Dated 7 October 1997
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
(2) CLINTON MCKELLAR, JR, AS MANDATAIRE FOR THE SHAREHOLDERS OF PRG FRANCE
IN FORMATION
- AND -
(3) THE VENDORS (AS DEFINED HEREIN)
_____________________________________
SALE AGREEMENT
for the acquisition
of 28.28 per cent of the share capital of Financiere
Alma SA and 10.44 per cent of the share capital of
Alma Intervention SA
______________________________________
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THIS AGREEMENT is made on 7 October 1997
BETWEEN:
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC, a Georgia corporation
("PRG"), Clinton Mc Kellar, Jr., acting as Agent (mandataire) in the
name and on behalf of PRG France SA a French societe anonyme in the
process of formation at the date hereof ("AGENT") (which expression
shall on formation of PRG France SA mean PRG France SA), PRG, Agent and
PRG France SA being called together the "PURCHASER" which expression
includes each or any of them;
(2) MARC EISENBERG of 14, rue Margueritte, 75017 Paris and ERIC EISENBERG of
4, rue Juliette Lambert, 75017 Paris individually a "VENDOR" and
together "THE VENDORS".
RECITALS:
(A) PRG is in the business of auditing accounts payable, paid bill files,
promotional and demonstrator agreements, personal property, real estate,
sales and use tax and other taxes, common area maintenance charges,
telephone and other utilities, sales promotion, advertising and cosmetic
wage/commission agreements of its clients, to identify and document for
subsequent charge back or credit over-payments and/or under-deductions
and rendering management consulting services associated with such
activities.
(B) The Vendors are at the date hereof the owners of (i) the numbers of
shares in Financiere Alma SA ("FA") set out in Annex 1 hereto, such
shares comprising in aggregate 28.28 per cent of the share capital of FA
and (ii) the number of shares in Alma Intervention SA ("AI") set out in
Annex 1 hereto. Such shares in AI comprise 39.42 per cent of all the
shares of AI, 60.58 per cent of the remainder being owned by FA.
(C) Alma Group (as defined below) is in the business of providing management
consulting services primarily on a success fee basis, involving research
and recovery of various French indirect taxes (e.g. fiscal taxes,
foncier taxes and VAT taxes) and social charges; providing general
expense reduction in various areas including building services and
surveillance; assisting its clients in obtaining grants or subsidies;
and operating buying clubs for small business.
(D) This Agreement sets out the terms and conditions pursuant to which (i)
the Vendors sell and PRG purchases all of the FA Shares and all of the
AI Shares owned by the Vendors as set out in Annex 1 and (ii) the
Vendors sell and the PRG France Shareholder
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purchase all of the FA Shares and all of the AI Shares owned by the
Vendors as set out in Annex 1. It is the intention of PRG to immediately
resell the FA Shares and AI Shares so acquired by PRG to the PRG France
Shareholders on behalf of and for the account of PRG France SA, a
societe anonyme in the process of being formed by the PRG Shareholders.
IN CONSIDERATION OF THE MUTUAL REPRESENTATIONS, WARRANTIES AND
COVENANTS HEREIN CONTAINED, THE PARTIES AGREE AS FOLLOWS:-
1. INTERPRETATION
1.1 The following provisions shall have effect for the interpretation of
this Agreement.
1.2 The following words and expressions and abbreviations shall, unless the
context otherwise requires, have the following meanings:
"AI" means Alma Intervention SA;
"AI SHARES" means all the shares in the capital of AI as set out in
Annex 2;
"ALMA GROUP" or the "COMPANY" means FA, and the Subsidiaries, all of
them or each of them as the context admits;
"COMPLETION" means the date hereof;
"COMPLETION DATE" means the date hereof;
"DORMANT COMPANIES" means Almatel SARL, Alma Sud SARL and Cabinet
Brossard SARL;
"EMPLOYMENT AGREEMENT OF MR ERIC EISENBERG" means the Employment
Agreement entered into between Mr Eric Eisenberg and AI in the form set
out in Annex 4 hereto;
"ENCUMBRANCE" means any mortgage, charge, pledge, lien, security
interest or other third party right or interest, or option or
restriction of any nature over or in respect of the relevant asset,
security or right;
"FA" means Financiere Alma;
"FA SHARES" means all the shares in the capital of FA as set out in
Annex 3;
"MANDATE" means the mandate as President of AI to be entered into
between Mr Marc Eisenberg and AI in the form set out in Annex 5 hereto;
"PRG GROUP" means PRG and its subsidiaries as the same may exist from
time to time;
"PROSPECTIVE CLIENT" means as the date of determination, any person to
whom the Company has sent or delivered a written sale or servicing
proposal or contract in connection with the Business of the Company;
"PURCHASER'S LAWYERS" means Ashurst Morris Crisp of Paris, 22, rue de
Marignan, 75008 Paris;
"SEC" means the United States Securities and Exchange Commission;
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended;
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"STOCK" means shares of the common stock of PRG of no par value per
share;
"SUBSIDIARY" or "SUBSIDIARIES" means the subsidiaries of FA, all of them
or each of them as the context admits being AI, STEP SARL, Club Affaires
SA, Meridian Club France SA, B & T Associes SARL;
"VENDORS" means Marc and Eric Eisenberg whose addresses are set out at
the beginning of this Agreement (individually a "VENDOR" and together
the "VENDORS");
"VENDORS' LAWYERS" means Wilinski & Scotto of 19, rue Marbeuf, 75008
Paris.
