SAPE » Topics » SCHEDULE 9

This excerpt taken from the SAPE 8-K filed Aug 7, 2008.

SCHEDULE 9

Conduct of business during Earn-Out Period

1.  Each of the Purchaser and Sapient undertakes to and with each of the Vendors that, during the Earn-Out Period, it will and will procure that each member of the  Purchaser's Group will (unless the Vendors' Representatives otherwise give their prior written consent):

(a)  use all reasonable and proper means to maintain, improve and extend the Eligible Services;

(b)  not take any action (nor procure that any action is taken) which is intended to affect adversely the profitability or revenue of any Group Company (in Year One) or the Eligible Services Revenue (in Year Two or Year Three);

(c)  in Year One not dispose of all or any part of the share capital of any Group Company or any interest therein except where, in the case of the Company, it remains within the Purchaser's Group, or in the case of any other Group Company, it remains in the Group, in each case following such disposal;

(d)  in Year One procure that neither it nor any other member of the Purchaser's Group will acquire or commence or carry on a new business or acquire or establish any company which would be likely to compete with any business carried on by the Group as at the Completion Date except where such business is conducted through the Group;

(e)  in Year One procure that all enquiries or orders received for Eligible Services are directed to the Group and are not referred, transferred or allocated to any other member of the Purchaser's Group;

(f)  save where the Purchaser is advised by a licensed insolvency practitioner that the directors of a Group Company are under a duty to do so, not petition for the winding-up of any Group Company or permit or procure the passing of a resolution to wind up any Group Company voluntarily or permit or procure the appointment of an administrator of any Group Company or of any receiver or administrative receiver over the whole or any part of the assets or undertaking of any Group Company;

(g)  in Year One procure that the management team of the Group (including Cameron Munro and Jonathan Davies provided that they are still employed by the Company) shall be responsible for the day to day running of the business of the Group, subject to the overall supervision and direction of (i) the board of directors of each Group Company; (ii) the management of the TRM Practice (reporting to Chip Register or his successor); and (iii) the corporate governance and management policies and practices adopted by the Purchaser's Group from time to time;

108

(h)  not terminate the employment of any of the Covenantors other than: (i) in circumstances where a Covenantor has been or was entitled to have been summarily dismissed under the terms of such Covenantor's contract of employment; or (ii) where the board of directors of the Company reasonably determines that the Covenantor was not performing his duties to a standard that could reasonably be expected of such Covenantor having regard to his position and level of seniority;

(i)  not require any Covenantor (unless he consents to do so) to provide services to any member of the Purchaser's Group other than to a Group Company in Year One or which are not Eligible Services in Year Two or Year Three; and

(j)  in Year One not solicit or endeavour to entice away, offer employment to, employ or offer to conclude any contract for services with any person who was at Completion or is at any time during Year One engaged by any member of the Group.

2.  Without prejudice to the generality of the foregoing, each of the Purchaser and Sapient further undertakes to and with each of the Vendors that, during the Earn-Out Period, it will exercise all of its rights available to it (whether as shareholder (direct or indirect) of any member of the Purchaser's Group or through directors appointed to the board of directors of any member of the Purchaser's Group) so as to procure that no Group Company shall, save with the prior written consent of the Vendors' Representatives:

(a)  enter into any contract, transaction or arrangement otherwise than in the ordinary and usual course of its trading and on arm's length terms (provided that any transactions between any Group Company or member of the Purchaser's Group providing Eligible Services (in respect of such services) of the one part and any other member of the Purchaser's Group of the other part shall be carried out pursuant to Sapient's standard inter-company agreements or in accordance with Sapient's normal business practices (including its standard internal labour rates));

(b)  in Year One declare, make or pay any dividend or other distribution (other than to another member of the Group);

(c)  in Year One make any loans to any other member of the Purchaser's Group;

