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Sgr & Frdlndr AIM 3 (VICT)

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Wednesday 11 January, 2006

Sgr & Frdlndr AIM 3

Merger Proposals

Singer & Friedlander AIM 3 VCT PLC
11 January 2006




SINGER & FRIEDLANDER AIM 3 VCT PLC

11 January 2006

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO
AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, SOUTH AFRICA OR THE UNITED
STATES OF AMERICA OR TO US PERSONS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR
FORM PART OF AN OFFER TO SELL, PURCHASE, EXCHANGE OR SUBSCRIBE FOR ANY
SECURITIES OR SOLICITATION OF SUCH AN OFFER IN THE UNITED STATES OF AMERICA OR
ANY OTHER JURISDICTION. THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT HAVE NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED, AND WILL NOT BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT PURSUANT
TO AN APPLICABLE EXEMPTION FROM REGISTRATION.

RECOMMENDED PROPOSALS FOR A MERGER BETWEEN SINGER & FRIEDLANDER AIM 3 VCT PLC,
SINGER & FRIEDLANDER AIM 2 VCT PLC AND SINGER & FRIEDLANDER AIM VCT PLC

 Summary

The boards of Singer & Friedlander AIM 3 VCT plc ('Singer & Friedlander AIM 3'
or the 'Company'), Singer & Friedlander AIM 2 VCT plc ('AIM 2') and Singer &
Friedlander AIM VCT plc ('AIM') announce agreement on recommended proposals for
the merger of Singer & Friedlander AIM 3, AIM 2 and AIM on a formula asset value
basis (the 'Merger'). The boards of Singer & Friedlander AIM 3, AIM 2 and AIM
further announce that they are today writing to their respective shareholders
with full details of the proposed merger.

The Merger will be effected by means of a Scheme of Arrangement of AIM 2 and AIM
under section 425 of the Companies Act 1985 (the 'Scheme').

The Merger and the associated Scheme will be conditional, amongst other things,
on the approval of shareholders of Singer & Friedlander AIM 3 ('Singer &
Friedlander AIM 3 Shareholders'), shareholders of AIM 2 ('AIM 2 Shareholders')
and shareholders of AIM ('AIM Shareholders') and the approval of the Court and
will result in Singer & Friedlander AIM 3, as the continuing company, being
substantially enlarged (the 'Enlarged Company'). The conditions to the
implementation of the Scheme and the Merger are set out in the Appendix.

Expected summary timetable:

Extraordinary general meeting of Singer & Friedlander AIM 3 and extraordinary
general meetings and Court-convened meetings of AIM 2 and AIM: 3 February 2006.

Formula asset value calculation date: 14 February 2006.

Court hearing to consider sanctioning scheme: 21 February 2006.

Effective date of merger: 22 February 2006.

Dealings commence in the new Singer & Friedlander AIM 3 shares: 8.00 am on 22
February 2006.



Introduction

The boards of Singer & Friedlander AIM 3, AIM 2 and AIM today announce that they
have agreed the terms and conditions of a proposed merger of Singer &
Friedlander AIM 3, AIM 2 and AIM to form the Enlarged Company, which is to be
effected by way of a Scheme of Arrangement under section 425 of the Companies
Act 1985. The boards of Singer & Friedlander AIM 3, AIM 2 and AIM have written
to their shareholders with full details of the proposals and to convene the
necessary shareholder and Court meetings. The Merger is subject, amongst other
conditions, to the approval of the shareholders of Singer & Friedlander AIM 3,
AIM 2 and AIM. The conditions to the implementation of the Scheme and the Merger
are set out in the Appendix.

Singer & Friedlander AIM 3, AIM 2 and AIM are all listed venture capital trusts
('VCTs'), have the same investment objectives, with a substantial proportion of
their portfolios overlapping, and are each managed by Singer & Friedlander
Investment Management Limited (the 'Manager'), who will continue to manage the
Enlarged Company but on revised terms that include a reduced investment
management fee. The Manager has indicated its support for the Merger.

The relative contribution of each VCT to the Enlarged Company will be calculated
on a formula asset value ('FAV') basis. Under the terms of the Merger, AIM 2
Shareholders and AIM Shareholders will receive new shares in Singer &
Friedlander AIM 3 ('New AIM 3 Shares'), the number of which will be determined
according to detailed calculations set out in the Scheme. In essence, holders of
shares in AIM which are the subject of the Scheme ('AIM Scheme Shares') and
holders of shares in AIM 2 which are the subject of the Scheme ('AIM 2 Scheme
Shares') will receive New AIM 3 Shares with a net asset value equal to the net
asset value of their current holding of shares in AIM or AIM 2 (as appropriate),
adjusted for those expenses of the Merger to be borne by the three companies
(after allowing for a contribution by the Manager of GBP100,000 (plus any
applicable VAT) towards the costs of the Merger).

Singer & Friedlander AIM 3 will act as the continuing company following the
Merger. It is expected that, if all necessary conditions are met, the Merger
will become effective on 22 February 2006.

The boards of Singer & Friedlander AIM 3, AIM 2 and AIM (with the exception, in
each case, of Andrew Banks who, as a director of Singer & Friedlander AIM 3, AIM
2, AIM and the Manager, has not participated in the recommendations relating to
the Merger) are pleased to recommend the Merger to their respective
shareholders.



Benefits of the Merger

The three VCTs have the same investment manager, auditors and investment
objectives. They also share a number of common investments. The merger of the
three entities will enable material cost savings to be made. The total recurring
annualised savings in respect of corporate and administrative costs expected to
arise from the implementation of the Merger are estimated to be approximately
GBP230,000. A substantial part of such savings are expected to arise from the
reduction in the Manager's fee. The current expectation of the directors of the
Company (the 'Directors') is that, on the basis of the NAVs of the three
companies as at 30 November 2005 (the latest published unaudited NAVs of the
three companies), the total annual running costs will be less than 2.7 per cent.
of the Enlarged Company's NAV, whereas historically, such costs have amounted to
approximately 3.5 per cent. of AIM's NAV and approximately 3 per cent. of AIM
2's NAV.

In addition to the cost savings that are expected to arise from the Merger,
there are a number of further anticipated benefits to the Company, including:

•         a more diverse investment portfolio. Assuming no change in the
portfolios of the three VCTs between the current date and the date of the
implementation of the Merger, the Enlarged Company would, on the Merger becoming
effective hold investments in 117 companies (112 quoted and 5 unquoted), with an
aggregate valuation of GBP39.66 million, in addition to various gilts, fixed
interest stocks and cash with an aggregate value of GBP8.33 million. The Company
currently holds 60, 57 and 3 such investments, respectively. It is expected that
in the period following the Merger there will be a rationalisation of the
Enlarged Company's investment portfolio with a sale of a small number of
investments;

•         the potential for a smoother dividend flow. As the distribution of
dividends is essentially dependent on the realisation of investments, the
greater number of investments held by the Enlarged Company and the enlarged
portfolio's wider spread over the investment cycle should increase the potential
for realisations in each accounting period and thereby the opportunity for a
smoother flow of dividends;

•         the greater number of investments held by the Enlarged Company can be
expected to lead to a larger aggregate number of realisations being made by the
Company which, when combined with the larger pool of assets within the Company,
will permit the Manager greater flexibility in applying reserves towards follow-
on investment opportunities.

The Merger and its Financial Impact

The Merger will be implemented by way of the Scheme. The Scheme is subject to
the conditions set out in the Appendix. Under the Scheme, holders AIM Scheme
Shares ('AIM Scheme Shareholders') and holders of AIM 2 Scheme Shares ('AIM 2
Scheme Shareholders') will receive New AIM 3 Shares, the number of which will be
worked out according to detailed calculations in the Scheme. In essence, AIM
Scheme Shareholders and AIM 2 Scheme Shareholders will receive New AIM 3 Shares
with a net asset value equal to the net asset value of their current holding of
AIM Scheme Shares or AIM 2 Scheme Shares (as appropriate) adjusted for those
expenses of the Merger to be borne by the three companies after allowing for the
Manager's contribution of GBP100,000 (plus any applicable VAT) towards the
expenses of the Merger. The total expenses of the Merger to be borne by the
three companies will be borne by them in proportion to their relative total net
asset values by means of an adjustment to their respective formula asset values.

Costs of the Merger

The costs of the Merger are estimated to amount to approximately GBP640,000
(inclusive of VAT). If the Merger is successful, the costs of the Merger, less a
contribution to costs being made by the Manager of GBP100,000 (plus any
applicable VAT), will be split between AIM, AIM 2 and the Company in proportion
to their net assets (before deduction of such costs). It is expected that, over
time, the costs associated with the Merger will be recouped by the Enlarged
Company from savings in annual running costs which, on an annualised basis, are
estimated to amount to approximately GBP230,000 (inclusive of estimated savings
in irrecoverable VAT).



Dividend Policy

The directors of the Enlarged Company intend to continue the payment of
dividends where possible, reflecting the progress of the enlarged investment
portfolio. In pursuing this policy, the directors of the Enlarged Company will
take account of a number of factors including the realisation of investments,
the availability of distributable reserves, the movement in net asset value per
share and the requirements for investment in fresh venture capital opportunities
and for reserving for follow-on investments. Subject to balancing these
considerations, and the Company ceasing to maintain its status as an investment
company, it would be the intention to distribute a significant proportion of any
gains on investment realisation.



Changes to the Boards

The board of the Company will be refreshed upon the Merger becoming effective.
Andrew Banks and Michael Edelson have agreed to resign as Directors and James
Hambro (the Chairman of AIM 2) and Mike Killingley (a director of AIM) have
agreed to join the board of the Enlarged Company which, following the Merger,
will therefore comprise: Christopher Moorsom (who will remain the Chairman of
the Enlarged Company), David Page, Dominic Wheatley, James Hambro and Mike
Killingley.

Andrew Banks is stepping down from the board as reflects the best current
corporate governance practice in the industry; namely that he, as a fund manager
employed by the Manager, should not be a member of the Company's board. Michael
Edelson is stepping down having been a Director since the establishment of the
Company.



Investment Management Agreement

Singer & Friedlander Investment Management Limited will continue to manage the
Enlarged Company's portfolio of investments following the Merger, but the
Company has agreed with the Manager, by way of an amended and restated
investment management agreement, that, following the Merger, the annual
management fee will be reduced from 1.65 per cent. to 1.5 per cent. of the
Company's NAV.

New Option Agreement

The option which will replace the existing option of the Manager to subscribe
for shares in the Company (the 'New Option'), like the prior option agreements,
is based upon the dividend return to AIM 3 Shareholders.

If between the date on which the Scheme becomes effective and the date of
payment of the final dividend in respect of the Enlarged Company's accounting
year ending 31 January 2013 cumulative dividends declared and paid on each
ordinary share of the Company (by reference to a record date after the Merger)
exceed a return of 8 per cent. (compounded annually) of the NAV per ordinary
share of the Company on the Merger becoming effective, the Manager will be
entitled to subscribe at par for a number of additional ordinary shares equal to
15 per cent. of the ordinary share capital of the Enlarged Company as increased
by such subscription.

If the dividend target return is not achieved on the timescale above, but is
achieved on or before the date of payment of the final dividend in respect of
the Enlarged Company's accounting year ending 31 January 2015, the proportion of
the increased ordinary share capital of the Enlarged Company that may be
acquired by the Manager under the New Option will be scaled down as follows:



  31 January 2014                                           12.5 per cent. 
  31 January 2015                                           10.0 per cent.



The New Option will lapse on the date of payment of the final dividend in
respect of the Enlarged Company's accounting year ending 31 January 2015 unless
exercised prior to that date.

The New Option may not be exercised if at the date of the New Option's exercise
the net asset value per ordinary share plus the cumulative dividend payments per
ordinary share since the Merger does not exceed the net asset value per ordinary
share on the Merger becoming effective as increased on each anniversary of the
Scheme becoming effective at the rate of 8 per cent. per annum (compounding
annually).



Transfer Agreement

Following the Scheme becoming effective, the Company, AIM 2 and AIM will enter
into an agreement pursuant to which the Company will agree to acquire and AIM 2
and AIM will agree to transfer their investment portfolio interests and any
other assets held by them, subject to any necessary consents, waivers of pre-
emption rights and other requisite documents being entered into or obtained. The
Company will also assume any liabilities of AIM 2 and AIM under the agreement.



Shareholder meetings

General meetings of the Company, AIM 2 and AIM and Court-convened meetings of
AIM 2 and AIM will be held on 3 February 2006 in order for shareholders to
consider resolutions to approve the Merger. The Merger requires the approval of
the shareholders of all three companies at the relevant meetings.



Illustrative Merger Terms

General Under the Scheme, the number of New AIM 3 Shares to be issued to holders
of AIM Shares and AIM 2 Shares will be determined by reference to the proportion
that the total formula asset values of AIM and AIM 2 bear respectively to the
total formula asset value of AIM, AIM 2 and the Company. The formula asset
values will reflect the proposed sharing of the transaction costs being borne by
each company in an amount proportionate to its formula asset value. Where the
total number of New AIM 3 Shares to be issued to any AIM Shareholder or AIM 2
Shareholder produces a fractional entitlement, the number of New AIM 3 Shares to
be issued to such person shall be rounded down to the nearest whole number.

The actual formula asset values of AIM 2, AIM and the Company will be determined
for the purpose of the Scheme on the FAV Calculation Date (expected to be 14
February 2006) and it is therefore not possible prior to such date to specify
the actual number of New AIM 3 Shares to which the AIM Shareholders and the AIM
2 Shareholders will become entitled.

FAVs For illustrative purposes only, based on net asset values per share for
AIM, AIM 2 and the Company of 35.78p, 67.31p and 90.05p, respectively, as at 30
November 2005 (the latest published unaudited net asset values of the three
companies), an AIM Shareholder would receive 3,974 New AIM 3 Shares for every
10,000 AIM Scheme Shares held and an AIM 2 Shareholder would receive 7,475 New
AIM 3 Shares for every 10,000 AIM 2 Scheme Shares held. Based on these figures
and taking into account the estimated expenses of the Merger to be borne by the
three companies, the total net asset value of the Enlarged Company would be
approximately GBP 46.54 million immediately following the Merger. AIM
Shareholders would receive approximately 5.86 million AIM 3 Shares in aggregate
and AIM 2 Shareholders would receive approximately 15.28 million AIM 3 Shares in
aggregate.



Documents and Approvals

AIM 2 Shareholders and AIM Shareholders will receive a circular in relation to
the Scheme of Arrangement under section 425 of the Companies Act 1985, together
with a prospectus to be published by the Company (the 'Prospectus') in respect
of the New AIM 3 Shares to be issued in connection with the Merger.

The approval of AIM 2 Shareholders will be sought at a Court-convened meeting
and an extraordinary general meeting, each of which will be held on 3 February
2006.

The approval of AIM Shareholders will be sought at a Court-convened meeting and
an extraordinary general meeting, each of which will be held on 3 February 2006.

Singer & Friedlander AIM 3 Shareholders will also receive the Prospectus and a
circular convening an extraordinary general meeting to be held on 3 February
2006 at which their approval of the Merger will be sought.

Implementation of the Scheme will become binding on all AIM Scheme Shareholders
and all AIM 2 Scheme Shareholders once it has been approved by the AIM Court-
convened meeting and the AIM 2 Court-convened meeting (as appropriate) and has
been sanctioned by the Court.

Copies of the Prospectus and the circular of Singer & Friedlander AIM 3 will be
submitted to the UK Listing Authority and will shortly be available for
inspection at the UK Listing Authority's Document Viewing Facility, which is
situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

(Telephone number 020 7066 1000)

Enquiries

Singer & Friedlander Investment Management Limited

Mark Ellisdon                        020 7623 3000
Trina Hill


Charles Stanley & Co Ltd (adviser to Singer & Friedlander AIM 3)

Dugald Carlean                                    020 7739 8200
Henry Fitzgerald-O'Connor

Corporate Synergy Plc (adviser to AIM 2)

Brian Stockbridge                                 020 7448 4419
Rhodri Cruwys

Zimmerman Adams International Ltd (adviser to AIM)

Peter Trevelyan-Clark                              020 7060 1760
Ray Zimmerman


Rule 8 of the City Code on Takeovers and Mergers


Under the provisions of rule 8.3 of the City Code on Takeovers and Mergers (the
'Code'), if any person is, or becomes, ''interested'' (directly or indirectly)
in one per cent. or more of any class of ''relevant securities'' of the Company,
AIM 2 or of AIM, all ''dealings'' in any ''relevant securities'' of that company
(including by means of an option in respect of, or a derivative referenced to,
any such ''relevant securities'') must be publicly disclosed by no later than
3.30 p.m. (London time) on the London business day following the date of the
relevant transaction. This requirement will continue until the date of the
shareholder and Court-convened meetings of the companies or on which the ''offer
period'' ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an ''interest'' in ''
relevant securities'' of the Company, AIM 2 or of AIM, they will be deemed to be
a single person for the purpose of rule 8.3.



Under the provisions of rule 8.1 of the Code, all ''dealings'' in ''relevant
Securities'' of the Company, AIM 2 or of AIM by the Company, AIM 2 or AIM, or by
any of their respective ''associates'', must be disclosed by no later than 12.00
noon (London time) on the London business day following the date of the relevant
transaction.



A disclosure table giving details of the companies in whose ''relevant
securities'' ''dealings'' should be disclosed and the number of such securities
in issue can be found on the Panel's website at www.thetakeoverpanel.org.uk.



''Interests in securities'' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an ''interest'' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.



Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a ''dealing'' under rule 8, you should consult the Panel.




Responsibility

(a)           The directors of Singer & Friedlander AIM 3 accept responsibility
for the information relating to Singer & Friedlander AIM 3 and its directors
contained in this announcement, other than information for which responsibility
is accepted by others pursuant to paragraphs (b) to (f) below. To the best of
the knowledge and belief of such directors (who have taken all reasonable care
to ensure that such is the case), the information contained in this announcement
for which they accept responsibility, is in accordance with the facts and does
not omit anything likely to affect the import of such information.

(b)           The independent directors of Singer & Friedlander AIM 3 accept
responsibility for the recommendations and opinions of the independent directors
of Singer & Friedlander AIM 3 contained in this announcement. To the best of the
knowledge and belief of the independent directors (who have taken all reasonable
care to ensure that such is the case), the information contained in this
announcement for which they accept responsibility, is in accordance with the
facts and does not omit anything likely to affect the import of such
information.

(c)           The directors of AIM 2 accept responsibility for the information
relating to AIM 2 and its directors contained in this announcement, other than
information for which responsibility is accepted by others pursuant to
paragraphs (a), (b) and (d) to (f). To the best of the knowledge and belief of
such directors (who have taken all reasonable care to ensure that such is the
case), the information contained in this announcement for which they accept
responsibility, is in accordance with the facts and does not omit anything
likely to affect the import of such information.

(d)           The independent directors of AIM 2 accept responsibility for the
recommendations and opinions of the independent directors of AIM 2 contained in
this announcement. To the best of the knowledge and belief of the independent
directors (who have taken all reasonable care to ensure that such is the case),
the information contained in this announcement for which they accept
responsibility, is in accordance with the facts and does not omit anything
likely to affect the import of such information.

(e)           The directors of AIM accept responsibility for the information
relating to AIM and its directors contained in this announcement, other than
information for which responsibility is accepted by others pursuant to
paragraphs (a) to (d) and (f). To the best of the knowledge and belief of such
directors (who have taken all reasonable care to ensure that such is the case),
the information contained in this announcement for which they accept
responsibility, is in accordance with the facts and does not omit anything
likely to affect the import of such information.

(f)            The independent directors of AIM accept responsibility for the
recommendations and opinions of the independent directors of AIM contained in
this announcement. To the best of the knowledge and belief of the independent
directors (who have taken all reasonable care to ensure that such is the case),
the information contained in this announcement for which they accept
responsibility, is in accordance with the facts and does not omit anything
likely to affect the import of such information.



Charles Stanley & Co. Ltd, Corporate Synergy Plc and Zimmerman Adams
International Ltd are acting exclusively for Singer & Friedlander AIM 3, AIM 2
and AIM respectively and for no one else in connection with the matters
described herein and will not be responsible to anyone other than Singer &
Friedlander AIM 3, AIM 2 and AIM respectively for providing the protections
afforded to clients of Charles Stanley & Co. Ltd, Corporate Synergy Plc and
Zimmerman Adams International Ltd, nor for providing advice in relation to the
matters described herein.



                                    APPENDIX



         CONDITIONS TO THE IMPLEMENTATION OF THE SCHEME AND THE MERGER





The Merger can only become effective if all the conditions to the implementation
of the Scheme have been satisfied (or waived, where applicable, in accordance
with paragraph 4 below).



The Scheme will become effective upon the delivery to the Registrar of Companies
in England and Wales of office copies of the order of the Court sanctioning the
Scheme under section 425 of the Companies Act 1985 and confirming the reduction
of capital therein under section 137 of the Companies Act 1985 (the 'Court Order
') and registration of the Court Order which, subject to the sanction of the
Scheme by the Court, is expected to occur on or about 22 February 2006. Unless
the Scheme becomes effective by no later than 30 June 2006, or such later date
as AIM, AIM 2 and the Company may agree and the Court may permit, the Scheme
will not become effective and the Merger will not proceed.



The conditions which need to be satisfied (or waived, if applicable) for the
Scheme to be implemented are set out below:



1. The Merger is conditional upon the Scheme becoming unconditional and becoming
effective by not later than 30 June 2006 or such later date as AIM, AIM 2 and
the Company and the Court may agree.



2. The Scheme will be conditional upon:



(a) approval of the Scheme by a majority in number representing at least
three-fourths in value of the holders of the AIM Shares present and voting,
either in person or by proxy, at the Court-convened meeting of AIM Shareholders;



(b) approval of the Scheme by a majority in number representing at least
three-fourths in value of the holders of AIM 2 Shares present and voting, either
in person or by proxy, at the Court-convened meeting of AIM 2 Shareholders;



(c) the resolution required to implement the Scheme and the associated reduction
of capital being passed at the AIM extraordinary general meeting;



(d) the resolution required to implement the Scheme and the associated reduction
of capital being passed at the AIM 2 extraordinary general meeting;



(e) the resolution to approve the Merger and to authorise the allotment of New
AIM 3 Shares pursuant to the Scheme being passed at the Company's extraordinary
general meeting;



(f) (i) the admission to the Official List of the Financial Services Authority
('FSA') of the New AIM 3 Shares becoming effective in accordance with the
listing rules of the FSA or the UK Listing Authority agreeing to admit such
shares to the Official List and (ii) the admission to trading of the New AIM 3
Shares becoming effective in accordance with the rules of the London Stock
Exchange or the London Stock Exchange agreeing to admit such shares to trading;



(g) no notice having been received by the Company before 6.00 p.m. on the last
business day immediately prior to the date on which the Scheme becomes effective
in accordance with its terms (the 'Scheme Record Time') from Her Majesty's
Revenue and Customs ('HMRC') which indicates that AIM and AIM 2 may not remain
approved as venture capital trusts pursuant to the Income and Corporation Taxes
Act 1988, the Venture Capital Trust (Winding Up and Mergers) (Tax) Regulations
2004 or any other statute or regulations; and



(h) the sanction (with or without modification) of the Scheme and confirmation
of the reductions of capital involved therein by the Court, an office copy of
the Court Order being delivered for registration to the Registrar of Companies
in England and Wales and registration of the Court Order confirming the
reductions of capital involved in the Scheme with the Registrar of Companies in
England and Wales.



3. Subject as stated in paragraph 4 below, the Merger will be conditional upon,
and accordingly the necessary action to make the Scheme effective will not be
taken, unless the following conditions are satisfied or waived before 6.00 p.m.
on the day before the final Court hearing to approve the Scheme as referred to
below:



(a) no notification having been received by any of AIM, AIM 2 and the Company
from the Office of Fair Trading in the United Kingdom indicating that it is the
intention of the Secretary of State for Trade and Industry to refer the proposed
Merger or any matter arising therefrom or related thereto to the Competition
Commission;



(b) no notice having been given or action taken by HMRC which indicates that
AIM, AIM 2 or the Company may not remain approved as a venture capital trust
pursuant to section 842AA of ICTA up to the time when the Scheme becomes
effective, or that the Merger and/or the transfer of AIM and/or AIM 2 assets to
the Company might cause AIM, AIM 2 and the Company to cease to be approved as a
venture capital trust;



(c) no governmental authority, regulatory body, Court or other person having
instituted or threatened any action, proceedings or investigation, or enacted or
proposed any statute, regulation or order, which would or might make the
implementation of the Scheme and the other steps involved in the Merger void or
illegal, or restrict or prohibit the implementation of the Merger, or impose
material additional conditions in relation to that implementation, or otherwise
adversely affect in any material respect the business of AIM, AIM 2 or the
Company;



(d) since 30 September 2005, being the date to which the latest audited report
and accounts of AIM were made up, or as disclosed in the latest audited report
and accounts of AIM:



(i) there being no material pending or threatened litigation, arbitration
proceedings, prosecution or other legal proceedings against AIM;



(ii) there having been no material adverse change in the business, financial or
trading position or prospects or profits of AIM, in either case, which cannot be
accounted for through an adjustment to the relevant FAV pursuant to the Scheme;



(e) since 31 March 2005, being the date to which the latest audited report and
accounts of AIM 2 were made up, or as disclosed in the latest audited report and
accounts of AIM 2 (as the case may be):



(i) there being no material pending or threatened litigation, arbitration
proceedings, prosecution or other legal proceedings against AIM 2; and



(ii) there having been no material adverse change in the business, financial or
trading position or prospects or profits of AIM 2, in either case, which cannot
be accounted for through an adjustment to the relevant FAV pursuant to the
Scheme;



(f) since 31 January 2005, being the date to which the latest audited report and
accounts of the Company were made up, or as disclosed in the latest audited
report and accounts of the Company (as the case may be):



(i) there being no material pending or threatened litigation, arbitration
proceedings, prosecution or other legal proceedings against the Company; and



(ii) there having been no material adverse change in the business, financial or
trading position or prospects or profits of the Company, in either case, which
cannot be accounted for through an adjustment to the relevant FAV pursuant to
the Scheme;



(g) neither AIM nor AIM 2 having incurred any liability for or in the nature of
borrowings, or any material contingent liabilities not reflected in their
respective latest annual report or accounts or otherwise disclosed to the
Company in writing before 11 January 2006;



(h) the Company not having incurred any liability for or in the nature of
borrowings, or any material contingent liabilities not reflected in its latest
annual report or accounts or otherwise disclosed to AIM and AIM 2 in writing
before 11 January 2006;



(i) except as publicly disclosed before 11 January 2006 or contemplated by the
Scheme, AIM not having issued any shares or other securities or securities
convertible into, or any warrants or options to subscribe for, its shares or
other securities, or entered into any commitment to do so, or made any material
change in its investment policies other than as agreed between AIM, AIM 2 and
the Company, or entered into any material agreement or commitment which is of a
long term or unusual nature or magnitude, other than agreements the existence of
which has been disclosed in writing to the Company before 11 January 2006;



(j) except as publicly disclosed before 11 January 2006 or contemplated by the
Scheme, AIM 2 not having issued any shares or other securities or securities
convertible into, or any warrants or options to subscribe for, its shares or
other securities, or entered into any commitment to do so, or made any material
change in its investment policies other than as agreed between AIM, AIM 2 and
the Company, or entered into any material agreement or commitment which is of a
long term or unusual nature or magnitude, other than agreements the existence of
which has been disclosed in writing to the Company before 11 January 2006; and



(k) except as publicly disclosed before 11 January 2006 or contemplated by the
Scheme, the Company not having issued any shares or other securities or
securities convertible into, or any warrants or options to subscribe for, its
shares or other securities, or entered into any commitment to do so, or made any
material change in its investment policies other than as agreed between AIM, AIM
2 and the Company, or entered into any material agreement or commitment which is
of a long term or unusual nature or magnitude, other than agreements the
existence of which has been disclosed in writing to AIM and AIM 2 before 11
January 2006.



4. AIM, AIM 2 and the Company, acting together, may waive all or any of the
conditions contained in paragraphs 3(a) to (k) (inclusive) in whole or in part
on or before the Scheme Record Time.




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