1.3 References to the parties hereto include their respective permitted
assignees and/or the respective successors in title to substantially the
whole of their respective undertakings and, in the case of individuals,
to their respective estates and personal representatives.
1.4 References to persons shall include bodies corporate and unincorporated,
associations, partnerships and individuals. Words denoting the singular
shall include the plural and words denoting any gender shall include all
genders.
1.5 References to statutes or statutory provisions include references to any
orders or regulations made thereunder and references to any statute,
provision, order or regulation include references to that statute,
provision, order or regulation as amended, modified, re-enacted or
replaced from time to time whether before or after the date hereof
(subject as otherwise expressly provided herein) and to any previous
statute, statutory provision, order or regulation amended, modified,
re-enacted or replaced by such statute, provision, order or regulation.
1.6 Headings to clauses, paragraphs and descriptive notes in brackets
relating to provisions of taxation statutes are for information only and
shall not form part of the operative provisions of this agreement and
shall be ignored in construing the same.
1.7 References to recitals, clauses or schedules are to recitals to, clauses
of and schedules to this agreement. The recitals and schedules form part
of the operative provisions of this Agreement and references to this
Agreement shall, unless the context otherwise requires, include
references to the recitals and the schedules.
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2. SALE AND PURCHASE
2.1 Upon the terms and subject to the conditions of this Agreement, (i) the
Vendors sell to and PRG purchases the numbers of FA Shares and the
number of AI Shares of which each of the Vendors is the owner as set out
in Annex 1 hereto and (ii) the Vendors sell and the PRG France
Shareholders purchase the number of FA Shares and the number of AI
Shares of which each of the Vendors is the owner as set out in Annex 1
hereto, in each case, with effect from 1 October 1997 free from any
Encumbrances and together with all accrued benefits and rights attaching
thereto and all dividends declared after 30 June 1997 in respect of the
such shares.
2.2 The Vendors represent, warrant, covenant and undertake with the
Purchaser (so as to bind each such Vendor and the Vendor's personal
representatives, successors and assigns) as follows:
(a) that each Vendor has good title to and the right to sell to
Purchaser the number of FA Shares and / or AI Shares, as the
case may be, that is set out in Annex 1;
(b) that each Vendor is selling their FA Shares and/or their AI
Shares, as the case may be, together with all such rights now or
hereafter attaching thereto including the right to all dividends
and other distributions (if any) declared, made or paid after 30
June 1997, free from any Encumbrances;
(c) as set forth in Annex 2 hereto.
2.3 (a) The price for the sale to and purchase by PRG is paid by the
delivery to the Vendors of 110,911 Stock in the proportions set in Annex
1;
(b) The price for the sale to and purchase by the Agent is US $
6,931,177 in the proportions set out in Annex 1.
2.4 The Vendors hereby unconditionally release FA and the Subsidiaries and
the Dormant Companies from all and any claims they may have against the
FA and the Subsidiaries and the Dormant Companies.
3. COMPLETION
3.1 On Completion the Vendors have delivered to or made available to the
Purchaser or the Purchaser has delivered or made available to the
Vendors:
(a) the shares transfer forms relating to all the FA Shares and AI
Shares sold by the Vendors duly signed and completed in favour
of PRG and the PRG France Shareholders as the case may be;
(b) written confirmation from PRG's transfer agent that stock
certificates evidencing the 110,911 of Stock, have been issued
in the names of the Vendors;
(c) bankers drafts for the aggregate amount of US $ 6,931,177 in the
amounts and payable to the Vendors as set out in Annex 1 hereto.
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4. WARRANTIES BY PRG
PRG hereby represents warrants, covenants and undertakes to the Vendors
as set out in Annex 3 of this Agreement.
5. BENEFIT OF THE AGREEMENT
For the purposes of Article 223 B of the General Taxation Code (Code
General des Impots) it is expressly agreed that PRG will acquire 49 of
the FA Shares and 606 of the AI Shares with the intention of immediately
transferring them to the Agent to be held by PRG France SA on its
formation.
6. TRANSFER BY THE VENDORS
The Vendors may not substitute any third party for themselves in any way
whatsoever in respect of the performance of their obligations hereunder.