109

(d)  in Year One sell, transfer or otherwise dispose of the whole or any part of its undertaking and assets or cease to carry on its business or any part thereof (other than the transfer of employees or contractors from employment or engagement with the Group to employment or engagement with a customer in the ordinary course of business) except to another member of the Group or in the ordinary course of business, whether by a single transaction or by a series of transactions (whether  related or not);

(e)  in Year Two or Year Three sell, transfer or otherwise dispose of the whole or any part of any undertaking or assets providing Eligible Services or cease to carry on any business providing Eligible Services or any part thereof (other than the transfer of employees or contractors from employment or engagement with the Group to employment or engagement with a customer in the ordinary course of business) whether by a single transaction or by a series of transactions (whether related or not) except: (i) to another member of the Purchaser's Group; or (ii) in the ordinary course of business;

(f)  during Year One pay any directors' fees to any member of the Purchaser's Group (other than a Group Company) or to any directors or officers appointed by or at the request of the Purchaser;

(g)  in Year One acquire any other business or acquire or subscribe for shares in any other company;

(h)  in Year One borrow or raise money or secure any liabilities otherwise than on normal commercial terms in the ordinary course of business;

(i)  in Year One acquire or dispose of any freehold or leasehold property;

(j)  in Year One appoint any employees or contractors (other than replacements for existing employees or contractors on materially the same emoluments and fees) nor increase the emoluments or fees of employees or contractors, other than as expressly contemplated in the Budget;

(k)  in Year One, pay any bonuses to the employees and/or contractors of the Group in excess of (in aggregate) £600,000 (gross of tax).

3.  Each of the Purchaser and Sapient undertakes to each of the Vendors that:

(a)  in the event that during Year One any Group Company shall, in the course of carrying on its business, require goods or services of a type or kind which the Purchaser's Group is able to supply or provide, then the Purchaser shall procure that such goods or services are supplied to the Group Company on Sapient's standard inter-company costs (including its standard internal labour rates);

110

(b)  in the event that during Year One any Group Company shall, in the course of carrying on its business, require goods or services of a type or kind which is the same as or similar to goods or services which are at the relevant time supplied or provided to any member of the Purchaser's Group by any third party, then the Purchaser shall use all reasonable endeavours to procure that such goods or services are supplied or provided to the Group Company on terms which are no less favourable to the Group Company than those on which such goods or services are supplied or provided to the relevant member of the Purchaser's Group;

(c)  in the event that during the Earn-Out Period any member of the Purchaser's Group shall, in the course of carrying on its business, require goods or services of a type or kind which a Group Company or a member of the Purchaser's Group providing Eligible Services (in respect of such services)  is able to supply or provide, then the Purchaser shall procure that such member shall obtain such goods or services from the Group Company or the relevant member of the Purchaser's Group providing Eligible Services, provided always that the Group Company or the relevant member of the Purchaser's Group providing Eligible Services is able to supply or provide such goods or services, on Sapient's standard inter-company costs (including its standard internal labour rates).

4.  The Purchaser further undertakes to each of the Vendors that it will procure that during the Earn-Out Period:

(a)  there is prepared and delivered to the Vendors' Representatives within 30 Business Days of the end of each financial quarter management accounts of the Relevant Group for that quarter; and

(b)  the Vendors' Representatives are given such financial and other information and documentation as they may reasonably request in order to enable the Vendors to monitor the performance of the Relevant Group,

and the Vendors shall provide such assistance as the Purchaser may reasonably request to enable it to comply with this paragraph 4.

5.  In the event of a breach of this Schedule 9, the relevant DCG Revenue and/or EBITDA and/or Eligible Services Revenue, as appropriate, shall be adjusted so as to eliminate the effect of such breach thereon and the Purchaser shall have no further liability or obligation in respect of such breach.

111

6.  The Purchaser, Sapient and the Covenantors agree to co-operate in good faith to identify and implement costs savings as part of the management of the business of the Group Companies during Year One, provided that such measures are reasonable and are not reasonably likely to have an adverse affect on the business of the Group or conflict with the parties' intention to maintain, improve and extend the Eligible Services.

112

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki