissions earned prior to such termination and no such Person 
has been granted the right to continued employment or engagement by any Company 
or to any material compensation or payment following termination of employment  
with such Company.                                                              

                    (ii)     Schedule 2.15(a)(ii) contains a true,
correct and complete copy of each Company's standard form employment agreement  
and noncompetition and restrictive covenant agreement with its employees.       
Except to the extent specified on Schedule 2.15(a)(ii), there are no deviations 
from such standard contract in the agreements with the employees, except for    
immaterial modifications which do not confer additional benefits on such        
employee or impose additional liability on any Company.                         

                         (iii)    To the Shareholders' knowledge, no officer
or Key Employee, or any group of employees, intends to terminate their          
employment with any Company, nor does any Company have a present intention to   
terminate the employment of any officer, Key Employee or group of employees. As 
used herein, "Key Employees" shall mean H. Schultz, A. Schultz and those        
individuals listed on Schedule 2.15(a)(iii).                                    

                (iv)     Schedule 2.15(a) shall be updated
immediately prior to the Closing so as to be true, correct and complete as of   
the Closing Date.                                                               

(b)      Associates.                        

                      (i)      Schedule 2.15(b) is a true, correct and
complete list as of the date of this Agreement of the name, location address,   
function and title of each Company's Associates (defined in Section 2.15(b)(vi) 
hereof), together with each Associate's commission percentage, any bonus        
arrangements, all accrued commissions, the amount of any advances on            
commissions or other amount owed to any Company (describing the repayment terms 
thereof) which are outstanding, any rights to payments upon or after            
termination of the independent contractor relationship with any of the          
Companies, any other benefits, and the name of the entity which pays the        
commission to such Associate. Prior to the Closing, each Company shall have     
delivered to PRGX, true, correct and complete copies of all agreements and      
understandings between each Company and its Associates (including a written     
description on such Schedule of all oral agreements) together with all          
amendments, addenda and supplements thereto concerning                          

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their relationship with such Company (including any restrictive covenant        
agreements and any severance agreements).                                       

                  (ii)     The engagement of each Associate is
terminable without cause within 30 days' written notice by such Company or such 
Associate, subject to any rights to commissions earned prior to such            
termination and no such Person has been granted the right to continued          
engagement by any Company or to any material compensation or payment following  
termination of engagement with such Company.                                    

                        (iii)    Schedule 2.15(b) contains a true, correct
and complete description of the Companies' policy for post-termination trailing 
commissions payable to Associates and its policy for the deduction of           
commissions associated with paybacks owed to clients of the companies and lists 
any material deviations from such policy in respect of any Associate, except    
for immaterial modifications which do not confer additional benefits on such    
Associate or impose additional liability on any Company. Each Associate has     
met, and until the Closing Date will continue to meet, the requirements under   
the Code, and the regulations promulgated thereunder, to be an independent      
contractor.                                                                     

                        (iv)     To Shareholders' knowledge, no Associate,
or any group of Associates, intends to terminate their engagement with any      
Company, nor does any Company have a present intention to terminate the         
engagement of any Associate or group of Associates.                             

               (v)      None of Companies' agreements or
arrangements with any Associates will obligate PRGX to pay commissions, fees or 
other compensation to such sales agents or Associates for revenues earned by    
PRGX for services performed for Clients after the Closing Date other than       
services of the type the Companies provided to such Clients prior to the        
Closing Date.                                                                   

                         (vi)     Schedule 2.15(b) shall be updated prior to
the Closing Date to be true, correct and complete as of the Closing Date. As    
used herein, "Associates" shall mean those independent contractors engaged by   
the Companies to perform accounts payable auditing and related consulting       
services. Other than those individuals listed on Schedule 2.15(a) or Schedule   
2.15(b), none of the Companies employs or engages, directly or indirectly, any  
other Persons, in any capacity, including without limitation, as employees,     
agents, consultants, partners, or independent contractors.                      

               (c)      Employment Laws. Each Company (i) is in compliance
with all applicable laws, rules and regulations respecting employment,          
employment practices, terms and conditions of employment and wages and hours in 
respect of its employees and, to the extent applicable, its Associates of any   
Governmental Entity which have jurisdiction over such Company's employment      
practices; (ii) has withheld all amounts required by Law or by agreement to be  
withheld from the wages, salaries and other payments to its employees; (iii) is 
not liable for any arrears of wages or any taxes or any penalty for failure to  
comply with any of the foregoing in respect of any employees or Associates; and 
(iv) is not liable for any payment to any trust or other fund or to any         
Governmental Entity with respect to unemployment compensation benefits, social  
security or other benefits for employees (other than routine                    

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payments to be made in the normal course of business and consistent with past   
practice). In respect of each Company's current and former employees and        
Associates, (i) there are no charges, investigations, administrative            
proceedings or formal complaints of discrimination pending or, to Shareholders' 
knowledge, threatened by or before any Governmental Entity against any Company; 
(ii) there have been no audits by any Governmental Entity of any of the         
Companies' equal employment opportunity practices; (iii) no current or former   
employee or Associate of any Company has notified any Company of any fact or    
circumstance which, if true, might constitute a violation of any Employment     
Law; and (iv) to Shareholders' knowledge, no Company nor any employee of any    
Company has engaged in any activity which constitutes a violation of any        
Employment Law. For purposes hereof, "Employment Laws" means any                
constitutional, statutory, regulatory or common law of any Governmental Entity  
relating to employment discrimination or harassment, including, but not limited 
to, the Age Discrimination in Employment Act, the Older Workers' Benefit        
Protection Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act 
of 1991 and the Americans with Disabilities Act.                                

             (d)      Breaches. To the Shareholders' knowledge, (i) no
Person employed or engaged as an employee or Associate by any Company has, in   
respect of his or her activities to date on behalf of such Company, violated    
any of the terms or conditions of his or her employment agreement or other      
engagement with the Company or any other contract to which Company is a party   
with any third party, or disclosed or used any trade secrets or proprietary or  
confidential information or documentation of any third party without the        
authorization of such third party, or interfered in the employment relationship 
between any third party and any of its employees and (ii) no Person employed or 
engaged as an employee or independent contractor by any Company has disclosed   
or used any trade secrets or any other proprietary or confidential information  
or documentation of any former employer or other third party, or has violated   
any non-compete obligation or confidential relationship that such Person has or 
may have had with any third party, in connection with such person's activities  
on behalf of the Companies. To the Shareholders' knowledge, excluding any       
former employees or Associates who are performing services for PRGX or its      
affiliates, no former employees whose employment with any Company was           
terminated by such Company or by such employee or otherwise expired within the  
last 2 years and no Associate whose engagement with any Company was terminated  
by such Company or by such Associate or otherwise expired within the last 2     
years is currently or has within the last 2 years, directly or indirectly,      
competed with the HSA-Texas or the Companies.                                   

             (e)      Unions. None of the Companies are, nor have they
ever been, a party to any collective bargaining agreement or any other          
contract, written or oral, with any trade or labor union, employees'            
association or similar organization. There are no, and there never have been    
any, attempts at union organization of the employees of any of the Companies.   

2.18     INTELLECTUAL PROPERTY. None of the Companies owns any
intellectual property. All intellectual property used by the Companies is       
licensed solely from HSA-Texas. To the extent that work performed by any        
employee or Associate constitutes a "work made for hire" within the meaning of  
the Copyright Act, each such Person has signed a proprietary inventions or      
similar agreement with HSA-Texas transferring and assigning to HSA-Texas all    
right, title and interest in and to intellectual property developed by such     
employee or Associate.                                                          

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   2.19     INTERNET PRESENCE. No Company has any public, private or
reserved presence on the world wide web, multi-party extranet, virtual private  
network, or similar internet based, linked system.                              

      2.20     YEAR 2000 COMPLIANCE. Each Company has previously performed
unit, integration and acceptance testing of all software, hardware, and all     
other devices containing or utilizing electronic components reasonably          
necessary to the performance of its respective business obligations and         
operations (all of the foregoing, collectively, "Computer Systems"), including  
all Computer Systems owned, leased, sold, developed, assembled, distributed,    
supported, maintained, used, or operated by, to, for, or from any Company, and  
the results of such testing, as well as the Companies' experience to date,      
establish that all Computer Systems, have functioned normally before, during,   
and after the change from the year 1999 to each successive year through the     
year 2010, and Companies have no basis to believe there will be any             
interruption in service in the future attributable to such change.              

2.21     BENEFIT PLANS AND ERISA.                             

                (a)      Other than bonuses, commission formulae, sick leave
and vacation policies which are set forth on Schedule 2.15(a), no Company       
(directly or indirectly) maintains or sponsors, nor has it ever (directly or    
indirectly) maintained or sponsored, any "employee benefit plan" (as defined by 
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended 
("ERISA"), but without regard to whether such plan is subject to ERISA), or any 
other bonus, profit sharing, pension, compensation, deferred compensation,      
stock option, stock purchase, fringe benefit, severance, post-retirement,       
scholarship, disability, sick leave, vacation, individual employment,           
commission, bonus, payroll practice, retention, or other plan, agreement,       
policy, trust fund or arrangement for the benefit of (i) the Company's          
directors or employees or any other person performing services for the Company; 
(ii) the Company's former directors or former employees or any other persons    
formerly performing services for the Company; and/or (iii) beneficiaries or     
covered dependents of anyone described in (i) or (ii) above (each such plan,    
agreement, policy, trust fund or arrangement is referred to herein as an        
"Employee Benefit Plan").                                                       

                 (b)      Other than an obligation to provide benefits arising
in the ordinary course pursuant to those Employee Benefit Plans set forth on    
Schedule 2.15(a), none of the Companies has any liability for, under, with      
respect to or otherwise in connection with any Employee Benefit Plan.           

            (c)      PRGX shall not, as a result of the transactions
contemplated by this Agreement: (i) become liable for any contribution, tax,    
lien, penalty, cost, interest, claim, loss, action, suit, damage, cost          
assessment or other similar type of liability or expense of the Companies or    
any ERISA Affiliate (including predecessors thereof) with regard to any         
Employee Benefit Plan or any Employee Benefit Plan sponsored, maintained or     
contributed to by an ERISA Affiliate (including predecessors thereof) (assuming 
a like definition of "Employee Benefit Plan" were applicable to ERISA           
Affiliates as to those same types of agreements, policies, trusts, funds and    
arrangements sponsored, maintained or contributed to by them, and each such     
plan for an ERISA Affiliate is referred to herein as an "ERISA Affiliate        
Employee                                                                        

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Benefit Plan"), including, without limitation withdrawal liability arising      
under Title IV, Subtitle E, Part 1 of ERISA, liabilities to the PBGC,           
liabilities under Section 412 of the Code or Section 302(a)(2) of ERISA, or     
liabilities arising under the applicable requirements of Part 6 of Subtitle B   
of Title I of ERISA and Section 4980B of the Code, or (ii) be or become a party 
to any Employee Benefit Plan or any ERISA Affiliate Employee Benefit Plan.      
Without limiting any other provision of this Section 2.21, none of PRGX or any  
of the Companies shall have liability for, under, with respect to or otherwise  
in connection with any Employee Benefit Plan, including, without limitation, an 
ERISA Affiliate Employee Benefit Plan, which liability arises under ERISA or    
the Code by virtue of any of the Companies being aggregated in a controlled     
group or affiliated service group with any ERISA Affiliate for purposes of      
ERISA or the Code at any relevant time prior to the Closing Date.               

            (d)      For purposes of this Agreement, the term "ERISA
Affiliate" shall mean, with respect to each Company, any trade or business,     
whether or not incorporated, other than such Company, which has employees who   
are or have been at any date of determination occurring within the preceding    
six (6) years, treated pursuant to Section 4001(a)(14) of ERISA and/or Section  
414 of the Code as employees of a single employer which includes such Company,  
including, without limitation, HSA-Texas.                                       

       2.22     ENVIRONMENTAL COMPLIANCE. None of the Companies conducts its
business or has any material assets located in the United States.               

2.23     LITIGATION; JUDGMENTS.                               

              (a)      Except as set forth on Schedule 2.23, there is no
action, proceeding or, to Shareholders' knowledge, investigation, by or before  
any Governmental Entity pending or, to Shareholders' knowledge, threatened:     

                       (i)      that has been commenced by or against or
involving any Company or its business; or                                       

                         (ii)     that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with any of the  
transactions contemplated in this Agreement or Shareholders' ability to         
consummate the transactions contemplated by this Agreement and the              
Shareholders' Transaction Documents or which might give rise to a Material      
Adverse Effect on any Company.                                                  

             (b)      No event has occurred and no circumstance exists
that may give rise to or serve as a basis for the commencement of any such any  
action, proceeding or investigation described in Section 2.23(a).               

