SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 7, 1997
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
Commission File Number 0-28000
Georgia 58-2213805
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation)
2300 Windy Ridge Parkway
Suite 100 North
Atlanta, Georgia 30339-8426
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code
(770) 955-3815
(Former name or former address, if changed since last report)
N/A
481577.3
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 7, 1997, The Profit Recovery Group International Group, Inc., a
Georgia corporation (the "Company"), and its wholly owned subsidiary, PRG France
S.A. ("PRG France"), acquired all of the outstanding capital stock of Financiere
Alma S.A., a French company, and substantially all of the outstanding capital
stock (98.3%) of Alma Intervention S.A., a French company, together with all of
the equity interests of the wholly-owned subsidiaries of Alma Intervention, S.A.
(collectively, "Alma"), pursuant to the terms of Share Purchase Agreements dated
October 7, 1997 by and among the Company, PRG France and the equity holders of
Alma. Alma is a recovery audit firm specializing in identifying and recovering
various French tax overpayments.
Pursuant to the Share Purchase Agreements, the total aggregate
consideration paid to the former equity holders of Alma consisted of $24.6
million in cash and 858,827 unregistered shares of the Company's Common Stock.
The consideration given to acquire the outstanding equity interests of Alma was
determined as a result of arm's length negotiations among unrelated parties, and
the acquisition will be accounted for using the purchase method of accounting.
The description of the acquisition contained herein is qualified in its
entirety by reference to the Agreements dated as of October 7, 1997 by and among
the Company and the equity holders of Alma attached hereto as Exhibits 2.1, 2.2,
2.3, 2.4, 2.5, 2.6, 2.7 and 2.8 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
As of the date of filing this Current Report on Form 8-K, it is
impracticable for the Company to provide the financial statements required by
Item 7(a) of Form 8-K. In accordance with Item 7(a)(4) of Form 8-K, such
financial statements shall be filed by amendment to this Form 8-K no later than
December 22, 1997.
(b) Pro Forma Financial Information.
As of the date of filing this Current Report on Form 8-K, it is
impracticable for the Company to provide the pro forma financial information
required by Item 7(b) of Form 8-K. In accordance with Item 7(a)(4) of Form 8-K,
such financial information shall be filed by amendment to this Form 8-K no later
than December 22, 1997.
481577.3
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(c) Exhibits.
Exhibit
Number Description
2.1(a)* Share Purchase Agreement dated as of October 7, 1997 among the
Company, PRG France and certain individual Stockholders of Alma
Intervention S.A.
2.1(b)* Share Purchase Agreement dated as of October 7, 1997 among the
Company, PRG France and certain individual Stockholders of Alma
Intervention S.A.
2.2* Share Purchase Agreement dated as of October 7, 1997 among the
Company, PRG France and Epargne Capitalisation Intermediaire and
Epargne Developpement.
2.3* Share Purchase Agreement dated as of October 7, 1997 among the
Company, PRG France and Sophie Davet.
2.4* Share Purchase Agreement dated as of October 7, 1997 among the
Company, PRG France and Marc Eisenberg and Eric Eisenberg.
2.5* Share Purchase Agreement dated as of October 7, 1997 among the
Company, PRG France and Banque Internationale a Luxembourg S.A. for
share capital of Financiere Alma S.A. and Alma Intervention S.A.
2.6* Share Purchase Agreement dated as of October 7, 1997 among the
Company, PRG France and Banque Internationale a Luxembourg S.A. for
share capital of Alma Intervention S.A.
2.7* Warranty Agreement dated as of October 7, 1997 among the Company, PRG
France, Marc Eisenberg and Eric Eisenberg.
2.8* Indemnity Escrow and Stock Pledge Agreement dated as of October 7,
1997 among the Company, PRG France, Marc Eisenberg, Eric Eisenberg,
Banque Internationale a Luxembourg S.A. and Arnall Golden & Gregory,
LLP.
____________________
* In accordance with Item 601(b)(2) of Regulation S-K, the schedules have
been omitted and a list briefly describing the schedules is contained at the end
of the Exhibit. The Company will furnish supplementally a copy of any omitted
schedule to the Commission upon request.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
On October 7, 1997, in connection with the acquisition of substantially all
of the outstanding capital stock of Alma, the Company issued 858,827 shares of
its Common Stock to the former stockholders of Alma as part of the consideration
of the acquisition price. The shares were sold outside the United States in
reliance on multiple exemptions from registration including, without limitation,
Regulation S under the Securities Act of 1933, as amended.
481577.3
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC.
Date: October 22, 1997 By: /s/ Donald E. Ellis, Jr.
_______________________________
Donald E. Ellis, Jr., Senior
Vice President, Chief Financial
Officer and Treasurer
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481577.3
SHARE PURCHASE AGREEMENT
Dated 7 October 1997
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
(2) THE SHAREHOLDERS IN THE PROCESS OF CONSTITUTING PRG
FRANCE SA
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(3) MARC EISENBERG, AS ATTORNEY-IN-FACT FOR THOSE PERSONS WHOSE NAMES ARE SET
OUT ON ANNEX 1 ATTACHED HERETO
---------------
SHARE PURCHASE AGREEMENT
for the acquisition of share capital of Financiere
Alma SA and Alma Intervention SA
---------------
<PAGE>
THIS AGREEMENT is made on 7 October 1997.
BETWEEN:
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC, a Georgia corporation
("PRG"), Clinton McKellar, Jr, acting as attorney (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") , PRG France SA 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, AS ATTORNEY-IN-FACT FOR THOSE PERSONS WHOSE NAMES AND
ADDRESSES ARE SET OUT ON ANNEX 1 ATTACHED HERETO (the "VENDOR").
THE PARTIES AGREE AS FOLLOWS:
1. SALE AND PURCHASE
1.1 On or after December 31, 1998 and not later than January 5, 1999
(the "COMPLETION DATE"), (i) the Vendor shall sell to PRG and
PRG shall purchase from the Vendor the numbers of shares in Alma
Intervention SA ("AI") of which the Vendor is the owner as set
out in Section 1 of ANNEX 1, and (ii) the Vendor shall sell and
the Agent shall purchase the number of shares in AI of which the
Vendor is the owner as set out in Section 2 of ANNEX 1, in each
case with effect from the Completion Date free from 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 (the
"ENCUMBRANCES"), and together with all accrued benefits and
rights attaching thereto and all dividends declared after the 30
June 1997 in respect of the all such shares in AI (collectively
the "AI SHARES").
On the Completion Date, the Vendor shall deliver to the
Purchaser the shares transfer forms relating to all the AI
Shares referred to in ANNEX 1 duly signed and completed in
favour of the Purchaser.
1.2 The Vendor hereby represents, warrants, covenants and undertakes
with the Purchaser (so as to bind him, his personal
representatives, successors and assigns) as follows:
1.2.1 that Vendor has the right to dispose of the AI Shares
which he sells to Purchaser;
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1.2.2 that Vendor is disposing of the AI Shares free from any
Encumbrances together with all such rights now or
hereafter attaching thereto, including the right to all
dividends and other distributions (if any) declared,
after 30 June 1997;
1.2.3 as set out in ANNEX 2 to this Agreement;
1.2.4 that Vendor has made available to each person from whom
Vendor received a "pouvoir" all information concerning
PRG and its business and has informed such persons of
the availablity of the investment representations, Risk
Factors and other matters set forth in ANNEX 2 to this
Agreement and has provided copies of ANNEX 2 to any
person who requested same;
1.2.5 that Vendor warrants, covenants and undertakes with
Purchaser that each Pouvoir attached to this Agreement
is an original pouvoir executed by the person whose name
appears on same, and the each such person executed such
pouvoir as a voluntary act and with full right and
authority;
1.2.6 that Vendor warrants, covenants and undertakes with
Purchaser that each pouvoir attached to this Agreement
is valid and enforceable and vests the Vendor with full
right and authority to enter into this Agreement for and
on behalf of the persons whose names are set forth on
ANNEX 1 attached hereto; and
1.2.7 that, at the Completion Date, Vendor shall reaffirm all
of the warranties and representations contained herein
as being true and correct at Completion as if such
warranties and representations were made at that time.
1.3 The price for the AI Shares to be sold by the Vendor to PRG
pursuant to this Agreement shall be paid by PRG by the delivery
at the Completion Date of 13,900 Shares of no par value common
stock of PRG (the "STOCK") in the proportions set out in Annexe
1. The Vendor acknowledges and agrees the the Stock will from
the Completion Date be subject to the restrictions set forth on
ANNEX 2 to this Agreement.
1.4 The price for the AI Shares to be sold by the Vendor to PRG
France is US $ 398,244 to be paid at the Completion Date by way
of one or more bankers drafts as set forth in ANNEX 1.
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1.5 The Vendor warrants, covenants and represents to Purchaser that
promptly after the Completion Date, he will deliver to the
persons whose names are set forth on ANNEX 1 attached hereto
stock certificates representing the appropriate number of shares
of PRG Stock and cash in accordance with the amounts set forth
on said ANNEX 1.
2. WARRANTIES BY PRG
PRG hereby represents warrants, covenants and undertakes to the Vendor
as set out in ANNEX 3 of this Agreement.
3. FURTHER ASSURANCES
At any time after the Completion Date, the Vendor shall without charge
to the Purchaser execute all such documents and do such acts and things as the
Purchaser may reasonably require for the purpose of vesting in PRG and/or PRG
France with the full legal and beneficial title to the AI Shares referred to in
ANNEX 1 and giving to the Purchaser the full benefit of this Agreement.
4. GUARANTEE
The obligations of PRG and of the Agent hereunder shall be joint and
several and PRG hereby guarantees the obligations of the Agent hereunder.
5. GOVERING LAW AND RULING VERSION
5.1 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.
5.2 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 in English.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement at Broadwalk
House, 5 Appold Street, London EC2A 2HA as of the date first above written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
/s/ Clinton McKellar, Jr.
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By: Mr. Clinton McKellar, Jr.
Title: Senior Vice President and General Counsel
/s/ CLINTON MCKELLAR, JR.
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MR. CLINTON MCKELLAR, JR., AS "MANDATAIRE"
FOR THE SHAREHOLDERS OF PRG FRANCE S.A. IN FORMATION
MR MARC EISENBERG AS ATTORNEY OF FACT FOR THOSE PERSONS
WHOSE NAMES ARE SET OUT IN ANNEX 1
By: /s/ Marc Eisenberg
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Title:
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LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 List of names and addresses of persons executing a Pouvoir
in favor of Marc Eisenberg
Annex 2 Warranties of Vendor
Annex 3 Warranties by PRG
SHARE PURCHASE AGREEMENT
Dated 7 October 1997
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
(2) THE SHAREHOLDERS IN THE PROCESS OF CONSTITUTING PRG FRANCE SA
- and -
(3) MARC EISENBERG, AS ATTORNEY-IN-FACT FOR THOSE PERSONS WHOSE NAMES ARE
SET OUT ON ANNEX 1 ATTACHED HERETO
---------------
SHARE PURCHASE AGREEMENT
for the acquisition of share capital of Financiere Alma SA and 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 Kellan, Jr., acting as attorney (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, AS ATTORNEY-IN-FACT FOR THOSE PERSONS WHOSE NAMES ARE
SET OUT ON ANNEX 1 ATTACHED HERETO (the "VENDOR").
THE PARTIES AGREE AS FOLLOWS:
1. SALE AND PURCHASE
1.1 The Vendor sells to PRG and PRG purchases from the Vendor (i)
the numbers of shares in Financiere Alma SA ("FA") and the
number of shares of Alma Intervention SA ("AI") of which the
Vendor is the owner as set out in Section 1 of ANNEX1, and (ii)
the Vendor sells and the Agent purchases the number of shares in
FA and the number of shares of AI of which the Vendor is the
owner as set out in Section 2 of ANNEX 1, in each case with
effect from 1 October 1997 free from 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 (the
"ENCUMBRANCES"), and together with all accrued benefits and
rights attaching thereto and all dividends declared after the 30
June 1997 in respect of the all such shares in FA (collectively,
the "FA SHARES") and all such shares in AI (collectively the "AI
SHARES").
As at date hereof the Vendor delivers to the Purchaser the
shares transfer forms relating to all the FA Shares and AI
Shares referred to in ANNEX 1 duly signed and completed in
favour of the Purchaser and the Agent, as appropriate.
1.2 The Vendor hereby represents, warrants, covenants and undertakes
with the
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Purchaser (so as to bind them, their personal representatives,
successors and assigns) as follows:
1.2.1 that Vendor has the right to dispose of the FA Shares
and the AI Shares which they sell to Purchaser;
1.2.2 that Vendor is disposing of the FA Shares and AI Shares
free from any Encumbrances together with all such rights
now or hereafter attaching thereto, including the right
to all dividends and other distributions (if any)
declared, after 30 June 1997;
1.2.3 as set out in ANNEX 2 to this Agreement;
1.2.4 that Vendor has made available to each person from whom
Vendor received a "pouvoir" all information concerning
PRG and its business and has informed such persons of
the availablity of the investment representations, Risk
Factors and other matters set forth in ANNEX 2 to this
Agreement and has provided copies of ANNEX 2 to any
person who requested same;
1.2.5 that Vendor warrants, covenants and undertakes with
Purchaser that each pouvoir attached to this Agreement
is an original Pouvoir executed by the person whose name
appears on same, and that each person executed such
pouvoir as a voluntary act and with full right and
authority; and
1.2.6 that Vendor warrants, covenants and undertakes with
Purchaser that each pouvoir attached to this Agreement
is valid and enforceable and vests the Vendor with full
right and authority to enter into this Agreement for and
on behalf of the persons whose names are set forth on
ANNEX 1 attached hereto.
1.3 The price for the FA Shares and the AI Shares sold by the Vendor
to PRG pursuant to this Agreement shall be paid by PRG by the
delivery of 13,348 shares of no par value common stock of PRG
(the "STOCK") in the proportions set out in ANNEX 1 hereto. The
Vendor acknowledges and agrees the the Stock is subject to the
restrictions set forth on ANNEX 2 to this Agreement.
1.4 The price for the FA Shares and AI Shares sold by the Vendor to
the PRG France Shareholders is US $ 512,271 paid at the date
hereof by way of one bankers drafts as set forth in ANNEX 1.
1.5 The Vendor warrants, covenants and represents to Purchaser that
he will
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promptly deliver to the persons whose names are set forth on
ANNEX 1 attached hereto stock certificates representing the
appropriate number of shares of PRG Stock and cash in accordance
with the amounts set forth on said ANNEX 1.
2. WARRANTIES BY PRG
PRG hereby represents warrants, covenants and undertakes to the Vendor
as set out in ANNEX 3 of this Agreement.
3. FURTHER ASSURANCES
At any time after the date hereof the Vendor shall without charge to the
Purchaser execute all such documents and do such acts and things as the
Purchaser may reasonably require for the purpose of vesting in PRG and/or the
Agent with the full legal and beneficial title to the FA Shares and the AI
Shares referred to in ANNEX 2 and giving to the Purchaser the full benefit of
this Agreement.
4. 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 FA Shares and
the AI Shares in Section 1 of ANNEX 1 with the intention of immediately
transferring them to the Agent on behalf of PRG France SA in the process of
being formed.