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7. SUCCESSORS AND ASSIGNS OF THE VENDORS
The obligations set out in this Agreement shall bind the inheritors,
successors and assigns of the Vendors who shall be jointly and severally
and indivisibly bound in respect of the performance of the obligations
hereunder.
8. WAIVER
The non-exercise by the Purchaser or the Vendors of any of their
respective rights pursuant to this Agreement shall not in any way
whatsoever be construed as a waiver of that right and shall not affect in
any way whatsoever the right of such party to exercise such right.
No waiver of any representation or contractual or legal warranty will be
effective without a written and signed declaration of the person giving
the waiver notifying the other party of its waiver.
9. SEVERABILITY OF CLAUSES
In the event that any of the clauses hereof becomes void, unenforceable,
invalid, illegal or inapplicable, this shall not jeopardise the validity,
legality or applicability of the other provisions of this Agreement and
shall not release the Vendors from the performance of this Agreement.
10. RESTRICTIONS
10.1 During the period of five years from the Completion Date each of the
Vendors shall not (except with the prior consent in writing of PRG) be
engaged, associated, implicated or interested whether solely or jointly
with any other person, and whether directly or indirectly, in whatever
capacity, within France in any activities competitive with those carried
out by the Alma Group as described in Recital (C) above.
Each of the Vendors shall not during this same five year period take any
interest direct or indirect (with the exception of interests not
exceeding 5% of a company whose shares are quoted on a stock exchange) in
company or group carrying on within France, activities competitive with
those carried
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on by the Alma Group as described in Recital (C) above.
10.2 During the period of five years from the Completion Date each of the
Vendors shall not (except with the prior consent in writing of PRG) be
engaged, associated, implicated or interested whether solely or jointly
with any other person, and whether directly or indirectly, in whatever
capacity, within France, the United States of America and countries in
the world where PRG Group presently carries on activities in any
activities competitive with those carried out by the PRG Group as at the
Completion Date.
The Vendors shall not during this same five year period take any interest
direct or indirect (with the exception of interests not exceeding 5% of a
company whose shares are quoted on a Stock Exchange) in companies or
groups carrying on within the United States of America and countries in
the world where PRG presently carries on activities.
10.3 During the same period as referred to in Article 10.1 above the Vendors
undertake not to employ any persons who are or become employees,
independent contractors or agents of the Alma Group, who provide
substantially all their services to Alma Group, in whatever capacity,
even in the case of an activity which is not competitive with that
carried on by the Alma Group as described in Recital (C) above.
10.4 During the period of five years from the Completion Date, each of the
Vendors will not, except with the prior written consent of PRG, directly
or indirectly, on their own or on behalf of any other person, solicit or
call upon or serve any client or Prospective Client (including persons
associated with such client or Prospective Client) with a view to selling
or providing to such client or Prospective Client any product, equipment
or service, competitive with any service sold or provided or under
development by Alma Group at or prior to the date hereof.
10.5 (a) In the event of the termination by AI of the Mandate of Mr Marc
Eisenberg during the period of such Mandate for a reason other
than (i) serious or gross misconduct (faute grave ou lourde) or
(ii) violation of the terms of his non competition clause in
this Agreement or in the Mandate, the period of five years
referred to in clauses 10.1 to 10.5 above shall be reduced to
three years in respect of Mr Marc Eisenberg;
(b) In the event of the termination by AI of the Employment Contract
of Mr Eric Eisenberg during the period of such Employment Contract
for a reason other than (i) serious or gross misconduct (faute
grave ou lourde) or (ii) violation of the terms of his non
competition clause in this Agreement or in such Employment
Agreement, the period of five years referred to in clauses 10.1 to
10.5 above shall be reduced to three years in respect of Mr Eric
Eisenberg.
10.6 Each of the Vendors hereby covenants with the Purchaser that he will not
at any time divulge to any third party whatsoever or use for his own or
another's advantage any of the trade secrets or
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confidential know-how or confidential financial or trading information as
to customers or suppliers or in relation to the business, finances,
dealings or affairs of the Company or the Subsidiaries except only (a)
insofar as the Vendors may prove the same has become a matter of public
knowledge (otherwise than by reason of a breach by either of them of this
Clause) (b) insofar as may be required by law.
10.7 The Vendors agree that the covenants and undertakings contained in this
Clause 10 are reasonable and are entered into for the purpose of
protecting the goodwill of the business of Alma Group and PRG Group and
that accordingly the benefit of the covenants and undertakings may be
assigned by the Purchaser and its successors in title without the consent
of the Vendors.
10.8 Each covenant and/or undertaking contained in this Clause 10 shall be
construed as a separate covenant and/or undertaking and if one or more of
the covenants and/or undertakings contained in this clause is held to be
against the public interest or unlawful or in any way an unreasonable
restraint of trade the remaining covenants and/or undertakings shall
continue to bind the Vendors.
11. ANNOUNCEMENTS
Neither the making of this Agreement nor its terms shall be disclosed by
any party hereto without the prior consent of the other parties unless
disclosure is required by law or the rules of any regulatory or
governmental body, including the SEC.
12. BOARD POSITION
PRG shall use its best efforts to place Marc Eisenberg on the board of
directors of PRG, with tenure thereon subject to the Articles of
Incorporation and bylaws of PRG and all applicable laws, for a term to
expire not later than the annual meeting of shareholders of PRG in 2000.
13. GUARANTEE
The obligations of PRG and of the PRG Shareholders hereunder shall be
joint and several and PRG hereby guarantees the obligations of the PRG
France Shareholders hereunder.
14. EFFECT OF COMPLETION
The terms of this Agreement shall insofar as not performed at Completion
and subject as specifically otherwise provided in this Agreement continue
in force after and notwithstanding Completion.
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15. WAIVER, AMENDMENT
15.1 No waiver of any term, provision or condition of this Agreement shall be
effective unless such waiver is evidenced in writing and signed by the
waiving party.
15.2 No omission or delay on the part of any party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or of any other
right, power or privilege. The rights and remedies herein provided are
cumulative with and not exclusive of any rights or remedies provided by
law.
15.3 No variation to this Agreement shall be effective unless made in writing
and signed by all the parties.
16. FURTHER ASSURANCES
At any time after Completion the Vendors shall at their own expense
execute all such documents and do such acts and things as the Purchaser
may reasonably require for the purpose of vesting in the Purchaser the
full legal and beneficial title to the Shares and the AI Shares and
giving to the Purchaser the full benefit of this agreement.
17. NOTICES
Save as specifically otherwise provided in this Agreement any notice,
demand or other communication to be served under this Agreement may be
served upon any party hereto only by posting by first class post or
sending the same by an international recognised courier service which
guarantees at least second business day delivery or sending the same by
facsimile transmission to the party to be served at its address given
below, or facsimile number given below or at such other address or number
in France on the United States as he or it may from time to time notify
in writing to the other parties hereto:
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If to the Vendors: Mr Marc Eisenberg
14, rue Margueritte
75017 Paris
in either case,
with a copy to: Wilinski et Scotto
19, rue Marbeuf
75008 Paris
Attention: Serge Wilinski
Telefax: 01 53 57 97 98
If to the Purchaser: The Profit Recovery Group International, Inc.
2300 Windy Ridge Parkway
Suite 100 North
Atlanta, Georgia 30339-8426
Attention: Clinton McKellar, Jr,
Senior Vice President and General Counsel
Telefax: (770) 661-3034
with a copy to: Ashurst Morris Crisp
22, rue de Marignan
75008 Paris
Attention: Christopher Crosthwaite, Thomas Forschbach
Telefax: 01 53 53 53 54
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, (ii) by
[courier delivery,] will be deemed received on the second business day
immediately following the date sent, and (iii) by certified mail, will be
deemed received [seven (7)] business days immediately following the date
sent. For purposes of this Agreement, a "BUSINESS DAY" is a day on which
PRG and FA or AI is open for business and shall not include a Saturday or
Sunday or legal holiday in France or the United States. 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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18. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
several parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all the counterparts
shall together constitute one and the same instrument.
19. GOVERNING LAW AND RULING VERSION
19.1 This Agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this agreement
or its formation) shall be governed by and construed in accordance with
French law.
19.2 Any dispute arising from the execution of this Agreement shall be finally
resolved in accordance with the Rules of Conciliation and Arbitration of
the International Chamber of Commerce by three arbitrators nominated in
accordance with their rules unless the parties can agree on a sole
arbitrator. The arbitration shall take place in Paris. The language of
the arbitration shall be English.
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MADE AND SIGNED IN EXAMPLES AT BROADWALK HOUSE, 5 APPOLD STREET, LONDON EC2A
2HA, ENGLAND, ON THE FIRST ABOVE DATE WRITTEN
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
By: /s/ Clinton McKellar, Jr.
----------------------------
Mr. Clinton McKellar, Jr.
Senior Vice President and
General Counsel
MR. CLINTON MCKELLAR, JR., AS "MANDATAIRE" FOR THE SHAREHOLDERS OF PRG FRANCE SA
INFORMATION
By: /s/ Clinton McKellar, Jr.
----------------------------
Clinton McKellar, Jr.
By: /s/ Mark Eisenberg
----------------------------
Mark Eisenberg
By: /s/ Eric Eisenberg
----------------------------
Eric Eisenberg
LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 Schedule of Shares Sold
Annex 2 Warranties of Vendor
Annex 3 PRG Warranties