                 (c)      None of the Companies or Shareholders are subject to
any judgment, order or decree entered in any lawsuit or proceeding relating to  
any Company, its assets or its business, nor has any such action been settled   
or resulted in a final judgment since January 1, 2000.                          

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2.24     INSURANCE. Schedule 2.24 contains a true, correct and
complete list of all of the insurance policies maintained by each Company,      
which schedule includes the name of the insurance company, the policy number, a 
description of the type of insurance covered by such policy, the dollar limit   
of the policy, and the annual premiums for such policy, and the name and phone  
number of the insurance agent in respect thereto. Each Company shall maintain   
such insurance policies in full force and effect through the Closing Date.      
Except as set forth on Schedule 2.24, (i) no claims are pending under the       
listed policies, nor do Shareholders know of any basis therefor and (ii) there  
have been no settlement of insurance claims since January 1, 2000.              

2.25     IMMIGRATION MATTERS.                                 

             (a)      Companies Employing Persons in the U.S. The only
Persons who are currently employees of the Companies in the United States (and  
the only Persons who shall be so employed by the Companies in the United States 
as of the Closing Date) are H. Schultz, A. Schultz, and L. Schultz, all of whom 
are citizens of the United States.                                              

              (b)      Companies Employing Persons Outside the U.S. With
respect to each of the Companies which employs persons outside the U.S., such   
Company is in compliance with all Laws of any Governmental Entity relating to   
the employment of persons who are not citizens of such jurisdiction.            

   2.26     BROKER'S FEES. No Company or Shareholder has retained or
utilized the services of any broker, finder or intermediary or paid or agreed   
to pay any fee or commission to any other Person for or on account of the       
transactions contemplated hereby, or had any communications with any Person     
with respect thereto, which would obligate PRGX to pay any such fees or         
commissions.                                                                    

       2.27     ABSENCE OF MATERIAL CHANGES. Except as set forth in Schedule
2.27, from December 31, 2000 to the date of this Agreement with respect to each 
Company:                                                                        

            (a)      there has not been any Material Adverse Effect;

                 (b)      no Company has lost (or received written notice that
it is about to lose) any Key Clients or Key Clients with which any Company has  
significant business relations;                                                 

             (c)      to the Shareholders' knowledge, no former senior
manager (i.e., an audit manager or higher) of any Company is currently          
competing with any Company or planning to so compete;                           

          (d)      each Company has operated its business in its
ordinary course and has not sold, assigned, or transferred any of its assets    
except in the ordinary course of business consistent with past practice;        

              (e)      no Company has mortgaged, pledged or subjected to
any lien, pledge, mortgage, security interest, conditional sales contract, or   
other encumbrance of any nature whatsoever, any of its assets;                  

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                (f)      there has been no amendment, termination, or waiver
of any right of any Company under any contract, governmental license or permit  
that may materially adversely affect the business or assets of such Company;    

(g)      No Company has:                    

                         (i)      paid any judgment resulting from any suit,
proceeding, arbitration, claim or counterclaim in respect of its assets or      
business in excess of $1,000 (provided that all such excluded payments do not   
aggregate to more than $5,000);                                                 

                    (ii)     made any such payment to any party in
settlement of any such suit, proceeding, arbitration, claim or counterclaim in  
excess of $1,000 (provided that all such excluded payments do not aggregate to  
more than $5,000);                                                              

                        (iii)    written down, or failed to write down (in
accordance with its past practices consistently applied) or written up the      
value of any inventory or assets of such Company;                               

                         (iv)     made any material changes in the customary
methods of operation of its business, including practices and policies relating 
to purchasing, marketing, selling, accounting, payment of trade creditors or in 
the billing or collection of accounts receivable or work in progress, including 
without limitation, discounting or writing off any of Companies' accounts       
receivable or work in progress for early payment, or granting any other         
deduction or discount thereon or accelerating the collection thereof except in  
accordance with past practices consistently applied;                            

                   (v)      (except in respect of ordinary trade
payables) incurred any indebtedness or guaranteed any indebtedness, except for  
borrowings under existing loans or lines of credit in the ordinary course of    
business consistent with past practice;                                         

                          (vi)     taken any action other than in the ordinary
course of business and in a manner consistent with past practices (none of      
which actions has been unreasonable or unusual) with respect to increasing the  
compensation of any officer, director, consultant or employee of any Company,   
paid bonuses to any consultant or employees (except for bonuses earned in the   
ordinary course of business), or with respect to the grant of any severance or  
termination pay (otherwise than pursuant to policies of Companies in effect on  
the date hereof fully disclosed to PRGX in writing prior to the date hereof) or 
with respect to any increase of benefits payable under its severance or         
termination pay policies in effect on the date hereof;                          

                          (vii)    declared, set aside or paid any dividend or
distribution payable in cash, stock, property or otherwise with respect to any  
Company's capital stock (except for distributions to Shareholders consistent    
with past practices); or                                                        

                 (h)      agreed, whether in writing or otherwise, to take any
of the actions specified in this Section 2.27.                                  

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2.28     CERTAIN ARRANGEMENTS.                                

                  (a)      Schedule 2.28 is a true, correct and complete list as
of the date hereof and since December 31, 2000 of, any direct or indirect       
transaction, or series of transactions, involving more than $60,000 per year,   
individually or in the aggregate, (other than in respect of compensation or     
travel or expense account reimbursement in the ordinary course of business      
consistent with past practice) that any Shareholder, director, officer,         
employee, Associate or other affiliate (for purposes of this Agreement,         
"affiliate" means any individual, partnership, corporation, trust, joint venture
or other entity controlled by, controlling or under common control with any     
Company or any Shareholder) or any relative of any Shareholder, director,       
officer, employee, Associate or other affiliate (collectively, a "Related       
Party") has or had with any Company and contains a brief description of each    
transaction, including without limitation:                                      

                       (i)      any oral or written contract, agreement,
understanding, commitment or other arrangement providing for the furnishing of  
services, or the sale or rental of real or personal property from or otherwise  
requiring payments to any such Related Party or to any affiliate or relative of 
such Related Party;                                                             

                           (ii)     any loans or advances to or from any Company
(exclusive of travel advances, expense advances, and normal salary advances in  
connection with vacation periods, or compensation, or travel or expense account 
reimbursement all in the ordinary course of business) to any such Related Party 
or to any affiliate or relative of such Related Party, giving for each the      
principal amount outstanding, interest rate, maturity date and security         
therefor;                                                                       

                     (iii)    any direct or indirect interest in any
property, real or personal, tangible or intangible by any such Related Party or 
to any affiliate or relative of such Related Party, including inventions,       
patents, copyrights, trademarks, or trade names, used in or pertaining to its   
business, except for the normal rights of a shareholder; and                    

                         (iv)     all services and overhead support provided
by such Related Party to any Company, describing the nature and value of such   
services and support, the amount of all compensation, fees, commissions or other
amounts owed by or to the Related Party and a description of the relationship   
of, and oral or written agreements or understandings between, any Company and   
such Related Party in respect of such Related Party as a supplier or customer to
any Company.                                                                    

                (b)      Except as set forth on Schedule 2.28, all services,
overhead support and other interests provided by Shareholder or any affiliate   
thereof to any Company have been provided on a basis no more favorable to such  
Company than could be obtained in an arms' length transaction.                  

               (c)      None of the Shareholders is engaged in competition
with any Company with respect to any line of the products or services of such   
Company (a "Competing Business") in any market presently served by such Company.
None of the Shareholders use the services of any employee of any Company in any 
other enterprise controlled by such Shareholder.                                

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    2.29     BANK ACCOUNTS. Schedule 2.29 contains a true, correct and
complete list showing the name and location of each bank or other institution in
which each Company has any deposit account, lock box or safe deposit box        
(collectively, the "Bank Accounts"), together with a listing of all account     
numbers and names of all persons authorized to draw thereon or have access      
thereto.                                                                        

2.30     NO UNLAWFUL PAYMENTS.                                

                  (a)      None of the Companies nor, to Shareholders' knowledge
any director, officer, agent, employee, or other person associated with or      
acting on behalf of any Company has, directly or indirectly:                    

                    (i)      used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to     
political activity;                                                             

                       (ii)     made any unlawful payment to domestic or
foreign government officials or employees, or to domestic or foreign political  
parties or campaigns, from corporate funds;                                     

                    (iii)    violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended;                                      

                        (iv)     established or maintained any unlawful or
unrecorded fund of corporate monies or other assets;                            

                        (v)      made any false or fictitious entry on the
books or records of any Company;                                                

                        (vi)     made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment;                                   

                   (vii)    given any favor or gift which is not
deductible for federal income tax purposes; or                                  

                           (viii)   made any bribe, kickback or other payment of
a similar or comparable nature, whether lawful or not, to any person or entity, 
private or public, regardless of form, whether in money, property, or services, 
to obtain favorable treatment in securing business or to obtain special         
concessions, or to pay for favorable treatment for business secured or for      
special concessions already obtained.                                           

     2.31     DISCLOSURE. The statements, representations and warranties
made by each Shareholder in this Agreement and in the Schedules do not contain  
any untrue statement of a material fact or omit to state a material fact        
necessary to make the statements contained herein or therein, in light of the   
circumstances under which they were made, not misleading. No notice given       
pursuant to Section 4.4 will contain any untrue statement or omit to state a    
material fact necessary to make the statements therein or in this Agreement in  
light of the circumstances in which they were made, not misleading. To          
Shareholders' knowledge, there is no fact that has specific application to any  
Company (other than general economic or industry conditions) and                

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that has a Material Adverse Effect or, as far as any Shareholder can reasonably 
foresee, materially threatens to have a Material Adverse Effect that has not    
been set forth in this Agreement or the Schedules hereto.                       

         2.32     INVESTMENT INTENT. Each of the undersigned Shareholders hereby
covenants, represents and warrants to PRGX as follows, and acknowledges that    
each such covenant, representation and warranty is material to and intended to  
be relied upon by PRGX:                                                         

       (a)      The undersigned is acquiring the shares of PRGX Common Stock
issued as Consideration hereunder (the "PRGX Shares") for the undersigned's own 
account for investment purposes and not with a view to resale or distribution   
within the meaning of the Securities Act of 1933, as amended (the "Securities   
Act") and the rules and regulations thereunder; and the undersigned will not    
distribute the PRGX Shares in violation or contravention of the Securities Act. 

        (b)      The undersigned, if an individual, is a resident of the state
of Texas, or, if a trust, is a trust formed under the laws of the state of      
Texas.                                                                          

   (c)      The undersigned acknowledges that all of the PRGX Shares
acquired by the undersigned will be issued to it without registration and in    
reliance upon certain exemptions under the Securities Act and in reliance upon  
certain exemptions from registration requirements under applicable state        
securities laws.                                                                

 (d)      The undersigned will make no distribution, transfer or
assignment of any of the PRGX Shares except in compliance with the Securities   
Act and any other applicable securities laws.                                   

     (e)      The undersigned consents, agrees and acknowledges that the
certificate or certificates representing the PRGX Shares may bear the following 
legend, or another legend to the same effect and agrees to the restrictions set 
forth therein:                                                                  

     The shares represented by this certificate have not been registered
      under the Securities Act of 1933, as amended or under the securities
      laws of any other jurisdiction, in reliance upon exemptions from the
        registration requirements of such laws. The shares represented by this
   certificate may not be sold or otherwise transferred, nor will an
       assignee or endorsee hereof be recognized as an owner of these shares
         by the issuer unless: (i) a registration statement under the Securities
   Act of 1933, as amended and other applicable securities laws with
         respect to the shares and the transfer shall then be in effect; or (ii)
      in the opinion of counsel satisfactory to the issuer, the shares are
    transferred in a transaction which is exempt from the registration
requirements of such laws.                                    

       (f)      The undersigned is aware that no federal or state agency has
made any recommendation or endorsement of the PRGX Shares or any finding or     
determination as to the fairness of the investment in such PRGX Shares.         

       (g)      Neither PRGX nor any person acting on its behalf offered the
PRGX Shares to the undersigned by means of general or public solicitation or    
general or public advertising, such as by                                       

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newspaper or magazine advertisements, by broadcast media, or at any seminar or  
meeting whose attendees were solicited by such means.                           

         (h)      The undersigned hereby acknowledges that the PRGX Shares are a
speculative investment. The undersigned represents that it can bear the economic
risks of such an investment for an indefinite period of time.                   