5. GUARANTEE
The obligations of PRG and of the Agent hereunder shall be joint and
several and PRG hereby guarantees the obligations of the Agent hereunder.
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6. GOVERING LAW AND RULING VERSION
6.1 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.
6.2 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 in English.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement at Broadwalk
House, 5 Appold Street, London EC2A 2HA, as of the date first above written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
/s/ Clinton McKellar,Jr.
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By: Mr. Clinton McKellar, Jr.
Title: Senior Vice President and General Counsel
/s/ Clinton McKellar, Jr.
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MR CLINTON MCKELLAR, JR, AS "MANDATAIRE"
FOR THE SHAREHOLDERS OF PRG FRANCE S.A. IN FORMATION
MR MARC EISENBERG AS ATTORNEY OF FACT FOR THOSE PERSONS
ABOVE NAMES ARE SET OUT IN ANNEX 1
By:/s/ Marc Eisenberg
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Title:
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<PAGE>
LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 List of names and addresses of persons executing a Pouvoir
in favor of Marc Eisenberg
Annex 2 Warranties of Vendor
Annex 3 Warranties by PRG
SHARE PURCHASE AGREEMENT
Dated 7 October 1997
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
(2) THE SHAREHOLDERS IN THE PROCESS OF CONSTITUTING PRG FRANCE SA
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(3) EPARGNE CAPITALISATION INTERMEDIAIRE AND EPARGNE DEVELOPPEMENT
---------------
SHARE PURCHASE AGREEMENT
for the acquisition of share capital of Financiere Alma SA
---------------
<PAGE>
THIS AGREEMENT is made on 7 October 1997.
BETWEEN:
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC, a Georgia corporation
("PRG"), Clinton McKellar, Jr. acting as attorney (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 other;
(2) EPARGNE CAPITALISATION INTERMEDIAIRE and EPARGNE DEVELOPPEMENT;
individually a "VENDOR" and together the "VENDORS".
THE PARTIES AGREE AS FOLLOWS:-
1. SALE AND PURCHASE
1.1 The Vendors sell to PRG and PRG purchases from the Vendors (i)
the numbers of shares in Financiere Alma ("FA") of which each of
the Vendors is the owner as set out opposite each of the
Vendors' names in Section 1 of ANNEX 1, and (ii) the Vendors
sell and the Agent purchases the number of shares in FA of which
each of the Vendors is the owner as set out opposite each of the
Vendors' names in Section 2 of ANNEX 1, in each case with effect
from 1 October 1997 free from 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 (the "ENCUMBRANCES"), and
together with all accrued benefits and rights attaching thereto
and all dividends declared after the 30 June 1997 in respect of
the all such shares in FA (collectively, the "FA SHARES").
As at date hereof the Vendors deliver to the Purchaser the
shares transfer forms relating to all the FA Shares referred to
in ANNEX 1 duly signed and completed in favour of the Purchaser
and the Agent, as appropriate.
1.2 The Vendors hereby represent, warrant, covenant and undertake
with the Purchaser (so as to bind them, their personal
representatives, successors and assigns) as follows:
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1.2.1 that each of them has the right to dispose of the FA
Shares which they sell to Purchaser;
1.2.2 that each of them is disposing of the FA Shares free
from any Encumbrances together with all such rights now
or hereafter attaching thereto, including the right to
all dividends and other distributions (if any) declared,
after 30 June 1997;
1.2.3 as set out in ANNEX 2 to this Agreement;
1.2.4 that they hereby unconditionally remise, release and
forever discharge FA, Alma Intervention SA ("AI"), and
all subsidiaries and affiliates of FA and AI, the
Purchasers and all subsidiaries and affiliates of PRG,
and all officers and directors of any and all of the
foregoing entities (collectively the "RELEASED PARTIES")
from all and any claims whatsoever they may have against
any and all of the Released Parties;
1.2.5 that they hereby waive and release any and all right,
title and interest of any nature whatsoever in FA, AI or
any of their subsidiaries and affiliates, or the
business, assests or profits of same arising out of,
resulting from or relating to any agreement, oral or
written, by law or otherwise, including but not limited
to any investment agreement, loan agreement,
shareholders' agreement or the like;and
1.2.6 that they acknowledge that Mr Marc Eisenberg has made
available all information concerning the purchase and
sale of 100% of all the shares in FA and AI, including
but not limited to the matters set forth in ANNEX 3
attached hereto.
1.3 The price for the FA shares sold by the Vendors to PRG pursuant
to this Agreement shall be paid by PRG by the delivery of shares
of no par value common stock of PRG (the "STOCK") in such
numbers as are set out against each of the Vendors' names in
Section 1 of ANNEX 1. The Vendors acknowledge and agree the the
Stock is subject to the restrictions set forth in ANNEX 2 to
this Agreement.
1.4 The aggregate price for the FA shares sold by the Vendors to the
Agent is US $ 2 948 304,84 paid at the date hereof by way of two
bankers drafts in such amounts as are set out against each of
the Vendors' names in Section 2 of ANNEX 1.
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<PAGE>
2. WARRANTIES BY PRG
PRG hereby represents warrants, covenants and undertakes to the Vendors
as set out in ANNEX 4 of this Agreement.
3. FURTHER ASSURANCES
At any time after the date hereof the Vendors shall without charge to
the Purchaser execute all such documents and do such acts and things as the
Purchaser may reasonably require for the purpose of vesting in PRG and/or the
Agent with the full legal and beneficial title to the FA Shares referred to in
ANNEX 1 and giving to the Purchaser the full benefit of this Agreement.
4. GUARANTEE
The obligations of PRG and of the Agent hereunder shall be joint and
several and PRG hereby guarantees the obligations of the Agent hereunder.
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 the FA
Shares in Section 1 of Annexe 1 with the intention of immediately
transferring them to the Agent on behalf of PRG France SA in the process
of being formed.
6. GOVERING LAW AND RULING VERSION
6.1 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.
6.2 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 in English.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement at Broadwalk
House, 5 Appold Street, London EC2A 2HA, as of the date first above written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
/s/ Clinton McKellar, Jr.
- --------------------------------
By: Mr Clinton McKellar, Jr.
Title: Senior Vice President and General Counsel
/s/ Clinton McKellar, Jr.
- --------------------------------
MR CLINTON MCKELLAR, JR, AS "MANDATAIRE"
FOR THE SHAREHOLDERS OF PRG FRANCE S.A. IN FORMATION
EPARGNE
CAPITALISATION INTERMEDIAIRE
By:/s/ Marc Eisenberg
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Title: Attorney
EPARGNE DEVELOPPEMENT
By:/s/ Marc Eisenberg
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Title:
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LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 Schedule of Shares Sold
Annex 2 Warranties of Vendor
Annex 3 Letter from Denis Metzer of Epargne Partners
Annex 4 Warranties of PRG
SHARE PURCHASE AGREEMENT
Dated 7 October 1997
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
(2) THE SHAREHOLDERS IN THE PROCESS OF CONSTITUTING PRG FRANCE SA
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(3) SOPHIE DAVET
---------------
SHARE PURCHASE AGREEMENT
for the acquisition of share capital of Financiere Alma SA
and Alma Intervention SA
---------------
<PAGE>
THIS AGREEMENT is made on 7 October 1997.
BETWEEN:
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC, a Georgia corporation
("PRG"), Clinton McKellar, Jr., acting as attorney (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) SOPHIE DAVET (the "VENDOR").
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 consultingg services associated with such
activities.
(B) The Vendor is at the date hereof the owner of (i) the numbers of shares
in Financiere Alma SA ("FA") and Alma Intervention S.A. ("AI") set out
opposite her name in Section 1 of Annex 1 hereto, and (ii) the number
of shares in FA and AI set out opposite her name in Section 2 of ANNEX 1
hereto.
(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 Vendor sells and PRG purchases all of the FA Shares and all of the
AI Shares owned by the Vendor as set out in Section 1 of ANNEX 1 and
(ii) the Vendor sells
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<PAGE>
and the Agent purchases all of the FA Shares and all of the AI Shares
owned by the Vendor as set out in Section 2 of ANNEX 1. It is the
intention of PRG to immediately resell the FA Shares and AI Shares so
acquired by PRG to the Agent on behalf of and for the account of PRG
France SA, a societe anonyme in the process of being formed.
IN CONSIDERATION OF THE MUTUAL REPRESENTATIONS, WARRANTIES AND COVENANTS HEREIN
CONTAINED, THE PARTIES AGREE AS FOLLOWS:-
1. INTERPRETATION
"AI" means Alma Intervention SA;
"ALMA GROUP" means FA, AI, STEP SARL, Club Affaires SA, Meridian Club
France SA and B&T Associes SARL FA, and all of them or each of them as
the context admits;
"FA" means Financiere Alma SA;
"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 Alma Group has sent or delivered a written sale or servicing
proposal or contract in connection with the Business of Alma Group;
2. SALE AND PURCHASE
2.1 The Vendor sells to PRG and PRG purchases from the Vendor (i)
the numbers of shares in FAand the number of shares in AI of
which the Vendor is the owner as set out in Section 1 of ANNEX
1, and (ii) the Vendor sells to the Agent and the Agent
purchases the number of shares in FA and the number of shares in
AI of which the Vendor is the owner as set out in Section 2 of
ANNEX 1, in each case with effect from 1 October 1997 free from
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 (the "ENCUMBRANCES"), and together with all accrued
benefits and rights attaching thereto and all dividends declared
after the 30 June 1997 in respect of the all such shares in FA
(collectively, the "FA SHARES") and all such shares in AI
(collectively the "AI SHARES").
As at date hereof the Vendor delivers to the Purchaser the
shares transfer forms relating to all the FA Shares and AI
Shares referred to in ANNEX 1 duly signed and completed in
favour of the Purchaser and the Agent, as appropriate.
2.2 The Vendor hereby represents, warrants, covenants and undertakes
with the
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<PAGE>
Purchaser (so as to bind her, her personal representatives,
successors and assigns) as follows:
2.2.1 that Vendor has the right to dispose of the FA Shares
and the AI Shares which she sells to Purchaser;
2.2.2 that Vendor is disposing of the FA Shares and AI Shares
free from any Encumbrances together with all such rights
now or hereafter attaching thereto, including the right
to all dividends and other distributions (if any)
declared, after 30 June 1997;
2.2.3 as set out in ANNEX 2 to this Agreement;and
2.2.4 as set out in ANNEX 3 to this Agreement.
2.3 The price for the FA Shares and the AI Shares sold by the Vendor
to PRG pursuant to this Agreement is paid by PRG by the delivery
of 16,703 shares of no par value common stock of PRG (the
"STOCK"). The Vendor acknowledges and agrees the the Stock is
subject to the restrictions set forth on ANNEX 2 to this
Agreement.
2.4 The price for the FA Shares and AI Shares sold by the Vendor to
the Agent is US $ 497,025.18 paid at the date hereof by way of
of bankers draft.
3. WARRANTIES BY PRG
PRG hereby represents warrants, covenants and undertakes to the Vendor
as set out in ANNEX 4 of this Agreement.
4. FURTHER ASSURANCES
At any time after the date hereof the Vendor shall without charge to the
Purchaser execute all such documents and do such acts and things as the
Purchaser may reasonably require for the purpose of vesting in PRG
and/or the Agent with the full legal and beneficial title to the FA
Shares and the AI Shares referred to in ANNEX 1 and giving to the
Purchaser the full benefit 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 the FA
Shares and the AI Shares in Section 1 of Annex 1 with the intention of
immediately transferring them to the Agent on behalf of PRG France SA in
the process of being formed.
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<PAGE>
6. GUARANTEE
The obligations of PRG and of the Agent hereunder shall be joint and
several and PRG hereby guarantees the obligations of the Agent
hereunder.
7. GOVERING LAW AND RULING VERSION
7.1 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.
7.2 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 in English.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement at Broadwalk
House, 5 Appold Street, London EC2A 2HA, England, as of the date first above
written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
/s/ Clinton McKellar, Jr.
- --------------------------------
By: Mr Clinton McKellar, Jr.
Title: Senior Vice President and General Counsel
/s/ Clinton Mckellar, Jr.
- --------------------------------
MR CLINTON MCKELLAR, JR, AS "MANDATAIRE"
FOR THE SHAREHOLDERS OF PRG FRANCE S.A. IN FORMATION
SOPHIE DAVET
/s/ Sophie Davet
- --------------------------------
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<PAGE>
LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 Schedule of Shares Sold
Annex 2 Warranties of Vendor
Annex 3 Restrictive Covenants
Annex 4 Warranties by PRG
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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<PAGE>
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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<PAGE>
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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<PAGE>
"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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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
<PAGE>
LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 Schedule of Shares Sold
Annex 2 Warranties of Vendor
Annex 3 PRG Warranties
SHARE PURCHASE AGREEMENT
Dated 7 October 1997
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
(2) THE SHAREHOLDERS IN THE PROCESS OF CONSTITUTING PRG FRANCE SA
- and -
(3) BANQUE INTERNATIONALE A LUXEMBOURG S.A.
---------------
SHARE PURCHASE AGREEMENT
for the acquisition of share capital of Financiere Alma SA
and Alma Intervention SA
---------------
<PAGE>
THIS AGREEMENT is made on 7 October 1997.
BETWEEN:
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC, a Georgia corporation
("PRG"), Clinton McKellar, 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 OF
ANY OF THEM;
(2) BANQUE INTERNATIONALE A LUXEMBOURG S.A. ("VENDOR").
THE PARTIES AGREE AS FOLLOWS:
1. SALE AND PURCHASE
1.1 The Vendor sells to PRG and PRG purchases from the Vendor (i) the number
of shares in Financiere Alma SA ("FA") and the number of shares in Alma
Intervention SA ("AI") of which the Vendor is the owner as set out in
Section 1 of ANNEX 1, and (ii) the Vendor sells and the Agent purchases
the number of shares in FA and the number of shares in AI of which the
Vendor is the owner as set out in Section 2 of ANNEX 1, in each case
with effect from 1 October 1997 free from 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 (the "ENCUMBRANCES"), and together with all
accrued benefits and rights attaching thereto and all dividends declared
after the 30 June 1997 in respect of the all such shares in FA
(collectively, the "FA SHARES") and all such shares in AI (collectively
the "AI SHARES").
As at date hereof the Vendor delivers to the Purchaser the shares
transfer forms relating to all the FA Shares and AI Shares referred to
in ANNEX 1 duly signed and completed in favour of the Purchaser and the
Agent, as appropriate.
1.2 The Vendor hereby represents, warrants, covenants, undertakes and where
indicated acknowledges with the Purchaser (so as to bind it, its
personal representatives, successors and assigns) as follows:
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<PAGE>
1.2.1 that Vendor has the right to dispose of the FA Shares and the AI
Shares which it sells to Purchaser;
1.2.2 that Vendor is disposing of the FA Shares and AI Shares free
from any Encumbrances together with all such rights now or
hereafter attaching thereto, including the right to all
dividends and other distributions (if any) declared, after 30
June 1997;
1.2.3 as set out in ANNEX 2 to this Agreement;
1.2.4 that Vendor hereby unconditionally remise, release and forever
discharges FA, AI, and all subsidiaries and affiliates of FA and
AI, the Purchasers and all subsidiaries and affiliates of PRG,
and all officers and directors of any and all of the foregoing
entities (collectively the "RELEASED PARTIES") from all and any
claims whatsoever Vendor may have against any and all of the
Released Parties;
1.2.5 that Vendor hereby waives and releases any and all right, title
and interest of any nature whatsoever in FA, AI or any of their
subsidiaries and affiliates, or the business, assests or profits
of same arising out of, resulting from or relating to any
agreement, oral or written, by law or otherwise, including but
not limited to any investment agreement, loan agreement,
shareholders' agreement or the like; and
1.2.6 that Vendor acknowledges that Mr Marc Eisenberg has made
available all information concerning the purchase and sale by
the Purchaser of 100% of all the shares in FA and AI.
1.3 The price for the FA Shares and the AI Shares sold by the Vendor to PRG
pursuant to this Agreement is paid by PRG by the delivery at the date
hereof and in accordance with this clause 1.3 of 421 138 shares of no
par value common stock of PRG (the "STOCK") subject to the restrictions
set forth in ANNEX 2 and subject further to the condition that such
Stock is not delivered to the Vendor and is immediately pledged and
delivered to the Interim Escrow Agent Arnall Golden & Gregory, LLP in
Atlanta, Georgia, United States of America, pursuant to the Indemnity
Escrow and Stock Pledge Agreement, referred to in clause 1.5 below,
which condition is the fundamental condition on which the Purchaser has
agreed to acquire all FA and AI Shares, including the FA and AI Shares
purchased pursuant to this Agreement.
1.4 The price for the FA Shares and AI Shares sold by the Vendor to the
Agent is US $ 10 460 178,63 paid at the date hereof by way of bankers
draft.
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<PAGE>
1.5 In accordance with clause 1.3 above, concurrently with the execution of
this Agreement, the Vendor has executed and delivered that certain
Indemnity and Escrow Agreement (the "ESCROW AGREEMENT") among PRG, the
Agent, the Vendor, Marc Eisenberg, Eric Eisenberg and Arnall Golden &
Gregory, LLP of Atlanta, Georgia, United States of America, as Escrow
Agent, and has deposited with Escrow Agent (together with appropriate
share transfer forms), all of the PRG Stock free and clear from any
Encumbrances. The Vendor warrants, covenants and undertakes with
Purchaser and Escrow Agent that it has all capacity and authority to so
execute this Agreement and the Escrow Agreement, and deposit and pledge
the PRG Stock pursuant thereto.
2. WARRANTIES BY PRG
PRG hereby represents warrants, covenants and undertakes to the Vendor
as set out in ANNEX 3 of this Agreement.
3. FURTHER ASSURANCES
At any time after the date hereof the Vendor shall without charge to the
Purchaser execute all such documents and do such acts and things as the
Purchaser may reasonably require for the purpose of vesting in PRG and/or the
Agent with the full legal and beneficial title to the FA Shares and the AI
Shares referred to in ANNEX 1 and giving to the Purchaser the full benefit of
this Agreement and the Escrow Agreement.
4. GUARANTEE
The obligations of PRG and of the Agent hereunder shall be joint and
several and PRG hereby guarantees the obligations of the Agent hereunder.
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 the FA Shares
and the AI Shares in Section 1 of ANNEX 1 with the intention of immediately
transferring them to the Agent on behalf of PRG France SA in the process of
being formed.
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<PAGE>
6. GOVERING LAW AND RULING VERSION
6.1 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.
6.2 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 in
English.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, at
Broadwalk House, 5 Appold Street, London EC2A 2HA, England, as of the date first
above written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
By Mr Clinton McKellar, Jr,
Title: Senior Vice President and General Counsel
/s/ Clinton McKellar, Jr.
- --------------------------------
MR CLINTON MCKELLAR, JR, AS "MANDATAIRE"
FOR THE SHAREHOLDERS OF PRG FRANCE S.A. IN FORMATION
BANQUE INTERNATIONALE A LUXEMBOURG SA
By: /s/ Jean Bodoni
__________________________
Title:Directeur
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<PAGE>
LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 Schedule of Shares Sold
Annex 2 Warranties of Vendor
Annex 3 Warranties by PRG
SHARE PURCHASE AGREEMENT
Dated 7 October 1997
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
(2) THE SHAREHOLDERS IN THE PROCESS OF CONSTITUTING PRG
FRANCE SA
- and -
(3) BANQUE INTERNATIONALE A LUXEMBOURG S.A.
---------------
SHARE PURCHASE AGREEMENT
for the acquisition of share capital of Alma Intervention SA
---------------
<PAGE>
THIS AGREEMENT is made on 7 October 1997.
BETWEEN:
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC, a Georgia corporation
("PRG"), Clinton McKellar, 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 which expression includes each or any of them being called together
the "PURCHASER");
(2) BANQUE INTERNATIONALE A LUXEMBOURG S.A. ("VENDOR").
IN CONSIDERATION OF THE MUTUAL REPRESENTATIONS, WARRANTIES AND COVENANTS HEREIN
CONTAINED, THE PARTIES AGREE AS FOLLOWS:
1. SALE AND PURCHASE
1.1 The Vendor sells to PRG and PRG purchases from the Vendor (i) the
number of shares in Alma Intervention SA ("AI") of which the
Vendor is the owner as set out in Section 1 of ANNEX 1, and (ii)
the Vendor sells and the Agent purchases the number of shares in
AI of which the Vendor is the owner as set out in Section 2 of
ANNEX 1, in each case with effect from 1 October 1997 free from
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
(the "ENCUMBRANCES"), and together with all accrued benefits and
rights attaching thereto and all dividends declared after the 30
June 1997 in respect of the all such shares in AI (collectively
the "AI SHARES").
As at date hereof the Vendor delivers to the Purchaser the shares
transfer forms relating to all the AI Shares referred to in ANNEX
1 duly signed and completed in favour of the Purchaser and the
Agent, as appropriate.
1.2 The Vendor hereby represents, warrants, covenants and undertakes
with the Purchaser (so as to bind it, its personal
representatives, successors and assigns) as follows:
1.2.1 that Vendor has the right to dispose of the AI Shares which
it sells to Purchaser;
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<PAGE>
1.2.2 that Vendor is disposing of the AI Shares free from any
Encumbrances together with all such rights now or hereafter
attaching thereto, including the right to all dividends and
other distributions (if any) declared, after 30 June 1997;
1.2.3 as set out in ANNEX 2 to this Agreement;
1.2.4 that Vendor hereby unconditionally remise, release and
forever discharges Financiere Alma SA ("FA"), AI, and all
subsidiaries and affiliates of FA and AI, the Purchasers
and all subsidiaries and affiliates of PRG, and all
officers and directors of any and all of the foregoing
entities (collectively the "RELEASED PARTIES") from all and
any claims whatsoever Vendor may have against any and all
of the Released Parties;
1.2.5 that Vendor hereby waives and releases any and all right,
title and interest of any nature whatsoever in FA, AI or
any of their subsidiaries and affiliates, or the business,
assests or profits of same arising out of, resulting from
or relating to any agreement, oral or written, by law or
otherwise, including but not limited to any investment
agreement, loan agreement, shareholders' agreement or the
like;and
1.2.6 that Vendor acknowledges that Mr Marc Eisenberg has made
available all information concerning the purchase and
sale by the Purchaser of 100% of all the shares in FA and
AI.
1.3 The price for the AI Shares sold by the Vendor to PRG pursuant to
this Agreement shall be paid by PRG by the delivery of 125,189
shares of no par value common stock of PRG (the "STOCK"). The
Vendor acknowledges and agrees the the Stock is subject to the
restrictions set forth on ANNEX 2 to this Agreement.
1.4 The price for the AI Shares sold by the Vendor to Agent is US $
3,252,799.04 paid at the date hereof by way of bankers draft.
1.5 The Vendor warrants, covenants and undertakes with that it has all
capacity and authority to so execute this Agreement and to perform
its obligations hereunder.
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<PAGE>
2. WARRANTIES BY PRG
PRG hereby represents warrants, covenants and undertakes to the Vendor as
set out in ANNEX 3 of this Agreement.
3. FURTHER ASSURANCES
At any time after the date hereof the Vendor shall without charge to the
Purchaser execute all such documents and do such acts and things as the
Purchaser may reasonably require for the purpose of vesting in PRG and/or the
Agent with the full legal and beneficial title to the AI Shares referred to in
ANNEX 1 and giving to the Purchaser the full benefit of this Agreement and the
Escrow Agreement.
4. GUARANTEE
The obligations of PRG and of the Agent hereunder shall be joint and
several and PRG hereby guarantees the obligations of the Agent hereunder.
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 the AI Shares
in Section 1 of Annex 1 with the intention of immediately transferring them to
the Agent on behalf of PRG France SA in the process of being formed.
6. GOVERING LAW AND RULING VERSION
6.1 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.
6.2 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 in
English.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement at Broadwalk
House, 5 Appold Street, London EC2A 2HA, as of the date first above written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
/s/ Clinton McKellar, Jr.
- --------------------------------
By: Clinton McKellar, Jr.
Title: Senior Vice President and General Counsel
/s/ Clinton McKellar, Jr.
- --------------------------------
MR CLINTON MCKELLAR, JR, AS "MANDATAIRE"
FOR THE SHAREHOLDERS OF PRG FRANCE S.A. IN FORMATION
BANQUE INTERNATIONALE A LUXEMBOURG SA
By:/s/ Jean Bodoni
- --------------------------------
Title: Directeur
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<PAGE>
LIST OF SCHEDULES AND/OR ANNEXES
Annex 1 Schedule of Shares Sold
Annex 2 Warranties of Vendor
Annex 3 Warranties by PRG
WARRANTY AGREEMENT
THIS WARRANTY AGREEMENT is made on 7 October 1997.
BETWEEN:
(1) THE PROFIT RECOVERY GROUP INTERNATIONAL, INC, a Georgia corporation
("PRG"), Clinton McKellar, Jr, acting as Agent (mandataire) in the name
and on behalf of PRG France SA, a French corporation in the process of
formation ("AGENT") (which expression shall on formation of PRG France
SA mean PRG France SA), PRG France SA ("PRG FRANCE SHAREHOLDER"), 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 (together the "PRINCIPALS").
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) 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.
(C) The Purchaser has today purchased for US $ 24,601,758 in cash and US $
858,827 in Stock of PRG all the shares of Financiere Alma SA ("FA") and
39.42 per cent of all the shares of Alma Intervention SA ("AI"), the
remaining shares of AI being owned by FA. Such purchases have been made
persuant to the various sale agreements made today between the Purchaser
and respectively (1) Marc Eisenberg and Eric Eisenberg, (2) Epargne
Capitalisation Intermediaire and Epargne Developpement, (3) Sophie
Davet, (4) the individuals who are employees of AI and (5) Banque
Internationale a Luxembourg. The Purchaser has also today agreed to
purchase from certain other employees of AI their 206 shares in AI to be
paid as to US $ 398,244 in cash and as to 13 900 in Stock of PRG. Copies
of all such agreements are attached hereto.
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<PAGE>
IT IS THEREFORE AGREED AS FOLLOWS:
1. DEFINITIONS
1.1 The following words and expressions and abbreviations shall, unless the
context otherwise requires, have the following meanings in this
Agreement:
"ALL THE VENDORS" means all the vendors persuant to All the Share Sale
Agreements;
"ALL THE SHARE SALE AGREEMENTS" means all the share sale agreements
referred to in Recital (C) above;
"AI" means Alma Intervention SA registered at Evreux under number B 339
602 195;
"AI SHARES" means all the shares in the capital of AI as set out in
Annex 1;
"ALMA GROUP" or the "COMPANY" means FA, and the Subsidiaries, all of
them or each of them as the context admits;
"ACCOUNTS 1996" means the audited consolidated financial statements of
FA and Subsidiaries, comprising the consolidated balance sheet and
related consolidated statements of earnings, shareholders' equity and
cash flows, prepared in accordance with US GAAP, as of and for the year
ended December 31, 1996 attached hereto at Annex 3;
"ACCOUNTS 1995" means the audited consolidated financial statements of
FA and Subsidiaries, comprising the consolidated balance sheet and
related consolidated statements of earnings, shareholders' equity and
cash flows, prepared in accordance with US GAAP, as of and for the year
ended December 31, 1995 attached hereto at Annex 4;
"JUNE ACCOUNTS" means the audited consolidated financial statements of
FA and Subsidiaries, comprising the consolidated balance sheet and
related consolidated statements of earnings, shareholders' equity and
cash flows, prepared in accordance with US GAAP, as of and for the
six-month period ended June 30, 1997 attached hereto at Annex 5;
"CHANGE OF CONTROL" means the acquisition, directly or indirectly, by
any person or entity other than a current shareholder of PRG, of 35% or
more of the voting power of PRG. For the purposes of this paragraph,
"voting power" of PRG means the total number of votes which may be cast
by the holders of the total number of outstanding shares of stock of
any class or classes of PRG in any election of directors of PRG;
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<PAGE>
"CLAIM" means any claim asserted by Purchaser against the Principals
pursuant to this Agreement and the date of any Claim shall be the first
date that either of the Principals is first notified in writing of such
Claim;
"CLAIM AMOUNT" means the amount of any Claim before reduction for any
applicable Deductible;
"CLAIMS FOR TAXES SUR LES SALAIRES ET ORGANIC" means the list of
specific claims filed by AI with the appropriate tax authorities on
behalf of AI's customers prior to the Completion Date as set out in
Annex 7 hereto;
"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;
"DEDUCTIBLE" means with respect to any Claim, in respect of which a
Deductible applies, US $ 400,000, (i) increased by the sum of (a) the
amount by which the cumulative amounts actually collected at the end of
a financial year with respect to the Receivables at Completion exceeds
the amount of the Net Receivables and (b) the amount by which any
specific reserve established by Alma Group for a particular litigation
as reflected in the June Accounts to the extent that such reserve
remained in place at Completion exceeds the liability incurred by Alma
Group as a result of reduction of such litigation reserve made in the
financial statements of Alma Group prepared under US GAAP as determined
by the Conseil de Surveillance of AI at the end of a financial year and
(ii) reduced (but not below zero) by the aggregate Deductibles for all
previous Claims. In no event shall a Deductible exceed the Claim to
which it relates;
"DISCLOSURES" means the matters set out in the Warranty Schedules
referred to below;
"DORMANT COMPANIES" means Almatel SARL, Alma Sud SARL and Cabinet
Brossard SARL;
"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;
"ESCROW AGENT" means Arnall Golden & Gregory, LLP;
"ESCROW STOCK" means the Stock pledged and deposited with the Escrow
Agent persuant to the Indemnity Escrow and Stock Pledge Agreement;
"FA" means Financiere Alma SA registered at Evreux under number B 393
066 055;
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<PAGE>
"FA SHARES" means all the shares in the capital of FA as set out in
Annex 2;
"FINANCIAL STATEMENTS" means the Accounts 1995 and the Accounts 1996;
"FRENCH GAAP" means French Generally Accepted Accounting Principles;
"INDEMNITY ESCROW AND STOCK PLEDGE AGREEMENT" means an agreement to be
entered into on Completion between the Purchaser, the Escrow Agent and
the Principals and Banque Internationale a Luxembourg in the form of
Annex 8 hereto;
"NACC SA" means Negociation Achat Creances Contentieuses SA;
"NET CLAIM AMOUNT" means the Claim Amount, less any applicable
Deductible;
"NET RECEIVABLES" means the Receivables at Completion less any
allowance for doubtful receivables at Completion (excluding any
allowance for doubtful receivables for claims relating to "Taxe sur les
salaires et organic");
"OPQCM" means Office Professionnel de Qualification des Conseils en
Management of 6, rue Louis Pasteur, BP 124, 92106 Boulogne Billancourt;
"PRG GROUP" means PRG and its subsidiaries as the same may exist from
time to time;
"THE PRINCIPALS" means Mr Marc Eisenberg of 14, rue Margueritte, 75017
Paris and Mr. Eric Eisenberg of 4, rue Juliette Lambert, 75017 Paris;
"PROPERTIES" means the properties described in the Warranty Agreement,
or any part or parts thereof and
"PROPERTY" means any of the Properties;
"RECEIVABLES AT COMPLETION" means the gross trade and other receivables
(excluding receivables for claims relating to "Taxe sur les salaires et
organic", of FA, AI and the Subsidiaries as at the Completion Date as
attached hereto at Annex 9;
"REORGANISATION" means the reorganisation of the Alma Group to be
effected by the Vendors and the Company and the Subsidiaries, described
in Annex 10 hereof;
"REORGANISATION POST COMPLETION" means the actions to be taken after
Completion necessary to complete the Reorganisation including
completion of the Reorganisation referred to in Annex 10 hereof;
"STOCK" means shares of the common stock of PRG of no par value per
share to be held persuant to the Indemnity Escrow and Stock Pledge
Agreement;
"SUBSIDIARY" or "SUBSIDIARIES" means the subsidiaries of FA, details of
which are set out in schedule 3, all of them or each of them as the
context admits being AI, STEP SA, Club Affaires SA, Meridian Club
France SARL, B & F & Associes SARL;
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<PAGE>
"UNDERLYING ACCOUNTS" means the Financial Statements excluding any
adjustments necessary to convert the Financial Statements from French
GAAP to US GAAP which US GAAP adjustments are attached thereto attached
hereto at Annex 6.
2. REPRESENTATIONS AND WARRANTIES
The Puchaser has only agreed to purchase the FA Shares and the AI
Shares sold or to be sold persuant to All the Share Sale Agreements on
the basis of the undertakings representations and warranties contained
in this Warranty Agreement (the "WARRANTIES") by the Principals, and
the entering into of the Indemnity Escrow and Stock Pledge Agreement.
The Principals therefore represent and warrant that the Warranties
(together with the Disclosures) are true and accurate at the date
hereof.
Where Warranties are qualified by the words "To the best of the
Principals knowledge" or any other similar expression, this
qualification will be valid against the Purchaser from such time as the
Principals are able to show that they checked reasonably the accuracy
of the representations and warranties so qualified.
2.1 Any information supplied by or on behalf of the Company to the
Principals or their agents or accountants, lawyers or other advisers in
connection with the Warranties, the Disclosures or otherwise in
relation to the business and affairs of the Company shall not
constitute a representation or warranty or guarantee to the Principals
as to the accuracy thereof by the Company and the Principals hereby
waive any and all claims which they might otherwise have against the
Company or any of their respective agents or employees in respect
thereof.
2.2 Each of the Warranties shall be construed as an independent and
separate representation, warranty, covenant or undertaking (as the case
may be) and (save as expressly provided to the contrary) shall not be
limited by the terms of any of the other Warranties or by any other
term of this Warranty Agreement.
2.3 No information relating to the company of which the purchaser has
knowledge (actual or constructive) other than that contained in or
referred to in this warranty agreement and/or included in the
disclosures and no investigation by or on behalf of the purchaser shall
prejudice any claim by the purchaser under the warranties or operate to
reduce any amount recoverable hereunder.
The principals shall give to the purchaser and its representatives (so
long as either one of them is in a managerial position with the alma
group enabling them to do so) after completion all such information and
documentation relating to the company as the purchaser shall reasonably
require to enable it to satisfy itself as to the accuracy and
observance of the warranties.
Where in the warranties, the word "material" qualifies any event, this
qualification will mean that such event would have a significant
adverse effect on the financial position the assets, or business
(patrimoine) the functioning, the structure or prospects of the alma
group.
On each occasion on which any of the warranties contains a
qualification or exclusion, such qualification and exclusion is set out
in a warranty schedule to this warranty agreement with the same
reference number as the representations and warranties concerned. Only
those facts or events which are expressly referred to in this warranty
agreement or in the warranty schedules hereto shall be admitted as
limiting the obligations of the principals under this warranty
agreement and then only to the extent indicated.
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<PAGE>
3. WARRANTIES BY THE PRINCIPALS
3.1 The principals hereby represent warrant covenant and undertake to the
purchaser as set out in this clause 3.
3.2 AUTHORITY AND POWER
All the vendors have all the powers, rights, authorities and the
capacity required to transfer the FA shares and the AI shares to the
purchaser and in particular, to initial, execute and perform all the
share sale agreements as well as to carry out all other acts relating
thereto or envisaged therein, which constitute firm and validly binding
obligations between the parties thereto.
None of all the vendors is the subject of any bankruptcy or any
proceedings instituted within the context of the prevention or
treatment of business difficulties or a decision to wind-up, and there
is no reason suggesting that any of all the vendors will be the subject
of such proceedings or such a decision. None of all the vendors is
within a doubtful period (periode suspecte) in the sense of the law
relating to collective procedure (procedure collective).
3.3 SALE OF SHARES
The FA Shares represent 100% of the share capital and voting rights in
FA and the number of FA Shares owned by each owner of FA Shares are set
out in Annex 3.3 (a). The AI Shares represent 100% of the share capital
and voting rights in AI and the beneficial and legal owners of the AI
Shares and the number of AI Shares owned by each such owner are set out
in Annex 3.3 (b). All the Vendors being the owners of the FA Shares and
the owners of the AI Shares and have full rights of disposal and
enjoyment and can sell such shares to Purchaser pursuant to All Share
Sale Agreements without any restriction.
The various operations necessary for the successful completion of the
sale of the FA Shares and the AI Shares by All the Sale Agreements have
been carried out in accordance with the regulations in force and have
validly transferred title to the FA Shares and the AI Shares to the
Purchaser at Completion.
The transfer of title to the FA Shares and the AI Shares to the
Purchaser persuant to All the Sale Agreements and does not breach and
transfer of titles to the FA Shares and the AI Shares and will not
breach, any of FA or AI's or All the Vendors contractual or other
obligations and is not contrary to any laws or regulations applicable
to FA or AI or All the Vendors
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<PAGE>
3.4 CONSTITUTION AND BUSINESS
3.4.1 The company has been duly incorporated in accordance with the laws and
regulations in force at the date of incorporation and continues to
exist legitimately. Its statuts and the functioning of the corporate
bodies within the company are in accordance with the laws and
regulations in force.
The extraits k-bis (french company searches) and the statuts of the
company are attached at Warranty Schedule 3.4.1 And within 7 days will
be accurate, complete and fully up to date.
3.4.2 The share capital of the company is fully paid up except for the share
capital of step sa as indicated in Warranty Schedule 3.4.2.
3.4.3 The list of directors and statutory auditors of the company is set out
in Warranty Schedule 3.4.1 And within 7 days will be accurate and fully
up to date.
3.4.4 All decisions taken and undertakings given by the corporate bodies
within the company and/or its directors and managers were validly
taken, duly authorised or ratified by the competent corporate bodies in
accordance with law and regulations and with the statuts of the company
and, where necessary, validly recorded in the company registers, in
particular any agreements referred to in article 101 and following of
the law of 24 july 1966 were duly authorised;
3.4.5 THe minute books and the registers and records of attendance of the
company's corporate bodies comply with the regulations in force and all
the signatures and initials relating to the decisions of the company's
corporate bodies have been placed thereon. These registers are up to
date and faithfully reflect the operations referred to therein.
3.4.6 All of the necessary formalities of publicity arising from the
decisions taken by the company's corporate bodies have been observed,
by way of advertisements placed in the legal press and at the register
of commerce in accordance with the applicable laws and regulations.
3.4.7 All of the accounting books, documents, registers and files required by
the applicable regulations have been kept by the company, and are in
its possession, and contain information which is accurate, up to date
and has been established in accordance with applicable laws and
regulations.
All agreements and other documents proving title to the company's
assets and the originals of all the contracts in force entered into by
the company which should be in its possession are actually in its
possession.
3.4.8 The businesses of the company do not require the obtaining of any
permits, consents or authorisations other than in the case of AI
membership of OPQCM. AI is a member in goodstanding of opqcm..
Morever, the principals warrant represent and undertake to the
purchaser that at the date hereof the principal activity of AI is the
lawful business of management consultancy in the field of finance and
management ("Finance et Gestion"). In particular the principal activity
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of AI is not that of giving legal advice or consultations ("Des
Consultations Juridiques") or drafting or issuing private acts ("actes
sous seing prive") and in any event any activities of AI which could be
considered as those of giving legal advice or consultations relate
directly to such principal activity and any activities of AI which
could consist of drafting or issuing private acts would constitute a
necessary accessory of such principal activity and as a member of opqcm
AI lawfully carries on its activities within the scope of the law
n(degree) 71 113089, 31 december 1971 as modified by the law n(degree)
90 12599, 31 december 1990.
In the context of the debate about giving legal advice or consultations
or drafting or issuing private acts and of the conflict which has been
going on in france for several years between lawyers and the other
professions who give legal advice or consultations or draft private
acts, several disputes have taken place between lawyers and audit or
accounting firms or management consultancy firms, of the kind similar
to ai, and the press have widely reported some of these disputes.
The purchaser acknowledges that the principals have advised them that
AI has received since 1993 claims or inquires coming from lawyers or
professional organisations of lawyers and in particular, from the
"ordres des avocats" of paris and of hauts-de seine, from the "institut
des avocats et conseils specialises en droit fiscal" and from
fidal-kpmg.
The principals warrant, represent and undertake to the purchaser (i)
That AI answered these claims or inquiries by giving all appropriate
explanations and justifications and that as at the date hereof they
have never given rise to any legal procedure or action and (ii) that
all material correspondence in respect of such claims and inquiries is
contained in warranty schedule 3.4.8 And (iii) these claims and
inquiries are the only claims or inquiries of material significance,
and (iv) except as disclosed in warranty schedule 3.4.8 There have been
no claims or inquiries of any nature since 1 January 1997.
3.4.9 The company has not made and is not making any call for public
investment (appel public a l'epargne).
3.4.10 No resolution to dissolve or liquidate the company has been taken by
its shareholders.
No demand or declaration has been made with a view to the legal redress
(redressement judiciaire) or liquidation of the company and it is not
and is not likely to enter into a state of ceasing to make payments or
be the subject of any collective procedure (procedure collective) or of
any warning procedure (procedure d'alerte) or other similar procedure.
No legal administrator has been appointed to manage all or any part of
the assets or business (fonds de commerce) of the company.
3.5 REORGANISATION
The vendors have completed or initiated the reorganisation of the alma
group as follows:
(i) the shares of the subsidiaries other than ai, not previously
owned by ai, have been transferred to AI on the terms and
conditions set out in warranty schedule 3.5. Ai is now
therefore the legal owner of 100% of the share capital of the
subsidiaries;
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(ii) any special or priority rights attaching to any shares in ai
have been removed with no cost including tax cost to ai;
(iii) the annual shareholders meeting of alma held on 28 august 1997
has approved the principle of the absorption of FA and step SA
by AI, by way of a merger. AI's works council has been
consulted on the merger and has given a positive opinion
thereon;
(iv) all of the shares of nacc sa have been transferred by FA to Mr
Marc Eisenbergfor their net value in the books of FA which has
been paid by Mr Marc Eisenberg to FA and any guarantees and
security given by the company in respect of NACC SA has been
released at no cost to the company.
The principals represent that all of the costs for the company arising
out of resulting from or relating directly to the reorganisation
whether incurred before or after completion, including the mergers
described in (iii) above, including the costs of statutory and special
auditors (commissaires a la fusion et aux apports), the registration
and publication costs, transfer taxes (droits de mutation) lawyers fees
and tax cost shall not exceed $ 70,000 and that the principals will be
Responsible for any such costs in excess of US $ 70,000.
3.6 SHARES
3.6.1 Each of the shares in the company gives the same rights over the
profits of the company and the same voting rights at general meetings
of the company as all the other shares.
3.6.2 The shares in the company comprise one class only. No preference shares
exist nor more generally do any shares granting special rights or
subject to special restrictions exist, whether such special rights or
restrictions be in respect of the shares themselves, their holders, the
duration of holding of the shares or any other matter.
3.6.3 The shares of the company have been validly issued, fully paid-up
(except for the share capital of step sa), are freely transferable and
negotiable and are free from any encumbrances and are not the subject
of any dispute.
In particular, except as specified in warranty schedule 3.4.1, The
statuts of the company contain no clauses of consent, pre-emption, or
any other provision of such a nature as to restrict in any manner the
freely transferable and negotiable nature of the shares of the company
and any such clauses or provisions have been lawfully waived or
surrendered to enable the sale of the FA shares and the AI shares to
the purchaser pursuant to the sale agreement and the other sale
agreements to lawfully take place.
3.6.4 All of the shares or other corporate rights that the company holds in
any legal person or entity are set out in warranty schedule 3.6.4 Along
with the form and nationality of such legal person or entity. Such
shares and corporate rights are free from any encumbrances.
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The company does not possess or hold, directly or indirectly any
securities or other corporate rights, other than the shareholdings in
the dormant companies, any shareholding in another company, legal
person or company de jure or de facto (whatsoever it may be), or other
entity with or without legal personality (including societes civiles
immobilieres, economic interest groups (groupements d'interet
economique) or societes en participation), and nor is the company party
to any agreement or shareholders' agreement, including "joint
ventures", societe en participation, or agreements for the holding of
shares in the place of the original owner (convention de croupier). The
company does not hold the position of director, de jure or de facto, in
any company or entity having legal personality or not, and will not be
pursued for any liability jointly and severally and/or indefinitely.
3.6.5 The company has not issued any shares or corporate rights other than
that set out in Warranty Schedule 3.6.4 And the company has no
obligation, in particular legal obligations and obligations resulting
from a decision of the company to issue suchshares or corporate rights,
and no authorisation has been given or delegation made to the company's
corporate bodies to go ahead with any modifications, even if deferred,
to the share capital of the company or to issue any shares or corporate
rights whatsoever, and no restriction has been Placed on voting rights
attaching to the company's shares or corporate rights and nor is the
placing of any such restriction in progress.
3.6.6 The company has not granted any option conferring a right to purchase,
acquire, sell, exchange or subscribe for securities or loan stock and
more generally, there is no shareholders' agreement or other agreement
existing, as distinct from the statuts (engagement extra-statutaire) in
place which affects the company and or the company's shares.
