Terms of the Acquisition5 Nov 2013 20:56
On 4 November 2013, the Company entered into a conditional share purchase agreement (Agreement) with Nicholas Ponting (1), Jamie Atkins (2), Annabel Brooke (3), Leo Eccles (4) and Robert Giles (5) (Sellers) pursuant to which, subject to, amongst other things, the approval of the Resolutions at the EGM, it has agreed to purchase and the Sellers have agreed to sell the entire issued share capital of Meld for the initial aggregate consideration of £2,000,000 (payable as to £1,000,000 on Completion (as defined below) and £1,000,000 on 13 December 2013) (Cash Payment) and 347,642,857 Ordinary Shares (each a Consideration Share). The 347,642,857 Consideration Shares will, if issued, equate to 15.6 per cent. of the issued share capital of the Company immediately following completion of the Acquisition and the Placing (Completion) (Enlarged Share Capital).
In addition to the Consideration Shares issued to the Sellers at Completion, up to 347,642,857 further Ordinary Shares (each an Earn Out Share) may be issued to the Sellers following the conclusion of the Earn Out Period (as defined below), subject to the following earn out arrangements (Earn Out). The Sellers will be entitled to receive Earn Out Shares if the aggregate EBITDA of Meld and its subsidiaries (Meld Group) exceeds £683,000 during the period commencing on 1 January 2014 and ending on 31 December 2014 (Earn Out Period). Depending on the EBITDA of the Meld Group during the Earn Out Period, the maximum number of Earn Out Shares which the Sellers can receive under the Earn Out is 347,642,857 Earn Out Shares.
Following Completion, the Sellers will produce a consolidated completion balance sheet in respect of the Meld Group. If this balance sheet shows net tangible assets which are less than £2,000,000, the Cash Payment will be adjusted so that an amount equal to the deficit (Adjustment Amount) will be deducted from the Cash Payment. The Sellers will pay the Adjustment Amount (if any) to the Company within seven days of the determination of the same. The Adjustment Amount cannot exceed the Cash Payment.
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