DATED 13 APRIL, 2007 PURPOSE UK HOLDINGS LIMITED and MEM CAPITAL LIMITED and THE SHAREHOLDERS AND OPTION HOLDERS OF
Exhibit 2.3
DATED 13 APRIL, 2007
PURPOSE UK HOLDINGS LIMITED
and
MEM CAPITAL LIMITED
and
THE SHAREHOLDERS AND OPTION HOLDERS OF
MEM CAPITAL LIMITED
and
XXXX XXXX XXXXXXXXX
and
XXXXXXXXXXXX XXXXX XXXXXX
_______________________________________
DEED OF VARIATION
of
relating to
MEM CAPITAL LIMITED
______________________________________
1
THIS DEED OF VARIATION (the “Deed”), is made and entered into as of 13 April, 2007, by and among Purpose UK Holdings Limited, a private limited company organized under the laws of England and Wales with company number 06045943 (“Buyer”), MEM Capital Limited, a private limited company organized under the laws of England and Wales with company number 5164798 (the “Company”) and each shareholder whose name and address is set out in Schedule 1.01 (the “Shareholders”) of the Company and each holder of options of the Company whose names and addresses are set out in Schedule 1.01 (the “Option Holders,” and together with the Shareholders, the “Sellers”), and Xx. Xxxx Xxxx Xxxxxxxxx of 00 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx (“Coughtrie”) and Xx. Xxxxxxxxxxxx Xxxxx Xxxxxx, Flat 8, 00 Xxxxxxx Xxxxxx, Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx (“Hungin,” and together with Coughtrie, the “Rentassured Sellers”)
(each a "Party" and together the "Parties").
WHEREAS:
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1.
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Prior to the date hereof the Parties have signed and placed in escrow a Share Purchase Agreement pursuant to which the Sellers will agree to sell and transfer to Buyer, and Buyer will agree to purchase from the Sellers, substantially all of the issued and outstanding capital stock of the Company (as defined therein) (the "Share Purchase Agreement");
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2.
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Prior to the Share Purchase Agreement being released from escrow the Parties now desire to amend and vary the terms of the Share Purchase Agreement in the manner set out in this Deed of Variation so that, inter alia, from the date hereof any and all references to the Share Purchase Agreement shall be to the Share Purchase Agreement as amended by this Deed of Variation.
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IT IS HEREBY AGREED as follows:
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1.
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INTERPRETATION
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Unless otherwise defined herein or unless the context otherwise requires, capitalised terms used herein without definition shall have the respective meanings assigned to them in the Share Purchase Agreement.
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2.
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VARIATION OF SHARE PURCHASE AGREEMENT
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2.1
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Variation of Earn-out calculation
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The Parties agree that Section 1.04 of the Share Purchase Agreement shall be amended as follows:
2
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(a)
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In sub-section 1.04(a), the following wording shall be deleted:
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'The aggregate Earnout Payment paid by Buyer for each Measurement Period shall be equal to the difference between (i) the product of (A) 3.6 times Adjusted EBT during the applicable Measurement Period, multiplied by (B) 0.95, and (ii) the sum of (X) the aggregate Purchase Price (including prior Earnout Payments) paid to all Sellers as of the date of such calculation and (Y) the aggregate amount that the Buyer is entitled to for indemnification claims under Article VII and for any working capital deficiency under Section 1.06. Prior to payment of any Earnout Payment to the Management Shareholders, any fee due to Xxxxxxxx Inc. as a result of the Earnout Payment shall be paid by Buyer and the remaining amount of the Earnout Payment after deduction of any such fee shall be paid to the Management Shareholders. Each Earnout Payment shall be divided among the Management Shareholders in accordance with the allocation set forth on Schedule 1.04. Notwithstanding the foregoing, the total Purchase Price paid to Sellers pursuant to this Agreement shall not exceed £120,000,000 and no Earnout Payments shall be paid to the Management Shareholders to the extent such threshold is met.'
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and shall be replaced with:
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'The aggregate Earnout Payment paid by Buyer for each Measurement Period shall be computed in accordance with Schedule 1.04(b).'
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(b)
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A new Schedule 1.04(b) shall be added to the Share Purchase Agreement, as follows:
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'Schedule 1.04(b)
Computation of Earnout Payments
The aggregate Earnout Payment paid by Buyer for each Measurement Period shall be computed as follows:
Step 1: Determine the Tentative Total. The Tentative Total is the product of (A) 3.6 times the Adjusted EBT for the applicable Measurement Period, and (B) the Factor.
Step 2: Determine the Earnout Payment for the Measurement Period. The Earnout Payment for each Measurement Period is the difference between (A) the Tentative Total for that Measurement Period, and (B) the sum of the following amounts: (i) any fee due to Xxxxxxxx Inc. as a result of the Earnout Payment (which Buyer shall pay directly to
3
Xxxxxxxx, Inc.); (ii) the aggregate amount that the Buyer is entitled to or has been paid for indemnification claims under Article VII and for any working capital deficiency under Section 1.06; (iii) the aggregate Purchase Price (including prior Earnout Payments) paid to all Sellers up to and including the last day of the Measurement Period. Notwithstanding the foregoing, if the foregoing computation produces an amount that is less than zero, the Earnout Payment shall be zero.
For purposes of this Schedule 1.04(b):
“Factor” shall mean a fraction, determined as follows: (A) if Adjusted EBT for the applicable Measurement Period is £35,087,719 or less the fraction is 0.95 and (B) to the extent that Adjusted EBT for the applicable Measurement Period is more than £35,087,719 the fraction is 0.95 in respect of amounts up to and including £35,087,719 and the fraction is 0.001 in respect of the excess over £35,087,719. An illustrative example is annexed to this schedule.
All capitalized terms used herein shall have the meanings ascribed to them in the Share Purchase Agreement dated April 13, 2007 (the “Agreement”) to which this Schedule is attached.'
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2.2
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To the extent that the principal amount of the Promissory Note is insufficient to satisfy the Earn Out Payments as varied by this Deed of Variation the Buyer will satisfy any such additional Earn Out Payments by the issue of further Promissory Notes in a principal amount equal to the amount of such additional Earn Out Payments but otherwise on terms pari passu with the Promissory Note.
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3.
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Covenants
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Buyer hereby agrees:
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3.1
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to pay such stamp duty in connection with the transfers of Shares pursuant to the terms of the Share Purchase Agreement as may be required by HM Revenue and Customs; and
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3.2
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to make all proper and necessary disclosure to HM Revenue and Customs for the purposes of enabling HM Revenue and Customs to determine the amount of stamp duty payable in connection with the transfers of Shares pursuant to the terms of the Share Purchase Agreement.
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4
SHARE PURCHASE AGREEMENT OTHERWISE UNAMENDED
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Except as specifically varied or amended hereby, all other provisions of the Share Purchase Agreement shall remain in full force and effect in accordance with their terms.
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4.
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MISCELLANEOUS
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4.1
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Reference in any of the Transaction Documents to the "Share Purchase Agreement" shall mean the Share Purchase Agreement as amended by this Deed of Variation.
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4.2
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No Party shall be entitled to make or permit or authorise the making of any press release or other public statement or disclosure concerning this Deed of Variation or any of the transactions contemplated herein without the prior written consent of the other Parties (except as required by any requirement of law, stock exchange rule, a court of competent jurisdiction or any other competent authority when such Party shall first supply a copy of such statement, release or disclosure to the other Parties and shall incorporate any amendments or additions reasonably required by such other Parties thereto).
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4.3
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Each Party agrees to pay all costs and expenses incurred or to be incurred by it in negotiating and preparing this Deed and in closing and carrying out the transactions contemplated by this Deed.
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4.4
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The subject headings of the paragraphs and subparagraphs of this Deed are included for convenience only and shall not affect the construction or interpretation of any of its provisions.
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4.5
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This Deed may not be amended or waived except in writing executed, in the case of an amendment, by Buyer and Sellers, and the case of a waiver, by the party that is entitled to the benefit of the provisions being waived. No course of dealing between or among any Persons having any interest in this Deed will be deemed effective to modify or amend any part of this Deed or any rights or obligations of any Person under or by reason of this Deed. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.
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4.6
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Whenever possible, each provision of this Deed will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Deed is held to be prohibited by or invalid under applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Deed.
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5
This Deed may be executed in counterparts, each of which shall be an original, and any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same instrument. This Deed shall become effective when each counterpart shall have been signed and dated with the same date.
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4.7
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The internal law, without regard to conflicts of law principles, of England and Wales will govern all questions concerning the construction, validity and interpretation of this Deed and the performance of the obligations imposed by this Deed and the courts of England and Wales shall have exclusive jurisdiction over all such questions and disputes.
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4.8
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The Schedules identified in this Deed are incorporated herein by reference and made a part hereof as if set out in full in this Deed. In the event of a conflict between any term of this Deed and information contained in the Schedules or Exhibits to this Deed, the terms included in this Deed shall govern.
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4.9
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Upon the reasonable request of any party hereto, each other party hereto shall take any and all actions, necessary or appropriate to give effect to the terms and conditions set forth in this Deed.
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4.10
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Nothing in this Deed of Variation shall be deemed to constitute a partnership between the parties nor constitute one party the agent of the other party or otherwise entitle one party to have authority to bind the other party for any purpose.
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6
Schedule 1.01
Part I
Shareholders' Holdings
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Name and address of Shareholder
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Number of Shares
to be sold
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Amount of Initial Consideration
£
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Relevant Proportions
%
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|||||||||
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Xxxx XxXxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx
XX00 0XX
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712,667 | 3,390,898 | 69.832 | |||||||||
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Xxxxxxx Xxxxx Xxxxxx
Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx
Xxxxxxxxx
XX00 0XX
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44,520 | 211,828 | 4.362 | |||||||||
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Noygate Limited
Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx
Xxxxx
XX00 0XX
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1,872 | 62,733 | 0.183 | |||||||||
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St Helen's Capital plc
00 Xx Xxxxx'x Xxxxx
Xxxxxx
XX0X 0XX
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19,686 | 659,704 | 1.929 | |||||||||
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St Helen's Private Equity plc
00 Xx Xxxxx'x Xxxxx
Xxxxxx
XX0X 0XX
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624 | 20,911 | 0.061 | |||||||||
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Xxxx Xxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx
Xxxxxx
X0 0XX
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45,053 | 1,509,785 | 4.415 | |||||||||
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Xxxxx Xxxxxx Xxxx
0 Xxxxxx Xxxxxxxx
Xxxxxx
XX0 0XX
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44,520 | 1,491,924 | 4.362 | |||||||||
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Xxxxxxxx Xxxxxxx Xxxxxxxxxxx
00 Xxxxxx Xxxx
Xxxxxx
X0 0XX
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4,424 | 148,254 | 0.434 | |||||||||
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Xxxxx Xxxxxxxxxxx
00 Xxxxxx Xxxx
Xxxxxx
X0 0XX
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624 | 20,911 | 0.061 | |||||||||
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Xxx Xxxxx Xxxxxx
0X Xxxxxx Xxxxxxx
Xxxxxxxxx
XX0 0XX
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1,872 | 62,733 | 0.183 | |||||||||
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Xxxxx Xxxxxx Xxxxxxx
Maison Bordeaux
Rue de Havre
Vale
Guernsey
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933 | 31,266 | 0.091 | |||||||||
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Xxxxxx Xxxxxxxx
Xxx Xxxxx Xxxxx
Xxxxx Xxxx Xxxxx
Xxxxxxx
Xxxxxxxx
Xxxxx
X00 0XX
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858 | 28,753 | 0.084 | |||||||||
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Xxxxxxxxx Xxxxxxxx
Xxx Xxxxx Xxxxx
Xxxxx Xxxx Xxxxx
Xxxxxxx
Xxxxxxxx
Xxxxx
X00 0XX
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858 | 28,753 | 0.084 | |||||||||
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X X Xxxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxx
Xxxxxx
XX0 0XX
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- | - | 4.363 | |||||||||
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Xxxxxxxxxxxx Xxxxx Hungin
00 Xxxxxxx Xxxxxx
Xxxxxx
XX0 0XX
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- | - | 4.363 | |||||||||
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TOTAL
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878,511 | 7,668,453 | 94.807 | |||||||||
7
Part II
Optionholders' Options
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Name and address of Optionholder
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Number of Shares
over which Options are held
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Amount of Initial Consideration
£
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Relevant Proportion
%
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|||||||||
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Xxxxxx Xxxxxxxxxxx
Kerkende
Xxxx Xxxxxx
Xxxxxxxxx
Xxxxxxxxxxx
XX000XX
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21,200 | 100,870 | 2.077 | |||||||||
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Xxxxxxx Xxxxx Xxxxxx
Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx
Xxxxxxxxx
XX00 0XX
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31,800 | 798,830 | 3.116 | |||||||||
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TOTAL
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53,000 | 899,700 | 5.193 | |||||||||
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CUMULATIVE TOTAL
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931,511 | 8,568,153 | 100 | |||||||||
8
IN WITNESS WHEREOF, the parties hereto have executed this Deed as a Deed as of the day and year first above written.
“Buyer”
EXECUTED and DELIVERED as a DEED by
PURPOSE UK HOLDINGS LIMITED
acting by Xxxx Xxxxxx, a director _/s/ Xxxx Xxxxxx ________________
Name: Xxxx Xxxxxx
Title: Director
and Xxxx Xxxxxx, its secretary _/s/ Xxxx Xxxxxx ________________
Name: Xxxx Xxxxxx
Title: Secretary
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(Signatures Continued on Next Page)
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9
“Sellers”
EXECUTED and DELIVERED as a DEED by
XXXX XXXXXXXX __/s/ Xxxx XxXxxxxx _____________
in the presence of __/s/ X. Xxxxx Davies_____ _______
Address: 0 Xxxx Xxxx, Xxxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXXXX XXXXX XXXXXX __/s/ Xxxxxxx Xxxxx Abbott________
in the presence of __/s/ X. Xxxxx Davies_____ _______
Address: 0 Xxxx Xxxx, Xxxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXXX XXXXXXXXXXX __/s/ Xxxxxx Xxxxxxxxxxx __________
in the presence of __/s/ X. Xxxxx Davies_____ _______
Address: 0 Xxxx Xxxx, Xxxxx
Occupation: Solicitor
(Signatures Continued on Next Page)
10
EXECUTED and DELIVERED as a DEED by
NOYGATE LTD.
acting by , a director __/s/ Xxxxxxx Xxxxx Abbott________
Name: ________________________
Title: Director
and ,
a director/ secretary _____________________________
Name: ________________________
Title: Director/Secretary
EXECUTED and DELIVERED as a DEED by
ST. HELEN’S CAPITAL PLC
acting by , a director __/s/ Xxxx Cameron______________
Name: ________________________
Title: Director
and ,
a director/ secretary _____________________________
Name: ________________________
Title: Director/ Secretary
EXECUTED and DELIVERED as a DEED by
ST. HELEN’S PRIVATE EQUITY PLC
acting by , a director __/s/ Xxxx Cameron______________
Name: ________________________
Title: Director
and ,
a director/ secretary _____________________________
Name: ________________________
Title: Director/ Secretary
(Signatures Continued on Next Page)
11
EXECUTED and DELIVERED as a DEED by
X. X. XXXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXX XXXXXX XXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXXXXX XXXXXXX XXXXXXXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXX XXXXXXXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
(Signatures Continued on Next Page)
12
EXECUTED and DELIVERED as a DEED by
XXX XXXXX XXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXX XXXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXXX XXXXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXXXXXX XXXXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
(Signatures Continued on Next Page)
13
“Rentassured Sellers”
EXECUTED and DELIVERED as a DEED by
XXXX XXXX XXXXXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
EXECUTED and DELIVERED as a DEED by
XXXXXXXXXXXX XXXXX XXXXXX __/s/ Xxxx Cameron______________
in the presence of __/s/ R. Xxxxx Xxxxxx ____________
Address: 0 Xxxx Xxxx
Occupation: Solicitor
(End of Signatures)