3.6.7 The up to date list of the company's shareholders, which specifies the
number of shares held by each shareholder, is set out in warranty
schedule 3.6.4. The dormant companies are dormant and have no liability
whatsoever and their liquidation will not cause any cost (including tax
cost) whatsoever exceeding in total frf 50,000 (and the principals will
be responsible for any costs in excess of frf 50,000) and apart from
those companies mentioned in the financial statements and in warranty
schedule 3.6.4 There are no other companies or entities of whatever
description in the alma group.
3.6.8 The company's shareholder accounts and the register of share movements
have been kept up to date and are in accordance with the regulations in
force
3.7 EFFECT OF THE SALE OF THE FA SHARES AND THE AI SHARES
Except as disclosed in Warranty Schedule 3.7 the sale of the FA Shares
and the AI Shares to the Purchaser persuant to: All the Sale Agreements
will not, to the best of the Principals knowledge, have any effect upon
the legal position of the Company nor its rights and obligations in
respect of third parties and in particular will not give rise to, to
the best of the Principals knowledge inter alia:
(i) any breach of a legal, regulatory or statutory provision, or
of any agreement, obligation or decision, whether legal or
otherwise;
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(ii) the challenging of any grant, premium, exemption from
liability, tax relief, interest rebate loan or other benefit;
(iii) any early termination of or variation to contracts, in
particular contracts with clients or customers of the Company,
leases, equipment and building financing agreements (contrats
credit-bail), and supply agreements;
(iv) the early repayment of any loan or financing granted to the
Company;
(v) any obligation to pay a bonus or compensation to any of the
employees or directors or managers of the Company;
(vi) any preferential tax or employment regime, whether or not such
an action results from any consent;
(vii) liability for taxes, fees or other charges other than the
registration fees of 1% of value due, up to a limit of twenty
thousand French francs (FRF 20,000) per sale by reason of the
sale of the Shares and the AI Shares;
(viii) any fee whatsoever for the removal of a guarantee, security,
comfort letter or any other document of a similar nature
issued as security or as support for the Company's
commitments;
(ix) the registration or creation of any pledge or security
whatsoever over the assets of the Company; and
(x) any effect or restraint or restriction on the ability of the
Company to carry on its businesses and to provide its
services.
3.8 FINANCIAL STATEMENTS
3.8.1 The Underlying Accounts have been drawn up in accordance with French
GAAP in a manner coherent and consistent with previous financial years.
3.8.2 The Underlying Accounts and the June Accounts are consistent and
genuine and give a faithful and genuine picture of the financial,
contractual and commercial situation of the Company, its businesses
(assets and liabilities) and the consolidated results of operations of
FA and Subsidiaries at their respective dates.
Except as set out in Warranty Schedule 3.15, the Underlying Accounts
and the June Accounts show the whole of the liabilities and obligations
of FA and its Subsidiaries, owing or due in the future, as at their
respective dates.
3.8.3 No writing down period in respect of any part of the assets in the
Underlying Accounts or the June Accounts is longer that the expected
life span of the assets in question. No depreciation carried out by the
Company is greater that the amount permitted by the tax authorities in
respect of the calculation of corporation tax.
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All potential risks and charges of any nature burdening or likely to
burden the Company have been provided for in the Underlying Accounts
and the June Accounts in accordance with the laws and regulations and
French GAAP, which in the case of French GAAP have been applied
consistently in previous years.
All the transactions carried out by the Company have been properly
recorded in its accounting books and registers and are reflected in the
Underlying Accounts and the June Accounts at their respective dates.
3.8.4 Ownership of goods and assets
Except as specified in Warranty Schedule 3.8.4, the Company holds the
valid and incontestable right of ownership over all of the goods and
assets which it uses, whether movable or immovable, tangible or
intangible, whether or not included in the Financial Statements and
those acquired subsequent to the respective dates of the Financial
Statements.
Except as specified in Warranty Schedule 3.8.4, the Company holds the
title to all of the goods and assets and none of such title nor any of
the goods and assets are subject to any Encumbrances or preferential
rights nor has any contract or undertaking to agree to any preferential
rights been entered into.
Except as specified in Warranty Schedule 3.8.4, none of the goods and
assets used or leased by the Company is the property of the Principals
or affiliates of the Principals, or as the case may be, members of
their families.
The goods and assets which have become obsolete by reason of
technological advances, or any other reason, have been provided for in
the accounts at their real value.
The Principals and the Company have not been informed of any claim
allowing anybody to take an Encumbrance or preferential right over the
goods and assets of the Company.
3.8.5 Except as specified in Warranty Schedule 3.8.4 (b) and in respect of
salaries fees and commissions in respect of services rendered to the
Company,the Company has no indebtedness or obligation whatsoever to any
of All the Vendors.
3.9 INTELLECTUAL PROPERTY
3.9.1 The company is the legitimate owner of its company name, the use of
which to the best of the principals knowledge is not open to any claim
or objection of any sort.
For the purposes of this article 3.9, the intellectual and industrial
property rights means inventions, patents and patent applications,
trademarks, whatever the stage of their registration, trading names,
company names, designs and forms whether published or not, moulds,
copyright, software, know-how and technology or other intellectual or
industrial property rights (the "intellectual property rights").
3.9.2 The Company owns or uses the Intellectual Property Rights in accordance
with valid licences, the software and know-how and computer technology
which it uses in its business.
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3.9.3 The Company does not need any Intellectual Property Rights other than
those which are set out in Warranty Schedule 3.9.3 in order to carry
out their business.
3.9.4 To the best of the Principals knowledge, the Company has not breached,
in particular by way of infringement, any third party Intellectual
Property Rights nor is of the Company responsible for any act of unfair
competition in respect of any such rights and no claim, proceedings or
action has been brought or is about to be brought the Company in
relation to any of the Intellectual Property Rights set out at 3.9.3
above.
3.10 RECEIVABLE DEBTS
Except as stated in the financial statements and the june accounts, the
commercial and other receivable debts of the company contained in the
financial statements and the june accounts, together with those
contracted after the date of the financial statements and the june
accounts, are valid and recoverable and have been received or, as
appropriate, will be received in full for the nominal amount due,
within the usual period for payment from the date of billing granted by
the company.
Attached as warranty schedule 3.10 Is a true, correct and complete
listing of the net receivables at completion, such net receivables at
completion are valid and recoverable and will be received in full for
the nominal amount due, within the usual period for payment from the
date of billing granted by the company.
The company has not entered into any factoring agreement in respect of
its receivable debts or otherwise.
The purchaser acknowledges that the principals have advised the
purchaser that it is the company's policy and the company's obligation
(as disclosed in Warranty Schedule 3.15) To reimburse fees received
from customers if the savings made by such customers following the
company's involvement is subsequently challenged by any relevant
authority and the client is required to refund or repay the savings.
3.11 COMMERCIAL LEASES - PROPERTIES
3.11.1 Warranty Schedule 3.11.1 contains copies of contracts in respect of all
buildings occupied by the company by virtue of (i) commercial leases
governed by the law of 30th september 1953 (the "Leases"), (ii)
construction leases governed by the law of 31 may 1978 (the
"Construction Leases"), (iii) finance lease contracts (contrats de
credit-bail) governed by the law of 2nd july 1966 (the "finance
leases"), (iv) business management contracts (contrats de location
gerance) and (v) all other agreements for occupation, of whatever
nature (together the "Property Contracts").
3.11.2 To the best of the Principals knowledge, the Company materially
complies with the provisions of the Property Contract, the Property
Contracts are valid andare not likely to be cancelled or annulled
except in accordance with their terms. The amount of rent in respect of
each of the Property Contracts is set out in Warranty Schedule 3.11.2.
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3.11.3 As at the date of this Agreement, the Company has not been informed of
any increase in the rent or charges due in respect of the Leases or the
rates of interest relating to the Finance Leases.
3.11.4 The Company has given proper and lawful notice to leave and has no
liability in respect of any building or premises which it leased in the
past but does not now use or occupy.
3.11.5 Except as specified in Warranty Schedule 3.11.5, the Company has not
granted any sub-lease or right of residency, in whole or in part, or
any other right to any third party whatsoever, of the premises which
are the subject of the Property Contracts.
3.11.6 The Company owns no immovable property or real estate and has no
commitments in respect of any such.
3.11.7 To the best of the Principals knowledge, all the properties leased by
the Company (the "PROPERTIES") are occupied in accordance with the use
for which they are intended. To the best of the Principals knowledge,
their construction, occupation and use by the Company is all in
accordance with law and regulations, including without limitation, in
the areas of planning, health and safety and the environment.
The Properties are not and will not be the subject of any planning or
construction order or any other order which might reduce their value.
No notice is currently in force against the Company from any competent
authority which gives notice of a breach of any provision of the
Town-Planning Code (Code d'Urbanisme) or the Construction and Housing
Code (Code de la Construction et de l'Habitation) or any other
legislation or regulation relating to the Property or the use thereof,
including any local and municipal regulations or any orders.
None of the Properties is situated in an insanitary housing block, or
is the subject of a hazard order or of any measure forbidding
occupation or ordering the eviction of its occupiers. None of the
Properties is situated in a ZAD (zone d'amenagement differe), ZUP (zone
a urbaniser en priorite), ZAC (zone d'amenagement concerte) or other
zone of land, whatever its legal nature, which is governed by a
specific legal regime which derogates from the common law.
All of the Properties are in a good state of repair, in a stable
condition and fit for the purposes for which they are used.
3.12 MOVABLE PROPERTY NOT BELONGING TO THE COMPANIES
Subject to the contents of warranty schedule 3.8.4 (B), the company
does not rent any movable property with a value greater than frf
100.000, In particular, within the context of finance lease contracts
(contrats de credit-bail) or contracts for long-term occupation, and
the company has not entered into any other contracts of occupation
granting an option to acquire the ownership of the movable property
leased to the company at the end of a certain
time period.
None of the goods and assets referred to in warranty schedule 3.8.4 (B)
has been repossessed by its owner and the company is not in breach of
any contractual, statutory or other provision which would allow the
owner of the goods and assets referred to above to
repossess such goods and assets.
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3.13 CONTRACTS
3.13.1 The company is validly bound to all of the contracts and undertakings
to which it is party or of which it has the benefit (the "Contracts").
As at the date hereof the principals are not aware that the company has
breached any of its contractual obligations.
Warranty Schedule 3.13.1 contains copies of the standard business
service forms used by the Company.
3.13.2 To the best of the Principals knowledge, there is no event likely to
(i) lead to the nullification or early termination of the Contracts, or
(ii) permit a third party to such contract to demand early payment, or
such third party make the Company liable in respect of the Contracts.
3.13.3 In particular, and subject to what is stated in Warranty Schedule 3.8.4
(b) and Warranty Schedule 3.13.3, the Company has not entered into nor
is bound to enter into any contract or agreement:
- which binds them in an unusual or abnormal manner, having
regard to their normal course of business purpose;
- which could make it indefinitely or severally liable;
- with the Principals or the Affiliates of the Principals or
with the family members of the Principals;
- conferring exclusivity; or
- under the terms of which the Company is obliged not to carry
out certain activities or not to compete.
3.14 BANK ACCOUNTS AND SIGNATURES
The operating conditions of the bank accounts opened in the name of the
Company and a list of the persons authorised to use them is attached at
Warranty Schedule 3.14.
A list of the persons with powers of attorney and holders or users of
credit cards with amounts authorised, for each member of the Alma Group
is also attached at Warranty Schedule 3.14 (b).
3.15 OFF-BALANCE SHEET COMMITMENTS
With the exception of those stated in the financial statements or the
june accounts or Warranty Schedule 3.15 (Bank guarantees), or as
disclosed in Warranty 3.18, The company
has no off-balance sheet commitments.
In particular subject to warranty schedule 3.15, The company has not
granted any surety, signature backing a bill (aval) or guarantee or
provided any letters of comfort or patronage for the carrying out of
any commitments of any third parties (including those of shareholders,
directors, managers or employees of the company).
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3.16 BORROWINGS
Except as set out in warranty schedule 3.16, The company has no
borrowings and subject to the provisions of warranty schedule 3.7, The
company has not breached any of its obligations in respect of its
borrowings and there is no circumstance which could lead to a failure
to carry out any of its obligations in respect of such borrowings.
3.17 LITIGATION - DISPUTES
The company is not involved in and to the best of the principals
knowledge is not threatened with involvement in any legal, penal,
administrative or arbitration proceedings, or any investigation by any
professional body either as the person bringing or defending the
complaint, including counter-claims, subject to what is set out in
warranty schedule 3.17.
Moreover, no fact exists and no event has occurred likely to give rise
to any kind of proceedings or investigation whatsoever (civil, penal,
administrative or arbitration) involving the company as claimant or
defendant, the financial risk of which is greater than a figure of
100.000 Francs or involving directors, managers, employees or former
directors or managers or employees and for which the company would be
civilly or penally liable, or against or involving any person whose
acts would be likely to involve the company in liability.
Subject to the contents of warranty schedule 3.17 And normal client
debt recovery in the course of business, the company has not itself
commenced any proceedings of any nature whatsoever against an
administrative body or a third party and no fact exists and no event
has occurred which could serve as the basis for such proceedings.
3.18 CUSTOMERS - SUPPLIERS
No contract has been entered into by the company on the one part, on
its suppliers, customers or clients on the other part, other than in
the normal course of business.
Except for the contracts disclosed in warranty schedule 3.7 Hereto, no
agreement exists which could result in any restriction whatsoever in
the company business and no agreement exists which could result in the
company being obliged in the future to accept conditions
which are less favourable than those currently in force.
The company has not received any information according to which any
customer, client or supplier who contributes in a significant manner
either to their profits or to their operational needs, has the
intention of substantially ceasing or reducing operations with the
company, either immediately or to the best of the principals knowledge
in the future.
The company has no distributors, agents or franchisees nor does it acts
as such.
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3.19 EMPLOYEES AND SALARIES
3.19.1 Warranty Schedule 3.19.1 (A) contains copies of contracts of all of the
employees or directors or managers of the company, whose annual gross
salary is paid in one or more parts and in whatever form this may be
(by way of salary, benefits, fees (except mandators legal benefit) or
other remuneration for services supplied) exceeding 600,000 french
francs for each beneficiary. This list contains the position and length
of service for each of the employees, directors or managers and full
details of their remuneration or benefits of whatever nature. Warranty
Schedule 3.19.1 (B) includes french tax "das 2" forms of the company
filed with the french tax authorities for years 1995 and 1996 all of
which are true and accurate in every respect.
3.19.2 All salaries, commissions, other direct and indirect remuneration
(including in particular supplementary terms) and benefits of whatever
nature except for retirement bonus indemnities (indemnite de demande de
retraite) and reimbursements of charges payable in cash and in kind due
to the employees, directors or managers of the company of such
contracts have been duly and fully paid or provided for, and are
tax-deductible and any retirement bonus indemnities will be fully
tax-deductible.
Except as disclosed in Warranty Schedule 3.19.1 (A), no sum of any
nature is due to any current or former employees or directors or
managers of the company other than remuneration due but not yet
payable, reimbursement of professional fees and debt or as recorded in
the financial statements. No undertaking to employ a person not
previously employed by the company has been given by the company.
3.19.3 None of the senior employees, directors or managers has retired or
voluntary terminated or been dismissed from his functions in the
company in the last two years and nor has any such executive made known
his intention of resigning.
The company has not granted any loans other than advances on
remuneration recorded in the financial statements to the employees or
the directors or managers.
3.19.4 There are no claims or actions brought against the company on behalf of
any employees, directors or managers, trade unions or employees'
representative bodies.
There is no employee unrest or strike action.
The company voluntarily applies to its employees the provisions of the
collective bargaining agreement of syntecis.
3.19.5 Except in respect of consideration to be paid to them by the purchaser
under the sale agreement or in respect of the remuneration arrangement
contemplated for the principals in the sale agreement, no employee or
director or manager will gain any benefits by reason of the completion
of the sale of the shares or the AI shares.
3.20 PENSIONS
All contributions due and payable by the Company in respect of pensions
(whether legal or contractual) and miscellaneous social benefits (such
as shareholdings and profit-sharing) and all future undertakings given
by the Company in this respect have been duly paid or provided for. and
are fully set out and described in Warranty Schedule 3.20, or are the
minimum required by the law in France.
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3.21 COMMERCIAL AGENTS
The Company has not ever had and has no Commercial Agents.
3.22 SOCIAL SECURITY AND EMPLOYMENT REGULATION
3.22.1 The company has complied with all legal and regulatory requirements
relating to employment and social security law, including, without
limitation, in the areas of the establishment and functioning of
employee representative or trade union bodies and in the area of health
and safety at work.
The company has filed all the notifications required of it in the form
and within such a period as is in required under the laws and
regulations in force, and all the information contained in such
notifications as well as all other information provided by the company
was full and accurate.
3.22.2 The company has respected the instructions given by the competent
authorities regarding employment law, social security law and health
and safety regulations, and has obtained all necessary consents.
3.22.3 The company has paid or provided for all its contributions in respect
of the various social bodies, for contingency funds (prevoyance),
welfare (including but not limited to the basic, supplementary and
further supplementary contingency funds (prevoyance) and pension
schemes) and these contributions have been made by them in the form and
within such a period as is required under the laws and regulations in
force.
3.22.4 Except as disclosed in warranty schedule 3.22.4, There are no
negotiations in progress, either with the employees or with the social
bodies, with a view to changing the employment terms and social costs
currently borne.
3.22.5 The company has informed and consulted the employee representative
bodies of AI in accordance with the laws and regulations in force,
regarding the sale of the FA shares and the AI shares to the purchaser.
3.22.6 Except as disclosed in Warranty Schedule 3.22.6, The company has not
since 1995 been subject to investigation, supervision or redress
(redressement) by any social authority.
3.23 TAX REGULATION
3.23.1 Except as disclosed in Warranty Schedule 3.23.1, The company has
regularly completed in a complete and exact manner and filed in the
form and within the periods required all tax, parafiscal and customs
forms required by the laws and the regulations in force.
3.23.2 The company is up to date, up to the date hereof, with the payment, or
has provided in the financial statements for all taxes due or to become
due for all periods to the date hereof. Taxes means in this warranty
agreement all payment of whatever form of a nature or effect which is
fiscal, parafiscal or customs duty including without this list being
exhaustive, taxe, impot, droit, contribution, cotisation, charge,
prelevement including all precompte, retenue or prelevement a la
source. Taxes includes all demand or redressment for tax either in
principal or in interest as well as related increase or penalty.
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<PAGE>
3.23.3 Except as provided in warranty schedule 3.23.1, The company is not now
and has not previously been the subject of any enquiry or control by
the tax administration and has not received any notification or demand
for information or contestation on the part of the tax administration.
No control nor enquiry of such a nature is envisaged.
3.23.4 No engagement sanctioned by restitution or otherwise has been
contracted by the company in any manner, fiscally "social" or otherwise
by virtue of or on the occasion of the receipt of any grants, subsidies
or any particular regimes. The company has respected all conditions of
such grants or subsidies to ensure that they have a final character.
3.23.5 The company will not lose any right or tax advantage by reason of sale
of the FA shares or the AI shares (including in particular all
depreciation deemed to be deferred and ordinary loss appearing in the
financial statements).
3.23.6 The company has complied with its obligations relating to the periods
and the form in which it must retain records release to tax
authorities.
3.23.7 The company has all the necessary documents, complete and exact in
order to justify the existence and the amount and the good use of all
deficits, deemed deferred depreciation, tax credit, avoir fiscal or
debt on the state (including in particular carry back debts) and
generally all tax advantages which it has used or obtained or which it
could on fulfilment of such condition, use or obtain reimbursement for.
3.23.8 The company has not entered into any form of credit-bail operation
which has not complied with all fiscal formalities applicable any the
payment of all taxes due.
3.24 ENVIRONMENTAL MATTERS
In relation to the protection and preservation of the environment, the
company and all its representatives, agents, directors, managers and
employees have at all times complied with all applicable laws,
regulations, codes of custom and practice and any recommendations made
by the competent authorities (together the "Environmental Laws").
The activities of the Company and the installations that it uses are
not and have not in the past been the cause of any pollution, and nor
have they had any effect on human health or the environment.
No material investment is necessary in order to avoid any liability in
relation to the Environmental Laws or any breach of the Environmental
Laws, or to obtain the benefits of any permits, licences, declarations
or any other authorisations regarding environmental matters.
The Company has not received notice of nor been informed of any actions
or proceedings (procedure/instance) relating to any events or to their
activities which could be directly or indirectly attributable to the
Company and to the best of the Principals knowledge likely to lead to
liability on their part in respect of the Environmental Laws.
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<PAGE>
3.25 BUSINESS LIABILITY
Except as specified in Warranty Schedule 3.17, No claim of any sort
whatsoever exists against the company whether for loss, damage or
injury caused to persons or things, as a result of the businesses
carried on by and services provided by the company and neither the
principals nor the company have been informed of any such action which
might be brought against the company.
3.26 INSURANCE
3.26.1 A copy of the insurance policies taken out by the company or on its
behalf is set out in Warranty Schedule 3.26.1.
3.26.2 The company has paid all premiums owed under such insurance policies to
date.
3.26.3 The company has not breached any provision of such policies and has
carried out all necessary formalities and declarations properly and in
good time in accordance with the terms of the policies and of the law,
and as a result is indemnified against all loss or injury which has or
might be incurred or suffered.
3.26.4 There is no litigation or dispute in progress regarding any claim under
such insurance policies and no event has taken place likely to lead to
such a dispute or litigation.
The company has not since 1995 made any claim under such insurance
policies of such a nature as to hinder or hold up the continued pursuit
of its normal activities, or so as to lead to a significant increase in
the premiums or the excess relating to such policies.
3.26.5 The continuity and the cost of the policies set out in warranty
schedule 3.26.1 Will not be affected by the sale of the FA shares or
the AI shares to the purchaser.
3.27 RELATIONS WITH THE PRINCIPALS
Neither the principals nor any affiliate of the principals, nor any
member of the families of the principals:
(a) Are except as disclosed in warranty schedule 3.8.4, The
holders of any asset or right whatsoever that the company must
use or have the benefit of in order to carry out its
activities;
(b) Except for salary or fees for their services to the company
are the creditors or debtors of the company by reason of any
obligation whatsoever, and more generally, except as
aforesaid, do not have any present or future right to exercise
any right against any of the company;
(c) Have guaranteed any of the company's obligations, and nor has
the company guaranteed any of the obligations of the
principals, the affiliates of the principals, or any member of
the families of the principals.
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<PAGE>
3.28 EVENTS OCCURRING IN THE COMPANY SINCE 30 JUNE 1997
In respect of the period between 30 June 1997 and the Completion Date,
the management of the Company has been carried out using the same
methods as, and in manner consistent with the former management
thereof, so as to ensure the continuity of the running of the business.
Moreover, the Company has not entered into any agreement or made any
decision outside the normal course of business or the reasonable and
prudent management (gestion en bon pere de famille) of the Company.
In particular, since the 30 June 1997:
(i) except as disclosed in Warranty Schedule 3.28, no general
meetings (assemblee generale) of any of the Companies have
been held;
(ii) there has been no change in the Company's' accounting methods
and practices;
(iii) except as disclosed in Warranty Schedule 3.28, no distribution
has been made or decision taken in relation to a distribution
of a dividend, interim dividend or other remuneration of
capital.
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<PAGE>
3.29 INTERMEDIARIES
None of the negotiations relative to this warranty agreement or to the
operations provided for herein could provide grounds for a claim by the
principals against the company or the purchaser for any brokerage,
commission, fee or other payment of a similar nature.
3.30 INFORMATION AND DOCUMENTS
All information and documents in the warranty schedules hereto are
authentic, true and accurate.
4. INDEMNITIES
4.1 The principals undertake, in their own names and in the names of their
successors and assigns (ayants-droit), to indemnify the purchaser, or,
as the purchaser shall choose, the company, against the whole of any
loss as a result of:
(A) Either (i) any inaccuracy, omission or breach whatsoever of
any of the warranties or (ii) which results from facts or
circumstances whose origin is prior to the completion date and
has not been expressly disclosed to the purchaser in this
warranty agreement or the warranty schedules;
(B) The claims in respect of begin, alma atlantique and actor
specifically identified by the list in warranty schedule 3.17
To the extent that they have not been specifically provided
for in the june accounts which provisions the principals
represent as being:
Begin Frf 1,450,000
Alma Atlantique Frf 2,842,028;
Actor - None.
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<PAGE>
(C) Any claims arising out of the conflicts or disputes or claims
or enquiries referred to in clause 3.4.8Which go beyond and do
not only relate to the mere fact of such conflicts or disputes
existing or such claims or enquiries having been made and
dealt with as indicated in clause 3.4.8;
(D) Any claims against the purchaser and/or the companies by any
previous or current shareholder of fa, AI or of any of the
subsidiaries (other than the principals) arising out of
resulting from or relating to the transactions contemplated by
all the sale agreements, any claims arising out of any of
powers of attorney persuant to which any of all the sale
agreements are made, being invalid or the subject of any
challenge;
(E) Any reimbursement in whatever manner by the company for any
reason whatsoever of any fees or remuneration paid to the
company prior to completion except as reserved for in the net
receivables;
(F) Any liability of any of the dormant companies referred to in
warranty schedule 3.6.7, Or any cost including tax cost of
their liquidation exceeding in total frf 50,000;
(G) Any liability in respect of NACC SA;
(H) Any cost including any tax cost of the reorganisation as
described in clause 3.5 Including the absorption of FA and
step by way of merger, exceeding the amount of us $ 70,000;
(I) (i) the purchaser not having full valid ownership free from
encumbrances of all the FA shares or all the AI shares
(directly or indirectly through fa) or of all the shares in
the subsidiaries other than AI (directly or indirectly through
ai) as set out in warranty annex 3.6.7, Or (ii) such shares
not being freely transferable without restrictions or (iii)
such shares not representing 100% of the share capital and
voting rights of FA and the subsidiaries or (iv) there being
any other right or interest in FA and the subsidiaries or such
shares which is not directly or indirectly owned by the
purchaser.
In respect of calculation of any loss, it is hereby further agreed as
follows:
- There shall be included in any loss, all expenses including
legal expenses of obtaining indemnification;
- Any reassessment to tax involving a simple transfer of profit
from one accounting period to the next and any reassessment,
in particular in respect of value added tax (taxe sur la
valeur ajoutee) which does not impose an overall charge on the
company, shall not be included in the calculation of the loss,
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<PAGE>
except in respect of any fine, interest, compensation or
indemnity which such reassessment may bring about;
- There shall be deducted the amount of any sum paid to the
company under any insurance policies and relating to such
loss.
4.2 Notwithstanding that the principals have sold 28.28 Per cent of the fa
shares and 10.44 Per cent of the AI shares persuant to the sale
agreement referred to in recital (c) of this warranty agreement, the
liability of the principals hereunder shall be calculated as if the
principals had sold to the purchaser all the FA shares and all the ai
shares sold or agreed to be sold to the purchaser persuant to all of
the sale agreements.
4.3 The liability of the principals hereunder shall be limited to the
amount of (i) us $ 10,000,000 for all cumulative claims hereunder
relating to a reduction in the value of assets or an increase in
liabilities by reference to the accounting values in the june accounts
or the receivables at the completion and (ii) us $ 6,000,000 for
matters arising in respect of all cumulative claims hereunder not
within (i) above. Notwithstanding anything to the contrary, the
foregoing limitations shall not apply to claims in respect of clauses
4.1 (D), 4.1 (F), 4.1 (G) and 4.1 (I). Any claim amount shall be
reduced by any applicable deductible but not in respect of matters
arising in respect of any claims relating to 4.1.(B), 4.1 (D), 4.1 (F),
4.1 (G) 4.1 (H) and 4.1 (I) above the indemnification ceilings set
forth in (i) and (ii) of this clause 4.3 Shall not be cumulative of one
and other and for the avoidance of doubt the maximum aggregate,
liability of the principals hereunder shall be limited to us $
10,000,000.
4.4 The purchaser shall have the right to set-off against the escrow stock
in accordance with the indemnity escrow and stock pledge agreement any
amounts payable by the principals to the purchaser pursuant to the
indemnification provisions in this clause 4.
5. Liability under the warranty agreement by the principals
5.1 Notification - conduct of disputes and litigation
5.1.1 Any claim made under the warranties or indemnities above must be
notified to the principals within a reasonable period of time from the
moment the purchaser becomes aware of the fact or event of such a
nature as to justify a claim under the warranties or indemnities. Any
claim made under the warranties or indemnities must be founded upon and
accompanied by information and details useful for this purpose, subject
to the provisions of clause 6.2.
5.1.2 In the event that a fact comes to light or an event occurs which is
likely to give rise to an indemnity under this warranty agreement
involving a third party claim, the purchaser will at all times conduct
the defence of such a claim in good faith and will invite the
principals to take part at their own expense and with their own
advisors in the negotiation and possible dispute or litigation relating
to such a claim. In such a case the conduct of the dispute or
litigation will be assumed jointly by the principals and the purchaser
and the purchaser will not be entitled to settle any such claim without
the prior consent of the principals which consent cannot be refused
without good reason particularly where the third party is a client of
the company and having regard to the commercial relationship of the
company with such client.
If the principals do not inform the purchaser that they wish to
exercise their rights under the preceding paragraph within 30 days of
receiving the notice referred to above, the principals will be deemed
to have waived their rights in this respect.
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<PAGE>
5.2 PAYMENT
Any sums due from the principals in respect of any indemnified loss
calculated in accordance with this warranty agreement shall be paid
within a period of 30 days from the first written demand from the
purchaser or any of the company, and, at the choice of the purchaser,
shall be made to the purchaser or any of the company.
If the principals pay any sum to the purchaser for an indemnified loss,
and the purchaser ultimately recovers a further sum for the same
indemnified loss from a third party (including any tax authority), the
purchaser will promptly pay such sum paid by the third party to the
principals , subject to the total amount paid to the principals not
exceeding the sums recovered from such third party, less all costs,
charges and expenses reasonably incurred and justified by the purchaser
in order to obtain such a payment and to recover such sums from the
third party in question.
Without prejudice to the right of the purchaser, if necessary, to
enforce its rights under the last paragraph (alinea) of article 1153 of
the civil code, if the payments have not been made by the due date, the
sum outstanding will bear interest immediately and without prior
notice, at the paris inter-bank rate (taux interbancaire offert a paris
- tiop) (3 months) plus two per cent (2%). This provision should not be
considered as authorising the principals to make late payments.
For any claim that is subject to reduction by a deductible, the
deductible shall be finally recalculated at and as of january 1, 2000
to take into account any collections of receivables at completion and
any reduction in any reserve for litigation reserved in the june
accounts (to the extent that such reserve remained in place at
completion), which is made in the financial statements prepared under
us gaap as determined by the conseil de surveillance of ai, and that
occured after the date of the claim and before january 1, 2000, to the
extent such collections or settlements or adjudications have not been
not previously taken into account in reducing any other claim. If as a
result of this final recalculation of such claims, the amount of any
net claim is reduced below the net amount received by purchasers with
respect to such claim, then purchasers shall repay promptly such
difference to the principals jointly.
6. PERIOD FOR CLAIMS
6.1 Any claim under this warranty agreement must be notified to the
principals by the purchaser:
- regarding matters of taxation and social security during the
applicable limitation period increased by a further 30 days;
and
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<PAGE>
- regarding other matters by 31 december 1999; and
- except that there shall be no time limitation for notification
for matters arising in respect of claims under clauses 4.1.
(B), 4.1 (D), 4.1 (F), 4.1 (G), 4.1 (H) or 4.1 (I) above.
6.2 For the avoidance of doubt, any notification to the principals
regarding an indemnified loss may be made by the purchaser up until the
last day of the applicable period, and this is so even when the sums
potentially due are not precisely known or determinable before or on
such date, provided that the purchaser notifies the principals of the
existence of such in accordance with the provisions of this warranty
agreement.
The principals may not avoid their obligations under the warranties
contained in this warranty agreement or the financial liability
resulting therefrom by pleading ignorance of any facts capable of
giving rise to a claim under this warranty agreement or by relying upon
facts and information not contained expressly in this warranty
agreement.
7. INDEMNITY AND ESCROW AGREEMENT
The Principals have deposited into escrow with Escrow Agent and pledged
pursuant to the Indemnity Escrow and Stock Pledge Agreement 532 049
Stock of PRG, which Stock together with Stock pledged with Escrow Agent
by Banque Internationale a Luxembourg persuant to the Indemnity Escrow
and Pledge Agreement shall be held by Escrow Agent as a non exclusive
source of claims for indemnification persuant to the terms of the
Indemnity Escrow and Stock Pledge Agreement.
8. BENEFIT OF THE AGREEMENT
This Agreement is made in favour of the Purchaser and/or any physical
or legal person who may join with or be substituted for the Purchaser
in respect of the purchase of the FA Shares and the AI Shares under any
of All the Sale Agreements. However, in the event of a subsequent sale
transfer (or contribution) of all or part of the FA Shares and the AI
Shares, the Purchaser may transfer to the purchaser (or recipient) the
benefit of this Agreement in whole or pro rata to the rights in the
share capital of the FA or AI which have been acquired by such
purchaser (or recipient).
In the same way, the parties agree that the Purchaser may by any means
(including by the pledging or transfer of the right to receive the
benefit of the contract (creance) within the context of law 81- 1 of 2
January 1981) use the benefit of this Agreement as security to any
French or foreign credit establishments or financial institutions.
9. TRANSFER BY THE PRINCIPALS
The Principals 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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<PAGE>
10. SUCCESSORS AND ASSIGNS OF THE PRINCIPALS
The obligations set out in this Agreement shall bind the inheritors,
successors and assigns of the Principals who shall be jointly and
severally and indivisibly bound in respect of the performance of the
obligations hereunder.
11. 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.
12. 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 Principals from
the performance of this Agreement.
13. 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.
14. COSTS
All of the expenses incurred by PRG in connection with and incidental
to the negotiation, preparation, authorisation, execution and
performance of this agreement and All the Sale Agreements and
transaction contemplated herein, including, without limitation, all
legal and accounting expenses, shall be paid by PRG. All expenses
incurred by Alma Group and All the Vendors and the Principals in
connection with the negotiation, preparation, authorisation, execution
and performance of this agreement and All the Sale Agreements and
transactions contemplated herein, including, without limitation, all
legal, accounting and investment banking expenses, costs incurred in
negotiating this Warranty Agreement, preparation of the Disclosures and
costs incurred in responding to PRG's requests for information (but
excluding up to US $ 70,000 of the Reorganisation Costs and costs of
Alma Group within the normal remuneration of employees of Alma Group in
presentation of Disclosures and answering diligence requests) will be
paid by the Principals at the Principals sole cost and responsibility
(the "PRINCIPALS EXPENSES"). The Principals shall promptly reimburse
Alma Group for such Principals Expenses.
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<PAGE>
15. ENTIRE AGREEMENT
This Warranty Agreement and All the Sale Agreements (together with any
agreements or documents referred to in this Agreement or All the Sale
Agreements) constitute the entire agreement between the parties hereto
in connection with the subject matter of this Agreement and All the
Sale Agreements or any agreement or document referred to in this
Warranty Agreement or All the Sale Agreements. No party has relied upon
any warranty or representation save for the those expressly set out in
this Warranty Agreement or All the Sale Agreements (or any document
referred to in this Warranty Agreement or in All the Sale Agreements).
16. WAIVER, AMENDMENT
16.1 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.
16.2 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.
16.3 No variation to this Agreement shall be effective unless made in
writing and signed by all the parties.
17. NOTICES
Save as specifically otherwise provided in this Warranty Agreement any
notice, demand or other communication to be served under this Warranty
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:-
If to the Principals: 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
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<PAGE>
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.
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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<PAGE>
MADE AND SIGNED IN TWO (2) EXAMPLES AT BROADWALK
HOUSE, 5 APPOLD SREET, LONDON EC2A 2HA ON THE FIRST
ABOVE DATE WRITTEN
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC
By: /s/ Clinton McKellar, Jr.
_________________________________________
Clinton McKellar, Jr.,
Senior Vice President and
General Counsel
CLINTON MCKELLAR, JR, AS "MANDATAIRE" FOR THE
SHAREHOLDERS OF PRG FRANCE SA IN FORMATION
By:/s/ Clinton McKellar, Jr.
_______________________________________
Clinton McKellar, Jr.
By: /s/ Marc Eisenberg
_______________________________________
Marc Eisenberg
By: /s/ Eric Eisenberg
______________________________________
Eric Eisenberg
- 30 -
INDEMNITY ESCROW AND STOCK PLEDGE AGREEMENT
THIS INDEMNITY ESCROW AND STOCK PLEDGE AGREEMENT (the "ESCROW AGREEMENT") is
made as of October 7, 1997, by and among The Profit Recovery Group
International, Inc., a Georgia corporation ("PRG"), Clinton McKellar, Jr. acting
as Agent ("Mandataire") in the name of 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 together called the "PURCHASERS", which expression
includes each or any of them and Marc Eisenberg and Eric Eisenberg
("PRINCIPALS") and Banque Internationale a Luxembourg SA of 69, route d'Esch, L-
1470 Luxembourg ("BIL") formerly stockholders of Financiere Alma SA ("ALMA") and
Alma Intervention SA ("AI"), Arnall Golden & Gregory, LLP as interim escrow
agent hereunder ("INTERIM ESCROW AGENT") and the Permanent Escrow Agent as
provided for below (the term "Escrow Agent" referring herein either to Interim
Escrow Agent or to Permanent Escrow Agent, as appropriate.
WITNESSETH:
In this Recital capitalized terms have the same meaning as agreed in clause 1
below. Whereas, Purchasers have acquired or agreed to acquire all the shares of
Alma and AI pursuant to All the Agreements dated 7 October, 1997 among
Purchasers, the Principals and the other stockholders of Alma and AI (including
BIL). This Escrow Agreement is entered into by Purchasers, the Principals, BIL
and Interim Escrow Agent (i) in accordance with section 7 of the Warranty
Agreement, pursuant to which the Principals agreed to pledge and deposit certain
of the Stock (as defined in the Warranty Agreement) in escrow (with Interim
Escrow Agent agreeing to serve hereunder only on an interim basis until a
permanent escrow agent is selected by other parties hereto and enters into a
successor escrow agreement, but in no event for a period ending after 15
January, 1998 (the "INTERIM ESCROW PERIOD") all as provided in Section 10
hereof) and (ii) in accordance with the BIL Sale Agreement whereby, BIL agreed
to pledge and deposit the Stock as defined in the BIL Sale Agreement, in each
case to secure certain indemnity obligations of the Principals to Purchasers in
accordance with the provisions of the Warranty Agreement and the Indemnity
Agreement.
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<PAGE>
AGREEMENT:
In consideration of the mutual covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Capitalized Terms
Except as otherwise specifically defined in this Escrow Agreement, the
capitalized terms used herein shall have the meanings given such terms in the
Warranty Agreement, the "BIL SALE AGREEMENT" means the sale agreement between
BIL and the Purchasers referred to in Recital (C) of the Warranty Agreement, the
"PRINCIPALS SALE AGREEMENT" means the sale agreement between the Principals and
the Purchaser referred to in Recital (C) of the Warranty Agreement and the
"INDEMNITY AGREEMENT" means the Indemnity Agreement made between the Purchaser
and Marc Eisenberg and dated as of the date of this Escrow Agreement. Copies of
all of such agreements are attached hereto.
2. Deposit of Shares
(a) To secure the satisfaction of Principals' obligations under the
Warranty Agreement and the Indemnity Agreement and hereunder and
to secure the rights of Purchasers under the Warranty Agreement
and the Indemnity Agreement and hereunder, the Principals and BIL
hereby grant to Escrow Agent as bailee for the purpose of holding
and perfecting for Purchasers a lien upon, security interest in
and security title to, and hereby assign, transfer and pledge to
Escrow Agent as such bailee for Purchasers to hold in escrow
pursuant to the terms hereof, 532 049 shares of the Stock received
by the Principals pursuant to the Principals Sale Agreement and by
BIL pursuant to the BIL Sale Agreement. Such shares so deposited
with Escrow Agent less any shares set aside or transferred
pursuant to the terms hereof are hereinafter referred to as the
"ESCROW SHARES". The Escrow Shares shall be held and disposed of
in accordance with the terms of this Escrow Agreement. The parties
hereto acknowledge that the Principals and BIL hereby grant to
Escrow Agent as bailee for Purchasers, and Escrow Agent as bailee
for Purchasers has, all of the rights and remedies granted
pursuant to this Escrow Agreement or given to a secured party
under the Uniform Commercial Code of Georgia.
(b) Interim Escrow Agent hereby irrevocably appoints Ashurst Morris
Crisp of Paris as its agent to accept possession of the Escrow
Shares at Completion and to deliver promptly and under separate
cover the related stock powers, to Interim Escrow Agent by an
internationally recognized air courier service. Each certificate
evidencing any of the Escrow Shares shall be deposited with
Interim Escrow Agent
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<PAGE>
and shall have attached thereto a stock power duly executed in
blank by the Principals and BIL as appropriate, in proper form to
permit the transfer of the Escrow Shares represented thereby on
the books of PRG if the conditions for such transfer are met
pursuant to the terms hereof. The Principals and BIL shall not
assign, pledge or transfer in any manner their interests in the
Escrow Shares during the term of this Escrow Agreement. The Escrow
Shares shall continue to be registered in the name of the
Principals or BIL, as appropriate, unless they are transferred to
Purchasers in accordance with the terms of this Escrow Agreement.
3. Indemnification Claims Against Escrow Shares
(a) During the term hereof, if Purchasers determine that they are
entitled to indemnification pursuant to the Warranty Agreement or
the Indemnity Agreement, Purchasers shall give written notice (the
"CLAIM NOTICE") to the Escrow Agent, the Principals and BIL that
Purchasers are entitled to payment of such Claim and seek transfer
to PRG of all or a portion of the Escrow Shares. The Claim Notice
shall state the basis for the Claim and the amount of the Claim
(which amount converted to US Dollars in accordance with the
Warranty Agreement as of the date of the Claim Notice in the case
of Section 3 (a), (b) or (d), or the date as of which Market Value
is determined in the case of Section 3 (e) hereof, is referred to
herein as the "CLAIM AMOUNT"). The Principals and BIL shall
provide written confirmation to Purchasers and Escrow Agent of the
dates of receipt by each Principal and BIL of the Claim Notice;
provided, however, that any refusal or failure by the Principals
or BIL to provide such written confirmation shall not affect the
release of the Escrow Shares pursuant to the provisions of Section
3 hereof. Further, if Escrow Agent has not received any written
confirmation from the Principals or BIL of the first date on which
a Principal or BIL received such Claim Notice, then Escrow Agent
may rely on reasonable evidence supplied by Purchasers as to such
first date of receipt of such Claim Notice by a Principal.
(b) If a Claim Notice is given during the Interim Escrow Period and
Escrow Agent does not receive, within 20 business days after such
Claim Notice was first received by either a Principal or BIL (the
"DISPUTE NOTICE PERIOD"), a notice from either or both of the
Principals or BIL (the "DISPUTE NOTICE") stating that a dispute
exists relating to the Claim Notice (a "DISPUTED CLAIM") and the
basis of such dispute, Escrow Agent shall promptly thereafter
release from escrow for transfer to Purchasers that number of
Escrow Shares equal to the quotient of (1) the Claim Amount,
divided by (2) the average closing sale price per share of Stock
(as reported in The Wall Street Journal) for the last ten trading
days immediately preceding the 21st business day after Interim
Escrow Agent's receipt of the relevant Claim Notice.
(c) If Escrow Agent receives a Dispute Notice within the Dispute
Notice Period , Escrow Agent shall promptly notify Purchasers and
BIL to that effect and continue to hold the Escrow Shares subject
to a Disputed Claim in accordance with this Escrow Agreement and
Purchasers, Principals and BIL shall resolve the Dispute either by
agreement or in accordance with the procedure for arbitration set
forth in Section 7 of the Warranty Agreement or Section 6 of the
Indemnity Agreement as appropriate.
(d) Except for transfers of Escrow Shares pursuant to clause 3 (b)
above, the Escrow Shares shall be transferred to PRG or released
to the Principals or BIL by Escrow Agent as follows:
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<PAGE>
(1) If Purchasers obtain a final arbitration award in favor of
Purchasers in respect of any Disputed Claims (the "PRG
ARBITRATION AWARD") and Purchasers furnish Escrow Agent
with a copy of such award bearing the enforcement stamp
issued by any relevant jurisdiction where such enforcement
may be sought, then Escrow Agent shall promptly release
from escrow for transfer to Purchasers that number of
Escrow Shares equal to the quotient of:
(x) the PRG Arbitration Award converted to US
dollars in accordance with the Warranty Agreement or
in the Indemnity Agreement as of the date of such
final award, divided by (y) the average closing sale
price per share of the Stock in US Dollars for the
last ten trading days immediately preceding the date
of the PRG Arbitration Award.
(2) If the Principals and BIL and Purchasers jointly instruct
Escrow Agent on any release and/or transfer of all or any
portion of the Escrow Shares, Escrow Agent shall act in
accordance with such instruction.
(e) (1) On the first business day following the first
anniversary of the Completion Date, Escrow Agent shall
promptly as soon as possible thereafter release from the
Escrow Agreement and deliver to the Principals and BIL in
the proportions in which they deposited Escrow Shares with
Escrow Agent the number of Escrow Shares which equals 15%
of the initial number of Escrow Shares deposited in escrow
with the Escrow Agent pursuant to this Escrow Agreement
less (i) the number of Escrow Shares released to Purchasers
pursuant to either 3 (b) or 3 (d) above provided, however,
that in no event shall Escrow Shares be released from the
Escrow Agreement to the extent that the number of Escrow
Shares remaining subject to the Escrow Agreement shall be
less than that number determined by dividing the Claim
Amounts with respect to any Disputed Claims by the Market
Value. For the purpose of this clause 3 (e) (1) Market
Value shall mean the average closing sale price of PRG
Common Stock (as reported in the Wall Street Journal) for
the last ten trading days immediately preceding the first
business day following the first anniversary of the
Completion Date.
(2) On the first business day following the second anniversary
of the Completion Date, Escrow Agent shall promptly as soon
as possible thereafter release from the Escrow Agreement
and deliver to the Principals the number of Escrow Shares
which equals 15% of the initial number of Escrow Shares
deposited in escrow with the Escrow Agent pursuant to this
Escrow Agreement less (i) the number of Escrow Shares
released to Purchasers pursuant to either 3 (b) or 3 (d)
above provided, however, that in no event shall Escrow
Shares be released from the Escrow Agreement to the extent
that the number of Escrow Shares remaining subject to the
Escrow Agreement shall be less than that number determined
by dividing the Claim Amounts with respect to any Disputed
Claims by the Market Value. For the purpose of this Clause
3 (e) (2) Market Value shall mean the average closing sale
price of PRG Common Stock (as reported in the Wall Street
Journal) for the last ten trading days immediately
preceding the first business day following the second
anniversary of the Completion Date.
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<PAGE>
(3) On the first business day following the third anniversary
of the Completion Date, Escrow Agent shall promptly as soon
as possible thereafter release from the Escrow Agreement
and deliver to the Principals the number of Escrow Shares
which equals 20% of the initial number of Escrow Shares
deposited in escrow with the Escrow Agent pursuant to this
Escrow Agreement less (i) the number of Escrow Shares
released to Purchasers pursuant to either 3 (b) or 3 (d)
above provided, however, that in no event shall Escrow
Shares be released from the Escrow Agreement to the extent
that the number of Escrow Shares remaining subject to the
Escrow Agreement shall be less than that number determined
by dividing the Claim Amounts with respect to any Disputed
Claims by the Market Value. For the purpose of this Clause
3 (e) (3) Market Value shall mean the average closing sale
price of PRG Common Stock (as reported in the Wall Street
Journal) for the last ten trading days immediately
preceding the first business day following the third
anniversary of the Completion Date.
(4) On the first business day following the fourth anniversary
of the Completion Date, Escrow Agent shall promptly as soon
as possible thereafter release from the Escrow Agreement
and deliver to the Principals the number of Escrow Shares
which equals 30% of the initial number of Escrow Shares
deposited in escrow with the Escrow Agent pursuant to this
Escrow Agreement less (i) the number of Escrow Shares
released to Purchasers pursuant to either 3 (b) or 3 (d)
above provided, however, that in no event shall Escrow
Shares be released from the Escrow Agreement to the extent
that the number of Escrow Shares remaining subject to the
Escrow Agreement shall be less than that number determined
by dividing the Claim Amounts with respect to any Disputed
Claims by the Market Value. For the purpose of this Clause
3 (e) (4) Market Value shall mean the average closing sale
price of PRG Common Stock (as reported in the Wall Street
Journal) for the last ten trading days immediately
preceding the first business day following the fourth
anniversary of the Completion Date.
(5) On the first business day following the fifth anniversary
of the Completion Date, Escrow Agent shall promptly as soon
as possible thereafter release from the Escrow Agreement
and deliver to the Principals the remaining number of
Escrow Shares less the number of Escrow Shares determined
by dividing the Claim Amounts with respect to any Disputed
Claim by the Market Value provided, however, that in no
event shall Escrow Shares be released from the Escrow
Agreement to the extent that the number of Escrow Shares
remaining subject to the Escrow Agreement shall be less
than that number determined by dividing the Claim Amounts
with respect to any Disputed Claims by the Market Value.
For the purpose of this Clause 3 (e) (5) Market value shall
mean the average closing sale price of PRG Common Stock (as
reported in the Wall Street Journal) for the last ten
trading days immediately preceding the first business day
following the fifth anniversary of the Completion Date.
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<PAGE>
(6) Thereafter, upon resolution of each Disputed Claim Escrow
Agent shall promptly as soon as possible thereafter release
from the Escrow Agreement and deliver to the Principals the
remaining number of Escrow Shares less the number of Escrow
Shares determined by dividing the Claim Amount with respect
to a Disputed Claim by the Market Value provided, however,
that in no event shall Escrow Shares be released from the
Escrow Agreement to the extent that the number of Escrow
Shares remaining subject to the Escrow Agreement shall be
less than that number determined by dividing the Claim
Amounts with respect to any Disputed Claims by the Market
Value. For the purpose of this Clause 3 (e) (6) Market
Value shall mean the average closing sale price of PRG
Common Stock (as reported in the Wall Street Journal) for
the last ten trading days immediately preceding the first
business day following the communication of the resolution
of such Disputed Claim to the Escrow Agent.
(f) All stock amounts shall be adjusted for any stock splits or stock
dividends as notified by PRG to Escrow Agent and the Principals.
4. Voting: Dividends and Other Distributions; Issued and Outstanding
(a) Prior to the release from escrow of any shares of PRG Common Stock
constituting the Escrow Shares pursuant to the terms of this
Escrow Agreement, all ownership, voting and cash dividend rights
in such Escrow Shares shall belong to the Principals and BIL. The
Principals and BIL shall be entitled to retain all cash or other
taxable dividends paid or distributed on or in respect of the
shares of PRG Common Stock constituting the Escrow Shares, other
than dividends payable in PRG Common Stock and PRG Common Stock
issued as a result of a stock split. The Principals and BIL hereby
agree to deliver to Interim Escrow Agent promptly upon receipt
thereof, to be held in escrow subject to the terms of this Escrow
Agreement, all dividends in PRG Common Stock received in respect
of the Escrow Shares and all PRG Common Stock issued as a result
of a stock split received in respect of the Escrow Shares,
together with stock powers duly executed in blank by the
Principals and BIL, in proper form to permit the transfer of the
shares represented thereby on the books of PRG. All such shares
shall be distributed by Interim Escrow Agent in the same manner as
the Escrow Shares in respect of which they were issued.
(b) PRG acknowledges and agrees that the Escrow Shares are duly issued
and outstanding on its books for all purposes.
5. Joint Notices
If at any time Escrow Agent shall receive a notice signed jointly by
Purchasers, Principals and BIL containing instructions to Escrow Agent regarding
the disposition of the Escrow Shares or any matter related thereto, Escrow Agent
shall comply with such instructions. Similarly, if at any time Escrow Agent
shall receive a notice signed by Purchasers, Principals and BIL that this Escrow
Agreement has been terminated and containing instructions for releasing the then
remaining number Escrow Shares from the Escrow Agreement, Escrow Agent shall act
in accordance with the instructions contained in such notice and upon such
release this Escrow Agreement shall be deemed terminated and Escrow Agent shall
be released and discharged from all further obligations hereunder.
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<PAGE>
6. Ministerial Duties of Escrow Agent
It is understood and agreed that the duties of Escrow Agent hereunder
are purely ministerial in nature and that Escrow Agent shall not be liable for
any error of judgment, fact or law, or any act done or omitted to be done except
for its own willful misconduct or gross negligence. With respect to the Warranty
Agreement, the Escrow Agent shall not be required to determine whether an event
or condition thereunder has occurred, been met or satisfied, or as to whether a
provision of the Warranty Agreement has been complied with, or as to whether
sufficient evidence of the event or condition or compliance with the provision
has been furnished to it. No action in compliance with the terms of this Escrow
Agreement shall subject the Escrow Agent to any claim, liability or obligation
whatsoever, even if it shall be found that such determination was improper or
incorrect, provided only, that Escrow Agent shall not have been guilty of
willful misconduct or gross negligence in making such determination.
7. Genuineness: Validity
Escrow Agent shall not be responsible for the genuineness or validity
of any document or item deposited with it or any notice or instruction given to
it, and it is fully protected in acting in accordance with any written
instruction or instrument given to it, and reasonably believed by it to have
been signed by the proper parties.
8. Conflicting instructions
If at any time Escrow Agent shall receive conflicting notices, claims,
demands or instructions with respect to the Escrow Amount, or if for any other
reason it shall be unable in good faith to determine the party or parties
entitled to receive the Escrow Shares, or any part thereof, Escrow Agent may (i)
hold the Escrow Shares pending resolution of the dispute by mutual agreement of
the Purchasers, Principals and BIL or by a final, unappealable order of court of
competent jurisdiction or award of an arbitrator, whereupon Interim Escrow Agent
shall make such disposition in accordance with such instructions, order or award
or (ii) tender the Escrow Shares into the registry or custody of any court of
competent jurisdiction, together with such legal pleadings as it may deem
appropriate, and thereupon be discharged from all further duties and liabilities
under this Escrow Agreement. Any such legal action may be brought in such court
as the Escrow Agent may determine to have jurisdiction thereof.
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<PAGE>
9. Resignation of Escrow Agent
Escrow Agent may resign at any time prior to the end of the term hereof
upon giving the parties hereto thirty (30) calendar days' prior written notice
to that effect. In such event, the successor shall be such person, firm or
corporation as shall be mutually selected by Purchasers, Principals and BIL. It
is understood and agreed that such resignation shall not be effective until a
successor agrees to act hereunder; provided, however, if no successor is
appointed and acting hereunder within thirty (30) days after such notice is
given, Escrow Agent may deliver the then remaining Escrow Shares into a court of
competent jurisdiction.
10. Permanent Escrow Agent
On or before the end of the Interim Escrow Period, Purchasers,
Principals and BIL shall select a successor escrow agent ("PERMANENT ESCROW
AGENT"). Upon the expiration of the Interim Escrow Period (or such earlier date
as such Permanent Escrow Agent has executed and delivered a copy of this Escrow
Agreement to the parties hereto) Interim Escrow Agent shall deliver the then
remaining Escrow Shares to such Permanent Escrow Agent, from and after which
delivery Interim Escrow Agent shall be discharged from any further duties and
liabilities hereunder. If no Permanent Escrow Agent has executed and delivered a
copy of this Escrow Agreement to the parties hereto prior to the expiration of
the Interim Escrow Period, Interim Escrow Agent may deliver the then remaining
Escrow Shares into a court of competent jurisdiction, from and after which
delivery Interim Escrow Agent shall be discharged from any further duties and
liabilities hereunder.
11. Miscellaneous
(a) 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 international delivery service which guarantees at
least second business daydelivery ("COURIER DELIVERY") or mailed
by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth
below:
If to Principal: To the address set forth for Principals
on the stockholder records of PRG's
Transfer Agent
with a copy to: Wilinski & Scotto
19, rue Marbeuf
75008 Paris
Attention: Serge Wilinski
Telefax: 01 53 53 97 98
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<PAGE>
If to Purchasers: The Profit Recovery Group International, Inc.
2300 Windy Ridge Parkway, Suite 100 North
Atlanta, GA 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
If to Interim Escrow
Agent: Arnall Golden Gregory, LLP
2800 One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3450
Attention: Jonathan Golden, Esq.
Telefax: (404) 873-8701
If to Permanent
Escrow Agent: [ ]
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
business day sent, (ii) by Courier Delivery, will be deemed
received the second business day immediately following the date
sent, and (iii) by mail, will be deemed received seven (7)
business days immediately following the date sent. For purposes of
this Escrow Agreement, a "business day" is a day on which PRG is
open for business and shall not include a Saturday or Sunday or
legal holiday. Notwithstanding anything to the contrary in this
Escrow Agreement, no action shall be required of any party
heretoexcept 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.
(b) Counterparts: This Escrow Agreement may be executed in
counterparts, all of which taken together shall be deemed one
original.
(c) Entire Agreement: This Escrow Agreement contains the entire
agreement among the parties with respect to the Escrow Shares.
This Escrow Agreement may not be amended or supplemented, and no
provision, hereof may be waived, except by an instrument in
writing signed by all of the parties hereto. No waiver of any
provision hereof by any party shall be deemed a continuing waiver
of any matter by such party.
(d) Rights Cumulative: The rights, powers and remedies given to
Purchasers by this Escrow Agreement shall be in addition to all
rights, powers and remedies given to Purchasers by virtue of any
statute or rule of law and all such rights, powers and remedies
are cumulative and not alternative, and may be exercised and
enforced successively or concurrently. Any forebearance or failure
or delay by Purchasers in exercising any right, power or remedy
- 9 -
<PAGE>
hereunder shall not be deemed to be a waiver of such right, power
or remedy, and any single or partial exercise of any right, power
or remedy hereunder shall not preclude the further exercise
thereof; and every right, power and remedy of Purchasers hereunder
shall continue in full force and effect until such right, power
and remedy is specifically waived by an instrument in writing
executed by Purchasers.
(e) Governing Law and Submission to Jurisdiction: Except as otherwise
expressly provided herein, this Escrow Agreement shall be governed
by and construed under the laws of the State of Georgia. Principal
hereby agrees to submit to the jurisdiction of the courts of the
State of Georgia and the federal courts within the State of
Georgia and hereby appoints the Secretary of State of the State of
Georgia as agent for the purpose of receiving service of process
in respect of any proceeding in connection herewith. All claims in
respect of or related to the Warranty Agreement or the Indemnity
Agreement will be resolved in accordance with the procedure for
arbitration set out in clauses 6 and 7 respectively of those
agreements.
(f) Permanent Escrow Agent Fee: the Permanent Escrow Agent shall be
paid its fee and reasonable expenses by Purchasers and the
Principals which shall be agreed upon by Permanent Escrow Agent,
Purchasers, Principals and BIL and attached hereto upon execution
hereof by Permanent Escrow Agent.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Escrow Agreement to be duly
executed at Broadwalk House, 5 Appold Street, London EC2A 2HA, as of the date
first set forth above.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
By: /s/Clinton McKellar, Jr.
-------------------------
Clinton McKellar, Jr., Senior Vice President and General Counsel
PRG FRANCE SA
By: /s/ Clinton McKellar, Jr.
----------------------------------
Clinton McKellar, Jr. (acting as Agent (mandataire)
in the name of and on behalf of PRG France SA,
in the process of being incorporated)
PRINCIPALS
/s/ Marc Eisenberg
- ----------------------------------
Marc Eisenberg
/s/ Eric Eisenberg
- ----------------------------------
Eric Eisenberg
- 11 -
<PAGE>
BIL
BANQUE INTERNATIONALE A LUXEMBOURG SA
By: /s/ Jean Bodoni
INTERIM ESCROW AGENT
ARNALL GOLDEN & GREGORY, LLP
/s/ Arnall Golden & Gregory, LLP
PERMANENT ESCROW AGENT*
By: __________________________________
Its: _________________________________
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