         (i)      The undersigned acknowledges, represents and warrants that the
undersigned has received and reviewed the following:                            

-        A copy of this Agreement;                            

        -        A copy of all filings relating to PRGX on the web site of the
                Securities and Exchange Commission (www.sec.gov), other than
            PRGX's registration statement on form S-4 filed with the
               Commission on September 7, 2001, which has not been used by
     PRGX to offer the PRGX Shares to the undersigned;

 -        Disclosure Document dated as of November 15, 2001; and

   -        PRGX Private Offering Memorandum dated November 30, 2001
                relating to the Offering by PRGX of Convertible Subordinated
Promissory Notes due 2006.                  

         (j)      The undersigned acknowledges, represents and warrants that the
undersigned has such knowledge and experience in financial and business matters 
that it is capable of evaluating the merits and risks of an investment in the   
PRGX Shares; that the undersigned has had reasonable opportunity to ask         
questions of and receive answers from PRGX's officers and directors and to      
obtain any additional information, documents or instruments available from PRGX 
that the undersigned has reasonably requested; and that the undersigned has     
consulted with its own legal, tax and financial advisors with respect to the tax
consequences of acquiring the PRGX Shares and has not relied upon PRGX or its   
representatives as to such matters.                                             

 ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PRGX

         As an inducement to the Shareholders to enter into this Agreement, PRGX
represents and warrants to the Shareholders as follows:                         

     3.1      CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. PRGX has
full corporate power and authority to execute and deliver this Stock Purchase   
Agreement and each of the other agreements, documents and instruments referenced
in this Stock Purchase Agreement to which PRGX is or will be a party            
(collectively, the "PRGX Transaction Documents") and to consummate the          
Transaction contemplated hereby and thereby. The Board of Directors of PRGX has 
duly approved and authorized the execution and delivery of this Agreement and   
each of the PRGX Transaction Documents and the consummation of the Transaction  
contemplated hereby and thereby, and no other corporate proceedings on the part 
of PRGX are necessary to                                                        

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approve and authorize the execution and delivery of this Agreement and such PRGX
Transaction Documents and the consummation of the Transaction contemplated      
hereby and thereby. Assuming that this Agreement and each of the PRGX           
Transaction Documents constitutes a valid and binding agreement of Shareholders,
this Agreement and each of the PRGX Transaction Documents constitutes, or will  
constitute when executed and delivered, a valid and binding agreement of PRGX,  
enforceable against PRGX in accordance with its terms.                          

       3.2      NO CONFLICT; CONSENTS. The execution and delivery by PRGX of
this Agreement, the PRGX Transaction Documents and the consummation by PRGX of  
the Transaction contemplated hereby and thereby do not and will not (a) require,
other than the Lenders' Consent, the consent, approval or action of, or any     
filing or notice to, any Person (defined in Section 4.4 hereof) except as       
disclosed on Schedule 3.2(a); (b) violate the terms of any instrument, document 
or agreement to which PRGX is a party, or by which PRGX or the property of PRGX 
is bound, or be in conflict with, result in a breach of or constitute (upon the 
giving of notice or lapse of time, or both) a default under any such instrument,
document or agreement; (c) violate PRGX's Articles of Incorporation or Bylaws;  
or (d) violate any order, writ, injunction, decree, judgment, ruling, law or    
regulation of any Governmental Entity applicable to PRGX, or the business or    
assets of PRGX.                                                                 

        3.3      BROKER'S FEES AND EXPENSES. PRGX has not retained or utilized
the services of any broker, finder, or intermediary or paid or agreed to pay any
fee or commission to any other Person for or on account of the Transaction      
contemplated hereby, or had any communications with any Person which would      
obligate Shareholders to pay any such fees or commissions.                      

ARTICLE IV
ADDITIONAL COVENANTS

4.1      DUE DILIGENCE REVIEW.                                

                (a)      Due Diligence. Prior to the Closing Date, PRGX, its
counsel and representatives, including KPMG LLP (collectively, the "PRGX        
Representatives") shall have conducted such due diligence investigation of the  
Companies and the Shareholders as PRGX shall determine. The Shareholders shall  
cause the Companies to provide such persons full access during normal business  
hours to the offices, properties, books, records, files and other documents and 
information regarding the Companies' business, to the Companies' employees,     
independent contractors, associates, officers, sales agents, project managers,  
contract service providers, strategic partners, other representatives and       
customers and to all materials, programs, data, reports, systems, practices,    
deliverables, and other properties and assets and shall fully cooperate with    
PRGX and such persons and provide full opportunity to said parties to make such 
investigation and copy such documents as PRGX shall desire; provided, however,  
that (i) no information with respect to any specific Clients will be required to
be disclosed pursuant to this Section prior to or in any manner other than as   
set forth in the Schedules attached hereto (or to be attached hereto) in        
accordance with Section 2.11, Section 2.12 (with respect to information about   
Clients), or Section 2.14 hereof, (ii) no information with respect to trade     
secrets relating to technology and/or auditing methodologies of the Companies   
will be provided prior to obtaining Shareholders' Representative consent, which 
consent will not be unreasonably withheld,                                      

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(iii) with respect to employees of the Companies, PRGX will not communicate with
such Persons without prior notice to Shareholders' Representative and providing 
Shareholders' Representative an opportunity to be present at any meetings with  
such employees, and (iv) with respect to Associates, PRGX will not communicate  
with the Associates without obtaining the consent of Shareholders'              
Representative, which will not be unreasonably withheld. Such persons shall not 
contact employees or customers of any of the Companies Shareholders'            
Representative's prior consent. No investigation of the Companies by PRGX, its  
counsel and representatives, including the PRGX Representatives, either prior   
to, on, or after the date hereof shall affect PRGX's right to rely upon, or     
Shareholders' responsibility for the accuracy of the representations and        
warranties of Shareholders made herein.                                         

                (b)      Historical Statements. As soon as practicable after
the date hereof but in no event later than thirty days after the date of this   
Agreement, Shareholders, at their sole cost and expense, shall cause the chief  
financial officer for each Company to prepare and provide to PRGX the following 
for each Company:                                                               

                  (i)      a separate, unaudited balance sheet
(excluding the notes thereto) prepared as of December 31, 2000, December 31,    
1999, and December 31, 1998;                                                    

                  (ii)     a separate, unaudited statements of
operations, changes in shareholders' equity and statements of cash flows for the
years then ended, including in each case, the notes thereto; and                

                  (iii)    a separate balance sheet and income
statement as of June 30, 2001, for the period from January 1, 2001 through June 
30, 2001                                                                        

                  (iv)     a separate balance sheet and income
statement as of September 30, 2001, for the period from January 1, 2001 thorough
September 30, 2001 (items (i), (ii), (iii) and (iv) are hereinafter collectively
referred to as the "Historical Statements").                                    

                  (c)      Interim Financials. Within twenty (20) days after the
end of each month beginning October 31, 2001, Shareholders, at their sole cost  
and expense, shall cause the chief financial officer for each Company to prepare
and provide a separate balance sheet and income statement for each Company as of
the end of the preceding month (the "Interim Financials").                      

              (d)      Estimated Financials. On or before seven business
days prior to the Closing Date, Shareholders shall prepare in accordance with   
Section 4.1(e) hereof, and PRGX and Shareholders' Representative shall agree    
upon for each Company the following: (i) a separate, estimated balance sheet    
which includes a detailed listing of the assets and liabilities of each Company 
prepared as of the Closing Date (collectively, the "Estimated Balance Sheets"), 
(ii) a separate, estimated income statement sheet which includes a detailed     
listing of revenues, expenses and income of each Company for the period from    
January 1, 2001 through the Closing Date (collectively, the "Estimated Income   
Statements"), and (iii) a separate, estimated statement of cash flows of each   
Company for the period from January 1, 2001 through the Closing Date            
(collectively, the "Estimated Statement of Cash Flows") (collectively, the      
Estimated Balance Sheets, the Estimated Income Statement, the Estimated         
Statements of Cash Flows, being the "Estimated Financials"), each of which      
statements will contain with respect to any item which is                       

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not capable of determination at Closing, a good faith estimate of such item as  
of the Closing Date, and which shall, when delivered, be attached hereto as     
Schedule 4.1(d).                                                                

               (e)      Preparation of Estimated Financials. The Estimated
Financials shall be prepared in accordance with generally accepted accounting   
principles for financial reporting in the United States ("GAAP") applied on a   
basis consistent with the Historical Statements excluding the notes thereto,    
shall include the same categories of assets and liabilities of the Companies as 
of the Closing Date as were included on the December 31, 2000 balance sheet     
included in the Historical Statements and the same items of revenues, expenses  
and income of the Companies as of the Closing Date as were included on the      
income statement for the year ended December 31, 2000 included in the Historical
Statements, and shall be consistent with each Company's past accounting         
practices and procedures.                                                       

      4.2      CONDUCT OF THE COMPANIES PENDING CLOSING DATE. Shareholders
covenant and agree that, unless PRGX shall otherwise consent in writing or as   
otherwise specifically contemplated herein, between the date hereof and the     
Closing Date, they shall cause: (i) each Company to be operated only in, and    
each Company shall not take any action except in, the ordinary course of its    
business and in a manner consistent with such Company's past practices; and (ii)
each Company to use its best efforts to preserve substantially intact its       
business, to keep available the services of its present officers, directors and 
employees, and to preserve the present relationships of the each Company with   
its Clients and other persons having business relationships with such Company.  
Shareholders covenant and agree that between the date hereof and Closing, no    
Company shall not materially diminish its assets or materially increase its     
liabilities (except in the ordinary course of its business consistent with its  
past practices). By way of amplification and not limitation, except as expressly
provided for in this Agreement, Shareholders covenant and agree that, between   
the date hereof and the Closing, the Companies and Shareholders shall not,      
directly or indirectly, do any of the following without the prior written       
consent of PRGX, which consent will not be unreasonably withheld or delayed:    

                  (a)      (i)      issue, sell, gift, pledge, transfer, dispose
of, encumber, authorize any shares of capital stock, or any options, warrants,  
convertible securities or other rights of any kind to acquire any shares of     
capital stock of, or any other ownership interest in, any of the Companies      
(including the Shares); (ii) amend the Articles of Incorporation or By-Laws or  
other organizational documents of any Company; (iii) split, combine or          
reclassify any outstanding share of any Company's capital stock or other        
ownership interest, or declare, set aside or pay any dividend or distribution   
payable in cash, stock, property or otherwise with respect to any Company's     
capital stock or other ownership interest (except distributions from Canada to  
enable the Trust to pay its federal taxes on the taxable income from such       
Company's operations in the ordinary course of the business for the period from 
and after January 1, 2001 up to the Closing Date, in each case consistent or    
with the Company's past practices and as disclosed to PRGX in writing in advance
of payment as more particularly set forth in Section 4.7(c) below), or (iv)     
redeem, purchase or otherwise acquire any shares of any Company's capital stock 
or other ownership interest other than for no consideration as provided in      
Section 4.7 hereof;                                                             

                  (b)      (i) acquire (by merger, consolidation, or acquisition
of stock or assets) any interest in any Person; (ii) except in the ordinary     
course of business and in a manner                                              

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consistent with past practices, sell, pledge, dispose of, or encumber any assets
of any Company; (iii) enter into any material contract or agreement, except for 
Client Contracts entered into in the ordinary course of business; or (iv)       
authorize or consummate any single capital expenditure in excess of $100,000 or 
capital expenditures in the aggregate in excess of $200,000;                    

                 (c)      take any action other than in the ordinary course of
business and in a manner consistent with past practice, none of which actions   
shall be unreasonable or unusual, to increase the compensation or other         
remuneration of any officer, director, Shareholder or materially increase       
compensation or remuneration to any shareholder (including Shareholders),       
employee, independent contractor or consultant of any Company, pay any bonuses  
to any officer, director, shareholder (including Shareholders), employee,       
independent contractor or consultant (except for bonuses earned in the ordinary 
course of business and disclosed to PRGX in writing in advance of payment), or  
to grant any severance or termination pay (other than pursuant to policies of   
the Companies in effect on the date hereof and fully disclosed to PRGX in       
writing prior to the date hereof) or to grant any increase of benefits payable  
under its severance or termination pay policies in effect on the date hereof;   

               (d)      make any payments except in the ordinary course of
business and in amounts and in a manner consistent with past practice (none of  
which payments shall be unreasonable or unusual), under any employee benefit    
plan or otherwise to any employee of, or Associate, independent contractor or   
consultant to, any Company, enter into any employee benefit plan, any employment
or consulting agreement, grant or establish any new awards under any such       
existing employee benefit plan or agreement, or adopt or otherwise amend any of 
the foregoing;                                                                  

             (e)      take any action except in the ordinary course of
business and in a manner consistent with past practice with respect to, or      
make any change in, its methods of management, distribution, marketing,         
accounting or operating (including practices relating to payment of trade       
accounts or to other payments) or relating to establishing or adjusting         
reserves, writing down or failing to write down (in accordance with its past    
practices consistently applied) or writing up the value of any assets of any    
Company;                                                                        

                (f)      take any action or enter into any agreement or make
any change in the billing or collection of its accounts receivable and unbilled 
claims (other than in the ordinary course of business and consistent with past  
practices), including without limitation, discounting or writing off any of the 
Companies' accounts receivable or work in progress, or granting any other       
deduction or discount thereon or accelerating the collection thereof;           

          (g)      take any action to incur, assume, increase or
guarantee prior to Closing any indebtedness for borrowed money from banks or    
other financial institutions or cancel, without payment in full, any notes,     
loans or other receivables;                                                     

           (h)      loan or advance monies to any Person under any
circumstance whatsoever except travel advances or other reasonable expense      
advances to employees of any Company made in the ordinary course of business and
consistent with past practice;                                                  

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          (i)      change any existing bank accounts or lock box
arrangements of any Company, except for deposits, withdrawals, or changes of    
signatories in the ordinary course of business;                                 

               (j)      waive any material rights of any Company or settle
any material claim involving any Company;                                       

              (k)      sell, license, or otherwise dispose of any of its
intellectual property assets other than in the ordinary course of business      
consistent with past practice;                                                  

                 (l)      fail to make any Tax (defined in Section 4.7 hereof)
filing or Tax payment required to be made prior to the Closing Date;            

                 (m)      do any act or omit to do any act which would cause a
breach of, or inability to perform, any contract, commitment or obligation of   
any Company or any Shareholder which breach has a Material Adverse Effect on any
Company or the ability of any Company or any Shareholder to perform its, his or 
her obligations under this Agreement or any Shareholders' Transaction Document; 
or                                                                              

              (n)      enter into any agreement, contract, commitment or
arrangement to take any of the actions prohibited in this Section 4.2.          

    4.3      CONSENTS. Promptly after execution of this Stock Purchase
Agreement, Shareholders shall cause the Companies to apply for or otherwise     
seek, and use the Companies' best efforts to obtain, all consents, releases and 
approvals required from any Person with respect to the Companies and/or         
Shareholders for consummation of the Transaction contemplated hereby            
(collectively, "Consents").                                                     

4.4      NOTIFICATION.                                        

                 (a)      Shareholders shall give prompt notice to PRGX of the
following:                                                                      

                           (i)      The occurrence or nonoccurrence of any event
of which any Shareholder obtains knowledge, the occurrence or nonoccurrence of  
which would be reasonably likely to cause either (A) a material breach of any   
representation or warranty of any Shareholder contained in this Agreement at any
time from the date hereof to the Closing Date, or (B) directly or indirectly,   
any Material Adverse Effect on any of the Companies. PRGX's knowledge of any    
facts obtained by PRGX prior to the date hereof or disclosed herein that may    
give rise after the date hereof to a Material Adverse Effect on any of the      
Companies shall not affect whether or not a Material Adverse Effect on any of   
the Companies shall have occurred; and/or                                       

                        (ii)     Any failure by any of the Shareholders to
comply with or satisfy any covenant, condition or agreement to be complied with 
or satisfied by it hereunder.                                                   

              (b)      For purposes of this Agreement, "Material Adverse
Effect" means with respect to any Person, any change or effect that is          
materially adverse to the financial condition, business results of operations,  
assets, or prospects of such Person, taken as a whole.                          

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Notwithstanding the foregoing, the delivery of any notice pursuant to this      
Section 4.4 shall not limit or otherwise affect the remedies available hereunder
of the Person upon receiving such notice. The knowledge by a party to this      
Agreement of any facts obtained by such party prior to the date hereof or       
disclosed herein that may give rise after the date hereof to a Material Adverse 
Effect shall not affect whether or not a Material Adverse Effect shall have     
occurred.                                                                       

4.5      PUBLIC ANNOUNCEMENTS; CONFIDENTIALITY.               

         (a)      The parties hereto shall not make any public
announcements, and the terms and existence of this Stock Purchase Agreement     
shall remain confidential, until such time as a public announcement is made     
regarding the Asset Purchase Agreement in accordance with the terms of the Asset
Purchase Agreement.                                                             

               (b)      Between the date of this Agreement and the Closing
Date, PRGX and Shareholders will maintain in confidence to maintain in          
confidence any written, oral or other information obtained in confidence from   
any other party hereto in connection with this Agreement or the transactions    
contemplated herein, unless (i) such information is already known to such party 
or to others not bound by a duty of confidentiality or such information becomes 
publicly available through no fault of such party, (ii) or use of such          
information is necessary or appropriate in making any filing or obtaining any   
consent or approval required for the consummation of the transactions           
contemplated herein, or (iii) the furnishing of such information is required by,
or is necessary or appropriate in connection with, legal proceedings or any     
statute, regulation or rule of any Governmental Entity. The parties hereto will 
hold any information obtained pursuant to this Agreement in confidence in       
accordance with, and shall otherwise be subject to the Confidentiality Agreement
between HSA-Texas and PRGX, which Confidentiality Agreement shall continue in   
full force and effect. PRGX shall cause its directors, officers, employees,     
agents, representatives and advisors, and Shareholders shall cause the          
Companies' directors, officers, employees, agents, representatives and advisors 
to observe the covenants of this Section 4.5(b).                                

4.6      TRANSFER OF SHARES HELD BY NOMINEE SHAREHOLDER.      

                 (a)      Prior to the Closing and effective as of the Closing
Date, the Shareholders shall cause Nominee Shareholder to convey its equity     
interest in Singapore to Singapore in consideration of $100, unless ownership by
Nominee Shareholder is required by the laws of Singapore, in which case, the    
Shareholders shall cause Nominee Shareholder prior to the Closing and effective 
as of the Closing Date (i) to reduce its equity interest in Singapore to equal  
the minimum amount required to be held by Nominee Shareholder to satisfy        
Singapore law regarding resident ownership and (ii) enter into a written        
agreement, in substantially the form attached hereto as Exhibit 4.6 ("Agreement 
Regarding Nominee Shareholder"), confirming that Nominee Shareholder is holding 
such equity interest solely to satisfy a requirement of Singapore law and that  
Nominee Shareholder agrees to transfer its interest in Singapore to any designee
of PRGX, without consideration, upon written request by PRGX at any time, after 
the Closing.                                                                    

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          (b)      Prior to Closing, Shareholders shall take all
necessary action to prevent Nominee Shareholder from transferring (directly or  
indirectly) any interest it has in Singapore to any other Person other than a   
Shareholder or Singapore.                                                       

4.7      TAX MATTERS.                                         

                  (a)      Definitions. As used in this Agreement, the following
terms have the specified meanings:                                              

                           (i)      "Flow-Through Taxes" shall mean U.S. federal
income Taxes attributable to income and gains of Companies until the Closing    
Date which are payable by Shareholders pursuant to Section 1366 of the Code for 
Tax years or partial Tax years for which Canada is an S corporations. The term  
"Flow-Through Taxes" shall also include any foreign, state or local income Taxes
attributable to income and gains of any of the Companies which are payable by   
the Shareholders under principles comparable to Section 1366 of the Code.       

                      (ii)     "Tax Authority" shall mean any federal,
foreign, national, state, county or municipal or other local government, any    
subdivision, agency, commission or authority thereof, or any quasi-governmental 
body exercising any taxing authority or any other authority exercising tax      
regulatory authority.                                                           

                          (iii)    "Tax Return" shall mean any return, amended
return, estimated return, information return, declaration, deposit, claim for   
refund or statement (including any related or supporting information) filed or  
to be filed with any Tax Authority in connection with the determination,        
assessment, collection or administration of any Tax or filed by any Company.    

                     (iv)     "Tax" or "Taxes" shall mean all taxes,
charges, fees, interest, fines, penalties, additions to tax or other            
assessments, whether disputed or not, including without limitation, income,     
excise, environmental, property, sales, gross receipts, gains, transfer,        
occupation, privilege, employment (including social security and unemployment), 
use, value added, capital stock or surplus, franchise taxes, advance corporate  
tax and customs duties imposed by any Tax Authority, payable by any Company or  
any Shareholder, or relating to or chargeable against any Company's assets,     
revenues or income and payable by any Company or any Shareholder.               

(b)      Tax Returns.                       

                        (i)      Preparation and Filing of Tax Returns for
Tax Periods Ending on or Prior to the Closing Date. Shareholders shall prepare  
or cause to be prepared, and file or cause to be filed, at the Shareholders'    
expense, all Tax Returns required to be filed by the Companies and the          
Shareholders for Tax periods which end on or prior to the Closing Date. Such Tax
Returns shall be prepared based on and consistent with tax accounting methods   
and principles used by the Companies and Shareholders, as the case may be, in   
preparing Tax Returns for prior Tax periods.                                    

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                       (ii)     Preparation and Filing of the Companies'
Income Tax Returns for the Stub Period. Within ninety (90) days after the       
Closing Date, Shareholders shall cause to be prepared (at the Shareholders'     
expense) and delivered to PRGX for its review and approval, which approval shall
not be unreasonably withheld, conditioned or delayed, income Tax Returns for the
Companies required by any Tax Authority for the period beginning on January 1   
and ending on the day prior to the Closing Date ("Stub Period"), which Tax      
Return ("Stub Period Tax Returns") shall be prepared based on and consistent    
with tax accounting methods and principles used by the Companies in preparing   
Tax Returns for prior Tax periods for such Tax Authorities. PRGX shall cooperate
with the Shareholders in connection with Shareholders' preparation of the Stub  
Period Tax Returns, and shall make available to Shareholders such books, records
and other information necessary for the preparation of the Stub Period Tax      
Returns, as well as provide to Shareholders the assistance and cooperation of   
the Companies' former accounting personnel in connection therewith. Shareholders
shall permit PRGX to comment on the Stub Period Tax Returns prior to the filing 
thereof, shall make such revisions thereto as are reasonably requested by PRGX, 
and shall provide PRGX with a revised copy of the Stub Period Tax Returns within
15 days of receipt of comments from PRGX. Thereafter, Shareholders shall cause  
such Stub Period Tax Return to be timely filed incorporating all revisions      
reasonably requested by PRGX pursuant to the immediately preceding sentence.    
Shareholders shall be solely responsible for, and shall pay, all Flow-Through   
Taxes attributable to the Stub Period.                                          

                        (iii)    Preparation and Filing of Tax Returns for
Tax Periods Ending After the Closing Date. Except for the Stub Period Tax Return
described in Section 4.7(b)(ii) hereof, PRGX shall prepare or cause to be       
prepared, and file or cause to be filed, all Tax Returns required to be filed by
the Companies for Tax periods which end after the Closing Date.                 

                         (iv)     Methods of Allocating Tax Liabilities. For
purposes of this Agreement, any Tax for any Tax period which begins before the  
Closing Date and ends after the Closing Date (an "Overlap Tax Period") shall be 
allocated as follows: The portion of such Tax which relates to the portion of   
such Taxable period ending on the Closing Date shall (A) in the case of any     
Taxes other than Taxes based upon or related to income or receipts, be deemed to
be an amount of such Tax for the total number of days in the Overlap Tax Period 
multiplied by a fraction the numerator of which is the number of days in the    
Taxable period ending on the Closing Date and the denominator is the total      
number of days in the entire Overlap Tax Period, and (B) in the case of any Tax 
based upon or related to income or receipts, be deemed to be equal to the amount
which would be payable if the relevant Taxable period ended on the Closing Date.
Any credits relating to a Taxable period that begins before and ends after the  
Closing Date shall be taken into account as though the relevant Taxable period  
ended on the Closing Date. All determinations necessary to give effect to the   
foregoing allocations shall be made in a manner consistent with the prior       
practice of the Companies.                                                      

                          (v)      Cooperation of Parties. Except as otherwise
provided in this Agreement, the parties hereby agree that each of them shall    
cooperate with the other in executing or causing to be executed any required    
document and by making available to the other all work papers, records and notes
of any kind at all reasonable times for the purpose of allowing the             

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appropriate party to complete Tax Returns, participate in a proceeding, obtain  
refunds, make any determination required under this Agreement or defend or      
prosecute Tax claims.                                                           

                           (vi)     Reorganization. Shareholders and PRGX hereby
acknowledge and agree that the Transaction shall be treated by the parties for  
all tax purposes as (i) the acquisition by PRGX of the Shares solely for shares 
of PRGX Common Stock, and (ii) as a tax-free reorganization under Section       
368(a)(1)(B) of the Code and any other applicable laws. It is the intent of the 
parties that this Agreement shall constitute a "plan of reorganization" for     
purposes of Section 368(a) of the Code. The parties hereto shall use their best 
efforts to cause the Transaction be recognized as a tax-free reorganization     
under Section 368(a)(1)(B) of the Code and any other applicable state or federal
law.                                                                            

                 (c)      Certain Distributions to the Trust for Income Taxes.
Prior to the Closing Date, A. Schultz, in his capacity as trustee of the Trust, 
and PRGX shall agree on a good faith estimate (the "Estimate") of the amount    
which shall be distributed to the Trust by Canada and to enable the Trust to pay
its federal income taxes on the taxable income from such Company's operations in
the ordinary course of the business for the period from and after January 1,    
2001 up to the Closing Date (the "Sub-S Taxes"). The aggregate amount of such   
Estimate shall be distributed by Canada on the day immediately prior to the     
Closing Date. Within forty-five (45) days after the Closing Date, the Trust and 
PRGX shall jointly determine whether the Estimate was greater than or less than 
the amount actually owed by the Trust for the Sub-S taxes. If the amount        
actually owed by the Trust for the Sub-S Taxes is less than the Estimate, then  
the Trust shall immediately pay to the applicable Company an amount equal to    
such surplus together with accrued interest at the applicable Federal rate (the 
"Surplus"). The payment due under the immediately preceding sentence shall not  
be subject to the any limitations (including the Base Amount or the Cap provided
for in the Indemnification Agreement.) If the amount actually owed by the Trust 
for Sub-S Taxes is greater than the Estimate, then the Trust shall pay such     
shortfall at its sole cost and expense, and neither the Companies nor PRGX shall
have any liability or obligation therefor.                                      

 4.8      TRANSACTION EXPENSES. Except as otherwise specifically
provided herein, all of the expenses incurred by PRGX in connection with the    
authorization, negotiation, preparation, execution and performance of this      
Agreement and the consummation of the Transaction, including, without           
limitation, all fees and expenses of agents, representatives, brokers, counsel  
and accountants for PRGX shall be paid by PRGX ("PRGX Transaction Expenses").   

         Except as otherwise specifically provided herein, all expenses incurred
by Shareholders in connection with the authorization, negotiation, preparation, 
execution and performance of this Agreement and the consummation of the         
Transaction, including without limitation, all fees and expenses of agents,     
representatives, brokers, counsel and accountants, shall be paid by Shareholders
("Shareholders' Transaction Expenses").                                         

       4.9      COMMISSION BUY-DOWN PAYMENTS. Prior to the Closing, PRGX and
Shareholders' Representative may agree upon a plan pursuant to which each       
Company will negotiate with certain of its independent contractors to accept a  
Commission Buy-Down Payment. All Commission Buy-Down Payments to independent    
contractors of the Companies, if                                                

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any, will be made in accordance with and be governed by the provisions of       
Section 4.17 of the Asset Purchase Agreement.                                   

4.10     WAIVER OF CLAIMS.                                    

         (a)      Waiver of Claims. Shareholders, on behalf of
themselves and all of their respective heirs, successors and assigns, do hereby 
remise, release, acquit, satisfy and forever discharge each Company and all of  
each Company's past, present and future officers, directors, employees, agents, 
attorneys, representatives, participants, successors and assigns from any and   
all manner of debts, accountings, bonds, warranties, representations, covenants,
promises, contracts, controversies, agreements, liabilities, obligations,       
expenses, damages, judgments, executions, actions, claims, demands and causes of
action of any nature whatsoever, whether known or unknown, and whether at law or
in equity, either now accrued or hereafter maturing, which Shareholders now have
or hereafter can, shall or may have by reason of any matter, cause or thing,    
from the beginning of the world to and including the date of this Agreement.    

                  (b)      Covenant Not to Sue. Shareholders, for themselves and
all of their respective heirs, successors and assigns, hereby covenant and agree
never to institute or cause to be instituted or continue prosecution of any suit
or other form of action or proceeding of any kind or nature whatsoever against  
any Company, or any Company's past, present or future officers, directors,      
employees, agents, attorneys, representatives, participants, heirs, successors  
or assigns, by reason of or in connection with any of the foregoing matters,    
claims or causes of action.                                                     

     4.11     DELIVERY OF SCHEDULES. As soon as practicable but no later
than November 19, 2001, Shareholders shall deliver to PRGX all of the Schedules 
referenced in this Agreement (other than Schedule 3.2(a) which is to be         
delivered by PRGX).                                                             

      4.12     REPAYMENT OF SHAREHOLDER LOANS. Effective upon the Closing,
Shareholders shall cause all of the shareholders of each Company (including     
those other than the Shareholders) to repay in full all amounts owed by such    
shareholders to any of the Companies.                                           

4.13     RESIGNATIONS. Effective upon the Closing, each of the
Shareholders shall resign, and cause all other persons to resign, in writing    
from all offices and directorships held by such Shareholder or other person in  
each of the Companies.                                                          

 ARTICLE V
 CONDITIONS TO CLOSING

 5.1      CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of PRGX and Shareholders to consummate Transaction are subject to   
the satisfaction or waiver, by both PRGX and Shareholders, on or prior to the   
Closing Date of all of the following conditions:                                

              (a)      No Injunctions or Restraints, Illegality. No Laws
shall have been adopted or promulgated, and no temporary restraining order,     
preliminary or permanent injunction or other order issued by any Governmental   
Entity of competent jurisdiction shall be in effect, having the                 

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effect of making the Transaction illegal or otherwise prohibiting consummation  
of such Transaction. No action seeking such an order or injunction shall be     
pending or threatened.                                                          

                  (b)      Consents. Each of the consents and approvals that are
described on Schedule 3.2 shall have been duly obtained and shall be in full    
force and effect on the Closing Date. With respect to PRGX, PRGX shall have     
obtained either (i) the consent of its principal lenders, a syndicate led by    
Bank of America, N.A., to the acquisitions contemplated herein, the Asset       
Acquisition, the Other Acquisitions, including an agreement by such lenders to  
loan to PRGX any and all amounts required to satisfy any of the                 
Acquisition-Related Notes (as defined in the Asset Agreement), to repay the     
Assumed Schultz Loan, to pay any obligations assumed or to be paid by PRGX      
relating to the Other Acquisitions and any other transactions contemplated      
hereby (collectively, the "Contemplated Transactions" or (ii) if such consent is
not obtained, PRGX shall have entered into a new or amended credit facility     
which makes the consent of its lenders unnecessary and which does not prohibit  
the Contemplated Transactions (in either event, the "Lenders' Consent").        

             (c)      Closing of Asset Purchase Agreement. Prior to or
concurrently with the Closing, the Asset Purchase Agreement shall have been     
consummated.                                                                    

    5.2      ADDITIONAL CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS. The
obligation of Shareholders to consummate the Transaction is subject to the      
satisfaction, or waiver by Shareholders' Representative, on or prior to the     
Closing Date of all of the following additional conditions:                     

        (a)      Representations and Warranties. Each of the
representations and warranties of PRGX set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as of 
the Closing Date as though made on and as of the Closing Date (except to the    
extent that such representations and warranties speak as of another date, in    
which case such representations and warranties shall be true and correct as of  
such other date), and Shareholders shall have received a certificate of a senior
executive officer or a senior financial officer of PRGX to such effect.         

                (b)      Performance of Obligations of PRGX. PRGX shall have
performed or complied with all agreements and covenants required to be performed
by it under this Agreement at or prior to the Closing Date, and Shareholders    
shall have received a certificate of a senior executive officer or a senior     
financial officer of PRGX to such effect.                                       

             (c)      Closing Deliveries. PRGX shall have delivered to
Shareholders each of the following in form and substance reasonably satisfactory
to Shareholder's Representative:                                                

 (i)      the Consideration;

                         (ii)     a certificate from the corporate secretary
of PRGX certifying the resolutions of the board of directors of PRGX authorizing
and approving the Transaction, certifying that the shareholders of PRGX have    
authorized and approved the Transaction, and                                    

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certifying the incumbency of the officers of PRGX executing documents or        
instruments on behalf of PRGX; and                                              

                 (iii)    the Registration Rights Agreement,
substantially in the form attached hereto as Exhibit 5.2(c)(iii), duly executed 
by PRGX; and                                                                    

                    (iv)     any other documents or agreements, as
reasonably requested Shareholders' Representative, contemplated hereby and/or   
necessary to consummate the Transaction contemplated hereby.                    

       5.3      ADDITIONAL CONDITIONS TO OBLIGATIONS OF PRGX. The obligation
of PRGX to consummate the Transaction is subject to the satisfaction, or waiver 
by PRGX, on or prior to the Closing Date all of the following additional        
conditions:                                                                     

        (a)      Representations and Warranties. Each of the
representations and warranties of Shareholders and the Trust set forth in this  
Agreement (including, without limitation, those representations and warranties  
that are made as of the Closing Date), shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though  
made on and as of the Closing Date (except to the extent that such              
representations and warranties speak as of another date, in which case such     
representations and warranties shall be true and correct as of such other date);
and PRGX shall have received a certificate of Shareholders' Representative to   
such effect, together with a complete set of the Schedules and Revised Schedules
as of the Closing Date.                                                         

        (b)      Performance of Obligations of Shareholders.
Shareholders shall have performed or complied with all agreements and covenants 
required to be performed by it under this Agreement at or prior to the Closing  
Date that are qualified as to materiality or Material Adverse Effect, and       
Shareholders shall have performed or complied in all material respects with all 
other material agreements and covenants required to be performed by it under    
this Agreement at or prior to the Closing Date that are not so qualified, and   
PRGX shall have received a certificate of Shareholders' Representative to such  
effect.                                                                         

             (c)      Closing Deliveries. At the Closing, Shareholders
shall have delivered to PRGX each of the following in form and substance        
reasonably satisfactory to PRGX:                                                

                         (i)      the original certificates representing the
Shares, free and clear of any Share Encumbrances, duly endorsed for transfer to 
PRGX;                                                                           

                        (ii)     each Company's original minute book which
shall contain minutes and consents of all Board and shareholders' actions and   
meetings, cancelled stock certificates of all previously issued, but no longer  
outstanding, stock certificates of such Company, copies of the organizational   
documents of each Company and any amendments thereto, and the stock ledger with 
all issued or previously issued stock certificates accounted for.               

                 (iii)    a certificate of good standing, or
equivalent certificate, for each Company, dated no more than fifteen (15) days  
prior to the Closing Date, issued by the Secretary                              

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of State, or equivalent authority, for each jurisdiction in which each Company  
is organized and from each jurisdiction in which each Company conducts business;

                           (iv)     a certificate duly executed and delivered by
Shareholders' Representative certifying which (if any) shares held by Nominee   
Shareholders have been redeemed by any of the Companies (the form of such       
certificate being attached hereto as Exhibit 5.3(c)(iv)) and the Agreement      
Regarding Nominee Shareholders duly executed and delivered by each Nominee      
Shareholder whose shares have not been so redeemed by a Company;                

                           (v)      an affidavit, duly executed and delivered by
the chief executive officers of Asia and Singapore certifying that such         
Companies are not United States real property holding corporations; and         

                    (vi)     any other documents or agreements, as
reasonably requested by PRGX, contemplated hereby and/or necessary to consummate
the Transaction.                                                                

                  (d)      No Investigations of the Companies. As of the Closing
Date, there shall be no pending or threatened investigation by any Governmental 
Entity of any Company which in the reasonable judgment of PRGX would have a     
Material Adverse Effect on such Company.                                        

                 (e)      No Material Adverse Effect. Since December 31, 2000,
no Company shall have been subject to a Material Adverse Effect.                

                (f)      Revised Schedules. Shareholders shall have provided
PRGX with revised Schedules dated as of the Closing Date (collectively, the     
"Revised Schedules"), with all changes through such date duly noted thereon,    
provided however, that in the event the Revised Schedules contain any disclosure
or change which (i) should have been but was not shown on the Schedules attached
hereto at the date hereof, or (ii) individually or in the aggregate is material 
to any warranty or representation contained herein, or (iii) arose outside the  
ordinary course of business, the condition contained in this Section shall be   
deemed unsatisfied unless PRGX has agreed in writing to such disclosures or     
changes.                                                                        

                (g)      Repayment of Shareholder Loans. Each shareholder of
the Companies including the Shareholders, shall have repaid in full at or prior 
to the Closing all amounts owed by such shareholder to any of the Companies.    

ARTICLE VI
 INDEMNIFICATION; SURVIVAL

         6.1      INDEMNIFICATION BY SHAREHOLDERS AND THE COMPANIES. In addition
to any other indemnification obligation of Shareholders under any other         
provision hereof, H. Schultz and A. Schultz and the Trust, jointly and          
severally, (together with each of the Companies solely for indemnification      
claims asserted by PRGX prior to the Closing) indemnify and hold PRGX, and its  
subsidiaries, affiliates, directors, officers, employees and agents             
(collectively, the "PRGX Indemnified Parties"), harmless from and against all   
claims, liabilities, lawsuits, losses, costs, damages or expenses (together with
reasonable attorneys' fees and expenses incurred in litigation                  

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or otherwise are hereinafter collectively referred to as "Losses") arising out  
of and sustained by any of the PRGX Indemnified Parties due to or relating to,  
the following (collectively, "Section 6.1 Indemnified Claims"):                 

                  (a)      any misrepresentation or breach of any representation
or warranty, or breach, nonfulfillment of, or failure to perform, any covenant, 
obligation or agreement of any Shareholder contained in this Agreement or any of
the Shareholders' Transaction Documents; and/or                                 

             (b)      any liability or obligation suffered by the PRGX
Indemnified Parties (whether or not the existence or assertion of such liability
or obligation would constitute a breach of any representation, warranty,        
covenant, obligation or agreement contained in this Agreement or in any         
Shareholder Transaction Document) relating to or arising out of the (x)         
operation of the business of any Company or the ownership or use of the assets  
of any Company prior to the Closing Date and was not specifically disclosed     
herein or the Schedules; and/or                                                 

                 (c)      the treatment, as employees, for any period prior to
the Closing Date, by any Governmental Entity, including any Tax Authority, of   
any Associates, auditors, consultants or other service providers whom any       
Company treated for such period as independent contractors, and not as          
employees, and for any liability, foreign, federal, state or local taxes,       
including any withholding for any state, federal or foreign income tax, FICA or 
FUTA amounts, state, federal or foreign unemployment insurance contributions,   
payments in respect of workers' compensation insurance, the provision of        
benefits under the Employee Benefit Plans, or payments under The Fair Labor     
Standards Act or regulations promulgated thereunder; and/or                     

                  (d)      any failure by any Company to obtain prior to Closing
any required consent to the Transactions; and/or                                

           (e)      the amount in excess of $100,000 of any Vendor
Payback (less any payback reserve applicable) in respect of any Inactive Audit  
provided the aggregate Vendor Payback to such Client is in excess of $350,000;  
and/or                                                                          

                 (f)      all severance liabilities or obligations, if any, to
all employees and all Associates of any Company who voluntarily resign          
employment within 9 30 days after the Closing Date; and/or =                    

             (g)      any litigation, arbitrations and mediations that
existed on or at any time prior to the Closing Date; and/or                     

        (h)      any Surplus due pursuant to Section 4.7(c).

6.2      INDEMNIFICATION BY PRGX. In addition to any other    
indemnification obligation of PRGX hereunder, PRGX hereby indemnifies and holds 
each Shareholder harmless from and against all Losses arising out of and        
sustained by any of them due to or relating to (a) any misrepresentation or     
breach of any representation, warranty, covenant or agreement of PRGX in this   
Agreement or any of the PRGX Transaction Documents; and (b) any liability or    
obligation                                                                      

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incurred by any Shareholder relating to the operation or ownership of any       
Company by PRGX, or the ownership or use of and Company's assets by PRGX, from  
and after the Closing Date, other than Section 7.1 Indemnified Claims           
(collectively, "Section 6.2 Indemnified Claims").                               

6.3      PROCEDURE REGARDING INDEMNIFICATION. All claims for  
indemnification under this Stock Purchase Agreement (including, without         
limitation, the procedures for indemnification, the survival period and certain 
limitations on indemnification) shall be governed exclusively by the            
Indemnification Agreement.                                                      

 ARTICLE VII
 TERMINATION AND AMENDMENT

        7.1      ELECTIVE TERMINATION. This Agreement may be terminated at any
time before the Closing Date as follows:                                        

       (a)      by mutual written consent of Shareholders'
Representative and PRGX;                                                        

                  (b)      by either Shareholders' Representative or PRGX if the
Transaction has not been consummated on or before March 31, 2002 ("Termination  
Date") provided that the party seeking to exercise the right to terminate this  
Agreement under this Section 7.1(b) is not then in breach in any material       
respect of any of its representations, warranties, covenants or other agreements
under this Agreement;                                                           

               (c)      by either PRGX or Shareholders' Representative, if
any Governmental Entity of competent jurisdiction (i) shall have issued an      
order, decree or ruling or taken any other action (which the parties shall have 
used their reasonable best efforts to resist, resolve or lift, as applicable)   
permanently restraining, enjoining or otherwise prohibiting the Transaction, and
such order, decree, ruling or other action shall have become final and          
non-appealable, or (ii) shall have failed to issue an order, decree or ruling or
to take any other action, and such denial of a request to issue such order,     
decree or ruling or to take such other action shall have become final and       
non-appealable (which order, decree, ruling or other action the parties shall   
have used their reasonable best efforts to obtain); or                          

                (d)      by Shareholders' Representative, if PRGX shall have
materially breached its representations or warranties contained in this         
Agreement or failed to perform in any material respect any of its covenants or  
other agreements contained in this Agreement, which breach would result in the  
failure to satisfy the conditions set forth in Sections 5.2(a) and (b) hereof,  
and in such case, such breach is incapable of being cured, or, if capable of    
being cured, shall not have been cured on or before the Termination Date and    
within 10 days after written notice thereof shall have been received by PRGX    
provided that none of the Shareholders are then in breach in any material       
respect of any of its representations, warranties, covenants or other agreements
under this Agreement;                                                           

               (e)      by PRGX, (i) if any of the Shareholders shall have
materially breached its representations or warranties contained in this         
Agreement or failed to perform in any material respect any covenants or other   
agreements contained in this Agreement, which breach would                      

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result in the failure to satisfy the conditions set forth in Sections 5.3(a) and
(b) hereof and in any such case such breach is incapable of being cured, or if  
capable of being cured, shall not have been cured on or before the Termination  
Date and within 10 days after written notice thereof shall have been received by
Shareholders' Representative; or (ii) upon the occurrence of an event or        
development that has a Material Adverse Effect on any of the Companies,         
regardless of whether the conditions set forth in Section 8.3(a) and (b) are    
capable of being satisfied on or before the Termination Date, in either case,   
provided PRGX is not then in breach in any material respect of any of its       
representations, warranties, covenants or other agreements under this Agreement;
or                                                                              

                (f)      by PRGX, within 30 days after receipt of all of the
Schedules as provided in Section 4.11; or                                       

           (g)      notwithstanding anything in Section 7.1 to the
contrary, by PRGX or Shareholders' Representative, if PRGX has not received the 
Lenders' Consent described in Section 3.2(a) hereof on or before March 31, 2002.

    7.2      AUTOMATIC TERMINATION. This Agreement shall automatically
terminate upon the termination of the Asset Purchase Agreement.                 

    7.3      EFFECT OF TERMINATION. If this Agreement is terminated by
either PRGX or Shareholders' Representative as provided in Section 7.1 or       
Section 7.2 hereof, this Agreement shall forthwith become void and have no      
further effect, without any liability or obligation on the part of PRGX (its    
shareholders, officers or directors) and Shareholders, other than with respect  
to the provisions of Section 9.2 of the Asset Purchase Agreement which will     
govern all payments between the parties as a result of such termination.        

ARTICLE VIII
SHAREHOLDERS' REPRESENTATIVE

      8.1      IRREVOCABLE APPOINTMENT OF SHAREHOLDERS' REPRESENTATIVE. By
the execution and delivery of this Agreement, including counterparts hereof,    
each Shareholder hereby irrevocably constitutes and appoints H. Schultz, and any
successor to the foregoing person appointed pursuant to Section 8.3 hereof, as  
the true and lawful agent and attorney-in-fact (referred to in this Agreement as
the "Shareholders' Representative") of such Shareholder with full power of      
substitution and with full power and authority to act in the name, place and    
stead of such Shareholder with respect to the terms and provisions of this      
Section 8.1, as the same may be from time to time amended, and to do or refrain 
from doing all such further acts and things, and to execute all such documents, 
as the Shareholders' Representative shall deem necessary or appropriate in      
connection with the following powers granted under this Section 8.1:            

               (a)      to approve any action hereunder which requires the
consent, approval or the waiver of the Shareholders, including, without         
limitation, any action under Section 7.1 hereof;                                

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       (b)      to settle all claims, matters, disputes or
disagreements under this Agreement and the Indemnification Agreement; and       

                 (c)      to extend the Closing Date or change the location of
the Closing.                                                                    

8.2      ACTS OF SHAREHOLDERS' REPRESENTATIVE.                

                (a)      The appointment of the Shareholders' Representative
in Section 8.1 hereof shall be deemed coupled with an interest and shall be     
irrevocable, and PRGX and any other Person may conclusively and absolutely rely,
without inquiry, upon any action of the Shareholders' Representative as the act 
of each of the Shareholders in all matters referred to in Section 8.1 hereof.   
Each Shareholder hereby ratifies and confirms all that the Shareholders'        
Representative shall do or cause to be done by virtue of Shareholders'          
Representative's appointment as Shareholders' Representative of such            
Shareholder. The Shareholders' Representative shall act for the Shareholders on 
all of the matters set forth in Section 8.1 hereof in the manner the            
Shareholders' Representative believes to be in the best interest of the         
Shareholders and consistent with Shareholders' Representative's obligations     
under this Agreement, but the Shareholders' Representative shall not be         
responsible to any Shareholder for any loss or damage any Shareholder may suffer
by reason of the performance by the Shareholders' Representative of             
Shareholders' Representative's duties under this Agreement, including any loss  
or damage resulting from any error of judgment, mistake of fact or law, or any  
act done or omitted to be done in good faith, other than loss or damage arising 
from willful violation of law or gross negligence in the performance of         
Shareholders' Representative's duties under this Agreement.                     

               (b)      Each Shareholder hereby expressly acknowledges and
agrees that the Shareholders' Representative is authorized to act on behalf of  
such Shareholder notwithstanding any dispute or disagreement among the          
Shareholders, and that the PRGX shall be entitled to rely on any and all action 
taken by the Shareholders' Representative under this Agreement without liability
to, or obligation to inquire of, any of the Shareholders. PRGX is hereby        
expressly authorized to rely on the authority and genuineness of the signature  
of the Shareholders' Representative on any instrument, certificate or document. 
Upon receipt of any writing which reasonably appears to have been signed by the 
Shareholders' Representative, PRGX may act upon the same without any further    
duty of inquiry as to the genuineness of the writing.                           

8.3      REPLACEMENT OF SHAREHOLDERS' REPRESENTATIVE. If the  
Shareholders' Representative resigns or ceases to function in Shareholders'     
Representative's capacity for any reason whatsoever, then A. Schultz shall      
become the Shareholder Representative and if A. Schultz shall cease to serve,   
then a majority-in-interest of the Shareholders shall appoint a successor;      
provided, however, that, if for any reason no successor has been appointed      
within thirty (30) days, then any Shareholder or PRGX shall have the right to   
petition a court of competent jurisdiction for appointment of a successor. A    
"majority-in-interest" means those Shareholders entitled to receive a majority  
of the Consideration under this Agreement.                                      

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        8.4      INDEMNIFICATION OF SHAREHOLDERS' REPRESENTATIVE. Shareholders
do hereby jointly and severally agree to indemnify and hold the Shareholders'   
Representative harmless from and against any and all liability, loss, cost,     
damage or expense (including without limitation fees and expenses of legal      
counsel) reasonably incurred or suffered as a result of the performance of      
Shareholders' Representative's duties under this Agreement except for actions   
constituting gross negligence or willful misconduct.                            

 8.5      PROOF OF AUTHORITY. Each Shareholder shall execute and
deliver to the Shareholders' Representative such further documents requested by 
the Shareholders' Representative, if any, as may be necessary to the efficient  
proof of his authority to act and to exercise the powers granted the            
Shareholders' Representative under this Article VIII.                           

   8.6      SURVIVABILITY OF POWER. EACH SHAREHOLDER INTENDS FOR THE
AUTHORIZATIONS AND AGREEMENTS IN THIS ARTICLE VIII TO REMAIN IN FORCE AND NOT   
BE AFFECTED IF SUCH SHAREHOLDER SUBSEQUENTLY BECOMES MENTALLY OR PHYSICALLY     
DISABLED OR INCOMPETENT.                                                        

ARTICLE IX
GENERAL PROVISIONS

9.1      SEVERABILITY. If any provision of this Agreement is  
prohibited by the laws of any jurisdiction as those laws apply to this          
Agreement, that provision shall be ineffective to the extent of such            
prohibition and/or shall be modified to conform with such laws, without         
invalidating the remaining provisions hereto.                                   

9.2      AMENDMENT; MODIFICATION; EXTENSION; WAIVER.          

           (a)      This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. No party  
to this Agreement is obligated to execute any amendments to this Agreement.     

              (b)      At any time prior to the Closing, the parties may
(a) extend the time for the performance of any of the obligations or other acts 
of the other parties, (b) waive any inaccuracies in the representations and     
warranties contained in this Agreement or in any document delivered pursuant to 
this Agreement or (c) waive compliance with any of the agreements or conditions 
contained in this Agreement. Any such extension or waiver shall be valid only   
if set forth in an instrument in writing signed by each of the parties hereto.  
No failure or delay by any party in exercising any right, power or privilege    
hereunder shall operate as a waiver thereof nor shall any single or partial     
exercise thereof preclude any other or further exercise thereof or the exercise 
of any other right, power or privilege. The rights and remedies herein provided 
shall be cumulative and not exclusive of any rights or remedies provided by     
law.                                                                            

     9.3      ASSIGNMENT, SURVIVAL AND BINDING AGREEMENT. This Agreement
(a) may not be assigned by PRGX on or prior to the Closing without the prior    
written Shareholders' Representative (except for an assignment to a wholly      
owned subsidiary of PRGX, which may be made without the prior consent of, but   
with notice to, Shareholders' Representative provided                           

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that, in such event, the assignor shall remain obligated hereunder in the same  
manner as if such assignment had not been effected); (b) may not be assigned by 
PRGX after the Closing without the prior written consent of Shareholders'       
Representative, except for (i) an assignment to an affiliate of PRGX, which may 
be made without the prior consent of, but with notice to, Shareholders'         
Representative; provided that, in such event, the assignor shall remain         
obligated hereunder in the same manner as if such assignment had not been       
effected, and (ii) in the event of a merger, consolidation, reorganization or   
similar transaction of PRGX with a Person where such other Person is the        
surviving entity of such transaction, this Agreement may be assigned by PRGX    
without the prior written consent of, but with notice to, Shareholders'         
Representative; and (c) may not be assigned by any of the Shareholders at any   
time, without the prior written consent of PRGX (which consent may be granted   
or withheld in its sole discretion). The terms and conditions of this Agreement 
shall inure to the benefit of and be binding upon the parties hereto and their  
respective heirs, personal representatives, successors and assigns.             

      9.4      COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which       
together shall constitute one and the same instrument.                          

   9.5      NOTICES. All notices, requests, demands, claims or other
communications hereunder will be in writing and shall be deemed duly given if   
personally delivered, sent by telefax, sent by a recognized overnight delivery  
service which guarantees next-day delivery ("Overnight Delivery") or mailed by  
certified mail, return receipt requested, postage prepaid and addressed to the  
intended recipient, as set forth below:                                         

If to any of the Shareholders                                                   
or Companies:                  Howard Schultz & Associates International, Inc.  
9241 LBJ Freeway  
Dallas, TX  75243 
           Attention: Mr. Howard Schultz
     Telefax: (972) 690-7584

with a copy to:                Malouf Lynch Jackson & Swinson                   
      600 Preston Commons East
8115 Preston Road 
Dallas, TX  75225 
              Attention:  Curtis Swinson, Esq.
     Telefax: (214) 273-0567

with a copy to:                Howard Schultz & Associates International, Inc.  
9241 LBJ Freeway  
Dallas, TX  75243 
             Attention: Michael Glazer, Esq.
     Telefax: (972) 690-7584

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If to PRGX:                    The Profit Recovery Group International, Inc.    
      2300 Windy Ridge Parkway
Suite 100 North   
     Atlanta, GA  30339-8426
               Attention:  Clinton McKellar, Jr.
                     Senior Vice President & General Counsel
     Telefax: (770) 779-3034

with a copy to:                Arnall Golden Gregory LLP                        
                    1201 West Peachtree Street, Suite 2800
         Atlanta, Georgia 30309-3400
               Attention:  Jonathan Golden, Esq.
     Telefax: (404) 873-8701

or at such other address as any party hereto notifies the other parties hereof  
in writing. The parties hereto agree that notices or other communications that  
are sent in accordance herewith (i) by personal delivery or telefax, will be    
deemed received on the day sent or on the first business day thereafter if not  
sent on a business day (with written confirmation of receipt), (ii) by          
Overnight Delivery, will be deemed received on the first business day           
immediately following the date sent, and (iii) by certified U.S. Mail, return   
receipt requested, will be deemed received three (3) business days immediately  
following the date sent. For purposes of this Agreement, a "business day" is a  
day on which U.S. national banks are open for business and shall not include a  
Saturday or Sunday or legal holiday. Notwithstanding anything to the contrary   
in this Agreement, no action shall be required of the parties hereto except on  
a business day and in the event an action is required on a day which is not a   
business day, such action shall be required to be performed on the next         
succeeding day which is a business day.                                         

     9.6      ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. Except for
the Nondisclosure Agreement, which remains in full force and effect in          
accordance with the terms thereof, this Agreement, together with the Exhibits   
and Schedules, constitutes the entire agreement and supersedes any and all      
other prior agreements and undertakings, both written and oral, among the       
parties, or any of them, with respect to the subject matter hereof and, except  
as otherwise expressly provided herein, is not intended to confer upon any      
Person, other than PRGX and the Shareholders, any rights or remedies hereunder. 

     9.7      FURTHER ASSURANCES. The parties to this Agreement agree to
execute and deliver, both before and after the Closing, any additional          
information or documents or agreements contemplated hereby and/or necessary or  
appropriate to effect and consummate the transactions contemplated hereby.      
Shareholders and Companies agree to provide to PRGX, both before and after the  
Closing, such information as PRGX may reasonably request in order to consummate 
the transactions contemplated hereby and to effect an orderly transition of the 
business following the Closing Date.                                            

      9.8      CHOICE OF LAW. This Agreement and all documents executed in
connection therewith shall be governed by, and construed in accordance with,    
the laws of the State of                                                        

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Georgia, regardless of the laws that might otherwise govern under applicable    
principles of conflict of laws thereof.                                         

  9.9      CONSENT TO JURISDICTION. Each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any federal court     
located in the Northern District of Georgia or, if there is not a basis for     
federal court jurisdiction, a Superior Court of Cobb County, Georgia in the     
event any dispute arises out of this Agreement or any of the transactions       
contemplated by this Agreement, (b) agrees that it will not attempt to deny or  
defeat such personal jurisdiction by motion or other request for leave from any 
such court, and (c) agrees that it will not bring any action relating to this   
Agreement or any of the transactions contemplated by this Agreement in any      
court other than a federal court sitting in the Northern District of Georgia or 
a Cobb County Superior Court.                                                   

9.10     DISPUTE RESOLUTION.                                  

                (a)      Financial Matters. Notwithstanding any provision of
this Agreement to the contrary, all disputes, controversies or claims arising   
out of or relating to this Agreement or the transactions contemplated hereby    
relating to financial matters shall be resolved by agreement among the parties, 
or, if not so resolved within forty-five (45) days following written notice of  
dispute given by either party hereto to the other, by arbitration in accordance 
with Title 9 of the United States Code (the United States Arbitration Act), the 
Commercial Arbitration Rules of the American Arbitration Association, and its   
Optional Rules for Emergency Measures of Protection (the "Optional Rules"), all 
as amended from time to time (collectively, the "Rules") and the provisions of  
this Section; provided, however, that the provisions of this Section shall      
prevail in the event of any conflict with such Rules. The parties agree that    
they shall use their best efforts to cause the matter to be presented to the    
arbitral tribunal as soon as possible in light of the complexity of the         
dispute. The arbitral tribunal, except as provided under the Optional Rules,    
shall consist of three neutral arbitrators experienced in the industry related  
to the dispute, one of whom shall be chosen by the claimant and one chosen by   
respondent, and the two so chosen shall choose the third arbitrator who shall   
act as chairperson. The parties shall be entitled to engage in discovery in     
connection with arbitration, which discovery shall be conducted in accordance   
with Georgia rules of Civil Procedure and Evidence. Additionally, there shall   
be no evidence by affidavit allowed, and each party shall disclose a list of    
all documentary evidence to be used, a list of all witnesses and experts to be  
called by the party at least twenty (20) days prior to the arbitration hearing. 
The decision of a majority of the arbitration panel with respect to the matters 
referred to them pursuant hereto shall be final and binding upon the parties to 
the dispute, and confirmation and enforcement thereof may be rendered thereon   
by any court having jurisdiction upon application of any Person who is a party  
to the arbitration proceeding. The arbitral tribunal shall assess fees,         
expenses, compensation, and attorney's fees in the award as provided in the     
Rules. The arbitral tribunal shall have no power or authority under this        
Agreement or otherwise to award or provide for the award of punitive or         
consequential damages against any party. Any arbitration shall be conducted in  
Atlanta, Georgia.                                                               

                 (b)      Other Matters. Notwithstanding any provision of this
Agreement to the contrary, in respect of all disputes, controversies or claims  
arising out of or relating to this Agreement or the transactions contemplated   
relating to any matters other than financial matters                            

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the parties may exercise any and all rights and remedies available at law or in 
equity. Without limiting the generality of the foregoing, in the event of a     
breach or threatened breach by any party hereto of any of its covenants or      
other obligations hereunder, including, without limitation, the parties'        
respective obligations to close the transactions contemplated hereby, each of   
the parties hereby consents and agrees that the non-breaching party shall be    
entitled to an injunction or similar equitable relief restraining the breaching 
party(s) from committing or continuing any such breach or threatened breach or  
granting specific performance of any act required to be performed by the        
breaching party(s) under any such provision, without the necessity of showing   
any actual damage or that money damages would not afford an adequate remedy and 
without the necessity of posting any bond or other security. The right of the   
non-breaching party to injunctive relief shall be in addition to any and all    
other remedies available to it and shall not be construed to prevent it from    
pursuing, either consecutively or concurrently, any and all other legal or      
equitable remedies available to them including the recovery of monetary         
damages.                                                                        

    9.11     SCHEDULES, REVISED SCHEDULES AND EXHIBITS. All Schedules,
Revised Schedules and Exhibits referenced in this Agreement shall be deemed to  
be a part of this Agreement. All Schedules delivered to PRGX in connection with 
this Agreement shall be updated prior to the Closing so as to be true, correct  
and complete and "brought-down" as of the Closing Date, and shall, when         
delivered, be accompanied by a certificate of a duly authorized officer of the  
applicable Company certifying that they are delivered pursuant to the           
applicable Section of this Agreement, as referenced in such certificate, and    
shall, when delivered, be attached to this Agreement and for all intents and    
purposes, be deemed Schedules hereto. All Schedules and Revised Schedules shall 
be arranged in paragraphs corresponding to the lettered and numbered paragraphs 
contained in applicable Article hereof and shall provide information thereon    
separately in respect of each Company, as applicable.                           

     9.12     DEFINITION OF SHAREHOLDERS' KNOWLEDGE. As used herein, the
terms "to the Shareholders' knowledge" "and words of similar import shall mean  
the actual knowledge after reasonable investigation of the following            
individuals on the date hereof and on the Closing Date: H. Schultz, A. Schultz, 
Charles Schembri, Mac Martirossian and Michael Glazer.                          

      9.13     RELIANCE. Each party hereto acknowledges and represents (i)
that this Agreement is executed without reliance on any agreement, promise,     
statement, or representation by or on behalf of any person, except as set forth 
specifically herein or in the Shareholders' Transaction Documents and/or the    
PRGX Transaction Documents or referred to herein or therein, (ii) that no       
person, and no agent or attorney of any person, has made any promises,          
representations, or warranties whatsoever, whether expressed or implied, which  
are not expressly contained herein, and (iii) that he or its authorized officer 
has read this Agreement and is fully aware of its contents and legal effect.    

9.14     MARITAL PROPERTY RIGHTS. The Persons signing in their
individual capacities below, whether as a party or as a "spouse" of a party,    
acknowledge and agree that: (i) each is individually joining in and assenting   
to this Agreement, (ii) each consents to and approves of the transactions       
contemplated by this Agreement, and (iii) each intends individually to be       
legally bound by this Agreement and each of the Shareholders' Transaction       
Documents to which such individual or his or her spouse is a party (the         
"Transaction Agreements"). Each such individual                                 

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Person also acknowledges that he or she will directly and personally benefit    
from the transactions contemplated by the Transaction Agreements to which such  
individual or his or her spouse is a party, that he or she has had an           
opportunity to review all such agreements and consult with independent legal    
counsel, and that PRGX is entering into this Agreement and the PRGX Transaction 
Documents in reliance upon the agreements set forth in this paragraph.          

      9.15     SECTION HEADINGS; CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its        
construction or interpretation. Unless otherwise expressly provided, all        
references to "Section" or "Sections" refer to the corresponding Section or     
Sections of this Agreement. All words used in this Agreement will be construed  
to be of such gender or number as the circumstances require. Unless otherwise   
expressly provided, the word "including" does not limit the preceding words or  
terms.                                                                          

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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first hereof written.                                              

PRGX:   
                 THE PROFIT RECOVERY GROUP
           INTERNATIONAL, INC.

By:     
                                      ----------------------------------------
          John M. Cook
                       Chairman of the Board and
                     Chief Executive Officer

     SHAREHOLDERS:

                                   -------------------------------------------
      Howard Schultz

                                   -------------------------------------------
                                 Leslie Schultz, signing individually as a
                                  Shareholder in respect of Asia and signing
                            for the purpose of acknowledging the
                            provisions of Section 9.14 hereof in
                               respect of shares held by H. Schultz in
          Asia and Singapore

                                   -------------------------------------------
         Andrew H. Schultz

                           Andrew H. Schultz Irrevocable Trust
             u/a dated May 1, 1997

By:     
                                      ----------------------------------------
                             Andrew H. Schultz, Sole Trustee

                                   -------------------------------------------
                                  Nicole Malkoff Schultz, signing solely for
                                   the purpose of acknowledging the provisions
              of Section 9.14 hereof

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LIST OF SCHEDULES AND EXHIBITS

                                                        [Enlarge/Download Table]

                                                                                                                   
Schedule 1.2               Allocation of Consideration                                                             
Schedule 2.1(a)            Jurisdictions in which each Company is Organized                                        
Schedule 2.1(b)            Jurisdictions in which each Company is qualified as a foreign corporation to do business
Schedule 2.2               Directors and Officers of Each Company                                                  
Schedule 2.3(a)            Exceptions to Title to Assets                                                           
Schedule 2.5(a)            Ownership of Capital Stock and Options                                                  
Schedule 2.7               Licenses and Permits                                                                    
Schedule 2.8               Historical Statements                                                                   
Schedule 2.9A              Trade Payables and Accrued Expenses                                                     
Schedule 2.9B              Other Debts, Obligation Guaranties and other Liabilities                                
Schedule 2.10              Subchapter S Effective Date and Status                                                  
Schedule 2.11(a)           Information on Audits                                                                   
Schedule 2.12(a)           Material Contracts                                                                      
Schedule 2.12(b)(1)        Certain Representations re: Contracts                                                   
Schedule 2.13              Material Leases                                                                         
Schedule 2.13(i)           Equipment Leases and Location                                                           
Schedule 2.14(a-1)-(a-5)   Key Clients Preliminary Information                                                     
Schedule 2.14(b-1)-(b-5)   Key Clients Supplemental Information                                                    
Schedule 2.15(a)-(a)(iii)  Employees                                                                               
Schedule 2.15 (b)          Associates                                                                              
Schedule 2.23              Litigation; Judgments                                                                   
Schedule 2.24              Insurance                                                                               
Schedule 2.27              Absence of Material Changes                                                             
Schedule 2.28              Certain Arrangements                                                                    
Schedule 2.29              Bank Accounts                                                                           
Schedule 3.2(a)            PRGX Consents                                                                           
Schedule 4.1(d)            Estimated Financials                                                                    

Exhibit 4.6                Agreement Regarding Nominee Shareholder                                                 
Exhibit 5.2(c)(iii)        Registration Rights Agreement (See Asset Agreement Exhibits)                            
Exhibit 5.3(c)(iv)         Certificate Regarding Redeemed Shares Held by Nominee Shareholder                       

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                                                                         ANNEX C

OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED 

August 3, 2001

Board of Directors                                                              
The Profit Recovery Group International, Inc.                                   
2300 Windy Ridge Parkway                                                        
Suite 100                                                                       
Atlanta, Georgia 30339                                                          

Members of the Board of Directors:                                              

The Profit Recovery Group International, Inc. (the "Acquiror"), Howard
Schultz & Associates International, Inc. ("HSAI" and, collectively with its     
international affiliates referred to below, the "Company"), Howard Schultz ("H. 
Schultz"), Andrew H. Schultz ("A. Schultz") and certain trusts identified on the
signature pages thereto have entered into an Agreement and Plan of              
Reorganization, dated as of August 3, 2001 (the "Asset Purchase Agreement"), and
the Acquiror, H. Schultz, A. Schultz, Andrew H. Schultz Irrevocable Trust and   
Leslie Schultz have entered into an Agreement and Plan of Reorganization, dated 
as of August 3, 2001 (the "Stock Purchase Agreement" and, together with the     
Asset Purchase Agreement, the "Agreements"). Pursuant to the Agreements, the    
Acquiror will purchase substantially all of the assets of HSAI (the "Asset      
Acquisition") and substantially all of the capital stock of certain             
international affiliates of HSAI (the "Stock Purchase Acquisition") in exchange 
for approximately 15.35 million shares of the common stock, no par value per    
share, of the Acquiror (the "Acquiror Shares"), subject to adjustment as        
provided in the Asset Purchase Agreement. The Asset Acquisition and the Stock   
Purchase Acquisition, taken together, are referred to as the "Transaction," and 
the aggregate consideration to be paid by the Acquiror pursuant to the          
Transaction is referred to as the "Consideration." The terms of the Transaction 
are more fully set forth in the Agreements.                                     

    You have asked us whether, in our opinion, the Consideration to be paid by
the Acquiror pursuant to the Transaction is fair from a financial point of view 
to the Acquiror.                                                                

  In arriving at the opinion set forth below, we have, among other things:

  (1) Reviewed certain publicly available business and financial
   information relating to the Company and the Acquiror that we deemed to be
relevant;                                                             

    (2) Reviewed certain information, including financial forecasts,
relating to the business, earnings, cash flow, assets, liabilities and
     prospects of the Company and the Acquiror, as well as the amount and timing
   of the cost savings and related expenses and synergies expected to result
from the Transaction (the "Expected Synergies") furnished to us by the
Acquiror;                                                             

   (3) Conducted discussions with members of senior management and
     representatives of the Acquiror concerning the matters described in clauses
    1 and 2 above, as well as their respective businesses and prospects before
and after giving effect to the Transaction and the Expected Synergies;

  (4) Reviewed the market prices and valuation multiples for the
 Acquiror Shares and compared them with those of certain publicly traded
companies that we deemed to be relevant;                              

          (5) Reviewed the results of operations of the Company and the Acquiror
   and compared them with those of certain publicly traded companies that we
deemed to be relevant;                                                

  (6) Participated in certain discussions and negotiations among
representatives of the Acquiror and their legal advisor;              

   (7) Reviewed the potential pro forma impact of the Transaction;

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  (8) Reviewed each of the Agreements, except for the disclosure
    schedules thereto, which disclosure schedules have not been completed; and

        (9) Reviewed such other financial studies and analyses and took into
     account such other matters as we deemed necessary, including our assessment
of general economic, market and monetary conditions.                  

    As you are aware, we were not given the opportunity to conduct discussions
with the Company concerning any of the foregoing matters.                       

  In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us,     
discussed with or reviewed by or for us, or publicly available, and we have not 
assumed any responsibility for independently verifying such information or      
undertaken an independent evaluation or appraisal of any of the assets or       
liabilities of the Company or the Acquiror or been furnished with any such      
evaluation or appraisal. In addition, we have not assumed any obligation to     
conduct any physical inspection of the properties or facilities of the Company  
or the Acquiror. With respect to the financial forecast information and the     
Expected Synergies furnished to or discussed with us by the Acquiror, we have   
assumed that they have been reasonably prepared and reflect the best currently  
available estimates and judgment of the Acquiror's management as to the expected
future financial performance of the Company and the Acquiror and the Expected   
Synergies. We have also assumed that the final forms of the disclosure schedules
to the Agreements will not contain any information materially adverse to our    
analysis.                                                                       

     Our opinion is necessarily based upon market, economic and other conditions
as they exist and can be evaluated on, and on the information made available to 
us as of, the date hereof. We have assumed that in the course of obtaining the  
necessary regulatory or other consents or approvals (contractual or otherwise)  
for the Transaction, no restrictions, including any divestiture requirements or 
amendments or modifications, will be imposed that will have a material adverse  
effect on the contemplated benefits of the Transaction.                         

   We are acting as financial advisor to the Acquiror in connection with the
Transaction and will receive a fee from the Acquiror for our services, a portion
of which is payable upon delivery of this opinion and the balance of which is   
contingent upon the consummation of the Transaction. In addition, the Acquiror  
has agreed to indemnify us for certain liabilities arising out of our           
engagement. We have, in the past, provided financial advisory and financing     
services to the Acquiror and/or its affiliates and may continue to do so and    
have received, and may receive, fees for the rendering of such services. In     
addition, in the ordinary course of our business, we may actively trade the     
Acquiror Shares and other securities of the Acquiror, for our own account and   
for the accounts of customers and, accordingly, may at any time hold a long or  
short position in such securities.                                              

  This opinion is for the use and benefit of the Board of Directors of the
Acquiror in its evaluation of the Transaction and shall not be used for any     
other purpose. Our opinion does not address the merits of the underlying        
decision by the Acquiror to engage in the Transaction and does not constitute a 
recommendation to any shareholder of the Acquiror as to how such shareholder    
should vote on the proposed Transaction or any matter related thereto.          

We are not expressing any opinion herein as to the prices at which the
Acquiror Shares will trade following the announcement or consummation of the    
Transaction.                                                                    

   On the basis of and subject to the foregoing, we are of the opinion that,
as of the date hereof, the Consideration to be paid by the Acquiror pursuant to 
the Transaction is fair from a financial point of view to the Acquiror.         

                 Very truly yours,

                                     MERRILL LYNCH, PIERCE, FENNER & SMITH
                                    INCORPORATED

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PROXY 

 THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
 PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR USE AT THE SPECIAL MEETING ON JANUARY 24, 2002

The undersigned shareholder hereby appoints John M. Cook, Donald E. Ellis, Jr., 
Clinton McKellar, Jr., or any of them, with full power of substitution, to act  
as proxy for, and to vote the stock of, the undersigned at the Special Meeting  
of Shareholders of The Profit Recovery Group International, Inc. ("PRG") to be  
held on January 24, 2002, and any adjournments thereof. The undersigned         
acknowledges receipt of this Notice of Special Meeting of Shareholders and Proxy
Statement, each dated December   , 2001, and grants authority to said proxies,  
or their substitutes, and ratifies and confirms all that said proxies may       
lawfully do in the undersigned's name, place and stead. The undersigned         
instructs said proxies to vote as indicated hereon.                             

THE PROXIES SHALL VOTE AS SPECIFIED ON THE REVERSE, OR IF NO DIRECTION IS MADE, 
THIS PROXY WILL BE VOTED "FOR" THE PROPOSED SHARE AND OPTION ISSUANCES AND EACH 
OF THE DIRECTOR NOMINEES.                                                       

Please Vote, Sign, Date and Return This Proxy Card Promptly Using the Enclosed  
Envelope.                                                                       

---------------                                               ------------------
SEE REVERSE          (Continued on the Reverse Side)           SEE REVERSE  
SIDE                                                            SIDE  
---------------                                               ------------------

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[X]  PLEASE MARK YOUR VOTE AS IN THIS SAMPLE                                    

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED SHARE 
AND OPTION ISSUANCES AND
EACH OF THE DIRECTOR NOMINEES.

1.       Approval of the proposed issuance by PRG of an aggregate of up to      
  15,353,846 shares of its common stock and options to purchase an
   indeterminate number of shares of its common stock, not to exceed
         1,678,826 shares, in connection with the proposed acquisition by PRG of
substantially all of the assets of Howard Schultz & Associates
         International, Inc. ("HSA-Texas") and the concurrent acquisition by PRG
         of substantially all of the outstanding stock of HS&A International Pte
      Ltd. and all of the outstanding stock of Howard Schultz & Associates
   (Asia) Limited, Howard Schultz & Associates (Australia), Inc. and
        Howard Schultz & Associates (Canada), Inc., each an affiliated foreign
  operating company of HSA-Texas; and pursuant to the terms of the
  proposed acquisitions, the election of Howard Schultz and Andrew
      Schultz as Class II directors, Nate Levine as a Class I director and
        Arthur Budge, Jr. as a Class III director, conditioned upon closing of
the proposed acquisitions.                                    

FOR          AGAINST         ABSTAIN                          

[ ]            [ ]             [ ]                            

2.       Upon such other matters as may properly come before the meeting or any 
adjournment or postponements thereof.                         

Dated:                                                        
-------------------------------------             

Signature                                                     

-------------------------------------------------------       
Signature (if held jointly)                                   

-------------------------------------------------------       
Title(s)                                                      

         (Shareholders should sign exactly as name appears on stock. Where there
     is more than one owner, each should sign. Executors, Administrator,
    Trustees and others signing in a representative capacity should so
indicate.)